RISK
FACTORS
An
investment in the Shares involves a high degree of risk. You
should consider
carefully the following discussion of risks, in addition to
the other
information included or incorporated by reference in this prospectus,
before
purchasing any of the securities. In addition to historical
information, the
information in this prospectus contains “forward -looking” statements about our
future business and performance. See “Forward-Looking Statements.” Our actual
operating results and financial performance may be very different
from what we
expect as of the date of this prospectus. The risks below address
the material
factors that may affect our future operating results and financial
performance.
No
Assurances of Future Profitability; Losses from Operations;
Need for
Capital.
The
Company incurred net losses for the fiscal years ended June
30, 2006, 2005 and
2004 and for the quarters ended September 30, 2006, December
31, 2006 and March
31, 2007. In order to generate profits in the future, we need
to reduce cash and
non-cash interest expense, increase volumes of products and
services sold at
profitable margins, control costs and generate sufficient cash
flow to support
working capital and debt service requirements. There is no
assurance that our
management will be able to accomplish our business plan or
continue to raise
capital at terms that are acceptable to us in order to support
working capital
requirements or debt service shortfalls during any business
downturns. At June
30, 2006, our working capital was $1.3 million compared to
$5.9 million on June
30, 2005. The $4.6 million decrease primarily related to the
costs of developing
and maintaining our improved corporate infrastructure; continuing
costs of
integrating our recent acquisitions; capital expenditures related
to the
implementation of our new Enterprise Resource Planning (“ERP”) system; corporate
office leasehold improvements and other capital purchases;
and principal
payments on the Company’s August 2003 Senior Subordinated Notes; offset by
proceeds from warrant exercises and an increase in net margin
per gallon
compared to the prior year. In light of the recent losses,
which had further
decreased our working capital, on February 15, 2007, we conducted
a private
placement of our equity securities in order to provide funds
for debt repayment
and to boost our working capital. Notwithstanding the completion
of the $3.27
million private placement, the Company may need to raise additional
capital to
fund new acquisitions, the expansion or diversification of
existing operations
or additional debt repayment. While we believe that the Company
will be able to
obtain needed capital, there can be no assurance that it will
do so or that such
capital can be obtained on terms acceptable to the Company.
Trading
Market for Our Common Stock. Our
common stock trades on the Nasdaq Capital Market under the
symbol FUEL. During
the past few years, the stock sometimes traded in large daily
volumes and other
times at much lower volumes, in many cases at wide price variances.
This
volatility, which could make it difficult for stockholders
to sell shares at a
predictable price or at specific times, is generally due to
factors beyond our
control. Quarterly and annual operating results, changes in
general conditions
in the economy, the financial markets or other developments
affecting us could
cause the market price of our common stock to fluctuate.
Growth
Dependent Upon Future Expansion; Risks Associated With Expansion
into New
Markets. While
we
intend to continue to expand through acquisitions, our growth
will also depend
upon the ability to achieve greater penetration in existing
markets and to
successfully enter new markets in both additional major and
secondary
metropolitan areas. Such organic expansion will largely be
dependent on our
ability to demonstrate the benefits of our services and products
to potential
new customers; successfully establish and operate new locations;
hire, train and
retain qualified management, operating, marketing and sales
personnel; finance
acquisitions, capital expenditures and working capital requirements;
secure
reliable sources of product supply on a timely basis and on
commercially
acceptable credit terms; and successfully manage growth by
effectively
supervising operations, controlling costs and maintaining appropriate
quality
controls. There can be no assurance that we will be able to
successfully expand
our operations into new markets.
