As filed with the Securities and Exchange Commission on April 17, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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MANSUR INDUSTRIES INC.
(Exact name of registrant as specified in its charter)
FLORIDA 65-0226813
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification No.)
8305 N.W. 27TH STREET
SUITE 107
MIAMI, FLORIDA 33122
(305) 593-8015
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
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PAUL I. MANSUR
CHIEF EXECUTIVE OFFICER
MANSUR INDUSTRIES INC.
SUITE 107
8305 N.W. 27TH STREET
MIAMI, FLORIDA 33122
(305) 593-8015
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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COPIES OF COMMUNICATIONS TO:
ANDREW E. BALOG, ESQ.
GREENBERG TRAURIG HOFFMAN
LIPOFF ROSEN & QUENTEL, P.A.
1221 BRICKELL AVENUE
MIAMI, FLORIDA 33131
(305) 579-0500
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement becomes effective.
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If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
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TITLE OF SHARES AMOUNT TO BE PROPOSED MAXIMUM AMOUNT OF
TO BE REGISTERED REGISTERED AGGREGATE OFFERING PRICE(3) REGISTRATION FEE
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<S> <C> <C> <C>
Common Stock, par value $0.001 per 1,000,012 Shares $19,625,236 $5,789
share, issuable upon conversion of
certain 8-1/4% subordinated
convertible notes(1)
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Common Stock, par value $0.001 per 129,750 Shares $2,546,344 $751
share, underlying certain
warrants(2)
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</TABLE>
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(1) Plus such additional indeterminate number of shares as may become
issuable upon conversion of the notes as a result of in-kind interest
payments and/or adjustments to the conversion price.
(2) Plus such additional indeterminate number of shares as may become
issuable upon exercise of the warrants as a result of anti-dilution
provisions.
(3) Estimated solely for the purpose of calculating the registration fee,
and pursuant to Rule 457(c), based on the average of the ask and bid
price for the Common Stock reported by the Nasdaq SmallCap Market on
April 14, 1998.
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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.
<PAGE>
PROSPECTUS
APRIL 17, 1998
SUBJECT TO COMPLETION
MANSUR INDUSTRIES INC.
1,129,762 SHARES
($0.001 PAR VALUE)
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This Prospectus relates to (i) 1,000,012 shares of common stock, par
value $0.001 per share (the "Common Stock"), of Mansur Industries Inc. (the
"Company") which are initially issuable upon conversion of $17,000,000 aggregate
principal amount of 8 1/4% Subordinated Convertible Notes Due 2003 (the "Notes")
of the Company having a conversion price of $17.00 per share plus such
additional indeterminate number of shares of Common Stock as may become issuable
upon conversion of the Notes as a result of in-kind interest payments and/or
adjustments to the conversion price (the "Note Shares"), and (ii) 129,750 shares
of Common Stock which are initially issuable upon the exercise of warrants (the
"Warrants"), of which 100,000 Warrants have an exercise price of $9.00 per share
while the balance thereof have an exercise price of $19.50 per share, plus such
additional indeterminate number of shares of Common Stock as may become issuable
upon exercise of the Warrants as a result of anti-dilution provisions (the
"Warrant Shares", and together with the Note Shares, the "Shares"). The Shares
are being registered under the Securities Act of 1933, as amended (the
"Securities Act"), to permit public secondary trading, upon conversion of the
Notes and upon exercise of the Warrants, on behalf of and for the account of the
holders thereof (the "Selling Shareholders") from time to time after the date of
this Prospectus. The Company will not receive any proceeds from any such sales.
Certain of the Selling Shareholders acquired the Notes and 29,750 of the
Warrants from the Company in February 1998 in connection with a private
placement of the Notes. A certain Selling Shareholder acquired 100,000 of the
Warrants from the Company in October 1996 in connection with the Company's
initial public offering of its Common Stock. See "Selling Shareholders".
The Shares may be sold or distributed, from time to time, by or for the
account of the Selling Shareholders, or by their pledgees, donees, distributees,
transferees or other successors in interest, through underwriters or dealers,
through brokers or other agents, on Nasdaq (as defined below) or other
over-the-counter markets or on one or more exchanges or otherwise or, in special
offerings, exchange distributions or secondary distributions pursuant to and in
accordance with rules of such over-the-counter markets or exchanges, in
negotiated transactions or otherwise, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Shareholders and any underwriters, brokers, dealers or
agents executing sale orders on behalf of the Selling Shareholders may be deemed
to be "underwriters" as defined in the Securities Act, in which event profits
realized by the Selling Shareholders and any commissions paid to any
underwriters, brokers, dealers or agents may be deemed to be underwriting
commissions under the Securities Act. Furthermore, if any brokers or dealers
purchase any Shares as principals, any profits realized by such persons on the
resale of the Shares may be deemed to be underwriting discounts or commissions
under the Securities Act. If any Selling Shareholder sells his, her or its
Shares, or options thereon, pursuant to this Prospectus at a fixed price or at a
negotiated price which is, in either case, other than the prevailing market
price or in a block transaction to a purchaser who resells, or if any Selling
Shareholder pays compensation to a broker or dealer that is other than the usual
and customary discounts, concessions or commissions, or if there are any
arrangements either individually or in the aggregate that would constitute a
distribution of the Shares, a supplement to this Prospectus may need to be filed
or a post-effective amendment to the Registration Statement of which this
Prospectus forms a part, may need to be filed and declared effective by the
Securities and Exchange Commission ("SEC"), as the case may be, before such
Selling Shareholder could make such sale, pay such compensation or make such a
distribution. See "Plan of Distribution". The Company and the Selling
Shareholders have agreed to indemnify one another and certain other persons,
including underwriters who may be selected by the Selling Shareholders, against
liabilities under the Securities Act. See "Selling Shareholders" and "Plan of
Distribution".
The Company will bear all expenses incident to the registration, offer
and sale of the Shares other than underwriting and brokerage commissions,
discounts, fees and certain counsel fees incurred by such Selling Shareholders.
The Common Stock is traded on the Nasdaq SmallCap Market ("Nasdaq")
under the symbol "MANS". On April 14, 1998, the average of the last reported bid
and ask price of the Common Stock as reported by Nasdaq was $19.63 per share.
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SEE "RISK FACTORS" BEGINNING ON PAGE 6 FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE SHARES
OFFERED HEREBY.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS APRIL __, 1998
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<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules
and regulations promulgated thereunder, and in accordance therewith files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission") under File No. 000-21325.
Such reports, proxy and information statements and other information filed by
the Company can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington, D.C. 20549, and at the Commission's regional offices at 500
West Madison Street, Suite 1400, Chicago, Illinois 60606 and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of this material can also
be obtained at prescribed rates from the Public Reference Section of the
Commission at its principal office at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission also maintains a World Wide Web site at
http://www.sec.gov that contains reports, proxy and information statements and
other information regarding registrants, such as the Company, that file
electronically with the Commission. The Common Stock of the Company is traded on
Nasdaq. Information concerning the Company can also be inspected at the offices
of the Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement on
Form S-3 (including all amendments and supplements thereto, the "Registration
Statement") under the Securities Act with respect to the Shares offered hereby.
