AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON FEBRUARY 18, 1997.
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
MFRI, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3922969
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
7720 LEHIGH AVENUE
NILES, ILLINOIS 60714
(847) 966-1000
(Address, including ZIP code, and telephone number,
including area code, of registrant's principal executive
offices)
DAVID UNGER
CHAIRMAN OF THE BOARD OF DIRECTORS
MFRI, INC.
7720 LEHIGH AVENUE
NILES, ILLINOIS 60714
(847) 966-1000
(Name, address, including ZIP Code, and
telephone number, including area code, of agent for
service)
COPIES TO:
HAL M. BROWN, ESQ.
RUDNICK & WOLFE
203 NORTH LASALLE STREET, SUITE 1800
CHICAGO, ILLINOIS 60601
(312) 368-4012
(312) 236-7516(TELECOPIER)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE
PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. <square>
If any of the securities being registered on this form are being 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.
<square>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.
<square>
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.
<square>
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
<square>
<TABLE>
<CAPTION>
AMOUNT TO PROPOSED MAXIMUM PROPOSED MAXIMUM
CALCULATION OF TITLE OF SHARES BE REGISTERED AGGREGATE PRICE AGGREGATE
REGISTRATION FEE TO BE REGISTERED PER UNIT{(1)} OFFERING PRICE
<S> <C> <C> <C> <C>
AMOUNT OF Common Stock, par value 2,124,298 $7.688 $16,331,603
REGISTRATION FEE $.01 per share
$4,949
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) under the Securities Act of 1933, based on the
average of the high and low prices per share of the Common Stock reported by
Nasdaq on February 12, 1997.
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>
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 FEBRUARY 18, 1997
PROSPECTUS
2,124,298 Shares
[MFRI LOGO]
COMMON STOCK
This Prospectus relates to 2,124,298 outstanding shares ("Shares") of
common stock, par value $.01 per share (the "Common Stock"), of MFRI,
Inc., a Delaware corporation (the "Company"), which may hereafter be
offered or sold from time to time for the account of persons named under
the caption "Selling Stockholders."
The Shares were issued in the merger (the "Merger") of Midwesco, Inc.,
an Illinois corporation, with and into the Company, which occurred on
December 30, 1996.
The Shares may hereafter be offered or sold from time to time for the
account of persons named under the caption "Selling Stockholders" on the
Nasdaq National Market, or otherwise, at prices and on terms then
obtainable, in broker's transactions, special offerings, exchange
distributions, negotiated transactions, block transactions, or otherwise.
See "Selling Stockholders" and "Plan of Distribution." The Company will
not realize any proceeds from any sale of the Shares.
SEE "RISK FACTORS" ON PAGE 2 FOR A DISCUSSION OF CERTAIN FACTORS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED
HEREBY.
The Common Stock is traded on the Nasdaq National Market under the
symbol MFRI. On February 12, 1997, the last reported sale price of the
Common Stock on the Nasdaq National Market was $7.688.
______________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION PASSED OR ANY STATE SECURITIES COMMISSION UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
______________
FEBRUARY , 1997
<PAGE>
NO DEALER, BROKER OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS, OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, IN CONNECTION WITH THE OFFERING MADE HEREBY, AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE RELIED ON AS
HAVING BEEN AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF ANY OFFER TO BUY THE
SECURITIES TO WHICH IT RELATES IN ANY JURISDICTION IN WHICH, OR TO ANY
PERSON TO WHOM, IT IS UNLAWFUL TO MAKE SUCH AN OFFER OR SOLICITATION OF AN
OFFER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY OFFER OR SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
THIS PROSPECTUS, INCLUDING DOCUMENTS INCORPORATED BY REFERENCE,
CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF
THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE ACT. FORWARD-LOOKING
STATEMENTS ARE INHERENTLY SUBJECT TO RISKS AND UNCERTAINTIES, MANY OF
WHICH CANNOT BE PREDICTED WITH ACCURACY AND SOME OF WHICH MIGHT NOT EVEN
BE ANTICIPATED. FUTURE EVENTS AND ACTUAL RESULTS, FINANCIAL AND
OTHERWISE, MAY DIFFER MATERIALLY FROM THE RESULTS DISCUSSED IN THE
FORWARD-LOOKING STATEMENTS. FACTORS THAT MIGHT CAUSE SUCH A DIFFERENCE
INCLUDE, BUT ARE NOT LIMITED TO, THOSE DISCUSSED IN "RISK FACTORS" HEREIN
AND IN "MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION" INCORPORATED BY REFERENCE IN THE COMPANY'S ANNUAL
REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED JANUARY 31, 1996, AND THE
COMPANY'S QUARTERLY REPORTS ON FORM 10-Q FOR THE FISCAL QUARTERS ENDED
APRIL 30, 1996, JULY 31, 1996 AND OCTOBER 31, 1996, WHICH ARE INCORPORATED
BY REFERENCE IN THIS PROSPECTUS.
