Filed Pursuant
to Rule 424(b)(5)
Registration
No. 333-216621
The
information in this preliminary prospectus supplement is not complete and may be changed. A registration statement relating to
these securities became effective under the Securities Act of 1933, as amended. This preliminary prospectus supplement and the
accompanying prospectus are not an offer to sell these securities, and we are not soliciting an offer to buy these securities,
in any jurisdiction where the offer or sale is not permitted.
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PRELIMINARY
PROSPECTUS SUPPLEMENT
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SUBJECT
TO COMPLETION
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DATED
JUNE 23, 2017
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(To the Prospectus dated June 15, 2017)
Shares
Common Stock
Meridian
Waste Solutions, Inc.
We
are offering shares of common stock pursuant
to this prospectus supplement and the accompanying prospectus.
Our common stock is listed on The Nasdaq
Capital Market under the symbol “MRDN”. On June 22, 2017, the last reported sale price of our common stock on The NASDAQ
Capital Market was $2.80 per share.
Pursuant to General Instruction I.B.6 of
Form S-3, in no event will we sell securities in a public primary offering with a value of more than one-third of the aggregate
market value of our common stock held by non-affiliates in any twelve-month period, so long as the aggregate market value of our
common stock held by non-affiliates remains below $75,000,000. The aggregate market value of our outstanding common stock
held by non-affiliates pursuant to General Instruction I.B.6 of Form S-3 was approximately $20,301,302, which was calculated based
on 7,342,920 shares of common stock outstanding, as of June 22, 2017, of which 5,816,992 shares were held by non-affiliates, and
a price per share of $3.49, which was the closing sale price of our common stock on The NASDAQ Capital Market on May 2, 2017. Other
than the shares of common stock offered pursuant to this prospectus supplement, we have not offered any securities pursuant to
General Instruction I.B.6. of Form S-3 during the prior 12 calendar month period that ends on and includes the date hereof.
Investing
in our securities involves a high degree of risk. See “Risk Factors” beginning on page S-4 of this prospectus for
a discussion of information that should be considered in connection with an investment in our securities.
Neither
the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.
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Per
Share
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Total
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Public
offering price
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$
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$
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Underwriting discounts
and commissions(1)
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$
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$
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Proceeds to us, before
expenses
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$
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$
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(1)
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The
underwriters will receive compensation and warrants to purchase common stock in addition to the underwriting discount. We
have agreed to pay a non-accountable expense allowance to the underwriters equal to 1.0% of the gross proceeds received in
this offering; provided, however, the expense allowance of 1.0% is not payable with respect to the securities sold upon exercise
of the underwriters’ over-allotment option. See “Underwriting” beginning on page S-15 of this prospectus
supplement for a description of the compensation payable to the underwriters.
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We
have granted a 45-day option to the representative of the underwriters to purchase up to
additional shares of common stock solely to cover over-allotments, if any.
The
underwriters expect to deliver our shares to purchasers in the offering on or about , 2017.
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Roth
Capital Partners
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Joseph
Gunnar & Co.
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,
2017
TABLE
OF CONTENTS
Prospectus
Supplement
Prospectus
ABOUT
THIS PROSPECTUS SUPPLEMENT
This
document is in two parts. The first part is this prospectus supplement, which describes the terms of this offering and also adds
to and updates information contained in the accompanying prospectus and the documents incorporated by reference into this prospectus
supplement and the accompanying prospectus concerning Meridian Waste Solutions, Inc. The second part is the accompanying prospectus,
dated March 10, 2017, including the documents incorporated by reference therein, which provides more general information, some
of which may not apply to this offering. Generally, when we refer to this prospectus, we are referring to both parts of this document
combined together with all documents incorporated by reference. If the description of the offering varies between this prospectus
supplement, on the one hand, and the accompanying prospectus, or in any document incorporated by reference that was filed with
the Securities and Exchange Commission, or SEC, before the date of this prospectus supplement, on the other hand, you should rely
on the information contained in this prospectus supplement. However, if any statement in one of these documents is inconsistent
with a statement in another document having a later date — for example, a document incorporated by reference into this prospectus
supplement or the accompanying prospectus — the statement in the document having the later date modifies or supersedes the
earlier statement. You should rely only on the information contained in or incorporated by reference into this prospectus supplement
or contained in or incorporated by reference into the accompanying prospectus to which we have referred you. We have not authorized
anyone to provide you with information that is different. If anyone provides you with different or inconsistent information, you
should not rely on it. We may authorize one or more “free writing prospectuses” (i.e. written communications concerning
the offering that are not part of this prospectus supplement) that may contain certain material information relating to this offering.
The information contained in, or incorporated by reference into, this prospectus supplement and contained in, or incorporated
by reference into, the accompanying prospectus is accurate only as of the respective dates thereof, regardless of the time of
delivery of this prospectus supplement and the accompanying prospectus or of any sale of securities. It is important for you to
read and consider all information contained in this prospectus supplement and the accompanying prospectus, including the documents
incorporated by reference herein and therein, in making your investment decision. You should also read and consider the information
in the documents to which we have referred you under the captions “Where You Can Find More Information” and “Incorporation
of Documents by Reference” in this prospectus supplement and in the accompanying prospectus.
We
are offering to sell, and are seeking offers to buy, securities only in jurisdictions where such offers and sales are permitted.
The distribution of this prospectus supplement and the accompanying prospectus and the offering of securities in certain jurisdictions
or to certain persons within such jurisdictions may be restricted by law. Persons outside the United States who come into possession
of this prospectus supplement and the accompanying prospectus must inform themselves about and observe any restrictions relating
to the offering of securities and the distribution of this prospectus supplement and the accompanying prospectus outside the United
States. This prospectus supplement and the accompanying prospectus do not constitute, and may not be used in connection with,
an offer to sell, or a solicitation of an offer to buy, any securities offered by this prospectus supplement and the accompanying
prospectus by any person in any jurisdiction in which it is unlawful for such person to make such an offer or solicitation.
CAUTIONARY
STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus supplement and any accompanying prospectus, including the documents that we incorporate by reference, contain forward-looking
statements within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E
of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Such forward-looking statements include those that express
plans, anticipation, intent, contingency, goals, targets or future development and/or otherwise are not statements of historical
fact. These forward-looking statements are based on our current expectations and projections about future events and they are
subject to risks and uncertainties known and unknown that could cause actual results and developments to differ materially from
those expressed or implied in such statements.
In
some cases, you can identify forward-looking statements by terminology, such as “expects,” “anticipates,”
“intends,” “estimates,” “plans,” “believes,” “seeks,” “may,”
“should,” “could” or the negative of such terms or other similar expressions. Accordingly, these statements
involve estimates, assumptions and uncertainties that could cause actual results to differ materially from those expressed in
such statements. Any forward-looking statements are only estimates or predictions of future events based on information currently
available to our management and management’s current beliefs about the potential outcome of future events.
You
should read this prospectus supplement, the accompanying prospectus and the documents that we reference herein and therein and
have filed as exhibits to the registration statement, of which this prospectus supplement forms a part, completely and with the
understanding that our actual future results may be materially different from what we expect. You should assume that the information
appearing in this prospectus supplement and any accompanying prospectus is accurate as of the date on the front cover of this
prospectus supplement. Because the risk factors referred to above, as well as the risk factors referred to on page S-4 of this
prospectus supplement and incorporated herein by reference, could cause actual results or outcomes to differ materially from those
expressed in any forward-looking statements made by us or on our behalf, you should not place undue reliance on any forward-looking
statements. Further, any forward-looking statement speaks only as of the date on which it is made, and except as may be required
under applicable securities laws, we undertake no obligation to update any forward-looking statement to reflect events or circumstances
after the date on which the statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time
to time, and it is not possible for us to predict which factors will arise. In addition, we cannot assess the impact of each factor
on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. We qualify all of the information presented in this prospectus supplement and
the accompanying prospectus, and particularly our forward-looking statements, by these cautionary statements.
PROSPECTUS
SUPPLEMENT SUMMARY
This
summary highlights information contained elsewhere or incorporated by reference into this prospectus supplement and the accompanying
prospectus. This summary does not contain all of the information that you should consider before deciding to invest in our securities.
You should read this entire prospectus supplement and the accompanying prospectus carefully, including the “Risk Factors”
section contained in this prospectus supplement and our consolidated financial statements and the related notes and the other
documents incorporated by reference into this prospectus supplement and the accompanying prospectus. Unless we have indicated
otherwise or the context otherwise requires, references in this prospectus supplement, the accompanying prospectus or the documents
incorporated by reference herein and therein to the “Company,” “Meridian,” “we,” “us”
and “our” refer to Meridian Waste Solutions, Inc. and its subsidiaries.
Overview
Meridian
Waste Solutions, Inc., through its operating subsidiaries, is an integrated provider of non-hazardous solid waste collection,
transfer and disposal services. We currently have all of our operations in Missouri and Virginia but are actively looking to expand
our presence across the Midwest, South and East regions of the United States.
Meridian,
through its subsidiaries, provides solid waste collection services to approximately 65,000 industrial, commercial and residential
customers in the Metropolitan St. Louis, Missouri area, and, recently, approximately 33,000 in Virginia. Our transfer stations
allow us to consolidate waste for subsequent transfer in larger loads, thereby making disposal in our otherwise remote landfills
economically feasible. We now have three active and strategically located landfills, with substantial remaining airspace at the
core of our integrated operations which we believe provides us a significant competitive advantage, in that we do not need to
use our competitors’ landfills.
Recent
Developments
Certain
Preliminary Financial Results and Recent Developments
As
of May 31, 2017, we had approximately $1,100,000 in cash, cash equivalents, restricted cash and short- and long-term investments.
This amount is unaudited and preliminary, is subject to completion of financial closing procedures that could result in changes
to the amount, and does not present all information necessary for an understanding of our financial condition as of May 31,
2017.
Acquisition
of Mobile Science Technologies, Inc. via Share Exchange
On
April 21, 2017, we entered into a share exchange agreement (the “Share Exchange Agreement”) with Mobile Science Technologies,
Inc., a Georgia corporation (“MSTI”) and its shareholders. Pursuant to the Share Exchange Agreement, the Company purchased
28,333,333 shares of MSTI in exchange for 1,083,017 shares of the Company’s common stock (the “Purchase Shares”),
valued at $2.90 per share, to be paid to MSTI selling shareholders (the “MSTI Selling Shareholders”). In accordance
with the payment schedule contained in the Share Exchange Agreement, 403,864 of the Purchase Shares were issued as of the closing
date, with the remaining 679,153 Purchase Shares to be issued upon certain milestones; however, if the milestones are not attained,
such Purchase Shares will be issued on April 21, 2018. The Selling Shareholders included Walter H. Hall, Jr., the Company’s
President, Chief Operating Officer and a director, and four limited liability companies managed by Jeffrey Cosman, the Company’s
Chief Executive Officer and Chairman. Upon closing of the Share Exchange Agreement, the Company assumed all financial and contractual
obligations of MSTI incurred both prior to and after the closing. Prior to its entering into the Share Exchange Agreement, the
Company owned 5,000,000 shares of MSTI, or 15% of the issued and outstanding stock of MSTI; as a result of the closing of the
Share Exchange Agreement the Company became the owner of 100% of the shares of MSTI. Prior to the approval of the Share Exchange
Agreement by the Company’s Board of Directors and the Company’s entry into the Share Exchange Agreement, the Company
obtained a fairness opinion from a third party investment bank opining that the consideration to be paid by the Company in the
Share Exchange Agreement is fair from a financial point of view.
Chris
Diaz –Employment Agreement
Effective
as of April 18, 2017, the Board appointed Mr. Chris Diaz as Chief Financial Officer of the Company (the “Diaz Appointment”),
in connection with the resignation of Joseph D’Arelli from such position as of such effective date. In connection with such
appointment, the Company entered into an Employment Agreement, dated April 18, 2017, with Mr. Diaz (the “Diaz Employment
Agreement”). The Diaz Employment Agreement may be terminated by either party at any time without prior notice. Mr. Diaz
will receive a base salary of $265,000 and
is
also eligible for an annual cash incentive bonus in the amount of up to
$65,000
,
as well as a monthly automobile allowance of $1,000 and reimbursement of relocation expenses in an amount not to exceed $20,000.
Mr.
Diaz, age 51, brings 27 years of experience, including more than nine years’ experience in the waste industry.
Previously, Mr. Diaz was the Corporate Controller for Advanced Disposal Services, Inc., a publicly-traded environmental services
company, from 2008 to 2017. He has also held financial reporting and auditing positions, with Skinner Nurseries, Inc., where he
served as Controller from 2000 to 2008, and CSX Transportation, where he was a Manager, Financial Reporting from 1998 to 2002
and Senior Internal Auditor from 1996 to 1998. Mr. Diaz began his career as an auditor with the national accounting firm McGladrey
& Pullen, LLP, where he worked from 1990 to 1996. Mr. Diaz holds an MBA and bachelor’s degree from the University
of North Florida. He is a certified public accountant.
Corporate
Information
The
Company was incorporated in the State of New York on November 12, 1993, under the name CIP, Inc. On February 1, 1995, the Company
filed a Certificate of Amendment to its Certificate of Incorporation changing its name to Desserts and Cafes, Inc. On
August 17, 1996, the Company filed a Certificate of Amendment to its Certificate of Incorporation changing its name to William
Greenberg Jr. Desserts and Cafes, Inc. On July 28, 1997, the Company filed a Certificate of Amendment to its Certificate of Incorporation
changing its name to Creative Bakeries, Inc. On February 18, 2005, the Company filed a Certificate of Amendment to its Certificate
of Incorporation changing its name to Brooklyn Cheesecake & Desserts Company, Inc. On March 27, 2015, the Company filed a
Certificate of Amendment to its Certificate of Incorporation changing its name to Meridian Waste Solutions, Inc. Our principal
executive office is located at One Glenlake Parkway NE, Suite 900, Atlanta, GA 30328, and our telephone number is (770) 691-6350.
Our Internet address is
www.mwsinc.com
. Our web site and the information contained in, or accessible through, our
website will not be deemed to be incorporated by reference into this prospectus and does not constitute part of this prospectus.
THE
OFFERING
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Common
stock offered by us
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shares
of common stock (or shares if the representatives exercise their option to purchase
additional shares in full).
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Over-allotment
option
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We
have granted the underwriters a 45-day option to purchase up to additional
shares at the public offering price less underwriting discounts and commissions.
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Common stock to
be outstanding immediately after this offering
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shares.
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Use of proceeds
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We
intend to use the net proceeds of this offering for capital expenditures, tuck-in acquisitions, repayment of indebtedness,
and working capital. See “Use of Proceeds” on page S-13.
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Risk factors
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Investing
in our securities is highly speculative and involves a high degree of risk. You should carefully consider the information
set forth in the “Risk Factors” section beginning on page S-4 of this prospectus supplement and other information
included or incorporated by reference into this prospectus supplement before deciding to invest in our securities.
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NASDAQ Capital
Market Trading Symbol
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MRDN
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Lock-up Agreements
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We
and our directors and officers will enter into lock-up agreements with a representative of the underwriters prohibiting the
sale of common stock for a period of 90 days commencing on the date of the underwriting agreement.
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Unless we indicate otherwise, all information
in this prospectus is based on 7,342,920 shares of common stock outstanding as of June 22, 2017:
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assumes no exercise by the underwriters of their option to purchase up to an additional shares of our common stock to cover over-allotments;
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excludes 3,112,871 warrants to purchase shares of our common stock at a price of $5.16 per share; and
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excludes 12,250 shares of our common stock issuable upon exercise of outstanding stock options under our equity incentive plan at a weighted average exercise price of $19.35 per share, with 41,078 shares remaining available for future grant under such plan.
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Except
as otherwise indicated, all information in this prospectus supplement assumes no exercise of the underwriters’ warrants
to be issued to the underwriters in connection with this offering.
RISK
FACTORS
You
should carefully consider the risks described below before making an investment decision. The risks described below are not the
only ones we face. Additional risks we are not presently aware of or that we currently believe are immaterial may also impair
our business operations. Our business could be harmed by any of these risks. The trading price of our common stock could decline
due to any of these risks, and you may lose all or part of your investment. In assessing these risks, you should also refer to
the risk factors and other information contained or incorporated by reference into this prospectus supplement and the accompanying
prospectus, specifically including the risk factors contained in our Quarterly Report on Form 10-Q for the period ended March
31, 2017 filed with the SEC on May 22, 2017 and our Annual Report on Form 10-K for the year ended December 31, 2016 filed with
the SEC on April 17, 2017 and the financial statements and related notes filed therewith.
RISKS
Relating to this Offering
Management
will have broad discretion as to the use of the proceeds from this offering, and we may not use the proceeds effectively.
Our
management will have broad discretion in the application of the net proceeds from this offering and could spend the proceeds in
ways that you do not agree with or that do not improve our results of operations or enhance the value of our common stock (see
“Use of Proceeds”). Our failure to apply these funds effectively could have a material adverse effect on our business
and cause the price of our common stock to decline.
You
will experience immediate and substantial dilution in the net tangible book value per share of the common stock you purchase.
Since
the price per share of our common stock being offered is higher than the net tangible book value per share of our common stock,
you will suffer substantial dilution in the net tangible book value of the common stock you purchase in this offering. Based on
the public offering price of $ per share, and after deducting the underwriting discount and
estimated offering expenses payable by us, if you purchase shares of common stock in this offering, you will suffer immediate
and substantial dilution of $ per share in the net tangible book value of the common stock.
See the section entitled “Dilution” in this prospectus supplement for a more detailed discussion of the dilution you
will incur if you purchase common stock in this offering.
Future
sales of substantial amounts of our common stock could adversely affect the market price of our common stock.
Future
sales of substantial amounts of our common stock, or securities convertible or exchangeable into shares of our common stock, into
the public market, including shares of our common stock issued upon exercise of options, or perceptions that those sales could
occur, could adversely affect the prevailing market price of our common stock and our ability to raise capital in the future.
RISKS
RELATED TO OUR COMPANY AND OUR INDUSTRY
WE
ARE SUBJECT TO ENVIRONMENTAL AND SAFETY LAWS, WHICH RESTRICT OUR OPERATIONS AND INCREASE OUR COSTS.
We
are subject to extensive federal, state and local laws and regulations relating to environmental protection and occupational safety
and health. These include, among other things, laws and regulations governing the use, treatment, storage and disposal of wastes
and materials, air quality, water quality and the remediation of contamination associated with the release of hazardous substances.
Our compliance with existing regulatory requirements is costly, and continued changes in these regulations could increase our
compliance costs. Government laws and regulations often require us to enhance or replace our equipment. We are required to obtain
and maintain permits that are subject to strict regulatory requirements and are difficult and costly to obtain and maintain. We
may be unable to implement price increases sufficient to offset the cost of complying with these laws and regulations. In addition,
regulatory changes could accelerate or increase expenditures for closure and post-closure monitoring at solid waste facilities
and obligate us to spend sums over the amounts that we have accrued. In order to develop, expand or operate a landfill or other
waste management facility, we must have various facility permits and other governmental approvals, including those relating to
zoning, environmental protection and land use. The permits and approvals are often difficult, time consuming and costly to obtain
and could contain conditions that limit our operations.
WE
MAY BECOME SUBJECT TO ENVIRONMENTAL CLEAN-UP COSTS OR LITIGATION THAT COULD CURTAIL OUR BUSINESS OPERATIONS AND MATERIALLY DECREASE
OUR EARNINGS.
CERCLA,
and analogous state laws provide for the remediation of contaminated facilities and impose strict joint and several liability
for remediation costs on current and former owners or operators of a facility at which there has been a release or a threatened
release of a hazardous substance. This liability is also imposed on persons who arrange for the disposal of and who transport
such substances to the facility. Hundreds of substances are defined as hazardous under CERCLA and their presence, even in small
amounts, can result in substantial liability. The expense of conducting a cleanup can be significant. Notwithstanding our efforts
to comply with applicable regulations and to avoid transporting and receiving hazardous substances, we may have liability because
these substances may be present in waste collected by us. The actual costs for these liabilities could be significantly greater
than the amounts that we might be required to accrue on our financial statements from time to time.
