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Registration No. 33-______
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PDG REMEDIATION, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 25-1741849
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
300 OXFORD DRIVE
MONROEVILLE, PA 15146
(412) 856-2200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
With a Copy to:
JOHN M. MUSACCHIO, PRESIDENT RICHARD D. ROSE, ESQ.
PDG REMEDIATION, INC. THORP, REED & ARMSTRONG
300 OXFORD DRIVE ONE RIVERFRONT CENTER
MONROEVILLE, PA 15146 PITTSBURGH, PA 15222
(412) 856-6100 (412) 394-2303
(Address, including zip code, and
telephone number, including area code,
of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following
box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SECURITIES AMOUNT BEING OFFERING PRICE AGGREGATE OFFERING REGISTRATION
BEING REGISTERED REGISTERED PER SHARE (1) PRICE (1) FEE
<S> <C> <C> <C> <C>
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Common Stock, par value 1,470,320 Shares $1.50 $2,205,480.00 $760.45
$.01 per share
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</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) of the Securities Act of 1933.
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
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PDG REMEDIATION, INC.
CROSS-REFERENCE SHEET
Between Items of Form S-3 and Prospectus
<TABLE>
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ITEM PROSPECTUS
NO. ITEM IN FORM S-3 HEADING
- ---- --------------------------------- -----------------------
<C> <S> <C>
1. Forepart of the Registration Front Cover, Cross-
Statement and Outside Front Reference Sheet
Cover Page of Prospectus
2. Inside Front and Outside Back Available Information,
Cover Pages of Prospectus Incorporation of Certain
Documents by Reference
and Table of Contents
3. Summary of Information, Risk Summary of Information;
Factors and Ratio of Earnings Risk Factors
to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Not Applicable
6. Dilution Not Applicable
7. Selling Security Holders Selling Shareholder
8. Plan of Distribution Plan of Distribution
9. Description of Securities to be Description of Company's
Registered Capital Stock
10. Interests of Named Experts and Not Applicable
Counsel
11. Material Changes Recent Developments
12. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference
13. Disclosure of Commission Not Applicable
Position on Indemnification for
Securities Act Liabilities
</TABLE>
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SUBJECT TO COMPLETION, DATED MAY 28, 1996
PROSPECTUS
1,470,320 Shares
PDG REMEDIATION, INC.
Common Stock
______________________________
The shares (the "Shares") of Common Stock, par value $.01 per share
("Common Stock"), of PDG Remediation, Inc. (the "Company") covered by this
prospectus are being offered by PDG Environmental, Inc., a Delaware corporation
(the "Selling Shareholder"). See "Selling Shareholder." The Company will not
receive any of the proceeds from the sale of the Shares by the Selling
Shareholder. The Common Stock is traded on the National Association of
Securities Dealers Automated Quotation System ("NASDAQ") - Small Cap Market
under the symbol "PDGS." On May 21, 1996, the last reported average bid/asked
price of the Common Stock on the NASDAQ Small Cap Market was $1-3/8 per share.
The Shares may be sold directly by the Selling Shareholder, through
brokers designated from time to time or to or through underwriters or dealers.
The Selling Shareholder has informed the Company that it does not have any
arrangement with any particular underwriter, dealer or broker but expects to
sell the Shares through one or more brokers. Distribution of the Shares may be
effected from time to time in one or more transactions. See "Plan of
Distribution."
SEE "RISK FACTORS" BEGINNING ON PAGE 3 FOR A DISCUSSION OF CERTAIN MATTERS THAT
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS.
______________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
______________________________
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No dealer, salesman 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 representations must not be relied upon. This Prospectus
does not constitute an offer to sell or a solicitation of an offer to buy any
securities other than the securities offered hereby, nor does it constitute an
offer to sell or a solicitation of an offer to buy any securities (including the
securities offered hereby) in any jurisdiction to any person to whom it is
unlawful to make any such offer or solicitation. Neither the delivery of this
Prospectus nor any offer, solicitation or sale made hereunder shall, under any
circumstances, create an implication that there has been no change in the
affairs of the Company since the date hereof or that the information herein is
correct as of any time subsequent to its date.
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 reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). These reports,
proxy statements and other information filed by the Company with the Commission
can be inspected and copied at the public reference facilities maintained by
the Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549; and at the following regional offices of the
Commission: Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and New York Regional
Office, 7 World Trade Center, New York, New York 10048. Copies of such
material also can be obtained at prescribed rates upon written request
addressed to the Public Reference Section of the Commission, Judiciary Plaza,
450 Fifth Street, N.W., Washington, D.C. 20549. The Company's Common Stock is
traded on the NASDAQ Small Cap Market and such reports, proxy and information
statements and other information can also be inspected at the public reference
facilities maintained by NASDAQ at 1735 K Street N.W., Washington, D.C. 20006
at prescribed times.
This Prospectus, which constitutes a part of a registration
statement (the "Registration Statement") filed by the Company with the
Commission under the Securities Act of 1933, as amended (the "Securities Act"),
omits certain of the information set forth in the Registration Statement.
Reference is hereby made to the Registration Statement and to the exhibits
thereto for further information with respect to the Company and the securities
offered hereby. Statements contained herein concerning the provisions of such
documents 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. Copies of the Registration Statement and
the exhibits thereto are on file at the offices of the Commission and may be
obtained upon payment of the fee prescribed by the Commission, or may be
examined without charge at the public reference facilities of the Commission
described above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed by the Company
with the Commission pursuant to the Exchange Act are incorporated herein by
reference and made a part of this Prospectus: the Annual Report on Form
10-K for the fiscal year ended January 31, 1996.
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All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Prospectus and prior to the termination of the offering of the securities
covered hereby shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing of such documents.
Any statement contained herein or in a document or information incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document which also is, or is
deemed to be, incorporated herein by reference, modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as modified or superseded, to constitute a part of this Prospectus.
The Company undertakes to provide, without charge, to each
person, including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon the written or oral request of such person, a copy of any or
all of the foregoing documents or information referred to above that has been
or may be incorporated by reference in the Prospectus (excluding exhibits to
such documents unless such exhibits are specifically incorporated by
reference). Requests should be directed to Corporate Secretary, PDG
Remediation, Inc., 300 Oxford Drive, Monroeville, Pennsylvania 15146, telephone
(412) 856-6100.