Acquisition
Availability; Integrating Acquisitions. The
Company’s future growth strategy involves the acquisition of complementary
businesses, such as wholesale fuel or petroleum lubricants
marketers and
distributors; wholesale fuel and other commercial mobile fueling
companies; and
transportation logistics services businesses. It is not certain
that we will be
able to identify or make suitable acquisitions on acceptable
terms or that any
future acquisitions will be effectively and profitably integrated
into our
operations. Acquisitions involve numerous risks that could
adversely affect our
operating results, including timely and cost effective integration
of the
operations and personnel of the acquired business; potential
write downs of
acquired assets; retention of key personnel of the acquired
business; potential
disruption of existing business; maintenance of uniform standards,
controls,
procedures and policies; additional capital needs; the effect
of changes in
management on existing business relationships; and profitability
and cash flows
generally.
Effect
of Material Weakness in Internal Controls.
In
fiscal 2006, our management identified significant deficiencies
related to
policies and procedures to ensure accurate and reliable interim
and annual
consolidated financial statements that, considered together,
constituted a
material weakness in our internal controls. Specifically, we
lacked (i)
sufficient number of personnel with required technical accounting
and SEC
financial reporting experience; (ii) adequate segregation of
duties among our
accounting personnel; (iii) sufficient review controls over
account
reconciliations, account analyses and operating procedures,
primarily in
connection with acquired businesses; and (iv) policies and
procedures requiring
a timely and detailed review of information underlying amounts
included in
our financial statements and disclosures. While we have engaged
in substantial
efforts to address the material weakness in our internal controls
over financial
reporting and to improve the integrity of our reporting processes,
including the
development and implementation of our ongoing ERP infrastructure
capability that
we initiated in fiscal 2006, there is no assurance that our
efforts will be
successful. Those remediation efforts are explained in detail
in our Form 10-K
for the year ended June 30, 2006 and our Form 10-Q for the
quarter ended March
31, 2007, which are incorporated by reference herein. Even
though our management
has made the correction of the identified material weakness
one of its very
highest priorities for fiscal 2007, it is possible that, considering
our size,
our limited capital resources and our need to continue to expand
our business by
acquisitions and diversification, we will not be able to promptly
rectify all of
the significant deficiencies that led to our conclusion of
a material weakness
in our internal controls. We
have
incurred and will continue to incur substantial expenses relating
to the
remediation of this material weakness. These expenses may materially
affect our
financial condition, results of operations and cash flows.
Moreover, even after
the full implementation of our planned remedial measures, as
described in Item
9A - “Controls and Procedures” of our 2006 Form 10-K are fully implemented, our
internal controls may not prevent all potential errors or fraud
because any
control system, no matter how well designed, cannot provide
absolute assurance
that the objectives of the control system will be achieved.
Dependence
on Key Personnel.
The
future success of the Company will be largely dependent on
the continued
services and efforts of Richard E. Gathright, our Chief Executive
Officer and
President, and on those of other key executive personnel. The
loss of the
services of Mr. Gathright or other executive personnel could
have a material
adverse effect on our business and prospects. Our success and
plans for future
growth will also depend on our ability to attract and retain
additional
qualified management, operating, marketing, sales and financial
personnel. There
can be no assurance that we will be able to hire or retain
such personnel on
terms satisfactory to us. We have entered into written employment
agreements
with Mr. Gathright and certain other key executive personnel.
While Mr.
Gathright’s employment agreement provides for automatic one-year extensions
unless either party gives notice of intent not to renew prior
to such extension,
there is no assurance that Mr. Gathright’s services or those of our other
executive personnel will continue to be available to the Company.
Fuel
Pricing and Supply Availability; Effect on
Profitability.
Diesel
fuel and gasoline are commodities which are refined and distributed
by numerous
sources. The Company purchases the fuel delivered to our customers
from multiple
suppliers at daily market prices and in some cases qualifies
for certain
discounts. We monitor fuel prices and trends in each of our
service markets on a
daily basis and seek to purchase our supply at the lowest prices
and under the
most favorable terms. Commodity price risk is generally mitigated
since we
purchase and deliver our fuel supply daily and generally utilize
cost-plus
pricing when billing our customers. If we cannot continue to
utilize cost-plus
pricing when billing our customers, margins would likely decrease
and losses
could increase. We have not engaged in derivatives or futures
trading to hedge
fuel price movements. In addition, diesel fuel and gasoline
may be subject to
supply interruption due to a number of factors, including natural
disasters,
refinery and/or pipeline outages, labor disruptions and supplier
credit
limitations. The reduction of available supplies or our access
to those supplies
could impact our ability to provide commercial mobile and bulk
fueling, and
emergency response services and impact profitability.