In
addition to the costs of complying with environmental regulations, we may incur costs to defend against litigation brought by
government agencies and private parties. As a result, we may be required to pay fines or our permits and licenses may be modified
or revoked. We may in the future be a defendant in lawsuits brought by governmental agencies and private parties who assert claims
alleging environmental damage, personal injury, property damage and/or violations of permits and licenses by us. A significant
judgment against us, the loss of a significant permit or license or the imposition of a significant fine could curtail our business
operations and may decrease our earnings.
OUR
BUSINESS IS CAPITAL INTENSIVE, REQUIRING ONGOING CASH OUTLAYS THAT MAY STRAIN OR CONSUME OUR AVAILABLE CAPITAL AND FORCE US TO
SELL ASSETS, INCUR DEBT, OR SELL EQUITY ON UNFAVORABLE TERMS.
Our
ability to remain competitive, grow and maintain operations largely depends on our cash flow from operations and access to capital.
Maintaining our existing operations and expanding them through internal growth or acquisitions requires large capital expenditures.
As we undertake more acquisitions and further expand our operations, the amount we expend on capital will increase. These increases
in expenditures may result in lower levels of working capital or require us to finance working capital deficits. We intend to
continue to fund our cash needs through cash flow from operations and borrowings under our credit facility, if necessary. However,
we may require additional equity or debt financing to fund our growth.
We
do not have complete control over our future performance because it is subject to general economic, political, financial, competitive,
legislative, regulatory and other factors. It is possible that our business may not generate sufficient cash flow from operations,
and we may not otherwise have the capital resources, to allow us to make necessary capital expenditures. If this occurs, we may
have to sell assets, restructure our debt or obtain additional equity capital, which could be dilutive to our stockholders. We
may not be able to take any of the foregoing actions, and we may not be able to do so on terms favorable to us or our stockholders.
THE
COMPANY’S FAILURE TO COMPLY WITH THE RESTRICTIVE COVENANTS AND OTHER OBLIGATIONS UNDER THE CREDIT AGREEMENT MAY RESULT IN
THE FORECLOSURE OF THE COMPANY’S OR ITS SUBSIDIARIES’ PLEDGED ASSETS AND OTHER ADVERSE CONSEQUENCES.
Pursuant
to the current Credit Agreement, the Lenders have agreed to extend certain credit facilities to the Company, in an aggregate amount
not to exceed $89,100,000, consisting of $65,500,000 aggregate principal amount of Tranche A Term Loans (the “Tranche A
Term Loans”), $8,600,000 aggregate principal amount of Tranche B Term Loans (the “Tranche B Term Loans”), $10,000,000
aggregate principal amount of MultiDraw Term Loans (the “MDTL Term Loans”), and up to $5,000,000 aggregate principal
amount of Revolving Loans (the “Revolving Loans ” and, together with the Tranche A Term Loans, Tranche B Term Loans
and the MDTL Term Loans, the “Loans”). As of December 31, 2016, we had an outstanding principal balance of $43,195,000
under the Loans as in effect at such time, which is secured by a first position security interest in substantially all of the
Company’s assets in favor of Goldman Sachs Specialty Group, LP (“GS”), as collateral agent, for the benefit
of the lenders and other secured parties. The Credit Agreement requires us to comply with a number of covenants, including restrictive
covenants that limit our ability to, among other things: incur additional indebtedness; create or permit liens on assets;
make investments; and pay dividends. A breach of any of these covenants or our inability to comply with the required financial
ratios set forth in the Credit Agreement and related documents or the occurrence of certain other specified events could result
in an event of default under the Credit Agreement (an “Event of Default”). Events of Default under the Credit Agreement
also include, without limitation, the Company’s failure to make payments when due, defaults under other agreements, bankruptcy,
changes of control and termination of a material contract. Due to our recent failures to comply with the leverage ratio and certain
other covenants required under the Prior Credit Agreement, we entered into several amendments thereto. Any future Event(s) of
Default under the Credit Agreement, could result in the acceleration of all or a substantial portion of our debt, potential foreclosure
on our assets and other adverse consequences.
IF
THE COMPANY IS NOT ABLE TO MAINTAIN CERTAIN LEVERAGE RATIOS SET FORTH IN THE CREDIT AGREEMENT, WE ME BE UNABLE TO DRAW DOWN ADDITIONAL
FUNDS PURSUANT TO THE CREDIT AGREEMENT, AND AS A RESULT, WE MAY NEED TO SEEK OTHER SOURCES OF CAPITAL, WHICH COULD BE ON LESS
FAVORABLE TERMS.
As
a result of the Company’s failure historically to comply with the leverage ratio under the Prior Credit Agreement, the Company
was able to draw down additional funds under the Prior Credit Agreement solely as the result of the execution of the Fourth Amendment.
Although the Credit Agreement currently provides for increased leverage ratios, in the future, the Company may not be able to
draw down additional funds pursuant to the Credit Agreement until such time as either such leverage ratio complies with the requirements
of the Credit Agreement and the Company can show that it reasonably expects to be in pro forma compliance with such ratios or
the requisite lenders under the Credit Agreement waive such requirement or otherwise consent to advance additional funds (the
Lenders under our Credit Agreement having no requirement to grant such a consent or waiver and there can be no assurance that
any such consent or waiver would be forthcoming). Due to certain unanticipated delays in integration of landfill operations, including
due to flooding in the St. Louis area in December 2015, the Company had historically not been able to maintain the leverage ratios
set forth in the Prior Credit Agreement. The Company’s ability to maintain leverage ratios under the Credit Agreement may
be beyond the Company’s control. If the Company is unable to draw down additional funds pursuant to the Credit Agreement,
it may be required to seek other sources of capital, and such capital may only be available on terms that are substantially less
favorable than the terms of the Credit Agreement.
WE
DEPEND ON A LIMITED NUMBER OF CUSTOMERS FOR OUR REVENUE.
At
this time, the Company has a municipal contract that accounts for 11% of our long term contracted revenues for the fiscal year
ended December 31, 2016. Because we depend on this customer for a large portion of our revenue, a loss of this customer could
materially adversely affect our business and financial condition. If this customer were to cease using our services, our business
could be materially adversely affected.
GOVERNMENTAL
AUTHORITIES MAY ENACT CLIMATE CHANGE REGULATIONS THAT COULD INCREASE OUR COSTS TO OPERATE.
Environmental
advocacy groups and regulatory agencies in the United States have been focusing considerable attention on the emissions of greenhouse
gases and their potential role in climate change. Congress has considered recent proposed legislation directed at reducing greenhouse
gas emissions and President Obama had indicated his support of legislation aimed at reducing greenhouse gases. EPA has proposed
rules to regulate greenhouse gases, regional initiatives have formed to control greenhouse gases and certain of the states in
which we operate are contemplating air pollution control regulations that are more stringent than existing and proposed federal
regulations, in particular the regulation of emissions of greenhouse gases. The adoption of laws and regulations to implement
controls of greenhouse gases, including the imposition of fees or taxes, could adversely affect our collection operations. Changing
environmental regulations could require us to take any number of actions, including the purchase of emission allowances or installation
of additional pollution control technology, and could make some operations less profitable, which could adversely affect our results
of operations.
OUR
OPERATIONS ARE SUBJECT TO ENVIRONMENTAL, HEALTH AND SAFETY LAWS AND REGULATIONS, AS WELL AS CONTRACTUAL OBLIGATIONS THAT MAY RESULT
IN SIGNIFICANT LIABILITIES.
We
risk incurring significant environmental liabilities in connection with our use, treatment, storage, transfer and disposal of
waste materials. Under applicable environmental laws and regulations, we could be liable if our operations are found to cause
environmental damage to our properties or to the property of other landowners, particularly as a result of the contamination of
air, drinking water or soil. Under current law, we could also be held liable for damage caused by conditions that existed before
we acquired the assets or operations involved. This risk is of particular concern as we execute our growth strategy, partially
though acquisitions, because we may be unsuccessful in identifying and assessing potential liabilities during our due diligence
investigations. Further, the counterparties in such transactions may be unable to perform their indemnification obligations owed
to us. Additionally, we could be liable if we arrange for the transportation, disposal or treatment of hazardous substances that
cause environmental contamination, or if a predecessor owner made such arrangements and, under applicable law, we are treated
as a successor to the prior owner. Any substantial liability for environmental damage could have a material adverse effect on
our financial condition, results of operations and cash flows.
OUR
BUSINESS IS SUBJECT TO OPERATIONAL AND SAFETY RISKS, INCLUDING THE RISK OF PERSONAL INJURY TO EMPLOYEES AND OTHERS.
Providing
environmental and waste management services, including operating landfills, involves risks such as vehicular accidents and equipment
defects, malfunctions and failures. Additionally, there are risks associated with waste mass instability and releases of hazardous
materials or odors. There may also be risks presented by the potential for subsurface chemical reactions causing elevated landfill
temperatures and increased production of leachate, landfill gas and odors. Any of these risks could potentially result in injury
or death of employees and others, a need to shut down or reduce operation of facilities, increased operating expense and exposure
to liability for pollution and other environmental damage, and property damage or destruction.
While
we seek to minimize our exposure to such risks through comprehensive training, compliance and response and recovery programs,
as well as vehicle and equipment maintenance programs, if we were to incur substantial liabilities in excess of any applicable
insurance, our business, results of operations and financial condition could be adversely affected. Any such incidents could also
adversely impact our reputation and reduce the value of our brand. Additionally, a major operational failure, even if suffered
by a competitor, may bring enhanced scrutiny and regulation of our industry, with a corresponding increase in operating expense.
INCREASES
IN THE COSTS OF FUEL MAY REDUCE OUR OPERATING MARGINS.
The
price and supply of fuel needed to run our collection vehicles is unpredictable and fluctuates based on events outside our control,
including geopolitical developments, supply and demand for oil and gas, actions by OPEC and other oil and gas producers, war and
unrest in oil producing countries, regional production patterns and environmental concerns. Any significant price escalations
or reductions in the supply could increase our operating expenses or interrupt or curtail our operations. Failure to offset all
or a portion of any increased fuel costs through increased fees or charges would reduce our operating margins.
CHANGES
IN INTEREST RATES WOULD AFFECT OUR PROFITABILITY.
Our
acquisitions could require us to incur substantial additional indebtedness in the future, which will increase our interest expense.
Further, to the extent that these borrowings are subject to variable rates of interest, increases in interest rates will increase
our interest expense, which will affect our profitability. We bear exposure to, and are primarily affected by, changes in LIBOR
rates.
INCREASES
IN THE COSTS OF DISPOSAL MAY REDUCE OUR OPERATING MARGINS.
In
2016, we disposed of approximately 70% of the waste that we collect in landfills operated by others, and that rate may not
decrease significantly in the future. We may incur increases in disposal fees paid to third parties. Failure to pass these costs
on to our customers may reduce our operating margins. In December 2015, the Company purchased Eagle Ridge Landfill, LLC and, in
February 2017, the Company purchased two landfills located in Virginia, as part of the Company’s strategy to internalize
a majority of its volume. As of July 2016, the Company has begun to move its volume away from third party landfills. Going forward,
the Company may not internalize its volume in its own landfills to the extent desired, which may limit the expected savings it
anticipated from the acquisition of Eagle Ridge Landfill, LLC and the CFS Group.
INCREASES
IN THE COSTS OF LABOR MAY REDUCE OUR OPERATING MARGINS.
We
compete with other businesses in our markets for qualified employees. A shortage of qualified employees would require us to enhance
our wage and benefits packages to compete more effectively for employees or to hire more expensive temporary employees. Labor
is our second largest operating cost, and even relatively small increases in labor costs per employee could materially affect
our cost structure. Failure to attract and retain qualified employees, to control our labor costs, or to recover any increased
labor costs through increased prices we charge for our services or otherwise offset such increases with cost savings in other
areas may reduce our operating margins.
INCREASES
IN COSTS OF INSURANCE WOULD REDUCE OUR OPERATING MARGINS.
One
of our largest operating costs is for insurance coverage, including general liability, automobile physical damage and liability,
property, employment practices, pollution, directors and officers, fiduciary, workers’ compensation and employer’s
liability coverage, as well as umbrella liability policies to provide excess coverage over the underlying limits contained in
our primary general liability, automobile liability and employer’s liability policies. Changes in our operating experience,
such as an increase in accidents or lawsuits or a catastrophic loss, could cause our insurance costs to increase significantly
or could cause us to be unable to obtain certain insurance. Increases in insurance costs would reduce our operating margins. Changes
in our industry and perceived risks in our business could have a similar effect.
WE
MAY NOT BE ABLE TO MAINTAIN SUFFICIENT INSURANCE COVERAGE TO COVER THE RISKS ASSOCIATED WITH OUR OPERATIONS, WHICH COULD RESULT
IN UNINSURED LOSSES THAT WOULD ADVERSELY AFFECT OUR FINANCIAL CONDITION.
Integrated
non-hazardous waste companies are exposed to a variety of risks that are typically covered by insurance arrangements. However,
we may not be able to maintain sufficient insurance coverage to cover the risks associated with our operations for a variety of
reasons. Increases in insurance costs and changes in the insurance markets may, given our resources, limit the coverage that we
are able to maintain or prevent us from insuring against certain risks. Large or unexpected losses may exceed our policy limits,
adversely affecting our results of operations, and may result in the termination or limitation of coverage, exposing us to uninsured
losses, thereby adversely affecting our financial condition.
OUR
FAILURE TO REMAIN COMPETITIVE WITH OUR NUMEROUS COMPETITORS, SOME OF WHOM HAVE GREATER RESOURCES, COULD ADVERSELY AFFECT OUR ABILITY
TO RETAIN EXISTING CUSTOMERS AND OBTAIN FUTURE BUSINESS.
Because
our industry is highly competitive, we compete with large companies and municipalities, many of whom have greater financial and
operational resources. The non-hazardous solid waste collection and disposal industry includes large national, publicly-traded
waste management companies; regional, publicly-held and privately-owned companies; and numerous small, local, privately-owned
companies. Additionally, many counties and municipalities operate their own waste collection and disposal facilities and have
competitive advantages not available to private enterprises. If we are unable to successfully compete against our competitors,
our ability to retain existing customers and obtain future business could be adversely affected.
WE
MAY LOSE CONTRACTS THROUGH COMPETITIVE BIDDING, EARLY TERMINATION OR GOVERNMENTAL ACTION, OR WE MAY HAVE TO SUBSTANTIALLY LOWER
PRICES IN ORDER TO RETAIN CERTAIN CONTRACTS, ANY OF WHICH WOULD CAUSE OUR REVENUE TO DECLINE.
We
are party to contracts with municipalities and other associations and agencies. Many of these contracts are or will be subject
to competitive bidding. We may not be the successful bidder, or we may have to substantially lower prices in order to be the successful
bidder. In addition, some of our customers may terminate their contracts with us before the end of the contract term. If we are
not able to replace revenue from contracts lost through competitive bidding or early termination or from lowering prices or from
the renegotiation of existing contracts with other revenue within a reasonable time period, our revenue could decline.
Municipalities
may annex unincorporated areas within counties where we provide collection services, and as a result, our customers in annexed
areas may be required to obtain service from competitors who have been franchised or contracted by the annexing municipalities
to provide those services. Some of the local jurisdictions in which we currently operate grant exclusive franchises to collection
and disposal companies, others may do so in the future, and we may enter markets where franchises are granted by certain municipalities.
Unless we are awarded a franchise by these municipalities, we will lose customers, which will cause our revenue to decline.
We
were unable to win the renewal of an agreement to which we had been party, for the operation of a transfer station, that expired
in the fourth quarter of 2016. Accordingly, we will be forced to utilize other transfer stations which could cause our revenue
to decline.
EFFORTS
BY LABOR UNIONS TO ORGANIZE OUR EMPLOYEES COULD DIVERT MANAGEMENT ATTENTION AND INCREASE OUR OPERATING EXPENSES.
We
do not have any union representation in our operations. Groups of employees may seek union representation in the future, and the
negotiation of collective bargaining agreements could divert management attention and result in increased operating expenses and
lower net income. If we are unable to negotiate acceptable collective bargaining agreements, we might have to wait through “cooling
off” periods, which are often followed by union-initiated work stoppages, including strikes. Depending on the type and duration
of these work stoppages, our operating expenses could increase significantly.
POOR
DECISIONS BY OUR REGIONAL AND LOCAL MANAGERS COULD RESULT IN THE LOSS OF CUSTOMERS OR AN INCREASE IN COSTS, OR ADVERSELY AFFECT
OUR ABILITY TO OBTAIN FUTURE BUSINESS.
We
manage our operations on a decentralized basis. Therefore, regional and local managers have the authority to make many decisions
concerning their operations without obtaining prior approval from executive officers. Poor decisions by regional or local managers
could result in the loss of customers or an increase in costs, or adversely affect our ability to obtain future business.
WE
ARE VULNERABLE TO FACTORS AFFECTING OUR LOCAL MARKETS, WHICH COULD ADVERSELY AFFECT OUR STOCK PRICE RELATIVE TO OUR COMPETITORS.
Because
the non-hazardous waste business is local in nature, our business in one or more regions or local markets may be adversely affected
by events and economic conditions relating to those regions or markets even if the other regions of the country are not affected.
As a result, our financial performance may not compare favorably to our competitors with operations in other regions, and our
stock price could be adversely affected by our inability to compete effectively with our competitors.
SEASONAL
FLUCTUATIONS WILL CAUSE OUR BUSINESS AND RESULTS OF OPERATIONS TO VARY AMONG QUARTERS, WHICH COULD ADVERSELY AFFECT OUR STOCK
PRICE.
Based
on historic trends experienced by the businesses we have acquired, we expect our operating results to vary seasonally, with revenue
typically lowest in the first quarter, higher in the second and third quarters, and again lower in the fourth quarter. This seasonality
generally reflects the lower volume of waste during the winter months. Adverse weather conditions negatively affect waste collection
productivity, resulting in higher labor and operational costs. The general increase in precipitation during the winter months
increases the weight of collected waste, resulting in higher disposal costs, as costs are often calculated on a per ton basis.
Because of these factors, we expect operating income to be generally lower in the winter months. As a result, our operating results
may be negatively affected by these variations. Additionally, severe weather during any time of the year can negatively affect
the costs of collection and disposal and may cause temporary suspensions of our collection services. Long periods of inclement
weather may interfere with collection operations and reduce the volume of waste generated by our customers. Any of these conditions
can adversely affect our business and results of operations, which could negatively affect our stock price.
WE
ARE DEPENDENT ON OUR MANAGEMENT TEAM AND DEVELOPMENT AND OPERATIONS PERSONNEL, AND THE LOSS OF ONE OR MORE KEY EMPLOYEES OR GROUPS
COULD HARM OUR BUSINESS AND PREVENT US FROM IMPLEMENTING OUR BUSINESS PLAN IN A TIMELY MANNER.
Our
success depends substantially upon the continued services of our executive officers and other key members of management, particularly
our Chief Executive Officer, Mr. Jeffrey S. Cosman. From time to time, there may be changes in our executive management team resulting
from the hiring or departure of executives. Such changes in our executive management team may be disruptive to our business. We
are also substantially dependent on the continued service of our existing development and operations personnel because of the
complexity of our service and technologies. We have an employment agreement with Mr. Cosman. We maintain a key person life insurance
policy on Mr. Cosman. The loss of one or more of our key employees or groups could seriously harm our business.
WE
HAVE IDENTIFIED CERTAIN MATERIAL WEAKNESSES IN OUR INTERNAL CONTROLS, WHICH COULD CAUSE STOCKHOLDERS AND PROSPECTIVE INVESTORS
TO LOSE CONFIDENCE IN THE RELIABILITY OF OUR FINANCIAL REPORTING.
Currently,
the Company has an Audit Committee to oversee the financial reporting process; however, for much of the year ended December 31,
2016, the Company did not have an Audit Committee. Additionally, during the year ended December 31, 2016, certain related party
transactions and significant corporate transactions were not formerly authorized and approved by the Board of Directors before
execution (although authorization and approval was ultimately obtained). Our finance and accounting department is understaffed
and accordingly we cannot maintain sufficient segregation of duties within the financial reporting process. During the year ended
December 31, 2016, there was a lack of effective monitoring review controls with respect to accounting for complex transactions
and preparation of the financial statements and the financial statement disclosures. Because of the material weaknesses described
above, management believes that, as of December 31, 2016, we did not maintain effective internal control over financial reporting
based on the COSO (2013) criteria.
