F-3

As filed with the Securities and Exchange Commission on December 11, 2003

Registration Statement No. 333-            

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form F-3

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933

Capital Environmental Resource Inc.

(Exact name of registrant as specified in its charter)

Ontario, Canada	4953	Not Applicable
(State or Other Jurisdiction of Incorporation or Organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

1005 Skyview Drive

Burlington, Ontario, Canada L7P 5B1

(905) 319-1327

(Address, including zip code, and telephone number, including area code, of registrant’s principal executive office)

CT Corporation System

1633 Broadway

New York, New York 10009

(212) 246-5072

(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Thomas E. Durkin III
Capital Environmental Resource Inc.
1005 Skyview Drive
Burlington, Ontario, Canada L7P 5B1
(905) 319-1237 Marc Rossell
Shearman & Sterling LLP
599 Lexington Avenue
New York, NY 10022
(212) 848-4000

    Approximate date of commencement of proposed sale to the public: From time to time after this Registration Statement becomes effective.

    If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box.    o

    If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    þ

    If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

    If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act of 1933 registration statement number of the earlier effective registration statement for the same offering.    o

    If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.    o

CALCULATION OF REGISTRATION FEE

		Proposed Maximum	Proposed Maximum
Title of Each Class of	Amount to be	Offering Price	Aggregate Offering	Amount of
Securities to be Registered	Registered(1)	Per Share(2)	Price	Registration Fee
Common Shares, no par value	56,486,746	$5.79	$327,058,259	$26,459.01

(1)

Consists of (i) 21,679,897 outstanding common shares, (ii) 28,146,333 common shares issuable on the automatic conversion of the existing Series 1 Preferred Shares upon shareholder approval and (iii) 6,660,516 common shares issuable upon the exercise of outstanding warrants. In accordance with Rule 416 under the Securities Act of 1933, the common shares offered hereby shall also be deemed to cover an indeterminate number of shares of common shares as may from time to time become issuable by reason of share splits, share dividends or similar transactions.

(2)

Estimated solely for the purpose of calculating the registration fee pursuant to Rule 457(c) under the Securities Act of 1933 based upon the average of the high and low prices reported for the Company’s common shares by the Nasdaq SmallCap Market on December 9, 2003.

     The registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the registration statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. The selling shareholders may not sell these securities until the registration statement becomes effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

SUBJECT TO COMPLETION, DATED DECEMBER 11, 2003

56,486,746 Common Shares

     The selling shareholders listed on pages 20 through 41 below may, from time to time, offer and sell up to 56,486,746 common shares under this prospectus. These consist of (i) 21,679,897 outstanding common shares that were acquired by the selling shareholders from us in private placement transactions from September 2001 through September 2003, (ii) 28,146,333 common shares issuable on the automatic conversion of the existing Series 1 Preferred Shares upon shareholder approval, and (iii) 6,660,516 common shares issuable upon the exercise of outstanding warrants granted (a) to certain subscribers of Series 1 Preferred Shares from March 2003 to September 2003, (b) to our chief executive officer in connection with the commencement of his employment and (c) to certain other persons. Our registration of the common shares does not necessarily mean that the selling shareholders will sell all or any of the shares covered by this prospectus. The selling shareholders will receive all of the proceeds from the sale of the shares offered in this prospectus. We will not receive any part of the proceeds from this offering.

     The selling shareholders may sell their common shares directly or through one or more broker-dealers on the Nasdaq SmallCap Market or on any national securities exchange or automated quotation system on which our common shares may then be listed or traded, in the over-the-counter market, in negotiated transactions or otherwise, at prices related to the prevailing market price or at negotiated prices. Please see “Plan of Distribution” beginning on page 42 for more information.

     We will pay all expenses to register the common shares, except that the selling shareholders will pay any underwriting commissions and expenses, brokerage fees, transfer taxes and the fees and expenses of their attorneys and other experts.

     Our common shares are quoted on the Nasdaq SmallCap Market and trade under the symbol “CERI.” On December 9, 2003, the last reported sale price of our common shares was $5.60 per share.

      Investing in our common shares involves risks. See “Risk Factors” beginning on page 4.

     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.

The date of this prospectus is December      , 2003

TABLE OF CONTENTS

FORM OF COMMON SHARES CERTIFICATE

OPINION OF BLAKE, CASSELS & GRAYDON LLP

CONSENT OF PRICEWATERHOUSECOOPERS LLP

CONSENT OF PRICEWATERHOUSECOOPERS LLP

CONSENT OF SHEPARD SCHWARTZ & HARRIS LLP

      YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. NO DEALER, SALESPERSON OR OTHER PERSON IS AUTHORIZED TO GIVE INFORMATION THAT IS NOT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY JURISDICTION WHERE THE OFFER OR SALE IS NOT PERMITTED. THE INFORMATION CONTAINED IN THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR THE SALE OF ANY SECURITIES COVERED BY THIS PROSPECTUS.

TABLE OF CONTENTS

	Page
The Company		1
Recent Developments		2
Risk Factors		4
Special Note Regarding Forward-Looking Statements		14
Use of Proceeds		15
Capitalization		15
Market Price History of Common Shares		16
Dividend Policy		17
Description of Share Capital		18
Selling Shareholders		20
Plan of Distribution		42
Expenses of the Issue		44
Legal Matters		44
Experts		44
Where You Can Find More Information		44
Incorporation of Information By Reference		46

      All financial information presented in this prospectus is in U.S. dollars, unless otherwise indicated. All references to “$” or “dollars” means U.S. dollars and all references to “C$” means Canadian dollars. Unless we have indicated otherwise, or the context otherwise requires, references in this prospectus to “Capital Environmental,” “we,” “us,” “our” and “the Company” or similar terms are to Capital Environmental Resource Inc. and its predecessors, unless the context clearly indicates otherwise.

      This prospectus contains registered service marks, trademarks and trade names of Capital Environmental Resource Inc., including the Capital Environmental Resource Inc. name and logo.

(i)

THE COMPANY

      We are a regional, integrated solid waste services company that provides collection, transfer, disposal and recycling services to commercial, industrial and residential customers. We were formed on the amalgamation of our predecessor, Capital Environmental Resource Inc. with a number of its wholly owned subsidiaries, pursuant to the Business Corporations Act (Ontario) effective on January 1, 2003. Our predecessor was incorporated under the Business Corporations Act (Ontario) in May 1997 and began operations in June 1997 when it acquired selected Canadian solid waste assets and operations from Canadian Waste Services Inc. and its parent, USA Waste Services, Inc. (now known as Waste Management, Inc.).

      From June 1997 through June 2003, we acquired 42 solid waste services businesses in Canada, including 47 collection operations, 13 transfer stations, two landfills, seven recycling processing facilities and a contract to operate two landfills and one transfer station. Between May 1997 and May 2000, we acquired nine solid waste service businesses in the United States, all of which were sold in the first and second quarters of 2001.

      We re-entered the United States market with the acquisition of a landfill in Osceola County, Florida in May 2003, through our U.S. subsidiary, Waste Services, Inc. (“WSI”). In July 2003, we completed two acquisitions in the State of Arizona which included: (i) an option to acquire an 800 acre landfill site which has been rezoned for a municipal solid waste landfill with potential capacity of 100 million tons (the option was exercised and the landfill purchased in September 2003); (ii) a transfer station fully zoned and permitted, allowing for the construction of a facility that can process up to 4,000 tons of waste per day; and (iii) a waste collection business. Since then, we have purchased two additional collection businesses in Phoenix, Arizona. We have also recently entered into an agreement to acquire certain assets located in Florida from Allied Waste Industries, Inc. and an agreement to acquire all of the issued and outstanding shares of Florida Recycling Services, Inc. These pending acquisitions are further described under “Recent Developments.”

      Our corporate offices are located at 1005 Skyview Drive, Suite 221, Burlington, Ontario, Canada, L7P 5B1 and our telephone number is (905) 319-1237.

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RECENT DEVELOPMENTS

Restatement of 2002 Financial Statements

      On November 26, 2003, we announced that we would be restating our 2002 financial results due to a revision of the accounting treatment for certain Series 1 Preferred Shares relating to a February 2002 financing. In connection with the restatement, on November 28, 2003 we filed an amended Form 20-F/A for the year ended December 31, 2002.

      The purpose of the restatement was to reflect the accounting treatment of the beneficial conversion feature of 11,320,754 Series 1 Preferred Shares as a non-cash dividend of approximately $14.7 million to the purchasers of the Series 1 Preferred Shares. These Series 1 Preferred Shares were issued in February 2002 and were converted to common shares in March 2002. The effect of the restatement was to decrease net income available to common shareholders from approximately $2.1 million, as previously reported, to a net loss available to common shareholders of approximately $12.6 million, as restated, and to decrease basic income per share from $0.06, as previously reported, to a net loss per share of $0.39, as restated.

      The non-cash adjustments did not impact our previously reported cash flow, total assets or shareholders’ equity. Since our 2002 financial statements have been restated, investors are cautioned not to rely on our previously filed 2002 financial statements.

Pending Acquisitions

      On November 14, 2003, we announced that we had entered into a definitive agreement to acquire from Allied Waste Industries, Inc. (“Allied”), the assets of Allied’s northern and central Florida operations for a purchase price of approximately $120 million plus working capital, as defined in the asset purchase agreement, which as of September 30, 2003 approximated $4.8 million. The northern and central Florida operations to be acquired include five collection companies, two landfills, four recycling facilities and three transfer station operating contracts. The primary markets currently serviced by the operations are in Tampa, Sarasota and Jacksonville, Florida. Completion of the acquisition, which is expected to occur on or before December 31, 2003, is subject to certain customary conditions including but not limited to financing conditions.

      On November 24, 2003, we announced that we had entered into a definitive agreement to purchase all of the issued and outstanding shares of Florida Recycling Services, Inc. (“FRS”) for a purchase price of approximately $128.5 million in cash, subject to certain changes in working capital, and the issuance of 3,250,000 common shares. FRS’s operations are based in central Florida, primarily servicing the Orlando, Daytona, Fort Myers and Tampa markets. Completion of the acquisition, which is expected to occur on or before January 31, 2004, is subject to certain customary conditions including but not limited to financing conditions.

      Certain financial statements for the Allied and FRS businesses to be acquired, together with the pro forma financial statements, have been filed on Form 6-K and as Exhibits thereto with the Securities and Exchange Commission on December 11, 2003, which is incorporated by reference in this prospectus. See “Incorporation of Information by Reference”.

