As filed with the Securities and Exchange Commission on May 6, 2004
REGISTRATION NO. 333-115061
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1 TO
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
(Exact name of registrant as specified in charter)
DELAWARE 58-1954497
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1940 NORTHWEST 67TH PLACE
GAINESVILLE, FLORIDA 32653
(352) 373-4200
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive office)
DR. LOUIS F. CENTOFANTI
CHAIRMAN OF THE BOARD
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
1940 NORTHWEST 67TH PLACE
GAINESVILLE, FLORIDA 32653
(352) 373-4200
(Address, including zip code, and telephone number,
including area code, of agent for service)
Copy to:
IRWIN H. STEINHORN, ESQUIRE
CONNER & WINTERS, P.C.
ONE LEADERSHIP SQUARE, SUITE 1700
211 NORTH ROBINSON
OKLAHOMA CITY, OKLAHOMA 73102
(405) 272-5711
Approximate date of commencement of proposed sale to the public: AS SOON
AS PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this form are being offered
pursuant to a 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: |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering: |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
check the following box: |_|
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
CALCULATION OF REGISTRATION FEE
=============================== ====================== ======================= ===================== ================
PROPOSED PROPOSED
TITLE OF EACH CLASS NUMBER OF MAXIMUM MAXIMUM AMOUNT OF
OF SECURITIES TO BE SHARES TO BE OFFERING PRICE AGGREGATE REGISTRATION
REGISTERED REGISTERED PER SHARE OFFERING PRICE FEE
------------------------------- ---------------------- ----------------------- --------------------- ----------------
Common Stock 6,391,751(1) $2.08(2) $13,294,842(2) $1,685(3)
=============================== ====================== ======================= ===================== ================
(1) Includes (a) 4,616,113 shares which have been issued by the Registrant
pursuant to a private placement and (b) 1,775,638 shares issuable by the
Registrant upon the exercise of various warrants issued by the Registrant
in the private placement having an exercise price of $2.92 per share.
Pursuant to Rule 416 under the Securities Act of 1933, as amended, the
number of shares of common stock registered hereby shall include an
indeterminate number of shares of common stock that may be issued in
connection with a stock split, stock dividend, recapitalization or similar
event.
(2) Estimated solely for the purposes of calculating the registration fee in
accordance with Rule 457(c) on the basis of the average of the high and
low price as quoted on the NASDAQ Small Cap Market on April 26, 2004.
(3) Previously paid.
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THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE RELATED REGISTRATION STATEMENT FILED WITH
THE SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES
AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE
OFFER OR SALE IS NOT PERMITTED.
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SUBJECT TO COMPLETION: DATED MAY 6, 2004
PROSPECTUS
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[PERMAFIX ENVIRONMENTAL SERVICES LOGO]
6,391,751 SHARES
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
COMMON STOCK
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This prospectus relates to the offer or sale of up to 6,391,751 shares of
Perma-Fix Environmental Services, Inc. common stock from time to time by the
Selling Stockholders listed in this prospectus. We will not receive any proceeds
from the sale of such shares by the Selling Stockholders.
Our common stock is traded on the Nasdaq SmallCap Market under the symbol
"PESI" and on the Boston Stock Exchange under the symbol "PES." On April 26,
2004, the closing price of our common stock as reported on the Nasdaq SmallCap
Market was $2.06.
We have agreed to pay all the costs and fees relating to the registration
of the shares covered by this prospectus. However, we will not pay any
discounts, concessions, or commissions payable to underwriters, dealers, or
agents incident to the offering of such shares or the fees and expenses incurred
by counsel for the Selling Stockholders.
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INVESTMENT IN THESE SECURITIES INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 2 OF THIS PROSPECTUS FOR
CERTAIN RISKS YOU SHOULD CONSIDER.
------------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED THESE SECURITIES OR PASSED UPON THE
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
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The date of this prospectus is __________, 2004.
TABLE OF CONTENTS
ABOUT OUR BUSINESS............................................................1
RISK FACTORS..................................................................2
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS............................10
RECENT DEVELOPMENTS..........................................................10
USE OF PROCEEDS..............................................................12
SELLING STOCKHOLDERS.........................................................12
PLAN OF DISTRIBUTION.........................................................15
LEGAL OPINION................................................................17
EXPERTS .....................................................................17
WHERE YOU CAN FIND MORE INFORMATION..........................................17
Unless the context otherwise requires, references in this prospectus to
"Perma-Fix," "the company," "we," "our," and "us" refer to Perma-Fix
Environmental Services, Inc. and its consolidated subsidiaries.
i
ABOUT OUR BUSINESS
We are engaged, through our subsidiaries, in the following lines of
business:
INDUSTRIAL WASTE MANAGEMENT SERVICES
Our Industrial Waste Management Services include:
o treatment, storage, processing, and disposal of hazardous and
non-hazardous waste;
o industrial waste and wastewater management services, including the
collection, treatment, processing and disposal of hazardous and
non-hazardous waste; and
o various waste management services to certain governmental agencies.
These services are primarily conducted through eight of our subsidiaries
and through various locations within our government services group:
o Perma-Fix Treatment Services, Inc. located in Tulsa, Oklahoma;
o Perma-Fix of Dayton, Inc. located in Dayton, Ohio;
o Perma-Fix of Ft. Lauderdale, Inc. located in Davie, Florida;
o Perma-Fix of Orlando, Inc. located in Orlando, Florida;
o Perma-Fix of South Georgia, Inc. located in Valdosta, Georgia;
o Perma-Fix of Michigan, Inc. located in Detroit, Michigan;
o Perma-Fix of Maryland, Inc. located in Baltimore, Maryland; and
o Perma-Fix of Pittsburgh, Inc. located in Pittsburgh, Pennsylvania.
NUCLEAR WASTE MANAGEMENT SERVICES
Our Nuclear Waste Management Services include:
o treatment, storage, processing and disposal of mixed waste (waste
containing both low-level radioactive and hazardous waste); and
o nuclear and low-level radioactive waste treatment, processing and
disposal, which includes research, development, and on and off-site
waste remediation and processing.
These services are primarily conducted through three of our subsidiaries:
o Perma-Fix of Florida, Inc. located in Gainesville, Florida;
o Diversified Scientific Services, Inc. located in Kingston,
Tennessee; and
o East Tennessee Materials and Energy Corporation located in Oak
Ridge, Tennessee.
CONSULTING ENGINEERING SERVICES
Our Consulting Engineering Services include broad-scope environmental
issues, including:
o environmental management programs
o regulatory permitting
o compliance and auditing
o field testing and characterization
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These services are primarily conducted through our subsidiary, Schreiber,
Yonley & Associates, Inc., located in St. Louis, Missouri.
We have grown through both acquisitions and internal development. Our
present objective is to focus on the operations, maximize profitability, and to
continue the research and development of innovative technologies for the
treatment of nuclear, mixed and industrial waste.
We service research institutions, commercial companies, public utilities,
and governmental agencies nationwide. The distribution channels for services are
through direct sales to customers or via intermediaries.
We were incorporated in the State of Delaware in December 1990. Our
executive offices are located at 1940 N.W. 67th Place, Gainesville, Florida
32653, and our telephone number is (352) 373-4200. Our website is located at
www.perma-fix.com. The information contained in our website is not incorporated
by reference in this prospectus.
RISK FACTORS
Investing in our securities involves a high degree of risk. Before making
an investment decision, you should carefully consider the risk factors set forth
in this prospectus and any accompanying prospectus supplement delivered with
this prospectus, as well as other information we include or incorporate by
reference in this prospectus and any accompanying prospectus supplement and the
additional information in the other reports we file with the Securities and
Exchange Commission ("SEC").
OUR SUBSTANTIAL AMOUNT OF DEBT COULD ADVERSELY AFFECT OUR OPERATIONS.
We have a substantial amount of debt. At March 31, 2004, our aggregate
consolidated debt was approximately $20.9 million. If our floating rates of
interest experienced an upward increase of 1%, our debt service would increase
by approximately $209,000 annually. Our secured revolving credit facility (the
"Credit Facility") provides for an aggregate commitment of $25 million,
consisting of an $18 million revolving line of credit and a term loan of $7
million. The maximum we can borrow under the revolving part of the Credit
Facility is based on a percentage of the amount of our eligible receivables
outstanding at any one time. The Credit Facility is due December, 2005. Although
we used a substantial portion of the net proceeds received from a recently
completed private placement (see "Recent Developments - Private Placement") to
reduce our indebtedness under the revolving part of the Credit Facility, we
intend to continue to borrow under that facility from time to time, and this
reduction did not reduce the amount we can borrow under the Credit Facility. As
of March 31, 2004, we had borrowings under our revolving part of our Credit
Facility of $1.7 million and borrowing availability of up to an additional $11.4
million based on our then outstanding eligible receivables.