Accordingly,
based on these material weaknesses, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls
and procedures were not effective during the period ended December 31, 2016, to ensure that information required to be disclosed
by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time
periods specified in the SEC’s rules.
To
address these weaknesses, the Company's management has added independent Directors so that the Company will have an Audit Committee
that meets regulatory requirements for independence and financial expert experience. The Company also started the process of retaining
additional staff to assist its internal staff with compliance issues. Management has reported to the Audit Committee the content
of the material weaknesses identified in our assessment. Addressing these weaknesses is a priority of management and we are in
the process of remediating the cited material weaknesses. For example, as noted above, an Audit Committee has been established.
The Company is also actively evaluating its internal control structure to identify the need for additional resources to ensure
appropriate segregation of duties.
If
these material weaknesses are not resolved to satisfaction of the Company’s stockholders and prospective investors, such
stockholders and prospective investors could lose confidence in our financial reporting.
OUR
BUSINESS IS SUBJECT TO CHANGING REGULATIONS REGARDING CORPORATE GOVERNANCE AND PUBLIC DISCLOSURE THAT HAVE INCREASED BOTH OUR
COSTS AND THE RISK OF NON-COMPLIANCE.
We
are subject to rules and regulations by various governing bodies, including, for example, the Securities and Exchange Commission,
which are charged with the protection of investors and the oversight of companies whose securities are publicly traded. Our efforts
to comply with new and changing regulations have resulted in and are likely to continue to result in, increased general and administrative
expenses and a diversion of management time and attention from revenue-generating activities to compliance activities. Moreover,
because these laws, regulations and standards are subject to varying interpretations, their application in practice may evolve
over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters
and additional costs necessitated by ongoing revisions to our disclosure and governance practices. If we fail to address and comply
with these regulations and any subsequent changes, our business may be harmed.
WE
NEED ADDITIONAL CAPITAL TO DEVELOP OUR BUSINESS.
The
development of our services will require the commitment of substantial resources to implement our business plan. In addition,
substantial expenditures will be required to enable us to complete projects in the future. Currently, we have a credit agreement
with Goldman Sachs Specialty Lending Group. However, it is likely we would need to seek additional financing through subsequent
future private or public offerings of our equity securities or through strategic partnerships and other arrangements with corporate
partners.
We
cannot give any assurance that any additional financing will be available to us, or if available, will be on terms favorable to
us. The sale of additional equity securities will result in dilution to our stockholders. The occurrence of indebtedness would
result in increased debt service obligations and could require us to agree to operating and financing covenants that would restrict
our operations. If adequate additional financing is not available on acceptable terms, we may not be able to implement our business
development plan or continue our business operations.
OUR
RECENT STRATEGIC ACQUISITION OF MOBILE SCIENCE TECHNOLOGIES, INC. INVOLVES SIGNIFICANT RISKS AND UNCERTAINTIES.
Executing
strategic acquisitions, such as our recent acquisition of Mobile Science Technologies, Inc. via share exchange, carries significant
risks and uncertainties, which include:
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difficulty
in integrating newly acquired businesses and operations, including combining product and service offerings, and in entering
into new markets in which we are not experienced, in an efficient and cost-effective manner while maintaining adequate standards,
controls and procedures, and the risk that we encounter significant unanticipated costs or other problems associated with
integration;
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challenges
in achieving strategic objectives, cost savings and other benefits expected from acquisitions;
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risk
that our business does not evolve as anticipated and that the strategic acquisitions do not prove to be those needed to be
successful;
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risk
that we assume significant liabilities that exceed the limitations of any applicable indemnification provisions or the financial
resources of any indemnifying parties;
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risk
of diverting the attention of senior management and other resources from our existing operations;
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risk
that the industry may develop in a different direction than anticipated and that the technologies we acquire do not prove
to be those we need to be successful in the industry;
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risk
that future valuations of acquired businesses may decrease from the price we paid for these acquisitions;
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generation
of insufficient revenues by acquired businesses to offset increased operating expenses associated with these acquisitions;
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potential
difficulties in completing in-process research and development projects and delivering high quality products to our customers;
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potential
difficulties in integrating new operations, personnel and/or technologies in an efficient and effective manner; and
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unanticipated
costs.
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Our
inability to successfully operate and integrate newly-acquired businesses appropriately, effectively and in a timely manner could
have a material adverse effect on our ability to take advantage of further growth in demand for products in our marketplace, as
well as on our revenues, gross margins and expenses.
THE
OUTCOME OF LITIGATION OR ARBITRATION IN WHICH WE ARE INVOLVED OR MAY BECOME INVOLVED IS UNPREDICTABLE AND AN ADVERSE DECISION
IN ANY SUCH MATTER COULD HAVE A MATERIAL ADVERSE EFFECT ON OUR FINANCIAL CONDITION, RESULTS OF OPERATIONS AND CASH FLOWS.
From
time to time, we may become defendants in a number of litigation matters and we may become involved in a number of arbitrations.
We are currently involved in litigation in connection with a competitor’s claims related to an employee of the Company,
formerly employed by such competitor, allegedly having violated certain restrictive covenants, among other litigation matters.
The Company is vigorously defending against such claims and the Company does not expect the outcomes of these litigation matters,
in the aggregate could have a material effect on the Company or its business; however, such actions, together with actions that
may be brought in the future, may divert financial and management resources that would otherwise be used to benefit our operations.
No assurances can be given that the results of these or new matters will be favorable to us. An adverse resolution of lawsuits
or arbitrations could have a material adverse effect on our financial condition, results of operations and cash flows.
RISKS
RELATED TO OWNERSHIP OF OUR SECURITIES
THE
MARKET PRICE OF OUR COMMON STOCK IS LIKELY TO BE VOLATILE AND COULD SUBJECT US TO LITIGATION.
The
market price of our common stock has been and is likely to continue to be subject to wide fluctuations. Factors affecting the
market price of our common stock include:
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variations
in our operating results, earnings per share, cash flows from operating activities, deferred revenue, and other financial
metrics and non-financial metrics, and how those results compare to analyst expectations;
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issuances
of new stock which dilutes earnings per share;
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forward
looking guidance to industry and financial analysts related to future revenue and earnings per share;
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the
net increases in the number of customers and paying subscriptions, either independently or as compared with published expectations
of industry, financial or other analysts that cover our company.
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addition, if the stock market in general experiences uneven investor confidence, the market price of our common stock could decline
for reasons unrelated to our business, operating results or financial condition. The market price of our common stock might also
decline in reaction to events that affect other companies within, or outside, our industries even if these events do not directly
affect us. Some companies that have experienced volatility in the trading price of their stock have been the subject of securities
class action litigation. If we are to become the subject of such litigation, it could result in substantial costs and a diversion
of management’s attention and resources.
THE
OWNERSHIP BY OUR CHIEF EXECUTIVE OFFICER OF SERIES A PREFERRED STOCK WILL LIKELY LIMIT YOUR ABILITY TO INFLUENCE CORPORATE MATTERS.
Mr. Jeffrey S. Cosman, our chief executive
officer, is the beneficial owner of 100% of the outstanding shares of the Company’s Series A Preferred Stock. The entire
class of Series A Preferred Stock has voting power equivalent to that of approximately 51% of the aggregate shareholders’
voting power. As a result, our chief executive officer would have significant influence over most matters that require approval
by our stockholders, including the election of directors and approval of significant corporate transactions, even if other stockholders
oppose them. In addition, because Mr. Cosman beneficially owns approximately 17.5% of our issued and outstanding common stock,
based on the 7,342,920 shares of common stock outstanding and assuming exercise of 302,663 warrants owned by Mr. Cosman, Mr. Cosman
currently controls approximately 59.6% of the aggregate shareholders’ voting power. This concentration of ownership might
also have the effect of delaying or preventing a change of control of our company that other stockholders may view as beneficial.
ALTHOUGH
OUR SHARES AND WARRANTS HAVE BEEN APPROVED FOR LISTING ON THE NASDAQ CAPITAL MARKET, OUR SHARES MAY BE SUBJECT TO POTENTIAL DELISTING
IF WE DO NOT MEET OR CONTINUE TO MAINTAIN THE LISTING REQUIREMENTS OF THE NASDAQ CAPITAL MARKET.
Our
shares and warrants are currently listed on The Nasdaq Capital Market (“Nasdaq”); however Nasdaq has rules for
continued listing, including, without limitation, minimum market capitalization and other requirements. Failure to maintain our
listing, or delisting from Nasdaq, would make it more difficult for shareholders to dispose of our common stock and more difficult
to obtain accurate price quotations on our common stock. This could have an adverse effect on the price of our common stock. Our
ability to issue additional securities for financing or other purposes, or otherwise to arrange for any financing we may need
in the future, may also be materially and adversely affected if our common stock is not traded on a national securities exchange.
OUR
STOCK PRICE COULD FALL AND WE COULD BE DELISTED FROM NASDAQ IN WHICH CASE BECAUSE THEY MAY BE CONSIDERED PENNY STOCKS AND THUS
BE SUBJECT TO THE PENNY STOCK RULES, WHICH COULD RESULT IN U.S. BROKER-DEALERS BECOMING DISCOURAGED FROM EFFECTING TRANSACTIONS
IN SHARES OF OUR COMMON STOCK.
The
SEC has adopted a number of rules to regulate “penny stock” that restricts transactions involving stock which is deemed
to be penny stock. Such rules include Rules 3a51-1, 15g-1, 15g-2, 15g-3, 15g-4, 15g-5, 15g-6, 15g-7, and 15g-9 under the Securities
and Exchange Act of 1934, as amended. These rules may have the effect of reducing the liquidity of penny stocks. “Penny
stocks” generally are equity securities with a price of less than $5.00 per share (other than securities registered on certain
national securities exchanges or quoted on the NASDAQ Stock Market if current price and volume information with respect to transactions
in such securities is provided by the exchange or system). Our securities have in the past constituted, and may again in the future
constitute, “penny stock” within the meaning of the rules. The additional sales practice and disclosure requirements
imposed upon U.S. broker-dealers may discourage such broker-dealers from effecting transactions in shares of our common stock,
which could severely limit the market liquidity of such shares and impede their sale in the secondary market.
A
U.S. broker-dealer selling penny stock to anyone other than an established customer or “accredited investor” (generally,
an individual with net worth in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000 together with his or
her spouse) must make a special suitability determination for the purchaser and must receive the purchaser’s written consent
to the transaction prior to sale, unless the broker-dealer or the transaction is otherwise exempt. In addition, the “penny
stock” regulations require the U.S. broker-dealer to deliver, prior to any transaction involving a “penny stock”,
a disclosure schedule prepared in accordance with SEC standards relating to the “penny stock” market, unless the broker-dealer
or the transaction is otherwise exempt. A U.S. broker-dealer is also required to disclose commissions payable to the U.S. broker-dealer
and the registered representative and current quotations for the securities. Finally, a U.S. broker-dealer is required to submit
monthly statements disclosing recent price information with respect to the “penny stock” held in a customer’s
account and information with respect to the limited market in “penny stocks.”
Stockholders
should be aware that, according to the SEC, the market for “penny stocks” has suffered in recent years from patterns
of fraud and abuse. Such patterns include (i) control of the market for the security by one or a few broker-dealers that are often
related to the promoter or issuer; (ii) manipulation of prices through prearranged matching of purchases and sales and false and
misleading press releases; (iii) “boiler room” practices involving high-pressure sales tactics and unrealistic price
projections by inexperienced sales persons; (iv) excessive and undisclosed bid-ask differentials and markups by selling broker-dealers;
and (v) the wholesale dumping of the same securities by promoters and broker-dealers after prices have been manipulated to a desired
level, resulting in investor losses. Our management is aware of the abuses that have occurred historically in the penny stock
market. Although we do not expect to be in a position to dictate the behavior of the market or of broker-dealers who participate
in the market, management will strive within the confines of practical limitations to prevent the described patterns from being
established with respect to our securities.
SALES
OF OUR CURRENTLY ISSUED AND OUTSTANDING STOCK MAY BECOME FREELY TRADABLE PURSUANT TO RULE 144 AND MAY DILUTE THE MARKET FOR YOUR
SHARES AND HAVE A DEPRESSIVE EFFECT ON THE PRICE OF THE SHARES OF OUR COMMON STOCK
A
substantial majority of our outstanding shares of common stock are “restricted securities” within the meaning of Rule
144 under the Securities Act. As restricted shares, these shares may be resold only pursuant to an effective registration statement
or under the requirements of Rule 144 or other applicable exemptions from registration under the Act and as required under applicable
state securities laws. Rule 144 provides in essence that an Affiliate (as such term is defined in Rule 144(a)(1)) of an issuer
who has held restricted securities for a period of at least six months (one year after filing Form 10 information with the SEC
for shell companies and former shell companies) may, under certain conditions, sell every three months, in brokerage transactions,
a number of shares that does not exceed the greater of 1% of a company’s outstanding shares of common stock or the average
weekly trading volume during the four calendar weeks prior to the sale (the four calendar week rule does not apply to companies
quoted on the OTC Bulletin Board). Rule 144 also permits, under certain circumstances, the sale of securities, without any limitation,
by a person who is not an Affiliate of the Company and who has satisfied a one-year holding period. A sale under Rule 144 or under
any other exemption from the Act, if available, or pursuant to subsequent registrations of our shares of common stock, may have
a depressive effect upon the price of our shares of common stock in any active market that may develop. Additional shares of common
stock may be sold following the 90th day after the date of the underwriting agreement entered into in connection with this offering
pursuant to the expiration of the lock-up agreements that we and our directors and officers expect to enter into with a representative
of the underwriter. Additionally, shares of our restricted stock issued to the shareholders of Mobile Science Technologies, Inc.,
pursuant to the Share Exchange Agreement that we entered into with such company and its shareholders, may become freely tradeable
on or about October 21, 2017
YOU
MAY EXPERIENCE DILUTION OF YOUR OWNERSHIP INTEREST BECAUSE OF THE FUTURE ISSUANCE OF ADDITIONAL SHARES OF OUR COMMON STOCK AND
OUR PREFERRED STOCK.
In
the future, we may issue our authorized but previously unissued equity securities, resulting in the dilution of the ownership
interests of our present stockholders. We are currently authorized to issue an aggregate of 80,000,000 shares of capital stock,
which includes 4,861,468 shares of blank check preferred stock, par value $0.001, for which the designations, rights and
preferences may be established by the Board.
We
may also issue additional shares of our common stock or other securities that are convertible into or exercisable for common stock
in connection with hiring or retaining employees or consultants, future acquisitions, future sales of our securities for capital
raising purposes, or for other business purposes. The future issuance of any such additional shares of our common stock or other
securities may create downward pressure on the trading price of our common stock. There can be no assurance that we will
not be required to issue additional shares, warrants or other convertible securities in the future in conjunction with hiring
or retaining employees or consultants, future acquisitions, future sales of our securities for capital raising purposes or for
other business purposes, including at a price (or exercise prices) below the price at which shares of our common stock are trading.
ISSUANCE
OF SHARES OF PREFERRED STOCK COULD ADVERSELY EFFECT HOLDER OF OUR COMMON STOCK
Our
Restated Certificate of Incorporation authorizes the issuance of 5,000,000 shares of preferred stock, of which 4,861,468 shares
are available for issuance, with designations, rights and preferences as determined from time to time by the Board of Directors.
As a result of the foregoing, the Board of Directors can issue, without further shareholder approval, Preferred Stock with dividend,
liquidation, conversion, voting or other rights that could adversely affect the voting power or other rights of the holders of
Common Stock. The issuance of Preferred Stock could, under certain circumstances, discourage, delay or prevent a change in control
of the Company.
WE
DO NOT EXPECT TO PAY DIVIDENDS AND INVESTORS SHOULD NOT BUY OUR COMMON STOCK EXPECTING TO RECEIVE DIVIDENDS.
We
have not paid any dividends on our common stock in the past, and do not anticipate that we will declare or pay any dividends in
the foreseeable future. Consequently, investors will only realize an economic gain on their investment in our common stock if
the price appreciates. Investors should not purchase our common stock expecting to receive cash dividends. Because we do not pay
dividends, and there may be limited trading, investors may not have any manner to liquidate or receive any payment on their investment.
Therefore, our failure to pay dividends may cause investors to not see any return on investment even if we are successful in our
business operations. In addition, because we do not pay dividends we may have trouble raising additional funds, which could affect
our ability to expand our business operations.
USE
OF PROCEEDS
We
estimate that our net proceeds from the sale of the common stock offered pursuant to this prospectus supplement, will be approximately
$ million, or approximately $
million if the underwriters exercise in full their option to purchase additional shares, based upon the combined public offering
price of $ per share and after deducting the underwriting discount and the estimated offering expenses that are payable by us.
We
currently intend to use the net proceeds from this offering for repayment of debt and working capital, and for other general corporate
purposes.
We
have not yet determined the amount of net proceeds to be used specifically for any of the foregoing purposes. Accordingly, our
management will have significant discretion and flexibility in applying the net proceeds from this offering. Pending any use,
as described above, we intend to invest the net proceeds in high-quality, short-term, interest-bearing securities.
MARKET
FOR OUR COMMON STOCK
Market
and Other Information
The
Company’s common stock is currently quoted on The Nasdaq Capital Market under the symbol “MRDN.” The Company’s
common stock was quoted on the OTC Markets effective February 23, 2005 under the symbol “BCAK.” Effective March
22, 2006, the Company changed its symbol to “BCKE.” Effective April 15, 2015, the Company changed its symbol to “MRDN.” On
November 3, 2016, the Company effected a 1-for-20 reverse split. Effective January 25, 2017, the Company’s common stock
was quoted on The Nasdaq Capital Market under the symbol “MRDN”.
The
following table sets forth the high and low sales price of our common stock on The Nasdaq Capital Market and the OTCQB through
the most recent fiscal quarter. These prices are based on inter-dealer bid and asked prices, without markup, markdown, commissions,
or adjustments and may not represent actual transactions. The share values reflected below have been adjusted to give effect
to the 1-for-20 reverse split which we implemented on November 3, 2016.
|
Period
|
|
High
|
|
|
Low
|
|
|
Fiscal Year 2017:
|
|
|
|
|
|
|
|
Second Quarter (through June 22, 2017)
|
|
$
|
4.00
|
|
|
$
|
2.60
|
|
|
First Quarter
|
|
$
|
10.00
|
|
|
$
|
2.59
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2016:
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
36.00
|
|
|
$
|
20.40
|
|
|
Second Quarter
|
|
|
39.00
|
|
|
|
20.00
|
|
|
Third Quarter
|
|
|
30.00
|
|
|
|
16.00
|
|
|
Fourth Quarter
|
|
|
17.60
|
|
|
|
6.80
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2015:
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
36.00
|
|
|
$
|
26.00
|
|
|
Second Quarter
|
|
|
32.00
|
|
|
|
20.60
|
|
|
Third Quarter
|
|
|
22.20
|
|
|
|
7.00
|
|
|
Fourth Quarter
|
|
|
38.00
|
|
|
|
5.90
|
|
|
|
|
|
|
|
|
|
|
|
|
Fiscal Year 2014:
|
|
|
|
|
|
|
|
|
|
First Quarter
|
|
$
|
12.00
|
|
|
$
|
12.00
|
|
|
Second Quarter
|
|
|
12.00
|
|
|
|
12.00
|
|
|
Third Quarter
|
|
|
12.00
|
|
|
|
12.00
|
|
|
Fourth Quarter
|
|
|
27.60
|
|
|
|
27.60
|
|
DIVIDEND
POLICY
We
have never declared or paid cash dividends on our capital stock. We currently intend to retain our future earnings, if any, for
use in our business and therefore do not anticipate paying cash dividends in the foreseeable future. In addition, unless waived,
the terms of our credit agreement with Goldman Sachs Specialty Lending Group limit our ability to pay cash dividends. Payment
of future dividends, if any, will be at the discretion of our board of directors after taking into account various factors, including
our financial condition, operating results, current and anticipated cash needs and plans for expansion.