This Prospectus, which forms a part of the Registration Statement, does not
contain all of the information set forth in the Registration Statement and the
exhibits and schedules thereto, certain parts of which have been omitted in
accordance with the rules and regulations of the Commission. Statements
contained herein concerning the provisions of certain documents are not
necessarily complete and, in each instance, reference is made to the copy of the
document filed as an exhibit to the Registration Statement or otherwise filed
with the Commission. Each such statement is qualified in its entirety by such
reference. This Registration Statement and the exhibits and schedules thereto
can be inspected at the public reference facilities and regional offices of the
Commission and the offices of Nasdaq referred to above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company under the Exchange Act
with the Commission are incorporated in and made a part of this Prospectus by
reference:
(i) The Company's Annual Report on Form 10-KSB for the
fiscal year ended December 31, 1997; and
(ii) The description of the Common Stock contained in the
Company's Registration Statement on Form 8-A dated
August 26, 1996.
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 made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document or information incorporated or
deemed to be incorporated herein by reference shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any subsequently filed document that also is, or is
deemed to be, incorporated herein by reference, modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
The making of a modifying or superseding statement shall not be deemed an
admission that the modified or superseded statement, when made, constituted a
misrepresentation, an untrue statement of a material fact or an omission to
state a material fact that is required to be stated or that is necessary to make
a statement not misleading in light of the circumstances in which is was made.
The Company hereby undertakes to provide, without charge, to each
person, including any beneficial owner, to whom a copy of this Prospectus is
delivered, upon the written or oral request of such person, a copy of any and
all of the documents or information referred to above that has been or may be
incorporated by reference in this Prospectus (other than exhibits to such
documents unless such exhibits are specifically incorporated by reference into
the information that this Prospectus incorporates). Requests for such copies
should be directed to the Company's principal executive offices at Mansur
Industries Inc., 8305 N.W. 27th Street, Suite 107, Miami, Florida 33122, Attn:
Chief Financial Officer, telephone (305) 593-8015.
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<PAGE>
THE COMPANY
Mansur Industries Inc., together with its wholly owned subsidiary
SystemOne/registered mark/ Technologies Inc. (collectively, the "Company"),
designs, manufactures and sells a full line of patented, self-contained,
recycling industrial parts washers for use in the automotive, aviation, marine
and general industrial repair markets. The Company's product line includes a
variety of self-contained recycling industrial cleaning and washing equipment,
all of which incorporate proprietary resource recovery and waste minimization
technologies to distill contaminated solvent and yield pure solvent and a
by-product comparable to used motor oil. The Company has been awarded eight
patents for its products. The Company's currently available products include a
general parts washer, marketed as SystemOne/registered mark/ (the
"SystemOne/registered mark/ Washer"), a mobile telescoping mini parts washer
designed to contain airborne asbestos particles during automotive brake repair
operations, marketed as the SystemOne/registered mark/ Brake Washer (the
"SystemOne/registered mark/ Brake Washer"), and a power spray washer designed to
accommodate parts or units that are too large for the SystemOne/registered mark/
Washer, marketed as the Multiprocess Power Spray Washer (the "Spray Washer").
While the Company intends to exploit all of the foregoing products, and to
continue research and development of new products, it has initially focused its
attention on the manufacturing, marketing and sale of the SystemOne/registered
mark/ Washer. During the year ended December 31, 1997, the Company sold 2,986
SystemOne/registered mark/ Washers, an increase of 2,699 units compared to 1996,
and recorded revenues of approximately $7.2 million, an increase of
approximately $6.5 million compared to 1996. The Company commenced the sale of
SystemOne/registered mark/ Washers in July 1996.
Based on financial and trade journal reports, the Company believes that
domestic expenditures in connection with industrial parts cleaning machines
exceed $1.0 billion annually, including costs of equipment, personnel,
materials, storage and transportation. Industrial parts cleaning machines
typically remove lubrication oils from tools and parts through the use of
mineral spirits solvent that becomes progressively more contaminated and less
effective in the cleaning process. Eventually, the solvent becomes saturated
with oil, sludge and other contaminants, and is frequently classified as a
hazardous waste under federal and state regulations. Under the most common
current practice, the contaminated solvent must be stored until pick-up, when
pure solvent is delivered and the contaminated solvent is transported to
regional refining facilities. This delivery and off-site recycling program is
typically scheduled on four to sixteen week cycles. In contrast, the
distillation process used in the Company's SystemOne/registered mark/ Washer
removes all the contaminants from the solvent within the cleaning unit itself,
minimizing the volume of waste by-product and providing pure solvent to the
customer on demand, eliminating the need for the costly and potentially
dangerous storage and transportation of hazardous waste. Moreover, the small
amount of waste by-product yielded in the distillation process used in the
SystemOne/registered mark/ Washer can typically be recycled or disposed of
together with the customer's used motor oil, which is generally not classified
as hazardous waste. Industrial parts cleaning machines are used by automotive,
aviation and maritime service, repair and rebuilding facilities, gas stations,
transmission shops, parts remanufacturers, machine shops, and general
manufacturing operations of every size and category requiring parts cleaning.
Based on these factors, the Company believes that its product line presents an
attractive and economical alternative to users of parts cleaning machines.
The Company believes that the response of users to its products has
been favorable because the products increase worker productivity as a result of
enhanced cleaning solution utilization, facilitate efficient and economical
compliance with current environmental regulations, minimize waste disposal
requirements, and reduce insurance costs. Purchasers of the Company's
SystemOne/registered mark/ Washer include Waste Management, Florida Detroit
Diesel, Greenwich Air Services, Miami-Dade, Orange, Broward, and Palm Beach
Counties, Florida, Cummins Southeast Power, Houston Lighting & Power, Republic
Industries, South Florida Caterpillar dealers, and a number of automobile
dealerships.
In September 1996, the Company consummated an initial public offering
of 1,100,000 shares of Common Stock (the "IPO"). The Common Stock is traded on
Nasdaq under the symbol "MANS". The Company's principal executive offices are
located at 8305 Northwest 27th Street, Suite 107, Miami, Florida 33122, and its
telephone number is (305) 593-8015.
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<PAGE>
RISK FACTORS
AN INVESTMENT IN THE SHARES BEING OFFERED HEREBY INVOLVES A SIGNIFICANT
DEGREE OF RISK. IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS
PROSPECTUS, PROSPECTIVE PURCHASERS OF THE SHARES SHOULD CONSIDER CAREFULLY THE
FOLLOWING FACTORS WHICH MAY ADVERSELY AFFECT THE BUSINESS, FINANCIAL CONDITION,
RESULTS OF OPERATIONS AND FUTURE PROSPECTS OF THE COMPANY, AND THE PREVAILING
MARKET PRICE AND PERFORMANCE OF THE COMPANY'S COMMON STOCK. CERTAIN STATEMENTS
AND INFORMATION CONTAINED HEREIN CONSTITUTE "FORWARD-LOOKING STATEMENTS" WITHIN
THE MEANING OF SECTION 27A OF THE SECURITIES ACT AND SECTION 21E OF THE EXCHANGE
ACT. SUCH FORWARD-LOOKING STATEMENTS INVOLVE KNOWN AND UNKNOWN RISKS,
UNCERTAINTIES AND OTHER FACTORS WHICH MAY CAUSE THE ACTUAL RESULTS, PERFORMANCE
OR ACHIEVEMENTS OF THE COMPANY TO BE MATERIALLY DIFFERENT FROM ANY FUTURE
RESULTS, PERFORMANCE, OR ACHIEVEMENTS EXPRESSED OR IMPLIED BY SUCH
FORWARD-LOOKING STATEMENTS. SUCH FACTORS INCLUDE, AMONG OTHER THINGS:
LIMITED OPERATING HISTORY; ANTICIPATION OF CONTINUING LOSSES;
ACCUMULATED DEFICIT. The Company was incorporated in November 1990 and, as a
development stage company, devoted substantially all of its resources to
research and development programs related to its full line of self-contained,
recycling industrial parts washers until June 1996. As a result of such efforts,
as of December 31, 1997, the Company had an accumulated deficit of $5,918,790
The Company commenced the marketing and sale of the SystemOne/registered mark/
Washer in July 1996 and has recently commenced the direct marketing and sale of
the SystemOne/registered mark/ Brake Washer and Spray Washer, and accordingly,
has a limited operating history upon which an evaluation of the Company's
performance and prospects can be made. The Company's prospects must be
considered in light of the numerous risks, expenses, delays, problems and
difficulties frequently encountered in the growth stages of a new business in an
industry characterized by vigorous competition and regulatory requirements.