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SUMMARY INFORMATION
The following summary is qualified in its entirety by the more
detailed information and financial statements (including the notes thereto) set
forth elsewhere in, or incorporated by reference into, this Prospectus.
THE COMPANY
GENERAL
PDG Remediation, Inc. (the "Company"), provides remediation
services to assist its customers in complying with environmental laws and
regulations, such as those concerning leaking underground storage tanks
("USTs") and contaminated industrial facilities. The Company's remediation
services range from initial assessment of site contamination through the design
and implementation of remediation and treatment systems to remove
contamination. The Company also operated a thermal treatment facility for the
removal of petroleum contaminants from soil, which was discontinued effective
January 31, 1996 and sold on April 25, 1996. The Company's services are
provided to commercial, industrial and government clients through offices in
Monroeville, Pennsylvania and Melbourne, Florida. The corporate headquarters
of the Company are located at 300 Oxford Drive, Monroeville, Pennsylvania
15146.
The Company was incorporated on July 20, 1994 under the laws
of the Commonwealth of Pennsylvania as a wholly-owned subsidiary of the Selling
Shareholder. On October 20, 1994, the Selling Shareholder reorganized its
subsidiaries by merging one partnership into an existing subsidiary,
contributing the stock of that subsidiary to the Company, and contributing the
direct and indirect ownership interests in another partnership to subsidiaries
of the Company. The purpose of this reorganization was to capitalize the
Company with the environmental remediation service business of the Selling
Shareholder and to separate that business segment from the Selling
Shareholder's other business segment. Subsequent to the reorganization, the
Company owned two operating entities, PDG Environmental Services, Inc., a
Delaware corporation ("PDGES") and Geo Recovery Services, Ltd., d/b/a GeoLogic
Recovery Systems, a Florida limited partnership ("GeoLogic").
The Company operated as a wholly-owned subsidiary of the Selling
Shareholder until February 9, 1995, at which time 1,000,000 shares of the
Company's Common Stock and 1,000,000 redeemable warrants were sold to the
public. The Company sold 600,000 newly issued shares of Common Stock and
1,000,000 redeemable warrants. The Selling Shareholder sold 400,000 shares of
the Company's Common Stock in the initial public offering. Subsequent to the
initial public offering, the Selling Shareholder's ownership interest in the
Company was reduced to approximately 59.5%. On March 17, 1995, the underwriters
of the initial public offering exercised their option to purchase an additional
150,000 redeemable warrants from the Company.
The Company has historically performed a substantial amount of
work under a Florida state funded site rehabilitation program (the "EDI
Program") which provides for the remediation of contaminated sites related to
the storage of petroleum and petroleum products. The EDI Program has undergone
substantial modification during the year ended January 31, 1996 ("fiscal 1996")
due to an imbalance in the Inland Protection Trust Fund between reimbursement
application expenditures for work performed under the EDI Program and revenues
generated for the EDI Program, as well as a concern that the majority of the
site rehabilitation work was being conducted at sites that were not considered
to be high priority in terms of the potential impact on drinking water
supplies.
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On March 8, 1995, Florida's Governor Lawton Chiles issued
Executive Order 95-2 suspending processing of payment applications under the
EDI Program and on March 16, 1995 the Senate passed a bill establishing a
protocol for continued work on sites based on their priority ranking and a
pre-approval process for both the scope and the cost of work for petroleum
clean up program tasks. It was anticipated that the Florida legislature would
pass final legislation to amend the EDI Program prior to adjournment in May
1995; however, on May 11, 1995, the legislature adjourned for the year without
acting on proposed changes to the EDI Program or the Inland Protection Trust
Fund. As a result of the legislative inaction, the Company has continued to
work under the legislation passed on March 27, 1995.
On July 26, 1995, the Florida Department of Environmental
Protection ("FDEP") issued guidance to contractors operating under the EDI
Program for requesting pre-approval from the FDEP prior to commencing work on
eligible sites. A supplement was issued to this guidance on October 11, 1995
which contains maximum allowable charges for contractors to employ in the pre-
approval process.
The change in the legislation surrounding the EDI Program has
had a material adverse effect on the Company's operations during the last three
quarters of fiscal 1996 and in the first quarter of fiscal 1997 since the
number of sites in the Company's backlog immediately eligible for continued
reimbursement were significantly reduced. Further, the Company's thermal
treatment facility experienced a significant decline in soil shipments during
fiscal 1996. The Company believes this decline is indirectly related to EDI
Program changes, which have created a slowdown in the entire market for the
thermal treatment of petroleum-contaminated soil and intense competitive price
pressures. These changes in the EDI Program have resulted in substantial
reductions in the Company's contact revenues and created significant operating
losses in fiscal 1996 and in the first quarter of fiscal 1997.
The Company has responded to the impact of these revenue
reductions through reductions in staff and other overhead costs, the
reallocation of a portion of its workforce to cover existing backlog at the
Company's Pennsylvania remediation service operation and an intense marketing
effort focused on obtaining remediation service contracts for high priority
sites eligible for reimbursement under the revised Florida state funded site
rehabilitation program (the "Pre-Approval Program") and for remediation service
contracts outside the Pre-Approval Program. Further, as a result of the
indirect impact of these EDI Program changes on the Company's thermal treatment
facility, the Company made a decision to sell this facility effective January
31, 1996.
RECENT DEVELOPMENTS
The Florida legislature, in its recently completed session,
passed a bill which includes measures to satisfy the State of Florida's
existing obligations to fund the backlog under the EDI Program. The
legislation requires clean-ups to continue on the basis of priority rankings
under the Pre-Approval Program and also authorizes clean-ups in advance of a
site's priority ranking on a limited basis to facilitate property transactions
or public works projects. The legislation provides for the State of Florida to
fund the existing backlog through the issuance of bonds, thereby enabling
reimbursement applications submitted under the EDI Program to be paid on an
accelerated basis. However, in exchange for this accelerated payment,
reimbursement applications will be paid at a discount effective January 1,
1997. The annual discount rate to be used is 3.5%, and the present value of
an application will be based upon the accelerated date the FDEP anticipates
settling a reimbursement application, compared to the original date a
reimbursement application was scheduled to be settled. This legislation has
not yet been signed into law by the Florida governor. For a description of the
new legislation, see "RECENT DEVELOPMENTS - EDI Program."
