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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-27825
PROSPECTUS
5,372,805 SHARES
INTERNATIONAL ALLIANCE SERVICES, INC.
COMMON STOCK
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This Prospectus relates to an aggregate of 5,372,805 shares (the
"Shares") of common stock, par value $.01 per share ("Common Stock"), of
International Alliance Services, Inc., a Delaware corporation (formerly known
as Republic Environmental Systems, Inc., the "Company"), which may be offered
from time to time (the "Offering") by persons (the "Selling Stockholders") who
have acquired such Shares in certain private equity offerings and certain
acquisitions of businesses by the Company not involving a public offering
including 1,217,277 shares which may be offered for sale by certain of the
Selling Stockholders who may acquire such shares pursuant to the exercise of
certain warrants. The Shares are being registered under the Securities Act of
1933, as amended (the "Securities Act"), on behalf of the Selling Stockholders
in order to permit the public sale or other distribution of the Shares.
The Shares may be sold or distributed from time to time by or for the
account of the Selling Stockholders, or by their pledgees on behalf of the
Selling Stockholders, in transactions (which may involve crosses and block
transactions) on the Nasdaq National Market ("Nasdaq") or any national
securities exchange or U.S. inter-dealer quotation system of a registered
national securities association on which the Shares are then listed, in the
over-the-counter market, in one or more privately negotiated transactions
(including sales pursuant to pledges), through the writing of options on the
Shares, in a combination of such methods of distribution or by any other
legally available means. This Prospectus also may be used, with the Company's
consent, by donees of the Selling Stockholders, or by other persons acquiring
Shares and who wish to offer and sell such Shares under circumstances requiring
or making desirable its use. Such methods of sale may be conducted by the
Selling Stockholders at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at prices otherwise negotiated.
The Selling Stockholders may effect such transactions directly, or indirectly
through broker-dealers or agents acting on their behalf and, in connection with
such sales, such broker-dealers or agents may receive compensation in the form
of commissions or discounts from the Selling Stockholders and/or the purchasers
of the Shares for whom they may act as agent or to whom they sell Shares as
principal or both (which commissions or discounts might be in excess of
customary commissions). 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 the names of donees of Selling Stockholders and
any other material information with respect to the plan of distribution not
previously disclosed. See "Plan of Distribution."
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby, but will bear all expenses incident to the registration
of the Shares under federal and state securities laws and the sale of the
Shares hereunder other than expenses incident to the delivery of the Shares to
be sold by the Selling Stockholders, including any transfer taxes payable on
any Shares, and any commissions and discounts payable to underwriters, agents
or dealers.
The Common Stock is quoted on Nasdaq under the symbol "IASI." On June
6, 1997, the last reported sale price for the Common Stock as reported by
Nasdaq was $9.6875 per share. The Company had 36,012,459 shares of Common Stock
issued and outstanding as of June 6, 1997.
PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE MATTERS SET FORTH
UNDER THE CAPTION "RISK FACTORS" LOCATED ON PAGE 5 OF THIS PROSPECTUS.
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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.
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The date of this Prospectus is June 17, 1997.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "Exchange Act"), and, in accordance therewith,
files reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "SEC"). The reports, proxy and
information statements and other information concerning the Company can be
inspected and copied at the public reference facilities maintained by the SEC
at Judiciary Plaza, Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the SEC's regional offices located at Suite 1400, 500 West Madison
Street, Chicago, Illinois 60661 and at Seven World Trade Center, 13th Floor,
New York, New York 10048. Copies of such material can also be obtained from the
SEC at prescribed rates through the Public Reference Section of the SEC at 450
Fifth Street, N.W., Washington, D.C. 20549. Such documents also may be
obtained through the website maintained by the SEC at http://www.sec.gov. Such
reports, proxy statements and other information may also be inspected at the
offices of Nasdaq at 1735 K Street, N.W., Washington, D.C. 20006.
The Company has filed with the SEC a Registration Statement on Form
S-3 under the Securities Act with respect to the Shares (such registration
statement, including all amendments and supplements thereto, is hereinafter
referred to as the "Registration Statement"). This Prospectus, which forms a
part of the Registration Statement, does not contain all of the information set
forth in the Registration Statement, certain parts of which have been omitted
in accordance with the rules and regulations of the SEC. Statements contained
in this Prospectus as to the contents of any contract, agreement or other
document are not necessarily complete and in each instance reference is made to
the copy of such contract, agreement or other document filed as an exhibit to
the Registration Statement or incorporated herein by reference, and each such
statement is deemed qualified in its entirety by such reference. The
Registration Statement and exhibits thereto may be inspected without charge at
the public reference facilities maintained by the SEC, regional offices of the
SEC and offices of the SEC and Nasdaq referred to above, and copies thereof may
be obtained from the SEC at prescribed rates.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed by the Company (File No. 0-25890) with
the SEC pursuant to the Exchange Act, are incorporated herein by reference and
made a part of this Prospectus:
(i) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996;
(ii) the Company's Current Report on Form 8-K dated January 7, 1997;
(iii) the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997;
(iv) the Company's Schedule 14A Proxy Statement dated April 1, 1997
relating to the 1997 Annual Meeting of Stockholders held May 6,
1997;
(v) the Company's Current Report on Form 8-K dated April 3, 1997; and
(vi) the Company's Current Report on Form 8-K dated April 21, 1997.
All reports and other documents filed by the Company with the SEC
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Prospectus and prior to the termination of the Offering shall be deemed
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained in this Prospectus or
in a document incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that a statement contained in this Prospectus or in any
other subsequently filed document that also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus.
The Company undertakes to provide without charge to each person to
whom a copy of this Prospectus has been delivered, upon the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference herein, other than the exhibits to such documents, unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates. Written or oral requests for such copies should be
directed to International Alliance Services, Inc., 10055 Sweet Valley Drive,
Valley View, Ohio, 44125, Attention: Investor Relations, telephone number (216)
447-9000.
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RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION SET FORTH IN THIS PROSPECTUS, PROSPECTIVE
PURCHASERS OF THE SHARES SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS
IN EVALUATING AN INVESTMENT IN THE COMPANY.