Since its inception, the Company has incurred significant losses, including
losses of $1,188,924, $2,498,652 and $1,319,145 for the years ended December 31,
1997, 1996 and 1995, respectively. Inasmuch as the Company's operating expenses
have increased and can be expected to increase significantly in connection with
the Company's rapid expansion, development of a direct marketing and
distribution network for its SystemOne/registered mark/ product line, further
development of manufacturing capabilities, establishment of additional regional
technological support and service centers and a service fleet, development of
new products through the application of the Company's core technologies and the
purchase of raw materials, the Company anticipates that negative operating cash
flow will continue until such time, if ever, as the Company is able to generate
sufficient revenues to offset its operating costs and the costs of continued
expansion and development. The Company has generated only limited revenue to
date and its ability to generate significant revenue is subject to substantial
uncertainty. There can be no assurance that the Company will be able to generate
significant revenues to offset its increasing operating expenses, including
those relating to development of a direct marketing and distribution network,
and the failure to do so would have a material adverse effect on the Company's
business, results of operations and financial condition. Further, in view of the
foregoing and the Company's limited operating history, the Company believes that
period-to-period comparisons of its financial results are not necessarily
meaningful and should not be relied upon as an indication of future performance.
UNCERTAINTY OF DEVELOPING A DIRECT MARKETING AND DISTRIBUTION NETWORK.
In November 1997, the Company announced plans to develop a direct marketing and
distribution network for its SystemOne/registered mark/ Washer and its other
product lines. Since commencing sales of its SystemOne/registered mark/ Washer
in July 1996, substantially all of the Company's sales have been made to or
through First Recovery, an affiliate of Ashland, Inc., which has acted as the
Company's exclusive distributor in designated domestic metropolitan markets
since August 1996. The Company believes that developing a direct marketing and
distribution network will enable it to introduce its SystemOne/registered mark/
products in additional geographic areas, gain wider market acceptance, reduce
its dependence on First Recovery and enhance long-term profitability. During the
fourth quarter of 1997, the Company experienced a material reduction in revenues
and unit sales and a material increase in operating expenses primarily as a
result of the development of direct marketing and distribution capabilities. The
Company anticipates that it will continue to experience reductions in revenue
and increases in operating expenses during the pendancy of developing a direct
marketing and distribution network. No assurance can be given, however, that the
Company will develop a direct marketing and distribution network, or if
developed, that it will be successful. See "--Intense Competition."
DEPENDENCE ON FIRST RECOVERY PURCHASE AND DISTRIBUTION AGREEMENT. To
date, substantially all of the Company's sales of SystemOne/registered mark/
Washers have been made to or through First Recovery pursuant to a Commission
Sales Representative Agreement entered into January, 1997 (the "Sales and
Marketing Agreement"). In December 1997, the Company entered into a Purchase and
Distribution Agreement with First Recovery (the "First Recovery Agreement"),
which agreement superseded the Sales and Marketing Agreement between the parties
and extended the parties exclusive
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distribution relationship in a limited territory through June 1998. The First
Recovery Agreement is terminable by either party prior to expiration for cause.
Although the Company intends to continue to evaluate and discuss a long term
distribution relationship or other strategic alliance with First Recovery, there
is no assurance that the Company and First Recovery will establish such a
relationship or that First Recovery will continue to purchase
SystemOne/registered mark/ Washers at current levels or prices. Failure to
establish a long term term relationship with First Recovery, termination of the
First Recovery Agreement prior to its expiration, or failure by First Recovery
to perform under the First Recovery Agreement could have a material adverse
effect on the Company's business, financial condition and results of operations.
UNCERTAINTY OF CONTINUING MARKET ACCEPTANCE OF THE SYSTEMONE(R) WASHER;
MARKET ACCEPTANCE OF THE COMPANY'S OTHER PRODUCTS. The SystemOne/registered
mark/ Washer has been marketed in limited geographic areas and for a limited
period of time and, thus, has achieved only limited market acceptance. During
1997, the Company sold 2,986 SystemOne/registered mark/ Washers, substantially
all of which were sold to First Recovery. The SystemOne/registered mark/ Washers
as well as the Company's other products incorporate proprietary waste
minimization technology that fundamentally changes and departs from the
customary methods presently employed by potential customers to clean parts and
tools and utilitze solvent. As is typically the case with an emerging business,
demand and market acceptance for newly introduced products and services are
subject to a high level of uncertainty. The Company's success will be largely
dependent on the Company's ability to position its existing products as a
preferred method for cleaning parts and tools. The Company believes that
substantially all of its target customers currently utilize competitive parts
cleaning equipment. Potential customers may elect to utilize devices or methods
with which they are more familiar or which they believe to be more efficient or
have other advantages over the Company's products. Accordingly, achieving market
acceptance for the Company's products will require substantial marketing efforts
and significant expenditures to educate potential users of the products of the
distinctive characteristics and benefits of the Company's products, including
their environmental and cost savings advantages. Although the Company's
SystemOne/registered mark/ Washer has, to a limited extent, received market
acceptance, there can be no assurance that the Company's efforts will result in
significant continued and expanding market acceptance for the
SystemOne/registered mark/ Washer or other products of the Company or that the
Company will be able to position its products as a preferred method for cleaning
parts. The Company's business, financial condition and results of operations
will be materially adversely affected if the Company's SystemOne/registered
mark/ Washer does not achieve greater market acceptance and/or its other
products do not gain market acceptance. In addition, there can be no assurance
that products or technologies developed by others will not render the Company's
products or technologies noncompetitive or obsolete. See "--Intense
Competition."
INTENSE COMPETITION. The parts cleaning industry is characterized by
intense competition. While numerous companies provide parts cleaning equipment
and services, the industry has been dominated by Safety-Kleen, Inc.
("Safety-Kleen"), substantially all of whose shares were recently acquired by
Laidlaw Environmental Services, Inc., a supplier of hazardous and industrial
waste management service to industry and government across North America.
Although the Company believes that none of its competitors offer a product with
the same features as the Company's products, many customers may view the
products as functionally equivalent, and there can be no assurance that
additional functionally equivalent products will not become available in the
near future. In addition, there are numerous companies involved in the waste
management industry, including waste hauling companies and companies engaged in
waste separation, recovery and recycling, which may have the expertise and
resources that would encourage them to attempt to develop and market products
which would compete with the Company's products and technology or render them
less competitive or obsolete . Safety-Kleen, as well as most of the companies
marketing such waste disposal services or products or with the potential to do
so have substantially greater financial and other resources than the Company,
and have established reputations relating to product design, development,
marketing and support. There can be no assurance that the Company's financial
performance and prospects will not be adversely affected if any competitor of
the Company, including Safety-Kleen, materially lowers the price of its parts
washers and/or functionally equivalent products.
