As filed with the Securities and Exchange Commission October 2, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
under
THE SECURITIES ACT OF 1933
ECOTYRE TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 11-3234026
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
895 Waverly Avenue EcoTyre Technologies, Inc.
Holtsville, New York 11742 895 Waverly Avenue
(Address, including zip code and telephone Holtsville, New York 11742
number, including area code, of registrant's (516) 289-4500
principal executive offices) (Name address and telephone
number, including area code, of
agent for service)
Copy to:
David H. Lieberman, Esq.
Blau, Kramer, Wactlar & Lieberman, P.C.
100 Jericho Quadrangle
Jericho, New York 11753
(516) 822-4820
Approximate date of commencement of proposed sale to public: From time to
time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box [ ].
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box [ ].
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering [ ].
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration 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 [ ].
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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Title of Each Class of Securities Amount to be Proposed Maximum Offering Proposed Maximum Amount of
to be Registered Registered Price Per Share (1) Aggregate Offering Price (1) Registration Fee
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<S> <C> <C> <C> <C>
Common Stock, par value $.001 1,862,902 shs. $2.94 $5,476,932 $1,661
per share
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Common Stock, par value $.001 522,342 shs. $.35-24.50 $1,222,192 $ 370
per share, reserved for issuance
upon the exercise of Common
Stock Purchase Warrants (2)
Total $2,031
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<FN>
(1) Estimated solely for the purpose of calculating the registration fee, based on the closing price of the Common Stock reported
in the consolidated reporting system on September 25, 1997.
(2) Pursuant to Rule 416, this Registration Statement also covers any additional shares of Common Stock which may become issuable
by virtue of the anti-dilution provisions of such securities.
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</FN>
</TABLE>
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>
<TABLE>
ECOTYRE TECHNOLOGIES, INC.
Cross Reference Sheet
Showing location in Prospectus of Information Required by Items on Form S-3
<CAPTION>
Item No. Prospectus Caption
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<S> <C> <C>
1. Forepart of the Registration Outside Front Cover
Statement and Outside Front Cover Page Page of Prospectus
of Prospectus
2. Inside Front and Outside Back Cover Inside Front and Outside
Pages of Prospectus Back Cover Pages of
Prospectus
3. Summary Information, Risk Factors and Certain Investment
Ratio of Earnings to Fixed Charges Considerations
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Outside Front Cover Page;
Selling Securityholders
6. Dilution *
7. Selling Security Holders Selling Securityholders
8. Plan of Distribution Outside Front Cover Page;
Plan of Distribution
9. Description of Securities to be *
Registered
10. Interests of Named Experts and Counsel Legal Opinion;
Experts
11. Material Changes *
12. Incorporation of Certain Information Incorporation of
by Reference Certain Documents
By Reference
13. Disclosure of Commission Position on *
Indemnification for Securities Act
Liabilities
*Omitted since answer to item is negative or inapplicable
</TABLE>
<PAGE>
ECOTYRE TECHNOLOGIES, INC.
2,385,244 Shares of Common Stock, $.001 par value
The 2,385,244 shares of Common Stock, $.001 par value per share (the
"Shares"), of EcoTyre Technologies, Inc. (the "Company") being covered by this
Prospectus represent 1,862,902 shares issued by the Company in recent private
offerings of securities pursuant to Regulation D of the Securities Act of 1933,
as amended, and 522,342 shares issuable upon the exercise of Common Stock
Purchase Warrants. They are being offered by an aggregate of fifty-five (55)
selling stockholders and any pledgees, transferees, donees or other successors
in interest thereof (the "Selling Stockholders"). The Shares may be offered by
the Selling Stockholders from time to time in transactions on the NASDAQ, in
privately negotiated transactions, or by a combination of such methods of sale,
at fixed prices that may be changed, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Stockholders may effect such transactions by selling the
Shares to or through broker-dealers and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Stockholder or the purchaser of the Shares for whom such broker-dealers
may act as agent or to whom they sell as principal or both (which compensation
to a particular broker-dealer might be in excess of customary commissions). See
"Selling Stockholders" and "Plan of Distribution."
None of the proceeds from the sale of the Shares by the Selling
Stockholders will be received by the Company, except to the extent that the
Common Stock Purchase Warrants are exercised. If all the Common Stock Purchase
Warrants are exercised at current exercise prices, the net proceeds to the
Company from this offering would be approximately $1,223,000. The Company will
bear the expenses in connection with the offering, including filing fees and the
Company's legal and accounting fees, estimated at $15,000.
The Company's Common Stock is traded on the NASDAQ Small-Cap Issues market
(Symbol: ETTI). On September 25, 1997, the last reported sale price of the
Company's Common Stock as reported by NASDAQ was $2.94 per share.