Our high leverage could have material adverse consequences on our ability
to operate our business, including the following:
o it may make it difficult for us to satisfy our obligations and
contractual and commercial commitments
o our ability to obtain additional financing in the future for
refinancing indebtedness, acquisitions, working capital, capital
expenditures or other purposes may be impaired;
o funds available to us for our operations and general corporate
purposes or for capital expenditures will be reduced because a
substantial portion of our consolidated cash flow from operations
will be dedicated to the payment of the principal and interest on
our indebtedness;
o we may be more highly leveraged than certain of our competitors,
which may place us at a competitive disadvantage;
o we may be more vulnerable to a downturn in general economic
conditions;
o certain of the borrowings under our debt agreements have floating
rates of interest, which cause us to be vulnerable to increases in
interest rates; and
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o we must use a substantial portion of our cash flow from operations
to pay interest on our indebtedness, which reduces the funds
available to us for other purposes.
Our ability to make principal and interest payments, or to refinance
indebtedness, will depend on both our and our subsidiaries' future operating
performance and cash flow. Prevailing economic conditions, interest rate levels,
and financial, competitive, business, and other factors affect us. Many of these
factors are beyond our control.
THE DOCUMENTS GOVERNING OUR INDEBTEDNESS RESTRICT OUR ABILITY TO ENGAGE IN
CERTAIN BUSINESS TRANSACTIONS.
The terms of the Credit Facility restrict our ability and the ability of
our subsidiaries, without the lender's approval, to, among other things:
o incur or guarantee additional indebtedness;
o pay cash dividends on, redeem or repurchase capital stock;
o make certain investments;
o incur or permit to exist liens;
o make material changes in the nature or conduct of our business;
o merge or consolidate with or acquire substantially all of the stock
or assets of other companies; and
o transfer or sell assets.
The Credit Facility also requires that we meet specified financial ratios
and financial condition tests. Our ability to make additional borrowings under
the Credit Facility depends upon satisfaction of these covenants. Our ability to
meet these covenants and requirements may be affected by events beyond our
control.
Our failure to comply with obligations under the Credit Facility could
result in an event of default under the facility. A default, if not cured or
waived, could permit acceleration of our indebtedness. We cannot be certain that
we will be able to remedy any default. If our indebtedness is accelerated, we
cannot be certain that we will have funds available to pay the accelerated
indebtedness or that we will have the ability to refinance the accelerated
indebtedness on terms favorable to us or at all.
THE CONVERSION OF OUR CONVERTIBLE PREFERRED STOCK AND EXERCISE OF OUR
OUTSTANDING WARRANTS AND OPTIONS COULD CAUSE THE MARKET PRICE OF OUR COMMON
STOCK TO FALL AND MAY HAVE DILUTION AND OTHER EFFECTS ON OUR EXISTING
STOCKHOLDERS.
The conversion of our outstanding Series 17 Class Q Convertible Preferred
Stock, par value $.001 per share (the "Series 17 Preferred") could result in the
issuance of up to 1,666,667 shares of common stock at a conversion price of
$1.50 per share of common stock, subject to adjustment pursuant to certain
anti-dilution provisions. The exercise of our outstanding warrants and options
into common stock could result in the issuance of up to approximately 12,980,493
shares and 3,139,950 shares, respectfully (assuming that all options and
warrants are currently exercisable). The exercise prices of the outstanding
warrants and options range from $1.00 per share to $3.25 per share, subject to
adjustment pursuant to certain anti-dilution provisions. Consequently, upon such
issuances, our stockholders could experience a significant dilution of their
investment. Dilution of our common stock may potentially have a material adverse
impact on our earnings per share and could, among other things, depress the
price of our common stock. This result could detrimentally affect our ability to
raise additional equity capital.
The conversion of our outstanding Series 17 Preferred and the exercise of
all of our outstanding warrants and options could result in us having
outstanding a total of 59,214,835 shares of common stock, assuming all
outstanding warrants and options are currently exercisable and subject to
adjustment pursuant to certain anti-dilution provisions. Such issuances would
significantly reduce the percentage ownership of our existing and future common
stockholders.
Many of the beneficial holders of our convertible preferred stock and the
holders of many of our outstanding warrants and options may immediately sell the
full amount of common stock received upon conversion of the convertible
preferred stock and exercise of the warrants and options, as applicable, as
those shares of common stock are subject to effective registration statements
that are currently in effect. As these shares are sold, the price of the common
stock may decrease.
3
CAPITAL BANK'S INVESTORS BENEFICIALLY OWN A SIGNIFICANT NUMBER OF OUR
OUTSTANDING SHARES, HAVE THE RIGHT TO ACQUIRE ADDITIONAL SHARES, AND HAVE THE
ABILITY TO RESELL SUCH SHARES, WHICH MAY ADVERSELY AFFECT OUR ABILITY TO RAISE
ADDITIONAL FUNDS AND TO UNDERTAKE CERTAIN TRANSACTIONS.
As of April 22, 2004, Capital Bank-Grawe Gruppe AG ("Capital Bank"), owned
of record, as agent for certain of its investors, 7,246,045 shares of our common
stock or approximately 17.5% of the outstanding shares of common stock, and had
the right to acquire an additional 4,334,805 shares of common stock pursuant to
the convertible preferred stock and warrants held in Capital Bank's name, as
agent for certain investors. If Capital Bank acquires all of the shares issuable
pursuant to such preferred stock and warrants, Capital Bank would own of record
11,580,850 shares of common stock, representing 25.3% of our then issued and
outstanding common stock, assuming we issue no other shares of common stock and
Capital Bank does not dispose of any shares. We receive proceeds from the
exercise for cash of the warrants held by Capital Bank's investors, but we will
not receive any proceeds from the resale of these shares by Capital Bank's
investors.
A substantial amount of the shares beneficially owned by Capital Bank's
investors are registered for resale. To the extent that Capital Bank's investors
sell these shares at times when we are attempting to raise additional capital,
our ability to raise these additional funds may be adversely impacted.
We are not aware of any agreement or understanding among Capital Bank's
investors to act as a group (as defined in Rule 13d-5(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")). However, if Capital
Bank's investors agree to act as a group or otherwise to act in concert for the
purpose of voting on matters subject to stockholder vote, our management could
be greatly impacted. For instance, this investor group could instruct Capital
Bank to vote for or against the approval of a merger or other proposal requiring
stockholder approval. As a result, the ability of our other stockholders to
influence our management and policies could be limited, and their ability to
realize opportunities to sell some or all of their stock at prices that
represent a premium over market prices could be lost.
THE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK MAY ALSO RESULT IN A
CHANGE IN CONTROL.
The issuance of additional shares of our common stock upon conversion of
the Series 17 Preferred and exercise of our currently outstanding warrants could
result in a substantial number of shares being held by one or more groups acting
in concert. In that event, such group or groups may have the ability to cause a
change in control under our Credit Agreement. Our Credit Facility provides that
a change of control will occur if (a) Dr. Louis F. Centofanti, our Chairman,
President, and Chief Executive Officer, or Richard T. Kelecy, our Chief
Financial Officer, ceases to serve as a senior executive officer in
substantially the same capacity as served on the date of the Credit Facility or
(b) the persons who were members of our Board on the closing of the Credit
Facility cease to constitute 50% of our Board. Each of these events could be an
event of default under the terms of the credit facility.
The terms of the Purchase Agreement covering our subordinated notes
provide that if Dr. Centofanti ceases to be our President and Chief Executive
Officer, the holders of the subordinated notes have the option to require us to
prepay all amounts owing under the subordinated notes. As of the date of this
prospectus, we owe under the subordinated notes the principal sum of $5.6
million, which principal sum is due in full on July 31, 2006. The Purchase
Agreement covering the subordinated notes also provides that if any person or
group is successful in electing its nominees to 50% or more of the positions on
our Board, then the holders of the Subordinated Notes have the option to require
us to prepay all amounts owing under the Subordinated Notes, plus a prepayment
premium.
If anyone or a group were to successfully attempt to cause any of these
changes in our management or Board, we could be in default under our loan
agreements.
IF WE ARE UNABLE TO MAINTAIN OUR DOE SUBCONTRACTS, OR THE SUBCONTRACTS ARE
DELAYED, WE COULD LOSE A PRIMARY REVENUE SOURCE.
Currently, a material amount of our nuclear segment's revenues are
generated pursuant to subcontracts under contracts with the U. S. Department of
Energy (the "DOE"). Each subcontract provides that the contractor, on its or the
DOE's behalf, may terminate or delay each contract under which the subcontracts
were issued at any time by notifying us. If we fail to maintain, renew, or
replace these contracts, our revenues could be materially reduced, and your
investment could be materially and adversely affected. We have significant
revenues under subcontracts granted to our nuclear segment by Bechtel Jacobs
Company, LLC, a contractor to the DOE, which were approximately $13,139,000, and
$9,664,000, representing 15.5% and 11.6%, respectively, of our consolidated
revenues for 2003 and 2002.
4
THE INABILITY TO COMPLETE EXISTING GOVERNMENT CONTRACTS OR WIN NEW GOVERNMENT
CONTRACTS OVER AN EXTENDED PERIOD COULD HARM OUR OPERATIONS AND ADVERSELY AFFECT
OUR FUTURE REVENUES.
