As filed with the Securities and Exchange Commission on November 19, 1999
File No. 333-______
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
PURADYN FILTER TECHNOLOGIES, INCORPORATED
(Exact name of issuer as specified in its charter)
Delaware 14-1708544
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
3020 High Ridge Road
Suite 100
Boynton Beach, FL 33426
(Address of principal executive offices) (Zip Code)
PURADYN FILTER TECHNOLOGIES, INCORPORATED
1999 STOCK OPTION PLAN
(Full title of the plan)
Richard C. Ford, Chief Executive Officer
3020 High Ridge Road, Suite 100
Boynton Beach, FL 33426
(561) 547-9499
(Name and address of agent for service)
Copy to:
James M. Schneider, Esq.
Atlas, Pearlman, Trop & Borkson, P.A.
200 East Las Olas Boulevard, Suite 1900
Fort Lauderdale, Florida 33301
(954) 763-1200
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CALCULATION OF REGISTRATION FEE
=============================================================================================================================
Proposed Proposed
Maximum Maximum
Offering Aggregate Amount of
Title of Securities Amount to be Price per Offering Registration
to be Registered Registered Share Price Fee
=============================================================================================================================
Common Stock
($.001 par value) 2,000,000 $1.49(1) $2,980,000 $829
=============================================================================================================================
(1) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) under the Securities
Act based upon the average of the closing bid and ask price ($1.49) for
the Common Stock, $.001 par value per share (the "Common Stock"), on
November 17, 1999.
(2) Calculated pursuant to Rule 457(h)(1) based on the price at which the options are exercisable.
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PROSPECTUS
PURADYN FILTER TECHNOLOGIES, INCORPORATED
2,000,000 SHARES OF COMMON STOCK
($.001 PAR VALUE)
Issued Pursuant to the
Puradyn Filter Technologies, Incorporated 1999 Stock Option Plan
This prospectus relates to an offering by certain selling
shareholders of an aggregate of up to 2,000,000 shares of the common stock of
Puradyn Filter Technologies, Incorporated issuable upon exercise of options
granted from time to time, under Puradyn Filter Technologies, Incorporated's
1999 Stock Option Plan as consideration for their employment and for services
rendered and/or to be rendered to us. All of the 2,000,000 shares of common
stock are being offered for resale by such selling shareholders pursuant to this
prospectus.
The common stock may be offered from time to time by the selling
shareholders through ordinary brokerage transactions in the over-the-counter
markets, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices and in certain other ways as described
in the "Plan of Distribution." Puradyn Filter Technologies, Incorporated will
not receive any of the proceeds from the sale of common stock by the selling
shareholders.
The common stock is traded on the OTC Bulletin Board under the symbol
"PFTI". On November 17, 1999, the closing bid price of the common stock as
reported by the OTC Bulletin Board was $1.4375.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED ON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
-----------
This prospectus does not constitute an offer to sell securities in any
state to any person to whom it is unlawful to make such offer in such state.
The date of this prospectus is November 19, 1999.
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AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Reports, proxy statements
and other information filed with the Commission can be inspected and copied at
the public reference facilities of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Copies of this material can also be obtained at
prescribed rates from the Public Reference Section of the Commission at its
principal office at 450 Fifth Street, N.W., Washington, D.C. 20549. The
Commission also maintains a website on the internet that contains reports, proxy
and information statements and other information regarding registrants that file
electronically with the Commission at http://www.sec.gov. The Company's Common
Stock is traded on the NASD Over the Counter Bulletin Board under the symbol
"PFTI".
We have filed with the Commission a registration statement on Form S-8
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), with respect to the shares. This prospectus, which comprises Part I of
the Registration Statement, omits certain information contained in the
Registration Statement. For further information with respect to us and the
shares offered by this prospectus, reference is made to the Registration
Statement, including the exhibits thereto. Statements in this prospectus as to
any document are not necessarily complete, and where any such document is an
exhibit to the Registration Statement or is incorporated by reference herein,
each such statement is qualified in all respects by the provisions of such
exhibit or other document, to which reference is hereby made, for a full
statement of the provisions thereof. A copy of the Registration Statement, with
exhibits, may be obtained from the Commission's office in Washington, D.C. (at
the above address) upon payment of the fees prescribed by the rules and
regulations of the Commission, or examined there without charge or at the
Commission's website at http://www.sec.gov.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by us with the Securities and Exchange
Commission are incorporated herein by reference and made a part hereof:
(a) Annual Report on Form 10-KSB for the fiscal year ended December
31, 1998.
(b) Quarterly Report on Form 10-QSB for the quarter ended March 31,
1999.
(c) Quarterly Report on Form 10-QSB for the quarter ended June 30,
1999.
(d) Quarterly Report on Form 10-QSB for the quarter ended September
30, 1999.
(e) Form 8-K, as amended, dated January 15, 1999.
All reports and documents filed by us pursuant to Section 13, 14 or
15(d) of the Exchange Act, prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement incorporated by reference herein
shall be deemed to be modified or superseded for purposes of
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this Prospectus to the extent that a statement contained herein or in any other
subsequently filed document, which also is or is deemed to be incorporated by
reference herein, modifies or supersedes such statement. Any statement modified
or superseded shall not be deemed, except as so modified or superseded, to
constitute part of this prospectus.
We hereby undertake to provide without charge to each person, including
any beneficial owner, to whom a copy of the prospectus has been delivered, on
the written request of any such person, a copy of any or all of the documents
referred to above which have been or may be incorporated by reference in this
prospectus, other than exhibits to such documents. Written requests for such
copies should be directed to Corporate Secretary, Puradyn Filter Technologies,
Incorporated, 3020 High Ridge Road, Suite 100, Boynton Beach, Florida 33426.
3
THE COMPANY
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT INVOLVE RISKS
AND UNCERTAINTIES. OUR ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THE RESULTS
DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
YOU ARE URGED TO READ THIS PROSPECTUS CAREFULLY AND IN ITS ENTIRETY.
