AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER 13, 2001
Registration No. 333-________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
PURADYN FILTER TECHNOLOGIES INCORPORATED
(Exact name of registration as specified in its charter)
Delaware 14-1708544
(State or other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
3020 High Ridge Road
Suite 100
Boynton Beach, FL 33426
(561) 547-9499
(Address and Telephone Number of Principal Executive Offices)
2000 Non-Employee Directors' Stock Plan
and
Compensatory Plan with Oscar Otero
(Full Title of the Plan)
Copies to:
Richard C. Ford Steven I. Weinberger, Esq.
Chief Executive Officer Atlas Pearlman, P.A.
Puradyn Filter Technologies Incorporated 350 East Las Olas Boulevard
3020 High Ridge Road Suite 1700
Suite 100 Fort Lauderdale, FL 33301
Boynton Beach, FL 33426 (954) 763-1200
(561) 547-9499
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 per share (1) 170,000 shares $3.03 $515,100 $128.78
Common Stock, $.001
par value per share (2) 220,000 shares $5.88 $1,293,600 $ 323.40
Common Stock, $.001
par value per share (2) 7,500 shares $6.50 $ 48,750 $ 12.19
Common Stock, $.001
par value per share (2) 2,500 shares $4.81 $ 12,025 $ 3.01
Common Stock, $.001
par value per share (3) 50,000 shares $3.88 $ 194,000 $ 48.50
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$ 515.88
(1) Calculated in accordance with Rule 457 based upon the average of the
closing bid and asked prices on September 6, 2001.
(2) Calculated in accordance with Rule 457 based upon the price at which
outstanding options are exercisable.
(3) Calculated in accordance with Rule 457 based upon the price at which
outstanding warrants are exercisable.
PROSPECTUS
PURADYN FILTER TECHNOLOGIES INCORPORATED
450,000 SHARES OF COMMON STOCK
($.001 PAR VALUE)
Issued Pursuant to the
2000 Non-Employee Directors' Stock Plan
and
Compensatory Plan with Oscar Otero
This prospectus forms a part of a registration statement which
registers an aggregate of 450,000 shares of common stock, that are collectively
referred to as the "Shares", of Puradyn Filter Technologies Incorporated
("Puradyn", "we", "us" or "our"). The Shares may be issued to our non- employee
directors upon the exercise of non-qualified stock options to purchase shares of
our common stock under our 2000 Non-Employee Directors' Stock Plan (the "Plan").
Shares may also be issued upon exercise of certain warrants we have issued under
a consulting agreement to which we are a party. Individuals or entities that are
issued Shares are sometimes collectively referred to as the "selling security
holders." This prospectus also covers the resale of shares by persons who are
our "affiliates" within the meaning of federal securities laws. Those selling
security holders may sell all or a portion of the Shares from time to time in
the over-the-counter market, in negotiated transactions, directly or through
brokers or otherwise, and at market prices prevailing at the time of such sales
or at negotiated prices. We will not receive any proceeds from sales of Shares
by selling security holders.
No person has been authorized by us to give any information or to make
any representa tion other than as contained in this prospectus, and if given or
made, such information or representation must not be relied upon as having been
authorized by us. Neither the delivery of this prospectus nor any distribution
of the Shares shall, under any circumstances, create any implication that there
has been no change in our affairs since the date hereof.
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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.
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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 September __, 2001.
AVAILABLE INFORMATION
We are subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, and, in accordance therewith, we file reports,
proxy statements and other information with the Securities and Exchange
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.
We have filed with the Commission a registration statement on Form S-8
under the Securities Act of 1933, as amended, covering 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 entire 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 the 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 Commission are
incorporated herein by reference and made a part hereof:
o Annual Report on Form 10-KSB, as amended, for the year ended
December 31, 2000, filed on August 9, 2001;
o Quarterly Report on Form 10-QSB for the quarter ended March
31, 2001, filed on May 31, 2001;
o Quarterly Report on Form 10-QSB for the quarter ended June 30,
2001, filed on August 15, 2001; and
o Definitive Information Statement filed August 15, 2001.
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 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.
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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.
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.
Puradyn owns the rights to manufacture, market and distribute worldwide
the Puradyn(R) by-pass oil filtration system (the "Puradyn") for use with
substantially all internal combustion engines and hydraulic equipment that use
lubricating oil. The Puradyn(R) cleans oil by continually removing solid and
liquid contaminants from the oil through a sophisticated and unique filtration
and evaporation process. The Puradyn(R) 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. We also
manufacture and sell disposable replacement filter elements for the Puradyn(R),
including our recently introduced PFT Filter Plus, patented replacement element.
By keeping the oil continually clean, the Puradyn(R) 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.
We have also developed and sell a Hydraulic Batch System, which is
mounted on a handcart for mobility. The Batch System was developed to clean
55-gallon drums of used hydraulic oils, which substantially reduces oil
purchases as well as the high costs of storing and disposing of used oil in
compliance with environmental regulations. The Hydraulic Batch System consists
primarily of two 60-quart Puradyns(R), a preheater, a pump and other
miscellaneous parts.