CAPITALIZATION
The
following table sets forth our consolidated cash and capitalization as of March 31, 2017. Such information is set forth on the
following basis:
|
|
●
|
on a pro forma basis, giving effect to the sale of the shares of common stock in this offering at the public offering price of $ per unit after deducting underwriting discounts and commissions and other estimated offering expenses.
|
This
table should be read in conjunction with “Use of Proceeds” and our audited and unaudited financial statements.
|
|
|
As
of March 31, 2017
|
|
|
|
|
Actual
|
|
|
Pro
Forma
|
|
|
Cash
and cash equivalents
|
|
$
|
|
|
|
$
|
|
|
|
Total
indebtedness
|
|
$
|
|
|
|
$
|
|
|
|
Stockholders’
equity (deficit):
|
|
|
|
|
|
|
|
|
|
Common Stock, $0.025 par value; 75,000,000 shares authorized; shares outstanding and outstanding
pro forma
|
|
|
|
|
|
|
|
|
|
Additional
paid-in capital
|
|
|
|
|
|
|
|
|
|
Accumulated
deficit
|
|
|
|
|
|
|
|
|
|
Total
stockholders’ equity (deficit)
|
|
|
|
|
|
|
|
|
DILUTION
If
you purchase shares of our common stock in this offering, your interest will be diluted to the extent of the difference between
the public offering price per share of our common stock and the net tangible book value per share of our common stock after this
offering. We calculate net tangible book value per share by dividing our net tangible assets (tangible assets less total liabilities)
by the number of shares of our common stock issued and outstanding as of March 31, 2017.
Our
net tangible book value at March 31, 2017 was $ ,
or $ per share, based on shares of our common stock
outstanding. After giving effect to the issuance and sale of all the shares in this offering at the combined public offering price
of $ per share, less the estimated offering expenses, our pro forma and as adjusted pro forma net tangible book value at March
31, 2017 would be $ or $
per share. This represents an immediate increase in pro forma net tangible book value of $___ per share to existing stockholders
and an immediate dilution of $ per share to investors in this offering. The following table illustrates this per share dilution:
|
Public
offering price per share of common stock
|
|
$
|
|
|
|
|
|
|
|
|
|
Net tangible book
value per share as of March 31, 2017
|
|
$
|
|
|
|
|
|
|
|
|
|
Increase per share
attributable to this offering
|
|
$
|
|
|
|
|
|
|
|
|
|
As adjusted net tangible
book value per share as of March 31, 2017 after this offering
|
|
$
|
|
|
|
|
|
|
|
|
|
Dilution per share
to new investors participating in this offering
|
|
$
|
|
|
If
the underwriters exercise in full their option to purchase additional shares of common stock at the public offering price of $
per share, the as adjusted net tangible book value deficit after this offering would be $
per share, representing an increase in net tangible book value of $
per share to existing stockholders and immediate dilution in net tangible book value of $ per
share to purchasers in this offering at the public offering price.
To
the extent that outstanding options or warrants are exercised, or we issue new options under our equity incentive plan, you will
experience further dilution. In addition, we may choose to raise additional capital due to market conditions or strategic considerations
even if we believe we have sufficient funds for our current or future operating plans. To the extent that the additional capital
is raised through the sale of common stock or securities convertible or exchangeable into common stock, such issuance could result
in further dilution to our stockholders.
Unless we indicate
otherwise, all information in this prospectus is based on 7,342,920 shares of common stock outstanding as of June 22, 2017:
|
|
●
|
assumes no exercise by the underwriters of their option to purchase up to an additional shares of our common stock to cover over-allotments;
|
|
|
●
|
excludes 3,112,871 warrants to purchase shares of our common stock at a price of $5.16 per share; and
|
|
|
●
|
excludes 12,250 shares of our common stock issuable upon exercise of outstanding stock options under our equity incentive plan at a weighted average exercise price of $19.35 per share, with 41,078 shares remaining available for future grant under such plan
|
Except
as otherwise indicated, all information in this prospectus supplement assumes no exercise of the underwriters’ warrants
to be issued to the underwriters in connection with this offering.
DESCRIPTION
OF THE SECURITIES WE ARE OFFERING
In
this offering, we are offering shares of our common
stock.
Common
Stock
The
material terms and provisions of our common stock are described under the captions “Description of Capital Stock”
on page S-15 of the accompanying prospectus and “Common Stock” beginning on page 3 of the accompanying prospectus.
UNDERWRITING
Roth
Capital Partners, LLC and Joseph Gunnar & Co., LLC are acting as the representatives of the underwriters in this offering.
We have entered into an underwriting agreement dated , 2017 with
the representatives. Subject to the terms and conditions of the underwriting agreement, we have agreed to sell to each underwriter
named below and each underwriter named below has severally and not jointly agreed to purchase from us, at the public offering
price per share less the underwriting discounts and commissions set forth on the cover page of this prospectus, the number of
shares of common stock listed next to its name in the following table:
|
Underwriters
|
|
Number of
Shares
|
|
|
Roth Capital Partners, LLC
|
|
|
|
|
|
|
|
|
|
|
|
Joseph Gunnar & Co., LLC
|
|
|
|
|
|
|
|
|
|
|
|
Total
|
|
|
|
|
The
underwriters are committed to purchase all the shares of common stock offered by us other than those covered by the option to
purchase additional shares described below, if they purchase any shares. The obligations of the underwriters may be terminated
upon the occurrence of certain events specified in the underwriting agreement. Furthermore, pursuant to the underwriting agreement,
the underwriters’ obligations are subject to customary conditions, representations and warranties contained in the underwriting
agreement, such as receipt by the underwriters of officers’ certificates and legal opinions.
We
have agreed to indemnify the underwriters against specified liabilities, including liabilities under the Securities Act of 1933,
as amended, and to contribute to payments the underwriters may be required to make in respect thereof.
The
underwriters are offering the shares, subject to prior sale, when, as and if issued to and accepted by them, subject to approval
of legal matters by their counsel and other conditions specified in the underwriting agreement. The underwriters reserve the right
to withdraw, cancel or modify offers to the public and to reject orders in whole or in part.
The
underwriters propose to offer the shares offered by us to the public at the public offering price per share set forth on the cover
of this prospectus supplement. In addition, the underwriters may offer some of the shares to other securities dealers at such
price less a concession of $ per share. If all of
the shares offered by us are not sold at the public offering price per share, the underwriters may change the offering price per
share and other selling terms by means of a supplement to this prospectus.
We
have granted the underwriters an over-allotment option. This option, which is exercisable for up to 45 days after the date of
this prospectus, permits the underwriters to purchase a maximum of additional shares (15% of the shares sold in this offering)
from us to cover over-allotments, if any. If the underwriters exercise all or part of this option, they will purchase shares covered
by the option at the public offering price per share, less the underwriting discounts and commissions. If this option is exercised
in full, the total offering price to the public will be $
and the total net proceeds, before expenses, to us will be $ .
Discounts
and Commissions.
The following table shows the public offering price, underwriting discount and proceeds, before expenses,
to us. The information assumes either no exercise or full exercise by the underwriters of their over-allotment option.
|
|
|
Per
Share
|
|
|
Total
Without
Over-allotment
Option
|
|
|
Total
With
Over-allotment
Option
|
|
|
Public
offering price
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Underwriting discounts
and commissions (7%)
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Non-accountable expense
allowance
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
|
Proceeds, before expenses,
to us
|
|
$
|
|
|
|
$
|
|
|
|
$
|
|
|
We
have agreed to pay a non-accountable expense allowance to the Underwriter equal to 1.0% of the gross proceeds received in this
offering. The 1% non-accountable expense allowance will not include proceeds from any shares sold in connection with the exercise
of the over-allotment option. In addition to the 1.0% non-accountable expense allowance, we have also agreed to pay the underwriters’
expenses relating to the offering, including without limitation, (a) all filing fees and communication expenses relating to the
registration of the shares to be sold in the offering (including the over-allotment option) with the Commission; (b) all filing
fees and expenses associated with the review of the offering by FINRA; (c) all fees and expenses relating to the listing of the
shares on The Nasdaq Capital Market; (d) all fees, expenses and disbursements relating to background checks of the Company’s
officers, directors and entities in an amount not to exceed $1,000 in the aggregate; (e) all fees, expenses and disbursements
relating to the registration, qualification or exemption of the shares under the securities laws of such foreign jurisdictions
as the representatives may reasonably designate; (f) the costs of all mailing and printing of the underwriting documents (including,
without limitation, the Underwriting Agreement, any Blue Sky Surveys and, if appropriate, any Agreement Among Underwriters, Selected
Dealers’ Agreement, Underwriters’ Questionnaire and Power of Attorney), Registration Statements, Prospectuses and
all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the representatives may reasonably
deem necessary; (g) the costs and expenses of the public relations firm as previously agreed; (h) the costs of preparing, printing
and delivering certificates representing the shares; (i) fees and expenses of the transfer agent for the common stock; (j) stock
transfer and/or stamp taxes, if any, payable upon the transfer of securities from the Company to the representatives; (k) the
costs associated with bound volumes of the public offering materials as well as commemorative mementos and lucite tombstones,
each of which the Company or its designee will provide within a reasonable time after the Closing in such quantities as the representatives
may reasonably request, not to exceed $3,000; (l) the fees and expenses of the Company’s accountants; (m) the fees and expenses
of the Company’s legal counsel and other agents and representatives; (n) the fees and expenses of the Underwriter’s
legal counsel not to exceed $75,000; (o) the $20,000 cost associated with the use of Ipreo’s book building, prospectus tracking
and compliance software for the offering; and (p) up to $5,000 of the representatives’ actual accountable “road show”
expenses for the offering
We
estimate that the total expenses of the offering payable by us, excluding the total underwriting discounts and commissions, will
be approximately $ .
Representatives’
Warrants
. Upon closing of this offering, we have agreed to issue to the representatives as compensation, warrants to purchase
a number of shares of common stock equal to 5% of the aggregate number of shares of common stock sold in this public offering,
excluding the over-allotment shares (the “Representatives’ Warrants”). The Representatives’ Warrants will
be exercisable at a per share exercise price equal to 125% of the public offering price per share of the shares of common stock
sold in this offering. The Representatives’ Warrants are exercisable at any time and from time to time, in whole or in part,
during the four year period commencing one year from the effective date of the registration statement related to this offering.
The
Representatives’ Warrants and the shares of common stock underlying the Representatives’ Warrants have been deemed
compensation by FINRA and are, therefore, subject to a 180-day lock-up pursuant to FINRA Rule 5110(g)(1). The representative,
or permitted assignees under such rule, may not sell, transfer, assign, pledge, or hypothecate the Representatives’ Warrants
or the securities underlying the Representatives’ Warrants, nor will the representative engage in any hedging, short sale,
derivative, put, or call transaction that would result in the effective economic disposition of the Representatives’ Warrants
or the underlying shares of common stock for a period of 180 days from the effective date of the registration statement. Additionally,
the Representatives’ Warrants may not be sold transferred, assigned, pledged or hypothecated for a 180-day period following
the effective date of the registration statement except to any underwriter and selected dealer participating in the offering and
their bona fide officers or partners. The Representatives’ Warrants will provide for adjustment in the number and price
of the Representatives’ Warrants and the shares of common stock underlying such Representatives’ Warrants in the event
of recapitalization, merger, stock split or other structural transaction, or a future financing undertaken by us.
Right
of First Refusal
. In connection with our 2017 public offering, we granted to Joseph Gunnar & Co., LLC, who acted as the
representative of the underwriters in that public offering, a right of first refusal to act as sole and exclusive investment banker,
book-runner, financial advisor, underwriter and/or placement agent, at its sole and exclusive discretion, for each and every future
public or private equity or debt offering, including all equity linked financings. This right of first refusal extends through
January 2019.
Lock-Up
Agreements.
We and our directors and officers have entered into lock up agreements with the representative prior to the
commencement of this offering pursuant to which each of these persons or entities, for a period of 90 days from the date of the
underwriting agreement without the prior written consent of the representative, agree not to (1) offer, pledge, sell, contract
to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant
to purchase, lend, or otherwise transfer or dispose of, directly or indirectly, any shares of our securities or any securities
convertible into or exercisable or exchangeable for shares of our common stock; (2) file or caused to be filed any registration
statement relating to the offering of any shares of our capital stock or any securities convertible into or exercisable or exchangeable
for shares of our capital stock; or (3) enter into any swap or other arrangement that transfers to another, in whole or in part,
any of the economic consequences of ownership of our capital stock, whether any such transaction described in clause (1), (2)
or (3) above is to be settled by delivery of shares of our capital stock or such other securities, in cash or otherwise, except
for certain exceptions and limitations.
Electronic
Offer, Sale and Distribution of Securities.
A prospectus supplement in electronic format may be made available on the
websites maintained by one or more of the underwriters or selling group members, if any, participating in this offering and one
or more of the underwriters participating in this offering may distribute prospectus supplements electronically. The representative
may agree to allocate a number of shares to underwriters and selling group members for sale to their online brokerage account
holders. Internet distributions will be allocated by the underwriters and selling group members that will make internet distributions
on the same basis as other allocations. Other than the prospectus supplement in electronic format, the information on these websites
is not part of, nor incorporated by reference into, this prospectus supplement or the registration statement of which this prospectus
supplement forms a part, has not been approved or endorsed by us or any underwriter in its capacity as underwriter, and should
not be relied upon by investors.
Other
Relationships.
Certain of the underwriters and their affiliates have provided and may in the future provide, various
investment banking, commercial banking and other financial services for us and our affiliates for which they have received, and
may in the future receive, customary fees; however, except as disclosed in this prospectus supplement, we have no present arrangements
with any of the underwriters for any further services.
NASDAQ
Capital Market Listing.
Our common stock and warrants are listed on The NASDAQ Capital Market under the symbol “MRDN.”
Stabilization.
In
connection with this offering, the underwriters may engage in stabilizing transactions, over-allotment transactions, syndicate-covering
transactions, penalty bids and purchases to cover positions created by short sales.
|
|
●
|
Stabilizing
transactions permit bids to purchase shares so long as the stabilizing bids do not exceed a specified maximum, and are engaged
in for the purpose of preventing or retarding a decline in the market price of the shares while the offering is in progress.
|
|
|
|
|
|
|
●
|
Over-allotment
transactions involve sales by the underwriters of shares in excess of the number of shares the underwriters are obligated
to purchase. This creates a syndicate short position that may be either a covered short position or a naked short position.
In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares
that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than
the number of shares in the over-allotment option. The underwriters may close out any short position by exercising their over-allotment
option and/or purchasing shares in the open market.
|
|
|
|
|
|
|
●
|
Syndicate
covering transactions involve purchases of shares in the open market after the distribution has been completed in order to
cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will
consider, among other things, the price of shares available for purchase in the open market as compared with the price at
which they may purchase shares through exercise of the over-allotment option. If the underwriters sell more shares than could
be covered by exercise of the over-allotment option and, therefore, have a naked short position, the position can be closed
out only by buying shares in the open market. A naked short position is more likely to be created if the underwriters are
concerned that after pricing there could be downward pressure on the price of the shares in the open market that could adversely
affect investors who purchase in the offering.
|
|
|
|
|
|
|
●
|
Penalty
bids permit the representative to reclaim a selling concession from a syndicate member when the shares originally sold by
that syndicate member are purchased in stabilizing or syndicate covering transactions to cover syndicate short positions.
|
These
stabilizing transactions, syndicate covering transactions and penalty bids may have the effect of raising or maintaining the market
price of our shares or common stock or preventing or retarding a decline in the market price of our shares or common stock. As
a result, the price of our common stock in the open market may be higher than it would otherwise be in the absence of these transactions.
Neither we nor the underwriters make any representation or prediction as to the effect that the transactions described above may
have on the price of our common stock. These transactions may be effected on The NASDAQ Capital Market, in the over-the-counter
market or otherwise and, if commenced, may be discontinued at any time.
Passive
market making.
In connection with this offering, underwriters and selling group members may engage in passive market
making transactions in our common stock on The NASDAQ Capital Market in accordance with Rule 103 of Regulation M under the Exchange
Act, during a period before the commencement of offers or sales of the shares and extending through the completion of the distribution.
A passive market maker must display its bid at a price not in excess of the highest independent bid of that security. However,
if all independent bids are lowered below the passive market maker’s bid, then that bid must then be lowered when specified
purchase limits are exceeded.
Offer
Restrictions Outside the United States
Other
than in the United States, no action has been taken by us or the underwriters that would permit a public offering of the securities
offered by this prospectus in any jurisdiction where action for that purpose is required. The securities offered by this prospectus
may not be offered or sold, directly or indirectly, nor may this prospectus or any other offering material or advertisements in
connection with the offer and sale of any such securities be distributed or published in any jurisdiction, except under circumstances
that will result in compliance with the applicable rules and regulations of that jurisdiction. Persons into whose possession this
prospectus comes are advised to inform themselves about and to observe any restrictions relating to the offering and the distribution
of this prospectus. This prospectus does not constitute an offer to sell or a solicitation of an offer to buy any securities offered
by this prospectus in any jurisdiction in which such an offer or a solicitation is unlawful.
Australia
This
prospectus is not a disclosure document under Chapter 6D of the Australian Corporations Act, has not been lodged with the Australian
Securities and Investments Commission and does not purport to include the information required of a disclosure document under
Chapter 6D of the Australian Corporations Act. Accordingly, (i) the offer of the securities under this prospectus is only made
to persons to whom it is lawful to offer the securities without disclosure under Chapter 6D of the Australian Corporations Act
under one or more exemptions set out in section 708 of the Australian Corporations Act, (ii) this prospectus is made available
in Australia only to those persons as set forth in clause (i) above, and (iii) the offeree must be sent a notice stating in substance
that by accepting this offer, the offeree represents that the offeree is such a person as set forth in clause (i) above, and,
unless permitted under the Australian Corporations Act, agrees not to sell or offer for sale within Australia any of the securities
sold to the offeree within 12 months after its transfer to the offeree under this prospectus.
China
The
information in this document does not constitute a public offer of the securities, whether by way of sale or subscription, in
the People’s Republic of China (excluding, for purposes of this paragraph, Hong Kong Special Administrative Region, Macau
Special Administrative Region and Taiwan). The securities may not be offered or sold directly or indirectly in the PRC to legal
or natural persons other than directly to “qualified domestic institutional investors.”
European
Economic Area—Belgium, Germany, Luxembourg and Netherlands
The
information in this document has been prepared on the basis that all offers of securities will be made pursuant to an exemption
under the Directive 2003/71/EC (“Prospectus Directive”), as implemented in Member States of the European Economic
Area (each, a “Relevant Member State”), from the requirement to produce a prospectus for offers of securities.
An
offer to the public of securities has not been made, and may not be made, in a Relevant Member State except pursuant to one of
the following exemptions under the Prospectus Directive as implemented in that Relevant Member State:
|
|
(a)
|
to
legal entities that are authorized or regulated to operate in the financial markets or, if not so authorized or regulated,
whose corporate purpose is solely to invest in securities;
|
|
|
|
|
|
|
(b)
|
to
any legal entity that has two or more of (i) an average of at least 250 employees during its last fiscal year; (ii) a total
balance sheet of more than €43,000,000 (as shown on its last annual unconsolidated or consolidated financial statements)
and (iii) an annual net turnover of more than €50,000,000 (as shown on its last annual unconsolidated or consolidated
financial statements);
|
|
|
|
|
|
|
(c)
|
to
fewer than 100 natural or legal persons (other than qualified investors within the meaning of Article 2(1)(e) of the Prospectus
Directive) subject to obtaining the prior consent of the Company or any underwriter for any such offer; or
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(d)
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in
any other circumstances falling within Article3(2) of the Prospectus Directive, provided that no such offer of securities
shall result in a requirement for the publication by the Company of a prospectus pursuant to Article 3 of the Prospectus Directive.
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France
This
document is not being distributed in the context of a public offering of financial securities (offre au public de titres financiers)
in France within the meaning of Article L.411-1 of the French Monetary and Financial Code (Code monétaire et financier)
and Articles 211-1 et seq. of the General Regulation of the French Autorité des marchés financiers (“AMF”).
The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in France.
This
document and any other offering material relating to the securities have not been, and will not be, submitted to the AMF for approval
in France and, accordingly, may not be distributed or caused to distributed, directly or indirectly, to the public in France.