TABLE OF CONTENTS
PAGE
Available Information ....................................... 2
Risk Factors ................................................ 2
The Company ................................................. 3
Selling Stockholders ........................................ 5
Use of Proceeds ............................................. 6
Plan of Distribution ........................................ 6
Legal Matters ............................................... 7
Experts ..................................................... 7
Information Incorporated By Reference ....................... 7
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files periodic reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, and should also be available for inspection and copying at the
regional offices of the Commission located at 75 Park Place, 14th Floor,
New York, New York 10007 and 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission maintains a
Web site that contains reports, proxy and information statements, and
other information about the Company. The address of the Web site
maintained by the Commission is "http://www.sec.gov".
This Prospectus constitutes a part of a registration statement on
Form S-3 (herein, together with all amendments and exhibits, the
"Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), filed by the Company. This Prospectus does not
contain all of the information set forth in the Registration Statement.
For further information, reference is hereby made to the Registration
Statement, including the financial schedules and exhibits filed or
incorporated by reference as a part thereof, which may be -examined at the
Public Reference Room of the Commission in Washington, D.C., without
charge, or copies of which may be obtained from the Commission upon
payment of the prescribed fees. Statements contained herein concerning
the provisions of documents filed herewith as exhibits are necessarily
summaries of such documents, and each such statement is qualified in its
entirety by reference to the copy of the applicable document filed with
the Commission.
RISK FACTORS
COMPETITION; BUSINESS. The businesses in which the Company is engaged
are highly competitive. In addition, new installations of baghouses are
subject to competition from alternative technologies and the sale of
specialty piping systems and electronic leak detection and location
systems are subject to competition from alternative products. The
business of Thermal Care is dependent on the plastics industry. Any
adverse trends in the plastics industry may have a material adverse effect
on the business of Thermal Care. Thermal Care relies upon a single source
for key components of several of its products. Although the Company
believes that there are alternate sources available for such components,
there can be no assurance that the interruption of supplies of such
components would not have an adverse effect on the financial condition of
the Company, and that the Company, if required to do so, would be able to
negotiate agreements with alternative sources on acceptable terms.
GOVERNMENT REGULATION. The demand for the Company's leak detection
and location systems and secondary containment piping systems is driven
primarily by government regulation with respect to hazardous waste. Laws
such as the Federal Resource Conservation and Recovery Act ("RCRA"), and
standards such as the National Emission Standard for Hydrocarbon Airborne
Particulates ("NESHAP"), have increased the demand for the Company's leak
detection and location and secondary containment piping systems. The
Company's filtration products business to a large extent is dependent on
governmental regulation of air pollution at the federal and state levels.
The Company believes that continuing growth in the sale of filtration
products and services will be materially dependent on continuing
enforcement of environmental laws such as the Federal Clean Air Act
Amendments of 1990 ("Clean Air Act Amendments"). Although changes in such
environmental regulations could significantly alter the demand for the
Company's products and services, the Company does not believe that such a
change is likely to decrease demand in the foreseeable future.