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AN INVESTMENT IN THE SECURITIES OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS", PAGE 4.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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 ___________, 1997
<PAGE>
No person has been authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offer
contained herein, and, if given or made, such information or representations
must not be relied upon as having been authorized by the Company or by any
agent, dealer or underwriter. This Prospectus does not constitute an offer of
any securities other than those to which it relates or an offer to sell, or a
solicitation of an offer to buy, those to which it relates in any state to any
person to whom it is not lawful to make such offer in such state.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
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<S> <C>
Available Information. . . . . . . . . . . . . . . 3
Incorporation of Certain Documents by Reference. . 3
The Company. . . . . . . . . . . . . . . . . . . . 4
Risk Factors . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds. . . . . . . . . . . . . . . . . . 7
Description of Capital Stock . . . . . . . . . . . 7
Selling Stockholders . . . . . . . . . . . . . . . 9
Plan of Distribution . . . . . . . . . . . . . . . 11
Indemnification of Directors and Officers. . . . . 12
Legal Matters. . . . . . . . . . . . . . . . . . . 12
Experts . . . . . . . . . . . . . . . . . . . . . 13
</TABLE>
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<PAGE>
AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission"), Washington, D.C., a Registration Statement under the Securities
Act of 1933, as amended (the "Act"), with respect to the Common Stock offered
hereby. This Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits relating thereto. For further
information with respect to the Company and the shares of Common stock offered
by this Prospectus, reference is made to such Registration Statement and the
exhibits thereto. Statements contained in this Prospectus as to the contents of
any contract or other document are not necessarily complete and in each instance
reference is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement for a full statement of the provisions
thereof; each such statement contained herein is qualified in its entirety by
such reference.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities maintained at the office
of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549
and at the Commission's Regional Offices at Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511 and 7 World Trade
Center, New York, New York 10048. Copies of such material can be obtained from
the Public Reference Section of the Commission, Washington, D.C. 20549, at
prescribed rates, and from the Securities and Exchange Commission's web site at
the address http://www.sec.gov. Copies of such material can also be obtained at
the offices of the National Association of Securities Dealers, Inc. at 1735 K
Street, Washington, D.C.
20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the Commission
(File No. 0-18105) pursuant to the Exchange Act, are incorporated by reference
in this Prospectus and shall be deemed to be a part hereof:
(1) The Company's Annual Report on Form 10-KSB for the fiscal year ended
March 31, 1997.
(2) The Company's Proxy Statement dated April 24, 1997.
(3) The Company's Quarterly Report on Form 10-Q for the three months ended
June 30, 1997.
All documents filed 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
this offering of Common Stock shall be deemed to be incorporated by reference in
this Prospectus and to be part hereof from the date of filing of such documents.
Any statement contained in a document incorporated or 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 by reference herein modifies or supersedes such statement.
Any statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of such person, a
copy of any or all of the documents incorporated by reference (except for
exhibits thereto unless specifically incorporated by reference therein).
Requests for such copies should be directed to the Secretary, EcoTyre
Technologies, Inc., 895 Waverly Avenue, Holtsville, New York 11742 (516)
289-4545.
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<PAGE>
THE COMPANY
EcoTyre Technologies, Inc. (the "Company") is a manufacturer in the United
States that recycles used tires by utilizing European remolding technology to
manufacture and distribute a comprehensive line of replacement automobile tires.
This differs from the traditional retreading process in which new tread is
simply placed over the tread portion of a used casing. The Company applies new
sidewall and tread rubber to a completely buffed casing and permanently bonds
the rubber to the casing from sidewall to sidewall in high temperature
vulcanizing presses. The result is a superior quality tire which is virtually
"indistinguishable" from a new tire in appearance and performance, but sells for
substantially less than leading brands. The remolded tires manufactured by the
Company are created by manufacturing a previously used high-quality passenger or
light truck casing of a name brand manufacturer.
The Company commenced limited manufacturing operations in December 1995.
During the fiscal year ending March 31, 1997, the Company operations reflect the
full transition from a distribution company to a manufacturing distributor of
remanufactured tires.
The Company's executive offices are located at 895 Waverly Avenue,
Holtsville, New York 11742, and its telephone number is (516) 289-4545.
RISK FACTORS
The following information, in addition to other information in this
Prospectus and in the documents incorporated herein by reference, should be
considered carefully by potential purchasers in evaluating the Company, its
business and an investment in shares of the Common Stock offered hereby.
1. Need for Additional Funds. Management believes that its working capital
position at June 30, 1997, its operations, and the full proceeds of this
offering (which will only occur if the warrants are exercised) will make it
possible for the Company to support its internal overhead expenses through at
least March, 1998. Since the Company has no existing line of credit, it will be
required to secure additional financing for future cash requirements and there
is no assurance that the Company will be successful in these efforts. If the
Company is unsuccessful in achieving positive cash flow from its operations or
generating additional working capital, its business will be materially and
adversely affected.
2. Historical and Anticipated Losses. The Company was incorporated in May,
1994 and, to date, has had limited revenues. For the three months ended June 30,
1997 and the years ended March 31, 1997 and 1996, the Company sustained net
losses of $577,382, $3,411,743 and $2,637,313, respectively. The Company
recognized $1,121,261, $2,938,565 and $314,024 in revenues for the three months
ended June 30, 1997 and the years ended March 31, 1997 and 1996, respectively.
As of June 30, 1997, the Company had total assets of $5,248,127, working capital
of $512,457 and stockholders' equity of $2,271,162. The Company is subject to
all the general risks inherent in, and the problems, expenses, difficulties,
complications and delays frequently encountered in connection with establishing
any new business and manufacturing operation. There is no assurance that the
Company will operate at a level sufficient to achieve profitability.
3. Going Concern Opinion. As indicated in the Company's annual report on
Form 10-KSB, the Company's financial statements have been prepared assuming that
the Company will continue as a going concern. The Company has sustained losses
since inception and requires additional working capital. These factors raise
substantial doubt about the Company's ability to continue as a going concern.
The financial statements do not include any adjustments that might result from
the outcome of this uncertainty.