Puradyn distributes its products, domestically and internationally,
through a network of affiliated and unaffiliated distributors. Our wholly-owned
subsidiary, Puradyn Filter Technologies, Limited, operates from the United
Kingdom and generates sales to Europe, the Middle East, the former Soviet Union,
Egypt and South Africa. We have also established distribution arrangements with
unaffiliated parties who market our products in various countries including
Thailand, Columbia, Panama, Pakistan, Hong Kong and China. We have also been
assigned National Stocking Numbers that permit our products to be sold to the
Unites States government and its agencies.
Our principal offices are located at 3020 High Ridge Road, Suite 100,
Boynton Beach, FL 33426 and our telephone number is (561) 547-9499.
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RISK FACTORS AFFECTING OUR FUTURE RESULTS OF OPERATIONS
Our future results of operations involve a number of risks and
uncertainties. The following paragraphs discuss a number of risks that could
impact the company's financial condition and results of operations.
POTENTIAL FOR CONTINUING LOSSES AND ACCUMULATED DEFICIT AFFECTS OUR OUTLOOK
Prior to 1995, Puradyn was engaged in limited sales activities.
Consequently, we have had a limited operating history upon which an evaluation
of our prospects and performance can be made. Puradyn's prospects must be
considered in light of risks, expenses, difficulties and delays frequently
encountered in connection with the formation and early phase of operation of a
new business, the development and commercialization of new products based on
innovative technology and the high level of competition in the industry in which
we operate.
Puradyn has had significant losses in each year of its operations.
These net losses include $(7,089,393), $(3,585,028) and $(1,765,096) for the
years ended December 31, 2000 and 1999, and the six months ended June 30, 2001,
respectively. In addition, we have an accumulated deficit, which amounted to
approximately $23,593,957 as of June 30, 2001. It is likely that losses will
continue until such time, as Puradyn is able to generate a level of revenue
sufficient to offset these continuing early-phase expenditures. While we are
optimistic that a market for the Puradyn will develop, there can be no assurance
that we will be able to successfully implement our business strategy, that our
revenues will increase substantially in the future, or that we will ever be able
to achieve significant profitable operations.
OUR PRODUCTS MAY NOT SATISFY OUR CUSTOMERS' NEEDS
Our success will depend in part upon the ability of our products to
meet targeted performance and cost objectives, and will also depend upon their
timely introduction into the marketplace. We will be required to commit
considerable time, effort and resources to finalize development of our proposed
products and product enhancements. Although we anticipate that the development
of our products and technology will be successfully concluded, product
development efforts are subject to all of the risks inherent in the development
of new products and technology (including unanticipated delays, expenses and
difficulties). In addition, we can provide no assurance that our products will
satisfactorily perform the functions that our customers anticipate, that they
will meet applicable price or performance objectives or that unanticipated
technical or other problems will not occur which would result in increased costs
or material delays in their development.
WE MAY NOT BE ABLE TO OBTAIN MARKET ACCEPTANCE FOR THE PURADYN
To date, we have generated limited revenues from the sale of our
products, which have achieved limited market acceptance. Demand for our products
and proposed products will depend principally upon consumer demand for the
Puradyn. The oil filtration industry has historically been competitive, and as
is typically the case with innovative products, the ultimate level of demand for
our products is subject to a high degree of uncertainty. Developing market
acceptance for our products will require substantial marketing and sales efforts
and the expenditure of a significant amount of funds to inform consumers of the
benefits and cost advantages of our products and achieve name recognition. We
cannot assure you that we will be able to penetrate existing markets on a wide
scale basis or position our products to appeal to mainstream consumer markets or
that any marketing efforts undertaken by us will result in increased demand for
or
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market acceptance of our products. Puradyn relies, and intends to continue to
rely, in part, on arrangements with third parties for the marketing of our
products, including arrangements with distributors and other strategic partners.
We cannot assure you that they or the company will be able to successfully
market Puradyn's products or that their efforts will result in any significant
increase in revenues.
WE ARE DEPENDENT ON SUPPLIERS AND THEIR LOSS COULD HAVE A SIGNIFICANT IMPACT ON
US
A substantial portion of the component parts of our products are
manufactured by various suppliers for assembly by Puradyn. We believe our
relationships with our suppliers are satisfactory and that alternative suppliers
are available if relationships falter or existing suppliers are unable to keep
up with the Puradyn's requirements. However, we cannot assure you that our
current or future suppliers will be able to meet our requirements on
commercially reasonable terms or within scheduled delivery times. An
interruption of Puradyn's arrangements with suppliers could cause a delay in the
production of our products for timely delivery to distributors and customers.
The absence of suitable manufacturing arrangements would have a material adverse
effect on our operations.