ECONOMIC FACTORS. Although demand for many of the Company's products
is generally affected by its customers' need to comply with governmental
regulations, purchases of the Company's products at times may be delayed
by customers due to adverse economic factors.
DIVIDENDS. The Company has not paid dividends in the past and does
not anticipate paying cash dividends on its common stock in the
foreseeable future. The Company's line of credit agreement contains
certain restrictions on payment of dividends. The primary restriction
limits dividends to a cumulative amount of up to 25% of net income.
LACK OF ARM'S-LENGTH NEGOTIATIONS; CONFLICTS OF INTEREST. The
agreements between the Company and Midwesco relating to the Merger and the
Perma-Pipe Transaction were not negotiated on an arm's-length basis.
However, the Company believes the consideration, representations,
warranties and covenants in such agreements are fair to the Company even
though they may not provide the same level of protection as similar
representations, warranties and covenants contained in comparable
agreements with persons that are not affiliates of the Company. Members
of the Board of Directors affiliated with Midwesco (Messrs. Unger,
Ogilvie, Elgendy, Gruenberg and Henry and Bradley Mautner) will have a
conflict of interest with respect to their obligations as directors and
officers of the Company, and enforcing the terms of such agreements
against Midwesco, if necessary.
THE COMPANY
The Company is engaged in the manufacture and sale of filter bags for
use in industrial air pollution control systems known as "baghouses", and
also engineers, designs and manufactures specialty piping systems and leak
detection and location systems, and industrial water cooling equipment.
The Company, which was incorporated in Delaware in October 1993, is the
successor corporation to Midwesco Filter Resources, Inc. ("Midwesco
Filter").
Midwesco Filter was incorporated in Delaware in October 1989 as a
wholly owned subsidiary of Midwesco. On December 13, 1989, Midwesco
Filter exchanged shares of its common stock for the net assets
constituting its Midwesco Filter Resources division ("Filter Division") of
Midwesco. The Filter Division was formed from certain assets of the
Filter Media division of the Kennecott Corporation, acquired by Midwesco
in June 1982, and certain assets of the Filter Resources Corporation,
acquired by Midwesco in December 1983.
On January 28, 1994 pursuant to a merger transaction ("Perma-Pipe
Transaction") between the Company, a subsidiary of the Company and
Midwesco Filter, the Company acquired the Perma-Pipe business ("Perma-
Pipe") from Midwesco for cash and 278,666 shares of Common Stock.
Pursuant to the Perma-Pipe Transaction, each share of common stock of
Midwesco Filter was exchanged for one share of Common Stock. Immediately
prior to the effective time of the Perma-Pipe Transaction, a public
offering (the "Offering") of shares of common stock of Midwesco Filter was
consummated, the net proceeds of which were used to repay bank debt
related to Perma-Pipe. Perma-Pipe is in the business of engineering,
designing and manufacturing specialty piping systems and leak detection
and location systems.
On September 30, 1994, the Company and an indirect wholly-owned
subsidiary of the Company, pursuant to a purchase agreement dated as of
such date ("Purchase Agreement"), acquired substantially all of the assets
of Ricwil Piping Systems Limited Partnership ("Ricwil LP") for cash and
55,710 shares of Common Stock, as adjusted in accordance with the terms of
the Purchase Agreement. Ricwil LP was a manufacturer of insulated piping
systems for district heating and cooling systems.
On December 6, 1995, Perma-Pipe acquired for cash the net assets and
leak detection business of Hagenuk GmbH.
On August 15, 1996, the Company, pursuant to an Asset Purchase
Agreement dated as of such date (the "Purchase Agreement"), acquired
substantially all of the assets of Eurotech Air Filtration, Inc., an
Oregon corporation ("Eurotech"), for cash and 30,571 shares of Common
Stock, subject to possible adjustments in accordance with the terms of the
Purchase Agreement. Pursuant to the Purchase Agreement, Eurotech has the
right, subject to certain conditions, to distribute such shares to its
four shareholders.