Most of our government contracts or our subcontracts granted under
government contracts are awarded through a regulated competitive bidding
process. Some government contracts are awarded to multiple competitors, which
increases overall competition and pricing pressure and may require us to make
sustained post-award efforts to realize revenues under these government
contracts. In addition, government clients can generally terminate or modify
their contracts at their convenience. The inability to complete existing
government contracts or win new government contracts over an extended period
could harm our operations and adversely affect our future revenues.
IF WE CANNOT MAINTAIN OUR GOVERNMENTAL PERMITS OR CANNOT OBTAIN REQUIRED
PERMITS, WE MAY NOT BE ABLE TO CONTINUE OR EXPAND OUR OPERATIONS.
We are a waste management company. Our business is subject to extensive,
evolving, and increasingly stringent federal, state, and local environmental
laws and regulations. Such federal, state, and local environmental laws and
regulations govern our activities regarding the treatment, storage, recycling,
disposal, and transportation of hazardous and non-hazardous waste and low-level
radioactive waste. We must obtain and maintain permits, licenses and/or
approvals to conduct these activities in compliance with such laws and
regulations. Failure to obtain and maintain the required permits, licenses
and/or approvals would have a material adverse effect on our operations and
financial condition. If we are unable to maintain our currently held permits,
licenses, and/or approvals or obtain any additional permits, licenses and/or
approvals which may be required as we expand our operations, we may not be able
to continue certain of our operations. See "Risk Factors - Our Industrial waste
management services and nuclear waste management services subject us to
potential environmental liability."
CHANGES IN ENVIRONMENTAL REGULATIONS AND ENFORCEMENT POLICIES COULD SUBJECT US
TO ADDITIONAL LIABILITY AND ADVERSELY AFFECT OUR ABILITY TO CONTINUE CERTAIN
OPERATIONS.
Because the environmental industry continues to develop rapidly, we cannot
predict the extent to which our operations may be affected by future enforcement
policies as applied to existing laws, by changes to current environmental laws
and regulations, or by the enactment of new environmental laws and regulations.
Any predictions regarding possible liability under such laws are complicated
further by current environmental laws which provide that we could be liable,
jointly and severally, for certain activities of third parties over whom we have
limited or no control.
IF WE ARE UNABLE TO MAINTAIN PROFITABILITY, WE MAY BE UNABLE TO COMPLY WITH
CERTAIN GOVERNMENT REGULATIONS AND COULD BECOME SUBJECT TO SUBSTANTIAL FINES OR
LOSE OUR PERMITS.
The standards imposed by federal, state, and local environmental laws
require us to incur additional expenses as necessary to upgrade our facility. If
we are unable to continue to be profitable on a long-term basis, our ability to
remain in compliance with various federal, state, and local environmental
regulations would be impaired. Violation of such federal, state, and local
regulations could result in the loss of one or more of our permits or subject us
to substantial fines, penalties, or other liabilities that could have a material
adverse impact on our financial condition and our ability to continue certain of
our operations.
OUR INDUSTRIAL WASTE MANAGEMENT SERVICES AND NUCLEAR WASTE MANAGEMENT SERVICES
SEGMENTS SUBJECT US TO POTENTIAL ENVIRONMENTAL LIABILITY.
Our business of rendering services in connection with management of waste,
including certain types of hazardous waste and low-level radioactive waste,
subjects us to risks of liability for damages. Such liability could involve,
without limitation:
o claims for clean-up costs, personal injury or damage to the
environment in cases in which we are held responsible for the
release of hazardous or radioactive materials;
5
o claims of employees, customers, or third parties for personal injury
or property damage occurring in the course of our operations; and
o claims alleging negligence or professional errors or omissions in
the planning or performance of our services.
Our operations are subject to numerous environmental laws and regulations.
We have in the past, and could in the future, be subject to substantial fines,
penalties, and sanctions for violations of environmental laws and substantial
expenditures as a responsible party for the cost of remediating any property
which may be contaminated by hazardous substances generated by us and disposed
at such property or transported by us to a site selected by us, including
properties we own or lease.
During the first quarter of 2004, we discovered that one of our
subsidiaries has been storing a substantial amount of hazardous and
non-hazardous waste in violation of certain environmental laws. We voluntarily
reported this matter to the appropriate state governmental authorities and have
removed this waste to permitted treatment, storage, and/or disposal facilities
("TSD facilities"). As of the date of this prospectus, the state has not advised
us as to what action or actions, if any, it intends to take against our
subsidiary as a result of this matter. The state could assert monetary fines and
penalties or take other action against our subsidiary as a result of this matter
(including, but not limited to, loss of permits), which may have a material
adverse effect upon us.
AS OUR OPERATIONS EXPAND, WE MAY BE SUBJECT TO INCREASED LITIGATION, WHICH COULD
HAVE A NEGATIVE IMPACT ON OUR FUTURE FINANCIAL RESULTS.
Our operations are regulated by numerous laws regarding procedures for
waste treatment, storage, recycling, transportation, and disposal activities,
all of which may provide the basis for litigation against us. In recent years,
the waste treatment industry has experienced a significant increase in so-called
"toxic-tort" litigation as those injured by contamination seek to recover for
personal injuries or property damage. We believe that as our operations and
activities expand, there will be a similar increase in the potential for
litigation alleging that we are responsible for contamination or pollution
caused by our normal operations, negligence or other misconduct, or for
accidents, which occur in the course of our business activities. Such
litigation, if significant and not adequately insured against, could adversely
affect our financial condition and our ability to fund our operations.
Protracted litigation would likely cause us to spend significant amounts of our
time, effort, and money. This could prevent our management from focusing on our
operations and expansion.
6
IF WE CANNOT MAINTAIN ADEQUATE INSURANCE COVERAGE, WE WILL BE UNABLE TO CONTINUE
CERTAIN OPERATIONS.
Our business exposes us to various risks, including claims for causing
damage to property and injuries to persons that may involve allegations of
negligence or professional errors or omissions in the performance of our
services. Such claims could be substantial. We believe that our insurance
coverage is presently adequate and similar to, or greater than, the coverage
maintained by other companies in the industry of our size. If we are unable to
obtain adequate or required insurance coverage in the future or, if our
insurance is not available at affordable rates, we would violate our permit
conditions and other requirements of the environmental laws, rules, and
regulations under which we operate. Such violations would render us unable to
continue certain of our operations. These events would have a material adverse
effect on our financial condition.
OUR OPERATIONS ARE SUBJECT TO SEASONAL FACTORS, WHICH CAUSE OUR REVENUES TO
FLUCTUATE.
We have historically experienced reduced revenues and losses during the
first and fourth quarters of our fiscal years due to a seasonal slowdown in
operations from poor weather conditions and overall reduced activities during
these periods. This trend has continued through the first quarter of 2004.
During the first quarter of 2004, we had unaudited revenues of $17.5 million and
net loss applicable to common stockholders of $2.0 million, as compared to
unaudited revenues of $19.5 million and net loss applicable to common
stockholders of $431,000 for the first quarter of 2003. See below "Risk Factors
- Our Industrial waste management services segment has sustained substantial
losses, which, if continuing, may have a material adverse effect on your
investment in our common stock." During our second and third fiscal quarters
there has historically been an increase in revenues and operating profits. If we
do not continue to have increased revenues and profitability during the second
and third fiscal quarters, this will have a material adverse effect on our
results of operation and liquidity.
OUR INDUSTRIAL WASTE MANAGEMENT SERVICES SEGMENT HAS SUSTAINED SUBSTANTIAL
LOSSES WHICH, IF CONTINUING, COULD HAVE A MATERIAL ADVERSE EFFECT ON YOUR
INVESTMENT IN OUR COMMON STOCK.
The revenues from our industrial waste management services segment
constituted approximately 52.1% and 45.1% of our consolidated revenues in 2003
and 2002, respectively, and 41.6% of our consolidated revenues during the first
quarter of 2004. Our industrial waste management services segment sustained
losses in 2003 and 2002 of approximately $2.0 million and $3.9 million,
respectively. This segment has also sustained an unaudited loss of $2.5 million
for the first quarter of 2004, as compared to a loss of $828,000 during the
first quarter of 2003. This segment is generally adversely affected by economic
downturns, due, in part, to reductions in industrial production that result in
reduced levels of hazardous and non-hazardous waste. We believe that the
revenues and profits in this segment were negatively impacted by the downturn in
our economy that began in 2001 and continued during part of the first quarter of
2004.
During the fourth quarter of 2003, we completed a restructuring of our
industrial waste management services segment, changing this segment's management
and increasing its focus on higher-margin generator direct revenues and
eliminating lower-margin outside broker revenues. During March 2004, we
completed certain acquisitions in the industrial waste management services
segment. See "Recent Developments - Acquisitions."
If our industrial waste management services segment fails to become
profitable on an annualized basis in the foreseeable future, this could have a
material adverse effect on our results of operations, liquidity and our
potential growth.