WE ARE DEPENDENT ON DISTRIBUTORS AND THEIR LOSS COULD HAVE A SIGNIFICANT IMPACT
ON US
Puradyn currently sells a relatively small portion of its products
through distributors for resale to other distributors or customers, and is
dependent to some extent upon acceptance of its products by these distributors,
customers, and their active marketing and distribution efforts relating to
Puradyn's products. Most of the distributors to whom we sell products, including
those that are contractually obligated to purchase our products in order to
maintain their distribution territories, could discontinue carrying our products
at any time. Due to increasing competition, distributors are increasingly in a
stronger position to negotiate favorable terms of sale, including price
discounts and product return policies. We cannot assure you that Puradyn will be
able to increase or maintain its distribution, and as a result, our operating
results could be adversely affected.
COMPETITION MAY ADVERSELY AFFECT OUR OPERATIONS
Although there is limited competition in the electric mobile oil
filtration system market, the market for full-flow oil filters, in general, and
by-pass oil filters, in particular, is characterized by intense competition. To
the extent that our products reduce oil consumption, full-flow oil filter sales
and disposal costs and extend engine life, Puradyn's products compete with, or
affect the sales of many well-established companies. These companies have
substantially greater financial, technical, personnel and other resources than
Puradyn and have established reputations for success in the development,
licensing and sale of their products and technology. Certain of these
competitors have the financial resources necessary to enable them to withstand
substantial price competition or downturns in their markets. In addition,
certain companies may be expected to develop technologies or products, which may
be functionally similar to some or all of those being developed by us. Industry
standards with respect to the markets for the technology and products being
developed by Puradyn may be characterized as evolving, which often results in
product obsolescence or short product life cycles. Accordingly, the ability of
Puradyn to compete will depend on its ability to complete development and
introduce into the marketplace in a timely manner its proposed products and
technology, to continually enhance and improve such products and technology, to
adapt its proposed products to be compatible with specific products manufactured
by others, and to successfully develop and market new products and technology.
We cannot assure you that Puradyn will be able to compete successfully, that its
competitors or future competitors will not develop technologies or products that
5
render our products and technology obsolete or less marketable or that Puradyn
will be able to successfully enhance its proposed products or technology or
adapt them satisfactorily.
WE ARE DEPENDENT ON KEY PERSONNEL AND THEIR LOSS WOULD ADVERSELY AFFECT OUR
OPERATIONS
The success of Puradyn will be largely dependent on the efforts of the
members of the management of the company. Puradyn has not as yet entered into
employment agreements with some members of the management, and we cannot assure
you that these persons will continue their employment with Puradyn. The loss of
the services of one or more key personnel could have a material adverse effect
on our ability to maximize use of our products and technologies or to develop
related products and technologies. The success of Puradyn also is dependent upon
its ability to hire and retain qualified executive, engineering and marketing
personnel. We cannot assure you that Puradyn will be able to hire or retain such
necessary personnel. Puradyn does not presently have "key man" life insurance
with respect to members of its management, except with respect to $1M coverage
on the life of Kevin Kroger, our President and Chief Operating Officer.
WE MARKET A LIMITED NUMBER OF RELATED PRODUCTS WHICH MAKE US VULNERABLE IF OUR
PRODUCTS DO NOT GAIN MARKET ACCEPTANCE
Although Puradyn has taken steps to broaden its product offerings,
sales of the Puradyn and related products and enhancements are expected to
continue to account for a substantial portion of our sales for the foreseeable
future. Future growth will depend upon acceptance of the Puradyn by a broader
group of customers. If we fail to achieve broader acceptance of our products,
this will have a material adverse effect on our financial condition and results
of operations. In addition, any factors adversely affecting the Puradyn, such as
the introduction of superior products or shifts in the needs of the marketplace,
would have a material adverse effect on our financial condition and results of
operations.
THERE ARE RISKS ASSOCIATED WITH OUR INTERNATIONAL OPERATIONS AND INTERNATIONAL
DISTRIBUTION
In 2000, we formed a subsidiary in England for distribution throughout
Europe, Africa and the Middle East. These foreign operations are subject to a
number of risks, including longer payment cycles, unexpected changes in
regulatory requirements, import and export restrictions and tariffs,
difficulties in staffing and managing foreign operations, the burden of
complying with a variety of foreign laws, greater difficulty in accounts
receivable collection, potentially adverse tax consequences, currency
fluctuations and political and economic instability. Additionally, the
protection of our intellectual property may be more difficult to enforce outside
of the United States. In the event that we are unsuccessful in expanding our
international operations, the imposition of exchange or price controls or other
restrictions on foreign currencies could materially affect our business,
operating results and financial condition.
OUR INTELLECTUAL PROPERTY RIGHTS MAY NOT PROVIDE MEANINGFUL PROTECTION FOR US
Puradyn's success is heavily dependent upon its proprietary technology.
Puradyn relies on a combination of contractual rights, patents, trade secrets,
trademarks, non-disclosure agreements and technical measures to establish and
protect its proprietary rights.