Amendment to our Senior Credit Facility

      In November 2003, we amended our Senior Credit Facility to allow for (i) the acquisition of certain assets of Allied’s northern and central Florida businesses; (ii) the issuance of subordinated debt of up to $110.0 million to complete the acquisition of Allied’s north and central Florida businesses; and (iii) increased lending commitments of up to the lesser of $88.0 million or C$131.0 million. Additionally, we amended certain of our financial covenants to make them less restrictive. The amendment to our Senior Credit Facility is filed as an Exhibit to the Form 6-K filed with the Securities and Exchange Commission on November 28, 2003, which is incorporated by reference in this prospectus. See “Incorporation of Information by Reference”.

      As of September 30, 2003, we were in compliance with our financial covenants under the Senior Credit Agreement, as amended. As of September 30, 2003, unused availability under our Senior Credit Agreement, as amended was approximately $18.6 million.

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      We believe that our Senior Credit Facility will not provide sufficient liquidity for our prospective financing needs and, as such, we expect that we will pursue additional sources of financing which may include, but not be limited to, a new senior credit facility and other debt and equity offerings.

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RISK FACTORS

      Set out below are certain risk factors that could materially adversely affect our future business, operating results or financial condition. Investors should carefully consider these risk factors and the other information in this prospectus and our filings with the Securities and Exchange Commission, including our Annual Report on Form 20-F for the year ended December 31, 2002 filed with the Securities and Exchange Commission on July 15, 2003, as amended by Amendment No. 1 to Annual Report on Form 20-F/A filed on November 28, 2003, each of which is incorporated in this prospectus by reference, and the other documents incorporated by reference in this prospectus, before making investment decisions involving our common shares. Additional risks not currently known to us or that we now consider immaterial may also impair our business and adversely affect an investment in our common shares.

Risks Related To The Offering

Overhang on the Market for our Common Shares and Depression on the Market Price

      Following the effective date of this registration statement, a maximum of 56,486,746 additional common shares will be eligible for resale to the public. This amount of common shares represents a significant overhang on the market for our common shares. If a substantial number of shares in this overhang were sold in a short period of time, any market for our common shares could be dramatically depressed which will result in a reduction of the value of your investment.

Risks Related To Our Business

Growth Through Acquisitions — We may be unable to successfully execute and implement our acquisition strategy

      Part of our strategy to expand our business and increase our revenue and profitability is to pursue the acquisition of disposal-based and collection assets and businesses. We have identified a number of acquisition candidates, both in Canada and in the United States, which we believe are suitable. However, we may not be able to acquire these candidates at prices or on terms and conditions that are favorable to us. Our ability to execute our acquisition strategy also depends upon other factors, including the availability of additional equity and/or indebtedness to support our acquisition plans, the successful integration of acquired businesses and our ability to effectively compete in the new markets we enter. Our inability to achieve any of these factors could have a material adverse effect on our business, financial condition and results of operations.

Pending Acquisitions of Allied and FRS — Our recent agreements to acquire certain businesses of Allied and FRS are subject to financing conditions and other customary closing conditions which, if they are not met, will result in us forfeiting the deposits paid under those agreements

      We entered into a definitive agreement on November 13, 2003 to acquire from Allied, the assets of Allied’s northern and central Florida operations for a purchase price of approximately $120 million, plus working capital. On November 21, 2003 we entered into a definitive agreement to purchase all of the issued and outstanding shares of FRS for a purchase price of approximately $128.5 million in cash, subject to certain changes in working capital, and the issuance of 3,250,000 common shares. Completion of the Allied acquisition is expected to occur on or before December 31, 2003 and completion of the FRS acquisition is expected to occur on or before January 31, 2004. Both acquisitions are subject to customary closing conditions, including financing conditions.

      If we are not able to obtain financing for either or both of these acquisitions on terms acceptable to us, or if any of the other closing conditions are not met for either or both of these acquisitions, then we would forfeit the deposits we paid under the relevant acquisitions agreements. Under the agreement to acquire Allied, we paid a cash deposit of $7.5 million which would be forfeited if this acquisition is not closed by December 31, 2003. Under the agreement to acquire FRS, we paid a deposit of $3.0 million in cash and issued one million common shares to the sellers. The $3.0 million deposit and the one million common shares would be forfeited if the FRS acquisition is not closed by February 15, 2004, unless, upon making additional payments of up to $2.25 million to the sellers, we elect to extend the closing date to May 15, 2004 and the FRS acquisition is completed by that time.

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Capital Requirements — We may be unable to attract sufficient capital to fund our acquisition strategy

      Additional capital will be required by us in order to implement our acquisition strategy, both to finance acquisitions and for capital expenditures to develop and maintain acquired landfills and to upgrade fleets of acquired vehicles and other facilities. We expect to finance future acquisitions through a combination of cash from operations, borrowings under our senior credit facility, issuing additional equity or debt securities and/or seller financing. Seller financing depends upon the sellers’ willingness to accept our shares as part of the consideration for an acquisition and our willingness to issue our shares, which will be impacted by the market value of our common shares. If seller financing is not available, we will have to use cash from operations, borrowings under our senior credit facility and equity or debt issuances to fund our capital requirements. Using cash from operations to finance acquisitions may reduce the funds we have available for other corporate purposes. Additional borrowings from our lenders will increase interest expense and may require us to commit to additional covenants which further limit our financial and operational flexibility. Substantially all of our assets are already pledged to secure our senior credit facility, as described under “— Indebtedness” below. This could restrict our ability to obtain additional debt on favorable terms, or at all. We expect that cash from operations and/or borrowings under our senior credit facility will be insufficient to meet our capital needs in the near term, and, as a result, we will need to raise capital through the issuance of additional debt or equity securities, which may not be available on commercially reasonable terms, or at all. The issuance of additional equity will be dilutive to the existing shareholders. If we are unable to secure the capital we need on attractive terms, we may not be able to achieve our strategy of growth through acquisitions. This could have a material adverse effect on our financial condition and results of operations.

Integration of Acquired Businesses — We may be unable to successfully integrate the businesses we acquire into our operations

      Our growth and future financial performance will depend upon our ability to effectively combine the operations of acquired businesses with our existing operations and to realize expected benefits through the vertical integration of acquired operations and disposal facilities. The integration process may require changes in the operating methods and strategies of acquired businesses. The integration of acquired businesses may divert management’s attention from its day-to-day responsibilities. Any difficulties encountered by us in the integration process could adversely affect our financial condition and operating results.

Acquisition of Undisclosed Liabilities — We may acquire liabilities which are not disclosed to us as part of the acquisitions we make

      An important part of our growth strategy is to grow through acquisitions. While we have in place a due diligence process to review the businesses we acquire, we may not identify or may underestimate our exposure for certain liabilities of the businesses we acquire. As a result, we may become responsible for liabilities of the businesses we acquire, including liabilities for environmental claims, that were not discovered or fully quantified prior to completing the acquisition and for which we are unable to recover from the vendor. The acquisition of undisclosed liabilities could adversely affect our financial condition and our operating results.

Competition for Acquisitions — We may be unable to compete successfully for acquisition targets against other companies

      We compete with other companies for the acquisition of targets identified by us. Some of these companies are better capitalized than us. Competition for acquisition candidates may increase the costs of acquisitions to a point where they are beyond our financial capabilities or would adversely affect our operating results and financial condition.

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Timing of Acquisitions — We may not be able to complete acquisitions which we undertake within their intended timeframe

      There are a number of factors, such as obtaining third-party consents and regulatory approvals, completing our due diligence review of the acquisition target, finalizing the transaction documents and completing the required financing arrangements, which may cause acquisitions to be delayed beyond their expected completion dates. These delays may cause our operating results to be less favorable than expected, which could cause our share price to decline.

Deferral of Acquisition and Site Development-Related Expenses — We may incur significant expenses in pursuing acquisitions

      We may incur significant expenses in pursuing an acquisition. These include professional and consulting fees paid to complete our due diligence review of our acquisition targets. As permitted under U.S. GAAP, we capitalize certain of these expenses, as well as the costs of disposal site development and expansions. If an acquisition is no longer considered probable, or if a disposal site development or expansion is not completed or is determined to be impaired, in accordance with U.S. GAAP, we would charge against earnings any unamortized capitalized expenditures incurred in connection with that acquisition or disposal site or expansion. In future periods, we may be required to incur charges against earnings in accordance with this policy or due to other events that cause impairments. Depending upon the magnitude of the charge, this could have a material impact on our operating results and our covenants to our banks and to the preferred stockholders of WSI, which could adversely affect our liquidity.

Unsuccessful Acquisitions — Acquisitions we make may not fulfill revenue and profitability expectations

      Some of the acquisitions we complete may not fulfill their revenue and profitability expectations due to factors beyond our control, such as market position and customer base. This could result in our operating margins being less than anticipated when the acquisition was completed. We could, as a result, decide to change our strategy for that market and sell the operations we have acquired at a loss or recognize an impairment of goodwill and/or other intangible assets.

Migration Related Costs and Expenses — We expect to incur substantial costs and expenses related to our reorganization and may also incur substantial penalties if we do not complete our planned reorganization by March 31, 2004

      By the end of the first quarter of 2004, we currently expect to complete a reorganization by way of a plan of arrangement under the Business Corporations Act (Ontario). By the terms of the plan of arrangement, we will become an indirect subsidiary of WSI, which is currently our wholly-owned U.S. subsidiary. We refer to this transaction as the Migration.

      In order to complete the Migration, we must seek and obtain the approval of the Superior Court of Justice (Ontario) as well as the approval of a special majority of our shareholders. By the terms of the Business Corporations Act (Ontario), shareholders may have a right to dissent from approving the Migration. If shareholders are granted a right to dissent, shareholders who properly dissent in accordance with the Business Corporations Act (Ontario) are entitled to be paid the fair value of their common shares, determined as of the close of business on the date before the resolution approving the Migration was adopted. We must also seek and obtain certain regulatory approvals in both the United States and Canada.

      In completing the Migration, we expect to incur substantial legal and accounting costs and expenses. These costs must be expensed as they are incurred and will have a negative effect on our profitability in the fourth quarter of 2003 and the first quarter of 2004. The Migration may also divert management’s attention away from its day-to-day responsibilities.

      In addition, by the terms of our agreements with Kelso & Company LLC (“Kelso”) relating to the shares of preferred stock of WSI, if we do not complete the Migration by March 31, 2004, the dividend payable on the preferred stock of WSI issued to Kelso will increase by 1% per annum, from 17.75%, for every month that the Migration is delayed, up to a maximum increase of an additional 12% per annum. We may also be required to issue up to an additional 6,000,000 warrants to purchase WSI common stock

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to Kelso at an exercise price of $0.01 per share. Based on our quoted closing share price at December 8, 2003 of $5.88 per share, the intrinsic value of such warrants would approximate $35.3 million. The increase in the dividend payable on the WSI preferred stock issued to Kelso would increase the amount to be paid to Kelso on the redemption of the preferred stock and would have a material adverse effect on our financial condition. If the Migration is not completed at all, Kelso may also require us to exchange the existing 7,150,000 warrants to purchase common stock of WSI, and any of the additional up to 6,000,000 warrants for common stock of WSI, for warrants to purchase our common shares. The issue of additional common shares upon the exercise of the warrants would result in a substantial dilution of the existing shareholders’ holdings and could substantially reduce the value of your investment.