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During March 1996, the Company entered into a letter of intent to
acquire SPATCO Environmental, Inc. ("SEI"), an environmental remediation
services company located in the southeastern United States, from its sole
shareholder, Vigour Holding & Finance b v, in exchange for shares of the
Company's Common Stock and preferred stock. For the fiscal year ended December
31, 1995, SEI generated revenues of approximately $11.7 million and earnings
before interest and taxes (EBIT) of ($47,000). SEI's earnings reflect the
effects of a management fee of $493,000 which was paid to an affiliate of SEI.
The Company intends to provide similar services to SEI upon completion of the
purchase, which the Company anticipates will result in cost savings estimated at
between 65% to 80% compared to the current management fee. The Company believes
that the effect of this acquisition will be to replace and expand the Company's
revenues which were severely depressed by the changes in fiscal 1996 under the
EDI Program. The consummation of the transaction is subject to a number of
conditions, including the negotiation and execution of a definitive agreement
and the replacement of certain financing currently outstanding with respect to
SEI. The parties expect to close the transaction during the second or third
quarter of fiscal year 1997.
THE OFFERING
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<S> <C>
Securities Offered . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,470,320 shares of Common Stock
Number of Shares of Common Stock Outstanding . . . . . . . . . . . . . . . . . . . . . . . . 2,470,320 shares(1)
NASDAQ Symbol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . "PDGS"
</TABLE>
______________________
(1) As of May 22, 1996. Excludes approximately 1,353,332 shares
issuable upon the exercise of outstanding options and redeemable warrants.
RISK FACTORS
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE IN NATURE AND
INVOLVE A HIGH DEGREE OF RISK. THE SECURITIES SHOULD BE PURCHASED ONLY BY
PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. ATTENTION SHOULD BE
PAID TO THE FOLLOWING RISK FACTORS IN EVALUATING THE COMPANY AND THE OFFERING
BEFORE PURCHASING ANY SECURITY OFFERED HEREBY.
LACK OF PROFITABILITY
During the fiscal year ended January 31, 1996 and the first
quarter of the current fiscal year, the Company's operations were materially
adversely affected by the changes in the EDI Program because a substantial
portion of the Company's historical revenues have been generated both directly
and indirectly under the EDI Program. While the Company has attempted to
respond to the financial impact of these EDI Program changes through
implementation of cost reductions, the discontinuance of its thermal treatment
facility, increased marketing efforts to actively participate under the
Pre-Approval
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Program, and identification of potential acquisitions to replace the revenues
lost, there can be no assurance that on an ongoing basis the Company will be
profitable.
The Company has increased its backlog of high priority sites
eligible under the Pre-Approval Program in recent months; however, delays
associated with the Pre-Approval Program have prevented the Company from
commencing work on these high priority sites. In the first quarter, the
Florida operations continued to generate a loss as a consequence of these
delays and the Company took additional steps in the form of staff reductions
and reduced leased space to minimize costs. The Company believes that its
operations will continue to be adversely affected in the second quarter of
fiscal 1997 as a result of these delays.
In addition, the Florida legislature, in its recently completed
session, passed a bill which includes measures to satisfy the State
of Florida's existing obligations to fund the backlog under the EDI Program.
The legislation as passed requires clean-ups to continue on the basis of
priority rankings under the Pre-Approval Program and also authorizes clean-up
in advance of a site's priority ranking on a limited basis to facilitate
property transactions or public works projects pursuant to a Pre-Approval
Advance Clean-Up (PAC) provision. The legislation provides for the State of
Florida to fund the existing backlog through the issuance of bonds, thereby
enabling reimbursement applications submitted under the EDI Program to be paid
on an accelerated basis. However, in exchange for this accelerated payment,
reimbursement applications will be paid at a discount effective January 1,
1997. The annual discount rate to be used is 3.5%, and the present value of an
application will be based upon the accelerated date the FDEP anticipates
settling a reimbursement application, compared to the original date a
reimbursement application was scheduled to be settled. The legislation has not
yet been signed into law by Florida's governor; however, it is anticipated that
the governor will do so by June 30, 1996, the end of Florida's fiscal year. If
the legislation is not signed into law by the Florida governor, the law under
which the Company currently operates will remain unchanged.
Until the FDEP establishes a schedule of anticipated payment dates, the
Company will not be able to determine the impact of discounting on its operating
results. However, the Company may, if the legislation becomes final, be
required to record an adjustment to reflect the negative impact of the
discounting on its results of operations and financial condition. The
legislation also includes other provisions which management believes will be
beneficial to the Company if the legislation becomes law. See "RECENT
DEVELOPMENTS - EDI Program."
IMPACT OF LITIGATION
The Company has been named in a purported class action suit
involving the purchase by all persons and entities of the Company's Common
Stock from February 9, 1995 through May 23, 1995. The action alleges that the
defendants, including the Company, its directors and executive officers and the
Selling Shareholder, violated certain federal securities laws. The Company
believes that the allegations are without merit or that there are meritorious
defenses to the allegations, and intends to defend the action vigorously. If,
however, the plaintiff is successful in its claims, a judgment rendered against
the Company and the other defendants would likely have a material adverse
effect on the business and operations of the Company.
In addition, PDG Environmental Services, Inc. (PDGES), a wholly owned
subsidiary of the Company, is currently involved in litigation with
International Surplus Lines Insurance Company (ISLIC) as a result of insurance
advances made to PDGES by ISLIC. A judgment rendered against
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PDGES would have a detrimental impact on the Company's future cash flow. See
"RECENT DEVELOPMENTS - Litigation."
PURCHASE OF SEI
In an effort to replace, in part, revenues lost as a result of changes
in the EDI Program, the Company has entered into a letter of intent with Vigour
Holding & Finance b v for the acquisition of all of the issued and outstanding
shares of SEI. The parties are currently negotiating a definitive purchase
agreement, which contains a number of conditions precedent to the closing of the
transaction, including but not limited to the negotiation and execution of a
definitive purchase agreement and replacement of certain financing currently
outstanding with respect to SEI. There can be no assurance that all of such
conditions can be satisfied in order to allow the closing to occur. In the
fiscal year ended December 31, 1995, SEI had revenues of $11.7 million and an
EBIT of ($47,000). The Company believes that, in the first quarter of calendar
year 1996, SEI operated at a loss, and there can be no assurance that the
operations of SEI will be profitable on an ongoing basis. See "RECENT
DEVELOPMENTS."