RISKS RELATED TO THE COMPANY
Strategy for Future Acquisitions; Limited Operating History; Need for
Substantial Additional Capital
The Company's current business strategy is to act aggressively in
making acquisitions in the specialty insurance industry and the business
outsourcing services industry. In October 1996, the Company completed two
acquisitions (the "Merger Transactions") pursuant to which it acquired Century
Surety Company ("CSC") and its subsidiaries (together with CSC, the "CSC
Group"), which includes three insurance companies, and Commercial Surety
Agency, Inc. d/b/a Century Surety Underwriters ("CSU"), an insurance agency
that markets surety bonds. In addition, the Company acquired Environmental &
Commercial Insurance Agency, Inc. ("ECI") in November 1996, SMR & Co. Business
Services, Inc. (formerly known as SMR & Co., "SMR") in December 1996, Midwest
Indemnity Corporation ("Midwest") in January 1997, Midland Consultants, Inc. in
February 1997, M&N Risk Management, Inc., M&N Enterprises, Inc. and Millisor
Firmco, Inc. (collectively, the "M&N Companies") in March 1997 and The Benefits
Group Agency, Inc., Network Plus, Inc., Next, Inc. d/b/a Next Risk Management,
Inc. and Surety Associates Ltd. in April 1997. Accordingly, the Company has no
operating history with regard to a significant portion of its current
operations. The financial position and results of operations of the Company
will depend to a large extent on the Company's ability to integrate these and
subsequently acquired operations effectively. As the Company continues to
pursue its acquisition strategy in the future, its financial position and
results of operations may fluctuate significantly from period to period.
In December 1996, the Company received approximately $27.6 million in
net proceeds from the offering (the "December Private Placement") of 3,251,888
units of the Company (the "Units"). Each Unit consisted of one share of Common
Stock of the Company and one warrant to purchase one share of Common Stock of
the Company at an exercise price of $11.00 per share. In April 1997, the
Company received an additional estimated $5.2 million in net proceeds, from the
private placement of an additional 616,611 Units (the "April Private Placement"
and, together with the December Private Placement, the "Private Placement"). The
proceeds received from the Private Placement have been and will be used to
finance acquisitions. Future acquisitions, however, may require additional
equity and debt financing, although neither form of financing is contemplated at
this time. In the event the Company is required to seek additional financing,
there is no assurance that such additional financing will be available or, if it
is available, that it will be available on terms acceptable to the Company.
Risks Related to Growth Through Acquisitions; Failure to Manage Growth
The Company intends to continue its internal growth and to pursue an
aggressive acquisition strategy. Internal growth may place a significant strain
on the Company's management, operating and technical resources, while growth
through acquisitions will involve substantial risks, including the risk of
improper valuation of the acquired businesses and the risks inherent in
integrating such businesses with the Company's operations. The Company's
acquisition strategy depends on its ability to identify and acquire appropriate
specialty insurance companies and business outsourcing services companies, to
integrate the acquired operations effectively, and to increase its market
share. A number of the Company's competitors for such acquisitions are larger,
better known companies than the Company and have significantly greater
financial resources. There can be no assurance that the Company will be able to
locate acquisition candidates in geographic markets or on terms the Company
deems attractive, that any identified candidates will be acquired, that the
Company will be able to profitably manage acquired companies, or that future
acquisitions will produce financial returns that justify the investment or that
are comparable to the Company's past returns. The completion of acquisitions
requires the expenditure of sizable amounts of capital, as well as management's
time and attention, and the intense competition among companies pursuing
similar acquisition strategies may increase capital requirements. There can be
no assurance that
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management skills and systems currently in place will be adequate to implement
the Company's acquisition strategy. The failure to manage growth effectively,
or to implement its acquisition strategy, could have a material adverse effect
on the Company's results of operations and financial condition.
Risks Associated with Acquisitions
Although the Company investigates each business that it acquires,
there may be liabilities that the Company fails or is unable to discover. The
Company seeks to minimize the impact of any such liabilities by obtaining
indemnities and warranties from the seller of the business, which may be
supported by deferring payment of a portion of the purchase price. However,
these indemnities and warranties, if obtained, may not fully cover the
liabilities due to the limited scope of the indemnities, the amount or duration
of the indemnities, the financial limitations of the indemnitor or warrantor,
or other reasons.
Dependence on Key Personnel
The Company depends and will continue to depend in the foreseeable
future on the services of Messrs. Michael G. DeGroote, Edward F. Feighan,
Craig L. Stout, Roswell P. Ellis, Douglas R. Gowland and certain of its other
officers and key employees with extensive experience and expertise in the
insurance specialty industry and the waste and environmental services industry.
In addition, with respect to its provision of business services, the Company is
dependent on the services of Messrs. Gregory J. Skoda, Michael L. Minotti,
Keith W. Reeves, Patrick T. Carney, Terry L. Silver and certain of its other
key personnel with extensive experience and expertise in such industry. The
ability of the Company to retain its officers and key employees is important to
the success of the Company. The loss of key personnel, whether by resignation
or otherwise, could have a material adverse effect on the Company. The Company
does not maintain key personnel insurance on any of its officers or employees.
Possible Depressing Effect of Future Sales of Common Stock
No predictions can be made as to the effect, if any, that future sales
of the Shares, the availability of Common Stock for sale or the perception that
such sales could occur will have on the prevailing market price of the Common
Stock. The Company has registered for sale, from time to time on a continuous
basis under this registration statement and the registration statement dated
January 17, 1997, by certain Selling Stockholders an aggregate of approximately
37,492,215 shares of Common Stock. Future sales of such shares, or the
perception that such sales could occur, could adversely affect the market price
of the Common Stock. There can be no assurance as to when, and how many of,
such shares will be sold and the effect such sales may have on the market price
of the Common Stock. In addition, the Company intends to issue Common Stock and
options and warrants to purchase shares of Common Stock in connection with
future acquisitions. Although such securities are or will be, as the case may
be, subject to restrictions on resale in accordance with the Securities Act and
the regulations promulgated thereunder, as such restrictions lapse or if such
shares are registered for sale to the public, such securities may be sold into
the public market. In the event of the issuance and subsequent resale of a
substantial number of shares of Common Stock, or a perception that such sales
could occur, there could be a material adverse effect on the prevailing market
price of the Common Stock.
Dilution
The issuance of additional shares of Common Stock upon exercise of
outstanding warrants or options, or upon the Company's completion of any
acquisitions and business combinations, may have a dilutive effect on earnings
per share and will have a dilutive effect on the voting rights of the holders
of Common Stock.