4. Limited Manufacturing History. The Company commenced limited remolded
tire manufacturing operations in December, 1995, but no assurance can be given
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<PAGE>
that the Company will be able to successfully manufacture remolded tires of
sufficient quality to permit the successful sale thereof, that the Company will
be able to manufacture a sufficiently complete line of products to satisfy the
demands of its customers or that the Company will be able to produce quantities
of remolded tires sufficient to achieve profitability. In this regard, the
Company will be purchasing new machinery and equipment in order to manufacture a
greater percentage of recreational vehicle and high performance tires which
historically sell at greater profit margins. There is no assurance that this
machinery and equipment will operate efficiently and manufacture sufficient
numbers of such tires to increase the Company's profit margins.
5. Manufacturing with Used Machinery and Equipment. A majority of the
machinery and equipment which the Company is using in its manufacturing
operations is approximately nine years old and was used for approximately four
years. The equipment sat idle for four years prior to its use by the Company.
The Company has no warranty or service contract with respect to such equipment,
and bears the sole risk of such equipment failing to operate effectively.
Accordingly, no assurance can be given that this equipment will function
properly and some amount of repairs, refurbishings and delays already have been
experienced. There also can be no assurance that the Company's manufacturing
facility will not experience additional delays.
6. Uncertainty of Market Acceptance; Failure of Prior Tire Remolders. In
April, 1993, the Company began distributing remolded automobile passenger tires
in the United States manufactured by third parties and believes there will be
market acceptance of its own manufactured remolded passenger tires based on its
experience as a distributor. Remolded passenger automobile tires historically
have not accounted for a significant portion of the United States passenger
automobile replacement tire market. Since the Company's remolded tires compete
with new replacement tires, there can be no assurance that consumers will be
willing to purchase remolded tires notwithstanding the price differential and
the Company's belief that its remolded tires will be comparable in quality and
appearance to new tires. In this regard, the Company believes that at least
three previous businesses which attempted to manufacture, market and sell
remolded passenger automobile tires in the United States, including the previous
owner of the Company's machinery and equipment, failed to successfully do so and
such previous owner has ceased business operations. There is no assurance that a
U.S. market for the Company's products will develop and grow. There also is no
assurance that the U.S. market will provide sufficient revenue and earnings to
satisfy the cash requirements of the Company.
7. Competition. There are inherent difficulties for any new business
seeking to continue limited manufacturing operations and market a new product,
particularly in a very competitive market such as that for replacement
automobile tires. There are numerous manufacturers and/or distributors of new
tires, previously used tires and retreaded tires. The replacement tire market is
quite mature, and is serviced by a large number of competitors, several of which
dominate the marketplace. The Company anticipates that its primary competition
will be from lower-priced, lesser-known associated brands of major
manufacturers, and private-label manufacturers of new tires, both imported and
domestic, such as Coronet (Armstrong Tire Company), Summit (General Tire
Company), Hankock, Hercules (Cooper Tire & Rubber Co.), Ohtsu and others. The
Company would also compete with manufacturers and distributors of retreaded
tires such as Les Schwab Tire Centers. Many of these competitors have been in
existence for many years, have extensive marketing budgets, established market
shares, wide name recognition and existing franchise, dealer or other
distribution networks. They also have greater financial, personnel and
administrative resources than the Company and have the capability of value
pricing their products to deter or eliminate competition. Assuming the Company
does gain significant market share, there is no assurance that other U.S. or
foreign tire manufacturers, including those with experience in the foreign
remolded tire markets, will not begin manufacturing and marketing remolded tires
in direct competition with the Company in the United States. New entrants in
this industry could have an adverse impact on the Company's potential revenues
and profit margins. While the Company believes that the primary areas of
competition in its industry are price, warranty, service, appearance and quality
and that its products should compete favorably in these regards, there is no
assurance that the Company will be able successfully to compete against
established manufacturers or any new entrants into its industry.
8. Possible Adverse Impact of Unavailability of, or Higher Prices for, Raw
Materials. The primary raw materials used by the Company in its manufacturing
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<PAGE>
operations are previously used tire casings and rubber. The Company believes
that rubber is readily available from several sources, though the price thereof
has fluctuated. The Company also believes that suitable tire casings are readily
available from a wide variety of sources, including several distributors of
automobile tire casings and directly from tire distribution centers. Given the
nature of the market for tire casings, the Company believes that it will be
necessary to obtain casings from many sources to meet its anticipated needs.
While the Company does not anticipate any difficulties in obtaining sufficient
quantities of automobile tire casings and rubber to be used in its operations,
no assurance can be given in this regard. In the event that sufficient
quantities of raw materials are not available, or if the prices thereof become
uneconomical, the Company's business operations and financial condition could be
materially adversely affected.
9. Risks Relating to Environmental and Other Governmental Regulation. As a
manufacturer of remolded automobile tires, the Company's products are subject to
regulation by the United States Department of Transportation and other
government agencies relating to the safety and performance of its products. In
addition, as a manufacturer of rubber products with a manufacturing facility
located in the ecologically sensitive eastern region of Long Island, the Company
may be subject to various environmental regulations imposed by federal, state
and local authorities. While the Company believes that its manufacturing
operations are not environmentally sensitive, are in compliance with all
applicable environmental laws and regulations and that all necessary permits and
approvals will be obtained, no assurance can be given that compliance with
environmental laws, regulations or other restrictions, including any new laws or
regulations, will not impose additional costs on the Company which could
adversely affect its financial performance and results of operations.
10. Importance of and Risks Relating to Intellectual Property Rights. The
automobile tire industry is characterized by extensive use of intellectual
property protected by patent and trademark laws. The Company utilizes tire tread
designs and a manufacturing process which it has not patented and which it
believes are lawfully in the public domain. While the Company believes that it
does not infringe on the intellectual property rights of any third parties in
the conduct of its business, allegations of any such infringement, or disputes
or litigations relating thereto, could have a material adverse affect on the
Company's financial condition and results of operations.
