As filed with the Securities and Exchange Commission on May 6, 2004
REGISTRATION NO. 333-115061
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April 7, 2009
Registration No. 333-____________
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
(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,
DELAWARE (State or other jurisdiction of incorporation or organization) | 58-1954497 (I.R.S. Employer Identification No.) |
8302 Dunwoody Place, #250
Atlanta, Georgia 30350
(770) 587-9898
(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,
Chairman of the Board
Perma-Fix Environmental Services, Inc.
8302 Dunwoody Place, #250
Atlanta, Georgia 30350
(770) 587-9898
(Address, including zip code, and telephone number, including area code, of agent for service)
Copy to:
IRWIN
Irwin H. STEINHORN, ESQUIRE
CONNERSteinhorn, Esquire
Conner & WINTERS, P.C.
ONE LEADERSHIP SQUARE, SUITEWinters, LLP
One Leadership Square, Suite 1700
211 NORTH ROBINSON
OKLAHOMA CITY, OKLAHOMANorth 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.
From time to time 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|
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 ofthis Form is a registration statement pursuant to General Instruction I.D. or a post-effective amendment thereto that shall become effective upon filing with the prospectus is expected to be madeCommission pursuant to Rule 434,462(e) under the Securities Act, 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.
box.
If this Form is a post-effective amendment to a registration statement filed pursuant to General Instruction I.D. filed to register additional securities or additional classes of securities pursuant to Rule 413(b) under the Securities Act, check the following box.¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer ¨ | Accelerated filer x | |
Non-accelerated filer ¨ | (Do not check if a smaller reporting company) | Smaller reporting company ¨ |
The registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant pursuant toshall file a private placement and (b) 1,775,638 shares issuable by the
Registrant upon the exercisefurther amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) 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 or until this registration statement shall become effective on such date as amended, the Commission, acting pursuant to said Section 8(a), may determine.
CALCULATION OF REGISTRATION FEE
Title of Each Class of Securities to be Registered | Number of Shares to be Registered(1) | Proposed Maximum Offering Price Per Share(2) | Proposed Maximum Aggregate Offering Price(2) | Amount of Registration Fee | ||||||||||||
| Common Stock, $0.01 par value | 5,000,000 | $ | 1.94 | $ | 9,700,000 | $ | 381.22 | |||||||||
| (1) | Pursuant to Rule 416(a) of the Securities Act of 1933, the number of shares being registered shall be adjusted to include any additional shares |
| (2) | The proposed maximum aggregate offering price, estimated solely for the purpose of calculating the registration fee, has been computed pursuant to Rule 457(c) of the Securities Act of 1933 and is based on the average of the high and low prices of Perma-Fix Environmental Services, Inc.’s common stock, $0.001 par value, on April 1, 2009, as reported by The Nasdaq Capital Markets. |
The information in this prospectus is not complete and may be issued in
connection with a stock split, stock dividend, recapitalization or similar
event.
(2) Estimated solely for the purposes of calculatingchanged. We may not sell these securities until the registration fee in
accordancestatement filed with Rule 457(c) on the basis of the average of the highSecurities 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
- --------------------------------------------------------------------------------Exchange Commission is effective. This prospectus relatesis not an offer to sell securities, and is not soliciting an offer to buy securities in any state where the offer or sale of upis not permitted.
Subject to 6,391,751 shares of
Completion: Dated April 7, 2009
PROSPECTUS
5,000,000 Shares
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
Common Stock
Perma-Fix Environmental Services, Inc. may offer shares of its common stock from time to time by the
Selling Stockholders listed in this prospectus.time. We will not receivespecify in an accompanying prospectus supplement the terms of any proceeds
from the sale of such shares by the Selling Stockholders.offering. Our common stock is traded on the Nasdaq SmallCap MarketNASDAQ Capital Markets under the symbol "PESI" and on the Boston Stock Exchange under the symbol "PES."“PESI”. On April 26,
2004,1, 2009, the closing price of our common stock as reported on the Nasdaq SmallCap
MarketNASDAQ Capital Markets was $2.06.$1.94.
You should read this prospectus, any prospectus supplement and the documents incorporated by reference in this prospectus or any prospectus supplement carefully before you invest. This prospectus may not be used to offer and sell securities unless accompanied by a prospectus supplement.
The common stock offered by this prospectus may be offered in amounts, at prices and at terms determined at the time of the offering and may be sold directly by us to investors, through agents designated from time to time or to or through underwriters or dealers. We have agreed to pay allwill set forth the costs and fees relatingnames of any underwriters or agents in the accompanying prospectus supplement. For additional information on the methods of sale, you should refer to the registrationsection entitled “Plan of Distribution.” The net proceeds we expect to receive from such sale will also be set forth in a prospectus supplement.
Neither the shares covered bySecurities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus. However, we will not pay any
discounts, concessions,prospectus is truthful or commissions payable to underwriters, dealers, or
agents incidentcomplete. Any representation 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.
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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.
------------------------------------
contrary is a criminal offense.
The date of this prospectus is __________, 2004.
_____, 2009
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
| SUMMARY | 1 |
| THE COMMON STOCK WE MAY OFFER | 2 |
| RISK FACTORS | 2 |
| SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS | 11 |
| USE OF PROCEEDS | 12 |
| PLAN OF DISTRIBUTION | 12 |
| DESCRIPTION OF COMMON STOCK | 13 |
| LEGAL OPINION | 13 |
| EXPERTS | 13 |
| WHERE YOU CAN FIND MORE INFORMATION | 14 |
Unless the context otherwise requires, references in this prospectus to "Perma-Fix," "the“Perma-Fix,” “the company," "we," "our,"” “we,” “our,” and "us"“us” refer to Perma-Fix Environmental Services, Inc. and its consolidated subsidiaries.
No person has been authorized to give any information or make any representations in connection with this offering other than those contained or incorporated by reference in this prospectus and any accompanying prospectus supplement in connection with the offering described herein and therein, and, if given or made, such information or representations must not be relied upon as having been authorized by us. Neither this prospectus nor any prospectus supplement shall constitute an offer to sell or a solicitation of an offer to buy offered securities in any jurisdiction in which it is unlawful for such person to make such an offering or solicitation. Neither the delivery of this prospectus or any prospectus supplement nor any sale made hereunder shall under any circumstances imply that the information contained or incorporated by reference herein or in any prospectus supplement is correct as of any date subsequent to the date hereof or of such prospectus supplement.
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ABOUT OUR BUSINESS
SUMMARY
The following summary is qualified in its entirety by the more detailed information included in this prospectus or incorporated by reference in this prospectus. You should carefully consider the information set forth in this entire prospectus, including the “Risk Factors” section, the applicable prospectus supplement for such securities and the other documents we refer to or that we incorporate by reference.
This prospectus is part of a Registration Statement on Form S-3 that we filed with the Securities and Exchange Commission, or SEC, utilizing a “shelf” registration process. Under this shelf registration process, we may, from time to time, sell up to an aggregate of 5,000,000 shares of our common stock in one or more offerings. This prospectus provides you with a general description of the securities we may offer. Each time we sell securities, we will provide a prospectus supplement that will contain specific information about the terms of that offering. The prospectus supplement may also add, update or change information contained in this prospectus. You should read both this prospectus and any prospectus supplement, including the risk factors, together with additional information described below under the heading “Where You Can Find More Information.”