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No Cash Dividends
The payment and level of dividends on Common Stock are subject to the
discretion of the Board of Directors of the Company. The payment of dividends
will depend upon business decisions that will be made by the Board of Directors
of the Company from time to time based upon the results of operations and
financial conditions of the Company and its subsidiaries and such other
considerations as the Board of Directors considers relevant. In addition, the
Company's credit facility currently prohibits payment of dividends and other
distributions to the stockholders of the Company. Since becoming a public
company in April 1995, the Company has not paid cash dividends on its Common
Stock and the Company's Board of Directors does not anticipate paying cash
dividends in the foreseeable future. The Company currently intends to retain
future earnings to finance the ongoing operations and growth of the business.
Control of the Company
The Company's officers and directors, or their affiliates, currently
beneficially own greater than a majority of the Common Stock. The holders of a
majority of the Common Stock can elect all of the Company's directors and may
approve or disapprove certain fundamental corporate transactions, including
mergers and the sale of substantially all of the Company's assets.
RISKS RELATED TO THE PROVISION OF INSURANCE AND BONDING SERVICES
Inadequate Pricing Risk
The primary risk of any insurance enterprise is the risk of inadequate
pricing, which is a problem that manifests itself in the form of an
unexpectedly high level of claims after policy issuance. The Company utilizes a
variety of actuarial and qualitative methods to set price levels. Ultimately,
however, pricing depends upon an evaluation of prior experience as a predictor
of future experience. Events or trends that have not occurred in the past may
not be anticipated for the future and, therefore, could result in inadequate
pricing leading to elevated levels of losses. Such losses, if they were to
occur, could have a material adverse effect on the financial condition of the
Company.
Unanticipated Losses Due to Inadequate Reserve Estimates
When claims are made, the ultimate amount of liability cannot be
determined until claims are paid to the satisfaction of the insured or until
litigation finally determines liability in disputed cases. Since the process of
litigation and settlement can continue for years, the Company can only assess
its ultimate liability (and the ultimate expense of litigating disputed issues)
by estimation. These estimates, or reserves for losses and loss adjustment
expense (which, as of March 31, 1997, were $42.3 million) are, like prices,
determined by a variety of actuarial and qualitative methods based on prior
experience. There can be no assurance that such reserves will be sufficient to
cover the ultimate liabilities of the Company for policy and bond exposures.
The Company uses a reserving system which it believes will
enable it to meet claims obligations. Due to the nature of some of the
coverages written, claims may be presented which may not be settled for many
years after they are incurred; thus, subjective judgments as to the ultimate
exposure to losses are an integral and necessary component of the loss
reserving process. The Company regularly reviews reserves, using a variety of
statistical and actuarial techniques to analyze current claim costs, frequency
and severity data, and prevailing economic, social and legal factors. Reserves
established in prior years are adjusted as dictated by changes in loss
experience and as new information becomes available. An integral part of the
reserving policy of the Company includes a reserve for incurred but not
reported ("IBNR") claims. There can be no assurance that the assumptions upon
which reserves are based are valid or will be valid in the future.
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To help assure the adequacy of its IBNR reserves and individual case
reserves, the Company submits to an annual review by professional actuaries who
test reserve adequacy with a variety of sophisticated mathematical models. In
recent years, such actuaries have certified that reserve levels of the Company
are adequate. There can be no assurance, however, that the modeling techniques
of these actuaries will correctly forecast the adequacy of the Company's
reserves.
The inadequacy of reserves may result in unanticipated losses which
could have a material adverse effect on the financial condition of the Company.
Competition
Both the property and casualty and the surety industries have been
highly competitive in recent years resulting in the consolidation of some of
the industries' largest companies. Competition is particularly acute for
smaller, specialty carriers like the Company because the market niches
exploited by the Company are small and can be penetrated by a larger carrier
that elects to cut prices or expand coverage. The Company's insurance
subsidiaries have endured this risk historically by maintaining a high level of
development of new products, such as its environmental coverage and landfill
bonds eschewed by most major carriers. Nevertheless, there can be no assurance
that future development efforts will succeed or that product erosion from
intensifying competition will not outpace development efforts.
Expansion of Insurance Liability Due to Law Changes; Governmental Regulation
The Company is vulnerable to both judicial and legislative law changes
with respect to its insurance and bonding business. Judicial expansion of terms
of coverage can increase risk coverage beyond levels contemplated in the
underwriting and pricing process. Judicial imposition of pollution liability on
insurers before the era of specific pollution exclusions in insurance policies
created an estimated $25 billion liability, according to industry estimates
reported by A.M. Best, a leading rating agency of insurance companies and
reinsurers, for U.S. insurers and reinsurers that such companies did not know
they were underwriting and for which they received no premium.
At the same time, coverages that are established by statute may be
adversely affected by legislative or administrative changes of law. Most
surety bonds exist because they are required by government agencies. When
governments change the threshold for requiring surety, the market for surety
bonds is directly affected. The repeated postponement by the U.S.
Environmental Protection Agency ("EPA") of deadlines for compliance with the
financial assurance portions of the Resource Conservation and Recovery Act of
1976, as amended ("RCRA"), Subtitle D has significantly slowed growth of the
Company's landfill closure bond program, which was begun in March 1994 because
of the anticipated deadline of April 1994 for universal compliance. Such
compliance currently is not anticipated to be universally enforced until later
in 1997.
Inadequate Reinsurance Protection of Insurance Liabilities
The Company depends heavily on reinsurers to assume a substantial
portion of the exposures underwritten by it. Failure by one or more reinsurers
(which are assuming risks from many sources over which the Company has no
control) could have a material adverse effect on the Company's performance,
since the Company would then be obligated to pay the failed reinsurer's portion
of losses. Moreover, the adequacy of reinsurance, even assuming the solvency of
all reinsurers, is a matter of estimation. As with pricing and reserving,
procurement of reinsurance is premised upon assumptions about the future based
upon past experience. Unanticipated events or trends could produce losses
inadequately covered by reinsurance.
Market Reverses in Invested Asset Portfolio
Investment of the Company's assets to balance its reserves and surplus
is critical to the maintenance of the Company's solvency and profitability. The
Company believes that many insurance companies earn far more in investment
returns on their portfolio assets than they do from underwriting; and many
companies actually
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underwrite at a loss to develop premium balances, hence portfolio assets, for
investment as evidenced by the number of insurers operating at combined ratios
in excess of 100%. The Company maintains an investment policy of investing
primarily in debt instruments of government agencies and corporate entities with
quality ratings of AA or better, and of diversifying investments sufficiently to
minimize the risk of a substantial reverse or default in any one investment.