POTENTIAL ENVIRONMENTAL LIABILITY
The Company's environmental, engineering and remediation services
may expose the Company's employees and others to dangerous elements
and may involve a significant risk to the Company for liability for
environmental damage, personal injury, property damage, economic loss and fines
and costs imposed by regulatory agencies. Liability arising from providing
environmental services and for environmental contamination is a rapidly
developing area of the law and it is difficult to accurately assess the
potential risk to the Company. Claims may be asserted against the Company
under federal and state statutes and regulations, common law, contractual
indemnification agreements or otherwise. There can be no assurance that the
Company will not be subject to claims which could materially and adversely
affect the operations of the Company.
DEPENDENCE ON CONTINUED ENVIRONMENTAL REGULATION
The driving force behind the environmental services industry has
generally been environmental regulations and the response of governmental
and commercial entities and financial institutions to public concern with
environmentally contaminated facilities. The demand for environmental services
has largely been the result of the facility owners or operators attempting to
comply with, or avoid liability under, existing or newly imposed environmental
regulations at the federal, state or local levels. Because of the burden
imposed with respect to complying with such regulations, efforts have been made
by various groups to seek to relax or repeal certain forms of environmental
regulation. There can be no assurance that the scope or growth of such
regulation will not be curtailed in the future. Any relaxation of
environmental regulation may result in a decline in demand for environmental
services and may adversely affect the operations of the Company.
TIME LAG ON ACCOUNTS RECEIVABLE
As disclosed above, a substantial portion of the Company's business is
directly or indirectly related to the EDI Program. Payments are received
by the Company from the fund created by
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that program often as long as 18 months after the work is completed by the
Company. This lag in payment results in a material negative impact upon the
Company's cash flow which requires the Company to fund these applications with
third parties and causes the Company to incur interest expense.
INTENSE COMPETITION
Competition in the environmental service industry is very
intense. Existing competitors of the Company include large firms as well as
smaller engineering firms, construction firms, consulting firms and
environmental remediation firms. Numerous competitors have entered the
environmental services industry in recent years and additional firms can be
expected to enter the industry in the future. Many of the firms with which the
Company competes in the environmental services industry have significantly
greater financial resources and more established market positions than the
Company. There can be no assurance that other new firms will not expand into
or develop expertise in the area in which the Company operates.
NEED FOR ADDITIONAL FINANCING
The Company may require additional capital from time to time
to fund its operations or pursue acquisitions. If additional financing is
required and the Company is unable to obtain such financing, the Company may
suffer a material adverse effect upon its business, operating results and
financial condition or suffer an adverse effect upon its future growth
potential.
POTENTIAL INADEQUACY OF INSURANCE
It is difficult to obtain adequate insurance coverage against
possible liabilities that may be incurred in connection with the operations of
the Company, particularly including environmental hazard insurance. The
Company currently maintains consultants' environmental liability, general
liability and umbrella liability insurance policies which provide aggregate
coverage limits of $3 million, $2 million and $5 million, respectively. There
can be no assurance that such coverage will continue to be available and if
available that such coverage will be adequate and affordable. In addition,
while few contracts undertaken by the Company have required the Company to
provide performance and payment bonds, the Company's bonding capacity is
limited; thus, there can be no assurance that the Company will be able to
obtain adequate bonding should it be required in connection with a particular
project.
RELIANCE ON MANAGEMENT
The Company is dependent on its senior management to make all
material decisions with respect to the management of the Company. The Company's
success also depends, in part, on its ability to attract and retain technical
and management personnel of a high caliber. Competition for such personnel is
intense and no assurance can be given whether the Company will be able to
attract and retain such personnel. Failure to attract and retain key personnel
will have a material adverse affect on the Company's business, operating
results and financial condition.
DIVIDENDS
The Company has not historically declared or paid dividends with
respect to its Common Stock and does not anticipate paying a dividend on its
Common Stock in the foreseeable future.
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USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Shares by
the Selling Shareholder. See "PLAN OF DISTRIBUTION" below.
SELLING SHAREHOLDER
The following table sets forth certain information with respect to the
beneficial ownership of Common Stock by the Selling Shareholder as of the date
of this offering and as adjusted to reflect the sale of the Common Stock offered
hereby by the Selling Shareholder.
<TABLE>
<CAPTION>
BENEFICIAL OWNERSHIP BENEFICIAL OWNERSHIP
PRIOR TO OFFERING AFTER OFFERING
---------------------- ---------------------
NUMBER OF SHARES
NUMBER OF BEING OFFERED NUMBER
SELLING SHAREHOLDER SHARES PERCENT HEREBY OF SHARES PERCENT
<S> <C> <C> <C> <C> <C>
PDG Environmental, Inc. 1,470,320 59.5% 1,470,320 0 0.00%
</TABLE>
PLAN OF DISTRIBUTION
The Selling Shareholder has informed the Company that the
distribution of the Shares may be effected from time to time in transactions
(i) in the over-the-counter market, or (ii) in transactions otherwise than in
the over-the-counter market. The Selling Shareholder has also informed the
Company that it does not have any arrangement at this time with any particular
underwriter, broker or dealer but expects to sell the Shares of Common Stock
through one or more brokers. Any of such transactions may be effected at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices, at negotiated prices or at fixed prices; however, the
Selling Shareholder has informed the Company that in no event will the price
per share be less than $1.00. If the Selling Shareholder effects such
transactions by selling Shares to or through underwriters, brokers, dealers or
agents, such underwriters, brokers, dealers or agents may receive compensation
in the form of discounts, concessions or commissions from the selling
Shareholder or commissions from purchasers of Shares for whom they may act as
agent, which discounts, concessions or commissions as to particular
underwriters, brokers, dealers or agents might be in excess of those customary
in the types of transactions involved. The Selling Shareholder and any
brokers, dealers or agents that participate in the distribution of the Shares
might be deemed to be underwriters, and any profit on the sale of Shares by
them and any discounts, concessions or commissions received by any such
underwriters, brokers, dealers or agents might be deemed to be underwriting
discounts and commissions under the Securities Act. The Company will not
receive any of the proceeds from the sale of any of the Shares by the Selling
Shareholder.