The Company owns the rights to manufacture, market and distribute
worldwide the Purifiner(R), a bypass oil purification system for use with
substantially all internal combustion engines, generators and other types of
equipment that use lubricating oil. The Purifiner cleans oil by continually
removing solid and liquid contaminants from the oil through a sophisticated and
unique filtration and evaporation process. The Purifiner has been used
successfully to substantially extend oil-drain intervals and to extend the time
between engine overhauls to up to three times longer than traditional intervals.
The Company also manufactures (with one exception) and sells disposable
replacement filter elements ("Elements") for the Purifiner.
By keeping the oil continually clean, the Purifiner effectively extends
engine life and dramatically reduces new oil purchases as well as maintenance
time and the costs and environmental concerns involved in the storage and
disposal of waste oil.
As the Purifiner has had limited acceptance in the marketplace, our
strategy has been to obtain product credibility by disproving the
long-held conviction that oil must be changed regularly in accordance
with manufacturers' recommended guidelines. Gradually, the credibility
of the Purifiner and the concept of extended oil replacement intervals
is becoming more readily accepted. We believe that this increasing
acceptance is due to successful third-party testing of the product,
awards and other recognition the Purifiner has received and the
increased awareness of consumers as well as vehicle, engine and oil
companies that oil, if kept continually clean, will have a
significantly longer, useful life resulting in significant cost and
environmental benefits. As an example, we recently obtained the results
from Vulcan Chemicals, a division of Vulcan Materials Company, a
customer whose truck equipped with our Purifiner traveled 616,000 miles
without an oil change and whose engine parts showed no appreciable wear
over that period. The oil report showed all measurement levels to be
normal.
We are currently working with certain original equipment manufacturers
("OEM's") to enable them to evaluate the benefits of the Purifiner with the goal
of obtaining their approval of the Purifiner and eventually to install the
Purifiner on their products at their factories under either the Purifiner brand
or a private label name, and distribute the product throughout their dealer
networks. (See "Marketing"). These OEM's are mindful of the significant
competitive benefits of extended drain intervals and the environmental and
related regulatory considerations of the use of an oil purification system such
as the Purifiner.
Currently, we are refocusing our new distribution network and direct
sales activities, primarily in the heavy-duty truck marketplace, primarily in
the United States, although we do have some international distributors to which
it allocates limited amounts of resources. We also formed a foreign joint
venture effective January 1, 1996, to market the Purifiner through Europe, the
Middle East, the former Soviet Union, Egypt, and South Africa. (See
"Distribution" for recent events related to this joint venture). In the future,
we plan to expand our distribution channels worldwide, as well as the number of
market segments on which we focus.
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We employ direct sales personnel to help establish and service our
aftermarket distributors and to directly sell our products to certain major
national accounts. Additionally, we employ technical and installation personnel
to assist customers in analyzing the benefits of the Purifiner through oil
analysis, as well as answering technical questions and assisting with the
training and installation on the use of the Purifiner. In the future, we may
also consider additional joint ventures to manufacture and/or market our
products in various parts of the world.
We believe that business, economic, competitive, environmental and
governmental factors are now converging to provide fertile and opportunistic
conditions for achieving profitable business outcomes. One such example of a
noteworthy development was a video the company commissioned in mid-December 1998
of an engine teardown of a Vulcan Chemicals Company truck with an M-11 Cummins
engine equipped with a Purifiner filter unit that went 616,000 miles without a
single oil change. The engine wear and oil analysis reports stated the engine
parts and oil were well within specifications and normal. Because the content of
this video provides validation and assurance of the Purifiner's benefits to
end-users, it has been a catalyst for establishing sales opportunities with
numerous prospects since the beginning of 1999, and we believe it will also
assist in the search for long term financing commitments from institutions or
investor groups. We have developed an in-depth business plan and renewed our
comprehensive search for such financing.
Our fiscal year end is December 31. Our executive offices are located
at 3020 High Ridge Road, Suite 100, Boynton Beach, Florida 33426, and our
telephone number is (561) 547-9499.
PURADYN FILTER TECHNOLOGIES, INCORPORATED
1999 STOCK OPTION PLAN
INTRODUCTION
The following descriptions summarize certain provisions of the Plan and
the form of agreements to be entered into by recipients of options thereunder.
Such summaries do not purport to be complete and are qualified by reference to
the full text of the Plan and form of agreement. A copy of the Plan is on file
as an exhibit to the Registration Statement of which this Prospectus is a part.
Each person receiving an option under the Plan should read the Plan and related
option agreement in its entirety.
The Company's 1999 Stock Option Plan was adopted by the Board of
Directors on September 10, 1999, effective as of that date and is subject to
ratification by the Company's shareholders. Under the Plan, the Company has
reserved an aggregate of 2,000,000 shares of Common Stock for issuance pursuant
to options granted under the Plan ("Plan Options"). The purpose of the Plan is
to encourage stock ownership by officers, directors, employees, advisory board
members, and consultants of the Company, and to give such persons a greater
personal interest in the success of the Company's business and an added
incentive to continue to advance and contribute to the Company. The Compensation
Committee of the Board of Directors (the "Committee") or the Board of Directors
of the Company administers the Plan including, without limitation, the selection
of the persons who will be granted Plan Options under the Plan, the type of Plan
Options to be granted, the number of shares subject to each Plan Option and the
Plan Option price.
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Plan Options granted under the Plan may either be options qualifying as
incentive stock options ("Incentive Options") under Section 422 of the Internal
Revenue Code of 1986, as amended, or options that do not so qualify
("Non-Qualified Options"). In addition, the Plan also allows for the inclusion
of a reload option provision ("Reload Option"), which permits an eligible person
to pay the exercise price of the Plan Option with shares of Common Stock owned
by the eligible person and receive a new Plan Option to purchase shares of
Common Stock equal in number to the tendered shares. As discussed hereafter, any
Incentive Option granted under the Plan must provide for an exercise price of
not less than 100% of the fair market value of the underlying shares on the date
of such grant, but the exercise price of any Incentive Option granted to an
eligible employee owning more than 10% of the outstanding Common Stock of the
Company must not be less than 110% of such fair market value as determined on
the date of the grant. The term of each Plan Option and the manner in which it
may be exercised is determined by the Board of Directors or the Committee,
provided that no Plan Option may be exercisable more than 10 years after the
date of its grant and, in the case of an Incentive Option granted to an eligible
employee owning more than 10% of the Common Stock, no more than five years after
the date of the grant.