Perma-Fix
Perma-Fix Environmental Services, Inc. is an environmental and technology know-how company. We are engaged through our subsidiaries, in the following lines of
business:
INDUSTRIAL WASTE MANAGEMENT SERVICES
Our Industrialin:
Nuclear Waste Management Services (“Nuclear Segment”), which 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.
| · | Treatment, storage, processing and disposal of mixed waste (which is waste that contains both low-level radioactive and hazardous waste) including on and off-site waste remediation and processing; |
| · | Nuclear, low-level radioactive, and mixed waste treatment, processing and disposal; and |
| · | Research and development of innovative ways to process low-level radioactive and mixed waste. |
These services are primarily conducted through eightfour 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 Nuclearsubsidiaries:
| · | Perma-Fix Northwest Richland, Inc. located in Richland, Washington, adjacent to the U.S. Department of Energy’s Hanford, Washington, facility; |
| · | Perma-Fix of Florida, Inc., located in Gainesville, Florida; |
| · | Diversified Scientific Services, Inc., located in Kingston, Tennessee; and |
| · | East Tennessee Materials and Energy Corporation, located in Oak Ridge, Tennessee. |
Industrial 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,(“Industrial Segment”), which includes research, development, and on and off-site
waste remediation and processing.
include:
| · | treatment storage, processing and disposal of hazardous and non-hazardous waste, and |
| · | wastewater management services, including the collection, treatment, processing and disposal of hazardous and non-hazardous wastewater. |
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
| · | Perma-Fix of Fort Lauderdale, Inc., located in Ft. Lauderdale, Florida; |
| · | Perma-Fix of South Georgia, Inc., located in Valdosta, Georgia; and |
| · | Perma-Fix of Orlando, Inc., located in Orlando, Florida. |
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Consulting Engineering Services include(“Engineering Segment”), which provide solutions to industrial and government customers for broad-scope environmental issues including:
o environmental management programs
o regulatory permitting
o
| · | Air, water, and hazardous waste permitting; |
| · | air, soil, and water sampling; |
| · | compliance reporting; |
| · | emission reduction strategies; and |
| · | compliance auditing. |
The Engineering Segment also provides various compliance and auditing
o field testingtraining activities, as well as engineering and characterization
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compliance support needed by our other segments. These services are primarily conducted through our subsidiary, Schreiber, Yonley & Associates, Inc., located in St. Louis,Ellisville, Missouri.
We have grown through both acquisitions and internal development.
Our present objectivegoal is to continue focus on the operations, maximize profitability,efficient operation of our existing facilities within our Nuclear, Industrial, and Engineering Segments, evaluate strategic acquisitions primarily within the Nuclear Segments, and to continue the research and development of innovative technologies for the
treatment ofto treat nuclear waste, mixed waste, and industrial waste. We continue to place greater attention and resources on our nuclear business.
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. 67th8302 Dunwoody Place, Gainesville, Florida
32653,#250, Atlanta, Georgia 30350, and our telephone number is (352) 373-4200.(770) 587-9898. Our website is located at www.perma-fix.com.www.perma-fix.com. The information contained in our website is not incorporated by reference in this prospectus.
THE COMMON STOCK WE MAY OFFER
We may offer up to an aggregate of 5,000,000 shares of common stock in one or more offerings. A prospectus supplement, which we will provide to you each time we offer securities, will describe the specific amounts, prices and terms of these securities.
We may sell the common stock to or through underwriters, dealers or agents or directly to purchasers. We and our agents reserve the sole right to accept and to reject in whole or in part any proposed purchase of securities. Each prospectus supplement will set forth the names of any underwriters, dealers or agents involved in the sale of the common stock described in that prospectus supplement and any applicable fee, commission or discount arrangements with them.
Common stock holders are entitled to receive dividends declared by our board of directors out of funds legally available for the payment of dividends, subject to rights, if any, of preferred stock holders. However, we have never paid a dividend, and we do not anticipate paying a dividend in the foreseeable future. Our current secured credit facility prohibits us from paying cash dividends on our common stock. Each holder of common stock is entitled to one vote per share. The holders of common stock have no preemptive rights or cumulative voting rights. A prospectus supplement will describe the specific amounts, prices and terms of any common stock to be issued.
RISK FACTORS
Investing
An investment in our securities involves a high degree of risk. BeforeYou should carefully consider the risks described below before making an investment decision, youas well as the risks and other information included and incorporated by reference in the applicable prospectus supplement when determining whether or not to purchase the securities offered under this prospectus and the applicable prospectus supplement. You should carefully consideralso refer to the risk factors set forthother information in this prospectus and any accompanying prospectus supplement delivered withincorporated by reference into 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"(“SEC”).
OUR SUBSTANTIAL AMOUNT OF DEBT COULD ADVERSELY AFFECT OUR OPERATIONS.
We have a substantial amount of debt. At March 31, 2004,
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The risks and uncertainties described below are not the only risks and uncertainties we face. Additional risks and uncertainties not presently known to us or that we currently deem immaterial also may impair our aggregate
consolidated debt was approximately $20.9 million.business operations. 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 partany 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 operatefollowing risks actually occur, 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 ourresults of 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 undercould suffer. In that event, 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 conversiontrading 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 could decline, and you may potentially have a material adverse
impact on our earnings per share and could, among other things, depress the
pricelose all or part of your investment in our common stock. This result could detrimentally affectThe risks discussed below also include forward-looking statements and our abilityactual results may differ substantially from those discussed in these forward-looking statements.
Risks Relating to raise additional equity capital.
The conversionour Operations
Our insurer that provides our financial assurance that we are required have in order to operate our permitted treatment, storage and disposal facility has experienced financial difficulties.
It has been publicly reported that American International Group, Inc. (“AIG”), has experienced significant financial difficulties and is continuing to experience significant financial difficulties. A subsidiary of AIG provides our finite risk insurance policies which provide financial assurance to the applicable states for our permitted facilities in the event of unforeseen closure. We are required to provide and to maintain financial assurance that guarantees to the state that in the event of closure of our outstanding Series 17 Preferredpermitted facilities will be closed in accordance with the regulations. The policies provide a maximum of $35,000,000 of financial assurance coverage of which the coverage amount totals $32,515,000 at December 31, 2008. In March 2009, the policies were increased to provide a maximum of $39,000,000 of financial assurance coverage of which the coverage amounts totals $37,936,000. This additional increase was the result of additional financial assurance coverage requirement for our DSSI subsidiary to commercially store 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.
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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 fromPCB wastes under a permit issued by 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 concertEPA on November 26, 2008. The AIG subsidiary also provides other operating insurance policies for the purpose of voting on matters subject to stockholder vote,Company and our management could
be greatly impacted. For instance, this investor group could instruct Capital
Bank to vote for or againstsubsidiaries. In the approvalevent of a merger or other proposal requiring
stockholder approval. As a result, the abilityfailure of our other stockholders to
influence our management and policiesAIG, this 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 harmimpact 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.