The Selling Shareholder has informed the Company that it desires to
liquidate its entire holdings of Common Stock upon commencement of this
offering, but there can be no assurance that such a transaction or series of
transactions can be accomplished. At the time a particular offer of Shares is
made, a Prospectus Supplement, to the extent required, will be distributed which
will set forth the aggregate amount of Shares being offered, the purchase price,
the amount of expenses of the offering and the terms of the offering, including
the name or names of any underwriters, brokers, dealers or agents, any
discounts, commissions and other items constituting compensation from the
Selling Shareholder and any discounts, commissions or concessions allowed or
reallowed or paid to dealers.
7
<PAGE> 13
Under the Exchange Act and applicable rules and regulations
promulgated thereunder, any person engaged in a distribution of any of the
Shares may not simultaneously engage in market making activities with respect
to the Shares for a period, depending upon certain circumstances, of either two
days or nine days prior to the commencement of such distribution. In addition
and without limiting the foregoing, the Seller Shareholder will be subject to
applicable provisions of the Exchange Act and the rules and regulations
promulgated thereunder, including without limitation Rules 10b-6 and 10b-7,
which provisions may limit the timing of purchases and sales of any of the
Shares by the Selling Stockholders.
Under the securities laws of certain states, the Shares may be
sold in such states only through registered or licensed brokers or dealers. In
addition, in certain states the Shares may not be sold unless the Shares have
been registered or qualify for sale in such state or an exemption from
registration or qualification is available and is complied with.
DESCRIPTION OF THE COMPANY'S CAPITAL STOCK
DESCRIPTION OF THE COMPANY'S SECURITIES
The Company has authorized for issuance 35,000,000 shares of
capital stock, of which 5,000,000 shares are preferred stock, $0.01 par value
("Preferred Stock"), and 30,000,000 shares are Common Stock. No Preferred
Stock has been issued; however, the Company reserves the right to do so at any
time, and it is anticipated that shares of a series of Preferred Stock yet to
be designated will be issued in connection with the purchase of SEI. Only
Common Stock is being registered hereby. The following is a brief description
of the Common Stock.
COMMON STOCK
The holders of Common Stock are entitled to one vote per share. Except
as otherwise provided in the Pennsylvania Business Corporation Law ("BCL"),
the Articles of Incorporation or the by-laws of the Company, any corporate
action that is to be taken by a vote of the shareholders shall be authorized
upon receiving the affirmative vote of a majority of the votes cast by
all shareholders entitled to vote thereon. Currently, the Articles of
Incorporation and the by-laws of the Company contain no "super majority" voting
requirements. However, pursuant to the provisions of the BCL the Board of
Directors may, without a vote of the shareholders, at any time, amend the
by-laws of the Company to, among other things, so provide for a "super
majority" voting requirement. The Board of Directors has no present intent to
do so. The Articles of Incorporation expressly provide that shareholders shall
not be entitled to cumulative voting with respect to the election of directors.
Any action which may be approved by a vote of the shareholders may be
accomplished by a written consent in lieu of a meeting so long as the consent
is executed by that number of shareholders who would be required to approve the
action had a meeting occurred.
The holders of Common Stock are entitled to receive dividends, whether
in cash, stock or other property, declared and paid from time to time by the
Board of Directors subject only to any preference of any holders of preferred
stock issued by the Company. The Board of Directors is not required at any time
to declare and pay any dividends. In the event of the liquidation of the
Company, the holders of Common Stock will share pro rata in any distributions
subject only to the rights of any
8
<PAGE> 14
creditors of the Company and the rights of the holders of any preferred stock
of the Company issued from time to time.
The Common Stock has no conversion provisions, no sinking fund
provisions and no redemption provisions. The holders of the Common Stock have
no preemptive rights. Once issued and paid for, the Common Stock will not be
subject to any assessment by the Company.
The by-laws of the Company call for the classification of the Board of
Directors in respect of the time for which they shall severally hold office as
follows: (1) each class shall be as nearly equal in number as possible; (2) the
term of office of at least one class shall expire in each year; and (3) with the
exception of the classes of the initial board of directors the members of each
class shall be elected for a period of three years. The initial board of
directors has been classified into three classes with: (i) Class I serving until
the meeting of the shareholders next following January 31, 1995; (ii) Class II
serving until the annual meeting of the shareholders next following January 31,
1996; and (iii) Class III serving until the annual meeting of the shareholders
next following January 31, 1997.
With the exception of the classification of directors described above
and the provisions contained in the BCL, the Company has not adopted any
provisions in its Articles of Incorporation or by-laws which the Company
believes are intended to have an anti-takeover effect. However, the Company has
elected not to opt out of the provisions of Chapter 25 of the BCL relating to,
among other things, control transactions and control-share acquisitions. In
general, those provisions, among other things, require that any person or group
of persons acting in concert that acquires voting power over 20% or more of the
voting shares of a registered corporation (as defined in Section 2502 of the
BCL) to notify all holders of record of the corporation's voting stock and the
appropriate court that a "control transaction" has occurred, and to pay, in
cash, to any shareholder who objects to the control transaction an amount equal
to the fair value of the stock held by the objecting shareholder. In addition,
a person or group of persons acting in concert that acquires voting power over
certain specified levels of the registered corporation's voting shares
(beginning with a level of 20%) must obtain the consent of the corporation's
other shareholders before being able to exercise voting rights with respect to
such shares.