ELIGIBILITY
Officers, directors, employees, advisory board members, and consultants
of the Company and its subsidiaries are eligible to receive Non-Qualified
Options under the Puradyn Filter Technologies, Incorporated 1999 Stock Option
Plan. Only officers and employees of the Company who are employed by the Company
or by any subsidiary thereof are eligible to receive Incentive Options.
ADMINISTRATION
The Plan is administered by the Company's Compensation Committee of the
Board of Directors or the Board of Directors itself. The Committee or the Board
of Directors determines from time to time those officers, directors, employees,
advisory board members, and consultants of the Company or any of its
subsidiaries to whom Plan Options are to be granted, the terms and provisions of
the respective option agreements, the time or times at which such Plan Options
shall be granted, the type of Plan Options to be granted, the dates such Plan
Options become exercisable, the number of shares subject to each Plan Option,
the purchase price of such shares and the form of payment of such purchase
price. All other questions relating to the administration of the Plan, and the
interpretation of the provisions thereof and of the related option agreements,
are resolved by the Committee or the Board of Directors.
SHARES SUBJECT TO AWARDS
The Company has reserved 2,000,000 of its authorized but unissued
shares of Common Stock or shares maintained in the treasury of the Company for
issuance under the Plan, and a maximum of 2,000,000 shares may be issued
thereunder. In connection with the adoption and approval of the Plan, the
Company's Board of Directors resolved that the aggregate number of total shares
of the Company's Common Stock issuable under the Plan may not exceed 2,000,000
shares (subject to adjustment in the event of certain changes in the Company's
capitalization) without further action by the Company's Board of Directors and
shareholders, as required. Except for such limitation on the aggregate number of
shares issuable under the Plan, there is no maximum or minimum number of shares
of Common Stock as to which a Plan Option may be granted to any person. Shares
used for Plan Options may be authorized and unissued shares or shares reacquired
by the Company, including shares purchased in the open market. Shares covered by
Plan Options which terminate unexercised will again become available for
additional Plan
6
Options, without decreasing and maximum number of shares issuable under the
Plan, although such shares may also be used by the Company for other purposes.
The Plan provides that, if the Company's outstanding shares are
increased, decreased, exchanged or otherwise adjusted due to a share dividend,
forward or reverse share split, recapitalization, reorganization, merger,
consolidation, combination or exchange of shares, an appropriate and
proportionate adjustment shall be made in the number or kind of shares subject
to the Plan or subject to unexercised Plan Options and in the purchase price per
share under such Plan Options. Any adjustment, however, does not change the
total purchase price payable for the shares subject to outstanding Plan Options.
The Board of Directors are required by the Plan to accelerate the exercise
provisions of any outstanding Plan Option in the event of a tender offer for the
Company's shares, the adoption of a plan of merger under which all the shares of
the Company would be eliminated, a sale of substantially all of the Company's
assets or business or the liquidation or dissolution of the Company.
TERMS OF EXERCISE
The Plan provides that the Plan Options granted thereunder shall be
exercisable from time to time in whole or in part, unless otherwise specified in
the agreement representing the Plan Options or by the Committee or by the Board
of Directors. Each Plan Option may be exercised in whole or in part at any time
during the period from the date the Plan Option becomes exercisable until the
end of the period covered by the Plan Option period.
The Plan provides that, with respect to Incentive Stock Options, the
aggregate fair market value (determined as of the time the option is granted) of
the shares of Common Stock, with respect to which Incentive Stock Options are
first exercisable by any option holder during any calendar year (including all
incentive stock option plans of the Company, any parent or any subsidiaries
which are qualified under Section 422 of the Internal Revenue Code of 1986)
shall not exceed $100,000.
EXERCISE PRICE
The purchase price for shares subject to Incentive Stock Options must
be at least 100% of the fair market value of the Company's Common Stock on the
date the option is granted, except that the purchase price must be at least 110%
of the fair market value in the case of an Incentive Stock Option granted to a
person who is a "10% stockholder." A "10% stockholder" is a person who owns
(within the meaning of Section 422(b)(6) of the Internal Revenue Code of 1986)
at the time the Incentive Stock Option is granted, shares possessing more than
10% of the total combined voting power of all classes of the outstanding shares
of the Company, any parent or any subsidiaries. The Plan provides that fair
market value shall be determined by the Board or the Committee in accordance
with procedures which it may from time to time establish. If the purchase price
is paid with consideration other than cash, the Board or the Committee shall
determine the fair value of such consideration to the Company in monetary terms.
The exercise price of Non-Qualified Options shall be determined by the
Board of Directors or the Committee and will not be less than 75% of the fair
market value (but in no event less than par value).
The per share purchase price of shares subject to Plan Options granted
under the Plan may be adjusted in the event of certain changes in the Company's
capitalization, but any such adjustment shall not change the total purchase
price payable upon the exercise in full of Plan Options granted under the Plan.
7
MANNER OF EXERCISE
Plan Options are exercisable under the Plan by delivery of written
notice to the Company stating the number of shares with respect to which the
Plan Option is being exercised, together with full payment of the purchase price
therefor. Payment shall be in cash, checks, certified or bank cashier's checks,
shares of Common Stock or in such other form or combination of forms which shall
be acceptable to the Board of Directors or the Committee, provided that any loan
or guarantee by the Company of the purchase price may only be made upon
resolution of the Board or Committee that such loan or guarantee is reasonably
expected to benefit the Company.
OPTION PERIOD
All Incentive Stock Options shall expire on or before the tenth (10th)
anniversary of the date the Option is granted except for Incentive Options
granted to 10% stockholders. Non-Qualified Options shall expire ten (10) years
and one (1) day from the date of grant unless otherwise provided under the terms
of the option grant.