Risks
Associated with Customer Concentration; Absence of Written
Agreements.
Although
the Company provides services to many customers, a significant
portion of our
revenues are generated from a few of our larger customers.
While we have formal,
length of service written contracts with some of these larger
customers, such
agreements are not customary and we do not have them with the
majority of our
customers. As a result, most of our customers can terminate
our services at any
time and for any reason, and we can similarly discontinue service
to any
customer. The Company may discontinue service to a customer
if changes in the
service conditions or other factors cause us not to meet our
minimum level of
margins and rates, and the pricing or delivery arrangements
cannot be
re-negotiated. As a result of this customer concentration and
absence of written
agreements, our business, results of operations and financial
condition could be
materially adversely affected if one or more of our large customers
were lost or
if we were to experience a high rate of service terminations.
Management
of Growth; Accounting and Information Technology Systems Implementation.
Our
future growth strategy requires effective operational, financial
and other
internal systems, and the ability to attract, train, motivate,
manage and retain
our employees. If we are unable to manage growth effectively,
results of
operations will be adversely affected. In particular, our results
of operations
will be influenced by the redesign and implementation of our
accounting and
information technology systems. While in the short run, the
costs of that
redesign and implementation have increased our expenses and
adversely affected
our results of operations, we expect that, once implemented,
it will help reduce
operating costs and improve our ability to effectively manage
our business and
integrate acquisitions. There can be no assurance, however,
that such redesign
and implementation will be completed as planned, or that it
will have the
intended results.
Competition.
The
Company competes with other service providers, including several
large regional
providers and numerous small, local independent operators,
who provide some or
all of the same services that we offer to our customers. In
the mobile fueling
area, we also compete with retail fuel marketing, since fleet
operators have the
option of fueling their own equipment at retail stations and
at other
third-party service locations such as card lock facilities.
Our ability to
compete is affected by numerous factors, including price, the
complexity and
technical nature of the services required, delivery dependability,
credit terms,
the costs incurred for non-mobile fueling alternatives, service
locations as
well as the type of reporting and invoicing services provided.
There can be no
assurance that we will be able to continue to compete successfully
as a result
of these or other factors.
Operating
Risks May Not Be Covered by Insurance.
Our
operations are subject to the operating hazards and risks normally
incidental to
handling, storing and transporting diesel fuel and gasoline,
which are
classified as hazardous materials. We maintain insurance policies
in amounts and
with coverages and deductibles that we believe are reasonable
and prudent. There
can be no assurance, however, that our insurance will be adequate
to protect us
from liabilities and expenses that may arise from claims for
personal and
property damage arising in the ordinary course of business;
that we will be able
to maintain acceptable levels of insurance; or that insurance
will be available
at economical prices.
Governmental
Regulation. Numerous
federal, state and local laws, regulations and ordinances,
including those
relating to protection of the environment and worker safety,
affect the
Company’s operations. There can be no assurance that we will be able
to comply
with existing and future regulatory requirements in the future
without incurring
substantial costs or otherwise adversely affecting our operations.
Changes
in Environmental Requirements.
The
Company expects to generate future business by converting certain
fleet
operators, currently utilizing underground fuel storage tanks
for their fueling
needs, to commercial mobile fueling. The owners of underground
storage tanks
have been required to remove or retrofit those tanks to comply
with technical
regulatory requirements pertaining to their construction and
operation. If other
more economical means of compliance are developed or adopted
by owners of
underground storage tanks, the opportunity to market our services
to these
owners may be adversely affected.