                  Difficulty Enforcing Suits Against Us — We are incorporated in Ontario, Canada and it may be difficult for shareholders to sue us or our non-U.S. directors within the United States

      We are incorporated in the province of Ontario, Canada under the Business Corporations Act (Ontario). As of the date of this prospectus, the majority of our assets are located in Canada. In addition, a majority of our directors are residents of Canada, and all or a substantial portion of their assets are located outside of the United States. As a result, it may be difficult for our shareholders to serve notice of a lawsuit on us or our non-U.S. directors within the United States or to enforce against us or such persons judgments of courts of the United States, including judgments predicated upon the civil liability provisions of the federal securities laws of the United States. In addition, it may be difficult for our shareholders to enforce judgments predicated on the federal securities laws of the United States resulting from actions brought in jurisdictions located outside the United States.

Risk Related To Our Operations

Competition from Large and Small Solid Waste Services Companies — We may be unable to successfully compete with other solid waste companies

      The markets in which we operate are highly competitive and fragmented and require substantial labor and capital resources. We compete with large, national solid waste services companies, as well as smaller regional solid waste services companies of varying sizes and resources. Some of our competitors are better capitalized, have greater name recognition and greater financial, operational and marketing resources than us, and may be able to provide services at a lower cost. We also compete with operators of alternative disposal facilities, and municipalities that maintain their own waste collection and disposal operations. Public sector operators may have financial advantages over us because of their access to user fees and similar charges as well as to tax revenues. Competitive pressures may make our internal growth strategy of improving service and increasing sales penetration difficult or impossible to execute.

Termination or Non-Renewal of Existing Customer Contracts, or Failure to Obtain New Customer Contracts — If we are unable to renew existing customer contracts, or obtain new ones, our revenue from operations may decline

      We derive a portion of our revenue from municipal contracts that require competitive bidding by potential service providers. We intend to continue to bid on municipal contracts and to rebid on existing municipal contracts, but there is no way to predict which contracts will be maintained or won in the future. In the past year, we have found that some municipalities in Canada have imposed more restrictive bonding requirements as a qualification to bid for some residential waste collection contracts. We may be unable to meet such bonding requirements at a reasonable cost to us or at all. These requirements may limit our ability to bid for some municipal contracts and may favor some of our competitors. If we are unable to compete for municipal contracts because of bonding requirements, our revenue from operations may decline.

      We also derive a portion of our revenue from non-municipal contracts, which generally have a term of one to three years. Some of these contracts permit our customers to terminate them before the end of the contractual term. Any failure by us to replace revenues from contracts lost through competitive bidding, termination or non–renewal, within a reasonable time period could have a material adverse effect on our business, financial position and results of operations.

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Dependence on Third Parties for Disposal of Its Solid Waste — If we cannot maintain favorable disposal arrangements with third parties we could incur significant costs

      We currently deliver a substantial portion of the solid waste we collect in Canada to municipally owned disposal facilities and to privately owned or operated disposal facilities. If municipalities increase their disposal rates or if we cannot obtain and maintain favorable disposal arrangements with private owners or operators, we could incur significant additional costs and, if we are not able to pass these cost increases on to our customers because of competitive pressure, this could have a material adverse effect on our business, financial condition and results of operations.

Recent Losses/Unprofitability — Continued losses would adversely affect our financial condition

      We experienced net losses of $3.3 million for the six months ended June 30, 2003, $19.7 million for the year ended December 31, 2000 and $18.3 million for the year ended December 31, 2001. We experienced net income of $2.1 million for the year ended December 31, 2002. Continued ongoing losses, and the resulting impact on our cash flow, would adversely affect our financial condition and our ability to obtain financing.

Indebtedness — Our indebtedness could adversely affect our ability to raise additional capital to fund our operations and limit our ability to implement our growth strategy or to react to changes in the economy

      As of June 30, 2003, we had indebtedness of approximately $123.6 million, including approximately $60.0 million outstanding under our senior secured credit facility, $4.4 million in other subordinated promissory notes, $2.7 million in capital lease obligations, and cumulative mandatorily redeemable preferred shares with a liquidation preference of approximately $56.5 million.

      Our indebtedness was incurred pursuant to a senior secured credit facility with a syndicate of financial institutions, including Bank of America, the Canadian Imperial Bank of Commerce and the Bank of Nova Scotia (which we refer to as the Senior Credit Facility) which was completed in June of 2002. At that time, our prior senior debt facility was repaid in full. The Senior Credit Facility is a revolving credit facility denominated in Canadian dollars and provides for borrowings of up to the lesser of $88.0 million or C$131.0 million. The Senior Credit Facility is collateralized by a first priority security interest in substantially all of our current and future acquired assets and that of our subsidiaries.

      The amount of indebtedness owed under our Senior Credit Facility may have adverse consequences for us, including making us more vulnerable to unfavorable economic conditions and competitive pressures, limiting our ability to borrow additional funds, requiring us to dedicate or reserve a large portion of cash flow from operations to service debt, limiting our ability to plan for or react to changes in our business and industry and placing us at a disadvantage compared to competitors with less debt in relation to cash flow. In addition, we believe that the unused capacity of our Senior Credit Facility will not provide sufficient liquidity for our prospective financing needs or allow us to complete our current acquisition strategy. We expect that we will pursue additional sources of financing, which may include debt and equity offerings. There can be no assurance that we will be successful in securing the additional financing that we require to complete our acquisition strategy, to meet our other prospective financing needs or on terms that are favorable to us or at all.

      The interest rate charged on our Senior Credit Facility is a variable rate based on current market rates plus a fixed margin based on the form of borrowing (Canadian Eurodollar or prime). The fixed margins range from 2.75% per annum to 3.75% per annum for Canadian Eurodollar rate loans and 1.25% per annum to 2.25% per annum for prime rate loans. Within the ranges, the fixed margin is determined based on our leverage ratio. As a result, we may be subject to increased interest expense if interest rates increase over the term of the Senior Credit Facility which could have an adverse effect on our profitability.

      The Senior Credit Facility, as amended, contains certain financial and other covenants that restrict our ability to, among other things, pay cash dividends on our share capital, repurchase shares and make certain acquisitions and dispositions and enter into operating leases. These financial covenants relate primarily to (i) a leverage ratio, being funded debt as a ratio of EBITDA, as that term is defined in our

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Senior Credit Facility, as amended; (ii) a fixed charge coverage ratio; (iii) total net worth; and (iv) minimum pro forma adjusted EBITDA. These covenants and restrictions could limit the manner in which we conduct our operations and could adversely affect our ability to raise capital. Any failure by us to comply with these covenants and restrictions will, unless waived by the lenders, result in an inability to borrow under the Senior Credit Facility and/or an immediate obligation to repay all amounts outstanding. In such event, we would be required to refinance our debt or obtain capital from other sources, including sales of additional debt or equity or sales of assets, in order to meet our repayment obligations, which may not be possible. We may also be required to cash collateralize certain of our performance bonds and letters of credit. This would have a material adverse effect on our operations and financial condition.

      As of September 30, 2003, we were in compliance with our covenants under the Senior Credit Facility, as amended. However, there can be no assurance that we will continue to be in compliance with our amended covenants. If we fail to meet any of our debt covenants and our lenders do not waive or amend the Senior Credit Facility, the lenders would have the right to declare an event of default and seek remedies against us, including acceleration of all amounts then outstanding under the Senior Credit Facility. There can be no assurance that we would be successful in obtaining alternative sources of funding to repay this obligation should these events occur. In addition, should an event of default by declared by our lenders, we may be required to cash collateralize certain of our performance bonds and letters of credit.

      Beginning January 1, 2004, the availability under the Senior Credit Facility will be mandatorily reduced by a specified amount each calendar quarter. The amount of each scheduled quarterly reduction is based upon a percentage of the aggregate commitment amount under the facility as of December 31, 2003. Based upon the current aggregate commitment of $88.0 million, the facility will decline to $44.0 million by April 1, 2005. The Senior Credit Facility terminates on June 30, 2005. In addition to scheduled reductions, we are required to prepay and reduce the available credit with the proceeds of asset sales and issuances of debt, in each case subject to certain exceptions.

      In addition to our indebtedness under the Senior Credit Facility, in May of 2003, our U.S. subsidiary, WSI, issued 55,000 shares of preferred stock (the “WSI Preferred Stock”) to Kelso Investment Associates VI, L.P. and KEP VI, LLC (collectively, “Kelso”) pursuant to the terms of an agreement dated as of May 6, 2003 (“the WSI Subscription Agreement”). The WSI Preferred Stock entitle the holders to a liquidation preference of $1,000 per share and a cumulative cash dividend of 17.75% per annum (compounding and accruing quarterly in arrears). In the event of liquidation, the liquidation preference approximated $56.5 million as of June 20, 2003. As we are not permitted to declare and pay cash dividends pursuant to the terms of our Senior Credit Facility, the dividend payments will accrue. The WSI Preferred Stock, including all accrued and unpaid dividends must be redeemed in full by no later than May 6, 2015. We have the option to redeem all or any part of the WSI Preferred Stock prior to that date, subject to the payment of certain premiums if we elect to redeem the preferred shares prior to May 6, 2006. If we do not exercise our option to redeem all of the WSI Preferred Stock by May 6, 2009, Kelso may require WSI to initiate a sale of WSI or its assets on terms acceptable to its board of directors consistent with the exercise by the board members of their fiduciary obligations. If Kelso exercises this right, we may lose control of WSI or be forced to sell it at a lower price than we might otherwise expect to receive.

      Additionally, Kelso, as the holder of the WSI Preferred Stock, has the exclusive right to elect two directors of WSI so long as 25,000 or more WSI Preferred Stock are outstanding or one director so long as there are 5,000 or more WSI Preferred Stock outstanding. Certain actions of WSI and its affiliates also require the prior approval of the holders of a majority of the WSI Preferred Stock. All of these covenants and restrictions could limit the manner in which we conduct our operations and could adversely affect our ability to raise additional capital. Any failure by us to comply with these covenants and restrictions will, unless waived by Kelso, result in an immediate obligation to redeem all of the then outstanding WSI Preferred Stock. If such events occurred, we would be required to refinance WSI or obtain capital from other sources, including sales of additional debt or equity or the sale of assets, in order to meet our

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redemption obligations. There can be no assurance that we would be successful in obtaining alternative sources of funding to repay this obligation should events of default occur, particularly in the circumstances where a default has also occurred under our Senior Credit Facility.