11. Risk of Seasonality. While there is a year-round demand for automobile
tires, automobile tire sales in the Northeastern United States are generally
strongest during the second and third calendar quarters of the year. Seasonality
may have an impact on the Company's operations including cash flow, insofar as
the Company is required to control inventory levels to reflect projected
quarterly sales. However, since the Company anticipates that approximately 50%
of its sales will be in the Western United States and other regions where all
purpose automobile tires are used year round, it does not believe that
seasonality will adversely impact its operations.
Forward-Looking Statements
All statements other than statements of historical fact included in this
Prospectus regarding the Company's financial position, business strategy and
plans and objectives of management of the Company for future operations, are
forward-looking statements. When used in this Prospectus, words such as
"anticipate," "believe," "estimate," "expect," "intend" and similar expressions,
as they relate to the Company or its management, identify forward-looking
statements. Such forward-looking statements are based on the beliefs of the
Company's management, as well as assumptions made by and information currently
available to the Company's management. Actual results could differ materially
from those contemplated by the forward-looking statements as a result of certain
factors such as those disclosed under "Risk Factors," including but not limited
to, competitive factors and pricing pressures, changes in legal and regulatory
requirements, technological change or difficulties, product development risks,
commercialization and trade difficulties and general economic conditions. Such
statements reflect the current views of the Company with respect to future
events and are subject to these and other risks, uncertainties and assumptions
relating to the operations, results of operations, growth strategy and liquidity
of the Company. All subsequent written and oral forward-looking statements
attributable to the Company or persons acting on its behalf are expressly
qualified in their entirety by this paragraph.
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<PAGE>
USE OF PROCEEDS
The Company will not receive any proceeds from this offering, except to the
extent that the Common Stock Purchase Warrants are exercised. If all the Common
Stock Purchase Warrants are exercised at current exercise prices, the net
proceeds to the Company from this offering would be approximately $1,223,000.
Such proceeds, if received, are intended to be used to support further
manufacturing activities and for general working capital.
DESCRIPTION OF CAPITAL STOCK
Capital Stock
The Company's authorized capital stock consists of 30,000,000 shares of
Common Stock, $.001 par value per share, 2,000,000 shares of Class A Convertible
Preferred Stock, 675,000 shares of Class B Convertible Preferred Stock and
1,325,000 shares of Preferred Stock, $.001 par value per share.
Common Stock
------------
Holders of the Common Stock do not have subscription, redemption,
conversion or preemptive rights. The shares of Common Stock sold by the Company
in this offering will be, when issued and paid for, fully paid and
non-assessable. Each share of Common Stock is entitled to participate pro rata
in distribution upon liquidation, subject to the rights of holders of Preferred
Stock, and to one vote on all matters submitted to a vote of stockholders. The
holders of Common Stock may receive cash dividends as declared by the Board of
Directors out of funds legally available therefor, subject to the rights of any
holders of Preferred Stock. Holders of the Common Stock are entitled to elect
all directors. The Company's Board consists of three classes each of which
serves for a term of three years. At each annual meeting of the stockholders the
directors in only one class will be elected. The holders of the Common Stock do
not have cumulative voting rights, which means that the holders of more than
half of the shares voting for the election of a class of directors can elect all
of the directors of such class and in such event the holders of the remaining
shares will not be able to elect any of such directors.
Class A Convertible Preferred Stock
Each issued and outstanding share of Class A Convertible Preferred Stock
("Class A Preferred") entitles the holder to receive dividends when, as and if
declared by the Board of Directors, at the annual rate of 10%, payable
semi-annually in either cash or common stock at the option of the Company.
Additionally, these preferred shareholders have the right to receive
preferential payments in the event of liquidation, dissolution or winding up of
the affairs of the Company. The holders of Class A Preferred have the right to
convert all or any part of their shares into Common Stock of the Company. The
Conversion Rate shall be (A) the sum of (1) $1.00 plus (2) all accrued and
unpaid dividends on a single share of Class A Convertible Preferred Stock
divided by (B) the Conversion Price (as hereinafter defined). The "Conversion
Price" shall be the lesser of (a) $21.00 per share ("fixed conversion price") or
(b) seventy-five (75%) percent of the Closing Bid Price of one share of the
Company's Common Stock for the five trading day period immediately prior to the
conversion date. For the purposes hereof, the "Closing Bid Price" shall mean the
closing bid price of the Company's Common Stock as reported by NASDAQ (or, if
not reported by NASDAQ, as reported by such other exchange or market where
traded).
Holders of shares of Class A Convertible Preferred Stock shall be permitted
to convert such shares as follows:
(a) commencing July 15, 1997, for such month and for each calendar
month thereafter, each holder of Class A Convertible Preferred Stock shall be
entitled to convert up to twenty-five (25%) percent of the shares of Class A
Convertible Preferred Stock held by such holder as of July 15, 1997.
(b) commencing October 15, 1997 all of the shares of Class A
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Convertible Preferred Stock shall be convertible into Common Stock.
The number of shares of Common Stock into which each share of Class A
Convertible Preferred Stock is convertible also shall be subject to adjustment
from time to time under certain situations including reclassification or
recapitalization of the Common Stock.
Class B Convertible Preferred Stock
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Each issued and outstanding share of Class B Convertible Preferred Stock
("Class B Preferred") entitles the holder to receive dividends when, as and if
declared by the Board of Directors, at the annual rate of 10%, payable
semi-annually in either cash or common stock at the option of the Company.