Wepermits which we are a waste management company. Our business is subjectrequired to extensive,
evolving, and increasingly stringent federal, state, and local environmental
laws and regulations. Such federal, state, and local environmental laws and
regulations governhave in order to operate our activities regarding the treatment, storage, recycling,and 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. facilities.
If we arecannot maintain adequate insurance coverage, we will be 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.
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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
The inability 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 beenmaintain existing government contracts or win new government contracts over 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 willextended period could have a material adverse effect on our resultsoperations and adversely affect our future revenues.
A material amount 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.
Theour Nuclear Segment's revenues are generated through various U.S. government contracts or subcontracts involving the U.S. government. Our revenues from governmental contracts and subcontracts relating to governmental facilities within our industrial waste management services segment
constitutedNuclear Segment were approximately 52.1%$43,464,000 and 45.1%$30,000,000, representing 57.6% and 46.5%, respectively, of our consolidated operating revenues in 2003from continuing operations for 2008 and 2002, respectively, and 41.6%2007. Most of our consolidatedgovernment 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 increase overall competition and pricing pressure and may require us to make sustained post-award efforts to realize revenues duringunder these government contracts. All contracts with, or subcontracts involving, the first
quarterfederal government are terminable, or subject to renegotiation, by the applicable governmental agency on 30 days notice, at the option of 2004. Our industrial waste management services segment sustained
lossesthe governmental agency. If we fail to maintain or replace these relationships, or if a material contract is terminated or renegotiated 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 compareda manner that is materially adverse 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 theus, our 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 restructuringfuture operations could be materially adversely affected.
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Failure of our industrial waste management services segment, changing this segment's managementNuclear Segment to be profitable could have a material adverse effect.
Our Nuclear Segment has historically been profitable. With the divestitures of certain facilities within our Industrial Segment and increasing itsthe acquisition of our Perma-Fix Northwest Richland, Inc. (“PFNWR”) within our Nuclear Segment in June 2007, the Nuclear Segment represents the Company’s largest revenue segment. The Company’s main objectives are to increase focus on higher-margin generator direct revenuesthe efficient operation of our existing facilities within our Nuclear Segment and eliminating lower-margin outside broker revenues. During March 2004, we
completed certainto further evaluate strategic acquisitions inwithin the industrial waste management services
segment. See "Recent Developments - Acquisitions."Nuclear Segment. If our industrial waste management services segmentNuclear Segment fails to becomecontinue to be profitable on an annualized basis in the foreseeable future, this could have a material adverse effect on ourthe Company’s 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 dependentexisting and future customers may reduce or halt their spending on nuclear services with outside vendors, including us.
A variety of factors may cause our existing or future customers (including the federal government) to reduce or halt their spending on nuclear services from outside vendors, including us. These factors include, but are not limited to:
| · | accidents, terrorism, natural disasters or other incidents occurring at nuclear facilities or involving shipments of nuclear materials; |
| · | failure of the federal government to approve necessary budgets, or to reduce the amount of the budget necessary, to fund remediation of U.S. Department of Energy (“DOE”) and U.S. Department of Defense (“DOD”) sites; |
| · | civic opposition to or changes in government policies regarding nuclear operations; or |
| · | a reduction in demand for nuclear generating capacity. |
These events could result in or cause the federal government to terminate or cancel its existing contracts involving us to treat, store or dispose of contaminated waste at one or more of the federal sites since all contracts with, or subcontracts involving, the federal government are terminable upon or subject to renegotiation at the option of the government on 30 days notice. These events also could adversely affect us to the extent that they result in the reduction or elimination of contractual requirements, lower demand for nuclear services, burdensome regulation, disruptions of shipments or production, increased operational costs or difficulties or increased liability for actual or threatened property damage or personal injury.
Economic downturns (i.e. the current economic recession) and/or reductions in government funding could have a material negative impact on our abilitybusinesses.
Demand for our services has been, and we expect that demand will continue to maintainbe, subject to significant fluctuations due to a variety of factors beyond our proprietary
technologies. There can be no assurancecontrol, including the current economic recession and conditions, inability of the federal government to adopt its budget or reductions in the budget for spending to remediate federal sites due to numerous reasons, including, without limitation, the substantial deficits that the steps taken by usfederal government has and is continuing to protect
our proprietary technologiesincur. During economic downturns, such as the current economic recession, and large budget deficits that the federal government and many states are experiencing, the ability of private and government entities to spend on nuclear services may decline significantly. Although the recently adopted economic stimulus package provides for substantial funds to remediate federal nuclear sites, we cannot be certain that economic or political conditions will be adequategenerally favorable or that there will not be significant fluctuations adversely affecting our industry as a whole. In addition, our operations depend, in large part, upon governmental funding, particularly funding levels at the DOE. Significant reductions in the level of governmental funding (for example, the annual budget of the DOE) or specifically mandated levels for different programs that are important to prevent misappropriationour business could have a material adverse impact on our business, financial position, results of these technologies by third parties. Misappropriationoperations and cash flows.
The loss of one or a few customers could have an adverse effect on us.
One or a few governmental customers or governmental related customers have in the past, and may in the future, account for a significant portion of our proprietary
technologyrevenue in any one year or over a period of several consecutive years. Because customers generally contract with us for specific projects, we may lose these significant customers from year to year as their projects with us are completed. Our inability to replace the business with other projects could have an adverse effect on our operationsbusiness and financial
condition. Changesresults of operations.
4
As a government contractor, we are subject to current environmental lawsextensive government regulation, and our failure to comply with applicable regulations also could limitsubject us to penalties that may restrict our ability to conduct our business.
Our governmental contracts, which are primarily with the useDOE or subcontracts relating to DOE sites, are a significant part of our proprietary technology.
LOSS OF CERTAIN KEY PERSONNEL COULD HAVE A MATERIAL ADVERSE EFFECT ON US.
business. Allowable costs under U.S. government contracts are subject to audit by the U.S. government. If these audits result in determinations that costs claimed as reimbursable are not allowed costs or were not allocated in accordance with applicable regulations, we could be required to reimburse the U.S. government for amounts previously received.
Governmental contracts or subcontracts involving governmental facilities are often subject to specific procurement regulations, contract provisions and a variety of other requirements relating to the formation, administration, performance and accounting of these contracts. Many of these contracts include express or implied certifications of compliance with applicable regulations and contractual provisions. If we fail to comply with any regulations, requirements or statutes, our existing governmental contracts or subcontracts involving governmental facilities could be terminated or we could be suspended from government contracting or subcontracting. If one or more of our governmental contracts or subcontracts are terminated for any reason, or if we are suspended or debarred from government work, we could suffer a significant reduction in expected revenues and profits. Furthermore, as a result of our governmental contracts or subcontracts involving governmental facilities, claims for civil or criminal fraud may be brought by the government or violations of these regulations, requirements or statutes.
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.
Changes in environmental regulations and enforcement policies could subject us to additional liability and adversely affect our ability to continue certain operations.