      In addition, by the terms of our agreements with Kelso relating to the shares of WSI Preferred Stock, if we do not complete the Migration by March 31, 2004, the dividend payable on the WSI Preferred Stock issued to Kelso will increase by 1% per annum, from 17.75%, for every month that the Migration is delayed, up to a maximum increase of an additional 12% per annum. We may also be required to issue up to an additional 6,000,000 warrants to purchase WSI common stock to Kelso at an exercise price of $0.01 per share. Based on our quoted closing share price at December 8, 2003 of $5.88 per share, the intrinsic value of such warrants would approximate $35.3 million. The increase in the dividend payable on the WSI Preferred Stock issued to Kelso would increase the amount to be paid to Kelso on the redemption of the WSI Preferred Stock and would have a material adverse effect on our financial condition. If the Migration is not completed at all, Kelso may also require us to exchange the existing 7,150,000 warrants to purchase common stock of WSI, and any of the additional up to 6,000,000 warrants for common stock of WSI, for warrants to purchase our common shares. The issue of additional common shares upon the exercise of the warrants would result in a substantial dilution of the existing shareholders’ holdings and could substantially reduce the value of your investment.

Labor Unions — Unfavorable collective bargaining agreements or work stoppages could have an adverse effect on our business and results of operations

      Some groups of our employees have chosen to be represented by unions, and we have negotiated collective bargaining agreements with them. In addition, labor unions may make attempts to organize our non-unionized employees. We cannot predict which, if any, groups of employees may seek union representation in the future or the outcome of any collective bargaining. The negotiation of any collective bargaining agreement could divert management’s attention and/or result in increased operating expenses and lower operating margins. If we are unable to negotiate acceptable collective bargaining agreements, we may have to wait through “cooling off” periods, which are often followed by union-initiated work stoppages, including strikes. Unfavorable collective bargaining agreements, work stoppages or other labor disputes could have a material adverse effect on our business, financial condition and results of operations.

Increases in Certain Operating Costs — Our operating margins and profitability may be negatively impacted by increased fuel and energy costs

      Although fuel and energy costs account for a relatively small portion of our total operating costs, sustained increases in such costs, which we are unable to pass on to our customers because of competitive pressures, could lower our operating margins and negatively impact our profitability.

Seasonality — The industry in which we operate can be seasonal and decreases in revenues during winter months may have an adverse effect on our results of operations

      Our operating revenues tend to be somewhat lower in the fall and winter months, reflecting the lower volume of solid waste generated during those periods. Our first and fourth quarter results typically reflect this seasonality. In addition, particularly harsh weather conditions may result in temporary slow downs or suspension of certain of our operations and/or higher labor and operational costs, any of which could have a material adverse effect on our business, financial condition and results of operations.

Loss of Key Personnel — If we lose our senior management, we may be unable to focus on our business or pursue additional opportunities

      We are highly dependent upon the experience, abilities and continued efforts of our senior management team. The loss of one or more of our senior management team could have a material adverse effect on our business, financial condition and results of operations.

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Foreign Exchange Rate Fluctuations Generated in Canada — Our Canadian operations subject us to currency translation risk which could cause our results to fluctuate significantly from period to period

      For the year ended December 31, 2002, and the six months ended June 30, 2003, 100% of our revenue was derived from our operations in Canada and as such our primary functional currency is the Canadian dollar. However, for each reporting period, we translate the results of operations and financial condition into U.S. dollars. Therefore, our reported results of operations and financial condition are subject to changes in the exchange relationship between the two currencies. For example, as the relationship of the Canadian dollar strengthens against the U.S. dollar, as it has to date in 2003, our revenue is favorably affected and conversely expenses are unfavorably affected. The effects of translation are reported as a component of other comprehensive income. Separately, monetary assets denominated in U.S. dollars held by our Canadian operations are re-measured from U.S. dollars into Canadian dollars and then translated into U.S. dollars. The effects of re-measurement are reported currently as a component of net income (loss). We do not currently hedge our exposure to changes in foreign exchange rates.

Inability to Obtain Performance Bonds, Letters of Credit and Insurance — Any failure to maintain the required financial assurance or insurance to support existing or future service contracts would have a material adverse effect on our business, financial condition and results of operations

      Municipal solid waste services contracts and permits to operate transfer stations, landfills and recycling facilities typically require us to obtain performance bonds, letters of credit or other means of financial assurance to secure our contractual performance. Such contracts and permits also typically require us to maintain adequate insurance coverage. Our ability to obtain performance bonds or letters of credit is generally dependent on our creditworthiness. Any failure by us to obtain or maintain the required financial assurance or insurance to support existing or future service contracts or permits could have a material adverse effect on our business, financial condition and results of operations. In addition, substantially all of our bonding is provided by one surety in Canada, which holds a security interest in our assets, subject to the security interest in favor of our secured lenders under the Senior Credit Facility and another surety in the United States. Our bonding arrangements are generally renewed annually. If we are unable to renew our bonding arrangements on favorable terms or at all or enter into arrangements with new surety providers, we would be unable to meet our existing contractual obligations which require the posting of performance bonds and we would be unable to bid on new contracts. This would have a material adverse effect on our business, financial condition and results of operations.

Waste Reduction Programs — Changes to patterns regarding disposal of waste could impact our business model and adversely affect our results of operations

      Waste reduction programs may reduce the volume of waste available for collection in some areas where we operate. Some areas in which we operate offer alternatives to landfill disposal, such as recycling and composting. In addition, provincial, state and local authorities increasingly mandate recycling and waste reduction at the source and prohibit the disposal of certain types of waste, such as yard waste, at landfills. Any change in regulation or patterns regarding disposal of waste could have a material adverse effect on our business, financial condition and results of operations.

Limitations on Landfill Permitting, Development and Expansion — We may not meet our growth objectives if we are unable to develop new landfill sites or enter into agreements that provide us with access to landfill sites

      As at December 31, 2002, we owned two landfills located in the provinces of Alberta and Ontario and operated one other landfill in Ontario under an agreement with a municipality. Effective May 6, 2003, we acquired a third landfill site in Osceola County, Florida which is expected to be operational by no later than the first quarter of 2004. In September, 2003, we acquired a property in Pinal County, Arizona that has been zoned as a municipal solid waste landfill. We are seeking the required permits to construct and operate a landfill on this site. Our ability to meet our growth objectives depends in part on our ability to acquire, lease or expand landfills, develop new landfill sites or enter into agreements that will give us long-term access to landfill sites in our markets. In some areas in which we operate, suitable land for new sites

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or expansion of existing landfill sites may be unavailable. Permits to expand landfills are often not approved until the remaining permitted disposal capacity of a landfill is very low. We may not be able to purchase additional landfill sites, re-permit or expand existing landfill sites or negotiate or renegotiate agreements to obtain a long-term advantage for landfill costs. If we were to exhaust our permitted capacity at our landfills, our ability to expand internally could be limited, and we could be required to cap and close our landfills and dispose of collected waste at more distant landfills or at landfills operated by our competitors or other third parties. In Alberta, Canada regulations require landfills to be re-approved every 10 years, thereby providing the regulator an opportunity to add potentially more stringent or costly design or operating conditions to the permit or prevent the renewal of the permit. Any failure by us to secure favorable arrangements (through ownership of landfills or otherwise) for the disposal of collected waste could have a material adverse effect on our business, financial condition and results of operations.

      Changes in legislative or regulatory requirements may cause changes in the landfill site permitting process. These changes could make it more difficult or costly for us to obtain or renew landfill permits. Technical design requirements, as approved, may need modification at some future point in time which could result in higher development and construction costs than projected. Our current estimates of future disposal capacity may change as a result of changes in design requirements prescribed by legislation, construction requirements and changes in the expected waste density over the life of a landfill site. The density of waste may vary from those estimated in determining the available airspace at a landfill because of variations in operating conditions, including waste compaction practices, site design, climate and the nature of the waste.

      We rely on studies performed internally or by third parties to estimate the costs of obtaining and renewing permits and construction costs. Third party studies, surveys and internal estimates are relied upon to estimate landfill development costs and site capacities. These studies or surveys could be inaccurate which could result in increased permitting, landfill development or construction costs, or in lower site capacities from those currently projected.

Lack of Landfill Capacity/Limits on Export of Waste — Any disruptions to cross-border flow of waste may adversely affect our results

      There is limited disposal capacity available in Ontario, Canada, a market in which we have significant operations. As a result, a significant portion of the solid waste collected in Ontario is transported to sites in the United States for disposal. Disruptions in the cross-border flow of waste, or periodic closures of the border to solid waste could result in a lack of disposal capacity available to our Ontario market at all or at a reasonable price. These disruptions could have a material adverse affect on our business and operating results in the Ontario market.

Liability for Landfill Closing and Post-Closing Care Costs — To the extent our reserves or accruals are inadequate to cover landfill closing and post-closing care costs, these obligations could have a material adverse effect on our business, financial conditions and results of operations

      We have significant financial obligations to pay closure and post-closure care costs for the landfills we currently own and will likely have similar obligations with respect to any landfills we acquire in the future. We rely on internally performed studies and those of third parties in estimating our obligations for future closure and post-closure care costs. These studies could be inaccurate which could result in the costs incurred by us for closure and post-closure care being higher than those estimated.

      Actual future costs of construction materials and third party labor could differ from the costs we have used in estimating these closure and post-closure care costs for example, because of the impact of general economic conditions on the availability of the required materials and labor. Technical designs could be altered due to unexpected operating conditions, legislative or regulatory changes resulting in higher costs than currently estimated.

      Changes in legislative or regulatory requirements, including changes in capping, closure or post-closure care, activities, types or quantities of materials used, or the term of post closure care, could result in higher costs than those estimated by us. The actual rate at which disposal capacity is utilized could differ from

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the projected timing resulting in the landfill reaching capacity earlier or later than projected and us thereby incurring closure and post-closure care costs earlier or later than projected.

      To the extent our reserves or accruals are inadequate to cover such costs, these obligations could have a material adverse effect on our business, financial condition and results of operations.

Environmental and Land Use Regulation — We may be unable to obtain or maintain the environmental permits and approvals we need to operate our business and this would have a material adverse effect on our business

      We are subject to significant environmental and land use laws and regulations. To own and operate solid waste facilities, including landfills and transfer stations, we must obtain and maintain licenses or permits, as well as zoning, environmental and other land use approvals. It has become increasingly difficult, costly and time-consuming to obtain required permits and approvals to build, operate and expand solid waste management facilities. The process often takes several years, requires numerous hearings and compliance with zoning, environmental and other requirements and is resisted by citizen, public interest and other groups. The cost of obtaining permits could be prohibitive. We may not be able to obtain and maintain the permits and approvals needed to own, operate or expand our solid waste facilities. Moreover, the enactment of additional laws and regulations or the more stringent enforcement of existing laws and regulations could increase the costs associated with our operations. Any of these occurrences could have a material adverse effect on our business, financial condition and results of operations.