RISKS ASSOCIATED WITH RAPID EXPANSION. The Company has rapidly and
significantly expanded its operations and anticipates that significant expansion
of its operations will continue to be required in order to address potential
market opportunities. In connection with developing a marketing and distribution
network the Company has and expects to add additional personnel in the near
future. Such growth has placed, and further growth will continue to place an
increased demand on the Company's management and its operational, manufacturing
and financial resources. To manage its growth, the Company must implement,
improve and effectively utilize its operational, management, manufacturing,
marketing and financial resources. In addition, it may become necessary for the
Company to increase its manufacturing capacity on short notice. There can be no
assurance that the Company will be able to effectively manage the expansion of
its operations or that the Company's systems or procedures or controls will be
adequate to support the Company's growth. Any failure of
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management to effectively manage the Company's growth would have a material
adverse effect on the Company's business, financial condition and results of
operations.
LIMITED MANUFACTURING CAPABILITIES; SINGLE FACILITY . The Company has
limited experience in the manufacture of products. Although the Company believes
that following the installation of manufacturing machinery and equipment in its
new manufacturing facility it will have the capacity to manufacture
approximately 25,000 SystemOne/registered mark/ Washers annually, the Company
has only limited experience in the manufacture of commercial quantities of
SystemOne/registered mark/ Washers. In addition, other than the
SystemOne/registered mark/ Washer, the Company has not manufactured any other
product in commercial quantities. Production of SystemOne/registered mark/
Washers and other products in commercial quantities may create technical
challenges for the Company. No assurance can be given that manufacturing or
quality control problems will not arise as the Company attempts to manufacture
large quantities of several products at one time or that additional facilities
will not be required in the future. In addition, the Company only has a single
manufacturing facility located in Miami, Florida. All of the Company's
administrative, manufacturing and research and development operations take place
at this facility. Any catastrophe, such as a fire, flood or hurricane that
renders the facility substantially unusable for an extended period of time would
have a material adverse affect on the Company's business, financial condition
and results of operations.
POSSIBLE NEED FOR ADDITIONAL FINANCING. The Company's capital
requirements have been and will continue to be significant. In February, 1998,
the Company consummated the private placement of the Notes resulting in net
proceeds to the Company of approximately $15.6 million. In September 1996, the
Company consummated the IPO resulting in net proceeds to the Company of
approximately $6.0 million. The proceeds from these offerings have been and will
continue to be used primarily for, among other things, the development of a
direct marketing and distribution network, additional manufacturing capacity,
marketing, research and development activities, establishing additional support
and service centers, and for working capital and general corporate purposes. The
Company anticipates, based on currently proposed plans and assumptions relating
to its operations (including the anticipated costs associated with, and
timetable for, continued expansion, including the development of a direct
marketing and distribution network), that the proceeds from these offerings,
together with cash flow from operations, will be sufficient to satisfy its
contemplated cash requirements for at least 12 months following the date of this
Prospectus. In the event that the Company's plans change, its assumptions change
or prove to be inaccurate or if the proceeds from these offerings or cash flow
otherwise prove to be insufficient to fund the Company's growth and development
(due to unanticipated expenses, delays, problems, difficulties or otherwise),
the Company could restructure its operations to minimize cash expenditures
and/or seek to obtain additional financing in order to fund operations. Other
than a factoring arrangement with a third party, the Company has no current
arrangements with respect to, or sources of, additional financing and there can
be no assurance that any additional financing will be available to the Company
on acceptable terms, or at all. Any future financings may involve the issuance
of additional equity or convertible debt securities which may cause dilution to
the Company's then existing shareholders. If adequate funds are not available
from additional sources of financing, the Company's business would be materially
adversely affected.
DEPENDENCE ON THE ADOPTION OF FAVORABLE ENVIRONMENTAL LEGISLATION. In
recent years, government authorities have adopted extensive regulations
regulating the storage, handling, shipment, recycling and/or disposal of
hazardous waste, including contaminated solvent used in industrial parts
washers. Failure by government authorities to continue to implement such
legislation or significant relaxation of such requirements or enforcement
thereof could have a material adverse effect on the Company's business and
prospects. While the Company believes that the utilization of its products as
intended does not constitute the generation, treatment or disposal of hazardous
waste and that its products yield pure solvent and a residue that is not
classified as hazardous waste, there can be no assurance that environmental
agencies will continue to reach the same conclusion. If the utilization of the
Company's products constitutes the generation, treatment or disposal of
hazardous waste, if the residue is classified as hazardous waste, or if used
motor oil itself is classified as hazardous waste, the Company will lose a
significant competitive advantage. The Company believes that attempts have been
made and are continuing to have used motor oil classified as a hazardous waste.
See "--Potential Warranty Expense and Product Liability Claims."
DEPENDENCE ON THIRD PARTIES FOR COMPONENTS AND RAW MATERIALS. The
SystemOne/registered mark/ Washer is an assembly of raw materials and
components, all of which the Company believes are readily obtainable. The
Company does not believe that it is dependent upon any of its current suppliers
to obtain raw materials and components necessary to assemble and manufacture
SystemOne/registered mark/ Washers. However, because the Company does not
maintain extensive inventories of products, if the Company were unable to obtain
adequate raw materials and components, the Company would be unable to meet
-8-
<PAGE>
purchase orders on a timely basis which would have an adverse effect on the
Company's financial condition and results of operations. Moreover, the Company
is substantially dependent on the ability of approximately 40 component and raw
material suppliers to, among other things, satisfy performance and quality
specifications and dedicate sufficient production capacity for components and
raw materials within scheduled delivery times. The inability of the Company to
obtain quality components and raw materials would also have an adverse effect on
the Company's business and prospects.
PATENTS, TRADEMARKS AND PROPRIETARY INFORMATION. The Company holds
eight United States patents and has three United States patents pending with
respect to the Company's products. The Company has applied for international
patents in Canada, Mexico, Europe and Japan and anticipates that it will apply
for additional patents as deemed appropriate. The Company believes that patent
protection is important to its business and that it could be required to expend
significant funds in connection with enforcing or defending its patent rights.
There can be no assurance as to the breadth or degree of protection that
existing or future patents, if any, may afford the Company, that any unissued
patent applications will result in issued patents or that patents will not be
circumvented or invalidated. It is possible that the Company's existing patent
rights may not be valid although the Company believes that neither its products
nor processes infringe on patents or violate proprietary rights of others. It is
possible that infringement of existing or future patents or proprietary rights
of others may occur. In the event that the Company's products or processes
infringe patents or proprietary rights of others, the Company may be required to
modify the design of its products or obtain licenses. There can be no assurance
that the Company will be able to do so in a timely manner, upon acceptable terms
and conditions or at all. Failure to do any of the foregoing could have a
material adverse effect on the Company. In addition, there can be no assurance
that the Company will have the financial or other resources necessary to enforce
or defend a patent infringement, proprietary rights violation action or alleged
infringement or violation action. If the Company's products or processes
infringe patents or proprietary rights of others, the Company could, under
certain circumstances, become the subject of an immediate injunction and be
liable for damages, which could have a material adverse effect on the Company's
business, financial condition and results of operations.