Terrorism
and warfare in the Middle East may adversely affect the economy
and the price
and availability of petroleum products.
Terrorist attacks, such as the attacks that occurred in New
York, Pennsylvania
and Washington, D.C., on September 11, 2001, as well as the
continuing political
unrest and warfare in the Middle East, may adversely impact
the price and
availability of fuel, our results of operations, our ability
to raise capital
and our future growth. The impact of terrorism on the oil industry
in general,
and on the Company in particular, is not known at this time.
An act of terror
could result in disruptions of crude oil or natural gas supplies
and markets,
the sources of our products, and our infrastructure facilities
or our suppliers
could be direct or indirect targets. Terrorist activity may
also hinder our
ability to transport fuel if the means of supply transportation,
such as rail or
pipelines, become damaged as a result of an attack. A lower
level of economic
activity following a terrorist attack could result in a decline
in energy
consumption, which could adversely affect our revenues or restrict
our future
growth. Instability in the financial markets as a result of
terrorism could also
impair our ability to raise capital. Terrorist activity or
further instability
in the Middle East could also lead to increased volatility
in fuel prices, which
could adversely affect our business generally.
USE
OF PROCEEDS
We
will
receive up to $59,667 upon the exercise of the Warrants by
the Selling
Stockholders. We will not receive any of the proceeds from
the sales of our
common stock or the Warrants by the Selling Stockholders. Expenses
expected to
be incurred in connection with this offering are estimated
to be approximately
$35,000.
DESCRIPTION
OF WARRANTS
This
section is a summary and may not describe every aspect of the
Warrants that may
be important to you. We urge you to read the Form of Stock
Purchase Warrant as
previously filed with the SEC as it defines the rights of a
holder of these
securities. See “Where You Can Find More Information” for information on how to
obtain copies of documents referenced in this prospectus.
The
Warrants entitle the holder to purchase one share of common
stock at an exercise
price of $1.60 per share. The Warrants are exercisable for
a period of four
years and will expire on January 24, 2009. As
of
April 9, 2007, there were 37,292 Warrants outstanding to purchase
a total of
37,292 shares of common stock.
The
Warrants include provisions for the appropriate adjustment
in the Warrant price
and the number and kind of securities purchasable upon the
exercise of the
Warrants upon the occurrence of certain events, including,
subdivision or
combination of shares, reclassification of our common stock,
merger, and the
payment of stock dividends. The shares of common stock, when
issued upon
exercise of a Warrant, will be fully paid and non-assessable
and free from all
taxes, liens and charges. No fractional Shares will be issued
in connection with
any exercise of the Warrants. The holder of a Warrant will
not possess any
rights as our stockholder before the Warrant has been exercised
and the shares
purchasable upon the exercise have become deliverable.
A
Warrant
may be exercised by surrender of the Warrant on or before the
expiry date at our
principal office in Fort Lauderdale, Florida, accompanied by
(i) a completed and
executed Notice of Exercise form, attached as Exhibit A to
the Warrant, and (ii)
payment of the exercise price for the number of shares of common
stock to be
acquired.
We
have
the right to redeem the Warrants at any time after July 24,
2006, at $.01 per
share if the common stock trades at two hundred percent (200%)
of the Warrant
price for any twenty (20) consecutive trading days beginning
anytime on or after
such date.
The
foregoing discussion is qualified in its entirety by reference
to the detailed
provisions of the Stock Purchase Warrant.