TERMINATION
All Plan Options are nonassignable and nontransferable, except by will
or by the laws of descent and distribution, and during the lifetime of the
optionee, may be exercised only by such optionee. If an optionee's employment is
terminated for any reason, other than his death or disability or termination for
cause, or if an optionee is not an employee of the Company but is a member of
the Company's Board of Directors, Advisory Board Members and consultants, and
his service as a director, advisory board member, or consultant, is terminated
for any reason, other than death or disability, the exercisable Plan Option
granted to him shall lapse to the extent unexercised on the earlier of the
expiration date or 30 days following the date of termination. If the optionee
dies during the term of his employment, the exercisable Plan Option granted to
him shall lapse to the extent unexercised on the earlier of the expiration date
of the Plan Option or the date one year following the date of the optionee's
death. If the optionee is permanently and totally disabled within the meaning of
Section 22(c)(3) of the Internal Revenue Code of 1986, the exercisable Plan
Option granted to him lapses to the extent unexercised on the earlier of the
expiration date of the option or one year following the date of such disability.
MODIFICATION AND TERMINATION OF PLANS
The Board of Directors may amend, suspend or terminate the Plan at any
time, except that no amendment shall be made which (i) increases the total
number of shares subject to the Plan or changes the minimum purchase price
therefor (except in either case in the event of adjustments due to changes in
the Company's capitalization), or (ii) affects outstanding Plan Options or any
exercise right thereunder. Unless the Plan shall theretofore have been suspended
or terminated by the Board of Directors, the Plan shall terminate on September
10, 2009. Any such termination of the Plan shall not affect the validity of any
Plan Options previously granted thereunder.
FEDERAL INCOME TAX EFFECTS
The following discussion applies to the Puradyn Filter Technologies,
Incorporated 1999 Stock Option Plan and is based on federal income tax laws
and regulations in effect on December 31, 1995. It
8
does not purport to be a complete description of the federal income tax
consequences of the Plan, nor does it describe the consequences of state, local
or foreign tax laws which may be applicable. Accordingly, any person receiving a
grant under the Plan should consult with his own tax adviser.
The Plan is not subject to the provisions of the Employee Retirement
Income Security Act of 1974 and is not qualified under Section 401(a) of the
Internal Revenue Code of 1986, as amended (the "Code").
An employee granted an Incentive Stock Option does not recognize
taxable income either at the date of grant or at the date of its timely
exercise. However, the excess of the fair market value of Common Stock received
upon exercise of the Incentive Stock Option over the Option exercise price is an
item of tax preference under Section 57(a)(3) of the Code and may be subject to
the alternative minimum tax imposed by Section 55 of the Code. Upon disposition
of stock acquired on exercise of an Incentive Stock Option, long-term capital
gain or loss is recognized in an amount equal to the difference between the
sales price and the Incentive Stock Option exercise price, provided that the
option holder has not disposed of the stock within two years from the date of
grant and within one year from the date of exercise. If the Incentive Stock
Option holder disposes of the acquired stock (including the transfer of acquired
stock in payment of the exercise price of an Incentive Stock Option) without
complying with both of these holding period requirements ("Disqualifying
Disposition"), the option holder will recognize ordinary income at the time of
such Disqualifying Disposition to the extent of the difference between the
exercise price and the lesser of the fair market value of the stock on the date
the Incentive Stock Option is exercised (the value six months after the date of
exercise may govern in the case of an employee whose sale of stock at a profit
could subject him to suit under Section 16(b) of the Securities Exchange Act of
1934) or the amount realized on such Disqualifying Disposition. Any remaining
gain or loss is treated as a short-term or long-term capital gain or loss,
depending on how long the shares are held. In the event of a Disqualifying
Disposition, the Incentive Stock Option tax preference described above may not
apply (although, where the Disqualifying Disposition occurs subsequent to the
year the Incentive Stock Option is exercised, it may be necessary for the
employee to amend his return to eliminate the tax preference item previously
reported). The Company and its subsidiary are not entitled to a tax deduction
upon either exercise of an Incentive Stock Option or disposition of stock
acquired pursuant to such an exercise, except to the extent that the Option
holder recognized ordinary income in a Disqualifying Disposition.
If the holder of an Incentive Stock Option pays the exercise price, in
full or in part, with shares of previously acquired Common Stock, the exchange
should not affect the Incentive Stock Option tax treatment of the exercise. No
gain or loss should be recognized on the exchange, and the shares received by
the employee, equal in number to the previously acquired shares exchanged
therefor, will have the same basis and holding period for long-term capital gain
purposes as the previously acquired shares. The employee will not, however, be
able to utilize the old holding period for the purpose of satisfying the
Incentive Stock Option statutory holding period requirements. Shares received in
excess of the number of previously acquired shares will have a basis of zero and
a holding period which commences as of the date the Common Stock is issued to
the employee upon exercise of the Incentive Stock Option. If an exercise is
effected using shares previously acquired through the exercise of an Incentive
Stock Option, the exchange of the previously acquired shares will be considered
a disposition of such shares for the purpose of determining whether a
Disqualifying Disposition has occurred.
In respect to the holder of Non-Qualified Options, the option holder
does not recognize taxable income on the date of the grant of the Non-Qualified
Option, but recognizes ordinary income generally at the date of exercise in the
amount of the difference between the option exercise price and the fair market
9
value of the Common Stock on the date of exercise. However, if the holder of
Non-Qualified Options is subject to the restrictions on resale of Common Stock
under Section 16 of the Securities Exchange Act of 1944, such person generally
recognizes ordinary income at the end of the six-month period following the date
of exercise in the amount of the difference between the option exercise price
and the fair market value of the Common Stock at the end of the six-month
period. Nevertheless, such holder may elect within 30 days after the date of
exercise to recognize ordinary income as of the date of exercise. The amount of
ordinary income recognized by the option holder is deductible by the Company in
the year that income is recognized.