The Company also relies on trade secrets and proprietary know-how and
employs various methods to protect the concepts, ideas and documentation of its
proprietary information. However, such methods may not afford complete
protection and there can be no assurance that others will not independently
develop such know-how or obtain access to the Company's know-how, concepts,
ideas and documentation. Although the Company has and expects to have
confidentiality agreements with its employees, suppliers and appropriate
vendors, there can be no assurance that such agreements will adequately protect
the Company's trade secrets. Since the Company believes that its proprietary
information is important to its business, failure to protect such information
could have a material adverse effect on the Company's business, financial
condition and results of operations.
POTENTIAL WARRANTY EXPENSE AND PRODUCT LIABILITY CLAIMS. The Company
warrants the SystemOne/registered mark/ Washer and its other products to be free
of material defects for periods of up to 60 months. In addition, the Company
warrants to users that if the System One/registered mark/ Washer is properly
used in accordance with the accompanying operator manual, it will not generate
hazardous waste under current interpretations of applicable federal and state
regulations. Accordingly, the Company could incur significant warranty expenses
as a result of defects in its products or changes in applicable regulations.
Since the Company only commenced its principal operations in July 1996, the
reserve account it established for warranty expense was based on estimates made
without the benefit of an analysis of historical performance. Actual warranty
expenses could exceed the amounts which were established as reserves. The
Company may also be exposed to potential product liability claims by its
customers and users of its products. The Company maintains product liability
insurance coverage of $6,000,000 in the aggregate and $6,000,000 per occurrence.
The Company believes such insurance provides adequate coverage for the types of
products CURRENTLY marketed by the Company. There can be no assurance, however,
that such insurance will be sufficient to cover potential claims or that an
adequate level of coverage will be available in the future at a reasonable cost.
An uninsured or partially insured successful claim against the Company could
have a material adverse effect on the Company's business, financial condition
and results of operations.
DEPENDENCE ON KEY PERSONNEL. The Company's future success depends, in
significant part, upon the continued service of its senior management and key
personnel, including Pierre Mansur, its Chairman of the Board and President and
the inventor of its products, and Paul Mansur, its Chief Executive Officer. The
Company maintains $1,000,000 of key man life insurance on each of Pierre Mansur
and Paul Mansur. The Company is the sole beneficiary of these policies. However,
the loss of the services of either of the Mansurs or one or more of the
Company's other executive officers or key employees (whether such loss is
through resignation or other causes) could have a material adverse effect on the
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<PAGE>
Company's business and future prospects and the prevailing market price of the
Company's Common Stock. The Company's future success is also dependent upon its
continuing ability to attract and retain additional qualified marketing,
technical and managerial personnel. There can be no assurance that the Company
will be able to attract or retain a sufficient number of highly qualified
employees in the future. If the Company is unable to attract and retain
personnel in key positions, the Company's business, results of operations and
financial condition could be materially adversely affected.
CONTROL BY MANAGEMENT. After consummation of this Offering, Pierre
Mansur, the Company's Chairman of the Board and President, will beneficially own
approximately 35% of the Company's outstanding Common Stock. Accordingly, Mr.
Mansur may be in a position to effectively control of all matters requiring
shareholder approval, including the election of all of the directors of the
Company and the approval of significant corporate transactions.
DIVIDENDS. The Company has never declared or paid any cash dividends on
its Common Stock. Under the terms of the Notes, the Company may not declare or
pay any dividends or make any other distributions, except dividends or
distributions payable in equity securities. Notwithstanding the foregoing
restrictions, the Company does not anticipate paying any cash dividends in the
foreseeable future, and currently intends to retain future earnings, if any, to
fund the continued development and expansion of its business.
YEAR 2000. The Year 2000 problem is the result of computer programs
being written using two digits rather than four to define the applicable year.
In 1997, the Company developed a plan to address the Year 2000 issue and intends
to begin upgrading its computer systems to be Year 2000 compliant. The plan
provides for the upgrade efforts to be completed by the end of 1998. Management
does not expect the financial impact of upgrading the Company's computer systems
to have a material adverse effect on the Company's business, financial condition
or results of operations.
NO ASSURANCE OF THE CONTINUED PERFORMANCE OF THE COMMON STOCK;
SIGNIFICANT PRICE AND VOLUME FLUCTUATIONS OF THE STOCK MARKET. Since the
consummation of the IPO, the price of the Company's Common Stock has increased
substantially. The average of the last reported bid and ask price closing sales
price of the Common Stock as reported by Nasdaq on April 14, 1998 was $19.63 per
share. No assurance can be given that the price of the Common Stock will remain
at its current level or increase. Factors such as the Company's ability to
develop a direct marketing and distribution network, fluctuations in the
Company's operating results, evidence of the efficacy of additional products of
the Company or its competitors, announcements of technological innovations or
new products by the Company or its competitors, changes in governmental
regulation, developments in patent or other proprietary rights of the Company or
its competitors, including litigation, and changes in general market conditions
could have a significant impact on the future price of the Common Stock.
Moreover, the stock market has experienced significant price and volume
fluctuations that are often unrelated to the operating performance of particular
companies.
EFFECT OF ANTI-TAKEOVER LEGISLATION; POSSIBLE ADVERSE EFFECT OF
ISSUANCE OF PREFERRED STOCK. The State of Florida has enacted legislation that
may deter or frustrate takeovers of Florida corporations. The Florida Control
Share Act generally provides that shares acquired in excess of certain specified
thresholds will not possess any voting rights unless such voting rights are
approved by a majority vote of a corporation's disinterested shareholders. The
Florida Affiliated Transactions Act generally requires supermajority approval by
disinterested directors or shareholders of certain specified transactions
between a public corporation and holders of more than 10% of the outstanding
voting shares of the corporation (or their affiliates). The Company's Amended
and Restated Articles of Incorporation authorize the issuance of up to 1,500,000
shares of "blank check" Preferred Stock ("Preferred Stock") with such
designations, rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors is empowered,
without shareholder approval, to issue Preferred Stock with dividend,
liquidation, conversion, voting or other rights that could adversely affect the
voting power or other rights of the holders of the Common Stock. The issuance of
any series of Preferred Stock having rights superior to those of the Common
Stock may result in a decrease in the value or market price of the Common Stock.
Holders of Preferred Stock to be issued in the future may have the right to
receive dividends and certain preferences in liquidation and conversion rights.
The issuance of such Preferred Stock could make the possible takeover of the
Company or the removal of management of the Company more difficult, discourage
hostile bids for control of the Company in which shareholders may receive
premiums for their Common Stock and adversely affect the voting and other rights
of the holders of the Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE. Upon the issuance of the Note Shares
and the Warrants Shares the Company anticipates that it will have 5,731,071
shares of Common Stock outstanding. Of such shares, 3,617,226 shares, including
those sold pursuant to this offering will be freely tradable without restriction
or further registration under the Securities Act, unless held by an "affiliate"
of the Company. The remaining 2,113,845 shares of Common Stock are deemed to be
"restricted securities" within the meaning of Rule 144 ("Rule 144") under the
Securities Act, and may not be publicly resold, except in compliance with the
registration requirements of the Securities Act or pursuant to an exemption from
registration, including that provided by Rule 144. No prediction can be made as
to the effect, if any, that sales of
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<PAGE>
shares of Common Stock or the availability of such shares for sale will have on
the market prices prevailing from time to time. Nevertheless, the possibility
that substantial amounts of Common Stock may be sold in the public market may
adversely affect prevailing market prices for the Common Stock and could impair
the Company's ability to raise capital through the sale of its equity securities
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares being offered by the Selling Shareholders hereunder. All expenses related
to the registration of the Shares will be borne by the Company. See "Plan of
Distribution."