Additionally, these preferred shareholders have the right to receive
preferential payments in the event of liquidation, dissolution or winding up of
the affairs of the Company. The holders of Class B Preferred have the right to
convert all or any part of their shares into Common Stock of the Company. The
conversion rate shall be (A) the sum of (1) $1.00 plus (2) all accrued and
unpaid dividends on a single share of Class B Convertible Preferred Stock
divided by (B) the Conversion Price (as hereinafter defined). The "Conversion
Price" shall be $2.45 per share. Notwithstanding the foregoing, in no event
shall the shares of Common Stock issued on conversion have a market value of
less than $675,000 in the aggregate.
The number of shares of Common Stock into which each share of Class B
Convertible Preferred Stock is convertible shall also be subject to adjustment
from time to time under certain situations including reclassification or
recapitalization of the Common Stock.
Preferred Stock
---------------
The Company's certificate of incorporation, as amended, authorizes the
issuance of up to 1,325,000 shares of additional preferred stock, par value
$.001 per share.
The issuance of additional Series A Preferred Stock or Preferred Stock by
the Board of Directors could adversely affect the rights of holders of shares of
Common Stock by, among other things, establishing preferential dividends,
liquidation rights or voting power. The issuance of Series A Preferred Stock or
Preferred Stock could be used to discourage or prevent efforts to acquire
control of the Company through the acquisition of shares of Common Stock.
Certain Provisions of the Certificate of Incorporation
The Company's Certificate of Incorporation contains certain provisions
which may be deemed to be "anti-takeover" in nature in that such provisions may
deter, discourage or make more difficult the assumption of control of the
Company by another entity or person. In addition to the ability to issue
Preferred Stock, these provisions are as follows:
A vote of 66-2/3% of the stockholders is required by the Certificate of
Incorporation in order to approve certain transactions including mergers and
sales or transfers of all or substantially all of the assets of the Company.
The Company's Certificate of Incorporation also provides that the members
of the Board of Directors of the Company have been classified into three
classes. The term of each class will run for three years and expire at
successive annual meetings of stockholders. Accordingly, it is expected that it
would take a minimum of two annual meetings of stockholders to change a majority
of the Board of Directors.
The Delaware General Corporation Law further contains certain anti-takeover
provisions. Section 203 of the Delaware General Corporation Law provides, with
certain exceptions, that a Delaware corporation may not engage in any of a broad
range of business combinations with a person who owns 15% or more of the
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<PAGE>
corporation's outstanding voting stock (an "interested stockholder") for a
period of three years from the date that such person became an interested
stockholder unless: (i) the transaction resulting in a person's becoming an
interested stockholder, or the business combination is approved by the board of
directors of the corporation before the person becomes an interested
stockholder; (ii) the interested stockholder acquires 85% or more of the
outstanding voting stock of the corporation (excluding shares owned by persons
who are both officers and directors of the corporation, and shares held by
certain employee stock ownership plans); or (iii) the business combination is
approved by the corporation's board of directors and by the holders of at least
66 2/3% of the corporation's outstanding voting stock at an annual or special
meeting, excluding shares owned by the interested stockholder.
SELLING STOCKHOLDERS
The following table sets forth the ownership of the Selling Security
Holders and, the number of shares of Common Stock beneficially owned by each of
the Selling Security Holders, and the number of shares which may be offered for
resale pursuant to this Prospectus. Except as otherwise disclosed herein, none
of the Selling Security Holders has had any position, office or other material
relationship with the Company or its predecessors or affiliates within the past
three years.
The information included below is based upon information provided by the
Selling Security Holders. Because the Selling Security Holders may offer all,
some or none of their shares, no definitive estimate as to the number of shares
that will be held by the Selling Security Holders after such offering can be
provided.
<TABLE>
<CAPTION>
Number of Shares
Number of Shares Number of Shares of Common Stock
Number of Shares of Common Stock of Common Stock Remaining After
of Class A Preferred Beneficially Owned Sold Under the Sale of Common
Selling Security Holder Stock Owned (1) Prior to Closing Offering Stock Hereunder
- ----------------------- -------------------- ----------------- ---------------- ----------------
<S> <C> <C> <C> <C>
Barbara Banach 28,750 28,750 0
Richard Banach (Trustee)
Profit Sharing Plan
Pershing Division of DLJSC 2,875 2,875 0
Sally Banach 11,500 11,500 0
Daniel L. Beach 11,500 11,500 0
George and Barbara Billings 23,880 23,793 (2) 11,500 12,293
Charles Cantore 5,750 5,750 0
James Costello 2,875 2,875 0
J. Healey Country Village
Realty, Inc. 5,750 5,750 0
Island Foreclosure Resale
Co., Inc. 5,750 5,750 0
Maslee Mallette 2,875 2,875 0
Rudy J. & Evelena Ann
Rosado 5,750 5,750 0