      In some markets in which we operate, permitting requirements may be prohibitive and may differ between those required of us and those required of our competitors. Our inability to obtain and maintain permits for solid waste facilities may adversely affect our ability to service our customers and compete in these markets.

      In addition, stringent controls on the design, operation, closure and post-closure care of solid waste facilities could require us to undertake investigative or remedial activities, curtail operations, close a facility temporarily or permanently, or modify, supplement or replace equipment or facilities at substantial costs, any of which could have a material adverse effect on our business, financial condition and results of operations.

Liability for Environmental Damage — Any exposure to environmental liabilities, to the extent not adequately covered by insurance, could have a material adverse effect on our business, financial condition and results of operations

      We could be held liable for environmental damage at solid waste facilities that we own or operate, including damage to neighboring landowners and residents for contamination of the air, soil, groundwater, surface water, and drinking water. Our liability could extend to damage resulting from pre-existing conditions and off-site contamination caused by pollutants or hazardous substances that we or our predecessors arranged to transport, treat or dispose of at other locations. We are also exposed to liability risks from businesses that we acquire as these businesses may have liabilities that we fail or are unable to discover, including noncompliance with environmental laws. Our insurance program may not cover all liabilities associated with environmental cleanup or remediation. Any exposure to environmental liabilities, to the extent not adequately covered by insurance, could have a material adverse effect on our business, financial condition and results of operations.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      This prospectus, and the other reports we have filed and may file from time to time with the Securities and Exchange Commission, contain forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934. Some of these forward-looking statements include forward-looking phrases such as “anticipates”, “believes”, “could”, “estimates”, “expects”, “foresees”, “intends”, “may”, “should” or “will continue”, or similar expressions or the negatives thereof or other variations on these expressions, or similar terminology, or discussions of strategy, plans or intentions. These statements also include descriptions in connection with, among other things:

•  anticipated revenues, capital expenditures, future cash flows and future financing and capital requirements;

•  the implementation of our business strategy;

•  descriptions of the expected effects of our competitive strategies; and

•  the impact of actions taken by our competitors and other third parties, including courts and other governmental authorities.

      Such statements reflect our current views regarding future events and are subject to certain risks, uncertainties and assumptions. Many factors could cause the actual results, performance or achievements to be materially different from any future results, performance or achievements that forward-looking statements may express or imply, including, among others:

•  changes in inflation;

•  changes in regulations affecting our business and costs of compliance;

•  revocation of existing permits and licenses, or the refusal to renew or grant new permits and licenses, which are required to enable us to operate our business or implement our growth strategy;

•  our ability to successfully implement our corporate strategy and integrate any acquisitions we undertake;

•  the outcome of pending legal claims against us;

•  changes in general business and economic conditions and in the financial markets; and

•  changes in accounting standards or pronouncements.

      Some of these factors are discussed in more detail in this prospectus, including under the caption “Risk Factors” and in documents incorporated by reference into this prospectus. If one or more of these risks or uncertainties affects future events and circumstances, or if underlying assumptions do not materialize, actual results may vary materially from those described in this prospectus as anticipated, believed, estimated or expected, and this could have a material adverse effect on our business, financial condition and results of operations. We have no plans to update any industry information or forward-looking statements set out in this prospectus and have no obligation to update any such statements. We are under no duty to update any of the forward-looking statements after the date of this prospectus. Moreover, neither we nor any other person assumes responsibility for the accuracy and completeness of our forward-looking statements.

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USE OF PROCEEDS

      The selling shareholders will receive all of the proceeds from the sale of common shares offered by this prospectus. We will not receive any proceeds from the sale of the common shares. The net proceeds received by us from the exercise of any outstanding warrants will be used for general corporate purposes.

CAPITALIZATION

      The following table sets forth our capitalization as of June 30, 2003, and the pro forma effects of the conversion of Series 1 Preferred shares into common shares. You should read this table in conjunction with our Consolidated Financial Statements as filed on Form 20-F/A, our Unaudited Condensed Consolidated Financial Statements as filed on Form 6-K and our Unaudited Pro Forma Condensed Consolidated Financial Statements as filed on Form 6-K, discussing our planned acquisitions of Allied’s northern and central Florida businesses and of FRS.

			As of June 30, 2003
			(amounts in thousands)
			Historical			Pro Forma
Cash and Cash Equivalents			$	16,282		$	16,282
Debt:
	Senior credit facility		$	59,984		$	59,984
	Other subordinated notes			4,432			4,432
	Capital lease obligations			2,658			2,658
	Mandatorily redeemable preferred at liquidation preference value			56,474			56,474
		Total Debt		123,548			123,548
Shareholder Equity:
	Common shares (38,444,995 and 53,686,661 issued and outstanding respectively) (1)(2)			128,055			168,098
	Series 1 Preferred Shares (10,241,666 and nil issued and outstanding respectively) (2)(3)			26,891			—
	Other additional paid-in-capital (2)			13,152			—
	Options, warrants, and deferred compensation			19,455			19,455
	Accumulated deficit and accumulated comprehensive income			(27,182	)		(27,182	)
				160,371			160,371
		Total Capitalization	$	283,919		$	283,919

(1)	During the period from July 1, 2003, to December 2, 2003, we issued 1,106,000 common shares for a value of approximately $6.6 million, due to the exercise of stock options and warrants, and the issuance of shares as a deposit in connection with the FRS acquisition. As such, the common shares issued and outstanding as of December 2, 2003, were 39,550,995.
(2)	Contemplates the conversion into common shares as of June 30, 2003 of the Series 1 Preferred Shares issued or to be issued as of June 30, 2003, thereby increasing the common shares issued and outstanding by 15,241,666.
(3)	During the three months ended September 30, 2003, we issued an additional 12,904,667 Series 1 Preferred Shares for net proceeds of approximately $39.6 million.

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MARKET PRICE HISTORY OF COMMON SHARES

      The following table provides high and low common shares price information for the periods indicated:

	High		Low
Year Ended December 31, 1999	$	15.0625	$	4.8750
Year Ended December 31, 2000	$	7.2500	$	1.4375
Year Ended December 31, 2001
First Quarter	$	4.3750	$	2.0625
Second Quarter	$	3.1900	$	1.5500
Third Quarter	$	4.4500	$	2.1000
Fourth Quarter	$	4.6000	$	3.2000
Year Ended December 31, 2002
First Quarter	$	6.07	$	3.70
Second Quarter	$	5.75	$	4.49
Third Quarter	$	5.11	$	3.03
Fourth Quarter	$	4.91	$	2.89
Year Ended December 31, 2003
First Quarter	$	4.51	$	3.85
Second Quarter	$	4.25	$	3.74
Third Quarter	$	5.85	$	3.75
Fourth Quarter (through to December 9, 2003)	$	5.21	$	6.59
Share price for the most recent six months:
June 2003	$	4.25	$	3.74
July 2003	$	4.51	$	3.91
August 2003	$	5.00	$	3.75
September 2003	$	5.85	$	5.00
October 2003	$	5.75	$	5.19
November 2003	$	6.72	$	5.21
December 2003 (through to December 9, 2003)	$	5.60	$	6.59

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      The following table sets forth the history of our share capital for the past three years:

		Issuances
		Type of Security	Number	Price
Shares Outstanding at December 31, 2000:		Common Shares	7,196,627	$7.93 per share(1)
	September 2001	Common Shares	16,500,000	$2.00 per share
Shares Outstanding at December 31, 2001:		Common Shares	23,696,627	$3.59 per share(1)
	February 2002	Series 1 Preferred Shares(2)	11,320,754	$2.65 per share
	May 2002	Common Shares	71,541	$5.27 per share
	June 2002	Common Shares	92,226	$0.005 per share
	August 2002	Common Shares	13,847	$2.44 per share
Shares Outstanding at December 31, 2002:		Common Shares	35,194,995	$3.23 per share(1)
	March 2003	Common Shares	2,050,000	$4.76 per share
	March – June 2003	Series 1 Preferred Shares	10,241,666	$3.00 per share(3)
	May 2003	Common Shares	1,200,000	$3.96 per share
	July 2003	Series 1 Preferred Shares	9,154,667	$3.00 per share(4)
	September 2003	Series 1 Preferred Shares	8,750,000	$3.20 per share(5)
	September 2003	Common Shares	50,000	$3.94 per share
	November 2003	Common Shares	1,000,000	$6.43 per share
	November 2003	Common Shares	10,000	C$4.05 per share
	November 2003	Common Shares	46,000	$3.75 per share

(1)	Adjusted for the after-tax effect of issuance costs.
(2)	These Series 1 Preferred Shares were automatically converted to common shares in accordance with their terms upon shareholder approval received at a shareholders’ meeting held on March 27, 2002.
(3)	For financial statement purposes, the issue price is adjusted for the after-tax effect of issuance costs and the allocation of a portion of the purchase price to the issuance of warrants and is recorded at $2.65 per share.
(4)	For financial statement purposes, the issue price is adjusted for the after-tax effect of issuance costs and the allocation of a portion of the purchase price to the issuance of warrants and is recorded at $2.58 per share.
(5)	For financial statement purposes, the issue price is adjusted for the after-tax effect of issuance costs and the allocation of a portion of the purchase price to the issuance of warrants and is recorded at $2.89 per share.

DIVIDEND POLICY

      We have not paid cash dividends on our common shares since our initial public offering. Further, we currently intend to retain our future earnings, if any, to finance the growth, development and expansion of our business. Accordingly, we do not intend to declare or pay any cash dividends on our common shares in the immediate future. The declaration, payment and amount of future cash dividends, if any, will be at the discretion of our board of directors after taking into account various factors. These factors include our financial condition, results of operations, cash flows from operations, current and anticipated capital requirements and expansion plans, the income tax laws then in effect and the requirements of the law of Ontario. In addition, the terms of our existing credit facility include, and any future financing arrangements we enter into may also include, prohibitions on the payment of cash dividends without the consent of the respective lenders.

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DESCRIPTION OF SHARE CAPITAL

      For certain information about our articles of amalgamation, the rights, preferences and restrictions attaching to our shares and our by-laws, please see “Item 10B. Additional Information — Articles of Amalgamation” in our Annual Report on Form 20-F for the year ended December 31, 2002 filed with the Securities and Exchange Commission on July 15, 2003 as amended by Amendment No. 1 to Annual Report on Form 20-F/A filed on November 28, 2003, incorporated herein by reference. These summaries do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all of the provisions of our articles of amalgamation and by-laws, copies of which have been filed as exhibits to our 2002 Annual Report, incorporated herein by reference.

      Our authorized share capital consists of an unlimited number of common shares, no par value, and an unlimited number of preferred shares, no par value. As of December 31, 2002 and December 8, 2003 we had 35,194,995 and 39,550,995 common shares issued and outstanding, respectively. As of December 8, 2003, we had 28,146,333 shares of Series 1 Preferred Shares issued and outstanding.