RECENT DEVELOPMENTS
LITIGATION
International Surplus Lines Insurance Co. vs. PDG Environmental
Services, Inc., in the United States District Court for the Middle District of
Florida, Case No. 94-1101-CV-ORL-19. On or about November 10, 1994, the
Plaintiff, ISLIC, filed a complaint against PDGES to recover certain refunds
claimed to be owed by PDGES to ISLIC as a result of insurance advances made to
PDGES on behalf of two of ISLIC's insured customers. ISLIC claims that PDGES
was paid for its work by both ISLIC and the Florida Department of Environmental
Regulations under the EDI Program. ISLIC contends that PDGES must reimburse
ISLIC for the specific items ISLIC paid which were also paid for by the State of
Florida. However, ISLIC has never specified the items for which it has
requested reimbursement. PDGES contests the amount and the timing of such
reimbursements. ISLIC claims that, pursuant to its agreement with its two
insured, ISLIC paid PDGES $1,744,993 for clean-up costs and that PDGES
reimbursed ISLIC $412,000 for a net advance of $1,334,993. According to the
records of PDGES, ISLIC actually paid only $1,346,220, which PDGES recorded as a
current liability when it was received. Without a breakdown of costs from ISLIC
identifying which clean-up costs were paid for by ISLIC, PDGES cannot determine
the specific amount of ISLIC's claim.
9
<PAGE> 15
On December 19, 1994, PDGES filed an Answer and Counterclaims to the
Complaint in which PDGES vigorously contests the allegations in the Complaint.
The counterclaim is for an amount in excess of $2,517,215, and this amount
continues to increase. The basis of the counterclaim is that PDGES has
continued to clean up sites covered by the ISLIC insurance. The counterclaim is
based upon the legal theories of breach of contract, bad faith (insurance),
unjust enrichment, promissory estoppel and implied contract. PDGES and ISLIC
met in March 1996 to explore settlement options; however, to date the parties
have been unable to reach a settlement. Discovery with respect to the matter is
scheduled to be completed in May 1996. Motions for summary judgment were filed
on behalf of both PDGES and ISLIC on May 3, 1996, and each party has until May
29, 1996 to respond to the other party's motion. PDGES has made an additional
offer of settlement to ISLIC, but ISLIC has not yet responded. If neither
party's summary judgment motion is granted, or no settlement is reached, trial
is expected to commence on August 5, 1996.
On June 30, 1995, an action, captioned Klein v. PDG Remediation, Inc.,
et al., No. CIV-4954 (DAB), was filed in the United States District Court for
the Southern District of New York asserting federal securities law claims
against the Company, its directors and certain of its officers, the Selling
Shareholder and the underwriters of the Company's initial public offering. The
Klein action is brought as a purported class action on behalf of the named
plaintiff and all persons and entities who purchased the Company's Common Stock
from February 9, 1995, the effective date of the initial public offering,
through May 23, 1995. The plaintiff alleges that the defendants violated
Sections 11 and/or 15 of the Securities Act of 1933, as amended, and Section
12(2) of the Securities Exchange Act of 1934, as amended, by issuing or
participating in the issuance of the registration statement and prospectus which
contained material misstatements or omissions, and that the purported class
members purchased shares of Common Stock in reliance on the allegedly false and
misleading registration statement and prospectus. Specifically, plaintiff
alleges that the defendants knew or should have known that the Florida
reimbursement program in which the Company participates was operating at a
deficit and was being revised to eliminate funding of remediation activities for
lower priority sites. The plaintiff is seeking certification of the action as a
class action and rescission of the purchase of shares of Common Stock by members
of the purported class or statutory damages, as well as interest, attorneys'
fees and other costs and expenses. The Company believes that the plaintiff's
allegations are without merit or that there are meritorious defenses to the
allegation, and intends to defend the action vigorously. On September 1, 1995,
an answer was filed on behalf of the Company, its officers and directors and the
Selling Shareholder which generally denied the plaintiff's claims.
By letter dated December 5, 1995, the plaintiff requested a pre-motion
conference on a motion for class certification. By letter dated December 6,
1995, the underwriter defendants requested a pre-motion conference on a motion
to dismiss the complaint. In December 1995, the underwriter defendants filed a
notice of motion to dismiss and a memorandum of law in support of the motion;
the Company, its officers and directors and the Selling Shareholder have joined
that motion. The court has not yet acted on the motion. The parties have begun
initial discovery with respect to the action.
EDI PROGRAM
During the fiscal year ended January 31, 1996, the Company's operations
were materially adversely affected by the changes in the EDI Program because a
substantial portion of the Company's revenues have historically been generated
both directly and indirectly under the EDI Program. The Company has responded
to the financial impact of these EDI Program changes through implementation of
cost reductions, the discontinuance of its thermal treatment facility, increased
marketing efforts to
10
<PAGE> 16
actively participate under the Pre-Approval Program, and identification of
potential acquisitions to replace the revenues lost.
The Company has increased its backlog of high priority sites eligible
under the Pre-Approval Program in recent months; however, delays associated with
the Pre-Approval Program have prevented the Company from commencing work on
these high priority sites. In the first quarter of fiscal year 1997, the
Florida operations continued to generate a loss as a consequence of these delays
and the Company took further steps in the form of staff reductions and reduced
leased space to minimize costs. The Company believes that its operations will
continue to be adversely affected in the second quarter of fiscal year 1997 as a
result of these delays.
In a further effort to replace these lost revenues, the Company has
entered into a letter of intent to acquire SEI, an environmental remediation
service company which generated annual revenues of approximately $11.7 million
and an EBIT of ($47,000) in the fiscal year ended December 31, 1995, in exchange
for shares of the Company's Common and Preferred Stock. SEI's earnings reflect
the effects of a management fee of $493,000 which was paid to an affiliate of
SEI. The Company intends to provide similar services to SEI upon completion of
the purchase, which the Company believes will result in cost savings estimated
at between 65% to 80% compared to the current management fee. Although the
consummation of the transaction is subject to a number of conditions, including
the negotiation and execution of a definitive agreement and the replacement of
certain financing currently outstanding with respect to SEI, the parties expect
the transaction to close during the Company's second or third quarter of fiscal
1997.
The Florida legislature, in its recently completed session, passed a
bill which includes measures to satisfy the State of Florida's existing
obligations to fund the backlog under the EDI Program. The legislation requires
clean-ups to continue on the basis of priority rankings using the Pre-Approval
Program and also authorizes clean-up in advance of a site's priority ranking on
a limited basis to facilitate property transactions or public works project.
The Company considers this PAC provision as a potentially positive source of new
work beyond the standard priority system.