On December 30, 1996, the Company acquired the Thermal Care Division
("Thermal Care") and certain other specified assets and liabilities of
Midwesco by the merger of Midwesco with and into MFRI (the "Merger").
Through the Merger, an aggregate of 2,124,298 shares of Common Stock were
issued to the shareholders of Midwesco and the 1,717,666 shares of Common
Stock owned by Midwesco immediately prior to the consummation of the
Merger were cancelled. Thermal Care engineers, designs and manufactures
industrial water cooling equipment.
The Company's filtration products business is carried on by Midwesco
Filter, and the piping system products business is carried on by Perma-
Pipe, Inc. Midwesco Filter and Perma-Pipe, Inc. are wholly-owned
subsidiaries of MFRI. As used herein, unless the context otherwise
requires, the term Company includes MFRI, Inc., Midwesco Filter, Thermal
Care, Perma-Pipe, Inc., and its subsidiaries, and their predecessors.
The Company's principal executive offices are located at 7720 Lehigh
Avenue, Niles, Illinois 60714 and its telephone number is (847) 966-1000.
Other information concerning the Company's management, business,
securities, and results of operations is incorporated by reference from
its reports filed with the Commission. See "Information Incorporated by
Reference."
SELLING STOCKHOLDERS
The Shares may be offered from time to time for the account of the
Selling Stockholders whose names are set forth in the table below. The
table sets forth information as of January 31, 1997 with respect to the
beneficial ownership of the Shares by the Selling Stockholders. To the
knowledge of the Company, none of the Selling Stockholders has any
material relationship with the Company except as set forth in the
footnotes to the following table and as more fully described elsewhere in
this Prospectus (including the information incorporated by reference in
this Prospectus).
<TABLE>
<CAPTION>
SELLING STOCKHOLDER NO. OF SHARES OWNED NO. OF SHARES WHICH NO. OF SHARES WHICH MAY
PRIOR TO Offering(1) MAY BE Offered BE OWNED AFTER
Offering(1)
<S> <C> <C> <C>
Henry Mautner(2) 451,688 419,938 31,750
Debra Mautner 170,473 170,473 --
David M. Mautner 171,298 170,473 825
Bradley E. Mautner(3) 172,773 170,473 2,300
David Unger(4) 535,677 489,927 45,750
Maxine S. Unger 29,359 12,859 16,500
Judith Golden 141,632 141,632 --
Rebecca Fishman 148,932 141,632 7,300
Michael Unger 142,132 141,632 500
Robert F. Spreenberg 187,925 187,925 --
David A. Miller 6,611 5,511 1,100
William F. Davis 27,126 25,901 1,225
Judith & Jeff Golden 4,374 3,674 700
Don L. Gruenberg(5) 4,587 1,837 2,750
John F. Conroy(6) 2,543 918 1,625
Carlo Ferraro 367 367 --
Edward A. Crylen 3,062 1,837 1,225
Herbert J. Sturm(7) 9,815 3,490 6,325
Robert K. Spreenberg 9,552 9,552 --
Gene K. Ogilvie(8) 43,772 11,022 32,750
Michael D. Bennett(9) 10,331 3,306 7,025
Fati Elgendy(10) 27,969 9,919 18,050
</TABLE>
(1) Includes shares, if any, held by spouse; held as custodian; held in
joint tenancy with spouse; held by or for the benefit of the named
person or one or more members of his immediate family; with respect to
which the named person has or shares voting or investment powers; or
in which the named person otherwise has a beneficial interest. Also
includes shares issuable upon exercise of employee stock options.
(2) Henry Mautner is Director and Vice Chairman of the Board of Directors
of the Company.
(3) Bradley E. Mautner is Director and Vice President of the Company.
(4) David Unger is Director, Chairman of the Board of Directors, President
and Chief Executive Officer of the Company.
(5) Mr. Gruenberg is Director and Vice President of the Company.