      As of September 30, 2003, we had outstanding stock options to purchase 5,045,699 common shares. 2,370,158 of the issued options are exercisable in Canadian dollars at a weighted average exercise price of C$5.67 per share. 2,675,541 of the issued options are exercisable in U.S. dollars at a weighted average exercise price of $4.11 per share. The expiration dates of these employee stock options range from March 11, 2004 to July 15, 2008. As of September 30, 2003, we had outstanding warrants to purchase 6,660,516 common shares at a weighted average exercise price of $3.02 per share. 5,454,266 warrants were granted to certain investors in connection with their subscription of Series 1 Preferred Shares, 1,000,000 warrants were granted to our chief executive officer in connection with the commencement of his employment, and 206,250 warrants were granted to certain other persons in connection with certain acquisitions.

Common Shares

      Holders of common shares are entitled to one vote for each common share held at all meetings of the shareholders of the Company, except for meetings at which only holders of another specified class or series of shares of the Company are entitled to vote separately as a class or series. There are no cumulative voting rights. Holders of common shares are entitled to dividends, if any, as and when declared by the Board of Directors at its discretion out of funds legally available therefor, subject to any prior rights of the holders of another class of shares of the Company. In the event of the Company’s liquidation, dissolution or winding up, the holders of common shares would be entitled to receive, subject to the prior rights of any holders of another class of shares, the Company’s remaining property after payment of all debts and liabilities. Holders of common shares have no pre-emptive, subscription, redemption or conversion rights. The rights, preferences and privileges of holders of common shares are subject to and may be adversely affected by the rights of holders of any preferred shares issued in the future.

Preferred Shares

      The Board of Directors has the authority to issue an unlimited number of preferred shares in one or more series and to fix the designation, rights, privileges, restrictions and conditions attaching to the series, including dividend rights, conversion rights, voting rights, terms of redemption, redemption prices, liquidation preferences and the number of shares constituting any series, without further vote or action by the shareholders. The issuance of preferred shares may have the effect of delaying, deferring or preventing a change in control of the Company without further action by the shareholders. In addition, the issuance of preferred shares with voting and conversion rights may adversely affect the voting power of the holders of common shares.

      On January 23, 2002, the Company, by Articles of Amendment, created the first series of Preferred Shares, consisting of an unlimited number of shares designated as Series 1 Preferred Shares. The Series 1 Preferred Shares are non-voting, non-dividend bearing and convertible. The Series 1 Preferred Shares are automatically convertible into Common Shares on the basis of one Common Share for each Series 1

18

Preferred Share held, such conversion to be effected by, and only by, approval of the conversion by ordinary resolution of the holders of the Common Shares.

      There are no limitations on the right of non-residents of Canada or foreign owners to hold or vote the Company’s common shares or any of its other securities imposed by Canadian or provincial laws or any of the Company’s constituent documents, subject to the provisions of the Investment Canada Act (Canada), which generally provides for notice and/or approval requirements in respect of the acquisition of control of a Canadian business by non-Canadians in certain circumstances.

19

SELLING SHAREHOLDERS

      All of the shares being offered hereby are being offered for the accounts of the selling shareholders. The following table sets forth information about the selling shareholders and their beneficial ownership of our common shares, Series 1 Preferred Shares and warrants to purchase common shares, as of October 16, 2003, and as adjusted to reflect the sale of the shares offered by this prospectus. The information is based on information provided by or on behalf of the selling shareholders. This prospectus relates to periodic offers and sales of up to 56,486,746 common shares by the selling shareholders named below. This consists of (i) 21,679,897 outstanding common shares that were acquired by the selling shareholders from us in private placement transactions from September 2001 through September 2003, (ii) 28,146,333 common shares issuable on the automatic conversion of the existing Series 1 Preferred Shares upon shareholder approval, and (iii) 6,660,516 common shares issuable upon the exercise of outstanding warrants. Other than as set forth below, the selling shareholders do not hold any other position or office and have not had any other material relationship with us, or any of our predecessors or affiliates, during the past three years.

      The selling shareholders may sell all, some or none of the common shares covered by this prospectus. In addition, the selling shareholders identified below may have sold, transferred or otherwise disposed of all or a portion of their common shares in transactions exempt from the registration requirements of the Securities Act of 1933 since the date on which they provided the information regarding their equity ownership. In certain cases, where such selling shareholders have provided us with such information, it is reflected in the table below.

      The common shares offered by this prospectus may be offered from time to time by the selling shareholders named below. The table assumes that all common shares being offered by the selling shareholder pursuant to this prospectus are ultimately sold in the offering.

		Common Shares							Common Shares
		Beneficially Owned Prior							Beneficially Owned After
		to Offering							Offering
				Percent of			Common				Percent of
				Outstanding			Shares Being				Outstanding
Name of Holder		Number		Shares			Offered		Number		Shares(1)
Westbury(Bermuda) Ltd.(2)			18,999,455		25.55	%		18,949,497		49,958		*
	Victoria Hall 11 Victoria Street P.O. Box HM1065 Hamilton HMEX Bermuda
SMH CERI II, LLC(3)			2,818,868		3.79	%		2,818,868		—		*
	c/o Bruce McMaken 600 Travis Ste., Suite 3100 Houston, TX 77002
GWD Management Inc.(4)			2,275,000		3.06	%		2,275,000		—		*
	1455 Lakeshore Road, Suite 201N Burlington, Ontario L7S 2J1 Canada
D.S.Y. Investments Ltd.(5)			1,949,497		2.62	%		1,949,497		—		*
	c/o David Sutherland-Yoest 150 Randall Street, Suite 103 Oakville, ON L6J 1P4
Donald F. Moorehead, Jr			1,925,000		2.59	%		1,925,000		—		*
	15301 Spectrum Drive, Suite 390 Addison, TX 75001

20

		Common Shares							Common Shares
		Beneficially Owned Prior							Beneficially Owned After
		to Offering							Offering
				Percent of			Common				Percent of
				Outstanding			Shares Being				Outstanding
Name of Holder		Number		Shares			Offered		Number		Shares(1)
Environmental Opportunities Fund II (Institutional), L.P.(6)			1,904,630		2.56	%		1,177,500		727,130		*
	c/o Bruce McMaken 600 Travis Ste., Suite 3100 Houston, TX 77002
GWD Limited(7)			1,843,750		2.48	%		1,843,750		—		*
	Victoria Hall P.O. Box HM1065 11 Victoria Street Hamilton HMEX Bermuda
David Sutherland-Yoest(8)			1,751,665		2.36	%		1,750,000		1,665		*
	150 Randall Street, Suite 103 Oakville, Ontario L6J 1P4
Kevin F. Flynn June 1992 Non-Exempt Trust(9)			1,638,793		2.20	%		788,793		850,000		1.14	%
	c/o Kevin F. Flynn, Trustee 120 N. Lasalle Street, Suite 3300 Chicago, IL 60602
Historia Investments Inc.(10)			1,500,000		2.02	%		1,500,000		—		*
	85 St. Paul Ouest, Suite 500 Montreal, PQ H2Y 3V4
The Victoria Bank(Barbados) Incorporated(11)			1,478,497		1.99	%		1,478,497		—		*
	Weymount Corporate Centre 4th Floor Roebuck Street Bridgetown, Barbados, W.I.
CERI ACP II Limited Partners, LP(12)			1,457,404		1.96	%		457,404		1,000,000		1.34	%
	c/o Argentum 60 Madison Avenue, Suite 701 New York, NY 10010
Bayou Superfund LLC(13)			1,380,401		1.86	%		1,380,401		—		*
	40 Signal Road Stamford, CT 06902
Connecticut Capital Assoc. L.P.(14)			1,200,000		1.61	%		1,200,000		—		*
	137 Rowayton Avenue, Suite 230 Rowayton, CT 06853
Vantage Finance Company(15)			1,200,000		1.61	%		1,200,000		—		*
	2911 Turtle Creek Blvd, Suite 500 Dallas, TX 75219
Don A. Sanders(16)			1,139,142		1.53	%		1,050,000		89,142		*
	600 Travis Street, Suite 3100 Houston, TX 77002
Lawrence Venture Fund(17)			958,750		1.29	%		958,750		—		*
	70 York Street, Suite 1500 Toronto, Ontario M5J 1S9
Pequot Scout Fund, L.P.(18)			639,600		*			639,600		—		*
	c/o Pequot Capital Management, Inc. 500 Nyala Farm Road Westport, CT 06880

21

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Robert F. Irwin IV & Donna V. Irwin			638,702		*		228,702		410,000		*
	330 Tom Brown Road Morristown, NJ 08057
Sanders Opportunity Fund(Institutional) L.P.(19)			615,474		*		595,520		19,954		*
	c/o Don A. Sanders 600 Travis Street, Suite 3100 Houston, TX 77002
Katherine U. Sanders(20)			614,053		*		106,500		507,553		*
	600 Travis Street, Suite 3100 Houston TX 77002
Atlas Capital Master Fund, L.P.(21)			608,000		*		608,000		—		*
	100 Crescent Court, #880 Dallas, TX 75201
Larry Martin(22)			548,053		*		446,400		101,653		*
	2100 West Loop South, Suite 1400 Houston, TX 77027
Environmental Opportunities Fund II, L.P.(23)			526,153		*		322,500		203,653		*
	c/o Bruce McMaken 600 Travis Ste., Suite 3100 Houston, TX 77002
Koshi Shirvanian			516,653		*		500,000		16,653		*
	23 Corporate Plaza #247 Newport Beach, CA 92660
Sherry Sutherland-Yoest(24)			500,000		*		500,000		—		*
	150 Randal Street, Suite 103 Oakville, Ontario L6J 1P4
XML Limited(25)			500,000		*		500,000		—		*
	48 Par-La-Ville Road, Suite 143 Hamilton, HM11, Bermuda
Mercator Focus Fund, LP(26)			492,727		*		492,727		—		*
	555 South Flower Street, Suite 4500 Los Angeles, CA 90071
Michael J. Verrochi			385,739		*		85,739		300,000		*
	80-L Washington Square Norwell, MA 02061
Morton A. Cohn(27)			365,567		*		240,000		125,567		*
	800 Bering Drive, Suite 210 Houston, TX 77057-2130
Bonanza Master Fund, Ltd(28)			360,000		*		360,000		—		*
	Walker House P.O. Box 908GT Grand Cayman Cayman Islands, BWI
Gene Alan Meredith			314,351		*		114,351		200,000		*
	16881 Ocean Drive Fort Bragg, CA 95437