These policies are articulated by a written policy statement and overseen by a
formal investment committee of senior company officials. The Company also
employs professional investment advisers to counsel it with respect to its
insurance and bonding operations on matters of policy as well as individual
investment transactions, although these advisers have no discretionary authority
to deploy the Company's assets. Notwithstanding these measures, an aggregation
of serious reverses or defaults in the investment portfolio could have a
material adverse effect on the earnings and financial condition of the Company.
Federal Income Taxes
The Company accounts for federal income taxes in accordance with
Statement of Financial Accounting Standards No. 109. The Company has reduced
the deferred tax asset by a valuation allowance of CSC Group because the
Company believes it is more likely than not that some portion of the deferred
asset would not be realized. In reaching the Company's determination of the
need to provide a deferred tax valuation allowance, management considered all
available evidence, both positive and negative, as well as the weight and
importance given to such evidence. The factors the Company relied upon in
determining the need for the valuation allowance are that the CSC Group has a
history of significant portions of their taxable income coming from
non-recurring transactions, as well as the risks that CSC Group has in the
areas of product pricing, reserves, niche market competition and adequacy of
reinsurance.
RISKS RELATED TO THE PROVISION OF BUSINESS OUTSOURCING SERVICES
Competition
The business outsourcing services industry has been highly competitive
in recent years resulting in the consolidation of many companies and strategic
alliances across industry lines. The principal competitive factors in this
industry are service and price. Competition is particularly acute for small to
medium sized providers because larger providers or strategic alliances with
larger providers can create service and price distortions in the market place.
The Company's business outsourcing services subsidiaries have historically
endured these risks by maintaining a high level of development of new services.
There can be no assurance that future development efforts will succeed or that
intensifying competition will not outpace development efforts.
Regulations
The Company is vulnerable to legislative law changes with respect to
its provision of tax advisory, compliance and preparation services. Legislative
changes may expand or contract the types and amounts of business services that
individuals and businesses require. There can be no assurance that future laws
will provide the same or similar opportunities to provide business consulting
and management services to individuals and businesses that the current laws
provide.
RISKS RELATED TO THE PROVISION OF ENVIRONMENTAL SERVICES
Consents of Regulatory Authorities
In October 1996, the Ohio attorney general's office determined that
the Merger Transactions constituted a change of ownership of Ohio Environmental
Protection Agency ("Ohio EPA") permitted facilities owned by Republic
Environmental Systems (Cleveland) Inc. ("RES (Cleveland)") and Republic
Environmental Systems (Ohio), Inc. ("RES (Ohio)"). In addition, the Ohio EPA
may determine that the Merger Transactions constitute a modification of such
permits. As a result, Ohio law requires that the change of ownership of the
permitted facilities, as well as the permit modifications, if any, be approved
by the director of the Ohio EPA, based upon the disclosure
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statements and an investigative report prepared by the Ohio attorney general's
office. The Company consummated the Merger Transactions prior to receipt of the
requisite approval of the director of the Ohio EPA as permitted by applicable
law. During the approval process, the Company does not anticipate that the
operations at such facilities will be affected. In the event that the director
of the Ohio EPA ultimately disapproves such change of ownership or, if required,
such permit modifications, the Company would be required to effect the negation
of the change of ownership of such facilities. The negation could be
accomplished through the restoration of the original ownership structure of such
facilities, the disposition of the facilities or another means that complies
with the requirements of applicable law. The failure to obtain approval of such
change of ownership or permit modifications, if any, could have a material
adverse effect on the financial condition and operations of the Company.
Regulation
The transportation and disposal of solid and chemical wastes and
rendering of related environmental services are subject to federal, state,
provincial and local requirements which regulate health, safety, the
environment, zoning and land-use. Operating permits are generally required for
treatment, storage and disposal facilities ("TSD Facilities") and certain
transportation vehicles, and these permits are subject to revocation,
modification and renewal. Federal, state, provincial and local regulations
vary, but generally govern waste management activities (including final
disposal), the location and use of facilities and also impose restrictions to
prohibit or minimize air and water pollution. In addition, governmental
authorities have the power to enforce compliance with these regulations and to
obtain injunctions or impose fines in the case of violations, including
criminal penalties. These regulations are administered by the EPA and various
other federal, state, provincial and local environmental and health and safety
agencies and authorities, including the Occupational Safety and Health
Administration of the U.S. Department of Labor. In addition, certain of the
Company's operations are regulated under applicable laws and regulations in
Canada.
The Company believes that in the existing climate of heightened legal,
political and citizen awareness and concerns, companies in the hazardous waste
and environmental services industry, including the Company, may be faced with
material fines and penalties and the need to expend funds for remedial work and
related activities at TSD Facilities. The Company has established a reserve
(which, as of March 31, 1997 was approximately $2.3 million) to cover such
fines, penalties and costs which the Company's management believes will be
adequate. Further, in connection with the acquisition of certain TSD
Facilities, the Company has been indemnified against certain environmental
liabilities. While such amounts expended in the past or anticipated to be
expended in the future have not had and are not expected to have a materially
adverse effect on the Company's financial condition or operation, the
possibility remains that technological, regulatory or enforcement developments,
the results of environmental studies or other factors could materially alter
this expectation and despite such reserves and indemnification obligations,
could adversely affect the Company's operating results.
The Company's operation of TSD Facilities subjects it to certain
operating, monitoring, site maintenance and closure obligations. In order to
construct, expand and operate a TSD Facility, one or more construction or
operating permits, as well as zoning approvals, must be obtained. These
construction and operating permits and zoning approvals are difficult and
time-consuming to obtain, and the issuance of such permits and approvals often
is opposed by neighboring landowners and local and national citizens' groups.
Once obtained, the operating permits may be subject to periodic renewal and are
subject to modification and revocation by the issuing agency. In connection with
the Company's acquisition of TSD Facilities, it often may be necessary to expend
considerable time, effort and money to bring the acquired facilities into
compliance with applicable requirements and to obtain the permits and approvals
necessary to increase their capacity. The failure of the Company to renew
existing permits or obtain newly required permits could adversely affect the
Company's operating results. In addition, the Company's waste transportation
obligations are subject to evolving and expanding laws and regulations that may
impose additional monitoring, training and safety requirements.