RESTRICTIONS UNDER SECURITIES LAWS
The sale of the Shares must be made in compliance with federal and
state securities laws. Officers, directors and 10% or greater shareholders of
the Company, as well as certain other persons or parties who may be deemed to be
"affiliates" of the Company under the Federal Securities Laws, should be aware
that resales by affiliates can only be made pursuant to an effective
Registration Statement, Rule 144 or any other applicable exemption. Officers,
directors and 10% and greater shareholders are also subject to the "short swing"
profit rule of Section 16(b) of the Securities Exchange Act of 1934.
10
DESCRIPTION OF SECURITIES
The Company is authorized to issue up to 20,000,000 shares of Common
Stock, $.001 per value, per Share. The Company is also authorized to issue up to
500,000 shares of Preferred Stock, par value $.001 per Share, no shares of which
have previously been issued.
COMMON STOCK
The Company is authorized to issue up to 20,000,000 shares of Common
Stock, $.001 par value per Share. Subject to the dividend rights of the holders
of any outstanding shares of Preferred Stock, holders of shares of Common Stock
are entitled to share, on a ratable basis, such dividends as may be declared by
the Board of Directors out of funds legally available therefor. Upon
liquidation, dissolution or winding up of the Company, after payment to
creditors and holders of any outstanding shares of Preferred Stock, the assets
of the Company will be divided pro rata on a per Share basis among the holders
of the Common Stock.
Each share of Common Stock entitles the holders thereof, to one vote.
Holders of Common Stock do not have cumulative voting rights which means that
the holders of more than 50% of shares voting for the election of Directors can
elect all of the Directors if they choose to do so, and in such event, the
holders of the remaining shares will not be able to elect any Directors. The
Company's management or their affiliates own or have the right to vote 637,246
shares or approximately 11.8% of the outstanding Common Stock of the Company at
November 15, 1999. The By-Laws of the Company require that only a majority of
the issued and outstanding shares of Common Stock of the Company need be
represented to constitute a quorum and to transact business at a stockholders'
meeting. The Common Stock has no preemptive, subscription or conversion rights
and is not redeemable by the Company.
PREFERRED STOCK
The Company is authorized to issue 500,000 shares of Preferred Stock,
par value $.001 per Share, issuable in such series and bearing such voting,
dividend, conversion, liquidation and other rights and preferences as the Board
of Directors may determine. As of the date hereof, no shares have been issued or
are outstanding. The Preferred Stock is so-called "Blank Check" Preferred Stock,
which means that the Board of Directors of the Company, in its sole discretion,
will be able to issue the shares of Preferred Stock in one or more series of
classes having such terms, designations and preferences as determined by the
Board of Directors and without authorization or confirmation by the stockholders
of the Company.
SHARES ELIGIBLE FOR FUTURE SALE
As of November 15, 1999, there were 5,389,903 shares of Common Stock
issued and outstanding. Of such shares, (i) 1,805,392 shares currently comprise
the public float, and (ii) the balance of 3,584,511 shares are "restricted
securities which may be sold in compliance with Rule 144. In general, Rule 144
permits a shareholder of the Company who has beneficially owned restricted
shares of Common Stock for at least one year to sell without registration,
within a three-month period, a number of shares not exceeding the greater of one
percent of the then outstanding shares of Common Stock or, for exchange-listed
shares, the average weekly trading volume during the four calendar weeks
preceding the sale, assuming compliance by the Company with certain reporting
requirements. Furthermore, if such shares are held for at least two years by a
person not affiliated with the Company (in general, a person who is not an
executive
11
officer, director or principal shareholder of the Company during the three month
period prior to resale), such restricted shares can be sold without any volume
limitation.
The public sale of shares, under Rule 144 or pursuant to the
Registration Statement, can be expected to have a depressive effect on the
market price of the Company's Common Stock.
NASD OTC BULLETIN BOARD
The Company's Common Stock is traded on the NASD Over the Counter
Bulletin Board under the symbol "PFTI". As such, the Company's Common Stock is
covered by a Securities and Exchange Commission ("SEC") rule that imposes
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or individuals with
net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written agreement to the transaction prior to the
sale. Consequently, the rule may affect the ability of broker-dealers to sell
the Company's securities and also may affect the ability of purchasers of Shares
to resell them. In the event the Company's Common Stock becomes listed on
Nasdaq, broker-dealers may be exempt from compliance with the SEC rule. So long
as the Company's net tangible assets remain in excess of $2,000,000, an
exemption from the rule will also continue in effect.
TRANSFER AGENT
The transfer agent and registrar for the securities of the Company is
Florida Atlantic Stock Transfer, Inc., 7130 Nob Hill Road, Tamarac, Florida
33321, telephone number (954) 726-4954.
LEGAL MATTERS
Certain legal matters in connection with the securities being offered
hereby will be passed upon for the Company by Atlas, Pearlman, Trop & Borkson,
P.A., 200 East Las Olas Boulevard, Suite 1900, Fort Lauderdale, Florida 33301.
Atlas, Pearlman, Trop & Borkson, P.A. and members of the firm own shares of
common stock of the Company.
EXPERTS
The consolidated financial statements of the Company appearing in the
Company's Annual Report on Form 10-KSB, for the fiscal year ended December 31,
1998, have been audited by Durland & Company, CPAs, P.A., Independent Certified
Public Accountants and Richard A. Eisner & Company, LLP, Independent Certified
Public Accountants, as set forth in their report thereon included therein and
incorporated herein by reference. Such financial statements are incorporated
herein in reliance upon the reports of Durland & Company, CPAs, P.A. and Richard
A. Eisner & Company, LLP, pertaining to such financial statements (to the extent
covered by consents filed with the Securities and Exchange Commission) given
upon the authority of such firms as experts in accounting and auditing.