We cannot assure you that the steps taken by Puradyn to protect its
proprietary rights will be adequate to prevent misappropriation of the
technology or independent development by others of products with features based
6
upon, or otherwise similar to, those of our products. In addition, although we
believe that its technology has been independently developed and does not
infringe on the proprietary rights of others, we cannot assure you that
Puradyn's technology does not and will not infringe or that third parties will
not assert infringement claims against Puradyn in the future. In the case of
infringement, Puradyn would, under certain circumstances, be required to modify
its products or obtain a license. We cannot assure you that Puradyn would be
able to do either in a timely manner, or upon acceptable terms and conditions,
and this failure could have a material adverse effect on us. In addition, the
company may not have the resources to defend a patent infringement or other
proprietary rights infringement action.
Certain of our patents will expire in June 2008. We have patents for a
redesigned Puradyn (the basis for the next generation of the Puradyn products),
and the PFT Filter Plus which have been issued in the United States and certain
other foreign countries in 1997, a U.S. patent for its new oil flow meter and a
U.S. patent issued in 1998 on another method of introducing additives into the
oil. These patents expire from May 2014 to October 2016. Also, we recently filed
a provisional application for our new chemical grafting process (CGP), a
technology designed to enhance the filtration efficiency of specified media.
These patents may not withstand competitive threats to their patentability or,
in the case of the redesigned Puradyn, be developed into commercially viable
products. The expiration of these patents may have an adverse competitive effect
on us and patents pending for these new products in various foreign countries
may not be issued and may not provide meaningful proprietary protection.
WE WILL LIKELY EXPERIENCE FLUCTUATIONS IN OPERATING RESULTS WHICH WILL EXPOSE US
TO GREATER UNCERTAINTIES
Puradyn's operating results may fluctuate significantly from period to
period as a result of a variety of factors, including product returns,
purchasing patterns of consumers, the length of Puradyn's sales cycle to key
customers, distributors and other strategic partners, the timing of the
introduction of new products and product enhancements by Puradyn and its
competitors, technological factors, variations and effectiveness in sales by
product, salesperson, and distribution channel, and competitive pricing.
Consequently, product revenues may vary significantly by quarter, and our
operating results may experience significant fluctuations.
OUR ABILITY TO RAISE CAPITAL TO FUND OPERATIONS IS LIMITED
Our operating results to date have been net losses and have required
cash from investors and loans from third parties and from related parties. Our
ability to raise capital to fund future operations is limited and cannot be
relied upon if present working capital funds and investments are depleted.
THERE IS ONLY A LIMITED PUBLIC MARKET FOR OUR SHARES AND IF AN ACTIVE MARKET
DOES NOT DEVELOP, INVESTORS MAY HAVE DIFFICULTY SELLING THEIR SHARES
There is a limited public market for our common stock. We cannot
predict the extent to which investor interest in us will lead to the development
of an active trading market or how liquid that trading market might become. If a
trading market does not develop or is not sustained, it may be difficult for
investors to sell shares of our common stock at a price that is attractive. As a
result, an investment in our common stock may be illiquid and investors may not
be able to liquidate their investment readily or at all when he/she desires to
sell.
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PURADYN 2000 NON-EMPLOYEE DIRECTORS' STOCK PLAN
INTRODUCTION
The following descriptions summarize certain provisions of our 2000
Non-Employee Directors' Stock Plan. This summary is not complete and is
qualified by reference to the full text of the Plan. A copy of the Plan has been
filed 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 in its
entirety.
The purpose of the Plan is to encourage stock ownership by our
non-employee directors and to give such persons a greater personal interest in
the success of our business and an added incentive to continue to advance and
contribute to us. On November 8, 2000, our Board of Directors adopted the Plan.
As of August 28, 2001, options to purchase 230,000 shares had been granted.
Since options are available only to non-employees, options will not
qualify as incentive stock options under Section 422 of the Internal Revenue
Code of 1986, as amended.
ELIGIBILITY
Only our non-employee directors, including non-employee advisory
directors (each, a "Participant"), are eligible to receive options under the
Plan.
ADMINISTRATION
The Plan is administered by our board of directors or an underlying
committee. The board of directors or the committee determines from time to time
those of our non-employee directors to whom options are to be granted, the terms
and provisions of the respective option agreements, the time or times at which
such options shall be granted, the dates such options become exercisable, the
number of shares subject to each 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 board or committee. Any
other actions by the board relating to the Plan will be taken only if, in
addition to any other required vote, such action is approved by the affirmative
vote of a majority of the directors who are not then eligible to participate in
the Plan.
SHARES SUBJECT TO AWARDS
We have reserved 400,000 of our authorized but unissued shares of
common stock for issuance under the Plan, and a maximum of 400,000 shares may be
issued (subject to adjustment in the event of certain changes in our
capitalization), without further action by our board of directors or
shareholders. Subject to the limitation on the aggregate number of shares
issuable under the Plan, there is no maximum or minimum number of shares as to
which an option may be granted to any person. Shares used for options may be
authorized and unissued shares or shares reacquired by us, including shares
purchased in the open market. Shares covered by options which terminate
unexercised will again become available for grant as additional options, without
decreasing the maximum number of shares issuable under the Plan, although such
shares may also be used by us for other purposes.