Louis P. Solferino 101,571 98,000 3,571
Gregory Thomas 5,750 5,750 0
Michael and Alana Verderosa 1,586 7,382 (2) 5,750 1,632
Karen Antos 7,436 16,000 (2) 16,000 0
Art Beroff 75,000 75,000 0
Annette Cantor 74,054 285,154 (2) 210,857 74,297
Claire Cohn 12,500 12,500 0
Ronald & Lorraine Fehr 8,000 8,000 0
Gerdaneu, Inc. 50,000 50,000 0
Marilyn Henderson 50,000 50,000 0
Susan Hindes 8,000 8,000 0
Jerry Holmes 15,222 25,000 (2) 25,000 0
- 9 -
<PAGE>
Keith Jackson 45,771 80,000 (2) 80,000 0
Steven & Jill Lander 4,900 4,900 0
Gerald & Eugenia Mercadante 50,000 50,000 0
Goldis Financial 7,500 7,500 0
Gerald Mercadante, Jr. 25,000 25,000 0
Michael Assoc. 75,000 75,000 0
Charles L. Rankin 50,000 50,000 0
Joseph Reges 25,000 25,000 0
Judd Rothman 67,071 64,500 2,571
Ernest Ruberto 25,000 25,000 0
Ruritania Ltd. 75,000 75,000 0
Swarthmore, S.A. 75,000 75,000 0
Trafalgor Strategic Investment
Fund, Ltd. 50,000 50,000 0
Alvin Wichard 20,000 20,000 0
Arthur Wu 24,800 24,800 0
Rosalind Wunderlin 18,137 18,137 0
Howard Schwartz 54,000 54,000 (3) 0
Steve Finkelstein 54,000 54,000 (3) 0
Salvatore Marasa 46,500 46,500 (4) 0
Anthony Imbo 46,500 46,500 (4) 0
David Ganz 46,500 46,500 (4) 0
Michael Ploshnick 27,500 27,500 (5) 0
BayTree Associates 5,714 5,714 (6) 0
Continental Capital and Equity
Corp. 5,714 5,714 (7) 0
Phoenixcor, Inc. 10,714 10,714 (7)
Srotnac Group, LLC 150,000 150,000 0
Optimum Fund 203,742 203,742 (8) 0
Capital Fund 329,591 329,591 (8) 0
Arlene Mari 2,923 12,725 8,000 4,725
Kenneth Barton 24,000 24,000 (9) 0
Anna Crispino 19,200 19,200 (10) 0
David H. Lieberman,P.C., PSP 24,714 24,000(9) 0
-----------------
<FN>
(1) See page 8 for explanation of Class A Convertible Preferred Stock.
(2) Does not include Common Stock issuable upon the conversion of the
Class A Convertible Preferred Stock currently held by selling
securityholder.
(3) Represents 22,500 shares issuable upon the exercise of Warrants at
an exercise price of $.35 per share and 31,500 shares issuable upon
the exercise of Warrants at an exercise price of $1.25.
(4) Represents 15,000 shares issuable upon the exercise of Warrants at
an exercise price of $.35 per share and 31,500 shares issuable upon
the exercise of Warrants at an exercise of $1.25.
(5) Represents 10,000 shares issuable upon the exercise of Warrants at
an exercise price of $.35 per share and 17,500 shares issuable upon
the exercise of Warrants at an exercise price of $1.25.
(6) Represents shares issuable upon exercise of Warrants at an
exercise price of $24.50 per share.
(7) Represents shares issuable upon exercise of Warrants at an exercise
price of $2.45 per share.
(8) Includes 140,000 shares issuable upon exercise of Warrants,
70,000 of which are exercisable at a price of $3.00 per share and
70,000 of which are exercisable at a price of $4.00 per share.
(9) Includes 9,000 shares issuable upon exercise of Warrants, 4,500 of
which are exercisable at a price of $3.00 per share and 9,000 of
which are exercisable at a price of $4.00 per share.
-10-
<PAGE>
(10) Includes 7,200 shares issuable upon exercise of Warrants, 3,600 of
which are exercisable at a price of $3.00 per share and 3,600 of
which are exercisable at a price of $4.00 per share.
</FN>
</TABLE>
PLAN OF DISTRIBUTION
The shares of Common Stock offered hereby may be offered for resale by the
Selling Security Holders (or their donees, transferees or successors in
interest) from time to time in transactions for their own account (which may
include block transactions) on any national securities exchange or quotation
service on which the Common Stock may be listed or quoted at the time of sale,
in the over-the-counter market, in transactions otherwise than on such exchanges
(including privately negotiated transactions) or in the over-the-counter market,
through the writing of options, or a combination of such methods of sale, at
fixed prices (which may be changed), at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at negotiated
prices. The Selling Security Holders may effect such transactions by selling the
shares of Common Stock to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Security Holders and/or the purchasers of shares for whom such
broker-dealers may act as agent or to whom they sell as principal, or both
(which compensation as to a particular broker-dealer might be in excess of
customary commissions). From time to time the Selling Security Holder may engage
in short sales, including short sales against the box, puts and calls and other
transactions in securities of the Company or derivatives thereof, and may sell
and deliver the Common Stock in connection therewith. Further, except as set
forth herein, the Selling Security Holders are not restricted as to the number
of shares which may be sold at any one time, and it is possible that a
significant number of shares could be sold at the same time, which may have a
depressive effect on the market price of the Company's Common Stock. The Selling
Security Holders may also pledge shares of Common Stock as collateral for margin
accounts, and such shares could be resold pursuant to the terms of such
accounts. The Selling Security Holders and any dealers or agents participating
in the distribution of the Common Stock may be deemed to be "underwriters" as
defined in the Securities Act and any profit on the sale of the Common Stock by
them and any discounts, commissions or concessions received by any such dealers
or agents might be deemed to be underwriting discounts and commissions under the
Securities Act. The Company will not receive any proceeds of the sales of the
Common Stock by the Selling Security Holders.