Governmental authorities have the power to enforce compliance with
regulations and permit conditions and to obtain injunctions or impose fines in
case of violations. Citizens' groups may also bring suit for alleged
violations. During the ordinary course of its operations, the Company has from
time to time received citations or
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notices from such authorities that its operations are not in compliance with
applicable environmental or health or safety regulations. Upon receipt of such
citations or notices, the Company works with the authorities to attempt to
resolve the issues raised. Failure to correct the problems to the satisfaction
of the authorities could lead to monetary or criminal penalties, curtailed
operations or facility closure any of which could have a material adverse effect
on the Company's business and financial condition.
Subtitle D of RCRA establishes a framework for regulating the disposal
of non-hazardous solid wastes. In the past, the Subtitle D framework has left
the regulation of non-hazardous waste disposal largely to the states. On
October 9, 1991, however, the EPA promulgated a final rule which imposes
minimum federal comprehensive solid waste management criteria and guidelines
including location restrictions, facility design and operating criteria,
closure and post-closure requirements, financial assurance standards,
groundwater monitoring requirements and corrective action standards. Because
some parts of the new regulations will be phased in over time, the full effect
of these regulations may not be felt for several years. However, other than for
groundwater monitoring and financial assurance requirements, all provisions of
the final rule became effective October 9, 1993. Operating and design criteria
for existing operations may have to be modified to comply with these new
regulations. In addition, new requirements applicable to the disposal of
non-hazardous solid waste may be adopted when reauthorization of RCRA is taken
up by Congress and the Company cannot predict the effect of such new
requirements.
Possibility of Liability for Hazardous Substance Remediation and Damages
With very limited exceptions, federal law imposes joint and several
liability upon present and former owners and operators of facilities that
release "hazardous substances" into the environment and the generators and
transporters of those substances, regardless of the care exercised by such
persons and regardless of when the hazardous substance is first detected in the
environment. All such persons may be liable for the costs of waste site
investigation, waste site cleanup and damages to natural resources. There is an
inherent industry risk of liability arising from the release of "hazardous
substances" into the environment, notwithstanding safety and other measures
taken by the Company and other owners or operators of facilities. In addition,
because the term "hazardous substance" is very broadly defined under applicable
federal law, "hazardous substances" or "hazardous wastes" may have been
deposited in properties with which the Company has been, or will become,
associated as an owner or operator. Moreover, waste collection companies
acquired by the Company have transported hazardous waste in the past and will
do so in the future, and some of the Company's operations may generate small
amounts of hazardous waste. As a result of the foregoing, the Company may face
claims for remediation of environmental contamination, personal injury or
damage to natural resources at sites with which it is, or has been, associated
as owner, operator, transporter or waste generator and from which there is a
release or threatened release of hazardous substances which causes the
incurrence of response costs and damages. Costs for remediation of, and damages
for, environmental contamination can be very substantial. Given the limitations
in insurance coverage for these risks, such liability could have a material
adverse effect on the Company's business and consolidated financial condition.
Legal Proceedings
The Company is a party to various legal and environmental proceedings
which have arisen in the ordinary course of its business. No assurance can be
given with respect to the outcome of these legal proceedings and the effect
such outcomes may have on the Company.
Lack of Environmental Liability Insurance
The majority of the Company's domestic locations currently carry
site-specific pollution legal liability insurance, which may provide coverage
under certain circumstances for pollution damage to third parties. In addition,
the Company's domestic contracting operations carry contractors' pollution
liability insurance, which may provide coverage under certain circumstances for
damage to third parties. However, both of these coverages are restrictive in
nature, as they are subject to certain exclusions and effective dates,
consistent with insurance industry
10
<PAGE> 11
requirements. In addition, such coverage is subject to specific and aggregate
limits which may not be sufficient to cover claims, if they should arise.
In prior years, consistent with industry trends, the Company was not
able to obtain pollution insurance at reasonable costs and, therefore, carried
only such coverage as was required by regulatory permits. In addition, the
extent of insurance coverage under certain forms of policies has been the
subject in recent years of litigation in which insurance companies have, in
some cases, successfully taken the position that certain risks are not covered
by such policies. If, in the absence of such insurance, the Company were to
incur liability for environmental damages of sufficient magnitude, it could
have a material adverse effect on the Company's business and consolidated
financial condition.
Competition
The hazardous waste industry is highly competitive. Entry and ongoing
operations require substantial technical, managerial and financial resources.
The Company competes with large national companies and with regional and local
companies, some of which have significantly greater financial resources and
more established market positions than the Company.
THE COMPANY
The Company is a diversified services company which, acting through
its subsidiaries, provides business outsourcing services, specialty insurance
services and waste and environmental services. In October 1996, the Company
completed the Merger Transactions. Through the Company's insurance
subsidiaries, the Company provides specialty insurance and bonding to small and
medium sized commercial enterprises in over forty states throughout the United
States.
In December 1996, the Company completed the acquisition of SMR.
Through SMR, the Company provides business consulting and management services
in the areas of tax planning, tax return preparation and compliance, computer
consulting, outsourcing, employee benefit program design and administration,
and human resource management to individuals and small and medium sized
commercial enterprises primarily in Ohio.
In February 1997, the Company signed a non-binding letter of intent
and confidentiality agreement (collectively, the "Letter of Intent") to sell the
Company's environmental services operating subsidiaries. The Letter of Intent
also contemplates the formation of a strategic alliance between the Company and
the purchaser whereby the Company will continue to have access to the Company's
environmental resources for the benefit of its insurance customers after the
sale. The Company anticipates that the sale will be completed by mid-1997.
Consummation of the transaction remains subject to the purchaser's due
diligence, the negotiation and execution of definitive documentation and the
receipt of necessary governmental and third party approvals and consents.
Accordingly, there can be no assurance that the transaction will be consummated.
The Company's strategy is to aggressively grow as a diversified
services company by expanding its recently acquired business outsourcing
services and specialty insurance operations through internal growth and
additional acquisitions in such industries.
The Company was formed as a Delaware corporation in 1987 under the
name Stout Environmental, Inc. In 1992, the Company was acquired by Republic
Industries, Inc. ("RII"). In April 1995, RII effected a spin-off of its
hazardous waste operations through a distribution of the Common Stock of the
Company to the stockholders of record of RII (the "Spin-off"). In connection
with the Merger Transactions, in October 1996, the Company changed its name to
International Alliance Services, Inc. from Republic Environmental Systems, Inc.
The Company's Common Stock trades on Nasdaq under the trading symbol "IASI."