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<PAGE>
SELLING SHAREHOLDERS
The Note Shares are being registered pursuant to the Subordinated
Convertible Note Purchase Agreement dated as of February 23, 1998, between the
Company and the investor signatories which provides, among other things, that
the Company file the Registration Statement with regard to the Note Shares
within 45 days of the latest date of original issuance of the Notes and use its
best efforts to maintain the effectiveness of such Registration Statement until
the earlier of (i) two years from the latest date of original issuance of the
Notes (provided that during such period the Registration Statement's
effectiveness may be suspended under certain circumstances, and if so suspended
the Registration Statement's effectiveness must be increased by the number of
days that its effectiveness was suspended), (ii) the sale or distribution
pursuant to the Registration Statement of all the Note Shares registered
thereunder, or (iii) the date on which such Note Shares may be sold under Rule
144(k) under the Securities Act or any successor provision. The Warrant Shares
are being registered primarily pursuant to the terms of the Warrants which
provide the holders of the Warrants the right to have the Warrant Shares
included in registration statements filed by the Company, subject to certain
terms and conditions set forth in the Warrants. Although none of the Selling
Shareholders has advised the Company that it currently intends to sell all or
any of the shares pursuant to this Prospectus, the Selling Shareholders may
choose to sell the Shares from time to time. See "Plan of Distribution."
The following tables set forth certain information as of April 14, 1998
(except as otherwise indicated) as to the beneficial ownership of the Note
Shares and the Warrant Shares by the Selling Shareholders. Because the Selling
Shareholders may offer all or a portion of the Shares pursuant to the offering
contemplated by this Prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the Shares
that will be held by the Selling Shareholders after completion of this offering,
no estimate can be made of the number of Shares that each Selling Shareholder
may retain upon completion of such offering. None of the 1,129,762 Shares being
registered and offered hereunder are issued and outstanding as of the date of
this Prospectus. To the knowledge of the Company, none of the Selling
Shareholders has had within the past three years any material relationship with
the Company or any of its predecessors or affiliates, except as set forth in the
footnotes to the following tables.
NOTE SHARES:
- ------------
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES TO BE OFFERED
OWNED PRIOR TO THE FOR THE SELLING SHAREHOLDER'S
NAME OF SELLING SHAREHOLDER OFFERING ACCOUNT
- ----------------------------------------- -------------------------------------- ----------------------------------
<S> <C> <C>
Morgan Guaranty Trust Company 352,943 352,943
of New York (1)
Oppenheimer Bond Fund for Growth 235,295 235,295
Warburg Pincus Institutional Fund, Inc. 117,647 117,647
- Small Company Growth Portfolio
Gulfbend & Co. 117,647 117,647
SB Mgt. Corp. 44,118 44,118
Triton Capital Investments, LTD. 23,530 23,530
Hull Overseas, Ltd. 20,589 20,589
J.M. Hull Associates, L.P. 20,589 20,589
Colonial Penn Life Insurance Co. 14,706 14,706
Palladin Partners I, L.P. 14,706 14,706
Pitt & Company 10,295 10,295
Croyden Associates 5,883 5,883
Gillett Welles, Jr. 2,942 2,942
WBM III, LLC 2,942 2,942
Anne Henry Welles 2,647 2,647
Steven G. Mihaylo 2,647 2,647
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES TO BE OFFERED
OWNED PRIOR TO THE FOR THE SELLING SHAREHOLDER'S
NAME OF SELLING SHAREHOLDER OFFERING ACCOUNT
- ----------------------------------------- -------------------------------------- ----------------------------------
<S> <C> <C>
BT Alex. Brown Incorporated 2,353 2,353
Custodian FBO Peter S. Welles' IRA
BT Alex. Brown Incorporated 2,353 2,353
Custodian FBO Clayton L. Moravec,
Jr.'s IRA
Sarah P. Beir 1,765 1,765
R. Pito Salas 1,177 1,177
Gillett Welles III 883 883
Michael H. & Anne V. Welles 883 883
Christine K. Salas 883 883
Robert L. and Thomasina M. Thompson 589 589
</TABLE>
- ----------
(1) The Shares being registered hereby are held by the Selling Shareholder,
(i) as trustee of the Commingled Pension Trust Fund (Multi-Market
Special Investment Fund II) of Morgan Guaranty Trust Company of New York
and the Multi-Market Special Investment Trust Fund of Morgan Guaranty
Trust Company of New York, and (ii) as investment manager and agent for
an institutional investor.
WARRANT SHARES:
- ---------------
<TABLE>
<CAPTION>
SHARES TO BE OFFERED
SHARES BENEFICIALLY OWNED FOR THE SELLING
NAME OF SELLING SHAREHOLDER PRIOR TO THE OFFERING SHAREHOLDER'S ACCOUNT
- ----------------------------------------- -------------------------------------- ----------------------------------
<S> <C> <C>
Josephthal Holdings Company, Inc. (2) 100,000 100,000
Credit Suisse First Boston Corporation (3) 29,750 29,750
</TABLE>
- --------------------
(2) An affiliate of the Selling Shareholder acted as the underwriter in
connection with the IPO. The Shares being registered hereby underlie
warrants to purchase such shares at an exercise price of $9.00 per share
that were granted by the Company to such affiliate in connection with
the IPO.
(3) The Selling Shareholder acted as a placement agent in connection with
the private placement of the Notes. The Shares being registered hereby
underlie warrants to purchase such shares at an exercise price of $19.50
per share that were granted by the Company to the Selling Shareholder in
connection with the private placement.
PLAN OF DISTRIBUTION
The Shares are being registered under the Securities Act to permit
public secondary trading of such shares by the holders thereof from time to time
after the date of this Prospectus. The Company's Common Stock is traded on
Nasdaq under the symbol "MANS", and the Shares have been approved for listing
upon official notice of issuance.
The Shares may be sold or distributed, from time to time, by or for the
account of the Selling Shareholders, or by their pledgees, donees, distributees,
transferees or other successors in interest, through underwriters or dealers,
through brokers or other agents, on Nasdaq or other over-the-counter markets or
on one or more exchanges or otherwise or, in special offerings, exchange
distributions or secondary distributions pursuant to and in accordance with
rules of such over-the-counter markets or exchanges, in negotiated transactions
or otherwise, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices or at negotiated prices. Brokers, dealers,
agents or underwriters participating in such transactions as agent may receive
compensation in the form of discounts, concessions or commissions from the
Selling Shareholders (and, if they act as agent for the purchaser of such
shares, from such
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<PAGE>
purchaser). Such discounts, concessions or commissions as to a particular
broker, dealer, agent or underwriter might be in excess of those customary in
the type of transaction involved. To the extent required, the Company will file,
during any period in which offers or sales are being made, one or more
supplements to this Prospectus to set forth any material information with
respect to the plan of distribution not previously disclosed. If any Selling
Shareholder sells his, her or its Shares, or options thereon, pursuant to this
Prospectus at a fixed price or at a negotiated price which is, in either case,
other than the prevailing market price or in a block transaction to a purchaser
who resells, or if any Selling Shareholder pays compensation to a broker or
dealer that is other than the usual and customary discounts, concessions or
commissions, or if there are any arrangements either individually or in the
aggregate that would constitute a distribution of the Shares, a supplement to
this Prospectus may need to be filed or a post-effective amendment to the
Registration Statement of which this Prospectus forms a part may need to be
filed and declared effective by the SEC, as the case may be, before such Selling
Shareholder could make such sale, pay such compensation or make such a
distribution.