We cannot predict the extent to which our operations may be affected by future governmental 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.
The refusal to accept our waste for disposal by, or a closure of, the end disposal site that our Nuclear Segment utilizes to dispose of its waste could subject us to significant risk and limit our operations.
Our Nuclear Segment has limited options available for disposal of its waste. If this disposal site ceases to accept waste or closes for any reason or refuses to accept the waste of our Nuclear Segment, for any reason, we could have nowhere to dispose of our nuclear waste or have significantly increased costs from disposal alternatives. With nowhere to dispose of our nuclear waste, we would be subject to significant risk from the implications of storing the waste on our site, and we would have to limit our operations to accept only waste that we can dispose of.
Our businesses subject us to substantial potential environmental liability.
Our business of rendering services in connection with management of waste, including certain types of hazardous waste, low-level radioactive waste, and mixed waste (waste containing both hazardous and low-level radioactive waste), subjects us to risks of liability for damages. Such liability could involve, without limitation:
| · | 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; and |
5
· | claims of employees, customers, or third parties for personal injury or property damage occurring in the course of our operations; and |
· | 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.
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 highly regulated and we are subject to numerous laws and regulations 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 have violated environmental laws or regulations or 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.
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, overall reduced activities during these periods resulting from holiday periods, and finalization of government budgets during the fourth quarter of each year. 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 operations and liquidity.
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 or radioactive 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 and our customers operate in a politically sensitive environment, and the public perception of nuclear power and radioactive materials can affect our customers and us.
We and our customers operate in a politically sensitive environment. Opposition by third parties to particular projects can limit the handling and disposal of radioactive materials. Adverse public reaction to developments in the disposal of radioactive materials, including any high profile incident involving the discharge of radioactive materials, could directly affect our customers and indirectly affect our business. Adverse public reaction also could lead to increased regulation or outright prohibition, limitations on the activities of our customers, more onerous operating requirements or other conditions that could have a material adverse impact on our customers’ and our business.
6
We may not be successful in winning new business mandates from our government and commercial customers.
We must be successful in winning mandates from our government and commercial customers to replace revenues from projects that are nearing completion and to increase our revenues. Our business and operating results can be adversely affected by the size and timing of a single material contract.
The elimination or any modification of the Price-Anderson Acts indemnification authority could have adverse consequences for our business.
The Atomic Energy Act of 1954, as amended, or the AEA, comprehensively regulates the manufacture, use, and storage of radioactive materials. The Price-Anderson Act supports the nuclear services industry by offering broad indemnification to DOE contractors for liabilities arising out of nuclear incidents at DOE nuclear facilities. That indemnification protects DOE prime contractor, but also similar companies that work under contract or subcontract for a DOE prime contract or transporting radioactive material to or from a site. The indemnification authority of the DOE under the Price-Anderson Act was extended through 2025 by the Energy Policy Act of 2005.
The Price-Anderson Act’s indemnification provisions generally do not apply to our processing of radioactive waste at governmental facilities, and do not apply to liabilities that we might incur while performing services as a contractor for the DOE and the nuclear energy industry. If an incident or evacuation is not covered under Price-Anderson Act indemnification, we could be held liable for damages, regardless of fault, which could have an adverse effect on our results of operations and financial condition. If such indemnification authority is not applicable in the future, our business could be adversely affected if the owners and operators of new facilities fail to retain our services in the absence of commercial adequate insurance and indemnification.
We are currently experiencingengaged in highly competitive businesses and typically must bid against other competitors to obtain major contracts.
We are engaged in highly competitive business in which most of our government contracts and some of our commercial contracts are awarded through competitive bidding processes. We compete with national and regional firms with nuclear services practices, as well as small or local contractors. Some of our competitors have greater financial and other resources than we do, which can give them a periodcompetitive advantage. In addition, even if we are qualified to work on a new government contract, we might not be awarded the contract because of growth through internal
expansionexisting government policies designed to protect certain types of businesses and strategic acquisitions, including two acquisitions in March 2004.
See "Recent Developments -- Acquisitions." This growth has placed, and could
continue to place, a significant strainunderrepresented minority contractors. Competition also places downward pressure on our management, personnel,contract prices and other
resources. Our growth requires us to effectively manage our collaborative
arrangements andprofit margins. Intense competition is expected to continue to improve our operational, management, and
financial systems and controls, and to successfully train, motivate, and manage
our employees.for nuclear service contracts. If we are unable to effectively managemeet these competitive challenges, we could lose market share and experience on overall reduction in our growth,profits.
Our failure to maintain our safety record could have an adverse effect on our business.
Our safety record is critical to our reputation. In addition, many of our government and commercial customers require that we maintain certain specified safety record guidelines to be eligible to bid for contracts with these customers. Furthermore, contract terms may provide for automatic termination in the event that our safety record fails to adhere to agreed-upon guidelines during performance of the contract. As a result, our failure to maintain our safety record could have a material adverse effect on our business, financial condition and results of operations.
We continue to have material weaknesses in our Internal Control over Financial Reporting (“ICFR”).
During our evaluation of our ICFR, we noted that the monitoring of invoicing process controls and the corresponding transportation and disposal process controls at our Industrial Segment subsidiaries were ineffective and were not being applied consistently. In addition, we noted that the monitoring of quote to invoicing control was ineffective at certain of our Nuclear Segment subsidiaries. These deficiencies resulted in material weaknesses to our ICFR, and could result in sales being priced and invoiced at amounts which were not approved by the customer, or the appropriate level of management, and recognition of revenue in incorrect financial reporting period. These deficiencies have resulted in our disclosure that our ICFR was ineffective as of the end of 2008 and 2007. Although these material weaknesses did not result in a material adjustment to our quarterly or annual financial statements, if we are unable to remediate these material weaknesses, there is a reasonable possibility that a misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.
7
We may be unable to utilize loss carryforwards in the future.
We have approximately $26,589,000 in net operating loss carryforwards which will expire from 2009 to 2028 if not used against future federal income tax liabilities. Our net loss carryforwards are subject to various limitations. Our ability to use the net loss carryforwards depends on whether we are able to generate sufficient income in the future years. Further, our net loss carryforwards have not been audited or approved by the Internal Revenue Service.
Risks Relating to our Intellectual Property
If we cannot maintain our governmental permits or cannot obtain required permits, we may not realizebe 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 expected benefitstreatment, storage, recycling, disposal, and transportation of hazardous and non-hazardous waste and low-level radioactive waste. We must obtain and maintain permits or licenses to conduct these activities in compliance with such growth,laws and such failure couldregulations. Failure to obtain and maintain the required permits or licenses would 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.
If any of our facilities are unable to maintain currently held permits or licenses or obtain any additional permits or licenses which may be required to conduct its operations, we may not be able to continue those operations at these facilities, which could have a material adverse effect on us.
We believe our proprietary technology is important to us.
We believe that it is important that we 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.
Risks Relating to our Financial Position and Need for Financing
Breach of financial covenants in existing credit facility could result in a default, triggering repayment of outstanding debt under the credit facility.