Such
offers, sales and distributions have been and shall only be made in France to (i) qualified investors (investisseurs qualifiés)
acting for their own account, as defined in and in accordance with Articles L.411-2-II-2° and D.411-1 to D.411-3, D. 744-1,
D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing regulation and/or (ii) a restricted number
of non-qualified investors (cercle restreint d’investisseurs) acting for their own account, as defined in and in accordance
with Articles L.411-2-II-2° and D.411-4, D.744-1, D.754-1 and D.764-1 of the French Monetary and Financial Code and any implementing
regulation.
Pursuant
to Article 211-3 of the General Regulation of the AMF, investors in France are informed that the securities cannot be distributed
(directly or indirectly) to the public by the investors otherwise than in accordance with Articles L.411-1, L.411-2, L.412-1 and
L.621-8 to L.621-8-3 of the French Monetary and Financial Code.
Ireland
The
information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been
filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a public offering
of securities in Ireland within the meaning of the Irish Prospectus (Directive 2003/71/EC) Regulations 2005 (the “Prospectus
Regulations”). The securities have not been offered or sold, and will not be offered, sold or delivered directly or indirectly
in Ireland by way of a public offering, except to (i) qualified investors as defined in Regulation 2(l) of the Prospectus Regulations
and (ii) fewer than 100 natural or legal persons who are not qualified investors.
Israel
The
securities offered by this prospectus have not been approved or disapproved by the Israeli Securities Authority (the ISA), or
ISA, nor have such securities been registered for sale in Israel. The shares may not be offered or sold, directly or indirectly,
to the public in Israel, absent the publication of a prospectus. The ISA has not issued permits, approvals or licenses in connection
with the offering or publishing the prospectus; nor has it authenticated the details included herein, confirmed their reliability
or completeness, or rendered an opinion as to the quality of the securities being offered. Any resale in Israel, directly or indirectly,
to the public of the securities offered by this prospectus is subject to restrictions on transferability and must be effected
only in compliance with the Israeli securities laws and regulations.
Italy
The
offering of the securities in the Republic of Italy has not been authorized by the Italian Securities and Exchange Commission
(Commissione Nazionale per le Società e la Borsa, “CONSOB” pursuant to the Italian securities legislation and,
accordingly, no offering material relating to the securities may be distributed in Italy and such securities may not be offered
or sold in Italy in a public offer within the meaning of Article 1.1(t) of Legislative Decree No. 58 of 24 February 1998 (“Decree
No. 58”), other than:
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Italian qualified investors, as defined in Article 100 of Decree no.58 by reference to Article 34-ter of CONSOB Regulation
no. 11971 of 15 May 1999 (“Regulation no. 11971”) as amended (“Qualified Investors”);
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in
other circumstances that are exempt from the rules on public offer pursuant to Article 100 of Decree No. 58 and Article 34-ter
of Regulation No. 11971 as amended.
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Any
offer, sale or delivery of the securities or distribution of any offer document relating to the securities in Italy (excluding
placements where a Qualified Investor solicits an offer from the issuer) under the paragraphs above must be:
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made
by investment firms, banks or financial intermediaries permitted to conduct such activities in Italy in accordance with Legislative
Decree No. 385 of 1 September 1993 (as amended), Decree No. 58, CONSOB Regulation No. 16190 of 29 October 2007 and any other
applicable laws; and
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in
compliance with all relevant Italian securities, tax and exchange controls and any other applicable laws.
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Any
subsequent distribution of the securities in Italy must be made in compliance with the public offer and prospectus requirement
rules provided under Decree No. 58 and the Regulation No. 11971 as amended, unless an exception from those rules applies. Failure
to comply with such rules may result in the sale of such securities being declared null and void and in the liability of the entity
transferring the securities for any damages suffered by the investors.
Japan
The
securities have not been and will not be registered under Article 4, paragraph 1 of the Financial Instruments and Exchange Law
of Japan (Law No. 25 of 1948), as amended (the “FIEL”) pursuant to an exemption from the registration requirements
applicable to a private placement of securities to Qualified Institutional Investors (as defined in and in accordance with Article
2, paragraph 3 of the FIEL and the regulations promulgated thereunder). Accordingly, the securities may not be offered or sold,
directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan other than Qualified Institutional Investors.
Any Qualified Institutional Investor who acquires securities may not resell them to any person in Japan that is not a Qualified
Institutional Investor, and acquisition by any such person of securities is conditional upon the execution of an agreement to
that effect.
Portugal
This
document is not being distributed in the context of a public offer of financial securities (oferta pública de valores mobiliários)
in Portugal, within the meaning of Article 109 of the Portuguese Securities Code (Código dos Valores Mobiliários).
The securities have not been offered or sold and will not be offered or sold, directly or indirectly, to the public in Portugal.
This document and any other offering material relating to the securities have not been, and will not be, submitted to the Portuguese
Securities Market Commission (Comissão do Mercado de Valores Mobiliários) for approval in Portugal and, accordingly,
may not be distributed or caused to distributed, directly or indirectly, to the public in Portugal, other than under circumstances
that are deemed not to qualify as a public offer under the Portuguese Securities Code. Such offers, sales and distributions of
securities in Portugal are limited to persons who are “qualified investors” (as defined in the Portuguese Securities
Code). Only such investors may receive this document and they may not distribute it or the information contained in it to any
other person.
Sweden
This
document has not been, and will not be, registered with or approved by Finansinspektionen (the Swedish Financial Supervisory Authority).
Accordingly, this document may not be made available, nor may the securities be offered for sale in Sweden, other than under circumstances
that are deemed not to require a prospectus under the Swedish Financial Instruments Trading Act (1991:980) (Sw. lag (1991:980)
om handel med finansiella instrument). Any offering of securities in Sweden is limited to persons who are “qualified investors”
(as defined in the Financial Instruments Trading Act). Only such investors may receive this document and they may not distribute
it or the information contained in it to any other person.
Switzerland
The
securities may not be publicly offered in Switzerland and will not be listed on the SIX Swiss Exchange (“SIX”) or
on any other stock exchange or regulated trading facility in Switzerland. This document has been prepared without regard to the
disclosure standards for issuance prospectuses under art. 652a or art. 1156 of the Swiss Code of Obligations or the disclosure
standards for listing prospectuses under art. 27 ff. of the SIX Listing Rules or the listing rules of any other stock exchange
or regulated trading facility in Switzerland. Neither this document nor any other offering material relating to the securities
may be publicly distributed or otherwise made publicly available in Switzerland.
Neither
this document nor any other offering material relating to the securities have been or will be filed with or approved by any Swiss
regulatory authority. In particular, this document will not be filed with, and the offer of securities will not be supervised
by, the Swiss Financial Market Supervisory Authority (FINMA).
This
document is personal to the recipient only and not for general circulation in Switzerland.
United
Arab Emirates
Neither
this document nor the securities have been approved, disapproved or passed on in any way by the Central Bank of the United Arab
Emirates or any other governmental authority in the United Arab Emirates, nor has the Company received authorization or licensing
from the Central Bank of the United Arab Emirates or any other governmental authority in the United Arab Emirates to market or
sell the securities within the United Arab Emirates. This document does not constitute and may not be used for the purpose of
an offer or invitation. No services relating to the securities, including the receipt of applications and/or the allotment or
redemption of such shares, may be rendered within the United Arab Emirates by the Company.
No
offer or invitation to subscribe for securities is valid or permitted in the Dubai International Financial Centre.
United
Kingdom
Neither
the information in this document nor any other document relating to the offer has been delivered for approval to the Financial
Services Authority in the United Kingdom and no prospectus (within the meaning of section 85 of the Financial Services and Markets
Act 2000, as amended (“FSMA”)) has been published or is intended to be published in respect of the securities. This
document is issued on a confidential basis to “qualified investors” (within the meaning of section 86(7) of FSMA)
in the United Kingdom, and the securities may not be offered or sold in the United Kingdom by means of this document, any accompanying
letter or any other document, except in circumstances which do not require the publication of a prospectus pursuant to section
86(1) FSMA. This document should not be distributed, published or reproduced, in whole or in part, nor may its contents be disclosed
by recipients to any other person in the United Kingdom.
Any
invitation or inducement to engage in investment activity (within the meaning of section 21 of FSMA) received in connection with
the issue or sale of the securities has only been communicated or caused to be communicated and will only be communicated or caused
to be communicated in the United Kingdom in circumstances in which section 21(1) of FSMA does not apply to us.
In
the United Kingdom, this document is being distributed only to, and is directed at, persons (i) who have professional experience
in matters relating to investments falling within Article 19(5) (investment professionals) of the Financial Services and Markets
Act 2000 (Financial Promotions) Order 2005 (“FPO”), (ii) who fall within the categories of persons referred to in
Article 49(2)(a) to (d) (high net worth companies, unincorporated associations, etc.) of the FPO or (iii) to whom it may otherwise
be lawfully communicated (together “relevant persons”). The investments to which this document relates are available
only to, and any invitation, offer or agreement to purchase will be engaged in only with, relevant persons. Any person who is
not a relevant person should not act or rely on this document or any of its contents.
Canada
The
securities may be sold in Canada only to purchasers purchasing, or deemed to be purchasing, as principal, that are accredited
investors, as defined in National Instrument 45-106 Prospectus Exemptions or subsection 73.3(1) of the Securities Act (Ontario),
and are permitted clients, as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant
Obligations. Any resale of the securities must be made in accordance with an exemption from, or in a transaction not subject to,
the prospectus requirements of applicable securities laws. Securities legislation in certain provinces or territories of Canada
may provide a purchaser with remedies for rescission or damages if this prospectus (including any amendment thereto) contains
a misrepresentation, provided that the remedies for rescission or damages are exercised by the purchaser within the time limit
prescribed by the securities legislation of the purchaser’s province or territory. The purchaser should refer to any applicable
provisions of the securities legislation of the purchaser’s province or territory for particulars of these rights or consult
with a legal advisor. Pursuant to section 3A.3 of National Instrument 33-105 Underwriting Conflicts (NI 33-105), the underwriters
are not required to comply with the disclosure requirements of NI 33-105 regarding underwriter conflicts of interest in connection
with this offering.
LEGAL
MATTERS
The
validity of the issuance of the securities offered hereby will be passed upon for us by Lucosky Brookman LLP. Certain legal matters
in connection with this offering will be passed upon for the underwriters by Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C.,
New York, New York.
EXPERTS
The
consolidated balance sheets of Meridian Waste Solutions, Inc. as of December 31, 2016 and the related consolidated statements
of operations, stockholders’ (deficit) equity, and cash flows for the year then ended have been audited by Hein & Associates
LLP, independent registered public accounting firm, as stated in their report which is incorporated herein by reference. Such
consolidated financial statements have been incorporated herein (by reference) in reliance on the report of such firm given upon
their authority as experts in accounting and auditing. The consolidated balance sheets of Meridian Waste Solutions, Inc. as of
December 31, 2015 and the related consolidated statements of operations, stockholders’ (deficit) equity, and cash flows
for the year then ended have been audited by D’Arelli Pruzansky, P.A., independent registered public accounting firm, as
stated in their report which is incorporated herein by reference. Such consolidated financial statements have been incorporated
herein (by reference) in reliance on the report of such firm given upon their authority as experts in accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
This
prospectus supplement and the accompanying prospectus are part of the registration statement on Form S-3 we filed with the Securities
and Exchange Commission, under the Securities Act, and do not contain all the information set forth in the registration statement.
Whenever a reference is made in this prospectus supplement or the accompanying prospectus to any of our contracts, agreements
or other documents, the reference may not be complete, and you should refer to the exhibits that are a part of the registration
statement or the exhibits to the reports or other documents incorporated by reference into this prospectus supplement and the
accompanying prospectus for a copy of such contract, agreement or other document. You may inspect a copy of the registration statement,
including the exhibits and schedules, without charge, at the SEC’s public reference room mentioned below, or obtain a copy
from the SEC upon payment of the fees prescribed by the SEC.
Because
we are subject to the information and reporting requirements of the Exchange Act, we file annual, quarterly and special reports,
proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s
website at www.sec.gov. You may also read and copy any document we file 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 operation of the
Public Reference Room.
We
also maintain a web site at www.mwsinc.com, through which you can access our SEC filings. The information set forth on our web
site is not part of this prospectus supplement.
INCORPORATION
OF DOCUMENTS BY REFERENCE
We
incorporate by reference the filed documents listed below, except as superseded, supplemented or modified by this prospectus,
and any future filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act (unless otherwise
noted, the SEC file number for each of the documents listed below is 001-13984):
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Our
Annual Reports on Form 10-K and 10-K/A for the year ended December 31, 2016, filed with the SEC on April 17, 2017 and May
31, 2017, respectively.
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Quarterly Report on Form 10-Q for the period ended March 31, 2017, filed with the SEC on May 22, 2017.
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Our
Current Reports on Form 8-K and 8-K/A filed with the SEC on January 26, 2017, February 3, 2017, February 6, 2017, February
15, 2017, April 24, 2017, April 27, 2017, May 1, 2017, May 31, 2017 and June 6, 2017.
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may request and obtain a copy of these filings, at no cost, by writing or telephoning us at the following address or phone number:
Meridian
Waste Solutions, Inc.
One
Glenlake Parkway NE, Suite 900
Atlanta,
GA 30328
(770)
691-6350
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the U.S. Securities and Exchange Commission, or the SEC, using
a “shelf” registration process. By using a shelf registration statement, we may sell securities from time to time
and in one or more offerings up to a total dollar amount of $50 million as described in this prospectus. Each time that we offer
and sell securities, we will provide a prospectus supplement to this prospectus that contains specific information about the securities
being offered and sold and the specific terms of that offering. The prospectus supplement may also add, update or change information
contained in this prospectus with respect to that offering. If there is any inconsistency between the information in this prospectus
and the applicable prospectus supplement, you should rely on the prospectus supplement. Before purchasing any securities, you
should carefully read both this prospectus and the applicable prospectus supplement, together with the additional information
described under the heading “Where You Can Find More Information; Incorporation by Reference.”
We
have not authorized any other person to provide you with different information. If anyone provides you with different or inconsistent
information, you should not rely on it. We will not make an offer to sell these securities in any jurisdiction where the offer
or sale is not permitted. You should assume that the information appearing in this prospectus and the applicable prospectus supplement
to this prospectus is accurate as of the date on its respective cover, and that any information incorporated by reference is accurate
only as of the date of the document incorporated by reference, unless we indicate otherwise. Our business, financial condition,
results of operations and prospects may have changed since those dates.
When
we refer to “Meridian,” “we,” “our,” “us” and the “Company” in this
prospectus, we mean Meridian Waste Solutions, Inc., unless otherwise specified. When we refer to “you,” we mean the
holders of the applicable series of securities.
WHERE
YOU CAN FIND MORE INFORMATION; INCORPORATION BY REFERENCE
Available
Information
We
file reports, proxy statements and other information with the SEC. Information filed with the SEC by us can be inspected and copied
at the Public Reference Room maintained by the SEC at 100 F Street, N.E., Washington, D.C. 20549. You may also obtain copies of
this information by mail from the Public Reference Room of the SEC at prescribed rates. Further information on the operation of
the SEC’s Public Reference Room in Washington, D.C. can be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains
a web site that contains reports, proxy and information statements and other information about issuers, such as us, who file electronically
with the SEC. The address of that website is
http://www.sec.gov
.
Our
website address is
http://www.mwsinc.com
. The information on our website, however, is not, and should not be deemed to
be, a part of this prospectus.
This
prospectus and any prospectus supplement are part of a registration statement that we filed with the SEC and do not contain all
of the information in the registration statement. The full registration statement may be obtained from the SEC or us, as provided
below. Forms of the documents establishing the terms of the offered securities are or may be filed as exhibits to the registration
statement. Statements in this prospectus or any prospectus supplement about these documents are summaries and each statement is
qualified in all respects by reference to the document to which it refers. You should refer to the actual documents for a more
complete description of the relevant matters. You may inspect a copy of the registration statement at the SEC’s Public Reference
Room in Washington, D.C. or through the SEC’s website, as provided above.
Incorporation
by Reference
The
SEC’s rules allow us to “incorporate by reference” information into this prospectus, which means that we can
disclose important information to you by referring you to another document filed separately with the SEC. The information incorporated
by reference is deemed to be part of this prospectus, and subsequent information that we file with the SEC will automatically
update and supersede that information. Any statement contained in a previously filed document incorporated by reference will be
deemed to be modified or superseded for purposes of this prospectus to the extent that a statement contained in this prospectus
modifies or replaces that statement.
We
incorporate by reference our documents listed below and any future filings made by us with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, as amended, which we refer to as the “Exchange Act” in this prospectus,
between the date of this prospectus and the termination of the offering of the securities described in this prospectus. We are
not, however, incorporating by reference any documents or portions thereof, whether specifically listed below or filed in the
future, that are not deemed “filed” with the SEC, including any information furnished pursuant to Items 2.02 or 7.01
of Form 8-K or related exhibits furnished pursuant to Item 9.01 of Form 8-K.
This
prospectus and any accompanying prospectus supplement incorporate by reference the documents set forth below that have previously
been filed with the SEC:
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Annual Report on Form 10-K and 10-K/A for the year ended December 31, 2016, filed with the SEC on April 17, 2017 and May 31,
2017, respectively.
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Quarterly Report on Form 10-Q for the quarter ended March 31, 2017, filed with the SEC on May 22, 2017.
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Current Report on Form 8-K and 8-K/A filed with the SEC on December 29, 2015 and March 30, 2016, respectively.
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Our
Current Report on Form 8-K and 8-K/A filed with the SEC on February 15, 2017, May 1, 2017 and May 31, 2017, respectively.
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Our Current Reports on Form 8-K filed with the SEC on May 20, 2016, June 9, 2016, June 17, 2016, June
27, 2016, July 25, 2016, September 1, 2016, October 18, 2016, November 7, 2016, December 1, 2016, December 5, 2016, December 15,
2016, January 9, 2017, January 13, 2017, January 26, 2017, February 3, 2017, February 6, 2017, April 24, 2017, April 27, 2017 and
June 6, 2017.
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The
description of our Common Stock contained in our Registration Statement on Form S-1, filed with the SEC on September 9, 2016,
as amended, and any amendment or report filed with the SEC for the purpose of updating the description.
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All
reports and other documents we subsequently file pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act prior to the
termination of this offering, including all such documents we may file with the SEC after the date of the initial registration
statement and prior to the effectiveness of the registration statement, but excluding any information furnished to, rather than
filed with, the SEC, will also be incorporated by reference into this prospectus and deemed to be part of this prospectus from
the date of the filing of such reports and documents.
You
may request a free copy of any of the documents incorporated by reference in this prospectus (other than exhibits, unless they
are specifically incorporated by reference in the documents) by writing or telephoning us at the following address:
Meridian
Waste Solutions, Inc.
12540
Broadwell Road, Suite 2104
Milton,
GA 30004
(404)
539-1147
Exhibits
to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this prospectus
and any accompanying prospectus supplement.
THE
COMPANY
Overview
Meridian
Waste Solutions, Inc. is an integrated provider of non-hazardous solid waste collection, transfer and disposal services. We currently
have all of our operations in Missouri and Virginia but are aggressively looking to expand our presence across the Midwest, South
and East regions of the United States.
Corporate
Structure
Missouri Waste Operations
Here
to Serve – Missouri Waste Division, LLC d/b/a Meridian Waste
Here to Serve – Missouri Waste
Division, LLC (“HTS Waste”) is a non-hazardous solid waste management company providing collection services for approximately
45,000 commercial, industrial and residential customers in Missouri. We own one collection operation based out of Bridgeton, Missouri.
Approximately 100% of HTS Waste’s 2015 revenue and revenue in 2016 through September 30, 2016, was from collection, utilizing
over 60 collection vehicles.
HTS
began non-hazardous waste collection operations in May 2014 upon the acquisition of nearly all of the assets from Meridian Waste
Services, LLC that in turn became the core of our operations. From our formation through today, we have begun to create the infrastructure
needed to expand our operations through acquisitions and market development opportunities.