To comply with the securities laws of certain jurisdictions, if applicable,
the Common Stock will be offered or sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain jurisdictions
the Common Stock may not be offered or sold unless they have been registered or
qualified for sale in such jurisdictions or an exemption from registration or
qualification is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Common Stock may not simultaneously engage in
market-making activities with respect to such securities for a period of two to
nine business days prior to the commencement of such distribution. In addition
to and without limiting the foregoing, each Selling Security Holder and any
other person participating in a distribution will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including without limitation Rules 10b-6 and 10b-7, which provisions may limit
the timing of purchases and sales of any of the securities by the Selling
Security Holders or any such other person. All of the foregoing may affect the
marketability of the Common Stock and the brokers' and dealers' ability to
engage in market-making activities with respect to these securities.
Pursuant to the Registration Agreement, all expenses of the registration of
the Common Stock will be paid by the Company, including, without limitation,
Commission filing fees and expenses of compliance with state securities or "blue
sky" laws; provided, however, that the Selling Security Holders will pay all
underwriting discounts and selling commissions, if any.
-11-
<PAGE>
INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under provisions of the By-Laws of the Company, each person who is or was a
director or officer of the Company shall be indemnified by the Company as of
right to the full extent permitted or authorized by the General Corporation Law
of Delaware, including against liabilities under the Securities Act of 1933.
Under such law, to the extent that such person is successful on the merits
of defense of a suit or proceeding brought against him by reason of the fact
that he is a director or officer of the Company, he shall be indemnified against
expenses (including attorneys' fees) reasonably incurred in connection with such
action. If unsuccessful in defense of a third-party civil suit or a criminal
suit is settled, such a person shall be indemnified under such law against both
(1) expenses (including attorneys' fees) and (2) judgements, fines and amounts
paid in settlement if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company, and
with respect to any criminal action, had no reasonable cause to believe his
conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the
Company, or if such suit is settled, such a person shall be indemnified under
such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company except that if such a person is adjudged to be liable in such suit for
negligence or misconduct in the performance of his duty to the Company, he
cannot be made whole even for expenses unless the court determines that he is
fairly and reasonably entitled to indemnity for such expenses.
The officers and directors of the Company are covered by officers and
directors liability insurance. The policy coverage is $1,000,000, which includes
reimbursement for costs and fees. There is a maximum deductible for officers and
directors under the policy of $100,000 for each claim. The Company has entered
into Indemnification Agreements with each of its officers and directors. The
Agreements provide for reimbursement for all direct and indirect costs of any
type or nature whatsoever (including attorneys' fees and related disbursements)
actually and reasonably incurred in connection with either the investigation,
defense or appeal of a Proceeding, as defined, including amounts paid in
settlement by or on behalf of an Indemnitee.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon
for the Company by Blau, Kramer, Wactlar & Lieberman, P.C., Jericho, New York
11753. Members of this law firm own an aggregate of approximately 40,000 shares
of Common Stock of which 24,000 shares are being registered hereunder.
EXPERTS
The financial statements incorporated by reference in this Prospectus and
elsewhere in the Registration Statement, to the extent and for the periods
indicated in their report (which report contains an explanatory paragraph
regarding the Company's ability to continue as a going concern) have been
audited by BDO Seidman, LLP, independent certified public accountants, and are
included herein in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
-12-
<PAGE>
No dealer, salesperson, or other person has been authorized by the Company
to give any information or to make any representations other than those
contained in this Prospectus and, if given or made, such other information or
representations must not be relied upon as having been so authorized by the
Company. 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, or an offer to or solicitation of any person in any jurisdiction in
which such offer or solicitation would be unlawful. Neither delivery of this
Prospectus nor any sale made hereunder shall, under any circumstances, create
any implication that the information herein is correct as of any time subsequent
to the date hereof.
ECOTYRE TECHNOLOGIES, INC.
2,385,244 Common Shares
PROSPECTUS
Dated: ____________, 1997
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee . . . $ 1,600
Legal Fees. . . . . . . . . . . . . . . . . . . . . 7,500
Accounting Fees . . . . . . . . . . . . . . . . . . 2,500
Miscellaneous . . . . . . . . . . . . . . . . . . . 3,400
-------
Total . . . . . . . . . . . . . . . . . . . . $15,000
=======
</TABLE>
The Company will pay all of these expenses.
Item 15. Indemnification of Directors and Officers
Under provisions of the By-Laws of the Company, each person who is or was a
director or officer of the Company shall be indemnified by the Company as of
right to the full extent permitted or authorized by the General Corporation Law
of Delaware.
Under such law, to the extent that such person is successful on the merits of
defense of a suit or proceeding brought against him by reason of the fact that
he is a director or officer of the Company, he shall be indemnified against
expenses (including attorneys' fees) reasonably incurred in connection with such
action. If unsuccessful in defense of a third-party civil suit or a criminal
suit is settled, such a person shall be indemnified under such law against both
(1) expenses (including attorneys' fees) and (2) judgments, fines and amounts
paid in settlement if he acted in good faith and in a manner he reasonably
believed to be in, or not opposed to, the best interests of the Company, and
with respect to any criminal action, had no reasonable cause to believe his
conduct was unlawful.
If unsuccessful in defense of a suit brought by or in the right of the
Company, or if such suit is settled, such a person shall be indemnified under
such law only against expenses (including attorneys' fees) incurred in the
defense or settlement of such suit if he acted in good faith and in a manner he
reasonably believed to be in, or not opposed to, the best interests of the
Company except that if such a person is adjudged to be liable in such suit for
negligence or misconduct in the performance of his duty to the Company, he
cannot be made whole even for expenses unless the court determines that he is
fairly and reasonably entitled to indemnity for such expenses.