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In the event any dividend or other distribution (whether in the form of
cash, shares or other property), recapitalization, forward or reverse split,
reorganization, merger, consolidated, spin-off, combination, repurchase,
exchange of shares or other of our securities, extraordinary dividend (whether
in the form of cash, shares or other property), liquidation, dissolution, or
other similar corporate transaction or event affects the shares such that an
adjustment is appropriate in order to prevent dilution or enlargement of each
Participant's rights under the Plan, then an adjustment shall be made, in a
manner that is proportionate to the change to the shares and otherwise
equitable, in (a) the number and kind of shares remaining reserved and available
for issuance, (b) the number and kind of shares to be subject to each automatic
grant of an option, and (c) the number and kind of shares issuable upon exercise
of outstanding options, and/or the exercise price per share thereof (provided
that no fractional shares will be issued upon exercise of any option). In
addition, the board of directors is authorized to make such adjustments in
recognition of unusual or non-recurring events (including, without limitation,
events described in the preceding sentence) affecting us or any of our
subsidiaries or our financial statements, or in response to changes in
applicable laws, regulations or accounting principles. The foregoing
notwithstanding, no adjustments may be made except as will be necessary to
maintain the proportionate interest of the Participant under the Plan and to
preserve, without exceeding, the value of outstanding options and potential
grants of options.
If at any date an insufficient number of shares are available under the
Plan for the automatic grant of options, options will first be automatically
granted proportionately to each eligible director, to the extent shares are then
available (provided that no fractional shares will be issued upon exercise of
any option).
AUTOMATIC GRANTS
An option to purchase 5,000 shares will automatically be granted to
each eligible director (a) upon his or her initial election or appointment to
the board of directors, and (b) at the close of business at each annual meeting
of the Company's stockholders (pro-rated for the initial year of a director's
service, based upon the number of months actually served). In addition, an
option to purchase 2,500 shares will automatically be granted to each eligible
director for each committee of the board of directors on which such director
sits (y) upon his or her initial appointment as a committee member, and (z) at
the close of business at each annual meeting of the Company's stockholders
(pro-rated for the initial year of a committee member's service, based upon the
number of months actually served).
TERMS OF EXERCISE
The Plan provides that the options granted thereunder shall be
exercisable from time to time in whole or in part, unless otherwise specified by
the committee or by the board of directors.
EXERCISE PRICE
The exercise price per share purchasable upon exercise of an option
will be equal to 100% of the fair market value of a share of Puradyn common
stock on the date of grant of the option. "Fair market value" of a share on a
given date means the last sales price or, if last sales information is generally
unavailable, the average of the closing bid and asked prices per share on such
date (or, if there was no trading or quotation in the stock on such date, on the
next preceding date on which there was trading or quotation) as reported in The
Wall Street Journal.
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MANNER OF EXERCISE
A Participant may exercise an option, in whole or in part, at such time
as it is exercisable and prior to its expiration, by giving written notice of
exercise to our Corporate Secretary, specifying the option to be exercised and
the number of shares to be purchased, and paying in full the exercise price in
cash (including by check) or by surrender of shares already owned by the
Participant having a fair market value at the time of exercise equal to the
exercise price or by a combination of cash and shares.
OPTION PERIOD
A Participant's option will expire at the earlier of (a) five years
after the date of grant or (b) one year after the date the Participant ceases to
serve as a director for any reason. Each option may be exercised commencing two
years following its grant (subject to any other limitations set forth in the
option grant) or prior thereto in the event of (x) the sale or transfer of 50%
of our equity interests in a single transaction; (y) the sale of substantially
all of our assets to a third party or (z) our merger with a third party in which
we are not the surviving entity or in which control of us is acquired by such
third party or its stockholders.
LIMITATIONS
Options under the Plan will not be transferable by a Participant except
by will or the laws of descent and distribution or to a beneficiary in the event
of the Participant's death, and, if exercisable, shall be exercisable during the
lifetime of a Participant only by such Participant or his guardian or legal
representative. Notwithstanding the foregoing, the board or committee may, in
its discretion, authorize all or a portion of the options granted to a
Participant to be on terms which permit transfer by such Participant to (a) the
spouse, children or grandchildren of such Participant ("Immediate Family
Members"), (b) a trust or trusts for exclusive benefit of such Immediate Family
Members, or (c) a partnership in which such Immediate Family Members are the
only partners, provided that (x) there may be no consideration for any such
transfer, (y) the option pursuant to which such awards are granted must be
approved by the board of directors and must expressly provide for
transferability in a manner consistent with this provision, and (z) subsequent
transfers of transferred options are similarly limited. Following transfer, any
such awards shall continue to be subject to the same terms and conditions as
were applicable immediately prior to transfer, provided that for purposes of the
Plan, the term participant shall be deemed to refer to the transferee. Options
under the Plan may not be pledged, mortgaged, hypothecated or otherwise
encumbered, and shall not be subject to the claims of creditors.