Christian
Disposal, LLC; FWCD
Effective
December 22, 2015, the Company consummated the closing of the Amended and Restated Membership Interest Purchase Agreement, dated
October 16, 2015, by and among the Company, Timothy M. Drury, Christian Disposal LLC (“Christian Disposal”), FWCD,
LLC (“FWCD”), Missouri Waste and Georgia Waste; as amended by that certain First Amendment thereto, dated December
4, 2015, pursuant to which Christian Disposal became a wholly-owned subsidiary of the Company in exchange for: (i) Thirteen Million
Dollars ($13,000,000), subject to working capital adjustment, (ii) 87,500 shares of the Company’s Common Stock, (iii) a
Convertible Promissory Note in the amount of One Million Two Hundred Fifty Thousand Dollars ($1,250,000), bearing interest at
8% per annum and (iv) an additional purchase price of Two Million Dollars ($2,000,000), due upon completion of an extension under
a certain contract to which Christian Disposal is party (the "Additional Purchase Price"), each payable to the former
stockholders of Christian Disposal. The Additional Purchase Price has not, and likely will not, become due, as it presently appears that an extension
will not be granted in connection with the relevant contract.
Christian Disposal, along with its
subsidiary, FWCD, LLC, is a non-hazardous solid waste management company providing collection and transfer services for approximately
35,000 commercial, industrial and residential customers in Missouri. Christian Disposal’s collection operation is based
out of Winfield, Missouri. Along with operations in Winfield, Christian Disposal operates two transfer stations, in O’Fallon,
Missouri and St. Peters, Missouri, and owns one transfer station, in Winfield, Missouri. Approximately 100% of Christian Disposal
and FWCD’s 2015 revenue and revenue in 2016 through September 30, 2016 was from collection and transfer, utilizing over
35 collection vehicles.
Christian
Disposal began non-hazardous waste collection operations in 1978. Our acquisition of Christian Disposal is a key element of our
strategy to create the vertically integrated infrastructure needed to expand our operations.
Meridian
Land Company, LLC (Assets of Eagle Ridge Landfill & Hauling)
Effective
December 22, 2015, Meridian Land Company, LLC, a wholly-owned subsidiary of the Company, consummated the closing of that certain
Asset Purchase Agreement, dated November 13, 2015, by and between Meridian Land Company, LLC and Eagle Ridge Landfill, LLC (“Eagle”),
as amended by that certain Amendment to Asset Purchase Agreement, dated December 18, 2015, to which the Company and WCA Waste
Corporation are also party, pursuant to which the Company, through Meridian Land Company, LLC, purchased from Eagle, a landfill
in Pike County, Missouri (the “Eagle Ridge Landfill”) and substantially all of the assets used by Eagle related to
the Eagle Ridge Landfill, including certain debts, in exchange for $9,506,500 in cash, subject to a working capital adjustment.
The
Eagle Ridge Landfill is currently permitted to accept municipal solid waste. The Eagle Ridge Landfill is located in Bowling Green,
Missouri. Meridian Land Company currently owns 265 acres at Eagle Ridge with 56.7 acres permitted and constructed to receive waste.
In
addition to the Eagle Ridge Landfill, the Company operates, through Meridian Land Company, hauling operations in Bowling Green,
Missouri, servicing commercial, residential and roll off customers in this market. The Company will be looking to expand its footprint
in the market through an aggressive sales and marketing strategy, as well as through additional acquisitions.
Virginia Waste Operations
The CFS Group, LLC; The CFS Disposal
& Recycling Services, LLC; RWG5, LLC
On February 15, 2017, the Company consummated
the closing of the Membership Interest Purchase Agreement (the “Virginia Purchase Agreement”) by and between the Company
and Waste Services Industries, LLC ("Seller"), pursuant to which the Company purchased from Seller 100% of the membership
interests of The CFS Group, LLC (“CFS”), The CFS Disposal & Recycling Services, LLC (“CFS Disposal”),
RWG5, LLC (“RWG5” and, together with CFS and CFS Disposal, the “CFS Companies”), in exchange for the following:
(i) $40,000,000 in cash and assumption of certain capital leases, subject to a working capital adjustment in accordance with Section
2.6 of the Virginia Purchase Agreement and (ii) 500,000 shares of the Company’s common stock.
Collectively, the CFS Companies are
non-hazardous solid waste management companies providing collection and transfer services for more than 30,000 commercial, industrial
and residential customers in Virginia, with main facilities in Petersburg, Virginia and satellite facilities in Lunenberg, Virginia
and Prince George, Virginia. Along with collection operations in Petersburg, the CFS Companies operate a transfer station, in Lunenberg,
and owns two landfills, in Petersburg and Lunenberg. Approximately 81% of the CFS Companies’ 2015 revenue was from collection
and transfer, utilizing over 60 collection vehicles.
Our acquisition of the CFS Companies
is a key element of our strategy to create the vertically integrated infrastructure needed to expand our operations.
Customers
For the nine months ended September
30, 2016, Meridian has one municipal contract that accounted for 11% of HTS Waste’s long-term contracted revenue for such
period. Meridian had two municipal contracts, the first of which accounted for 26%, and the second of which accounted for 18%,
of HTS Waste’s long-term contracted revenue for the year ended December 31, 2015.
Collection
Services
Meridian,
through its subsidiaries, provides solid waste collection services to approximately 65,000 industrial, commercial and residential
customers in the Metropolitan St. Louis, Missouri area. In 2015, its collection revenue consisted of approximately 17% from services
provided to industrial customers, 13% from services provided to commercial customers and 70% from services provided to residential
customers.
In
our commercial collection operations, we supply our customers with waste containers of various types and sizes. These containers
are designed so that they can be lifted mechanically and emptied into a collection truck to be transported to a disposal facility.
By using these containers, we can service most of our commercial customers with trucks operated by a single employee. Commercial
collection services are generally performed under service agreements with a duration of one to five years with possible renewal
options. Fees are generally determined by such considerations as individual market factors, collection frequency, the type of
equipment we furnish, the type and volume or weight of the waste to be collected, the distance to the disposal facility and the
cost of disposal.
Residential
solid waste collection services often are performed under contracts with municipalities, which we generally secure by competitive
bid and which give us exclusive rights to service all or a portion of the homes in these municipalities. These contracts usually
range in duration from one to five years with possible renewal options. Generally, the renewal options are automatic upon the
mutual agreement of the municipality and the provider; however, some agreements provide for mandatory re-bidding. Alternatively,
residential solid waste collection services may be performed on a subscription basis, in which individual households or homeowners’
or similar associations contract directly with us. In either case, the fees received for residential collection are based primarily
on market factors, frequency and type of service, the distance to the disposal facility and the cost of disposal.
Additionally,
we rent waste containers and provide collection services to construction, demolition and industrial sites. We load the containers
onto our vehicles and transport them with the waste to either a landfill or a transfer station for disposal. We refer to this
as “roll-off” collection. Roll-off collection services are generally performed on a contractual basis. Contract terms
tend to be shorter in length, in some cases having terms of only six months, and may vary according to the customers’ underlying
projects.
Transfer
and Disposal Services
Landfills
are the main depository for solid waste in the United States. Solid waste landfills are built, operated, and tied to a state permit
under stringent federal, state and local regulations. Currently, solid waste landfills in the United States must be designed,
permitted, operated, closed and maintained after closure in compliance with federal, state and local regulations pursuant to Subtitle
D of the Resource Conservation and Recovery Act of 1976, as amended. We do not operate hazardous waste landfills, which may be
subject to even greater regulations. Operating a solid waste landfill includes excavating, constructing liners, continually spreading
and compacting waste and covering waste with earth or other inert material as required, final capping, closure and post-closure
monitoring. The objectives of these operations are to maintain sanitary conditions, to ensure the best possible use of the airspace
and to prepare the site so that it can ultimately be used for other end use purposes.
Access
to a disposal facility is a necessity for all solid waste management companies. While access to disposal facilities owned or operated
by third parties can be obtained, we believe that it is preferable to internalize the waste streams when possible. Meridian is
targeting further geographic, as well as operational expansion by focusing on markets with transfer stations and landfills available
for acquisition.
Our
transfer stations allow us to consolidate waste for subsequent transfer in larger loads, thereby making disposal in our otherwise
remote landfills economically feasible. A transfer station is a facility located near residential and commercial collection routes
where collection trucks take the solid waste that has been collected. The waste is unloaded from the collection trucks and reloaded
onto larger transfer trucks for transportation to a landfill for final disposal. Transfer stations are generally owned by municipalities,
with contracts to operate such transfer stations awarded based on bids. As an alternative to operating a transfer station directly,
we could negotiate the use of a transfer station owned by a private party or operated by a competitor, which may not be as profitable
as operating our own transfer station. In addition to increasing our ability to internalize the waste that our collection operations
collect, using transfer stations reduces the costs associated with transporting waste to final disposal sites because the trucks
we use for transfer have a larger capacity than collection trucks, thus allowing more waste to be transported to the disposal
facility on each trip.
Our
Operating Strengths
We
have a proven and experienced senior management team. Our Chief Executive Officer, Jeffrey S. Cosman, and President and COO Walter
H. Hall, Jr. combine over 35 years of experience in the solid waste industry, including significant experience in
local
and regional operations, local and regional accounting,
mergers & acquisitions, integration and the development of
disposal capacity. Members of our team have held senior positions at Republic Services, Advanced Disposal, Southland Waste Services
and Browning Ferris Industries. Our team has a proven track record with
development and
implementation of strategic marketplace plans, sales, safety, acquisitions, and coordination of assets and personnel.
While
our senior leadership team creates and drives our overall growth strategy, we rely on a decentralized management structure which
does not interfere with local management and may afford us the opportunity to capitalize on growth and cost reduction at the local
level.
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Vertically
Integrated Operations
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The
vertical integration of our operations allows us to manage the waste stream from the point of collection through disposal, which
we hope will enable us to maximize profit by controlling costs and gaining competitive advantages, while still providing high-quality
service to our customers. In the St. Louis market, because we have integrated our network of collection, transfer and disposal
assets, primarily using our own resources, we generate a steady, predictable stream of waste volume and capture an incremental
disposal margin. We charge tipping fees to third-party collection service providers for the use of our transfer stations or landfills,
providing a source of recurring revenue. We believe this internalization rate provides us with a significant cost advantage over
our competitors, positioning us well to win additional profitable business through new customer acquisition and municipal contract
awards. We also believe this vertically integrated structure enables us to quickly and efficiently integrate future acquisitions
of transfer stations, collection operations or landfills into our current operations.
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Landfill
and Transfer Station Assets
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We
have one active and strategically located landfill at the core of our integrated operations which we believe provides us a significant
competitive advantage in Missouri, in that we do not need to use our competitors’ landfills. Our landfill has substantial
remaining airspace.
The
value of our landfill may be further enhanced by synergies associated with our vertically integrated operations, including our
transfer stations, which enable us to cover a greater geographic area surrounding the landfill, and provide competitive advantages
in that we would not need to use our competitors’ landfills. In our experience there has generally been a shift towards
fewer, larger landfills, which has resulted in landfills that are generally located farther from population centers, with waste
being transported longer distances between collection and disposal, typically after consolidation at a transfer station. With
a landfill, transfer stations and collection services in place, we aim to provide vertically integrated operations that cover
the substantial geographic area surrounding the landfill.
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Acquisition
Integration and Municipal Contracts
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Our
business model contemplates our ability to execute and integrate value-enhancing, tuck-in acquisitions and win new municipal contracts
as a core component of our growth.
As
a management team, we have experience executing large-scale transactions by direct association with our historical success at
Republic Services, Advanced Disposal and Browning Ferris Industries. In addition to significantly expanding our scale of operations,
the acquisitions of Christian Disposal and Eagle Ridge Landfill enhanced our geographic footprint by providing us with complementary
operations throughout the state of Missouri. This has helped us realize cost efficiencies through improved internalization by
virtue of increased route concentration and more efficient utilization of our assets.
Finally,
our management team has demonstrated success in municipal contract bidding, as we currently serve approximately 30 municipalities
and townships via contracts, historical arrangements or subscriptions with residents.
We
serve approximately 65,000 residential, commercial and Construction and Industrial customers, with no single customer representing
more than 12% of revenue in 2015. Our municipal customer relationships are generally supported by contracts ranging from three
to seven years in initial duration with subsequent renewal periods, and we have a historical renewal rate of 100% with such customers.
Our standard C&I service agreement is a five-year renewable agreement. We believe our customer relationships, long-term contracts
and exceptional retention rate provide us with a high degree of stability as we continue to grow.
We
maintain a central focus on customer service and we pride ourselves on trying to consistently exceed our customers' expectations.
We believe investing in our customers' satisfaction will ultimately maximize customer loyalty price stability.
Commitment
to Safety
The
safety of our employees and customers is extremely important to us and we have a strong track record of safety and environmental
compliance. We constantly review and assess our policies practices and procedures in order to create a safer work environment
for our employees and to reduce the frequency of workplace injuries.
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Growth
of Existing Markets
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We
believe that as the residential population and number of businesses grow in our existing market, we will see waste volumes increase
organically. We seek to remain active and alert with respect to the changing landscapes in the communities in which we already
provide service in order obtain long-term contracts for collecting solid waste for residential collection, collection from municipalities,
as well as collection from small and large commercial and industrial contracts. Obtaining long-term contracts may enable us to
grow our revenue base at the same rate as the underlying economic growth in these markets. Furthermore, securing long-term contracts
provides a significant barrier to entry from competitors in these markets.
Expanding
into New Markets
Our
operating model focuses on vertically integrated operations. We continue to pursue a growth strategy that includes acquiring solid
waste companies that complement our existing business. Our goal is to create market-specific, vertically integrated operations
consisting of one or more collection operations, transfer stations and landfills.
As
we expand, we plan to focus our business in the secondary markets where competition from national service providers is limited.
We plan to start new market development projects in certain disposal-neutral markets in which we will provide services under exclusive
arrangements with municipal customers, which facilitates highly-efficient and profitable collection operations and lower capital
requirements. We believe this strategic focus positions us to maintain significant share within our target markets, maximize customer
retention and benefit from a higher and more stable pricing environment.
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Acquisition
and Integration
|
Our
revenue model is based on organic growth of operations, the acquisition of established operations in new markets as well as being
able execute value-adding, tuck-in acquisitions. We hope to direct acquisition efforts towards those markets in which we would
be able to provide vertically integrated collection and disposal services and/or provide waste collection services, pursuant to
contracts that grant exclusivity. Prior to acquisition, we analyze each prospective target for cost savings through the elimination
of inefficiencies and excesses that are typically associated with private companies competing in fragmented industries. We aim
to realize synergies from consolidating businesses into our existing operations, which we hope will allow us to reduce capital
and expense requirements associated with truck routing, personnel, fleet maintenance, inventories and back-office administration.
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Pursue
Additional Exclusive Municipal Contracts
|
We
intend to devote significant resources to securing additional municipal contracts. Our management team is well versed in bidding
for municipal contracts with over 35 years of experience and working knowledge in the solid waste industry and local service areas
in existing and target markets. We hope to procure and negotiate additional exclusive municipal contracts, allowing us to maintain
stable recurring revenue but also providing a significant barrier to entry to our competitors in those markets.
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Invest
in Strategic Infrastructure
|
We
will continue to invest in our infrastructure to support growth and increase our margins. Given the long remaining life of our
existing landfill, we will invest resources toward its development and enhancement in order to increase our disposal capacity.
Similarly, we will continue to evaluate opportunities to maximize the efficiency of our collection operations.
Waste
Industry Overview
The
non-hazardous solid waste industry can be divided into the following three categories: collection, transfer and disposal services.
In our management’s experience, companies engaging in collection and/or transfer operations of solid waste typically have
lower margins than those performing disposal service operations. By vertically integrating collection, transfer and disposal operations,
operators seek to capture significant waste volumes and improve operating margins.
During
the past four decades, our industry has experienced periods of substantial consolidation activity; however, we believe significant
fragmentation remains. We believe that there are two primary factors that lead to consolidation:
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Stringent
industry regulations have caused operating and capital costs to rise, with many local industry participants finding these
costs difficult to bear and deciding to either close their operations or sell them to larger operators; and
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Larger
operators are increasingly pursuing economies of scale by vertically integrating their operations or by utilizing their facility,
asset and management infrastructure over larger volumes and, accordingly, larger solid waste collection and disposal companies
aim to become more cost-effective and competitive by controlling a larger waste stream and by gaining access to significant
financial resources to make acquisitions.
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Competition
The
solid waste collection and disposal industry is highly competitive and, following consolidation, remains fragmented, and requires
substantial labor and capital resources. The industry presently includes large, publicly-held, national waste companies such as
Republic Services, Inc. and Waste Management, Inc., as well as numerous other public and privately-held waste companies. Our existing
market and certain of the markets in which we will likely compete are served by one or more of these companies, as well as by
numerous privately-held regional and local solid waste companies of varying sizes and resources, some of which have accumulated
substantial goodwill in their markets. We also compete with operators of alternative disposal facilities and with counties, municipalities
and solid waste districts that maintain their own waste collection and disposal operations. Public sector operations may have
financial advantages over us because of potential access to user fees and similar charges, tax revenues and tax-exempt financing.
We
compete for collection based primarily on geographic location and the price and quality of our services. From time to time, our
competitors may reduce the price of their services in an effort to expand their market share or service areas or to win competitively
bid municipal contracts. These practices may cause us to reduce the price of our services or, if we elect not to do so, to lose
business.
Our
management has observed significant consolidation in the solid waste collection and disposal industry, and, as a result of this
perceived consolidation, we encounter competition in our efforts to acquire landfills, transfer stations and collection operations.
Competition exists not only for collection, transfer and disposal volume but also for acquisition candidates. We generally compete
for acquisition candidates with large, publicly-held waste management companies, private equity backed firms as well as numerous
privately-held regional and local solid waste companies of varying sizes and resources. Competition in the disposal industry may
also be affected by the increasing national emphasis on recycling and other waste reduction programs, which may reduce the volume
of waste deposited in landfills. Accordingly, it may become uneconomical for us to make further acquisitions or we may be unable
to locate or acquire suitable acquisition candidates at price levels and on terms and conditions that we consider appropriate,
particularly in markets we do not already serve.
Sales
and Marketing
We
focus our marketing efforts on increasing and extending business with existing customers, as well as increasing our new customer
base. Our sales and marketing strategy is to provide prompt, high quality, comprehensive solid waste collection to our customers
at competitive prices. We target potential customers of all sizes, from small quantity generators to large companies and municipalities.
Because the waste collection and disposal business is a highly localized business, most of our marketing activity is local in
nature.
Government
Contracts
We
are party to contracts with municipalities and other associations and agencies. Many of these contracts are or will be subject
to competitive bidding. We may not be the successful bidder, or we may have to substantially lower prices in order to be the successful
bidder. In addition, some of our customers may have the right to terminate their contracts with us before the end of the contract
term.
Municipalities
may annex unincorporated areas within counties where we provide collection services, and as a result, our customers in annexed
areas may be required to obtain service from competitors who have been franchised or contracted by the annexing municipalities
to provide those services. Some of the local jurisdictions in which we currently operate grant exclusive franchises to collection
and disposal companies, others may do so in the future, and we may enter markets where franchises are granted by certain municipalities,
thereby reducing the potential market opportunity for us.
Regulation
Our
business is subject to extensive and evolving federal, state and local environmental, health, safety and transportation laws and
regulations. These laws and regulations are administered by the U.S. Environmental Protection Agency, or EPA, and various other
federal, state and local environmental, zoning, air, water, transportation, land use, health and safety agencies. Many of these
agencies regularly inspect our operations to monitor compliance with these laws and regulations. Governmental agencies have the
authority to enforce compliance with these laws and regulations and to obtain injunctions or impose civil or criminal penalties
in cases of violations. We believe that regulation of the waste industry will continue to evolve, and we will adapt to future
legal and regulatory requirements to ensure compliance.
The
bond for our landfill is approximately $7.4 million, with premiums in the approximate amount of $250,000.
Our
operations are subject to extensive regulation, principally under the federal statutes described below.
The
Resource Conservation and Recovery Act of 1976, as amended, or RCRA.
RCRA regulates the handling, transportation and disposal
of hazardous and non-hazardous wastes and delegates authority to states to develop programs to ensure the safe disposal of solid
wastes. On October 9, 1991, the EPA promulgated Solid Waste Disposal Facility Criteria for non-hazardous solid waste landfills
under Subtitle D of RCRA. Subtitle D includes location standards, facility design and operating criteria, closure and post-closure
requirements, financial assurance standards and groundwater monitoring, as well as corrective action standards, many of which
had not commonly been in place or enforced at landfills. Subtitle D applies to all solid waste landfill cells that received waste
after October 9, 1991, and, with limited exceptions, required all landfills to meet these requirements by October 9, 1993. All
states in which we operate have EPA-approved programs which implemented at least the minimum requirements of Subtitle D and in
some states even more stringent requirements.