IF WE ARE UNABLE TO PROTECT OUR PROPRIETARY TECHNOLOGY, OUR GROWTH COULD BE
LIMITED.
Our success is dependent upon our ability to maintain our proprietary
technologies. There can be no assurance that the steps taken by us to protect
our proprietary technologies will be adequate to prevent misappropriation of
these technologies by third parties. Misappropriation of our proprietary
technology could have an adverse effect on our operations and financial
condition. Changes to current environmental laws and regulations also could
limit the use of our proprietary technology.
LOSS OF CERTAIN KEY PERSONNEL COULD HAVE A MATERIAL ADVERSE EFFECT ON US.
Our success depends on the contributions of our key management,
environmental and engineering personnel, especially Dr. Louis F. Centofanti,
Chairman, President, and Chief Executive Officer. The loss of Dr. Centofanti
could have a material adverse effect on our operations, revenues, prospects, and
our ability to raise additional funds. Our future success depends on our ability
to retain and expand our staff of qualified personnel, including environmental
specialists and technicians, sales personnel, and engineers. Without qualified
personnel, we may incur delays in rendering our services or be unable to render
certain services. We cannot be certain that we will be successful in our efforts
to attract and retain qualified personnel as their availability is limited due
to the demand for hazardous waste management services and the highly competitive
nature of the hazardous waste management industry. We do not maintain key person
insurance on any of our employees, officers, or directors.
IF ENVIRONMENTAL REGULATION OR ENFORCEMENT IS RELAXED, THE DEMAND FOR OUR
SERVICES WILL DECREASE.
The demand for our services is substantially dependent upon the public's
concern with, and the continuation and proliferation of, the laws and
regulations governing the treatment, storage, recycling, and disposal of
hazardous, non-hazardous, and low-level radioactive waste. A decrease in the
level of public concern, the repeal or modification of these laws, or any
significant relaxation of regulations relating to the treatment, storage,
recycling, and disposal of hazardous waste and low-level radioactive waste would
significantly reduce the demand for our services and could have a material
adverse effect on our operations and financial condition. We are not aware of
any current federal or state government or agency efforts in which a moratorium
or limitation has been, or will be, placed upon the creation of new hazardous
waste regulations that would have a material adverse effect on us; however, no
assurance can be made that such a moratorium or limitation will not be
implemented in the future.
7
OUR OPERATIONS WILL SUFFER IF WE ARE UNABLE TO MANAGE OUR GROWTH.
We are currently experiencing a period of growth through internal
expansion and strategic acquisitions, including two acquisitions in March 2004.
See "Recent Developments -- Acquisitions." This growth has placed, and could
continue to place, a significant strain on our management, personnel, and other
resources. Our growth requires us to effectively manage our collaborative
arrangements and to continue to improve our operational, management, and
financial systems and controls, and to successfully train, motivate, and manage
our employees. If we are unable to effectively manage our growth, we may not
realize the expected benefits of such growth, and such failure could have a
material adverse effect on our operations and financial condition.
WE DO NOT INTEND TO PAY DIVIDENDS ON OUR COMMON STOCK IN THE FORESEEABLE FUTURE.
Since our inception, we have not paid cash dividends on our common stock,
and we do not anticipate paying any cash dividends in the foreseeable future. We
intend to retain future earnings, if any, to provide funds for the operation
and/or expansion of our business.
The terms of the Series 17 Preferred allow us to pay dividends on the
outstanding Series 17 Preferred in cash or common stock. We currently intend to
pay the dividends accruing on the Series 17 Preferred in common stock if, and
when, declared and paid by our Board of Directors. The actual number of shares
of common stock issuable in payment of accrued dividends on the Series 17
Preferred will depend upon the length of time the Series 17 Preferred is
outstanding and the price of the common stock at the time of payment of
dividends. Our Credit Facility prohibits us from paying cash dividends
(including cash dividends on our Series 17 Preferred) without the lender's prior
written consent.
EXPIRATION OF THE PRICE-ANDERSON ACT'S INDEMNIFICATION AUTHORITY COULD HAVE
ADVERSE CONSEQUENCES ON OUR POWER, DEFENSE, AND ENERGY & ENVIRONMENT BUSINESS
UNITS.
We provide services to the nuclear industry. The Price-Anderson Act
promotes the nuclear industry by offering broad indemnification to commercial
nuclear power plant operators and DOE contractors for liabilities arising out of
nuclear incidents at power plants licensed by the NRC and at DOE nuclear
facilities. That indemnification protects not only the NRC license or DOE prime
contractor, but also others like us who may be doing work under contract or
subcontract for a licensed power plant or under a DOE prime contract. While the
Price-Anderson Act's indemnification provisions are broad, it has not been
determined whether they apply to all liabilities that might be incurred by a
radioactive materials cleanup contractor. Moreover, the Price-Anderson Act
indemnification authority expired on December 31, 2003, for NRC licensees, and
it will expire on December 31, 2004 for DOE contractors. There are legislative
proposals to enact a long-term extension of Price Anderson indemnification
authority, as has been done several times in the past. Those proposals are part
of the omnibus energy legislation that is pending in Congress. However, that
bill has been held up during the last several legislative sessions for reasons
unrelated to Price Anderson. DOE contractors who have coverage under current
contracts would be unaffected by the expiration of authority at the end of the
year. Their coverage continues until the contract under which the
indemnification was granted terminates. However, our federal business could be
adversely affected if DOE prime contractors are reluctant to enter into new
contracts involving nuclear hazards in the absence of an extension of Price
Anderson indemnification authority for them after December 31, 2004. DOE has
alternative, although more limited, indemnification authority under Public Law
85-804, and when Price Anderson has temporarily lapsed in the past, DOE prime
contractors were generally willing to accept that coverage on an interim basis.
Private insurers, however, have generally not been willing to cover nuclear
hazards associated with DOE work.
WE WILL NOT REALIZE A BENEFIT FROM OUR LOSS CARRYFORWARDS IF WE ARE UNABLE TO
GENERATE INCOME.
We have approximately $23.1 million in net operating loss carryforwards
which will expire from 2007 to 2023 if not used against future federal income
tax liabilities. Our net loss carryforwards are subject to various limitations
and have not been audited by the Internal Revenue Service. We anticipate the net
loss carryforwards will be used to reduce the federal income tax payments which
we would otherwise be required to make with respect to income, if any, generated
in future years.
8
DELAWARE LAW, CERTAIN OF OUR CHARTER PROVISIONS, THE PRESENCE OF ONE SUBSTANTIAL
STOCKHOLDER OF RECORD, AND OUR STOCK OPTION PLANS MAY INHIBIT A CHANGE OF
CONTROL UNDER CIRCUMSTANCES THAT COULD GIVE YOU AN OPPORTUNITY TO REALIZE A
PREMIUM OVER PREVAILING MARKET PRICES.
We are a Delaware corporation governed, in part, by the provisions of
Section 203 of the General Corporation Law of Delaware, an anti-takeover law. In
general, Section 203 prohibits a Delaware public corporation from engaging in a
"business combination" with an "interested stockholder" for a period of three
years after the date of the transaction in which the person became an interested
stockholder, unless the business contribution is approved in a prescribed
manner. As a result of Section 203, potential acquirers may be discouraged from
attempting to effect acquisition transactions with us, thereby possibly
depriving our security holders of certain opportunities to sell, or otherwise
dispose of, their stock in us at above-market prices pursuant to such
transactions.
Our 1991 Performance Equity Plan, 1992 Outside Directors Stock Option
Plan, 1993 Nonqualified Stock Option Plan, and 2003 Outside Directors Stock Plan
provide for the immediate acceleration of, and removal of restrictions from,
options and other awards under such plans upon a "change of control" (as defined
in the respective plans). Such provisions may also have the result of
discouraging acquisition of us.
Capital Bank, as agent for its investors, is the record owner of shares of
common stock, the issued and outstanding shares of Series 17 Preferred, and
outstanding warrants for the purchase of shares of common stock. The existence
of one substantial stockholder of record could discourage other persons from
attempting to acquire us.
Under our Restated Certificate of Incorporation, as amended (the
"Certificate"), as of April 22, 2004, 33,572,275 shares of common stock
(including 988,000 treasury shares) are available for future issuance, of which
17,787,110 are reserved for issuance under our outstanding preferred stock,
options and warrants. These authorized shares are necessary to provide us with
the ability to issue common stock from time to time as needed for proper
corporate purposes, such as:
o raising capital funds through private or public offerings;
o acquiring other companies;
o declaring stock splits or stock dividends; and
o issuing common stock under warrants, preferred stock, or other
rights which may be granted by us from time to time in the future.
Additional authorization of shares of common stock could be used by
incumbent management to make it more difficult, and thereby discourage an
attempt to acquire control of us, even though our stockholders may deem such an
acquisition desirable. The issuance of new shares of common stock and/or
preferred stock could also be used to dilute the stock ownership and voting
power of a third party seeking to remove the directors, replace incumbent
directors, accomplish certain business combinations alter, amend, or repeal
portions of our Certificate or discourage or prohibit a takeover of us.