22

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Crestview Capital Fund II, L.P.(29)			300,000		*		300,000		—		*
	95 Revere Drive, Suite F Northbrook, IL 60062
Thomas P. Hughes			300,000		*		300,000		—		*
	P.O. Box 3327 Pinehurst, ND
Bayou No Leverage Fund LLC(30)			285,200		*		285,200		—		*
	40 Signal Road Stamford, CT 06902
Pequot Navigator Offshore Fund, Inc.(31)			274,800		*		274,800		—		*
	c/o Pequot Capital Management, Inc. 500 Nyala Farm Road Westport, CT 06880
Christina Sutherland-Yoest			265,200		*		250,000		15,200		*
	150 Randall Street, Suite 103 Oakville, Ontario L6J 1P4
Joseph N. Verrochi			257,159		*		57,159		200,000		*
	80-L Washington Square Norwell, MA 02061
Lakefront Partners Ltd.(32)			254,400		*		240,000		14,400		*
	c/o Don A. Sanders 600 Travis Street, Suite 3100 Houston, TX 77002
C&W Logistics, Inc.(33)			240,000		*		240,000		—		*
	c/o Charles W. Creeden 703 Hennis Road Winter Garden, FL 34787
Bayou Accredited Fund LLC(34)			232,999		*		232,999		—		*
	40 Signal Road Stamford, CT 06902
Sanders Opportunity Fund, L.P.(35)			208,837		*		203,480		5,357		*
	c/o Don A. Sanders 600 Travis Street, Suite 3100 Houston, TX 77002
John M. O’Quinn(36)			206,216		*		84,000		122,216		*
	3518 Travis Street, Suite 200 Houston, TX 77002-9542
Sanders II Investments Ltd.(37)			203,331		*		200,000		3,331		*
	c/o Don A. Sanders 600 Travis Street, Suite 3100 Houston, TX 77002
Lynn Marvin Biship(38)			200,000		*		200,000		—		*
	206-52245 RR 232 Sherwood Park, Alberta T8B 1B6
Joseph F. Scoby(39)			200,000		*		200,000		—		*
	1204 Westview Road Glenview, IL 60025
Tim Salopek(40)			199,999		*		199,999		—		*
	3164 Lake Breeze Circle St. Cloud, FL 34771

23

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Atlas Capital(Q.P.) L.P.(41)			192,000		*		192,000		—		*
	100 Crescent Court #880 Dallas, TX 75201
Option Opportunities Corp.(42)			180,000		*		180,000		—		*
	339 Sheridan Road Winnetka, IL 60093
Tanya J. Drury(43)			179,680		*		36,000		143,680		*
	109 Timberwilde Lane Houston, TX 77024-6947
Jack Casagrande(44)			157,331		*		84,000		73,331		*
	6800 Gleneagle Drive Miami Lakes, FL 33014
John A. Pinto			150,000		*		150,000		—		*
	802 South Avenue West Westfield, NJ 07090
Lawrence & Company Inc.(45)			147,500		*		147,500		—		*
	70 York Street, Suite 1500 Toronto, Ontario M5J 1S9
Dan L. Duncan(46)			145,000		*		120,000		25,000		*
	2727 North Loop West 7th Floor Houston, TX 77008
Nolan Ryan(47)			143,331		*		120,000		23,331		*
	P.O. Box 5909 Round Rock, TX 78683
William P. Hulligan(48)			140,000		*		120,000		20,000		*
	19759 Loxahatchee River Road Jupiter, FL 33458-2424
Platinum Business Investment Company, Ltd.(49)			136,653		*		120,000		16,653		*
	c/o Matthew Stuller 1213 Terrace Highway Broussard, LA 70518
Donald F. Moorehead and Shelley B. Moorehead Charitable Trust(50)			125,000		*		125,000		—		*
	15301 Spectrum Drive, Suite 390 Addison, TX 75001
Charles W. & Gloria H. Creeden(51)			120,000		*		120,000		—		*
	703 Hennis Road Winter Garden, FL 34787
Larry D. Henk(52)			120,000		*		120,000		—		*
	10500 East Lost Canyon Drive, Lot 15 Scottsdale, AZ 85255
Tom Juda(53)			120,000		*		120,000		—		*
	333 S. Hope Street, Suite 2600 Los Angeles, CA 90071
Gregory T. Sangalis(54)			110,000		*		60,000		50,000		*
	21 Windy Point Road HC62 Box 403 Center Harbor, NH 03226

24

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Richard D. Kinder(55)			104,000		*		84,000		20,000		*
	3355 Del Monte Houston, TX 77019-3103
Rosen Family Trust(56)			101,500		*		30,000		71,500		*
	c/o Albert L. Rosen 15 Mayfair Drive Rancho Mirage, CA 92270
Bayou Affiliates Fund LLC(57)			101,400		*		101,400		—		*
	40 Signal Road Stamford, CT 06902
SF Condo Limited(58)			100,000		*		100,000		—		*
	P.O. Box 6 N.S., Grand Cayman Cayman Islands B.W.I
Linda Shirvanian(59)			100,000		*		100,000		—		*
	23 Corporate Plaza #247 Newport Beach, CA 92660
Precept Capital Master Fund, GP(60)			99,700		*		96,000		3,700		*
	100 Crescent Court #850 Dallas, TX 75201
J.A. Elkins, Jr.(61)			92,500		*		90,000		2,500		*
	1166 First City Tower 1001 Fannin Houston, TX 77002
Pequot Navigator Onshore Fund, L.P.(62)			85,200		*		85,200		—		*
	c/o Pequot Capital Management, Inc. 500 Nyala Farm Road Westport, CT 06880
Michael Mitchell(63)			85,000		*		30,000		55,000		*
	200 East 69th Street, Apt. 9-B New York, NY 10021
Luke Drury(64)			83,220		*		12,000		71,220		*
	2910 Shirewood Lane Houston, TX 77082
IRA FBO Anthony Jacobs Pershing LLC as Custodian Rollover Account(65)			78,000		*		78,000		—		*
	c/o Anthony S. Jacobs 95 Dell Place Glencoe, IL 60022
David Feals(66)			72,870		*		72,870		—		*
	236 Gosport Road Portsmouth, NH 03801
Luther Edward Creel, III			67,500		*		67,500		—		*
	8235 Douglas Avenue, Suite 1100 Dallas, TX 75225
Don & Julie Weir, Ten In Com(67)			67,000		*		17,000		50,000		*
	c/o Don Weir 303 Green Belt Houston, TX 77079-6411

25

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
The Estate of John Drury(68)			64,010		*		22,500		41,510		*
	c/o Don A. Sanders 109 Timberwilde Houston, TX 77024-6947
Mercator Momentum Fund III, LP(69)			61,818		*		61,818		—		*
	555 South Flower Street, Suite 4500 Los Angeles, CA 90071
Westwind Interests Ltd.(70)			60,000		*		60,000		—		*
	c/o Michael Martin 4400 Post Oak Parkway, 4th Floor Houston, TX 77027
Bruce Slovin(71)			55,000		*		30,000		25,000		*
	42 East 65th Street New York, NY 10021
Titus Harris, Jr.(72)			48,000		*		48,000		—		*
	1204 Potomac Houston, TX 77057
Sam W. Humphreys(73)			48,000		*		48,000		—		*
	13 Kensington Gate London, England W85 NA
Mercator Momentum Fund, LP(74)			45,455		*		45,455		—		*
	555 South Flower Street, Suite 4500 Los Angeles, CA 90071
Leo D’Addario			43,802		*		30,000		13,802		*
	8810 Joliot Curie Montreal, QC H1E 5E5
Brady Inc. Profit Sharing Plan & Trust(75)			41,000		*		36,000		5,000		*
	c/o Thomas Brady and Mr. Daniel Brady 3414 Persimmon Houston, TX 77093-8453
Ronald Lawrence Sussman			40,500		*		40,500		—		*
	8235 Douglas Avenue, Suite 1100 Dallas, TX 75225
Bernard C. Byrd, Jr. Trust(76)			40,400		*		40,400		—		*
	c/o Bernard C. Byrd Jr 1924 Craigmore Drive Charlotte, NC 28226
Highland Holdings, Inc.(77)			40,000		*		40,000		—		*
	15301 Spectrum Drive, Suite 390 Addison, TX 75001
John L. Nau III & Barbara Nau JT TEN(78)			40,000		*		40,000		—		*
	3217 Del Monte Houston, TX 77019
Bruce R. McMaken(79)			39,853		*		8,400		31,453		*
	2235 Bissonnet Houston, TX 77005
Brian Kuhn(80)			38,400		*		38,400		—		*
	3168 Mockingbird Knoll La Verne, CA 91750-2368

26

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Matthew Drury(81)			38,220		*		12,000		26,220		*
	75 Hibury Drive Houston, TX 77024-7124
Jacques Plante			37,000		*		31,000		6,000		*
	348 Keroack St. Bruno, QC J3V 5S1
Cornelious Durkin			35,840		*		35,840		—		*
	1120 Bloomfield Avenue P.O. Box 1289 West Caldwell, N.J 07007-1289
Elizabeth Durkin			35,840		*		35,840		—		*
	1120 Bloomfield Avenue P.O. Box 1289 West Caldwell, N.J 07007-1289
Murphy Durkin			35,840		*		35,840		—		*
	1120 Bloomfield Avenue P.O. Box 1289 West Caldwell, N.J 07007-1289
Dewey Investment Partnership Ltd./A.C Dewey & Company(82)			32,400		*		32,400		—		*
	c/o Andrew Dewey P.O. Box 3136 Incline Village, NV 89450-3136
Ronald D. Lossett(83)			32,400		*		32,400		—		*
	6 East Sunset Drive South Redlands, CA 92373-7110
Robert J. Zappia(84)			32,400		*		32,400		—		*
	38000 East Sunset Drive South Redlands, CA 92373-7448
Don Weir(85)			32,000		*		30,000		2,000		*
	303 Green Belt Houston, TX 77079-6411
Jean-Marc Benoit			31,500		*		30,000		1,500		*
	220 25th Avenue Ste-Anne De Sabrevois, QC, J0J 2J0
Julie Brosseau			30,000		*		30,000		—		*
	230 De Bayeux Boucherville, QC J4B 7T9
Andre Marier			30,000		*		30,000		—		*
	853 Chemin Du Borde De L’Eau Ste. Dorothee, Laval, QC H7Y 1A1
Tony Porrello			30,000		*		30,000		—		*
	30 Berlioz, Suite 100 Ile Des Soeurs, QC H3E 1L3
Maurice Trudeau			30,000		*		30,000		—		*
	1440 Rene-Gaultier Varennes, QC J3X 1W5
Dror Zadok(86)			30,000		*		30,000		—		*
	1749 Post Oak Blvd Houston, TX 77056