Our credit facility with our bank contains financial covenants. A breach of any of these covenants could result in a default under our credit facility triggering our lender to immediately require the repayment of all outstanding debt under our credit facility and terminate all commitments to extend further credit. In the past, none of our covenants have been restrictive to our operations. If we fail to meet our loan covenants in the future and our lender does not waive the non-compliance or revise our covenant so that we are in compliance, our lender could accelerate the repayment of borrowings under our credit facility. In the event that our lender accelerates the payment of our borrowing, we may not have sufficient liquidity to repay our debt under our credit facility and other indebtedness.
Our amount of debt and floating rates of interest could adversely affect our operations.
At December 31, 2008, our aggregate consolidated debt was approximately $16,203,000. If our floating rates of interest experienced an upward increase of 1%, our debt service would increase by approximately $162,000 annually. Our secured revolving credit facility (the “Credit Facility”) provides for an aggregate commitment of $25,000,000, consisting of an $18,000,000 revolving line of credit and a term loan of $7,000,000. 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. As of December 31, 2008, we had borrowings under the revolving part of our Credit Facility of $6,500,000 and borrowing availability of up to an additional $5,400,000 based on our outstanding eligible receivables. A lack of operating results could have material adverse consequences on our ability to operate our business. 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.
8
Risks Relating to an Investment in our Common Stock
Issuance of substantial amounts of our common stock could depress our stock price.
Any sales of substantial amounts of our Common Stock in the public market could cause an adverse effect on the market price of our Common Stock and could impair our ability to raise capital through the sale of additional equity securities. The issuance of our Common Stock will result in the dilution in the percentage membership interest of our stockholders and the dilution in ownership value. As of December 31, 2008, we had 53,934,560 shares of Common Stock outstanding.
In addition, as of December 31, 2008, we had outstanding options to purchase 3,417,347 shares of common stock at exercise prices from $1.22 to $2.98 per share. Further, we have adopted a preferred share rights plan, and if such is triggered, could result in the issuance of a substantial amount of our common stock. The existence of this quantity of rights to purchase our common stock could result in a significant dilution in the percentage ownership interest of our stockholders and the dilution in ownership value. Future sales of the shares issuable could also depress the market price of our common stock.
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) withoutcommon stock.
The price of our common stock may fluctuate significantly, which may make it difficult for you to resell our common stock when you want or at prices you find attractive.
The price of our common stock on 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.Nasdaq Capital Markets constantly changes. We provide servicesexpect that the market price of our common stock will continue to fluctuate. This may make it difficult for you to resell the common stock when you want or at prices you find attractive.
Future issuance or potential issuance of our common stock could adversely affect the price of our common stock, our ability to raise funds in new stock offerings and dilute your percentage interest in our common stock.
Future sales of substantial amounts of our common stock in the public market, or the perception that such sales could occur, could adversely affect prevailing trading prices of our common stock, and impair our ability to raise capital through future offerings of equity. No prediction can be made as to the nuclear industry. The Price-Anderson Act
promoteseffect, if any, that future issuances or sales of shares of common stock or the nuclear industry by offering broad indemnification to commercial
nuclear power plant operators and DOE contractorsavailability of shares of common stock for liabilities arising outfuture issuance, will have on the trading price 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, butour common stock. Such future issuances could 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 tosignificantly reduce the federal income tax payments which
we would otherwise be requiredpercentage ownership and dilute the ownership value of our existing common stockholders.
Delaware law, certain of our charter provisions, our stock option plans and outstanding warrants and our preferred stock may inhibit a change of control under circumstances that could give you an opportunity 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.
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"“business combination” with an "interested stockholder"“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 contributioncombination 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 ussuch securities 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 PlanFurther, certain of our option plans provide for the immediate acceleration of, and removal of restrictions from, options and other awards under such plans upon a "change“change of control"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
9
We have authorized and unissued 17,648,093 (which include outstanding options to purchase 3,417,347 shares of common stock, the issued and outstandingour Common Stock) shares of Series 17 Preferred,Common Stock and outstanding warrants for the purchase of2,000,000 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"),Preferred Stock as of April 22, 2004, 33,572,275December 31, 2008 (which includes 600,000 shares of common stock
(including 988,000 treasury shares) are available for future issuance, of which
17,787,110 areour Preferred Stock reserved for issuance under our outstanding preferred stock,
options and warrants.share rights plan). These authorizedunissued 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 incumbentour management to make it more difficult, and thereby discourage an attempt to acquire control of us, even thoughus.
Our Preferred Share Rights Plan may adversely affect our stockholders.
In May 2008, we adopted a preferred share rights plan (the “Rights Plan”), designed to ensure that all of our stockholders receive fair and equal treatment in the event of a proposed takeover or abusive tender offer. However, the Rights Plan may deem such an
acquisition desirable.also have the effect of deterring, delaying, or preventing a change in control that might otherwise be in the best interests of our stockholders.
In general, under the terms of the Rights Plan, subject to certain limited exceptions, if a person or group acquires 20% or more of our common stock or a tender offer or exchange offer for 20% or more of our common stock is announced or commenced, our other stockholders may receive upon exercise of the rights (the “Rights”) issued under the Rights Plan the number of shares our common stock or of one-one hundredths of a share of our Series A Junior Participating Preferred Stock, par value $.001 per share, having a value equal to two times the purchase price of the Right. In addition, if we are acquired in a merger or other business combination transaction in which we are not the survivor or more than 50% of our assets or earning power is sold or transferred, then each holder of a Right (other than the acquirer) will thereafter have the right to receive, upon exercise, common stock of the acquiring company having a value equal to two times the purchase price of the Right. The issuancepurchase price of neweach Right is $13, subject to adjustment.
The Rights will cause substantial dilution to a person or group that attempts to acquire us on terms not approved by our board of directors. The Rights may be redeemed by us at $0.001 per Right at any time before any person or group acquires 20% or more of our outstanding common stock. The rights should not interfere with any merger or other business combination approved by our board of directors. The Rights expire on May 2, 2018.
Resale of shares offered by this prospectus could adversely affect the market price of our common stock and our ability to raise additional equity capital.
The sale, or availability for sale, of common stock and/in the public market pursuant to this prospectus may adversely affect the prevailing market price of our common stock and may impair our ability to raise additional capital by selling equity or preferredequity-related securities. This prospectus includes 5,000,000 shares that will be available for resale (assuming the issuance from time to time of all of the common stock could also be used to dilute the stock ownership and voting
powerincluded in this offering). The resale of a third party seeking to remove the directors, replace incumbent
directors, accomplish certain business combinations alter, amend, or repeal
portionssubstantial number of shares 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 instabilitycommon stock in the United Statespublic market pursuant to this offering, and elsewhere, and future acts of terrorism, violence or warafterwards, could furtheradversely affect the industries where we operate,market price for our business, results of operationscommon stock and financial condition. The consequences of any terrorist attacks or hostilitiesmake it more difficult for you to sell our shares at times and prices that you feel are unpredictable, and we may not be able to foresee events that could have an
adverse effect on our operations or your investment.