The
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, or CERCLA.
CERCLA, which is also
known as Superfund, addresses problems created by the release or threatened release of hazardous substances (as defined in CERCLA)
into the environment. CERCLA’s primary mechanism for achieving remediation of such problems is to impose strict joint and
several liability for cleanup of disposal sites on current owners and operators of the site, former site owners and operators
at the time of disposal and parties who arranged for disposal at the facility (
i.e.
, generators of the waste and transporters
who select the disposal site). The costs of a CERCLA cleanup can be substantial. In addition to ordering remediation work to be
undertaken, federal or state agencies can perform remediation work themselves and seek reimbursement of their costs from potentially
liable parties, and may record liens to enforce their cost recovery claims. Beyond cleanup costs, federal and state agencies may
also assert claims for damages to natural resources, like groundwater aquifers, surface water bodies and ecosystems. Liability
under CERCLA is not dependent on the existence or intentional disposal of “hazardous wastes” (as defined under RCRA),
but can also be based upon the release or threatened release, even as a result of lawful, unintentional and non-negligent action,
of any one of the more than 700 “hazardous substances” listed by the EPA, even in minute amounts.
The
Federal Water Pollution Control Act of 1972, as amended, or the Clean Water Act.
This act establishes rules regulating the
discharge of pollutants into streams and other waters of the United States (as defined in the Clean Water Act) from a variety
of sources, including solid waste disposal sites. If wastewater or stormwater from our transfer stations may be discharged into
surface waters, the Clean Water Act requires us to apply for and obtain discharge permits, conduct sampling and monitoring and,
under certain circumstances, reduce the quantity of pollutants in those discharges. In 1990, the EPA issued additional rules under
the Clean Water Act, which establish standards for management of storm water runoff from landfills and which require landfills
that receive, or in the past received, industrial waste to obtain storm water discharge permits. In addition, if a landfill or
transfer station discharges wastewater through a sewage system to a publicly-owned treatment works, the facility must comply with
discharge limits imposed by the treatment works. Also, if development of a landfill may alter or affect “wetlands,”
the owner may have to obtain a permit and undertake certain mitigation measures before development may begin. This requirement
is likely to affect the construction or expansion of many solid waste disposal sites.
The
Clean Air Act of 1970, as amended, or the Clean Air Act.
The Clean Air Act provides for increased federal, state and local
regulation of the emission of air pollutants. The EPA has applied the Clean Air Act to solid waste landfills and vehicles with
heavy duty engines, such as waste collection vehicles. Additionally, in March 1996, the EPA adopted New Source Performance Standards
and Emission Guidelines (the “Emission Guidelines”) for municipal solid waste landfills to control emissions of landfill
gases. These regulations impose limits on air emissions from solid waste landfills. The Emission Guidelines impose two sets of
emissions standards, one of which is applicable to all solid waste landfills for which construction, reconstruction or modification
was commenced before May 30, 1991. The other applies to all municipal solid waste landfills for which construction, reconstruction
or modification was commenced on or after May 30, 1991. These guidelines, combined with the new permitting programs established
under the Clean Air Act, could subject solid waste landfills to significant permitting requirements and, in some instances, require
installation of gas recovery systems to reduce emissions to allowable limits. The EPA also regulates the emission of hazardous
air pollutants from municipal landfills and has promulgated regulations that require measures to monitor and reduce such emissions.
Climate
Change
. A variety of regulatory developments, proposals or requirements have been introduced that are focused on restricting
the emission of carbon dioxide, methane and other gases known as greenhouse gases. Congress has considered legislation directed
at reducing greenhouse gas emissions. There has been support in various regions of the country for legislation that requires reductions
in greenhouse gas emissions, and some states have already adopted legislation addressing greenhouse gas emissions from various
sources. In 2007, the U.S. Supreme Court held in Massachusetts, et al. v. EPA that greenhouse gases are an “air pollutant”
under the federal Clean Air Act and, thus, subject to future regulation. In a move toward regulating greenhouse gases, on December
15, 2009, the EPA published its findings that emission of carbon dioxide, methane and other greenhouse gases present an endangerment
to human health and the environment because greenhouse gases are, according to EPA, contributing to climate change. On October
30, 2009, the EPA published the greenhouse gas reporting final rule, effective December 29, 2009, which establishes a new comprehensive
scheme requiring certain specified industries as well as operators of stationary sources emitting more than established annual
thresholds of carbon dioxide-equivalent greenhouse gases to inventory and report their greenhouse gas emissions annually. Municipal
solid waste landfills are subject to the rule. In 2009, the EPA also proposed regulations that would require a reduction in emissions
of greenhouse gases from motor vehicles. According to the EPA, the final motor vehicle greenhouse gas standards will trigger construction
and operating permit requirements for stationary sources that exceed potential-to-emit (PTE) thresholds for regulated pollutants.
As a result, the EPA has proposed to tailor these programs such that only large stationary sources, such as electric generating
units, cement production facilities, and petroleum refineries will be required to have air permits that authorize greenhouse gas
emissions.
The
Occupational Safety and Health Act of 1970, as amended, or OSHA.
OSHA establishes certain employer responsibilities, including
maintenance of a workplace free of recognized hazards likely to cause death or serious injury, compliance with standards promulgated
by the Occupational Safety and Health Administration and various record keeping, disclosure and procedural requirements. Various
standards, including standards for notices of hazards, safety in excavation and demolition work and the handling of asbestos,
may apply to our operations.
Flow
Control/Interstate Waste Restrictions.
Certain permits and approvals, as well as certain state and local regulations, may
limit a landfill or transfer station to accepting waste that originates from specified geographic areas, restrict the importation
of out-of-state waste or wastes originating outside the local jurisdiction or otherwise discriminate against non-local waste.
From time to time, federal legislation is proposed that would allow some local flow control restrictions. Although no such federal
legislation has been enacted to date, if such federal legislation should be enacted in the future, states in which we use landfills
could limit or prohibit the importation of out-of-state waste or direct that wastes be handled at specified facilities. These
restrictions could also result in higher disposal costs for our collection operations. If we were unable to pass such higher costs
through to our customers, our business, financial condition and operating results could be adversely affected.
State
and Local Regulation.
Each state in which we now operate or may operate in the future has laws and regulations governing the
generation, storage, treatment, handling, transportation and disposal of solid waste, occupational safety and health, water and
air pollution and, in most cases, the siting, design, operation, maintenance, closure and post-closure maintenance of landfills
and transfer stations. State and local permits and approval for these operations may be required and may be subject to periodic
renewal, modification or revocation by the issuing agencies. In addition, many states have adopted statutes comparable to, and
in some cases more stringent than, CERCLA. These statutes impose requirements for investigation and cleanup of contaminated sites
and liability for costs and damages associated with such sites, and some provide for the imposition of liens on property owned
by responsible parties. Furthermore, many municipalities also have ordinances, local laws and regulations affecting our operations.
These include zoning and health measures that limit solid waste management activities to specified sites or activities, flow control
provisions that direct or restrict the delivery of solid wastes to specific facilities, laws that grant the right to establish
franchises for collection services and then put such franchises out for bid and bans or other restrictions on the movement of
solid wastes into a municipality.
Certain
state and local jurisdictions may also seek to enforce flow control restrictions through local legislation or contractually. In
certain cases, we may elect not to challenge such restrictions. These restrictions could reduce the volume of waste going to landfills
in certain areas, which may adversely affect our ability to operate our landfills at their full capacity and/or reduce the prices
that we can charge for landfill disposal services. These restrictions may also result in higher disposal costs for our collection
operations. If we were unable to pass such higher costs through to our customers, our business, financial condition and operating
results could be adversely affected.
Permits
or other land use approvals with respect to a landfill, as well as state or local laws and regulations, may specify the quantity
of waste that may be accepted at the landfill during a given time period and/or specify the types of waste that may be accepted
at the landfill. Once an operating permit for a landfill is obtained, it must generally be renewed periodically.
There
has been an increasing trend at the state and local level to mandate and encourage waste reduction and recycling and to prohibit
or restrict the disposal in landfills of certain types of solid wastes, such as construction and demolition debris, yard wastes,
food waste, beverage containers, unshredded tires, lead-acid batteries, paper, cardboard and household appliances.
Many
states and local jurisdictions have enacted “bad boy” laws that allow the agencies that have jurisdiction over waste
services contracts or permits to deny or revoke these contracts or permits based on the applicant’s or permit holder’s
compliance history. Some states and local jurisdictions go further and consider the compliance history of the parent, subsidiaries
or affiliated companies, in addition to that of the applicant or permit holder. These laws authorize the agencies to make determinations
of an applicant’s or permit holder’s fitness to be awarded a contract to operate and to deny or revoke a contract
or permit because of unfitness unless there is a showing that the applicant or permit holder has been rehabilitated through the
adoption of various operating policies and procedures put in place to assure future compliance with applicable laws and regulations.
Some
state and local authorities enforce certain federal laws in addition to state and local laws and regulations. For example, in
some states, RCRA, OSHA, parts of the Clean Air Act and parts of the Clean Water Act are enforced by local or state authorities
instead of the EPA, and in some states those laws are enforced jointly by state or local and federal authorities.
Public
Utility Regulation.
In many states, public authorities regulate the rates that landfill operators may charge.
Seasonality
Based
on our industry and our historic trends, we expect our operations to vary seasonally. Typically, revenue will be highest in the
second and third calendar quarters and lowest in the first and fourth calendar quarters. These seasonal variations result in fluctuations
in waste volumes due to weather conditions and general economic activity. We also expect that our operating expenses may be higher
during the winter months due to periodic adverse weather conditions that can slow the collection of waste, resulting in higher
labor and operational costs.
Employees
As
of December 31, 2016, we have approximately 180 full-time employees. None of our employees are represented by a labor union. We
have not experienced any work stoppages and we believe that our relations with our employees are good.
Properties
Our
principal executive office is located at 12540 Broadwell Road, Suite 2104, Milton, Georgia and is an approximately 3,500 sq. ft.
office space rented at a rate of $2,600 per month. We also lease approximately 8,500 sq. ft. of office space rented at a rate
of $23,000 per month in Bridgeton, Missouri. It is our belief that such space is adequate for our immediate office needs. Additional
space may be required as we expand our business activities, but we do not foresee any significant difficulties in obtaining additional
office facilities if deemed necessary.
Our
principal property and equipment is comprised of land, a landfill, buildings, vehicles and equipment in the State of Missouri.
In addition, we lease real property and own a landfill. These properties are sufficient to meet the Company’s current operational
needs; however, the Company is exploring the potential acquisition and/or leasing of additional properties pursuant to its growth
strategies.
Legal
Proceedings
There
are no material proceedings to which any director or officer, or any associate of any such director or officer, is a party that
is adverse to our Company or any of our subsidiaries or has a material interest adverse to our Company or any of our subsidiaries.
No director or executive officer has been a director or executive officer of any business which has filed a bankruptcy petition
or had a bankruptcy petition filed against it during the past ten years. Except as described below, no current director or executive
officer has been convicted of a criminal offense or is the subject of a pending criminal proceeding during the past ten years.
No current director or executive officer has been the subject of any order, judgment or decree of any court permanently or temporarily
enjoining, barring, suspending or otherwise limiting his involvement in any type of business, securities or banking activities
during the past ten years. No current director or officer has been found by a court to have violated a federal or state securities
or commodities law during the past ten years.
In
addition, there are no material proceedings to which any affiliate of our Company, or any owner of record or beneficially of more
than five percent of any class of voting securities of our Company, is a party that is adverse to our Company or any of our subsidiaries
or has a material interest adverse to our Company or any of our subsidiaries. We are not currently involved in any litigation
that we believe could have a material adverse effect on our financial condition or results of operations.
However,
from time to time, we may become involved in various lawsuits and legal proceedings that arise in the ordinary course of business.
Litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that
may harm our business.
RISK
FACTORS
Investment in any securities offered
pursuant to this prospectus and the applicable prospectus supplement involves risks. You should carefully consider the risk factors
incorporated by reference to our Registration Statement on Form S-1, filed with the SEC on September 9, 2016, as amended, our
most recent Annual Report on Form 10-K and 10-K/A and any subsequent Quarterly Reports on Form 10-Q or Current Reports on Form
8-K and 8-K/A we file after the date of this prospectus, and all other information contained or incorporated by reference into
this prospectus, as updated by our subsequent filings under the Exchange Act, and the risk factors and other information contained
in the applicable prospectus supplement before acquiring any of such securities. The occurrence of any of these risks might cause
you to lose all or part of your investment in the offered securities.
SPECIAL
NOTICE REGARDING FORWARD-LOOKING STATEMENTS
This
prospectus contains forward-looking statements that involve risks and uncertainties, principally in the sections entitled “Risk
Factors.” All statements other than statements of historical fact contained in this prospectus, including statements regarding
future events, our future financial performance, business strategy and plans and objectives of management for future operations,
are forward-looking statements. We have attempted to identify forward-looking statements by terminology including “anticipates,”
“believes,” “can,” “continue,” “could,” “estimates,” “expects,”
“intends,” “may,” “plans,” “potential,” “predicts,” “should,”
or “will” or the negative of these terms or other comparable terminology. Although we do not make forward looking
statements unless we believe we have a reasonable basis for doing so, we cannot guarantee their accuracy. These statements are
only predictions and involve known and unknown risks, uncertainties and other factors, including the risks outlined under “Risk
Factors” or elsewhere in this prospectus, which may cause our or our industry’s actual results, levels of activity,
performance or achievements expressed or implied by these forward-looking statements.
Forward-looking
statements should not be read as a guarantee of future performance or results, and will not necessarily be accurate indications
of the times at, or by which, that performance or those results will be achieved. Forward-looking statements are based on information
available at the time they are made and/or management’s good faith belief as of that time with respect to future events,
and are subject to risks and uncertainties that could cause actual performance or results to differ materially from what is expressed
in or suggested by the forward-looking statements.
Forward-looking
statements speak only as of the date they are made. You should not put undue reliance on any forward-looking statements. We assume
no obligation to update forward-looking statements to reflect actual results, changes in assumptions or changes in other factors
affecting forward-looking information, except to the extent required by applicable securities laws. If we do update one or more
forward-looking statements, no inference should be drawn that we will make additional updates with respect to those or other forward-looking
statements.
USE
OF PROCEEDS
We
intend to use the net proceeds from the sale of the securities as set forth in the applicable prospectus supplement.
DESCRIPTION
OF CAPITAL STOCK
The
following description of our capital stock is not complete and may not contain all the information you should consider before
investing in our capital stock. This description is summarized from, and qualified in its entirety by reference to, our Certificate
of Incorporation and Bylaws, which have been publicly filed with the SEC. See “Where You Can Find More Information; Incorporation
by Reference.”
Our authorized capital stock consists
of 75,000,000 shares of common stock, par value of $0.025 per share, and 5,000,000 shares of preferred stock, par value of $0.001
per share. As of June 13, 2017 there were 7,354,420 shares of our common stock issued and outstanding held by 145 holders of record.
We currently have (i) 51 shares of Series A Preferred Stock authorized of which 51 shares of Series A Preferred Stock are issued
and outstanding; (ii) 71,120 shares of Series B Preferred Stock authorized of which 0 shares of Series B Preferred Stock are issued
and outstanding; (iii) 67,361 shares of Series C Preferred Stock authorized of which 0 shares of Series C Preferred Stock are
issued and outstanding; and (iv) 4,861,468 shares of undesignated “blank check” preferred stock.
Common
Stock
Each
share of our common stock entitles its holder to one vote in the election of each director and on all other matters voted on generally
by our stockholders. No share of our common stock affords any cumulative voting rights. This means that the holders of a majority
of the voting power of the shares voting for the election of directors can elect all directors to be elected if they choose to
do so.
Holders
of our common stock will be entitled to dividends in such amounts and at such times as our Board of Directors in its discretion
may declare out of funds legally available for the payment of dividends. We currently do not anticipate paying any cash dividends
on the common stock in the foreseeable future. Any future dividends will be paid at the discretion of our Board of Directors after
taking into account various factors, including:
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general
business conditions;
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industry
practice;
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our
financial condition and performance;
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our
future prospects;
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our
cash needs and capital investment plans;
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our
obligations to holders of any preferred stock we may issue;
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income
tax consequences; and
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the
restrictions New York and other applicable laws and our credit arrangements may impose, from time to time.
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If
we liquidate or dissolve our business, the holders of our common stock will share ratably in all our assets that are available
for distribution to our stockholders after our creditors are paid in full and the holders of all series of our outstanding preferred
stock, if any, receive their liquidation preferences in full.
Our
common stock has no preemptive rights and is not convertible or redeemable or entitled to the benefits of any sinking or repurchase
fund.
Preferred
Stock
The
Company has 5,000,000 authorized shares of preferred stock par value $0.001 per share, which have three classes. The Series A
Preferred Stock has 51 shares issued and outstanding, the Series B Preferred Stock has 0 shares issued and outstanding and the
Series C Preferred Stock has 0 shares issued and outstanding.
Our
Board has the authority, within the limitations and restrictions in our certificate of incorporation, to issue shares of preferred
stock in one or more series and to fix the rights, preferences, privileges and restrictions thereof, including dividend rights,
dividend rates, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number
of shares constituting any series or the designation of any series, without further vote or action by the stockholders. The issuance
of shares of preferred stock may have the effect of delaying, deferring or preventing a change in our control without further
action by the stockholders. The issuance of shares of preferred stock with voting and conversion rights may adversely affect the
voting power of the holders of our common stock. In some circumstances, this issuance could have the effect of decreasing the
market price of our common stock.
Undesignated
preferred stock may enable our Board to render more difficult or to discourage an attempt to obtain control of our company by
means of a tender offer, proxy contest, merger or otherwise, and thereby to protect the continuity of our management. The issuance
of shares of preferred stock may adversely affect the rights of our common stockholders. For example, any shares of preferred
stock issued may rank prior to the common stock as to dividend rights, liquidation preference or both, may have full or limited
voting rights and may be convertible into shares of common stock. As a result, the issuance of shares of preferred stock, or the
issuance of rights to purchase shares of preferred stock, may discourage an unsolicited acquisition proposal or bids for our common
stock or may otherwise adversely affect the market price of our common stock or any existing preferred stock.
Series
A Preferred Stock
Each
share of the Series A Preferred Stock has no conversion rights, is senior to any other class or series of capital stock of the
Company and special voting rights. Each one (1) share of Series A Preferred Stock shall have voting rights equal to (x) 0.019607
multiplied by the total issued and outstanding Common Stock eligible to vote at the time of the respective vote (the “Numerator”),
divided by (y) 0.49, minus (z) the Numerator.
The
Company and the holder(s) of the Series A Preferred Stock intend to reach agreement providing for the cancelation of the Series
A Preferred Stock at such time that the holder(s) no longer have in place any personal guaranties on the Company's liabilities,
provided that such disposition of the Series A Preferred Stock by the holder(s) thereof would not result in an event of default
under any material contract of the Company. There can be no assurances, however, that any such agreement with respect to the terms
of the Series A Preferred Stock will occur.
There
are currently 51 shares of Series A Preferred Stock outstanding.