TERRORIST ATTACKS, SUCH AS THE ATTACKS THAT OCCURRED IN NEW YORK AND WASHINGTON,
D.C. ON SEPTEMBER 11, 2001, AND OTHER ACTS OF VIOLENCE OR WAR, INCLUDING THE
MILITARY CONFLICT IN IRAQ, HAVE AND COULD NEGATIVELY IMPACT US AND OTHER U.S.
AND FOREIGN COMPANIES, THE FINANCIAL MARKETS, THE INDUSTRIES WHERE WE OPERATE,
OUR OPERATIONS AND PROFITABILITY.
The terrorist attacks that occurred on September 11, 2001 negatively
effected our operations and your investment, as the DOE and other governmental
agencies that generate radioactive waste suspended shipments of these waste
streams to various off-site TSD radioactive waste facilities for a substantial
period of time after September 11, 2001 and did not begin to ship waste to these
off-site TSD facilities such as ours until the third quarter of 2003. There can
be no assurance that there will not be further terrorist attacks worldwide.
These attacks have contributed to economic instability in the United States and
elsewhere, and future acts of terrorism, violence or war could further affect
the industries where we operate, our business, results of operations and
financial condition. The consequences of any terrorist attacks or hostilities
are unpredictable, and we may not be able to foresee events that could have an
adverse effect on our operations or your investment.
9
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This prospectus contains forward-looking statements. All statements, other
than statements of historical fact, in this prospectus are forward-looking
statements, including statements regarding, among other things:
o the adequacy of our insurance;
o our ability to continue to borrow under the Credit Facility;
o our ability to manage our growth;
o potential for litigation against us;
o our ability to be profitable on a long term basis;
o our ability to protect our proprietary technologies;
o our ability to utilize net operating loss carryforwards against
future federal income tax liabilities;
o our ability to comply with our general working capital requirements;
o our ability to retain certain permits or licenses;
o the adoption of moratoriums or limitations by federal or state
governments regarding the creation of new hazardous waste
regulations.
Although we believe our expectations reflected in those forward-looking
statements are based on reasonable assumptions, we cannot assure you that these
expectations will prove to be correct. Important factors which could cause
actual results and future outcomes to differ materially from those described in
this prospectus include, but are not limited to, the following:
o general economic conditions;
o material reduction in revenues;
o inability to collect in a timely manner a material amount of
receivables;
o increased competitive pressures;
o inability to maintain and obtain required permits and approvals to
conduct operations;
o reduction in revenues and profitability of services provided by us
due to increased competition;
o future federal tax audit or audits which could reduce our loss
carryforwards;
o limitations imposed by the Internal Revenue Code or our inability to
utilize our loss carryforwards;
o inability to develop new and existing technologies in the conduct of
operations or to develop such technologies for commercial use;
o changes in federal, state, and local laws and regulations,
especially environmental regulations, or in the interpretation of
such laws and regulations;
o potential increases in equipment, maintenance, operating or labor
costs;
o management retention and development;
o inability to secure additional liquidity in the form of additional
equity or debt;
o inability to maintain the listing of our common stock on the Nasdaq;
o cancellation of one or more DOE subcontracts; and o the factors set
forth under "Risk Factors" beginning on page 2 of this prospectus.
In some cases, you can identify forward-looking statements by terminology
such as "may," "will," "should," "could," "would," "expect," "plan,"
"anticipate," "believe," "continue," or the derivative of these terms or other
similar expressions. All forward-looking statements attributable to us or
persons acting on our behalf are expressly qualified by the cautionary
statements included in this prospectus. We undertake no obligation to update or
revise our forward-looking statements, whether as a result of new information,
future events or otherwise. In light of these risks, uncertainties and
assumptions, the forward-looking events discussed in this prospectus might not
occur.
RECENT DEVELOPMENTS
The following are all material changes to our affairs which have occurred
since the end of our latest fiscal year for which audited financial statements
were included in our Form 10-K for year ended December 31, 2003, and which have
not been described in a report on Form 8-K filed under the Exchange Act:
10
PRIVATE PLACEMENT
Pursuant to a Securities Purchase Agreement, dated March 22, 2004, we
completed a private placement of our common stock and warrants for the purchase
of our common stock, and received gross proceeds of approximately $10.4 million
in connection with this offering. We sold to 15 accredited investors 4,616,113
shares of common stock at $2.25 per share and warrants for the purchase of up to
an additional 1,615,638 shares of common stock. The warrants have an exercise
price of $2.92 per share and a three year term. The warrants may be exercised
pursuant to a cashless exercise option if, at any time after one year from the
date of issuance of the warrants, there is no effective registration statement
registering the resale of the shares issuable upon exercise of the warrants and
such shares are not eligible to be sold pursuant to Rule 144(k) of the
Securities Act.
We realized net proceeds from the private placement of approximately $9.9
million, after paying fees of $515,000 to the placement agent and certain
expenses of the placement agent. The net proceeds were used as follows:
o $2.9 million in connection with a certain acquisition discussed
below; and
o the remaining $7.0 million to reduce debt, make certain capital
expenditures and for working capital purposes.
As compensation for consulting services in connection with the private
placement, we issued warrants ("Consultant Warrants") to outside consultants to
purchase an aggregate of 160,000 shares of our common stock, subject to
adjustment. The Consultant Warrants have an exercise price of $2.92 per share
and a three year term.
The exercise price of, and number of shares of common stock issuable upon
exercise of, the warrants and Consulting Warrants are each subject to adjustment
upon certain events. These events include, among others, stock splits and
reclassifications of our common stock, and certain reorganizations, mergers and
consolidations.
The issuance of shares, warrants and Consultant Warrants described above
was made pursuant to a private placement under Section 4(2) and/or Regulation D
of the Securities Act. The shares issued in the private placement and issuable
upon exercise of the warrants issued in the private placement (excluding the
shares issuable under the Consultant Warrants) are subject to demand and
piggyback registration rights. All of the shares listed above are registered for
resale in the registration statement, of which this prospectus is a part.
ACQUISITIONS
In March 2004, we completed the acquisition of certain assets of two
companies owned by US Liquids, Inc. We acquired assets of USL Environmental
Services, Inc., d/b/a A&A Environmental ("A&A"), primarily located in Baltimore,
Maryland. We also acquired certain assets of US Liquids of Pennsylvania d/b/a
EMAX ("EMAX"), located in Pittsburgh, Pennsylvania. We paid $2.9 million in cash
for these assets. A&A and EMAX had unaudited combined revenues in 2003 of
approximately $15 million and had an unaudited combined net loss of
approximately $299,000.
A&A is a full line provider of environmental, marine and industrial
maintenance services. A&A has been in business for over 45 years and continues
to adapt to meet the specialized needs of today's environmental and plant
managers. A&A offers expert environmental services such as 24 hour emergency
response, vacuum services, hazardous and non-hazardous waste disposal, marine
environmental and other remediation services. EMAX, through its field and
industrial services group, provides a variety of environmental services such as
transportation of drums and bulk loads, tank cleaning, industrial maintenance,
dewatering, drum management and chemical packaging. EMAX also has a wastewater
treatment group, which provides for the treatment of non-hazardous wastewaters
such as leachates, oily waters, industrial process waters and off-spec products.
We currently intend to continue operating the assets acquired from A&A and EMAX
substantially as they were operated prior to acquisition.
11
USE OF PROCEEDS
We will not receive any proceeds from the sale of shares by the Selling
Stockholders. We will receive approximately $5,184,863 if the Selling
Stockholders exercise, for cash, all of the warrants and Consultant Warrants
covering the shares included in this prospectus. We currently intend to use any
proceeds received by us from the exercise of the warrants and Consultant
Warrants to reduce debt and/or general working capital.
We have agreed to pay all costs and fees relating to the registration of
the common stock covered by this prospectus, except for any discounts,
concessions, or commissions payable to underwriters, dealers, or agents incident
to the offering of the shares covered by this prospectus, or any legal fees
incurred by any Selling Stockholders relating to this offering.
SELLING STOCKHOLDERS
The shares of common stock being offered by the Selling Stockholders
consist of (a) 4,616,113 shares issued in the private placement effected in
March 2004, (b) 1,615,638 shares issuable upon the exercise of the warrants
issued in the private placement, and (c) 160,000 shares issuable upon the
exercise of the Consultant Warrants issued in connection with the private
placement. These shares of common stock are described under "RECENT DEVELOPMENTS
- Private Placement." We are registering the shares of common stock in order to
permit the Selling Stockholders to offer the shares for resale from time to
time. Except for the ownership of the shares of common stock and the warrants,
the Selling Stockholders have not had any material relationship with us within
the past three years other than (a) R. Keith Fetter, Joe Dilustro, and Chet
Dubov, who provided consulting services in connection with the private
placement, and (b) Andy Reckless, who, in his capacity as managing member of PEF
Advisors, LLC, the investment advisor for Palisades Master Fund, L.P.