12
INDEMNIFICATION
Article X of the Company's Amended and Restated Certificate of
Incorporation provide for indemnification of officers and directors. The
specific provision of the Amended and Restated Certificate of Amendment related
to such indemnification is as follows:
A. Persons. The Corporation shall indemnify, to the extent provided in
paragraphs B, D or F:
(1) any person who is or was a director, officer, employee, or agent
of the Corpora tion; and
(2) any person who serves or served at the Corporation's request as a
director, officer, employee, agent, partner or trustee of another
corporation, partnership, joint venture, trust or other
enterprise.
B. Extent -- Derivative Suits. In case of a threatened, pending or
completed action or suit by or in the right of the Corporation against a person
named in paragraph A by reason of his holding a position named in paragraph A,
the Corporation shall indemnify him if he satisfied the standard in paragraph C,
for expenses (including attorneys' fees but excluding amounts paid in
settlement) actually and reasonably incurred by him in connection with the
defense or settlement of the action or suit.
C. Standard -- Derivative Suits. In case of a threatened, pending
or completed action or suit by or in the right of the Corporation, a person
named in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject of
the suit or action, and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Corporation,
including, but not limited to, the taking of any and all actions
in connection with the Corporation's response to any tender offer
or any offer or proposal of another party to engage in a Business
Combination and approved by the Board of Directors. However, he
shall not be indemnified in respect of any claim, issue or matter
as to which he has been adjudged liable to the Corporation unless
(and only to the extent that) the court in which the suit was
brought shall determine, upon application, that despite the
adjudication but in view of all the circumstances, he is fairly
and reasonably entitled to indemnity for such expenses a the
court shall deem proper.
D. Extent -- Nonderivative Suits. In case of a threatened, pending or
completed suit, action or proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the Corporation,
together hereafter referred to as a Nonderivative suit, against a person named
in paragraph A by reason of his holding a position named in paragraph A, the
Corporation shall indemnify him if he satisfied the standard in paragraph E, for
amounts actually and reasonably incurred by him in connection with the defense
or settlement of the nonderivative suit, including, but not limited to (i)
expenses (including attorneys' fees), (ii) amounts paid in settlement, (iii)
judgments, and (iv) fines.
13
E. Standard -- Nonderivative Suits. In case of a nonderivative suit, a
person named in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject of
the nonderivative suit and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation,
including, but not limited to, the taking of any and all actions
in connection with the Corporation's response to any tender offer
or any offer or proposal of another party to engage in a Business
Combination not approved by the Board of Directors and, with
respect to any criminal actions or proceeding, he had no
reasonable cause to believe his conduct was unlawful. The
termination of a nonderivative suit by judgment, order,
settlement, conviction, or upon a plea of no lo contendere or its
equivalent shall not, in itself, create a presumption that the
person failed to satisfy the standard of this subparagraph E(2).
F. Determination That Standard Has Been Met. A determination that the
standard of paragraph C or E has been satisfied may be made by a court, or,
except as stated in subparagraph C(2) (second sentence), the determination may
be made by:
(1) the Board of Directors by a majority vote of a quorum consisting
of directors of the Corporation who were not parties to the
action, suit or proceeding; or
(2) independent legal counsel (appointed by a majority of the
disinterested directors of the Corporation, whether or not a
quorum) in a written opinion; or
(3) the stockholders of the Corporation.
G. Proration. Anyone making a determination under paragraph F may determine
that a person has met the standard as to some matters but not as to others, and
may reasonably prorate amounts to be indemnified.
H. Advance Payment. The Corporation shall pay in advance any expenses
(including attorneys' fees) which may become subject to indemnification under
paragraphs A through G if:
(1) the Board of Directors authorizes the specific payment; and
(2) the person receiving the payment undertakes in writing to repay
the same if it is ultimately determined that he is not entitled
to indemnification by the Corporation under paragraphs A through
G.
I. Nonexclusive. The indemnification and advance payment of expenses
provided by paragraphs A through H shall not be exclusive of any other rights to
which a person may be entitled by law, agreement, vote of stockholders or
disinterested directors, or otherwise.
14
J. Continuation. The indemnification provided by this Article X shall be
deemed to be a contract between the Corporation and the persons entitled to
indemnification thereunder, and any repeal or modification of this Article X
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought based in whole or in part upon any such state
of facts. The indemnification and advance payment provided by paragraphs A
through H shall continue as to a person who has ceased to hold a position named
in paragraph A and shall inure to his heirs, executors and administrators.
K. Insurance. The Corporation may purchase and maintain insurance on behalf
of any person who holds or who has held any position named in paragraph A,
against any liability incurred by him in any such position, or arising out of
his status as such, whether or not the Corporation would have power to indemnify
him against such liability under paragraphs A through H.
L. Intention and Savings Clause. It is the intention of this Article X to
provide for indemnifi cation to the fullest extent permitted by the General
Corporation Law of the State of Delaware, and this Article X shall be
interpreted accordingly. If this Article X or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director, officer, employee, and
agent of the Corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settle with respect to
any action, suit, or proceed ing, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the Corporation to the
full extent permitted by any applicable portion of this Article X that shall not
have been invalidated and to the full extent permitted by applicable law. If the
General Corporation Law of the State of Delaware is amended, or other Delaware
law is enacted, to permit further or additional indemnification of the persons
defined in this Article X A, then the indemnification of such persons shall be
to the fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended, or such other Delaware law.
Article XI of the Company's Amended and Restated Articles of Incorporation
sets forth the limitations on directors" liability as follows:
"A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except: (i) for any breach of the
director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions that are not in good faith or that 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 any improper
personal benefit. If the General Corporation Law of the State of
Delaware or other Delaware law is amended or enacted after the date of
filing of this Certificate to further eliminate or limit the personal
liability of directors, then the liability of a director of the
Corporation shall be eliminated or limited to the fullest extent
permitted by the General Corporation Law of the State of Delaware, as
amended, or such other Delaware law. Any repeal or modification of the
foregoing paragraph by the stockholders of the Corporation shall not
adversely affect any right or protection of a director of the Corpora
tion existing at the time of such repeal or modification."
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the registrant pursuant to the foregoing provisions, or
15
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The above indemnification provisions notwithstanding, the Company is
aware that insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as express in the act and is
therefore unenforceable.