9
appropriate.
10
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This
Certain statements contained within this prospectus contains forward-looking statements.and the documents incorporated into this prospectus by reference may be deemed “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (collectively, the “Private Securities Litigation Reform Act of 1995”). All statements in this prospectus and the documents incorporated into this prospectus by reference other than statementsa statement of historical fact in this prospectus are forward-looking statements includingthat are subject to known and unknown risks, uncertainties and other factors, which could cause actual results and performance of the Company to differ materially from such statements. The words “believe,” “expect,” “anticipate,” “intend,” “will,” “may,” and similar expressions identify forward-looking statements. Forward-looking statements regarding, amonginclude, without limitation, the statements listed under “Special Note Regarding Forward-Looking Statements” in our 2008 Form 10-K, all of which are incorporated by reference herein, as well as those forward-looking statements identified in our 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 limitationsSEC filings incorporated by federal or state
governments regarding the creation of new hazardous waste
regulations.
Althoughreference in this prospectus.
While we believe ourthe expectations reflected in thosesuch forward-looking statements are based on reasonable, assumptions, we cannot assure you that thesecan give no assurance such expectations will prove to be correct. ImportantThere are a variety of factors which could cause
actual results and future outcomes to differ materially from those described in this prospectus include,report, including, but are not limited to:
| · | general economic conditions; |
| · | material reduction in revenues; |
| · | inability to collect in a timely manner a material amount of receivables; |
| · | increased competitive pressures; |
| · | the ability to maintain and obtain required permits and approvals to conduct operations; |
| · | the ability to develop new and existing technologies in the conduct of operations; |
| · | ability to retain or renew certain required permits; |
| · | discovery of additional contamination or expanded contamination at any of the sites or facilities leased or owned by us or our subsidiaries which would result in a material increase in remediation expenditures; |
| · | changes in federal, state and local laws and regulations, especially environmental laws and regulations, or in interpretation of such; |
| · | potential increases in equipment, maintenance, operating or labor costs; |
| · | management retention and development; |
| · | financial valuation of intangible assets is substantially more/less than expected; |
| · | the requirement to use internally generated funds for purposes not presently anticipated; |
| · | the inability to maintain the listing of our Common Stock on the NASDAQ; |
| · | terminations of contracts with federal agencies or subcontracts involving federal agencies, or reduction in amount of waste delivered to us under these contracts or subcontracts; |
| · | disposal expense accrual could prove to be inadequate in the event the waste requires retreatment; and |
| · | other factors described under “Risk Factors” in this prospectus and in the other documents we have filed with the SEC and that are incorporated herein by reference, including the factors described under “Business,” “Risk Factors,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in our annual report on Form 10-K for the fiscal year ended December 31, 2008 and that may be discussed from time to time in other reports filed with the SEC subsequent to the registration statement of which this prospectus is a part. |
Any forward-looking statement speaks only as 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 auditsdate on 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.that statement is made. We undertake no obligation to update or
revise ourpublicly any forward-looking statements,statement, 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
11
USE OF PROCEEDS
Unless otherwise indicated 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,supplement, 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 operatinguse the assets acquired from A&A and EMAX
substantially as they were operated prior to acquisition.
11
USE OF PROCEEDS
We will not receive anynet proceeds from the sale of sharesthe securities offered by this prospectus for general corporate purposes and working capital requirements, which may include the Selling
Stockholders. repayment of indebtedness. Under the terms of our existing Credit Facility, we may also use a portion of the net proceeds to fund possible investments in and acquisitions of complimentary businesses, partnerships, minority investments, products or technologies with the consent of our Credit Facility lender. Currently, there are no commitments or agreements regarding such acquisitions or investments that are material. Pending their ultimate use, we intend to invest the net proceeds in money market funds, commercial paper and governmental and non-governmental debt securities with maturities of up to three years. The terms of our existing Credit Facility require us to maintain such investments with our Credit Facility lender or its affiliates, which investments serve as additional collateral under the Credit Facility.
PLAN OF DISTRIBUTION
We may sell the securities:
| · | through one or more underwriters or dealers, |
| · | directly to purchasers, |
| · | through agents, or |
| · | through a combination of any of these methods of sale. |
We may distribute the securities:
| · | from time to time in one or more transactions at a fixed price or prices, which may be changed from time to time, |
| · | at market prices prevailing at the times of sale, |
| · | at prices related to such prevailing market prices, or |
| · | at negotiated prices. |
We will receive approximately $5,184,863 ifdescribe the Selling
Stockholders exercise, for cash, allmethod of distribution of the warrants and Consultant Warrants
coveringsecurities in the shares included in this prospectus. applicable prospectus supplement.
We currently intend to use any
proceeds received by us frommay determine the exerciseprice or other terms of the warrantssecurities offered under this prospectus by use of an electronic auction. We will describe how any auction will determine the price or any other terms, how potential investors may participate in the auction and Consultant
Warrants to reduce debt and/the nature of the obligations of the underwriter, dealer or general working capital.
We have agreed to pay all costs and fees relating toagent in the registration ofapplicable prospectus supplement.
If underwriters are used in the sale, they will acquire the common stock coveredfor their own account and may resell the stock from time to time in one or more transactions at a fixed public offering price. The obligations of the underwriters to purchase the common stock will be subject to the conditions set forth in the applicable underwriting agreement. We may offer the common stock to the public through underwriting syndicates represented by this prospectus, except for anymanaging underwriters or by underwriters without a syndicate. Underwriters, dealers or agents may receive compensation in the form of discounts, concessions or commissions payable tofrom us or our purchasers (as their agents in connection with the sale of securities). These underwriters, dealers or agents incidentmay be considered to be underwriters under the offering of the shares covered by this prospectus,Securities Act. As a result, discounts, commissions, or any legal fees
incurred by any Selling Stockholders relating to this offering.
SELLING STOCKHOLDERS
The shares of common stock being offeredprofits on resale received by the Selling Stockholders
consist of (a) 4,616,113 shares issuedunderwriters, dealers or agents may be treated as underwriting discounts and commissions. Each prospectus supplement will identify any such underwriter, dealer or agent, and describe any compensation received by them from us. Any initial public offering price and any discounts or concessions allowed or reallowed or paid to dealers may be changed from time to time.
Underwriters, dealers and agents may be entitled to indemnification by us against certain civil liabilities, including liabilities under the Securities Act, or to contribution with respect to payments made by the underwriters, dealers or agents, under agreements between us and the underwriters, dealers and agents.
We may grant underwriters who participate in the private placement effected in
March 2004, (b) 1,615,638 shares issuable upon the exercisedistribution of the warrants
issued in the private placement, and (c) 160,000 shares issuable upon the
exercise of the Consultant Warrants issuedsecurities an option to purchase additional securities to cover over-allotments, if any, 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 stockdistribution.
12
Underwriters or agents 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 thattheir associates may be acquired upon the exercisecustomers of, outstanding warrants, whether such are currently
exercisable. The Selling Stockholders may sell all, someengage in transactions with 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 outstandingperform services 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
* Less than 1%
(1) Includes 750,000 shares, and 262,500 shares issuable upon the
exercise of warrants, issued inbusiness.