("Palisades"), has voting and dispositive power over the shares owned of record
by Palisades, is chairman of HPC Capital Management Corporation, which acted as
our placement agent in the Private Placement.
The following table sets forth as to each Selling Stockholder: (a) the
name of each Selling Stockholder, (b) the amount of shares beneficially owned as
of April 12, 2004, (c) the number of shares of common stock owned by each
Selling Stockholder which are included under this prospectus, (d) the number of
shares beneficially owned after the offering, assuming that all shares of common
stock being offered hereby are sold and that such are outstanding, and (e) the
percentage of common stock beneficially owned after completion of the offering.
Unless otherwise noted, each Selling Stockholder has sole voting and investment
power over the shares of common stock listed as beneficially owned by the
Selling Stockholder.
The common stock being offered includes shares of common stock that may be
acquired upon the exercise of outstanding warrants, whether such are currently
exercisable. The Selling Stockholders may sell all, some or none of their shares
in this offering. See "PLAN OF DISTRIBUTION."
The percentage of common stock beneficially owned after completion of this
offering assumes: (a) all shares of common stock covered by this prospectus are
sold, (b) the Selling Stockholder does not acquire beneficial ownership of
additional shares of common stock after the date of this prospectus, and (c) we
do not issue any additional shares of common stock after the date of this
prospectus, except the shares of common stock which a person has the right to
acquire upon the exercise of warrants and conversion of preferred stock
outstanding as of the date of this prospectus, but such shares are not
determined to be outstanding for the purpose of computing the percentage
ownership of any other person. The percentages indicated are based on
outstanding common stock of 41,427,725 shares as of April 12, 2004.
This prospectus covers the resale of the shares of common stock issuable
upon exercise of the warrants issued in the private placement and the shares of
common stock issuable upon exercise of the Consultant Warrants, determined as if
the warrants and Consultant Warrants were exercised in full. Because the
exercise price of the warrants and Consultant Warrants may be adjusted, the
number of shares that will actually be issued may be more or less than the
number of shares being offered by this prospectus.
Under the terms of the warrants, a selling stockholder may not exercise
the warrants, to the extent such exercise would cause such selling stockholder,
together with its affiliates, to beneficially own a number of shares of common
stock which would exceed 4.99% of our then outstanding shares of common stock
following such exercise, excluding for purposes of such determination shares of
common stock issuable upon exercise of the warrants which have not been
exercised. The table below does not reflect this limitation.
12
Except as noted in the footnotes to the following table, none of the
Selling Stockholders are broker-dealers or affiliates of broker-dealers. Based
on the information provided to us, each of the Selling Stockholders purchased
the shares and the warrants, and upon the exercise of the warrants, will
purchase the shares underlying the warrants in the ordinary course of business
and did not at the time of their purchase have an arrangement to effect any
distribution of the shares, warrants and shares underlying the warrants to or
through any person or entity
SHARES OWNED SHARES BEING SHARES OWNED
BEFORE OFFERING OFFERED AFTER OFFERING
----------------------------- ------------------ --------------------------
SELLING STOCKHOLDER NUMBER PERCENT NUMBER NUMBER PERCENT
---------------- --------- ------------------ -------------- ----------
Alexandra Global Master Fund Ltd 1,012,500 (1) 2.4% 1,012,500 -- --
Alpha Capital AG 210,000 (2) * 210,000 -- --
Baystar Capital II, L.P. 243,000 (3) * 243,000 -- --
Bristol Investment Fund, Ltd. 240,000 (4) * 240,000 -- --
Crescent International Ltd 405,000 (5) * 405,000 -- --
Crestview Capital Master LLC 900,002 (6) 2.2% 900,002 -- --
Geduld Capital Partners LP 101,250 (7) * 101,250 -- --
Gruber & McBaine International 150,000 (8) * 150,000 -- --
Irwin Geduld Revocable Trust 67,500 (9) * 67,500 -- --
J Patterson McBaine 59,999 (10) * 59,999 -- --
Jon D. Gruber and Linda W. Gruber 150,000 (11) * 150,000 -- --
Lagunitas Partners LP 360,000 (12) * 360,000 -- --
Omicron Master Trust 300,000 (13) * 300,000 -- --
Palisades Master Fund, L.P. 1,822,500 (14) 4.3% 1,822,500 -- --
Stonestreet LP 210,000 (15) * 210,000 -- --
R. Keith Fetter 100,000 (16) * 100,000 -- --
Joe Dilustro 30,260 (17) * 30,000 260 *
Chet Dubov 30,000 (18) * 30,000 -- --
* Less than 1%
(1) Includes 750,000 shares, and 262,500 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Alexandra Investment Management, LLC, a Delaware limited liability
company ("Alexandra"), serves as investment adviser to Alexandra
Global Master Fund Ltd., a British Virgin Islands company ("Master
Fund"). By reason of such relationship, Alexandra may be deemed to
share dispositive power over the shares of common stock stated as
benefically owned by Master Fund. Alexandra disclaims beneficial
ownership of such shares of commons stock. Messrs. Mikhail A.
Filimonov ("Filimonov") and Dimitri Sogoloff ("Sogoloff") are
managing members of Alexandra. By reason of such relationships,
Filimonov and Sogoloff may be deemed to share dispositive power
over the shares of common stock stated as beneficially owned by
Master Fund. Filimonov and Sogoloff disclaim beneficial ownership of
such shares of common stock.
(2) Includes 155,556 shares, and 54,444 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Konrad Ackerman and Rainer Posch share voting and investment power
over these shares.
(3) Includes 180,000 shares, and 63,000 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Steve Derby, Lawrence Goldfarb, and Steven M. Lamar, as managing
members of Baystar Capital Management, LLC, the general partner of
Baystar Capital II, L.P., share voting and investment power over
these shares and disclaim beneficial ownership of these shares.
13
(4) Includes 177,778 shares, and 62,222 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Paul Kessler, as director and managing member of the investment
manager to Bristol Investment Fund, Ltd., has voting and investment
power over these shares.
(5) Includes 300,000 shares, and 105,000 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Mel Craw and Maxi Brezzi, in their capacity as managers of
GreenLight (Switzerland) SA, the investment advisor to Crescent
International Ltd., have voting control and investment discretion
over the shares owned by Crescent International Ltd. Messrs. Craw
and Brezzi disclaim beneficial ownership of such shares.
(6) Includes 666,668 shares, and 233,334 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Crestview Capital Master LLC is a limited liability company
registered in Delaware controlled by Richard Levy and Stewart Flink.
The fund is affiliated with Dillon Capital, Inc., a
registered broker-dealer owned by Mr. Flink.
(7) Includes 75,000 shares, and 26,250 shares issuable upon the exercise
of warrants, issued in connection with the private placement
discussed under "Recent Developments - Private Placement." Steven
Geduld, in his capacity as president of Geduld Capital Partners, LP,
has voting and investment power over these shares.
(8) Includes 111,111 shares, and 38,889 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Gruber & McBaine Capital Management is the investment advisor of
Gruber & McBaine International and the general partner of Lagunitas
Partners, L.P. and consequently has voting control and investment
discretion over the securities held by Gruber & McBaine
International and Lagunitas Partners, L.P. Gruber & McBaine Cap
Management is managed by Jon D. Gruber and J. Patterson McBaine.
Lagunitas Partners, L.P., Gruber & McBaine International, Jon D.
Gruber and J. Patterson McBaine disclaim beneficial ownership of
shares held by each other.
(9) Includes 50,000 shares, and 17,500 shares issuable upon the exercise
of warrants, issued in connection with the private placement
discussed under "Recent Developments - Private Placement." Irwin
Geduld, as trustee, has voting and dispositive power over these
shares.
(10) Includes 44,444 shares, and 15,555 shares issuable upon the exercise
of warrants, issued in connection with the private placement
discussed under "Recent Developments - Private Placement." See
footnote (8) for a discussion of certain relationships.
(11) Includes 111,111 shares, and 38,889 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
See footnote (8) for a discussion of certain relationships.
(12) Includes 266,667 shares, and 93,333 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
See footnote (8) for a discussion of certain relationships.
(13) Includes 222,222 shares, and 77,778 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
We have been advised by Omicron Master Trust as follows: Omicron
Capital, L.P., a Delaware limited partnership ("Omicron Capital"),
serves as investment manager to Omicron Master Trust, a trust formed
under the laws of Bermuda (`Omicron"), Omicron Capital, Inc., a
Delaware corporation ("OCI"), serves as general partner of Omicron
Capital, and Winchester Global Trust Company Limited ("Winchester")
serves as the trustee of Omicron. By reason of such relationships,
Omicron Capital and OCI may be deemed to share dispositive power
over the shares of our common stock owned by Omicron, and Winchester
may be deemed to share voting and dispositive power over the shares
of our common stock owner by Omicron. Omicron Capital, OCI and
Winchester disclaim beneficial ownership of such shares of our
common stock. Omicron Capital has delegated authority from the board
of directors of Winchester regarding the portfolio management
decisions with respect to the shares of common stock owned by
14
Omicron and, as of April 21, 2003, Mr. Olivier H. Morali and Mr.