(6) Mr. Conroy is Comptroller and Assistant Secretary of the Company.
(7) Mr. Sturm is Vice President of the Company and of Midwesco Filter,
Inc.
(8) Mr. Ogilvie is Director, Vice President of the Company and President
of Midwesco Filter, Inc.
(9) Mr. Bennett is Vice President, Secretary and Treasurer of the Company.
(10) Mr. Elgendy is Director, Vice President of the Company and President
of Perma-Pipe, Inc.
USE OF PROCEEDS
This Prospectus relates solely to Shares being offered and sold
for the accounts of the Selling Stockholders. The Company will not
realize any proceeds from any sale of Shares by the Selling
Stockholders.
PLAN OF DISTRIBUTION
The Selling Stockholders may offer and sell Shares by means of
the Prospectus from time to time in one or more transactions,
directly by the Selling Stockholders, or through agents, dealers or
brokers to be designated from time to time; such offers and sales
may be effected over any national securities exchange or automated
interdealer quotation system on which shares of the Common Stock are
then listed, in negotiated transactions or in a combination of such
methods of sale; the selling price of the Shares may be at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices; and the Shares may
also be offered in coordinated block transactions through
underwriters, dealers or agents, or otherwise who may receive
compensation in the form of underwriting or brokerage discounts,
concessions or commissions from the Selling Stockholders or the
purchasers of such Shares for whom they may act as agents. In
certain states, the Selling Stockholders may be required to offer
and sell Shares only through brokers and dealers registered in such
states.
The Selling Stockholders and any brokers or dealers that act in
connection with the sale of Shares hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities
Act and any commissions received by them and any profit on the sale
of Shares as principal may be deemed to be underwriting discounts
and commissions under the Securities Act.
The Company will pay all of the expenses of the preparation,
printing and filing of the Registration Statement, any amendments or
supplements thereto, and prospectuses and revised prospectuses as
required to cover the transactions covered hereby, as well as the
Company's fees and disbursements of its counsel and accountants
relating to the Registration Statement, but the Company is not
obligated to pay any underwriting discounts and commissions,
brokers' commissions or charges, the legal fees and expenses of the
Selling Stockholders, or transfer taxes, if any, relating to the
sale or disposition of Resale Shares by a Selling Shareholder.
The Selling Stockholders may also resell Shares in open market
transactions pursuant to the resale provisions of Rule 144 under the
Securities Act or in transactions otherwise permitted under the
Securities Act.
LEGAL MATTERS
Certain legal matters in connection with the Shares, including
the validity of the Shares, will be passed upon for the Company by
Rudnick & Wolfe, Chicago, Illinois.
EXPERTS
The financial statements incorporated in this Prospectus by
reference from the Company's Annual Report on Form 10-K for the year
ended January 31, 1996 have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report, which is
incorporated herein by reference, and have been so incorporated in
reliance upon the report of such firm given upon their authority as
experts in accounting and auditing.
INFORMATION INCORPORATED BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are hereby incorporated by
reference into this Prospectus:
(i) the Company's Annual Report on Form 10-K for the
fiscal year ended January 31, 1996;
(ii) the Company's Quarterly Report on Form 10-Q for the
quarter ended April 30, 1996;
(iii) the Company's Quarterly Report on Form 10-Q for the
quarter ended July 31, 1996;
(iv) the Company's Quarterly Report on Form 10-Q for the
quarter ended October 31, 1996;
(v) the registration statement of the Company's
predecessor on Form 8-A filed on March 13, 1990
registering common stock of the Company's predecessor
under Section 12(g) of the Securities Exchange Act of
1934; and
(vi) the Company's Current Report on Form 8-K dated
December 30, 1996.