The Selling Shareholders and any such underwriters, brokers, dealers or
agents that participate in such distribution may be deemed to be "underwriters"
within the meaning of the Securities Act, and any discounts, commissions or
concessions received by any such underwriters, brokers, dealers or agents might
be deemed to be underwriting discounts and commissions under the Securities Act.
Neither the Company nor the Selling Stockholders can presently estimate the
amount of such compensation. The Company knows of no existing arrangements
between any Selling Shareholder and any other Selling Shareholder, underwriter,
broker, dealer or other agent relating to the sale or distribution of the
Shares.
Under Rule 101 of Regulation M as promulgated by the Commission
("Regulation M") any person engaged in a distribution of any of the Shares may
not simultaneously engage in market activities with respect to the Common Stock
for the applicable period thereunder prior to the commencement of such
distribution. In addition and without limiting the foregoing, the Selling
Shareholders will be subject to applicable rules of Regulation M, including
without limitation Rule 102, which rules may limit the timing of purchases and
sales of any of the Shares by the Selling Shareholders. All of the foregoing may
affect the marketability of the Common Stock.
The Company will pay all of the expenses incident to the registration,
offer and sale of the Shares by the Selling Shareholders hereunder to the public
other than commissions and discounts of underwriters, brokers, dealers or agents
and certain counsel fees incurred by the Selling Shareholders. The Company and
the Selling Shareholders have agreed to indemnify each another and certain other
persons, including underwriters against liabilities under the Securities Act.
If Shares are sold in an underwritten offering, the Shares may be
acquired by the underwriters for their own account and may be further resold
from time to time in one or more transactions, including negotiated
transactions, at market prices prevailing at the time of sale, at prices related
to such prevailing market prices, at negotiated prices, or at fixed prices. The
names of the underwriters with respect to any such offering and the terms of the
transactions, including any underwriting discounts, concessions or commissions
and other items constituting compensation of the underwriters and brokers or
dealers, if any, will be set forth in a supplement to this Prospectus relating
to such offering. Any public offering price and any discounts, concessions or
commissions allowed or reallowed or paid to brokers or dealers may be changed
form time to time. Unless otherwise set forth in a supplement to this
Prospectus, the obligations of the underwriters to purchase the Shares will be
subject to certain conditions precedent and the underwriters will be obligated
to purchase all of the shares specified in such supplement if any such Shares
are purchased.
If the Shares are sold in an underwritten offering, the underwriters
and selling group members (if any) may engage in passive market making
transactions in the Common Stock on Nasdaq immediately prior to the commencement
of the sale of shares in such offering, in accordance with Rule 103 of
Regulation M. Passive market making presently consists of displaying bids on
Nasdaq limited by the bid prices of market makers not connected with such
offering and purchases limited by such prices and effected in response to order
flow. Net purchases by a passive market maker on each day are limited in amount
to 30% of the passive market maker's average daily trading volume in the Common
Stock during the period of the two full consecutive calendar months prior to the
filing with the Commission of the Registration Statement of which this
Prospectus forms a part, or 200 shares, whichever is greater, and must be
discontinued when such limit is reached. A passive market maker must identify
passive market making bids as such on the Nasdaq electronic inter-dealer
reporting system. Passive market making may stabilize the market price of the
Common Stock at a level above that which might otherwise prevail and, if
commenced, may be discontinued at any time.
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<PAGE>
In addition, any Shares covered by this Prospectus which qualify for
sale pursuant to Rule 144 or any other available exemption from registration
under the Securities Act may be sold under Rule 144 or such other available
exemption rather than pursuant to this Prospectus.
In order to comply with certain states' securities laws, if applicable,
the Shares will be sold in such jurisdictions 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 qualified for sale in such
state or an exemption from registration or qualification is available and is
complied with.
DESCRIPTION OF CAPITAL STOCK
The Amended and Restated Articles of Incorporation of the Company (the
"Articles of Incorporation") authorize capital stock consisting of 25,000,000
shares of Common Stock, par value $0.001 per share, and 1,500,000 shares of
preferred stock ("Preferred Stock"). There were 4,601,309 shares of Common
Stock, and no shares of Preferred Stock, issued and outstanding as of April 14,
1998. The following summary description of the capital stock of the Company is
qualified in its entirety by reference to the Articles of Incorporation and
Bylaws of the Company, copies of which have been filed as exhibits to the
Registration Statement of which this Prospectus forms a part.
COMMON STOCK. The holders of shares of Common Stock have equal pro rata
rights to dividends if, as and when declared by the Company's Board of
Directors; do not have any preemptive subscription or conversion rights; and
have one vote per share on all matters upon which the shareholders of the
Company may vote at all meetings of shareholders. There are no redemption or
sinking fund provisions applicable to the Common Stock. The holders of the
Common Stock do not have cumulative voting rights. As a result, the holders of a
majority of the shares voting for the election of directors can elect all the
members of the Board of Directors.
PREFERRED STOCK. No shares of Preferred Stock are currently
outstanding. The Board of Directors is authorized to divide the Preferred Stock
into series and, with respect to each series, to determine the dividend rights,
dividend rate, conversion rights, voting rights, redemption rights and terms,
liquidation preferences, the number of shares constituting the series, the
designation of such series and such other rights, qualifications, limitations or
restrictions as the Board of Directors may determine. The Board of Directors
could, without shareholder approval, issue Preferred Stock with voting rights
and other rights that could aversely affect the voting power of holders of
Common Stock and such stock could be used to prevent a hostile takeover of the
Company. The Company has no present plans to issue any shares of Preferred
Stock.
TRANSFER AGENT AND REGISTRAR. The Transfer Agent and Registrar for the
Common Stock is Continental Stock Transfer & Trust Company.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A., Miami,
Florida.
EXPERTS
The financial statements of the Company as of December 31, 1997 and
1996, and for each of the years in the two-year period ended December 31, 1997,
have been incorporated by reference in this Prospectus from the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1997 in reliance upon the
report of KPMG Peat Marwick LLP, independent certified public accountants, given
upon the authority of said firm as experts in accounting and auditing.
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<PAGE>
<TABLE>
============================================================== =======================================================
<S> <C>
NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS
OTHER THAN THOSE CONTAINED OR INCORPORATED BY REFERENCE IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING MADE BY THIS
PROSPECTUS AND IF GIVEN OR MADE, SUCH INFORMATION OR 1,129,762 SHARES
REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY OR ANY SELLING SHAREHOLDER. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY SECURITIES OTHER THAN THE SECURITIES TO WHICH IT RELATES MANSUR INDUSTRIES INC.
OR AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH
SECURITIES IN ANY CIRCUMSTANCES IN WHICH SUCH OFFER OR
SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE COMMON STOCK
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT
TO THE DATE HEREOF.
--------------- ---------------------------
TABLE OF CONTENTS PROSPECTUS
PAGE ----------------------------
----
Available Information......................................4
Incorporation Of Certain Documents By Reference............4
The Company................................................5
Risk Factors...............................................6
Use Of Proceeds............................................11
Selling Shareholders.......................................12
Plan Of Distribution.......................................13
Description Of Capital Stock...............................15
Legal Matters..............................................15
Experts....................................................15
============================================================== =======================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses (other than
underwriting and brokerage discounts, commissions and fees and legal fees
incurred by the Selling Shareholders, if any, payable by such Selling
Shareholders) payable in connection with the sale and distribution of the Shares
being registered. All amounts are estimates except the Securities and Exchange
Commission registration fee and the Nasdaq additional listing fee. All of the
expenses below will be paid by the Registrant.