Series
B Preferred Stock
Holders
of the Series B Preferred Stock shall be entitled to receive when and if declared by the Board of Directors cumulative dividends
at a rate of twelve percent (12%) of the Original Issue Price. In the event of any liquidation, dissolution or winding up of the
Company, either voluntary or involuntary, the holders of Series B Preferred Stock shall be entitled to receive, immediately prior
and in preference to any distribution to holders of the Company’s common stock, an amount per share equal to the sum of
$100.00 and any accrued and unpaid dividends of the Series B Preferred Stock. Each share of Series B Preferred Stock may be converted
at the option of the holder into the Company’s common stock. The shares shall be converted using the “Conversion Formula”
set forth in the Series B Preferred Stock Certificate of Designations, which is equal to the Original Issue Price divided by 75%
of the average closing bid price of the Common Stock for the five (5) consecutive trading days ending on the trading day of the
receipt by the Company of the applicable notice of conversion. In no event shall a holder of Series B Preferred Stock be entitled
to make conversions that would result in beneficial ownership by such holder and its affiliates of more than 9.99% of the outstanding
shares of Common Stock of the Company. The Series B Preferred Stock may be redeemed at the Company’s option, in whole or
in part, at any time and from time to time, at a redemption price per share equal to $100 per share, plus any accrued and unpaid
dividends on the shares to be redeemed; provided, however, that if there are any accrued yearly dividends on the Series B Preferred
Stock which have not been paid or declared and a sum sufficient for the payment thereof set apart, the Company may not redeem
any shares of Series B Preferred Stock unless all then outstanding shares of such stock are so redeemed.
There
are currently no shares of Series B Preferred Stock outstanding.
Series
C Preferred Stock
Holders of the Series C Preferred Stock
shall be entitled to receive dividends out of any assets legally available at a rate of eight percent (8%) per share per annum,
payable quarterly. In the event of any liquidation, dissolution or winding up of the Company, either voluntary or involuntary,
the holders of the Series C Preferred Stock shall be entitled to receive, immediately prior and in preference to any distribution
to the holders of the Company's other equity securities, including the Common Stock, Series A Preferred Stock, and Series B Preferred
Stock, a liquidation preference equal to $22.40 per share plus all accrued and unpaid dividends of the Series C Preferred Stock.
Pursuant a Qualified Offering, the shares of Series C Preferred Stock were automatically converted at a conversion price that
reflected a 20% discount to the price of the Common Stock pursuant to such Qualified Offering.
There
are currently no shares of Series C Preferred Stock outstanding.
Options
and Warrants
As of June 13, 2017, we have 12,250
outstanding options and 3,112,871 shares issuable upon the exercise of warrants. There are no other outstanding warrants or options
at this time.
Anti-Takeover
Provisions
Mr.
Jeffrey S. Cosman, our chief executive officer, is the beneficial owner of 100% of the outstanding shares of the Company’s
Series A Preferred Stock. As a result, our chief executive officer would have significant influence over most matters that require
approval by our stockholders, including the election of directors and approval of significant corporate transactions, even if
other stockholders oppose them. This concentration of ownership might also have the effect of delaying or preventing a change
of control of our Company that other stockholders may view as beneficial.
These
provisions are intended to enhance the likelihood of continued stability in the composition of our board of directors and its
policies and to discourage certain types of transactions that may involve an actual or threatened acquisition of us.
These
provisions are also designed to reduce our vulnerability to an unsolicited acquisition proposal and to discourage certain tactics
that may be used in proxy fights. However, such provisions could have the effect of discouraging others from making tender offers
for our shares and may have the effect of deterring hostile takeovers or delaying changes in our control or management. As a consequence,
these provisions also may inhibit fluctuations in the market price of our stock that could result from actual or rumored takeover
attempts.
The
NASDAQ Capital Market Listing
Our
common stock is listed on the NASDAQ Capital Market under the symbol “MRDN.”
Transfer
Agent and Registrar
Our
transfer agent and registrar for our common stock is Issuer Direct Corporation, 500 Perimeter Park Drive, Morrisville, NC 27560.
DESCRIPTION
OF WARRANTS
General
We
may issue warrants to purchase shares of our common stock and preferred stock in one or more series together with other securities
or separately, as described in the applicable prospectus supplement. Below is a description of certain general terms and provisions
of the warrants that we may offer. Particular terms of the warrants will be described in the warrant agreements to be entered
into by the Company, a warrant agent to be named by the Company, and the holders from time to time of the warrants and the prospectus
supplement relating to the warrants. Copies of the form agreement for each warrant and the warrant certificate, if any, reflecting
the provisions to be included in such agreements that will be entered into with respect to a particular offering of each type
of warrant, will be filed with the SEC and incorporated by reference as exhibits to the registration statement of which this prospectus
forms a part. You should read the applicable warrant agreement for additional information before you purchase any of our warrants.
The
prospectus supplement relating to any warrants we offer will describe the specific terms relating to the offering. These terms
may include some or all of the following:
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the
specific designation and aggregate number of, and the price at which we will issue, the warrants;
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the
currency or currency units in which the offering price, if any, and the exercise price are payable;
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the
designation, amount and terms of the securities purchasable upon exercise of the warrants;
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if
applicable, the exercise price for shares of our common stock and the number of shares of common stock to be received upon
exercise of the warrants;
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if
applicable, the exercise price for shares of our preferred stock, the number of shares of preferred stock to be received upon
exercise, and a description of that series of our preferred stock;
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the
date on which the right to exercise the warrants will begin and the date on which that right will expire or, if you may not
continuously exercise the warrants throughout that period, the specific date or dates on which you may exercise the warrants;
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whether
the warrants will be issued in fully registered form or bearer form, in definitive or global form or in any combination of
these forms, although, in any case, the form of a warrant included in a unit will correspond to the form of the unit and of
any security included in that unit;
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any
applicable material U.S. federal income tax consequences;
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the
identity of the warrant agent for the warrants and of any other depositaries, execution or paying agents, transfer agents,
registrars or other agents;
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the
proposed listing, if any, of the warrants or any securities purchasable upon exercise of the warrants on any securities exchange;
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if
applicable, the date from and after which the warrants and the common stock and preferred stock will be separately transferable;
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if
applicable, the minimum or maximum amount of the warrants that may be exercised at any one time;
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the
procedures and conditions relating to the exercise of the warrants;
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information
with respect to book-entry procedures, if any;
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the
triggering event and the terms upon which the exercise price and the number of underlying securities that the warrants are
exercisable into may be adjusted;
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the
anti-dilution provisions of the warrants, if any;
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any
redemption or call provisions;
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whether
the warrants may be sold separately or with other securities as parts of units; and
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any
additional terms of the warrants, including terms, procedures and limitations relating to the exchange and exercise of the
warrants.
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Until
the warrants are exercised, holders of the warrants will not have any rights of holders of the underlying securities.
Outstanding
Warrants
As of June 13, 2017, we had warrants
(the “Warrants”, and each a “Warrant”) to purchase up to 3,112,871 shares of our common stock outstanding.
Such warrants are listed on the Nasdaq Capital Market under the symbol “MRDNW.” On June 13, 2017, the last reported
sale price of the Warrants on the Nasdaq Capital Market was $0.43 per share. The provisions of the Warrants are summarized below,
but are qualified in their entirety by the language of the Warrants as filed with our Registration Statement on Form S-1, filed
with the SEC on September 9, 2016, as amended, and any amendment or report filed with the SEC for the purpose of updating the
description.
Exercisability
.
The Warrants are exercisable immediately upon issuance and at any time up to the date that is five years from the date of issuance.
The Warrants are exercisable, at the option of each holder, in whole or in part, by delivering to us a duly executed exercise
notice accompanied by payment in full for the number of shares of our common stock purchased upon such exercise (except in the
case of a cashless exercise as discussed below).
Cashless
Exercise
. In the event that a registration statement covering shares of common stock underlying the Warrants, or an exemption
from registration, is not available for the resale of such shares of common stock underlying the Warrants, the holder may, in
its sole discretion, exercise the Warrant in whole or in part and, in lieu of making the cash payment otherwise contemplated to
be made to us upon such exercise in payment of the aggregate exercise price, elect instead to receive upon such exercise the net
number of shares of common stock determined according to the formula set forth in the warrant. In no event shall we be required
to make any cash payments or net cash settlement to the registered holder in lieu of issuance of common stock underlying the warrants.
Certain
Adjustments
. The exercise price and the number of shares of common stock purchasable upon the exercise of the Warrants are
subject to adjustment upon the occurrence of specific events, including stock dividends, stock splits, combinations and reclassifications
of our common stock.
Transferability
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Subject to applicable laws, the Warrants may be transferred at the option of the holders upon surrender of the Warrants to us
together with the appropriate instruments of transfer.
Warrant
Agent and Exchange Listing
. The Warrants were issued in registered form under a warrant agency agreement between Issuer Direct
Corporation, as warrant agent, and us.
Fundamental
Transactions
. If, at any time while the Warrants are outstanding, (1) we consolidate or merge with or into another corporation
and we are not the surviving corporation, (2) we sell, lease, license, assign, transfer, convey or otherwise dispose of all or
substantially all of our assets, (3) any purchase offer, tender offer or exchange offer (whether by us or another individual or
entity) is completed pursuant to which holders of our shares of common stock are permitted to sell, tender or exchange their shares
of common stock for other securities, cash or property and has been accepted by the holders of 50% or more of our outstanding
shares of common stock, (4) we effect any reclassification or recapitalization of our shares of common stock or any compulsory
share exchange pursuant to which our shares of common stock are converted into or exchanged for other securities, cash or property,
or (5) we consummate a stock or share purchase agreement or other business combination with another person or entity whereby such
other person or entity acquires more than 50% of our outstanding shares of common stock, each a “Fundamental Transaction,”
then upon any subsequent exercise of the Warrants, the holder thereof will have the right to receive the same amount and kind
of securities, cash or property as it would have been entitled to receive upon the occurrence of such Fundamental Transaction
if it had been, immediately prior to such Fundamental Transaction, the holder of the number of warrant shares then issuable upon
exercise of the Warrant, and any additional consideration payable as part of the Fundamental Transaction.
Rights
as a Stockholder
. Except as otherwise provided in the warrants or by virtue of such holder’s ownership of shares of
our common stock, the holder of a warrant does not have the rights or privileges of a holder of our common stock, including any
voting rights, until the holder exercises the Warrant.
Governing
Law
. The Warrants and the warrant agency agreement are governed by New York law.
DESCRIPTION
OF RIGHTS
We
may issue rights to our stockholders to purchase shares of our common stock or preferred stock described in this prospectus. We
may offer rights separately or together with one or more additional rights, preferred stock, common stock, warrants or any combination
of those securities in the form of units, as described in the applicable prospectus supplement. Each series of rights will be
issued under a separate rights agreement to be entered into between us and a bank or trust company, as rights agent. The rights
agent for any rights we offer will be set forth in the applicable prospectus supplement. The rights agent will act solely as our
agent in connection with the certificates relating to the rights of the series of certificates and will not assume any obligation
or relationship of agency or trust for or with any holders of rights certificates or beneficial owners of rights. The following
description sets forth certain general terms and provisions of the rights to which any prospectus supplement may relate. The particular
terms of the rights to which any prospectus supplement may relate and the extent, if any, to which the general provisions may
apply to the rights so offered will be described in the applicable prospectus supplement. To the extent that any particular terms
of the rights, rights agreement or rights certificates described in a prospectus supplement differ from any of the terms described
below, then the terms described below will be deemed to have been superseded by that prospectus supplement. We encourage you to
read the applicable rights agreement and rights certificate for additional information before you decide whether to purchase any
of our rights.
The
prospectus supplement relating to any rights that we offer will include specific terms relating to the offering, including, among
other matters:
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date of determining the stockholders entitled to the rights distribution;
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the
aggregate number of shares of common stock, preferred stock or other securities purchasable upon exercise of the rights;
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the
exercise price;
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the
aggregate number of rights issued;
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whether
the rights are transferrable and the date, if any, on and after which the rights may be separately transferred;
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the
date on which the right to exercise the rights will commence, and the date on which the right to exercise the rights will
expire;
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the
method by which holders of rights will be entitled to exercise;
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the
conditions to the completion of the offering;
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the
withdrawal, termination and cancellation rights;
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whether
there are any backstop or standby purchaser or purchasers and the terms of their commitment;
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whether
stockholders are entitled to oversubscription right;
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U.S. federal income tax considerations; and
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any
other terms of the rights, including terms, procedures and limitations relating to the distribution, exchange and exercise
of the rights.
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If
less than all of the rights issued in any rights offering are exercised, we may offer any unsubscribed securities directly to
persons other than stockholders, to or through agents, underwriters or dealers or through a combination of such methods, including
pursuant to standby arrangements, as described in the applicable prospectus supplement. In connection with any rights offering,
we may enter into a standby underwriting or other arrangement with one or more underwriters or other persons pursuant to which
such underwriters or other persons would purchase any offered securities remaining unsubscribed for after such rights offering.
DESCRIPTION
OF UNITS
We
may issue units consisting of any combination of the other types of securities offered under this prospectus in one or more series.
We may evidence each series of units by unit certificates that we will issue under a separate agreement. We may enter into unit
agreements with a unit agent. We will indicate the name and address of the unit agent in the applicable prospectus supplement
relating to a particular series of units.
The
following description, together with the additional information included in any applicable prospectus supplement, summarizes the
general features of the units that we may offer under this prospectus. You should read any prospectus supplement and any free
writing prospectus that we may authorize to be provided to you related to the series of units being offered, as well as the complete
unit agreements that contain the terms of the units. Specific unit agreements will contain additional important terms and provisions
and we will file as an exhibit to the registration statement of which this prospectus is a part, or will incorporate by reference
from another report that we file with the SEC, the form of each unit agreement relating to units offered under this prospectus.
If
we offer any units, certain terms of that series of units will be described in the applicable prospectus supplement, including,
without limitation, the following, as applicable:
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the
title of the series of units;
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identification
and description of the separate constituent securities comprising the units;
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the
price or prices at which the units will be issued;
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the
date, if any, on and after which the constituent securities comprising the units will be separately transferable;
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a
discussion of certain United States federal income tax considerations applicable to the units; and
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any
other terms of the units and their constituent securities.
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PLAN
OF DISTRIBUTION
We
may sell the securities from time to time pursuant to underwritten public offerings, negotiated transactions, block trades or
a combination of these methods or through underwriters or dealers, through agents and/or directly to one or more purchasers. The
securities may be distributed from time to time in one or more transactions:
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at
a fixed price or prices, which may be changed;
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at
market prices prevailing at the time of sale;
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at
prices related to such prevailing market prices; or
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at
negotiated prices.
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Each
time that we sell securities covered by this prospectus, we will provide a prospectus supplement or supplements that will describe
the method of distribution and set forth the terms and conditions of the offering of such securities, including the offering price
of the securities and the proceeds to us, if applicable.
Offers
to purchase the securities being offered by this prospectus may be solicited directly. Agents may also be designated to solicit
offers to purchase the securities from time to time. Any agent involved in the offer or sale of our securities will be identified
in a prospectus supplement.
If
a dealer is utilized in the sale of the securities being offered by this prospectus, the securities will be sold to the dealer,
as principal. The dealer may then resell the securities to the public at varying prices to be determined by the dealer at the
time of resale.
If
an underwriter is utilized in the sale of the securities being offered by this prospectus, an underwriting agreement will be executed
with the underwriter at the time of sale and the name of any underwriter will be provided in the prospectus supplement that the
underwriter will use to make resales of the securities to the public. In connection with the sale of the securities, we or the
purchasers of securities for whom the underwriter may act as agent, may compensate the underwriter in the form of underwriting
discounts or commissions. The underwriter may sell the securities to or through dealers, and those dealers may receive compensation
in the form of discounts, concessions or commissions from the underwriters and/or commissions from the purchasers for which they
may act as agent. Unless otherwise indicated in a prospectus supplement, an agent will be acting on a best efforts basis and a
dealer will purchase securities as a principal, and may then resell the securities at varying prices to be determined by the dealer.
Any
compensation paid to underwriters, dealers or agents in connection with the offering of the securities, and any discounts, concessions
or commissions allowed by underwriters to participating dealers will be provided in the applicable prospectus supplement. Underwriters,
dealers and agents participating in the distribution of the securities may be deemed to be underwriters within the meaning of
the Securities Act of 1933, as amended, and any discounts and commissions received by them and any profit realized by them on
resale of the securities may be deemed to be underwriting discounts and commissions. We may enter into agreements to indemnify
underwriters, dealers and agents against civil liabilities, including liabilities under the Securities Act, or to contribute to
payments they may be required to make in respect thereof and to reimburse those persons for certain expenses.
Any
common stock will be listed on the Nasdaq Capital Market, but any other securities may or may not be listed on a national securities
exchange. To facilitate the offering of securities, certain persons participating in the offering may engage in transactions that
stabilize, maintain or otherwise affect the price of the securities. This may include over-allotments or short sales of the securities,
which involve the sale by persons participating in the offering of more securities than were sold to them. In these circumstances,
these persons would cover such over-allotments or short positions by making purchases in the open market or by exercising their
over-allotment option, if any. In addition, these persons may stabilize or maintain the price of the securities by bidding for
or purchasing securities in the open market or by imposing penalty bids, whereby selling concessions allowed to dealers participating
in the offering may be reclaimed if securities sold by them are repurchased in connection with stabilization transactions. The
effect of these transactions may be to stabilize or maintain the market price of the securities at a level above that which might
otherwise prevail in the open market. These transactions may be discontinued at any time.
We
may engage in at the market offerings into an existing trading market in accordance with Rule 415(a)(4) under the Securities Act.
In
addition, we may enter into derivative transactions with third parties, or sell securities not covered by this prospectus to third
parties in privately negotiated transactions. If the applicable prospectus supplement so indicates, in connection with those derivatives,
the third parties may sell securities covered by this prospectus and the applicable prospectus supplement, including in short
sale transactions. If so, the third party may use securities pledged by us or borrowed from us or others to settle those sales
or to close out any related open borrowings of stock, and may use securities received from us in settlement of those derivatives
to close out any related open borrowings of stock. The third party in such sale transactions will be an underwriter and, if not
identified in this prospectus, will be named in the applicable prospectus supplement (or a post-effective amendment). In addition,
we may otherwise loan or pledge securities to a financial institution or other third party that in turn may sell the securities
short using this prospectus and an applicable prospectus supplement. Such financial institution or other third party may transfer
its economic short position to investors in our securities or in connection with a concurrent offering of other securities.
We
do not make any representation or prediction as to the direction or magnitude of any effect that the transactions described above
might have on the price of the securities. In addition, we do not make any representation that underwriters will engage in such
transactions or that such transactions, once commenced, will not be discontinued without notice.
The
specific terms of any lock-up provisions in respect of any given offering will be described in the applicable prospectus supplement.
To
comply with applicable state securities laws, the securities offered by this prospectus will be sold, if necessary, in such jurisdictions
only through registered or licensed brokers or dealers. In addition, securities may not be sold in some states unless they have
been registered or qualified for sale in the applicable state or an exemption from the registration or qualification requirement
is available and is complied with.
The
underwriters, dealers and agents may engage in transactions with us, or perform services for us, in the ordinary course of business
for which they receive compensation.
LEGAL
MATTERS
Lucosky
Brookman LLP will pass upon certain legal matters relating to the issuance and sale of the securities offered hereby on behalf
of Meridian Waste Solutions, Inc. Additional legal matters may be passed upon for us or any underwriters, dealers or agents, by
counsel that we will name in the applicable prospectus supplement.
EXPERTS
The consolidated financial statements
of Meridian Waste Solutions, Inc. as of December 31, 2016 and for the year then ended incorporated in this Prospectus by reference
from our Annual Report on Form 10-K for the year ended December 31, 2016 have been audited by Hein & Associates LLP, an independent
registered public accounting firm, as stated in their report thereon, incorporated herein by reference, and have been incorporated
in this Prospectus and Registration Statement in reliance upon such report and upon the authority of such firm as experts in accounting
and auditing.
The consolidated financial statements
of Meridian Waste Solutions, Inc. as of December 31, 2015 and for the year then ended incorporated in this Prospectus by reference
from our Annual Report on Form 10-K for the year ended December 31, 2016 have been audited by D’Arelli Pruzansky, P.A.,
an independent registered public accounting firm, as stated in their report thereon, incorporated herein by reference, and have
been incorporated in this Prospectus and Registration Statement in reliance upon such report and upon the authority of such firm
as experts in accounting and auditing.
The combined and consolidated financial
statements of The CFS Group as of December 31, 2016 and, 2015 and for each of the years then ended incorporated in this Prospectus
by reference from our Amendment No. 1 to Current Report on Form 8-K filed on May 1, 2017 have been audited by Hein & Associates
LLP, an independent registered public accounting firm, as stated in their report thereon, incorporated herein by reference, and
have been incorporated in this Prospectus and Registration Statement in reliance upon such report and upon the authority of such
firm as experts in accounting and auditing.
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