SELLING
STOCKHOLDERS
The
following table sets forth certain information with respect
to (1) in column one
“Currently Held Shares,” the amount of shares of our common stock currently held
by the Selling Stockholder; (2) in column two “Shares Issuable Upon Conversion
of Warrants” the number of shares of our common stock that would be beneficially
owned by the Selling Stockholder assuming exercise of the Warrants;
(3) in
column three “Percentage,” the percentage of ownership based on our
13,037,421 shares outstanding on April 9, 2007 by each Selling
Stockholder, which assumes exercise of the Warrants, all of
which are currently
exercisable; (4) in column four “Number of Shares Registered,” the number of
shares registered under this prospectus; (5) in column five
“Shares,” the number
of shares beneficially owned after the offering, assuming the
sale of all the
shares registered, including shares issuable upon exercise
of the Warrants; and
(6) in column six “Percentage,” the percentage of beneficial ownership based on
our 13,037,421 shares outstanding on April 9, 2007 assuming sale of
all the shares registered by the Selling Stockholders.
To
the
best of our knowledge, none of the Selling Stockholders has
any position, office
or other material relationship with us or any of our predecessors
or affiliates
within the past three years except as described below:
|
|
• |
Leon
Frenkel is the manager of a limited liability company
which acts as the
general partner of both Triage Capital Management
L.P. and Triage Capital
Management B, L.P. Mr. Frenkel acts as the manager
of a limited liability
company that acts as general partner to an investment
manager of Triage
Offshore Fund, Ltd. Mr. Frankel also acts as the
general partner to
Periscope Partners L.P. He disclaims beneficial ownership
of the Company’s
securities held by those entities except to the extent
of his pecuniary
interest therein,
|
Except
as
set forth above, none of the Selling Stockholders has had positions,
offices or
other material relationships with us within the past three
years. The Selling
Stockholders are participating in this offering under registration
rights
presently granted to them. We have agreed to file and maintain
the effectiveness
of the registration statement of which this prospectus forms
a part and to pay
all fees and expenses incident to the registration of this
offering, including
all registration and filing fees, all fees and expenses of
complying with state
blue sky or securities laws, all costs of preparation of the
registration
statement and fees and disbursements of our counsel and independent
public
accountants.
| |
|
|
Ownership
of Shares Before the Offering
|
|
|
|
|
|
Ownership
After the Offering
|
|
|
Name
and Address of
Beneficial
Owner
|
|
|
Currently
Held Shares
|
|
|
Shares
Issuable Upon Conversion of
Warrants
|
|
|
Percentage
|
|
|
Number
of Shares Registered
|
|
|
Shares
|
|
|
Percentage
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TRIAGE
CAPITAL MANAGEMENT, L.P.
c/o
Leon Frenkel, Sr. Manager
401
City Avenue, Suite 526
Bala
Cynwyd, PA 19004
|
|
|
343,983(1
|
)
|
|
20,192
|
|
|
2.6
|
|
|
20,192
|
|
|
323,791
|
|
|
2.5
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARK
D. WITTMAN
20
Beacon Hill Lane
Phoenixville,
PA 19460
|
|
|
51,600(2
|
)
|
|
7,100
|
|
|
*
|
|
|
7,100
|
|
|
44,500
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
JAMES
ALSOPP
1717
Spruce Street #3F
Philadelphia,
PA 19103
|
|
|
15,794(3
|
)
|
|
10,000
|
|
|
*
|
|
|
10,000
|
|
|
5,794
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
BERNADETTE
PUCILLO
1501
Darby Road
Havertown,
PA 19083
|
|
|
3,810(4
|
)
|
|
0
|
|
|
*
|
|
|
1,000
|
|
|
2,810
|
|
|
*
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
415,187
|
|
|
37,292
|
|
|
|
|
|
38,292
|
|
|
376,895
|
|
|
|
|
______________
| * |
Less
than 1% of the shares outstanding.
|
| (1) |
Consists
of 343,983 shares issuable upon the exercise of warrants
that are
presently exercisable. This amount includes 20,192
shares offered in this
offering, of which 10,652 were assigned from the
Triage Capital Management
B, L.P.
|
| (2) |
Includes
21,600 shares issuable upon the exercise of warrants
that are presently
exercisable, including 7,100 shares offered in this
offering.
|
| (3) |
Includes
14,560 shares issuable upon the exercise of warrants
that are presently
exercisable, including 10,000 shares offered in this
offering.
|
| (4) |
Consists
of 2,810 shares issuable upon the exercise of warrants
that are presently
exercisable, including 1,000 shares offered in this
offering.
|
PLAN
OF DISTRIBUTION
General
The
shares of our common stock and Warrants covered by this prospectus
are being
registered to permit public secondary trading of these securities
by the holder
thereof from time to time after the date of the prospectus.