Securities and Exchange Commission registration fee..........$ 6,540
Nasdaq additional listing fee................................$ 15,000
Legal fees and expenses......................................$ 17,000
Accounting fees and expenses.................................$ 4,000
Printing and engraving expenses..............................$ 2,000
Transfer Agent and Registrar fees............................$ 2,000
Miscellaneous................................................$ 5,000
Total...............................................$ 51,540
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Registrant has authority under Section 607.0850 of the Florida
Business Corporation Act to indemnify its directors and officers to the extent
provided for in such statute. The Registrant's Amended and Restated Articles of
Incorporation and Bylaws provide that the Registrant shall indemnify and may
insure its officers and directors to the fullest extent not prohibited by law.
The Registrant has entered into an agreement with each of its directors and
executive officers wherein it has agreed to indemnify each of them to the
fullest extent permitted by law. The Registrant also maintains a policy of
directors' and officers' liability insurance that insures, subject to certain
exclusions, the Registrant's directors and officers against the cost of defense,
settlement of, payment of a judgment in connection with a proceeding, whether
actual or threatened, to which any such person may be made a party by reason of
the fact that such person is or was a director or officer of the Registrant.
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<PAGE>
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
3.1 The Company's Amended and Restated Articles of Incorporation
(incorporated by reference to Exhibit 3.1 of the Company's Registration
Statement on Form S-1, as amended (No.333-08657))
3.2 The Company's Bylaws (incorporated by reference to Exhibit 3.2 of the
Company's Registration Statement on Form S-1, as amended (No.
333-08657))
4 Form of Subordinated Convertible Note Purchase Agreement dated as of
February ___, 1998 by and between the Company and each investor
signatory (incorporated by reference to Exhibit 4.1 of the Company's
Form 8-K dated February 24, 1998 (No. 000-21325)).
5 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
23.1 Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
(included in Exhibit 5)
23.2 Consent of KPMG Peat Marwick LLP
24 Power of Attorney (included on signature page)
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this Registration Statement or
any material change to such information in this Registration Statement;
(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.
(b) 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers, and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of
II-2
<PAGE>
whether such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<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 Miami, State of Florida on this 17th day of
April, 1998.
MANSUR INDUSTRIES INC.
By:/S/ PAUL I. MANSUR
-----------------------
Paul I. Mansur
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Pierre G. Mansur and Paul I.
Mansur, respectively, his true and lawful attorney-in-fact, each acting alone,
with full powers of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any or all amendments,
including any post-effective amendments, to this Registration Statement, and to
file the same, with all exhibits thereto, and other documents to be filed in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that said attorney-in-fact or his substitute, each
acting alone, may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/S/ PIERRE G. MANSUR
- --------------------------------------- Chairman of the Board and April 17, 1998
Pierre G. Mansur President
/S/ PAUL I. MANSUR
- --------------------------------------- Chief Executive Officer and April 17, 1998
Paul I. Mansur Director (principal executive
officer)
/S/ RICHARD P. SMITH
- --------------------------------------- Vice President of Finance and Chief April 17, 1998
Richard P. Smith Financial Officer (principal
accounting officer)
- --------------------------------------- Director April 17, 1998
Elias S. Mansur
/S/ DR. JAN HEDBERG
- --------------------------------------- Director April 17, 1998
Dr. Jan Hedberg
- --------------------------------------- Director April 17, 1998
Joseph E. Jack
</TABLE>
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<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
<S> <C>
5 Opinion of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
23.1 Consent of Greenberg Traurig Hoffman Lipoff Rosen & Quentel, P.A.
(contained in Exhibit 5 herein)
23.2 Consent of KPMG Peat Marwick LLP
24 Power of Attorney (included on signature page)
</TABLE>
EXHIBIT 5
April 16, 1998
Mansur Industries Inc.
8305 N.W. 27th Street, Suite 107
Miami, Florida 33122
RE: OFFERING OF SHARES PURSUANT TO REGISTRATION STATEMENT ON FORM S-3
Gentlemen:
We have acted as counsel to Mansur Industries Inc., a Florida
corporation (the "Company"), in connection with the preparation and filing with
the Securities and Exchange Commission under the Securities Act of 1933, as
amended (the "Securities Act"), of a Registration Statement on Form S-3 (the
"Registration Statement") relating to the registration by the Company of (i)
1,000,012 shares of the Company's common stock, par value $0.001 per share (the
"Common Stock"), which are initially issuable upon conversion of $17,000,000
aggregate principal amount of 8 1/4% Subordinated Convertible Notes Due 2003
(the "Notes") of the Company having a conversion price of $17.00 per share plus
such additional indeterminate number of shares of Common Stock as may become
issuable upon conversion of the Notes as a result of in kind interest payments
and/or adjustments to the conversion price (the "Note Shares"), and (ii) 129,750
shares of Common Stock which are initially issuable upon exercise of warrants
(the "Warrants") plus such additional indeterminate number of shares of Common
Stock as may become issuable upon exercise of the Warrants as a result of
anti-dilution provisions (the "Warrant Shares").
In so acting, we have examined originals, or copies certified or
otherwise identified to our satisfaction, of (a) the Amended and Restated
Articles of Incorporation and By-Laws, as amended, of the Company as currently
in effect, (b) the Registration Statement, (c) the Subordinated Convertible Note
Purchase Agreement pursuant to which the Notes were issued, (d) the Warrants,
(e) certain resolutions adopted by the Board of Directors of the Company, and
(f) such other documents, records, certificates and other instruments of the
Company as in our judgment are necessary or appropriate for purposes of this
opinion.
Based on and subject to the foregoing, we are of the following opinion:
1. The Company is a corporation duly incorporated and validly existing
in good standing under the laws of the State of Florida.
2. The Note Shares have been validly authorized and reserved for
issuance and, when duly issued and delivered upon conversion of the Notes in
accordance with the terms of the Notes, will be validly issued and will be fully
paid and non-assessable.
3. The Warrant Shares have been validly authorized and reserved for
issuance and, when duly issued and delivered upon conversion of the Warrants in
accordance with the terms of the Warrants, will be validly issued and will be
fully paid and non-assessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement. In giving such consent, we do not hereby admit that we
come within the category of persons whose consent is required under Section 7 of
the Securities Act, or the rules or regulations of the Securities and Exchange
Commission promulgated thereunder.
Very truly yours,
GREENBERG TRAURIG HOFFMAN LIPOFF
ROSEN & QUENTEL, P.A.
By /S/GARY M. EPSTEIN
-----------------------------------
Gary M. Epstein
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
Board of Directors
Mansur Industries Inc.
We consent to the use of our report, dated February 28, 1998, incorporated
herein by reference, in the Registration Statement of Mansur Industries Inc., on
Form S-3, relating to the balance sheets of Mansur Industries Inc. as of
December 31, 1997 and 1996, and the related statements of operations,
shareholders' equity and cash flows for each of the years in the two year period
then ended, which report appears in the December 31, 1997 Annual Report on Form
10-KSB of Mansur Industries Inc.
/S/ KPMG PEAR MARWICK LLP
-------------------------
KPMG Peat Marwick LLP
Miami, Florida
April 14, 1998