All documents filed by the Company pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and before the termination of the offering of shares of
the Common Stock made hereby are hereby incorporated by reference,
and such documents are deemed to be a part hereof from the date of
filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall
be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other
subsequently filed document which is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not, except as so modified
or superseded, constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON,
INCLUDING ANY BENEFICIAL OWNER OF COMMON STOCK, TO WHOM A COPY OF
THIS PROSPECTUS IS DELIVERED, UPON THE ORAL OR WRITTEN REQUEST OF
SUCH PERSON, A COPY OF ANY AND ALL OF THE INFORMATION THAT HAS BEEN
INCORPORATED BY REFERENCE IN THIS PROSPECTUS (NOT INCLUDING EXHIBITS
TO THE INFORMATION THAT IS INCORPORATED BY REFERENCE UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH
INFORMATION). SUCH REQUEST SHOULD BE DIRECTED TO MICHAEL D.
BENNETT, SECRETARY, MFRI, INC., 7720 LEHIGH AVENUE, NILES,
ILLINOIS 60714 (TELEPHONE (847) 966-1000).
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth expenses to be incurred in
connection with the issuance and distribution of the securities
being registered hereby:
S.E.C. registration fee $ 4,949
*Legal fees and expenses $ 5,000
*Miscellaneous $ 500
Total $10,449
________________
* Estimated.
The Company will pay all of the expenses of the preparation, printing and
filing of the Registration Statement, any amendments or supplements
thereto, and prospectuses and revised prospectuses as required to cover
the transactions covered hereby, as well as the Company's fees and
disbursements of its counsel and accountants relating to the Registration
Statement, but the Selling Stockholders will bear their pro rata portion
of any underwriting discounts and commissions, brokers' commissions or
charges, or other costs arising in the marketing of the Shares and their
own legal fees and expenses.
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes
indemnification of directors, officers, employees and agents of the
Company; allows the advancement of costs of defending against litigation;
and permits companies incorporated in Delaware to purchase insurance on
behalf of directors, officers, employees and agents against liabilities
whether or not in the circumstances such companies would have the power to
indemnify against such liabilities under the provisions of the statute.
The Company's Certificate of Incorporation and its By-Laws provide for
indemnification of its officers and directors to the full extent permitted
by Section 145 of the Delaware General Corporation Law.
The Company's Certificate of Incorporation eliminates, to the fullest
extent permitted by Delaware law, liability of a director to the Company
or its stockholders for monetary damages for a breach of such director's
fiduciary duty of care except for liability where a director (a) breaches
his or her duty of loyalty to the Company or its stockholders, (b) fails
to act in good faith or engages in intentional misconduct or knowing
violation of law, (c) authorizes payment of an illegal dividend or a stock
repurchase or (d) obtains an improper personal benefit. While liability
for monetary damages has been eliminated, equitable remedies such as
injunctive relief or rescission remain available. In addition, a director
is not relieved of his responsibilities under any other law, including the
federal securities laws.
The Company has entered into indemnification agreements in the form
described below with each person who is currently a member of the Board of
Directors of the Company and will enter into such agreements with persons
who in the future become directors of the Company. Such indemnification
agreements provide for indemnification against any and all expenses
incurred in connection with, as well as any and all judgments, fines, and
amounts paid in settlement resulting from, any threatened, pending, or
completed action, suit, or proceeding, whether civil, criminal,
administrative, or investigative (collectively an "Action"), by reason of
the fact that such director is or was a director, officer, employee or
agent of the Company, or is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust, or other enterprise. The
indemnification agreements provide that if any payment, advance or
indemnification of the director requires that he or she acted in good
faith, in a manner he or she reasonably believed to be for or not opposed
to the best interests of the Company or without reasonable cause to
believe his or her conduct was unlawful, then it shall be presumed that he
or she so acted unless proven otherwise by clear and convincing evidence.