All of the shares of
common stock and Warrants covered by this prospectus are being
sold by the
Selling Stockholders or its pledgees, donees, assignees, transferees
or their
successors-in-interest that receive the shares as a gift, partnership
distribution or other non-sale related transfer.
The
Selling Stockholders and their pledgees, donees, assignees,
or other
successors-in-interest who acquire their shares after the date
of this
prospectus may sell the common stock and Warrants directly
to purchasers or
through broker-dealers or agents.
The
common stock may be sold in one or more transactions at fixed
prices, at
prevailing market prices at the time of sale, at varying prices
determined at
the time of sale, or at negotiated prices. Sales may be effected
in one or more
of the following transactions:
| |
·
|
on
the NASDAQ Capital Market,
|
| |
·
|
in
the over-the-counter market,
|
| |
·
|
in
privately negotiated transactions,
|
| |
·
|
for
settlement of short sales, or through long sales,
options or transactions
involving cross or block trades,
|
| |
·
|
by
pledges to secure debts and other obligations,
or
|
| |
·
|
in
a combination of any of these
transactions.
|
In
addition, any shares that qualify for sale pursuant to Rule
144 under the
Securities Act may be sold under Rule 144 rather than pursuant
to this
prospectus.
Applicable
Law. Each
Selling Stockholder will be subject to applicable provisions
of the Exchange Act
and the associated rules and regulations under the Exchange
Act, including
Regulation M, which provisions may limit the timing of purchases
and sales of
shares of our common stock by the Selling Stockholders.
Pledge
or Transfer of Shares. The
Selling Stockholders may from time to time pledge or grant
a security interest
in some or all of the shares owned by them and, if they default
in the
performance of their secured obligations, the pledgees or secured
parties may
offer and sell shares of common stock from time to time under
this prospectus,
or under an amendment to this prospectus under Rule 424(b)(3)
or other
applicable provision of the Securities Act of 1933 amending
the list of Selling
Stockholders to include the pledgee, transferee or other successors
in interest
as Selling Stockholders under this prospectus. The Selling
Stockholders also may
transfer the shares of common stock in other circumstances,
in which case the
transferees, pledgees or other successors in interest will
be the selling
beneficial owners for purposes of this prospectus.
Selling
Arrangements with Broker-Dealers. Broker-dealers
engaged by the Selling Stockholders may arrange for other brokers-dealers
to
participate in sales. Broker-dealers may receive commissions
or discounts from
the Selling Stockholders (or, if any broker-dealer acts as
agent for the
purchaser of shares, from the purchaser) in amounts to be negotiated.
The
Selling Stockholders do not expect these commissions and discounts
to exceed
what is customary in the types of transactions involved.
Upon
the
Company being notified in writing by a Selling Stockholder
that any material
agreement has been entered into with a broker-dealer for the
sale of common
stock through a block trade, special offering, exchange distribution
or
secondary distribution or a purchase by a broker or dealer,
a supplement to this
prospectus will be filed, if required, pursuant to Rule 424(b)
under the
Securities Act, disclosing (i) the name of each such Selling
Stockholder and of
the participating broker-dealer(s), (ii) the number of shares
involved, (iii)
the price at which such shares of common stock were sold, (iv)
the commissions
paid or discounts or concessions allowed to such broker-dealers,
where
applicable, (v) that such broker-dealer(s) did not conduct
any investigation to
verify the information set out or incorporated by reference
in this prospectus,
and (vi) other facts material to the transaction.