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 sharesoffering of our common stock, owned by Omicron, and Winchestercertain persons participating in such offering may be deemed to share voting and dispositive power overengage in transactions that stabilize, maintain or otherwise affect 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 brokerageprice, including over-allotment, stabilizing transactions, short covering 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 distributionpenalty bids in accordance with Regulation M under the rulesExchange Act. Over-allotment involves sales in excess of the applicable exchange;
o privately negotiated transactions;
o settlement ofoffering size, which create a short sales;
o broker-dealers may agree withposition. Stabilizing transactions permit bids to purchase the Selling Stockholders to sellunderlying security so long as the stabilizing bids do not exceed 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 hedgingmaximum. Short covering 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 salesinvolve purchases of the common stock in the courseopen market after the distribution is completed to cover short positions. Penalty bids permit the underwriters to reclaim a selling concession from a dealer when the common stock originally sold by the dealer is purchased in a covering transaction to cover short positions. Those activities may cause the price of hedging the positions they assume. The Selling
Stockholderscommon stock to be higher than it would otherwise be. If commenced, the underwriters may also selldiscontinue any of the activities at any time.
Any underwriters who are qualified market makers on the NASDAQ Capital Markets may engage in passive market making transactions in the common stock on the NASDAQ Capital Global Markets in accordance with Rule 103 of Regulation M, during the business day prior to the pricing of the offering, before the commencement of offers or sales of the common stock. Passive market makers must comply with applicable volume and price limitations and must be identified as passive market makers. In general, a passive market maker must display its bid at a price not in excess of the highest independent bid for such security; if all independent bids are lowered below the passive market maker’s bid, however, the passive market maker’s bid must then be lowered when certain purchase limits are exceeded.
To the extent required, this prospectus may be amended and supplemented from time to time to describe a specific plan of distribution.
DESCRIPTION OF COMMON STOCK
Our certificate of incorporation authorizes us to issue up to 75,000,000 shares of common stock, $0.001 par value. As of April 3, 2009, there were 54,019,324 shares of our common stock shortissued 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. outstanding.
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 salesholders of shares of our common stock are entitled to one vote per share on all matters to be voted on by stockholders. Common stock holders are entitled to receive dividends declared by the Selling Stockholdersboard of directors out of funds legally available for the payment of dividends, subject to the rights, if any, of preferred stock holders. However, we have never paid a dividend and we do not anticipate paying a dividend in the foreseeable future. Our current secured credit facility prohibits us from paying cash dividends on our common stock. Upon any liquidation, dissolution or winding up of our business, the holders of common stock are entitled to share equally in all assets available for distribution after payment of all liabilities and provision for liquidation preference of shares of preferred stock then outstanding. The holders of common stock have no preemptive rights and no rights to convert their common stock into any other person. We will make copiessecurities. There are no redemption or sinking fund provisions applicable to our common stock. All outstanding shares of this prospectus
available tocommon stock are fully paid and nonassessable.
The transfer agent and registrar for 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
common stock is Continental Stock Transfer & Trust Company 17 Battery Place, Floor 8, New York, New York 10004-1123.
LEGAL OPINION
Conner & Winters, P.C.,LLP, Oklahoma City, Oklahoma will opine as to the validity of the sharesissuance of common stock beingthe securities offered hereby.
by this prospectus.
EXPERTS
Our
The consolidated financial statements and schedulefinancial statement schedules as of December 31, 2008 and 2007 and for each of the three years in the period ended December 31, 2008, and management’s assessment of the effectiveness of internal control over financial reporting as of December 31, 2008, incorporated by reference in this prospectusRegistration Statement have been audited byso incorporated in reliance on the reports of BDO Seidman, LLP, an independent certifiedregistered public accountants, toaccounting firm (the report on the extent and foreffectiveness of internal control over financial reporting expresses an adverse opinion on the periods set forth in their reporteffectiveness of the Company’s internal control over financial reporting as of December 31, 2008), incorporated herein by reference, and are incorporated herein in reliance upon
such report given uponon 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.
13
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other information with the SEC.Securities and Exchange Commission, in accordance with the Securities Exchange Act of 1934. You may read and copy any documentmaterials that we file with the Securities and Exchange Commission at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C., 20549.
following address:
| Public Reference Room | |
| 450 Fifth Street, N.W. | |
| Room 1024 | |
| Washington, D.C. 20549 | |
| 1-800-SEC-0330 |
Please call the SEC at 1-800-SEC-0330 for further information onabout the Public
Reference Room.public reference rooms. Our reports, proxy statements and other information filed with the SEC filings are also available to the public onover the SEC's
webInternet at the SEC’s World Wide Web site at http://www.sec.gov.
The SEC allows us to "incorporate“incorporate by reference"reference” the information contained in documents that we file with it.
This allows us tothe SEC, which means that we can disclose important information to you by referring you to those documents instead of having to repeat the information in this prospectus.other documents. The information incorporated by reference is considered to be a part of this prospectus, and later information that we file later with the SEC will automatically update and supersede this information. Therefore, before you decide to invest in a particular offering under this shelf-registration, you should always check for reports we may have filed with the SEC after the data of this prospectus.
We incorporate by reference the documents listed below and any future filings madebelow:
| · | Annual Report on Form 10-K for the fiscal year ended December 31, 2008, filed March 31, 2009; |
| · | Current Reports on Form 8-K filed with the Securities and Exchange Commission on March 2, 2009, March 11, 2009, and March 30, 2009; |
| · | The description of our Series A Junior Participating Preferred Stock, par value $.001 per share, that is contained in the Form 8-A Registration Statement, filed on May 13, 2008, as amended October 2, 2008, including any amendments or reports filed for the purpose of updating such description. |
| · | The description of the common stock of the Registrant that is contained in the Registration Statement on Form 8-A filed pursuant to Section 12 of the Exchange Act that became effective on October 30, 1992, including any amendments or reports filed for the purpose of updating such description. |
Also incorporated by reference into this prospectus are all documents that we may file with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act untilafter the Selling Stockholders sell alldate of this prospectus and before we stop offering the Shares:
o Oursecurities described in this prospectus. These documents include periodic reports, such as annual reportreports on Form 10-K, for the fiscal year ended December
31, 2003;
o Ourquarterly reports on Form 10-Q and current reportreports on Form 8-K, as well as proxy statements. Any statement contained herein or in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained herein or in any other subsequently 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 Descriptiondocument which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any such statement so modified or superseded shall not be deemed to constitute a part of our common stock contained in our Registration
Statement on Form 8-A, dated October 30, 1992.this prospectus, except as so modified or superseded.
We will provide to each person who so requests, including any beneficial owner to whom a prospectus is delivered, a copy of these filings excluding exhibits except to the extent such exhibits are specifically incorporated by reference. You canmay request a copy of these filings, at no cost, by writing or telephoning us at the following address and telephone number:
address:
14
Perma-Fix Environmental Services, Inc.