The principal executive office of the Company is located at 10055
Sweet Valley Drive, Valley View, Ohio, 44125 and its telephone number is (216)
447-9000.
11
<PAGE> 12
USE OF PROCEEDS
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby. The Company will bear all expenses incident to the
registration of the Shares under federal and state securities laws and the sale
of the Shares hereunder, other than expenses incident to the delivery of the
Shares to be sold by Selling Stockholders, including any transfer taxes payable
on any Shares and any commissions and discounts payable to underwriters, agents
or dealers. See "Plan of Distribution."
SELLING STOCKHOLDERS
The following table sets forth the name of each Selling Stockholder,
the number of shares of Common Stock owned by each Selling Stockholder as of
June 6, 1997, the number of Shares registered hereby that each Selling
Stockholder may offer and sell pursuant to this Prospectus. However, because
the Selling Stockholders may offer all or a portion of the Shares at any time
and from time to time after the date hereof, the exact number of Shares that
each Selling Stockholder may retain upon completion of the Offering cannot be
determined at this time. To the knowledge of the Company, none of the Selling
Stockholders has had any material relationship with the Company except as set
forth in the footnotes to the following table and as more fully described
elsewhere in this Prospectus (including the information incorporated by
reference in this Prospectus).
<TABLE>
<CAPTION>
NUMBER OF SHARES OWNERSHIP
TO BE OFFERED FOR AFTER THE OFFERING (1)
OWNERSHIP THE SELLING -----------------------
PRIOR TO THE STOCKHOLDER'S NUMBER PERCENT
SELLING STOCKHOLDER OFFERING ACCOUNT OF SHARES OF CLASS
------------------- -------- ------- --------- --------
<S> <C> <C> <C> <C>
American National Bank & Trust Co.
Of Chicago (2)......................... 20,008 20,008 0 --
Marjorie Boyas.......................... 10,000 1,500 8,500 *
Michael Boyas........................... 101,277 (3) 15,191 86,086 (3) *
Nicholas Boyas.......................... 10,772 (4) 1,615 9,157 (4) *
Pete Boyas.............................. 1,251,315 (5) 187,585 1,063,730 (5) 2.9%
Ronald P. Boyas......................... 4,311 (6) 646 3,665 (6) *
Stacey Boyas............................ 101,577 (3) 15,191 86,386 (3) *
Tony Boyas.............................. 101,277 (3) 15,191 86,086 (3) *
Joan Thoma Carney....................... 75,000 (7) 19,350 (8) 55,650 (9) *
William F. Comiskey, Jr. (10)........... 177,174 (11) 37,017 140,157 (11) *
Westbury (Bermuda) Ltd. (12)............ 14,247,112 (13) 1,111,112 (14) 13,136,000 (15) 31.3%
Roswell P. and Shirley Sue Ellis (16)... 82,500 82,500 0 --
Edward F. Feighan (17).................. 591,800 (18) 87,600 504,200 (18) 1.4%
The Harve A. Ferrill Trust U/A
12/31/69 (19)......................... 13,000 (20) 11,000 (20) 2,000 *
First Premium Services, Inc............. 26,210 26,210 0 --
Whitney L. Hubbs........................ 1,159 385 774 *
Indiana Lumbermens Mutual Ins. Co....... 45,903 45,903 0 --
Charles King............................ 166,650 (21) 27,208 139,442 (21) *
Patricia King........................... 166,390 (21) 27,208 139,182 (21) *
Kenneth A. and Linda Lanci.............. 113,216 (22) 15,333 97,883 (22) *
Kenneth & Davie LaVan................... 1,123,177 (23) 167,877 955,300 (23) 2.6%
Arlene M. LoConti (24).................. 707,987 106,198 601,789 1.7%
Joseph A. LoConti (25)................. 618,403 92,760 525,643 1.5%
Joseph E. LoConti (26).................. 1,757,500 (27) 262,800 1,494,700 (27) 4.1%
LoConti Family Trust (28)............... 1,536,800 (29) 230,520 1,306,280 (29) 3.6%
Geraldine L. Longo...................... 53,986 (30) 9,652 44,334 (30) *
Saverio J. Longo........................ 22,029 7,335 14,694 *
Midwest Indemnity Corp. (31)............ 138,655 138,655 0 --
Kenneth R. Millisor (32)................ 500,000 (33) 165,000 (33) 335,000 (33) *
Anna Marie Minotti (34)................. 472,500 (35) 121,905 (36) 350,595 (37) *
Lea Boyas Morabito...................... 104,277 (3) 15,191 89,086 (3) *
National American Insurance Co.......... 176,470 176,470 0 --
</TABLE>
12
<PAGE> 13
<TABLE>
<S> <C> <C> <C> <C>
Steven M. Nobil (38).................. 404,900 (39) 132,000 (40) 272,900 (41) *
Patan Rock, Inc. (42)................. 408,800 (43) 61,320 347,480 (43) *
Mark Perkins.......................... 27,900 27,500 400 *
Rochelle L. Reeves (44)............... 463,500 (45) 119,583 (46) 343,917 (47) *
Joseph E. Rutigliano.................. 102,716 (22) 15,333 87,383 (22) *
David J. Sgro......................... 99,900 (48) 18,208 (49) 81,692 (50) *
David M. Sgro......................... 8,600 (51) 1,583 (52) 7,017 (53) *
Patricia A. Skoda (54)................ 781,000 (55) 169,872 (56) 611,128 (57) 1.7%
Sophia Management Ltd (58)............ 5,825,000 (59) 1,029,750 4,795,250 (59) 12.5%
Craig L. Stout (60)................... 818,000 (61) 122,640 695,360 (61) 1.9%
Joseph and Juanita Tartabini
Charitable Trust................... 1,363,665 (62) 204,250 1,159,415 (62) 3.2%
Christopher J. Timm (63).............. 82,635 82,500 135 *
WeeZor I Limited Partnership (64)..... 111,110 (65) 111,110 (65) 0 --
Felicia P. Young...................... 234,600 (66) 35,040 199,560 (66) *
---------- --------- ---------- -----
Total.................. 35,250,761 5,372,805 29,877,956 63.1%
========== ========= ========== =====
</TABLE>
- ---------------------
*less than one percent
(1) The information contained in the table above includes shares of Common
Stock that the Selling Stockholder has the right to acquire within 60
days through the exercise of any option or warrant and excludes shares
of Common Stock and options or warrants to purchase shares of Common
Stock held of record by other parties.