The
Selling Stockholders and any broker-dealers or agents that
are involved in
selling the shares may be deemed to be “underwriters” within the meaning of the
Securities Act in connection with such sales. In such event,
any commissions
received by such broker-dealers or agents and any profit on
the resale of the
shares purchased by them may be deemed to be underwriting commissions
or
discounts under the Securities Act. Discounts, concessions,
commissions and
similar selling expenses, if any, attributable to the sale
of shares will be
borne by the Selling Stockholder. Each Selling Stockholder
has represented and
warranted to the Company that it acquired the securities subject
to this
registration statement in the ordinary course of such Selling
Stockholder’s
business and, at the time of its purchase of such securities
such Selling
Stockholder had no agreements or understandings, directly or
indirectly, with
any person to distribute any such securities.
The
Company has advised each Selling Stockholder that the stockholder
may not use
shares registered on this registration statement to cover short
sales of common
stock made prior to the date that the SEC declares this registration
statement
effective.
If
the
Selling Stockholders use this prospectus for any sale of the
common stock, they
will be subject to the prospectus delivery requirements of
the Securities Act.
The Selling Stockholders will be responsible to comply with
the applicable
provisions of the Securities Act and Exchange Act, and the
rules and regulations
thereunder promulgated, including, without limitation, Regulation
M, as
applicable to such Selling Stockholders in connection with
resales of their
respective shares under this registration statement.
Supplements.
To the
extent required, we will set forth in a supplement to this
prospectus filed with
the SEC the number of shares to be sold, the purchase price
and public offering
price, the name or names of any agent, dealer or underwriter,
and any applicable
commissions or discounts with respect to a particular offering.
In particular,
upon being notified by a Selling Stockholder that a donee or
pledgee intends to
sell more than 500 shares, we will file a supplement to this
prospectus.
State
Securities Law.
Under
the securities laws of some states, the Selling Stockholders
may only sell the
shares in those states through registered or licensed brokers
or dealers. In
addition, in some states the Selling Stockholders may not sell
the shares unless
they have been registered or qualified for sale in that state
or an exemption
from registration or qualification is available and is satisfied.
Expenses;
Indemnification.
We will
receive up to $59,667 upon exercise of the Warrants by the
Selling Stockholders.
We will not receive any of the proceeds from shares sold by
the Selling
Stockholders. We will bear the expenses related to the registration
of this
offering but will not pay the Selling Stockholders’ underwriting fees,
commissions or discounts, if any. We have agreed to indemnify
the Selling
Stockholders against some civil liabilities, including some
that may arise under
the Securities Act.
LEGAL
MATTERS
The
validity of the securities offered by this prospectus will
be passed upon by
Davis Graham & Stubbs LLP, Denver, Colorado.
EXPERTS
Our
audited consolidated financial statements as of June 30, 2006
and June 30, 2005,
included in our Annual Report of Form 10-K for the year ended
June 30, 2006,
incorporated by reference herein, have been audited by Grant
Thornton LLP, an
independent registered public accounting firm as set forth
in their report
thereon. Such financial statements are incorporated by reference
in reliance
upon such report given the authority of such firm as experts
in accounting and
auditing in giving said report.
Our
audited consolidated financial statements for the year-ended
June 30, 2004, have
been incorporated by reference herein in reliance upon the
report of KPMG LLP
(“KPMG”), independent registered public accounting firm, incorporated
by
reference herein, and upon the authority of said firm as experts
in accounting
and auditing.
We
have
agreed to indemnify and hold KPMG harmless against and from
any and all legal
costs and expenses incurred by KPMG in successful defense of
any legal action or
proceeding that arises as a result of KPMG’s consent to the incorporation by
reference of its audit report on the Company’s past financial statements
incorporated by reference in this registration statement.