MODIFICATION AND TERMINATION OF PLANS
The board of directors may amend, alter, suspend, discontinue or
terminate the Plan or authority to grant options under the Plan without the
consent of stockholders or Participants except that an amendment or alteration
will be subject to the approval of our stockholders at or before the next annual
meeting of stockholders for which the record date is after the date of such
board action if such approval is required by any federal or state law or
regulation or the rules of any stock exchange or automated quotation system as
then in effect, and the board may otherwise determine to submit other such
amendments or alterations to stockholders for approval; provided, however, that,
without the consent of an affected Participant, no such action may materially
impair the rights of such Participant with respect to any previously granted
10
option. Unless earlier terminated by action of the board of directors, the Plan
shall terminate at such time as no shares remain available for issuance under
the Plan and we and Participants have no further rights or obligations under the
Plan.
FEDERAL INCOME TAX EFFECTS
The following discussion applies to the Plan and is based on federal
income tax laws and regulations in effect on January 1, 2001. It 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.
In respect to the holder of options, the option holder does not
recognize taxable income on the date of the grant of the 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 value of the
common stock on the date of exercise. However, if the holder of options is
subject to the restrictions on resale of common stock under Section 16 of the
Securities Exchange Act of 1934, 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 us 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. Our officers, directors and 10% or greater shareholders,
as well as certain other persons or parties who may be deemed to be "affiliates"
of ours under federal securities laws, should be aware that resales by
affiliates can only be made pursuant to an effective registration statement,
Rule 144 or other applicable exemption. Our officers, directors and 10% and
greater stockholders may also be subject to the "short swing" profit rule of
Section 16(b) of the Securities Exchange Act of 1934.
COMPENSATORY PLAN WITH OSCAR OTERO [PETRO PURE (PPI), INC.]
This prospectus also relates to the resale of 50,000 shares of our
common stock issuable upon exercise of warrants issued to Petro Pure (PPI),
Inc., a Florida corporation that is wholly- owned by Oscar Otero. The warrants
were issued under a warrant agreement dated March 8, 2000 between us and Petro
Pure (PPI), Inc. The warrant agreement required that we register the shares
issuable upon exercise of the warrants. The warrants are exercisable at any time
from March 7, 2001 until March 7, 2003, at an exercise price of $3.88 per share.
11
SALES BY SELLING SECURITY HOLDERS
The information under this heading relates to resales of Shares covered
by this prospectus by persons who are our "affiliates" as that term in defined
under federal securities laws. Shares issued pursuant to this prospectus to our
affiliates are "control" shares under federal securities laws.
The following table sets forth
o the name of each selling security holder,
o the amount of common stock owned beneficially, directly or
indirectly, by each selling security holder,
o the maximum amount of Shares to be offered by the selling
security holders pursuant to this prospectus,
o the amount of common stock to be owned by each selling
security holder following sale of the Shares, and
o the percentage of our common stock to be owned by the selling
security holder following completion of such offering (based
on 15,457,791 shares of common stock of Puradyn outstanding at
August 24, 2001), and adjusted to give effect to the issuance
of shares upon the exercise of the named selling security
holder's options or warrants, but no other person's options or
warrants.
Beneficial ownership is determined in accordance with the rules of the
SEC and generally includes voting or investment power with respect to securities
and includes any securities which the person has the right to acquire within 60
days through the conversion or exercise of any security or other right. The
information as to the number of shares of our common stock owned by each
affiliated selling security holder is based upon the information provided by our
transfer agent as of August 24, 2001.
We may amend or supplement this prospectus from time to time to update
the disclosure set forth in the table. Because the selling security holders
identified in the table may sell some or all of the Shares owned by them which
are included in this prospectus, and because there are currently no agreements,
arrangements or understandings with respect to the sale of any of the Shares, no
estimate can be given as to the number of Shares available for resale hereby
that will be held by the affiliated selling security holders upon termination of
the offering made hereby. We have therefore assumed, for the purposes of the
following table, that the affiliated selling security holders will sell all of
the Shares owned by them which are being offered hereby, but will not sell any
other shares of our common stock that they presently own.
Percentage
Shares to be to be Owned
Name of Selling Number of Shares to Owned After After
Security Holder Shares Owned be Offered Offering Offering
--------------- ------------ ---------- ------------ -----------
Michael Castellano 9,000 7,500(a) 9,000 *
Oscar Otero 50,000 50,000 0 --
Ottavio Serena 120,000 10,000(b) 120,000 *
Peter Stephaich 250,000 10,000(b) 250,000 1.6%
Joseph Vittoria 1,143,334 200,000(b) 1,143,334 7.4%
---------------------
12
* Less than 1.0%.
(a) These shares underlie options that vest and become exercisable on
January 24, 2003 as to 7,500 shares and on May 16, 2003 as to 2,500
shares.
(b) These shares underlie options that vest and become exercisable on
October 23, 2002.
PLAN OF DISTRIBUTION
The information under this heading relates to resales of Shares covered
by this prospectus by persons who are our "affiliates" as that term in defined
under federal securities laws.