Attention: Richard T. Kelecy
1940 Northwest 67thChief Financial Officer
8302 Dunwoody Place, Gainesville, Florida 32653
Telephone (352) 373-4200
17
#250
Atlanta, Georgia 30350
(770) 587-9898
You should rely only on the information containedincorporated by reference or provided in this prospectus or any supplement and in the documents incorporated by reference.prospectus supplement. We have not authorized anyone else to provide you with different information. The Selling
Stockholders willWe are not makemaking an offer of these Sharessecurities in any state where the offer is not permitted. This prospectus is part of a registration statement we filed withYou should not assume 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 or any prospectus supplement is not always complete, you should readaccurate as of any date other than the full
contracts, which are filed as exhibits todate on 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
front of those documents.
15
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 aggregate estimated (other than the registration fee) expenses to be paid by the Registrant in connection with this offering are as follows:
| SEC Registration Fee | $ | 381 | ||
| Legal Fees (Including Blue Sky) | $ | 45,000 | ||
| Accounting Fees and Expenses | $ | 10,000 | ||
| Printing | $ | 2,500 | ||
| Miscellaneous | $ | 500 | ||
| Total: | $ | 58,381 |
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
The indemnification discussed in this Item 15 is not exclusive of any other rights the party seeking indemnification may possess. We carry officer and director liability insurance with respect to certain matters, including matters arising under the Securities Act of 1933, as amended.
Item 16. Exhibits
EXHIBIT NO. DESCRIPTION
- --------------------------------------------------------------------------------
4.1* Securities Purchase Agreement dated March 16, 2004, betweenExhibits.
See 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 schedulesExhibit Index attached 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
heretothis registration statement and incorporated herein by reference.
- --------------------------------------------------------------------------------
* Previously filed.
+ Filed herewithin.
II-3
Item 17. Undertakings
(a) The Companyundersigned registrant 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,registration statement:
| (i) | To include any prospectus required by section 10(a)(3) of the Securities Act; |
| (ii) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective 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), (1)(ii) and (1)(ii)(iii) do not apply if the registration statement is on Form S-3 or Form F-3, and 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 Companyregistrant pursuant to SectionSections 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.
the registration statement, or is contained in a form of prospectus filed pursuant to Rule 424(b) that is part of the registration statement.
(2) That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at thethat 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.
(4) That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser:
| (i) | Each prospectus filed by the registrant pursuant to Rule 424(b)(3)shall be deemed to be part of the registration statement as of the date the filed prospectus was deemed part of and included in the registration statement; and |
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| (ii) | Each prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in reliance on Rule 430B relating to an offering made pursuant to Rule 415(a)(1)(i), (vii), or (x) for the purpose of providing the information required by section 10(a) of the Securities Act of 1933 shall be deemed to be part of and included in the registration statement as of the earlier of the date such form of prospectus is first used after effectiveness or the date of the first contract of sale of securities in the offering described in the prospectus. As provided in Rule 430B, for liability purposes of the issuer and any person that is at that date an underwriter, such date shall be deemed to be a new effective date of the registration statement relating to the securities in the registration statement to which that prospectus relates, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. Provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such effective date, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such effective date. |
(5) That, for the purpose of determining liability of the registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities: The Companyundersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:
| (i) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
| (ii) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
| (iii) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
| (iv) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
(b) The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act, each filing of the Company'sregistrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan'splan’s annual report pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference in the Registration Statementregistration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at thethat time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Companyregistrant pursuant to the indemnificationforegoing provisions, described herein, or otherwise, the Companyregistrant 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 Companyregistrant of expenses incurred or paid by a director, officer or controlling person of the Companyregistrant 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 Companyregistrant 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 Securities Act and will be governed by the final adjudication of such issue.
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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,Atlanta, State of Florida,Georgia, on the 6th day of May, 2004.
PERMA-FIX ENVIRONMENTAL SERVICES, INC.
By: /s/April 2009.
| PERMA-FIX ENVIRONMENTAL SERVICES, INC. | |
| By: | /s/ Dr. Louis Centofanti |
Dr. Louis F. Centofanti Chairman of the Board Chief Executive Officer |
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Dr. Louis F. Centofanti ----------------------------------------
Dr. Louis F. Centofanti
Chairmanand Ben Naccarato, and each of them, with full power of substitution and resubstitution and each with full power to act without the Board
Chief Executive Officer
other, his or her true and lawful attorney-in-fact and agent, for him or her and in his or her name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same, with all exhibits thereto, and all other documents in connection therewith, with the Securities and Exchange Commission or any state, granting unto said attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he or she might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their, his or her substitutes or substitute, may lawfully do or cause to be done by virtue hereof.
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 (Principal Executive Officer) | April 3, 2009 | ||
| /s/ Ben Naccarato | ||||
| Ben Naccarato | Chief Financial Officer (Principal Financial and Accounting Officer) | April 3, 2009 | ||
| /s/ Jon Colin | ||||
| Jon Colin | Director | April 3, 2009 | ||
| /s/ Jack Lahav | ||||
| Jack Lahav | Director | April 6, |
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| /s/ Joe Reeder | ||||
| Joe R. Reeder | Director | April 6, |
| /s/ Larry Shelton | ||||
| Larry Shelton | Director | April 3, 2009 | ||
| /s/ Dr. Charles E. Young | ||||
| Dr. Charles E. Young | Director | April 6, | ||
| /s/ Robert L. Ferguson | ||||
| Robert L. Ferguson | Director | April 5, 2009 | ||
| /s/ Mark A. Zwecker | ||||
| Mark A. Zwecker | Director | April 4, 2009 |
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PERMA-FIX ENVIRONMENTAL SERVICES, INC.
REGISTRATION STATEMENT ON FORM S-3
EXHIBIT INDEX
Exhibit No. | Description | |
| 3(i) | Restated Certificate of Incorporation, as amended, is incorporated by reference to 3.1(i) to the Registrant’s Form 10-K for the year ended December 31, 2008. | |
| 3(ii) | Bylaws of Perma-Fix Environmental Services, Inc., as amended on October 30, 2007, is incorporated by reference to Exhibit 3(ii) to the Registrant’s Form 10-Q for the quarter ended September 30, 2007. | |
| 4.1 | Specimen Common Stock Certificate is incorporated by reference to Exhibit 4.3 to the Registrant’s Registration Statement, No. 33-51874. | |
| 4.2 | Rights Agreement, dated May | |
| 4.3 | Letter Amendment to Rights Agreement, dated September 29, 2008, between the Registrant and Continental Stock Transfer & Trust Company, as Rights Agent, is incorporated by reference to Exhibit 4.1 the Registrant’s Form 8-K, filed on October 2, 2008. | |
| 4.4 | Certificate of Designations of Series A Junior Participating Preferred Stock is incorporated by reference to Exhibit 4.2 to the Registrant’s Form 8-K, filed on May 8, 2008. | |
| 5.1 | Opinion of Conner & Winters, LLP. | |
| 23.1 | Consent of BDO Seidman, LLP | |
| 23.2 | Consent of Conner & Winters (included in Exhibit 5.1 to this registration statement) | |
| 24.1 | Power of Attorney |
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