WHERE
YOU CAN FIND MORE INFORMATION
We
file
annual, quarterly and special reports, proxy statements and
other information
with the SEC. You may read and copy any of these documents
at the SEC’s public
reference room at 100 F Street N.E., Room 1580, Washington,
D.C. 20549. Please
call the SEC at 1-800-SEC-0330 for further information on the
public reference
room. Our SEC filings are also available to the public at the
SEC’s website at
http://www.sec.gov.
INCORPORATION
OF CERTAIN DOCUMENTS BY REFERENCE
The
SEC
allows us to “incorporate by reference” the information we file with the SEC,
which means that we can disclose important information to you
by referring you
to those documents. The information incorporated by reference
is considered part
of this prospectus, and information that we file later with
the SEC will
automatically update and supersede, as applicable, the information
in this
prospectus.
The
following documents, which were previously filed with the SEC
pursuant to the
Exchange Act, are hereby incorporated by reference:
| |
·
|
our
Annual Report on Form 10-K for the year ended June
30,
2006;
|
| |
·
|
our
Quarterly Reports on Form 10-Q for the quarters ended September 30,
2006, December 31, 2006 and March 31,
2007;
|
| |
·
|
our
Definitive Proxy Statement on Schedule 14A, filed
on December 8,
2006;
|
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·
|
our
Current Reports on Form 8-K filed with the SEC on
July 7, 2006 (other than information in the Current
Report that is
furnished, but not filed); October 2, 2006; October
3, 2006;
October 16, 2006 (other than information in the Current
Report that is
furnished, but not filed); October 18, 2006; December
4, 2006; December
22, 2006; January 19, 2007; February 14, 2007; February 21, 2007;
February 22, 2007 and April 3, 2007;
and
|
| |
·
|
the
description of our common stock contained in Amendment
No. 2 to our
Registration Statement on Form 8-A/A (SEC File No.
000-21825) filed with
the SEC on June 5, 2007.
|
All
documents filed by us pursuant to Sections 13(a), 13(c), 14
or 15(d) of the
Exchange Act subsequent to the date of this prospectus and
prior to the
termination of this offering shall be deemed to be incorporated
by reference
into this prospectus and shall be a part hereof from the date
of filing of such
documents.
Any
statement contained in a document incorporated or deemed to
be incorporated by
reference in this prospectus shall be deemed modified, superseded
or replaced
for purposes of this prospectus to the extent that a statement
contained in this
prospectus, or in any subsequently filed document that also
is deemed to be
incorporated by reference in this prospectus, modifies, supersedes
or replaces
such statement. Any statement so modified, superseded or replaced
shall not be
deemed, except as so modified, superseded or replaced, to constitute
a part of
this prospectus. Subject to the foregoing, all information
appearing in this
prospectus is qualified in its entirety by the information
appearing in the
documents incorporated by reference.
Statements
contained in this prospectus as to the contents of any contract
or other
document are not necessarily complete, and in each instance
we refer you to the
copy of the contract or document filed as an exhibit to the
registration
statement or the documents incorporated by reference in this
prospectus, each
such statement being qualified in all respects by such reference.
You
may
receive a copy of any of these filings, at no cost, by writing
or calling SMF
Energy Corporation, 200 West Cypress Creek Road, Suite 400,
Fort Lauderdale,
Florida, 33309, telephone (954) 308-4200, and directed to the
attention of
Richard E. Gathright, Chief Executive Officer and President.
You
should rely only on the information incorporated by reference
or provided in
this prospectus or any supplement to this prospectus. We have
authorized no one
to provide you with different information. We are not making
an offer of these
securities in any state where the offer is not permitted. You
should not assume
that the information in this prospectus is accurate as of any
date other than
the date on the front of this prospectus.
SMF
ENERGY CORPORATION
COMMON
STOCK
WARRANTS
____________
PROSPECTUS
____________
July
19,
2007