The legislation creates a non-profit public benefit corporation, known
as the Inland Protection Financing Corporation (IPFC), to issue evidences of
indebtedness to finance the backlog of unpaid reimbursement claims which the
State currently estimates at $456 million. This will enable the FDEP to
accelerate payment on unpaid reimbursement applications to the first quarter of
calendar year 1997. Under the legislation, the FDEP will develop a schedule of
anticipated payment dates effective January 1, 1997, assuming a payment rate of
$100 million per year from the State. The FDEP will then direct the IPFC to pay
applicants the present value of their applications as soon as practicable after
approval by the FDEP. The present value of an application will be based on the
date on which the FDEP anticipates the IPFC will settle the reimbursement
application and the schedule's projected date of payment, and will use 3.5% as
the annual discount rate. Until the FDEP establishes the schedule of
anticipated payment dates, the Company will not be able to determine the impact
of discounting on its operating results. However, the Company believes that, if
the legislation becomes final, it may be required to record an additional charge
to reflect the negative impact of discounting on its results of operations and
financial condition.
The effects of the acceleration by IPFC of payments from FDEP to early
1997 also include the early release of cash held in escrow to cover future
interest costs and potential disallowances and the termination of associated
interest obligations which currently are being incurred at the rate of
approximately $32,000 per month. Finally, with the backlog liability being
relieved through the IPFC, the annual allocation for new work from the FDEP will
be increased from current allocation levels, thus accelerating the Company's
ability to access its backlog of higher priority sites.
11
<PAGE> 17
Although this legislation has been approved by the legislature, the
Florida governor has yet to sign it into law. The Company anticipates that the
governor will execute the legislation by June 30, 1996, the end of Florida's
current fiscal year. If the legislation is not signed into law by the Florida
governor, the law under which the Company currently operates will remain
unchanged.
LEGAL MATTERS
Matters in connection with the legality of the shares of Common Stock
offered hereby have been passed upon by Thorp, Reed & Armstrong, Pittsburgh,
Pennsylvania.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-K for the year ended January 31, 1996, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given upon the authority of such firm as experts in
accounting and auditing.
12
<PAGE> 18
___________________________
No dealer, salesperson or other person has been
authorized to give any information or to make any
representations other than those contained in or
incorporated by reference in this Prospectus and, if
given or made, such information or representations
must not be relied upon as having been authorized by
the Company or the Selling Shareholder. This
Prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any of these
securities in any jurisdiction to any person to whom
it is unlawful to make such offer or solicitation in
such jurisdiction. The delivery of this Prospectus
at any time does not imply that the formation
contained or incorporated by reference herein is
correct as of any time subsequent to its date.
___________________________
TABLE OF CONTENTS
Available Information . . . . . . . . . . . . . . . ii
Incorporation of Certain Documents
by Reference . . . . . . . . . . . . . . . . . . ii
Summary Information . . . . . . . . . . . . . . . . 1
Risk Factors . . . . . . . . . . . . . . . . . . . 3
Dividends . . . . . . . . . . . . . . . . . . . . . 6
Use of Proceeds . . . . . . . . . . . . . . . . . . 7
Selling Shareholder . . . . . . . . . . . . . . . . 7
Plan of Distribution . . . . . . . . . . . . . . . 7
Description of the Company's
Common Stock . . . . . . . . . . . . . . . . . . 8
Recent Developments . . . . . . . . . . . . . . . . 9
Legal Matters . . . . . . . . . . . . . . . . . . . 12
Experts . . . . . . . . . . . . . . . . . . . . . . 12
___________________________
1,470,320 SHARES
PDG REMEDIATION, INC.
COMMON STOCK
_________________
PROSPECTUS
_________________
<PAGE> 19
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The expenses payable in connection with the securities being registered
(other than underwriting discounts and commissions, of which there are none) are
estimated as follows; all of such expenses will be paid by the Selling
Shareholder and not by the Company:
<TABLE>
<S> <C>
SEC Registration Fee $ 760.45
Accounting Fees and Expenses 10,000.00
Printing and Photocopying 5,000.00
Counsel Fees and Expenses 8,000.00
Miscellaneous Expenses 2,500.00
Total Expenses $26,260.45
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Company's Articles of Incorporation and By-laws contain provisions
permitted by the Pennsylvania Business Corporation Law (under which the Company
is organized) which, in general terms, provide that directors and officers will
be indemnified by the Company for all losses that may be incurred by them in
connection with any claim or legal action in which they may become involved by
reason of their service as a director or officer of the Company, if they meet
certain specified conditions. In addition, the Company's Articles of
Incorporation and By-laws contain provisions permitted by the Pennsylvania
Business Corporation Law, which limit the monetary liability of directors of the
Company for certain breaches of their fiduciary duty of care and provide for the
advancement by the Company to directors and officers of expenses incurred by
them in defending suits arising out of their service as such.
II-1
<PAGE> 20
Item 16. Index to Exhibits
3.1 Articles of Incorporation of the Company and all amendments thereto,
filed as Exhibit 3.1 to the Company's Registration Statement on Form
S-1 (No. 33-82092), effective as of February 9, 1995, is incorporated
herein by reference.
3.3 By-laws of the Company, filed as Exhibit 3.2 to the Company's
Registration Statement on Form S-1 (No. 33-82092), effective as of
February 9, 1995, is incorporated herein by reference.
5. Opinion of Thorp, Reed & Armstrong, counsel to the Company, as to the
legality of the securities being registered.
23.1 Consent of Ernst & Young LLP, independent auditors.
23.2 Consent of Thorp, Reed & Armstrong, counsel to the Company (included
in Exhibit 5).
24 Powers of Attorney of certain directors and officers and certified
copy of resolutions of the Company's Board of Directors conferring on
John M. Musacchio and Rose M. Cercone, and each of them, the authority
to sign this Registration Statement on Form S-3.
Item 17. Undertakings
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 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 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; and (iii) to include any material information with
respect to the plan of distribution not previously disclosed in the Registration
Statement or any material change in such information in the Registration
Statement.
Provided, however, that the undertaking set forth in the above paragraph
under clauses (i) and (ii) thereof shall not apply if the information required
to be included in a post-effective amendment by those clauses is contained in
periodic reports filed by the registrant pursuant to section 13 or section 15(d)
of the Securities Exchange Act of 1934.