16
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE
- ------- ---------------------------------------
(a) Annual Report on Form 10-KSB for the fiscal year ended December
31, 1998.
(b) Quarterly Report on Form 10-QSB for the quarter ended March 31,
1999.
(c) Quarterly Report on Form 10-QSB for the quarter ended June 30,
1999.
(d) Quarterly Report on Form 10-QSB for the quarter ended September
30, 1999.
(e) Form 8-K, as amended, dated January 15, 1999.
All reports and documents filed by the Company pursuant to Section 13,
14 or 15(d) of the Exchange Act, prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the respective
date of filing of such documents. Any statement 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
document, which also is or is deemed to be incorporated by reference herein,
modifies or supersedes such statement. Any statement modified or superseded
shall not be deemed, except as so modified or superseded, to constitute part of
this Prospectus.
The Company hereby undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of the Prospectus has been
delivered, on the written request of any such person, a copy of any or all of
the documents referred to above which have been or may be incorporated by
reference in this Prospectus, other than exhibits to such documents. Written
requests for such copies should be directed to Corporate Secretary, Puradyn
Filter Technologies, Incorporated, 3020 High Ridge Road, Suite 100, Boynton
Beach, Florida 33426.
ITEM 4. DESCRIPTION OF SECURITIES
- ------- -------------------------
The class of securities to be offered hereby is registered under
Section 12(g) of the Securities Exchange Act of 1934, as amended. A description
of the Registrant's securities is set forth in the Prospectus incorporated as a
part of this Registration Statement.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL
- ------- --------------------------------------
Not Applicable.
II-1
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS
- ------- -----------------------------------------
Article X of the Company's Amended and Restated Certificate of
Incorporation provide for indemnification of officers and directors. The
specific provision of the Amended and Restated Certificate of Amendment related
to such indemnification is as follows:
A. Persons. The Corporation shall indemnify, to the extent provided in
paragraphs B, D or F:
(1) any person who is or was a director, officer, employee, or agent
of the Corpora tion; and
(2) any person who serves or served at the Corporation's request as a
director, officer, employee, agent, partner or trustee of another
corporation, partnership, joint venture, trust or other
enterprise.
B. Extent -- Derivative Suits. In case of a threatened, pending or
completed action or suit by or in the right of the Corporation against a person
named in paragraph A by reason of his holding a position named in paragraph A,
the Corporation shall indemnify him if he satisfied the standard in paragraph C,
for expenses (including attorneys' fees but excluding amounts paid in
settlement) actually and reasonably incurred by him in connection with the
defense or settlement of the action or suit.
C. Standard -- Derivative Suits. In case of a threatened, pending or
completed action or suit by or in the right of the Corporation, a person named
in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject of
the suit or action, and in a manner he reasonably believed to be
in, or not opposed to, the best interests of the Corporation,
including, but not limited to, the taking of any and all actions
in connection with the Corporation's response to any tender offer
or any offer or proposal of another party to engage in a Business
Combination and approved by the Board of Directors. However, he
shall not be indemnified in respect of any claim, issue or matter
as to which he has been adjudged liable to the Corporation unless
(and only to the extent that) the court in which the suit was
brought shall determine, upon application, that despite the
adjudication but in view of all the circumstances, he is fairly
and reasonably entitled to indemnity for such expenses a the
court shall deem proper.
D. Extent -- Nonderivative Suits. In case of a threatened, pending or
completed suit, action or proceeding (whether civil, criminal, administrative or
investigative), other than a suit by or in the right of the Corporation,
together hereafter referred to as a Nonderivative suit, against a person named
in paragraph A by reason of his holding a position named in paragraph A, the
Corporation shall indemnify him if he satisfied the standard in paragraph E, for
amounts actually and reasonably incurred by him in connection with the defense
or settlement of the nonderivative suit, including, but not limited to (i)
expenses (including attorneys' fees), (ii) amounts paid in settlement, (iii)
judgments, and (iv) fines.
II-2
E. Standard -- Nonderivative Suits. In case of a nonderivative suit, a
person named in paragraph A shall be indemnified only if:
(1) he is successful on the merits or otherwise; or
(2) he acted in good faith in the transaction which is the subject of
the nonderivative suit and in a manner he reasonably believed to
be in, or not opposed to, the best interests of the Corporation,
including, but not limited to, the taking of any and all actions
in connection with the Corporation's response to any tender offer
or any offer or proposal of another party to engage in a Business
Combination not approved by the Board of Directors and, with
respect to any criminal actions or proceeding, he had no
reasonable cause to believe his conduct was unlawful. The
termination of a nonderivative suit by judgment, order,
settlement, conviction, or upon a plea of no lo contendere or its
equivalent shall not, in itself, create a presumption that the
person failed to satisfy the standard of this subparagraph E(2).
F. Determination That Standard Has Been Met. A determination that the
standard of paragraph C or E has been satisfied may be made by a court, or,
except as stated in subparagraph C(2) (second sentence), the determination may
be made by:
(1) the Board of Directors by a majority vote of a quorum consisting
of directors of the Corporation who were not parties to the
action, suit or proceeding; or
(2) independent legal counsel (appointed by a majority of the
disinterested directors of the Corporation, whether or not a
quorum) in a written opinion; or
(3) the stockholders of the Corporation.
G. Proration. Anyone making a determination under paragraph F may determine
that a person has met the standard as to some matters but not as to others, and
may reasonably prorate amounts to be indemnified.
H. Advance Payment. The Corporation shall pay in advance any expenses
(including attorneys' fees) which may become subject to indemnification under
paragraphs A through G if:
(1) the Board of Directors authorizes the specific payment; and
(2) the person receiving the payment undertakes in writing to repay
the same if it is ultimately determined that he is not entitled
to indemnification by the Corporation under paragraphs A through
G.
I. Nonexclusive. The indemnification and advance payment of expenses
provided by paragraphs A through H shall not be exclusive of any other rights to
which a person may be entitled by law, bylaw, agreement, vote of stockholders or
disinterested directors, or otherwise.