Bruce T. Bernstein, officers of OCI, have delegated authority from
the board of directors of OCI regarding the portfolio management
decisions of Omicron Capital with respect to the shares of common
stock owned by Omicron. By reason of such delegated authority,
Messrs. Morali and Bernstein disclaim beneficial ownership of such
shares of our common stock and neither of such persons has any legal
right to maintain such delegated authority. No other person has sole
or shared voting or dispositive power with respect to the shares of
our common stock being offered by Omicron, as those terms are used
for purposes under Regulation 13D of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). Omicron and Winchester are
not "affiliates" of one another, as that term is used for purposes
of the Exchange Act or of any other person named in this prospectus
as a selling stockholder. No person or "group" (as that term is used
in Section 13(d) of the Exchange Act or the SEC's Regulation 13D)
controls Omicron and Winchester.
(14) Includes 1,350,000 shares, and 472,500 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Andy Reckless is the managing member of PEF Advisors, LLC ("PEF"),
the investment manager to Palisades Masterfund, L.P. By reason of
such relationship, Mr. Reckless may be deemed to have voting and
investment power over these shares.
(15) Includes 155,556 shares, and 54,444 shares issuable upon the
exercise of warrants, issued in connection with the private
placement discussed under "Recent Developments - Private Placement."
Michael Finkelstein and Elizabeth Leonard, in their capacity as
officers of Stonestreet LP share voting and investment power over
these shares.
(16) Includes 100,000 shares issuable upon the exercise of Consultant
Warrants discussed under "Recent Developments - Private Placement."
(17) Includes 30,000 shares issuable upon the exercise of Consultant
Warrants discussed under "Recent Developments - Private Placement,"
and 260 shares beneficially owned by Mr. Dilustro's spouse. Mr.
Dilustro may be considered to share beneficial ownership with his
spouse over the shares beneficially owned by her.
(18) Includes 30,000 shares issuable upon the exercise of the Consultant
Warrants discussed under "Recent Developments - Private Placement."
PLAN OF DISTRIBUTION
The Selling Stockholders of our common stock and any of their pledgees,
assignees and successors-in-interest may, from time to time, sell any or all of
their shares of common stock on any stock exchange, market or trading facility
on which the shares are traded or in private transactions. These sales may be at
fixed or negotiated prices. The Selling Stockholders may use any one or more of
the following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block
as principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
o privately negotiated transactions;
o settlement of short sales;
o broker-dealers may agree with the Selling Stockholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale;
15
o through the writing or settlement of options or other hedging
transactions, whether through an options exchange or otherwise; or
o any other method permitted pursuant to applicable law.
The Selling Stockholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
Broker-dealers engaged by the Selling Stockholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the Selling Stockholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. Each Selling Stockholder does not expect these commissions and
discounts relating to its sales of shares to exceed what are customary in the
types of transactions involved.
In connection with the sale of our common stock or interests therein, the
Selling Stockholders may enter into hedging transactions with broker-dealers or
other financial institutions, which may in turn engage in short sales of the
common stock in the course of hedging the positions they assume. The Selling
Stockholders may also sell shares of our common stock short and deliver these
securities to close out their short positions, or loan or pledge the common
stock to broker-dealers that in turn may sell these securities. The Selling
Stockholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities which require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The Selling Stockholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. Each Selling Stockholder has
informed the Company that it does not have any agreement or understanding,
directly or indirectly, with any person to distribute the Common Stock.
We are required to pay certain fees and expenses incurred by us incident
to the registration of the shares. We agreed to indemnify the Selling
Stockholders against certain losses, claims, damages and liabilities, including
liabilities under the Securities Act.
Because Selling Stockholders may be deemed to be "underwriters" within the
meaning of the Securities Act, they will be subject to the prospectus delivery
requirements of the Securities Act. In addition, any securities covered by this
prospectus which qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than under this prospectus. Each Selling
Stockholder has advised us that they have not entered into any agreements,
understandings or arrangements with any underwriter or broker-dealer regarding
the sale of the resale shares. There is no underwriter or coordinating broker
acting in connection with the proposed sale of the resale shares by the Selling
Stockholders.
We agreed to keep this prospectus effective until the earlier of (i) the
date on which the shares may be resold by the Selling Stockholders without
registration and without regard to any volume limitations by reason of Rule
144(k) under the Securities Act or any other rule of similar effect or (ii) all
of the shares have been sold pursuant to the prospectus or Rule 144 under the
Securities Act or any other rule of similar effect. The resale shares will be
sold only through registered or licensed brokers or dealers if required under
applicable state securities laws. In addition, in certain states, the resale
shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available and is complied with.
Under applicable rules and regulations under the Exchange Act, any person
engaged in the distribution of the resale shares may not simultaneously engage
in market making activities with respect to our common stock for a period of two
business days prior to the commencement of the distribution. In addition, the
Selling Stockholders will be subject to applicable provisions of the Exchange
Act and the rules and regulations thereunder, including Regulation M, which may
limit the timing of purchases and sales of shares of our common stock by the
Selling Stockholders or any other person. We will make copies of this prospectus
available to the Selling Stockholders and have informed them of the need to
deliver a copy of this prospectus to each purchaser at or prior to the time of
the sale.
16
LEGAL OPINION
Conner & Winters, P.C., Oklahoma City, Oklahoma will opine as to the
validity of the shares of common stock being offered hereby.
EXPERTS
Our financial statements and schedule incorporated by reference in this
prospectus have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the periods set forth in their report
incorporated herein by reference, and are incorporated herein in reliance upon
such report given upon the authority of said firm as experts in auditing and
accounting.
Approximately 85% and 87% of the total hours spent on the audit of our
financial statements for the years ended December 31, 2003 and 2002,
respectively, were spent by Gallogly, Fernandez & Riley, LLP ("GFR"), as a
member of the BDO alliance network of firms. Members of the BDO alliance network
of firms, including GFR, are not full time, permanent employees of BDO.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file at the
SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C., 20549.
Please call the SEC at 1-800-SEC-0330 for further information on the Public
Reference Room. Our SEC filings are also available to the public on the SEC's
web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with it.
This allows us to disclose important information to you by referring you to
those documents instead of having to repeat the information in this prospectus.
The information incorporated by reference is considered to be part of this
prospectus, and later information that we file with the SEC will automatically
update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act until the Selling Stockholders sell all
the Shares:
o Our annual report on Form 10-K for the fiscal year ended December
31, 2003;
o Our current report on Form 8-K filed on March 2, 2004;
o Our current report on Form 8-K filed on March 23, 2004;
o Our current report on Form 8-K/A filed on April 2, 2004;
o Our current report on Form 8-K filed on April 8, 2004;
o Our current report on Form 8-K filed on April 30, 2004; and
o Description of our common stock contained in our Registration
Statement on Form 8-A, dated October 30, 1992.
You can request a copy of these filings, at no cost, by writing or
telephoning us at the following address and telephone number:
Perma-Fix Environmental Services, Inc.
Attention: Richard T. Kelecy
1940 Northwest 67th Place
Gainesville, Florida 32653
Telephone (352) 373-4200
17
You should rely only on the information contained in this prospectus or
any supplement and in the documents incorporated by reference. We have not
authorized anyone else to provide you with different information. The Selling
Stockholders will not make an offer of these Shares in any state where the offer
is not permitted.
This prospectus is part of a registration statement we filed with the SEC
(Registration No. 333-115061). That registration statement and the exhibits
filed along with the registration statement contain more information about the
shares sold by the Selling Stockholders. Because information about contracts
referred to in this prospectus is not always complete, you should read the full
contracts, which are filed as exhibits to the registration statement. You may
read and copy the full registration statement and its exhibits at the SEC's
public reference rooms or their website.
18
[PERMAFIX ENVIRONMENTAL SERVICES LOGO]
6,391,751 SHARES
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
COMMON STOCK
-------------------
PROSPECTUS
-------------------
__________, 2004
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
Nature of Expenses
SEC Registration Fee $ 1,685
Legal Fees (Including Blue Sky) $ 25,000
Accounting Fees and Expenses $ 6,500
Printing $ 500
Miscellaneous $ 0
----------------
Total: $ 33,685
----------------
The foregoing expenses, except for the registration fee, are estimated pursuant
to Item 511 of Regulation S-K.
Item 15. Indemnification of Officers and Directors
Section 145 of the Delaware Corporation Law provides that a corporation
has the power to indemnify a director, officer, employee or agent of the
corporation and certain other persons serving at the request of the corporation
in related capacities against amounts paid and expenses incurred in connection
with an action or proceeding to which he is or is threatened to be made a party
by reason of such position, if such person shall have acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best interests of
the corporation, and, in any criminal proceeding, if such person had no
reasonable cause to believe his conduct was unlawful; provided that, no
indemnification shall be made with respect to any matter as to which such person
shall have been adjudged to be liable to the corporation unless and only to the
extent that the adjudicating court determines that, despite the adjudication of
liability but in view of all the circumstance of the case, such person is fairly
and reasonably entitled to indemnification.