II-2
<PAGE> 21
The undersigned registrant hereby undertakes 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.
The undersigned registrant hereby undertakes 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.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling the
registrant pursuant to the provisions set forth under Item 15 hereof, 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.
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 are 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 referenced in
the prospectus to provide such interim financial information.
II-3
<PAGE> 22
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 Pittsburgh, and the Commonwealth of Pennsylvania, on
this 28th day of May, 1996.
PDG REMEDIATION, INC.
(Registrant)
By: /s/ John M. Musacchio
-----------------------------------------
John M. Musacchio
President and Chief Operating Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in their
capacities on the dates indicated.
John M. Musacchio /s/ John M. Musacchio
President and Chief -----------------------------
Operating Officer May 28, 1996
John C. Regan Chairman of the Board
David J. D'Appolonia Director
Edgar Berkey Director
Richard V. Lee Director
Rose M. Cercone Treasurer and Chief Financial Officer
(Principal Financial and Accounting
Officer)
By: /s/ John M. Musacchio
----------------------------------
John M. Musacchio
Attorney-in-Fact
May 28, 1996
II-4
<PAGE> 1
Exhibit 5
PDG Remediation, Inc. May 28, 1996
300 Oxford Drive
Monroeville, Pennsylvania 15146
Ladies and Gentlemen:
We have acted as counsel for PDG Remediation, Inc., a Pennsylvania corporation
(the "Company"), in connection with the Company's Registration Statement on
Form S-3 (the "Registration Statement") relating to the registration under the
Securities Act of 1933, as amended, of the offering and sale of 1,470,320
shares (the "Shares") of common stock, par value $.01 per share, of the Company
("Common Stock") to be offered by PDG Environmental, Inc. (the "Selling
Shareholder") as described in the Registration Statement.
In connection with this opinion, we have examined a copy of the Registration
Statement, copies of the Company's articles of incorporation and bylaws, and
such other instruments and documents as we have deemed necessary as a basis for
the opinions hereinafter expressed. In giving such opinions, we have assumed
that all signatures on all documents examined by us are genuine, that all
documents submitted to us as originals are authentic, that all documents
submitted to us as copies are true and correct copies of the originals thereof
and that all information submitted to us was accurate and complete.
Based on the foregoing, and subject to the assumptions and limitations herein
set forth, we are of the opinion that the Shares to be sold by the Selling
Shareholder as described in the "Plan of Distribution" of the Registration
Statement are validly issued, fully paid and non-assessable.
This opinion is limited in all respects to the applicable laws of the
Commonwealth of Pennsylvania and the United States of America.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and the reference to the use of our firm name under the
caption "Legal Matters" therein.
Very truly yours,
THORP, REED & ARMSTRONG
<PAGE> 1
Exhibit 23.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 and related Prospectus of PDG Remediation,
Inc. for the registration of 1,470,320 shares of its common stock and to the
incorporation by reference therein of our report dated March 8, 1996 (except
for Note 3, as to which the date is April 25, 1996), with respect to the
consolidated financial statements and schedule of PDG Remediation, Inc.
included in its Annual Report (Form 10-K) for the year ended January 31, 1996,
filed with the Securities and Exchange Commission.
Pittsburgh, Pennsylvania ERNST & YOUNG LLP
May 28, 1996
<PAGE> 1
Exhibit 24
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each of the undersigned officers
and directors of PDG Remediation, Inc., a Pennsylvania corporation, does hereby
make, constitute and appoint JOHN M. MUSACCHIO and ROSE M. CERCONE, and each of
them, with full power and authority to act without the other, his or her true
and lawful attorneys-in-fact and agents, for him or her and in his or her name,
place and stead in any and all capacities, to sign a Registration Statement on
Form S-3 covering up to 1,470,320 shares of the Common Stock of the Corporation
proposed to be offered and sold by PDG Environmental, Inc. under the Securities
Act of 1933, as amended, and any and all amendments to such Registration
Statement, and to file such Registration Statement, and all such amendments
thereto, so signed, with all exhibits thereto, with the Securities and Exchange
Commission, hereby granting unto said attorneys-in-fact full power and
authority to do and perform any and all acts and things requisite and necessary
to be done with respect to the matters described above as fully to all intents
and purposes as he or she might or could do in person.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands and
seals this 24th day of May , 1996.
---- ------
/s/ John C. Regan /s/ John M. Musacchio
- -------------------------- ----------------------------------
John C. Regan John M. Musacchio
Chairman of the Board President, Chief Operating
Officer and Director
/s/ Rose M. Cercone
----------------------------------
Rose M. Cercone
Treasurer and Chief Financial
Officer
/s/ David J. D'Applonia
----------------------------------
David J. D'Appolonia,
Director
/s/ Edgar Berkey
----------------------------------
Edgar Berkey,
Director
/s/ Richard V. Lee
----------------------------------
Richard V. Lee,
Director
<PAGE> 2
PDG REMEDIATION, INC.
Certificate
The undersigned hereby certifies that she is the Secretary of PDG
Remediation, Inc., a Pennsylvania corporation (the "Corporation"), and that, as
such, she is authorized to execute this certificate on behalf of the
Corporation. The undersigned further certifies, as of the date hereof, that
attached hereto as Exhibit A is a true and complete copy of resolutions duly
adopted by the Board of Directors of the Corporation at a meeting held on May
3, 1996. Such resolutions have not been amended, modified or rescinded and
remain in full force and effect since the adoption thereof, to and including
the date hereof.
IN WITNESS WHEREOF, the undersigned has hereunto set her hand this
24th day of May , 1996.
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PDG Remediation, Inc.
By: /s/ Rose M. Cercone
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Name: Rose M. Cercone
Title: Secretary
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EXHIBIT A
RESOLVED, that the proper officers of the Corporation be, and they hereby are,
authorized and directed, for the purpose of registering shares of the common
stock of the Corporation owned by PDG Environmental, Inc. ("PDGE") for sale by
PDGE, to prepare, or cause to be prepared, a Registration Statement on Form S-3
and to have such Registration Statement filed with the Securities and Exchange
Commission, and to do any and all additional acts, including the execution and
delivery of any and all exhibits, amendments, instruments and other documents
that such officers may deem to be necessary to effect such filing.