The Shares covered by this prospectus may be resold and distributed
from time to time by the selling security holders in one or more transactions,
including ordinary broker's transactions, privately-negotiated transactions or
through sales to one or more broker-dealers for resale of these shares as
principals, at market prices existing at the time of sale, at prices related to
existing market prices, through Rule 144 transactions or at negotiated prices.
Usual and customary or specifically negotiated brokerage fees or commissions may
be paid by the selling security holders in connection with sales of securities.
The selling security holders may sell the securities in one or more of
the following methods, which may include crosses or block transactions:
o through the "pink sheets", on the over-the-counter Bulletin
Board, or on such exchanges or over-the-counter markets on
which our shares may be listed from time-to-time, in
transactions which may include special offerings, exchange
distributions and/or secondary distributions, pursuant to and
in accordance with the rules of such exchanges, including
sales to underwriters who acquire the shares for their own
account and resell them in one or more transactions or through
brokers, acting as principal or agent;
o in transactions other than on such exchanges or in the
over-the-counter market, or a combination of such
transactions, including sales through brokers, acting as
principal or agent, sales in privately negotiated
transactions, or dispositions for value by any selling
security holder to its partners or members, subject to rules
relating to sales by affiliates;
o through the issuance of securities by issuers other than us,
convertible into, exchangeable for, or payable in our shares;
or
o through the writing of options on our shares, whether or not
such options are listed on an exchange, or other transactions
requiring delivery of our shares, or the delivery of our
shares to close out a short position.
13
Any such transactions may be effected at market prices prevailing at
the time of sale, at prices related to such prevailing market prices, at
negotiated prices or at fixed prices.
In making sales, brokers or dealers used by the selling security
holders may arrange for other brokers or dealers to participate. The selling
security holders who are affiliates of Puradyn and others through whom such
securities are sold may be "underwriters" within the meaning of the Securities
Act for the securities offered, and any profits realized or commission received
may be considered underwriting compensation. Information as to whether an
underwriter(s) who may be selected by the selling security holders, or any other
broker-dealer, is acting as principal or agent for the selling security holders,
the compensation to be received by underwriters who may be selected by the
selling security holders, or any broker-dealer, acting as principal or agent for
the selling security holders and the compensation to be received by other
broker-dealers, in the event the compensation of other broker-dealers is in
excess of usual and customary commissions, will, to the extent required, be set
forth in a supplement to this prospectus. Any dealer or broker participating in
any distribution of the shares may be required to deliver a copy of this
prospectus, including the supplement, if any, to any person who purchases any of
the shares from or through a dealer or broker.
In connection with distributions of the Shares or otherwise, selling
security holders may enter into hedging transactions with broker-dealers. In
connection with the transactions, broker- dealers may engage in short sales of
the Shares in the course of hedging the positions they assume with selling
security holders. Selling security holders may also sell shares short and
deliver the Shares to close out the positions. Selling security holders may also
enter into option or other transactions with broker-dealers which require the
delivery to the broker-dealer of the Shares, which the broker-dealer may resell
under this prospectus. The selling security holders may also pledge the Shares
to a broker or dealer and upon a default, the broker or dealer may effect sales
of the pledged Shares under this prospectus.
We have advised the selling security holders that, at the time a resale
of the Shares is made by or on behalf of a selling security holder, a copy of
this prospectus is to be delivered.
We have also advised the selling security holders that during the time
as they may be engaged in a distribution of the shares included herein they are
required to comply with Regulation M of the Exchange Act. With certain
exceptions, Regulation M precludes any selling security holders, any affiliated
purchasers and any broker-dealer or other person who participates in the
distribution from bidding for or purchasing, or attempting to induce any person
to bid for or purchase any security which is the subject of the distribution
until the entire distribution is complete. Regulation M also prohibits any bids
or purchase made in order to stabilize the price of a security in connection
with the distribution of that security.
Sales of securities by us and the selling security holders or even the
potential of these sales may have an adverse effect on the market price for
shares of our common stock.
14
DESCRIPTION OF SECURITIES
COMMON STOCK
We are authorized to issue (a) 20,000,000 shares of common stock, $.001
par value per share and (b) 500,000 shares of preferred stock, $.001 par value
per share. As of August 24, 2001, there were issued and outstanding, 15,457,791
shares of common stock and no shares of preferred stock.
Common stockholders share dividends on a proportionate basis, as may be
declared by the board of directors. Upon our liquidation, dissolution or winding
up, after payment to creditors, our assets will be divided proportionately on a
per share basis among the holders of our common stock.
Each share of our common stock has one vote. Holders of our common
stock do not have cumulative voting rights. This means that the holders of a
plurality of the shares voting for the election of directors can elect all of
the directors. In that event, the holders of the remaining shares will not be
able to elect any directors. Our bylaws provide that a majority of the
outstanding shares of our common stock are a quorum to transact business at a
stockholders' meeting. Our common stock has no preemptive, subscription or
conversion rights. Also, our common stock is not redeemable.