The indemnification agreements also provide for the advancement of all
expenses, including reasonable attorneys' fees, arising from the
investigation of any claim, preparation for the defense or defense or
settlement of an Action. The indemnification agreements authorize the
Company to participate in the defense of any action and to assume the
defense thereof, with counsel who shall be reasonably satisfactory to the
director, provided that the director shall be entitled to separate counsel
of his or her choosing if he or she reasonably believes that (i) there
exists conflicting interests between himself or herself and the Company or
other parties (the defense of whom the Company shall have assumed) or (ii)
there is any substantial likelihood that the Company will be financially
or legally unable to satisfy its obligations under the Indemnification
Agreement. The indemnification agreements provide that a director's
rights under such contract are not exclusive of any other indemnification
rights he or she may have under any provision of law, the Company's
Certificate of Incorporation or By-laws, the vote of the Company's
stockholders or disinterested directors, other agreements or otherwise.
Item 16. EXHIBITS.
EXHIBIT EXHIBIT
NUMBER DESCRIPTION
2.1 Agreement for Merger by and between Midwesco, Inc. and MFRI,
Inc. [Incorporated by reference to Appendix A to the
Company's Proxy Statement dated November 12, 1996 relating
to the Company's Special Meeting of Stockholders held on
December 16, 1996].
2.2 Agreement and Plan of Merger by and between Midwesco, Inc.
and MFRI, Inc. [Incorporated by reference to Exhibit 2.2 to
the Company's Current Report on Form 8-K dated December 30,
1996 (SEC File No. 0-18370)].
5 Form of Opinion of Rudnick & Wolfe with respect to the
legality of the Common Stock being registered
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Rudnick & Wolfe (contained in Exhibit 5 hereof)
24 Power of Attorney of directors and certain officers of the
Company.
Item 17. UNDERTAKINGS.
The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement;
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(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;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
by the Registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act 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.
(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.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of
the registrant's annual report pursuant to Section 13(a) or 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.
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the Prospectus, to each person to whom the Prospectus is
sent or given, the latest annual report to security holders that is
incorporated by reference in the Prospectus and furnished pursuant to and
meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities
Exchange Act of 1934; and, where interim financial information required to
be presented by Article 3 of Regulation S-X is not set forth in the
Prospectus, to deliver, or cause to be delivered to each person to whom
the Prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the Prospectus to provide such
interim financial information.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person of the registrant in
the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit
to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
<PAGE>
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 Niles, State of Illinois, on
February 14, 1997.
MFRI, INC.
By:/S/ DAVID UNGER
David Unger
Chairman of the Board and Chief
Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed below by the following persons in
the capacities and on the date indicated.
SIGNATURE TITLE DATE
David Unger* Director and Chairman of the
Board of Directors (Principal
Executive Officer) February 14, 1997
Henry M. Mautner* Director, Vice Chairman of
the Board of Directors February 14, 1997
Gene K. Ogilvie* Director and Vice President February 14, 1997
Michael D. Bennett* Vice President, Secretary and
Treasurer (Principal Financial
and Accounting Officer) February 14, 1997
Fati Elgendy* Director and Vice President February 14, 1997
Don Gruenberg* Director and Vice President February 14, 1997
Bradley E. Mautner* Director and Vice President February 14, 1997
Eugene Miller* Director February 14, 1997
*By:/S/ DAVID UNGER Individually and as Attorney- February 14, 1997
David Unger in-fact
<PAGE>
EXHIBIT INDEX
EXHIBIT EXHIBIT
NUMBER DESCRIPTION
2.1 Agreement for Merger by and between Midwesco, Inc. and MFRI, Inc.
[Incorporated by reference to Appendix A to the Company's Proxy
Statement dated November 12, 1996 relating to the Company's
Special Meeting of Stockholders held on December 16, 1996].
2.2 Agreement and Plan of Merger by and between Midwesco, Inc. and
MFRI, Inc. [Incorporated by reference to Exhibit 2.2 to the
Company's Current Report on Form 8-K dated December 30, 1996 (SEC
file No. 0-18370)].
5 Form of Opinion of Rudnick & Wolfe with respect to the legality
of the Common Stock being registered.
23.1 Consent of Deloitte & Touche LLP.
23.2 Consent of Rudnick & Wolfe (contained in Exhibit 5 hereof).
24 Power of Attorney by the Directors and certain officers of the
Company.