Article EIGHTH of our Restated Certificate of Incorporation, as amended,
provides as follows with respect to the indemnification of our officers and
directors:
All persons who the Corporation is empowered to indemnify pursuant
to the provisions of Section 145 of the General Corporation Law of
the State of Delaware (or any similar provision or provisions of
applicable law at the time in effect), shall be indemnified by the
Corporation to the full extent permitted thereby. The foregoing
right of indemnification shall not be deemed to be exclusive of any
other rights to which those seeking indemnification may be entitled
under any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise. No repeal or amendment of this Article
EIGHTH shall adversely affect any rights of any person pursuant to
this Article EIGHTH which existed at the time of such repeal or
amendment with respect to acts or omissions occurring prior to such
repeal or amendment.
Our Restated Certificate of Incorporation, as amended, provides that no
director shall be personally liable to us or its stockholders for any monetary
damages for breaches of fiduciary duty as a director, provided that this
provision shall not eliminate or limit the liability of a director (i) for any
breach of the director's duty of loyalty to us or our stockholders; (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law; (iii) under Section 174 of the General Corporation Law
of the State of Delaware; or (iv) for any transaction from which the director
derived an improper personal benefit.
II-1
Item 16. Exhibits
EXHIBIT NO. DESCRIPTION
--------------------------------------------------------------------------------
4.1* Securities Purchase Agreement dated March 16, 2004, between
the Company and Alexandra Global Master Fund, Ltd., Alpha
Capital AG, Baystar Capital II, L.P., Bristol Investment Fund,
Ltd., Crescent International Ltd, Crestview Capital Master
LLC, Geduld Capital Partners LP, Gruber & McBaine
International, Irwin Geduld Revocable Trust, J Patterson
McBaine, Jon D. Gruber and Linda W. Gruber, Lagunitas Partners
LP, Omicron Master Trust, Palisades Master Fund, L.P.,
Stonestreet LP. The Company will furnish supplementally a copy
of all omitted schedules to the Commission upon request.
--------------------------------------------------------------------------------
4.2* Registration Rights Agreement, dated March 16, 2004, between
the Company and Alexandra Global Master Fund, Ltd., Alpha
Capital AG, Baystar Capital II, L.P., Bristol Investment Fund,
Ltd., Crescent International Ltd, Crestview Capital Master
LLC, Geduld Capital Partners LP, Gruber & McBaine
International, Irwin Geduld Revocable Trust, J Patterson
McBaine, Jon D. Gruber and Linda W. Gruber, Lagunitas Partners
LP, Omicron Master Trust, Palisades Master Fund, L.P.,
Stonestreet LP.
--------------------------------------------------------------------------------
4.3* Common Stock Purchase Warrant, dated March 16, 2004, issued
by the company to Alexandra Global Master Fund, Ltd., for the
purchase of 262,500 shares of the Company's common stock.
Substantially similar warrants were issued by the Company to
the following: (1) Alpha Capital AG, for the purchase of up
to 54,444 shares; (2)Baystar Capital II, L.P., for the
purchase of up to 63,000 shares; (3) Bristol Investment Fund,
Ltd., for the purchase of up to 62,222 shares; (4) Crescent
International Ltd, for the purchase of up to 105,000 shares;
(5) Crestview Capital Master LLC, for the purchase of up to
233,334 shares; (6) Geduld Capital Partners LP, for the
purchase of up to 26,250 shares; (7) Gruber & McBaine
International, for the purchase of up to 38,889 shares; (8)
Irwin Geduld Revocable Trust, for the purchase of up to
17,500 shares; (9) J Patterson McBaine, for the purchase of
up to 15,555 shares; (10) Jon D. Gruber and Linda W. Gruber,
for the purchase of up to 38,889 shares; (11) Lagunitas
Partners LP, for the purchase of up to 93,333 shares; (12)
Omicron Master Trust, for the purchase of up to 77,778
shares; (13) Palisades Master Fund, L.P., for the purchase of
up to 472,500 shares; and (14) Stonestreet LP, for the
purchase of up to 54,444 shares. Copies will be provided to
the Commission upon request.
--------------------------------------------------------------------------------
4.4 Loan and Security Agreement by and between the Company,
subsidiaries of the Company as signatories thereto, and PNC
Bank, National Association, dated December 22, 2000, as
incorporated by reference from Exhibit 99.1 to the Company's
Form 8-K dated December 22, 2000.
--------------------------------------------------------------------------------
4.5 First Amendment to Loan Agreement and Consent, dated January
30, 2001, between the Company and PNC Bank, National
Association as incorporated by reference from Exhibit 99.7 to
the Company's Form 8-K dated January 31, 2001.
--------------------------------------------------------------------------------
4.6 Note and Warrant Purchase Agreement, dated July 31, 2001,
among the Company, AMI, and BEC is incorporated by reference
from Exhibit 99.1 to the Company's Form 8-K, dated July 30,
2001.
--------------------------------------------------------------------------------
5.1+ Opinion of Conner & Winters, P.C.
--------------------------------------------------------------------------------
10.1 Asset Purchase Agreement dated March 23, 2004, between the
Company and USL Environmental Services, Inc., a Maryland
corporation, d/b/a A & A Environmental, is incorporated by
reference from Exhibit 5.1 of our Current Report on Form 8-K
dated March 23, 2004, and filed on April 8, 2004. The Company
will furnish supplementally a copy of all omitted schedules to
the Commission upon request.
--------------------------------------------------------------------------------
10.2 Asset Purchase Agreement dated March 23, 2004, between the
Company and US Liquids of Pennsylvania, Inc., a Pennsylvania
corporation, d/b/a EMAX of Pittsburgh, Pa., is incorporated by
reference from Exhibit 5.2 of our Current Report on Form 8-K
dated March 23, 2004, and filed on April 8, 2004. The Company
will furnish supplementally a copy of all omitted schedules to
the Commission upon request.
--------------------------------------------------------------------------------
II-2
--------------------------------------------------------------------------------
10.3 Common Stock Purchase Warrant, dated March 16, 2004, granted
by the Company to R. Keith Fetter. Substantially similar
warrants were granted to Joe Dilustro and Chet Dubov, each for
the purchase of 30,000 shares of the Company's common stock.
Copies will be provided to the Commission upon request.
--------------------------------------------------------------------------------
23.1+ Consent of BDO Seidman, LLP.
--------------------------------------------------------------------------------
23.2+ Consent of Conner & Winters, as contained in Exhibit 5.1
hereto and incorporated herein by reference.
--------------------------------------------------------------------------------
* Previously filed.
+ Filed herewithin.
II-3
Item 17. Undertakings
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to the Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement
or any material change to such information in the Registration
Statement;
Provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the Company pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that are
incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the Act, each
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 the time shall be deemed to be the initial bona fide
offering thereof.
(3) To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The Company hereby undertakes that, for purposes of determining any liability
under the Act, each filing of the Company's annual report pursuant to Section
13(a) or 15(d) of the Exchange Act (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the Exchange
Act) 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 the time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Company pursuant
to the indemnification provisions described herein, or otherwise, the Company
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 Company of expenses incurred or paid by a director,
officer or controlling person of the Company 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 Company 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.
II-4
SIGNATURES FOR FORM S-3
Pursuant to the requirements of the Act of 1933, the Registrant certifies
that it has reasonable grounds to believe that it meets all of the requirements
for filing on Form S-3 and has duly caused this registration statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Gainesville, State of Florida, on the 6th day of May, 2004.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By: /s/ Dr. Louis F. Centofanti
----------------------------------------
Dr. Louis F. Centofanti
Chairman of the Board
Chief Executive Officer
Pursuant to the requirements of the Act, this Registration Statement has
been signed by the following persons in the capacities and on the dates
indicated.
SIGNATURE TITLE DATE
--------- ----- ----
/s/ Dr. Louis F. Centofanti
--------------------------------
Dr. Louis F. Centofanti Chairman of the Board of May 6, 2004
Directors, President, and Chief
Executive Officer
(Principal Executive Officer)
/s/ Richard T. Kelecy
--------------------------------
Richard T. Kelecy Chief Financial Officer May 6, 2004
(Principal Financial and
Accounting Officer)
*
--------------------------------
Jon Colin Director May 6, 2004
*
--------------------------------
Jack Lahav Director May 6, 2004
*
--------------------------------
Joe R. Reeder Director May 6, 2004
II-5
*
--------------------------------
Alfred C. Warrington, IV Director May 6, 2004
*
--------------------------------
Dr. Charles E. Young Director May 6, 2004
*
--------------------------------
Mark A. Zwecker Director May 6, 2004
* By: /s/ Dr. Louis F. Centofanti
---------------------------
Dr. Louis F. Centofanti May 6, 2004
Attorney in Fact
II-6