(2) Consists of shares beneficially owned by First Premium Services, Inc.
as exchange agent.
(3) Includes 14,568 shares of Common Stock issuable upon exercise of
outstanding warrants.
(4) Includes 1,548 shares of Common Stock issuable upon exercise of
outstanding warrants.
(5) Includes 181,315 shares of Common Stock issuable upon exercise of
outstanding warrants.
(6) Includes 621 shares of Common Stock issuable upon exercise of
outstanding warrants.
(7) Includes 45,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(8) Includes 14,850 shares of Common Stock issuable upon exercise of
outstanding warrants.
(9) Includes 30,150 shares of Common Stock issuable upon exercise of
outstanding warrants.
(10) Mr. Comiskey currently is President of Next, Inc. d/b/a Next Risk
Management, Inc.
(11) Includes 65,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(12) Westbury (Bermuda) Ltd. is controlled by Mr. Michael G. DeGroote.
Mr. DeGroote has served as Chairman of the Board and a Director of the
Company since April 1995. Mr. DeGroote served as President and Chief
Executive Officer of the Company from April 1995 until October 1996.
Mr. DeGroote also served as Chairman of the Board, President and
Chief Executive Officer of Republic Industries, Inc. from May 1991
until August 1995.
(13) Includes 6,495,556 shares of Common Stock issuable upon exercise of
outstanding warrants.
(14) Includes 555,556 shares of Common Stock issuable upon exercise of
outstanding warrants.
(15) Includes 5,940,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(16) Mrs. Ellis is the wife of Roswell P. Ellis. Mr. Ellis serves as the
Senior Vice President - Insurance Group of the Company since March
1997 and has served as the Chairman and Chief Executive Officer of the
Company's insurance subsidiaries.
(17) Mr. Feighan has served as the Chief Executive Officer, President and a
Director of the Company since October 1996.
(18) Includes 84,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(19) Mr. Harve A. Ferrill serves as trustee of The Harve A. Ferrill Trust
U/A 12/31/69. Mr. Ferrill has served as a Director of the Company
since October 1996.
13
<PAGE> 14
(20) Includes 5,500 shares of Common Stock issuable upon exercise of
outstanding warrants.
(21) Includes 11,090 shares of Common Stock issuable upon exercise of
outstanding warrants.
(22) Includes 2,216 shares of Common Stock issuable upon exercise of
outstanding warrants.
(23) Includes 160,977 shares of Common Stock issuable upon exercise of
outstanding warrants.
(24) Mrs. LoConti is the mother of Joseph E. LoConti. See Footnote 26.
(25) Mr. LoConti is the father of Joseph E. LoConti. See Footnote 26.
(26) Mr. LoConti served as a Director of the Company from April 1995 until
March 1997 and as Vice Chairman of the Company from October 1996 until
March 1997. Mr. LoConti has entered into a Representation Agreement
with the Company under which Mr. LoConti will continue to provide his
exclusive services to the Company. Mr. LoConti also serves as a
Director of some of the Company's subsidiaries.
(27) Includes 252,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(28) Mr. Joseph E. LoConti serves as trustee of the LoConti Family Trust.
See Footnote 26.
(29) Includes 436,800 shares of Common Stock issuable upon exercise of
outstanding warrants.
(30) Includes 25,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(31) The Company acquired certain of the assets and business of Midwest in
January 1997.
(32) Mr. Millisor serves as the Chairman of the Board and Chief Executive
Officer of both M&N Risk Management, Inc. and M&N Enterprises, Inc.,
subsidiaries acquired by the Company in March 1997.
(33) All of such shares of Common Stock are issuable upon exercise of
outstanding warrants.
(34) Mrs. Minotti is the wife of Michael L. Minotti. Mr. Minotti serves
as Vice President and Chief Operating Officer of SMR, a subsidiary of
the Company acquired in November 1996.
(35) Includes 283,500 shares of Common Stock issuable upon exercise of
outstanding warrants.
(36) Includes 93,555 shares of Common Stock issuable upon exercise of
outstanding warrants.
(37) Includes 189,945 shares of Common Stock issuable upon exercise of
outstanding warrants.
(38) Mr. Nobil currently serves as President of M & N Risk Management, Inc.
(39) Includes 400,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(40) Includes 132,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(41) Includes 268,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(42) Patan Rock, Inc. is an Ohio company controlled by Michael Minotti. See
footnote 34.
(43) Includes 58,800 shares of Common Stock issuable upon exercise of
outstanding warrants.
(44) Mrs. Reeves is the wife of Keith W. Reeves, the Senior Vice President -
Business Services of the Company since March 1997 and President of SMR
since December 1996. Mr. Reeves has served as Vice President of SMR
from August 1984 until December 1996.
(45) Includes 278,100 shares of Common Stock issuable upon exercise of
outstanding warrants.
(46) Includes 91,773 shares of Common Stock issuable upon exercise of
outstanding warrants.
(47) Includes 186,327 shares of Common Stock issuable upon exercise of
outstanding warrants.
(48) Includes 18,400 shares of Common Stock issuable upon exercise of
outstanding warrants.
(49) Includes 6,133 shares of Common Stock issuable upon exercise of
outstanding warrants.
(50) Includes 12,267 shares of Common Stock issuable upon exercise of
outstanding warrants.
(51) Includes 1,600 shares of Common Stock issuable upon exercise of
outstanding warrants.
(52) Includes 533 shares of Common Stock issuable upon exercise of
outstanding warrants.
(53) Includes 1,067 shares of Common Stock issuable upon exercise of
outstanding warrants.
(54) Mrs. Skoda is the wife of Gregory J. Skoda. Mr. Skoda has served as
the Executive Vice President and Chief Financial Officer of the
Company since December 1996.
(55) Includes 335,400 shares of Common Stock issuable upon exercise of
outstanding warrants.
14
<PAGE> 15
(56) Includes 96,822 shares of Common Stock issuable upon exercise of
outstanding warrants.
(57) Includes 238,578 shares of Common Stock issuable upon exercise of
outstanding warrants.
(58) Messrs. Joseph E. LoConti, Craig L. Stout, Edward F. Feighan and
Gregory J. Skoda are managers of Sophia Management Ltd. See Footnotes
17, 26, 54 and 60.
(59) Includes 2,435,000 shares of Common Stock issuable upon exercise of
outstanding warrants.