PREFERRED STOCK
We may issue preferred stock from time to time, with such designations,
preferences, conversion rights, cumulative, relative, participating, optional or
other rights, including voting rights, qualifications, limitations or
restrictions as are determined by our board of directors. We have no present
intention of issuing shares of preferred stock.
TRANSFER AGENT
The transfer agent and registrar for our common stock 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 us by Atlas Pearlman, P.A., 350 East Las Olas
Boulevard, Suite 1700, Fort Lauderdale, Florida 33301. That firm and certain of
its individual members own an aggregate of 72,000 shares of our common stock.
EXPERTS
The consolidated financial statements of Puradyn Filter Technologies
Incorporated ("Puradyn") appearing in Puradyn's Annual Report (Form 10-KSB/A)
for the year ended December 31, 2000, have been audited by Ernst & Young LLP,
independent certified public accountants, as set forth in their report thereon
included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
15
INDEMNIFICATION
Article X of our 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 Corporation; 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
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.
E. Standard-- Nonderivative Suits. In case of a nonderivative suit, a
person named in paragraph A shall be indemnified only if:
16
(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.
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
17
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 indemnification 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 proceeding, 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, 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 our Amended and Restated Articles of Incorporation sets
forth limitations on directors' liability by providing:
"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
Corporation 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 our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have 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 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, we 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.
18
PART II
INFORMATION REQUIRED IN REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference
------- ---------------------------------------
The documents listed below are incorporated by reference in the
Registration Statement. All documents subsequently filed by the Registrant
pursuant to Section 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), prior to the filing of a post-effective
amendment which indicates that all securities offered have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference in the Registration Statement and to be part thereof
from the date of filing of such documents.
o Annual Report on Form 10-KSB, as amended, for the year ended
December 31, 2000, filed on August 9, 2001;
o Quarterly Report on Form 10-QSB for the quarter ended March
31, 2001, filed on May 31, 2001;
o Quarterly Report on Form 10-QSB for the quarter ended June 30,
2001, filed on August 15, 2001;
o Definitive Information Statement filed August 15, 2001;
o All other reports filed pursuant to Section 13(a) or 15(d) of
the Exchange Act since the end of the fiscal year covered by
the Registrant's Form 10-KSB for the year ended December 31,
2000; and
o The description of the Common Stock of the Company which is
contained in a Registration Statement filed under the Exchange
Act, including any amendment or report filed for the purpose
of updating such description.
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 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.
II-1
Item 4. Description of Securities
------- -------------------------
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.
Item 6. Indemnification of Directors and Officers
------- -----------------------------------------
Article X of our 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 Corporation; 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 the court shall deem proper.
II-2
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.
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.
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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.
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 indemnification 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 proceeding, 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, 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 our Amended and Restated Articles of Incorporation sets
forth limitations on directors' liability by providing:
"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
Corporation existing at the time of such repeal or modification."
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Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to our directors, officers and controlling persons
pursuant to the foregoing provisions, or otherwise, we have 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 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, we 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.
Item 7. Exemption From Registration Claimed
------- -----------------------------------
Persons eligible to receive grants under the Plan will have an existing
relationship with us and will have access to comprehensive information about us
to enable them to make an informed investment decision. The recipient must
express an investment intent and consent to the imprinting of a legend on the
securities restricting their transferability except in compliance with
applicable securities laws.
Item 8. Exhibits
5.1 Opinion and Consent of Atlas Pearlman, P.A. [includes Exhibit
23(i)].*
10.1 2000 Non-Employee Directors' Stock Plan.*
10.2 Compensatory Plan with Oscar Otero [Petro Pure (PPI), Inc.].*
23.1 Consent of Independent Certified Public Accountants.*
--------------------
* Filed herewith.
Item 9. Undertakings
------- ------------
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by section
10(a)(3) of the Securities Act of 1933;
(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
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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 a 20% 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) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8 and the information
required to be included in a post- effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to section 13(a) or section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
against such liabilities (other than the payment by the registrant in the
successful defense of an 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.
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SIGNATURES
THE REGISTRANT. Pursuant to the requirements of the Securities Act of
1933, the registrant certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-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, State of Florida, on September 6,
2001.
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, 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 Chief Executive Officer September 6, 2001
-------------------------------------- and Director (Principal
Richard C. Ford Executive Officer)
/s/ Joseph V. Vittoria Chairman of the Board September 6, 2001
-------------------------------------- of Directors
Joseph V. Vittoria
/s/ Alan J. Sandler Vice-President, Secretary September 6, 2001
-------------------------------------- Chief Financial Officer and
Alan J. Sandler Director (Principal Accounting
and Financial Officer)
/s/ Kevin G. Kroger President, Chief Operating September 6, 2001
-------------------------------------- Officer and Director
Kevin G. Kroger
/s/ Michael Castellano Director September 6, 2001
--------------------------------------
Michael Castellano
/s/ Peter Stephaich Director September 6, 2001
--------------------------------------
Peter Stephaich
/s/ Ottavio Serena Director September 6, 2001
--------------------------------------
Ottavio Serena
II-7