EXHIBIT 5
RUDNICK & WOLFE
203 NORTH LASALLE STREET
CHICAGO, ILLINOIS 60601-1293
February , 1997 (312) 368-4000
The Board of Directors
MFRI, Inc.
7720 Lehigh Avenue
Niles, IL 60714
Gentlemen:
We have examined the registration statement on Form S-3 (Registration
No. 333-_____) filed with the Securities and Exchange Commission on or
about February 17, 1997, for registration under the Securities Act of
1933, as amended, of 2,124,298 shares of common stock of MFRI, Inc., a
Delaware corporation (the "Company"), par value $.01 per share ("Common
Stock"). We have examined pertinent corporate documents and records of
the Company, including its Certificate of Incorporation and its By-Laws,
and we are familiar with the corporate proceedings had and contemplated in
connection with the issuance of such shares of Common Stock by the
Company. We have also made such other examinations as we have deemed
necessary or appropriate as a basis for the opinion hereinafter expressed.
On the basis of the foregoing, we are of the opinion that such
2,124,298 shares of Common Stock of the Company have been duly authorized,
and are legally issued, fully paid and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
registration statement and to the reference to our firm in the
registration statement under the caption "Legal Matters."
Very truly yours,
RUDNICK & WOLFE
By:
Hal M. Brown, a Partner
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this Registration
Statement of MFRI, Inc. on Form S-3 of our report dated April 24, 1996,
appearing in the Annual Report on Form 10-K of MFRI, Inc. for the year
ended January 31, 1996 and to the reference to us under the "Experts" in
the Prospectus, which is part of this Registration Statement.
/S/ DELOITTE & TOUCHE LLP
Deloitte & Touche LLP
Chicago, Illinois
February 14, 1997
EXHIBIT 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned, being a
director or officer, or both, of MFRI, Inc., a Delaware corporation (the
"Company"), does hereby constitute and appoint David Unger, Henry M.
Mautner, Bradley E. Mautner, Fati Elgendy and Michael D. Bennett with full
power of substitution and resubstitution to each of said attorneys, to
execute, file or deliver any and all instruments and to do any and all
acts and things which said attorneys and agents, or any of them, deem
advisable to enable the Company to comply with the Securities Act of 1933,
as amended, and any requirements or regulations of the Securities and
Exchange Commission in respect thereto, in connection with the
registration under said Securities Act of the sale of shares of common
stock of the Company by certain stockholders of the Company, which shares
are to be issued by the Company in connection with the merger of Midwesco,
Inc., an Illinois corporation, and the Company, including specifically,
but without limitation of the general authority hereby granted, the power
and authority to sign his or her name as director or officer, or both, of
the Company, as indicated below opposite his or her signature, to the
registration statements and any amendment, post-effective amendment,
supplement or papers supplemental thereto, to be filed with respect to
said shares of common stock, and each of the undersigned does hereby fully
ratify and confirm all that said attorneys and agents, or any one of them,
or the substitute of any of them, shall do or cause to be done by virtue
hereof.
IN WITNESS WHEREOF, each of the undersigned has subscribed these
presents, this 14th day of February, 1997.
SIGNATURE TITLE
/S/ DAVID UNGER Director, Chairman of the Board of
David Unger Directors and President (Principal
Executive Officer)
/S/ HENRY M. MAUTNER Director and Vice Chairman of the Board
of
Henry M. Mautner Directors
/S/ GENE K. OGILVIE Director and Vice President
Gene K. Ogilvie
/S/ MICHAEL D. BENNETT Vice President, Secretary and Treasurer
Michael D. Bennett (Principal Financial and Accounting
Officer)
/S/ FATI ELGENDY Director and Vice President
Fati Elgendy
/S/ DON GRUENBERG Director and Vice President
Don Gruenberg
/S/ BRADLEY E. MAUTNER Director and Vice President
Bradley E. Mautner
/S/ EUGENE MILLER Director
Eugene Miller