(60) Mr. Stout has served as Chief Operating Officer and a Director of the
Company since October 1996.
(61) Includes 117,600 shares of Common Stock issuable upon exercise of
outstanding warrants.
(62) Includes 195,855 shares of Common Stock issuable upon exercise of
outstanding warrants.
(63) Mr. Timm has served as President of ECI, a subsidiary acquired by the
Company in November 1996, since its founding.
(64) WeeZor I Limited Partnership is a limited partnership controlled by
Mr. Rochon. Mr. Rochon has served as a Director of the Company since
October 1996.
(65) Includes 55,555 shares of Common Stock issuable upon exercise of
outstanding warrants.
(66) Includes 33,600 shares of Common Stock issuable upon exercise of
outstanding warrants.
PLAN OF DISTRIBUTION
The Shares may be sold or distributed from time to time by or for the
account of the Selling Stockholders, or their pledgees on behalf of the Selling
Stockholder, in transactions (which may involve crosses and block transactions)
on Nasdaq or any national securities exchange or U.S. inter-dealer quotation
system of a registered national securities association on which the Shares are
then listed, in the over-the-counter market, in one or more privately
negotiated transactions (including sales pursuant to pledges), through the
writing of options on the Shares, in a combination of such methods of
distribution or by any other legally available means. This Prospectus also may
be used, with the Company's consent, by donees of the Selling Stockholders, or
by other persons acquiring Shares and who wish to offer and sell such Shares
under circumstances requiring or making desirable its use. Such methods of sale
may be conducted by the Selling Stockholders at market prices prevailing at the
time of sale, at prices related to such prevailing market prices or at prices
otherwise negotiated. The Selling Stockholders may effect such transactions
directly, or indirectly through broker-dealers or agents acting on their behalf
and, in connection with such sales, such broker-dealers or agents may receive
compensation in the form of commissions or discounts from the Selling
Stockholders and/or the purchasers of the Shares for whom they may act as agent
or to whom they sell Shares as principal or both (which commissions or
discounts might be in excess of customary commissions). 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 the names
of donees of Selling Stockholders and any other material information with
respect to the plan of distribution not previously disclosed.
The Selling Stockholders 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 Stockholder and any other Selling
Stockholder, underwriter, broker, dealer or other agent relating to the sale or
distribution of the Shares.
Under applicable rules and regulations under the Exchange Act, 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 a period of
two business days prior to the commencement of such distribution. In addition
and without limiting the foregoing, the Selling Stockholders will be subject to
applicable provisions of the Exchange Act; including without
15
<PAGE> 16
limitation Rule 10b-5 and Regulation M, which provisions may limit the timing of
purchases and sales of any of the Shares by the Selling Stockholders. All of the
foregoing may affect the marketability of the Common Stock.
The Company will not receive any of the proceeds from the sale of the
Shares offered hereby, but will bear all expenses incident to the registration
of the Shares under federal and state securities laws and the sale of the
Shares hereunder other than expenses incident to the delivery of the Shares to
be sold by the Selling Stockholders, including any transfer taxes payable on
any Shares, and any commissions and discounts payable to underwriters, agents
or dealers.
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
Common Stock may not be sold unless the Common Stock has been registered or
qualified for sale in such state or an exemption from registration or
qualification is available and is complied with.
LEGAL MATTERS
The validity of the Shares offered hereby will be passed upon for the
Company by Akin, Gump, Strauss, Hauer & Feld, L.L.P. ("Akin Gump"). Mr. Rick
L. Burdick, a partner with Akin Gump, owns 500 shares of Common Stock and
warrants to purchase 12,000 shares of Common Stock.
EXPERTS
The audited consolidated and combined financial statements of the
Company (formerly known as Republic Environmental Systems, Inc.) and its
subsidiaries for the years ended December 31, 1994, 1995 and 1996 incorporated
by reference in this Prospectus and elsewhere in this Registration Statement
have been audited by KPMG Peat Marwick LLP, independent certified public
accountants incorporated by reference herein, and upon the authority of said
firm as experts in accounting and auditing.
UNCERTAINTY OF FORWARD LOOKING STATEMENTS
Certain statements and information in this Prospectus (including
documents incorporated herein by reference, see "Incorporation of Certain
Documents by Reference") constitute forward-looking statements within the
meaning of the Federal Private Securities Litigation Reform Act of 1995. Such
forward-looking statements are typically punctuated by words or phrases such as
"anticipate," "estimate," "projects," "management believes," "the Company
believes" and words or phrases of similar import. Such statements are subject
to certain risks, uncertainties or assumptions. Should one or more of these
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated
or projected. Among the key factors that may have a direct bearing on the
Company's results and financial condition are: (i) demand for the Company's
services; (ii) the Company's ability to integrate the operations of acquired
businesses; (iii) the Company's ability to expand into new markets; (iv) the
consummation of the Company's disposition of its environmental services
operations; (v) environmental liabilities to which the Company may become
subject in the future which are not covered by an indemnity or insurance; (vi)
the impact of current and future laws and governmental regulations affecting
the Company's operations; (vii) competitive practices in the specialty
insurance and bonding industries; (viii) competitive practices in the
reinsurance markets utilized by the Company's insurance operations; (ix)
judicial, legislative, and regulatory changes of law relating to risks covered
by the Company's insurance operations or to the operations of insurance
companies in general; (x) market fluctuations in the values or returns on
assets in the Company's investment portfolios; (xi) pricing of the Company's
insurance products; and (xii) adverse loss development.
16
<PAGE> 17
================================================================================
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 in connection with the offer made
by 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
Stockholders. Neither the delivery of this Prospectus nor any 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. This
Prospectus does not constitute an offer to sell or the solicitation of an offer
to buy any security other than the shares of Common Stock offered hereby, nor
does it constitute an offer to sell or a solicitation of an offer to buy any
shares of Common Stock by anyone in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation.
-----------------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information........................................................3
Incorporation of Certain Documents
by Reference.........................................................4
Risk Factors.................................................................5
The Company.................................................................12
Use of Proceeds.............................................................12
Selling Stockholders........................................................13
Plan of Distribution........................................................16
Legal Matters...............................................................17
Experts.....................................................................17
Uncertainty of Forward
Looking Statements..................................................17
</TABLE>
5,372,805 SHARES
INTERNATIONAL
ALLIANCE
SERVICES, INC.
COMMON STOCK
PROSPECTUS
June 17, 1997
================================================================================