II-3
J. Continuation. The indemnification provided by this Article X shall be
deemed to be a contract between the Corporation and the persons entitled to
indemnification thereunder, and any repeal or modification of this Article X
shall not affect any rights or obligations then existing with respect to any
state of facts then or theretofore existing or any action, suit or proceeding
theretofore or thereafter brought based in whole or in part upon any such state
of facts. The indemnification and advance payment provided by paragraphs A
through H shall continue as to a person who has ceased to hold a position named
in paragraph A and shall inure to his heirs, executors and administrators.
K. Insurance. The Corporation may purchase and maintain insurance on behalf
of any person who holds or who has held any position named in paragraph A,
against any liability incurred by him in any such position, or arising out of
his status as such, whether or not the Corporation would have power to indemnify
him against such liability under paragraphs A through H.
L. Intention and Savings Clause. It is the intention of this Article X to
provide for indemnifi cation to the fullest extent permitted by the General
Corporation Law of the State of Delaware, and this Article X shall be
interpreted accordingly. If this Article X or any portion hereof shall be
invalidated on any ground by any court of competent jurisdiction, then the
Corporation shall nevertheless indemnify each director, officer, employee, and
agent of the Corporation as to costs, charges, and expenses (including
attorneys' fees), judgments, fines, and amounts paid in settle with respect to
any action, suit, or proceed ing, whether civil, criminal, administrative, or
investigative, including an action by or in the right of the Corporation to the
full extent permitted by any applicable portion of this Article X that shall not
have been invalidated and to the full extent permitted by applicable law. If the
General Corporation Law of the State of Delaware is amended, or other Delaware
law is enacted, to permit further or additional indemnification of the persons
defined in this Article X A, then the indemnification of such persons shall be
to the fullest extent permitted by the General Corporation Law of the State of
Delaware, as so amended, or such other Delaware law.
Article XI of the Company's Amended and Restated Articles of Incorporation
sets forth the limitations on directors" liability as follows:
"A director of the Corporation shall not be personally liable to the
Corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except: (i) for any breach of the director's
duty of loyalty to the Corporation or its stockholders, (ii) for acts or
omissions that are not in good faith or that 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 any improper personal benefit. If the General
Corporation Law of the State of Delaware or other Delaware law is amended
or enacted after the date of filing of this Certificate to further
eliminate or limit the personal liability of directors, then the liability
of a director of the Corporation shall be eliminated or limited to the
fullest extent permitted by the General Corporation Law of the State of
Delaware, as amended, or such other Delaware law. Any repeal or
modification of the foregoing paragraph by the stockholders of the
Corporation shall not adversely affect any right or protection of a
director of the Corpora tion existing at the time of such repeal or
modification."
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or
II-4
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
The above indemnification provisions notwithstanding, the Company is
aware that insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers or persons
controlling the Company pursuant to the foregoing provisions, the Company has
been informed that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as express in the act and is
therefore unenforceable.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED
- ------- -----------------------------------
Inasmuch as the employees, executives, directors and consultants who
received the Shares of the Company will be either knowledgeable, sophisticated
or have access to comprehensive information relevant to the Company, such
transaction was undertaken in reliance on the exemption from registration
provided by Section 4(2) of the Act. Alternatively, the Company will rely upon
the exemptions afforded by Regulation D under the Act. As a condition precedent
to option grants, security holders were required to express an investment intent
and consent to the imprinting of a restrictive legend on each stock certificate
to be received from the Registrant.
ITEM 8. EXHIBITS
- ------- --------
EXHIBIT DESCRIPTION
- ------- -----------
4(a) Puradyn Filter Technologies, Incorporated 1999 Stock Option Plan
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to the
issuance of shares of Common Stock pursuant to the Puradyn Filter
Technologies, Incorporated 1999 Stock Option Plan and the Option
Agreements with Executive Employees
(23.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. (included in the
opinion filed as Exhibit (5) hereto)
(23.2) Consent of Durland & Company, CPAs, P.A., independent certified public
accountants
(23.3) Consent of Richard A. Eisner & Company, LLP, independent certified
public accountants
ITEM 9. UNDERTAKINGS
- ------- ------------
(1) The undersigned Registrant hereby undertakes:
II-5
(a) To file, during any period in which offerings or sales are
being made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material change to such
information in the Registration Statement;
(b) That, for the purposes of determining any liability under the
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(c) 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.
(2) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Act, each filing of the Registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Exchange Act) that is incorporated by reference
in the Registration Statement shall be deemed to be a new Registration Statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) Insofar as indemnification for liabilities arising under the Act
may be permitted to Directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a Director, officer of controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
Director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
II-6
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Boynton Beach and the State of Florida, on the
19th day of November, 1999.
PURADYN FILTER TECHNOLOGIES,
INCORPORATED
By: /s/ RICHARD C. FORD
-------------------------------
Richard C. Ford
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ RICHARD C. FORD Chairman of the Board, Chief November 19, 1999
- ----------------------
Richard D. Ford Executive Officer (Principal
Executive Officer)
/s/ ALAN J. SANDLER President, Director and November 19, 1999
- ----------------------
Alan J. Sandler Chief Financial and
Accounting Officer
EXHIBIT INDEX
PURADYN FILTER TECHNOLOGIES, INCORPORATED
-----------------------------------------
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
4 Puradyn Filter Technologies, Incorporated 1999 Stock Option Plan
(5) Opinion of Atlas, Pearlman, Trop & Borkson, P.A. relating to the
issuance of shares of Common Stock pursuant to the Puradyn Filter
Technologies, Incorporated 1999 Stock Option Plan
(23.1) Consent of Atlas, Pearlman, Trop & Borkson, P.A. (included in the
opinion filed as Exhibit (5) hereto).
(23.2) Consent of Durland & Company, CPAs, P.A., independent certified public
accountants
(23.3) Consent of Richard A. Eisner & Company, LLP, independent certified
public accountants