The officers and directors of the Company are covered by officers and
directors liability insurance. The policy coverage is $1,000,000, which includes
reimbursement for costs and fees. There is a maximum deductible for officers and
directors under the policy of $100,000 for each claim. The Company has entered
into Indemnification Agreements with each of its officers and directors. The
Agreements provide for reimbursement for all direct and indirect costs of any
type or nature whatsoever (including attorneys' fees and related disbursements)
actually and reasonably incurred in connection with either the investigation,
defense or appeal of a Proceeding, as defined, including amounts paid in
settlement by or on behalf of an Indemnitee.
Item 16. Exhibits
5 Opinion of Blau, Kramer, Wactlar & Lieberman, P.C.
23.1 Consent of BDO Seidman, LLP
23.2 Consent of Blau, Kramer, Wactlar & Lieberman, P.C.
(included in Exhibit 5 hereof)
24 Power of Attorney
Item 17. Undertakings
(a) The undersigned registrant hereby undertakes that, for purposes of
II-1
<PAGE>
determining any liability under the Securities Act of 1933, as amended (the
"Act"), each filing of the registrant's annual report pursuant to Section 13(a)
or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable,
each filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Securities Exchange Act of 1934) that is incorporated by reference
in the registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the 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 whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(c) 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 to include any material
information with respect to the plan of distribution not previously disclosed in
the registration statement or any material change to such information in the
registration statement;
(2) that, for the purpose of determining any liability under the Act, 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; and
(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.
II-2
<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 thereunto duly authorized, in Holtsville,
New York on the 25th day of September, 1997.
ECOTYRE TECHNOLOGIES, INC.
By: /s/ Vito V. Alongi
-------------------------------------------
Vito F. Alongi
President, Treasurer (Principal Executive,
Financial and Accounting Officer)
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Vito F. Alongi and Robert E. Munyer, Jr., and
each of them, his true and lawful attorneys-in-fact and agents, with full power
of substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done, as fully to all intents
and purposes as he might or could do in person, hereby ratifying and confirming
all that said attorneys-in-fact and agents or any of them, or their or his
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
In accordance with the requirements of the Securities Act of 1933, this
registration statement was signed by the following persons in the capacities
indicated on September 25, 1997.
Signatures Title
- ---------- -----
/s/ Marc de Logeres Chairman of the Board
- -----------------------
Marc de Logeres
/s/ Vito F. Alongi
- ----------------------- President, Treasurer and Director
Vito F. Alongi (Principal Executive, Financial and Accounting
Officer)
/s/ Robert E. Munyer, Jr.
- ------------------------ Vice President, Secretary and Director
Robert E. Munyer, Jr.
- ----------------------- Vice President and Director
John W. King
/s/ Theresa Mari
- ----------------------- Director
Theresa Mari
/s/ Arthur Rosenberg
- ----------------------- Director
Arthur Rosenberg
II-3
EXHIBIT 5
[Letterhead of Blau, Kramer, Wactlar & Lieberman, P.C.]
October 1, 1997
EcoTyre Technologies, Inc.
895 Waverly Avenue
Holtsville, New York 11742
Gentlemen:
We have acted as counsel to EcoTyre Technologies, Inc., a Delaware
corporation (the "Company"), in connection with the Registration Statement on
Form S-3 of the Company, to be filed with the Securities and Exchange Commission
on October 2, 1997 (the "Registration Statement"), relating to the registration
under the Securities Act of 1933, as amended, of 2,385,244 shares of the
Company's Common Stock, par value $.001 per share (the "Shares"), including
522,342 shares issuable upon the exercise of Common Stock Purchase Warrants.
In this connection, we have reviewed: (i) the Restated Certificate of
Incorporation and By-Laws of the Company, as currently in effect; (ii) the
Registration Statement; (iii) certain resolutions adopted by the Board of
Directors of the Company; and (iv) such other documents, records and other
matters as we have deemed necessary or appropriate in order to give the opinions
set forth herein. We are familiar with the proceedings heretofore taken by the
Company in connection with the authorization, registration, issuance and sale of
the Shares. We have, with your consent, relied as to factual matters on
certificates or other documents furnished by the Company or its officers and by
governmental authorities and upon such other documents and data that we have
deemed appropriate. We have assumed the authenticity of all documents submitted
to us as originals and the conformity to original documents of all documents
submitted to us as copies.
We are members of the Bar of the State of New York and express no opinion
as to the laws of any jurisdiction other than the laws of the State of New York
and the General Corporation Law of the State of Delaware.
Based on such examination and review and subject to the foregoing, we are
of the opinion that the Shares issued, or issuable upon exercise of Warrants,
when sold in the manner set forth in the Registration Statement, will be legally
issued, fully paid and nonassessable.
We consent to the use of this opinion as an Exhibit to the Registration
Statement and to the reference to us under the caption "Legal Matters" in the
Prospectus that is a part of the Registration Statement. In giving such consent,
we do not hereby admit that we are in the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended.
Very truly yours,
/s/ BLAU, KRAMER, WACTLAR &
LIEBERMAN, P.C.
Exhibit 23.1
Consent of Independent Certified Public Accountants
EcoTyre Technologies, Inc.
Holtsville, New York
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated July 10,
1997 relating to the financial statements of EcoTyre Technologies, Inc.
("EcoTyre") (which contains an explanatory paragraph regarding EcoTyre's ability
to continue as a going concern) appearing in the Company's Annual Report on Form
10-KSB for the year ended March 31, 1997.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
/s/ BDO Seidman,LLP
BDO SEIDMAN, LLP
Mitchel Field, New York
September 30, 1997