27

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Weldon Leslie Moore, III			27,000		*		27,000		—		*
	8235 Douglas Avenue, Suite 1100 Dallas, TX 75225
Laurette Ainscow			25,000		*		25,000		—		*
	9195 Rouyn Brossard Quebec J4X 2T5
Karen Anthony			25,000		*		25,000		—		*
	5025 Des Grands Coteaux St. Mathieu De Beloeil, QC J3G 2C9
Guy Brissette			25,000		*		25,000		—		*
	2710 Richelieu Beloeil, QC J3G 2C9
Andre Delisle			25,000		*		25,000		—		*
	2550 Arpin Brossard, QC J4Z 3B1
Claude Germain			25,000		*		25,000		—		*
	1031 Riverview Otterburn Park, QC J3H 1Z2
Dawn Marie Meredith			25,000		*		25,000		—		*
	333 NE 26th Avenue Portland, OR 97212
Jason Dean Meredith			25,000		*		25,000		—		*
	505 14th Avenue East #207 Seattle, WA 98112
Lilianne Rémillard			25,000		*		25,000		—		*
	8840 Rouyn Brossard, QC J4X 2T9
Micheline Rémillard			25,000		*		25,000		—		*
	935 Mainville St. Hubert, QC J3Y 8B2
Helene Wong			25,000		*		25,000		—		*
	805 Cournoyer St. Hilaire, QC J3H 5M5
FBO Family Trust UAD 07-21-87(87)			24,000		*		24,000		—		*
	c/o Randall C. Fower and Ms. Karen Fowler, Trustees, 210 Yerba Buena Avenue Los Altos, CA 94022-2200
Sue M. Harris — separate property(88)			24,000		*		24,000		—		*
	1204 Potomac Houston, TX 77057-1920
LAD Investments(89)			24,000		*		24,000		—		*
	c/o Leonard Olin 345 Marilyn Place Atlanta, GA 30342
Paula L. Santoski — separate property(90)			24,000		*		24,000		—		*
	3438 Chevy Chase Houston, TX 77019

28

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Sharon Perry Wise(91)			24,000		*		24,000		—		*
	278 Maple Valley Road Houston, TX 77056-1010
David Towery(92)			22,416		*		12,000		10,416		*
	3518 Travis, Suite 200 Houston, TX 77002-9542
HRAmerica Inc.(93)			22,000		*		22,000		—		*
	c/o Bernard C. Byrd Jr. 1924 Craigmore Drive Charlotte, NC 28226
Marx Family Trust Dtd.(94)			20,000		*		20,000		—		*
	c/o Melville Marx 3525 Ralston Avenue Hillsborough, CA 94010-6731
B.L. Corley, Jr.(95)			19,200		*		19,200		—		*
	3800 Tevino Drive Round Rock, TX 78664
IRA FBO John Unger Pershing LLC as Custodian Rollover Account(96)			19,000		*		18,000		1,000		*
	c/o John Unger 816 Kimpling Houston, TX 77006-4313
Frank Ward, Jr.(97)			18,750		*		18,750		—		*
	4 Rucci Court Burr Ridge, IL 60521
Frank Ward, Sr.(98)			18,750		*		18,750		—		*
	6500 Hillcrest Burr Ridge, IL 60521
George Ward(99)			18,750		*		18,750		—		*
	One Ridge Farm Road, Burr Ridge, IL 60521
IRA FBO Arlene Kuhn/Pershing LLC as Custodian/Roth Account(100)			18,000		*		18,000		—		*
	c/o Arlene Kuhn 3168 Mockingbird Knoll La Verne, CA 91750-2368
IRA FBO Gerald Kissner Pershing LLC as Custodian(101)			17,500		*		12,000		5,500		*
	c/o Gerald Kissner 1719 Cottage Landing Houston, TX 77077-1924
Jacques Bouchard			15,000		*		15,000		—		*
	954 Chopin Repentigny, QC J5Y 3T4
Suzanne Lavoie			15,000		*		15,000		—		*
	636 Ruisseau Nord St. Mathieu De Beloeil, QC

29

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Georges Antoun & Martha Antoun Ten Com(102)			12,000		*		12,000		—		*
	2716 Sylvan Way McKinney, TX 75070
Thomas Asarch & Barbara Asarch Ten Com(103)			12,000		*		12,000		—		*
	5103 Glenmeadow Drive Houston, TX 77096
Todd Asarch(104)			12,000		*		12,000		—		*
	2230 Towne Lane Parkway Building 1100, Suite 100 Woodstock, GA 30189
Atlantis Software Company Employee Profit Sharing Plan(105)			12,000		*		12,000		—		*
	c/o Rune Medhus Sharing Plan 3100 Chase Tower Houston, TX 77002
IRA FBO Don S. Cook Pershing LLC as Custodian Rollover Account(106)			12,000		*		12,000		—		*
	c/o Don S. Cook 1210 Pecan Ridge Lane Sealy, TX 77474
Nancy L. Farley — separate property(107)			12,000		*		12,000		—		*
	11325 Woodmar Lane, NE Albuquerque, NM 87111-6512
Lawrence E. Glenn & Louise Glenn JTWROS(108)			12,000		*		12,000		—		*
	2727 Allen Parkway Suite 1700 Houston, TX 77019
Dr. William Grose Agency(109)			12,000		*		12,000		—		*
	c/o William Grose 4131 Raven River Road Houston, TX 77059-5559
Joseph James Judkins III & Jennifer Judkins TenCom(110)			12,000		*		12,000		—		*
	928 Electra Street Lakeway, TX 78734-4237
Robert Larry Kinney(111)			12,000		*		12,000		—		*
	122 Tradd Street Charleston, SC 29401-2420
Gregory Selig Lewis(112)			12,000		*		12,000		—		*
	6110 Heards Creek Drive Atlanta, GA 30328
Laura Susan Moore(113)			12,000		*		12,000		—		*
	7706 S. Homers Court Drive Houston, TX 77055-6868

30

		Common Shares						Common Shares
		Beneficially Owned Prior						Beneficially Owned After
		to Offering						Offering
				Percent of		Common				Percent of
				Outstanding		Shares Being				Outstanding
Name of Holder		Number		Shares		Offered		Number		Shares(1)
Anned Muse(114)			12,000		*		12,000		—		*
	183 Litchfield Houston, TX 77027-6029
Ned Charles Muse & Margaret B.
	Haak-Muse JT Ten(115)		12,000		*		12,000		—		*
	200 Rusk Pittsburg, TX 75686
Scott T. O’Keefe(116)			12,000		*		12,000		—		*
	14350 Carolcrest Houston, TX 77079-6608
Lenny Olin(117)			12,000		*		12,000		—		*
	345 Marilyn Place Atlanta, GA 30342
RJS Jr. Pls 1992 Trust FBO(118)			12,000		*		12,000		—		*
	c/o Paula L. Santoski 3438 Chevy Chase Houston, TX 77019
Searing Ltd.(119)			12,000		*		12,000		—		*
	c/o Scott Brown 13306 Tosca Lane Houston, TX 77079-7121
Blake Selig(120)			12,000		*		12,000		—		*
	1100 Spring Street Suite 5500 Atlanta, GA 30309
David Shapiro(121)			12,000		*		12,000		—		*
	7660 Beverly Blvd Suite 441 Los Angeles, CA 90036
SLF PLS 1988 Trust FBO(122)			12,000		*		12,000		—		*
	c/o Paula L. Santoski 3438 Chevy Chase Houston, TX 77019
Emily Harris Todd & Christopher Neal Todd
	Ten Com(123)		12,000		*		12,000		—		*
	10742 Lennox Land Dallas, TX 75229-5418
Vincent Vazquez — sole and separate property(124)			12,000		*		12,000		—		*
	5 Buckingham Court Houston, TX 77024
Walter T. Weathers Jr. & Allyson N. Weathers TenCom(125)			12,000		*		12,000		—		*
	500 Dallas, Suite 3020 Houston, TX 77002
Robert Wilensky(126)			12,000		*		12,000		—		*
	975 Manchester Place Atlanta, GA 30328

31

Common Shares

Common Shares

Beneficially Owned Prior

Beneficially Owned After

to Offering

Offering

Percent of

Common

Percent of

Outstanding

Shares Being

Outstanding

Name of Holder

Number

Shares

Offered

Number

Shares(1)

Lawrence A. and Deborah W. Young JTWROS(127)

12,000

*

12,000

—

*

1303 Ambergate Houston, TX 77077-2520

John H. Gray(128)

10,000

*

10,000

—

*

2907 Kings Forest Drive Kingwood, TX 77339

Crestview Capital Offshore Fund, Inc.(129)

9,600

*

9,600

—

*

c/o Richard Levy 95 Revere Drive Suite F Northbrook, IL 60062

IRA FBO Charlie R. Epps Pershing LLC as Custodian(130)

8,400

*

8,400

—

*

c/o Charlie R. Epps 166 Warrenton Drive Houston, TX 77024-6243

Scott S. Brown(131)

2,400

*

2,400

—

*

13306 Tosca Lane Houston, TX 77079-7121

Cynthia B. Darraugh Residuary Trust(132)

1,200

*

1,200

—

*

c/o Scott Brown 13306 Tosca Lane Houston, TX 77079-7121

Victoria B. Parker Residuary Trust(133)

1,200

*

1,200

—

*

c/o Scott Brown 13306 Tosca Lane Houston, TX 77079-7121

Markell B. Rowe Residuary Trust(134)

1,200

*

1,200

—

*

209 Forest Hills, #101 Rockport, TX 78382-6930

62,245,494

83.71

%

56,486,746

5,758,748

7.74

%

    *     = less than 1%

(1)

Ownership of 28,146,333 Series 1 Preferred Shares, which are convertible into common shares upon shareholder approval has been taken into account for the purpose of calculating percentage of outstanding common shares. Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission. In general, a person who has voting power and/or dispositive power with respect to securities and a person who owns options and warrants exercisable within 60 days is treated as a beneficial owner of those securities.

(2)

The shareholders of Westbury (Bermuda) Ltd. are Robert Martyn, Gary DeGroote and Rick Burdick, as Trustees of the Westbury Trust. Robert Martyn, Gary DeGroote, and Rick Burdick as Trustees of the Westbury Trust have the power to direct the voting and disposition of the securities held by Westbury (Bermuda) Ltd. The beneficiaries of Westbury Trust include Gary DeGroote, Michael G. DeGroote, and all children of Michael G. DeGroote. Includes all shares transferred by Michael G. DeGroote. Includes 14,916,667 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,358,333 common shares issuable upon the exercise of warrants. Gary DeGroote currently serves as a director of the Company.

32

(3)	Bruce McMaken is the President and manager of SMH CERI II, LLC. Bruce McMaken has voting and dispositive power over the shares owned by SMH CERI II, LLC and therefore may be deemed to be the beneficial owner of such shares.
(4)	Gary DeGroote is the controlling shareholder and sole director of GWD Management Inc. and is deemed to beneficially own the shares owned by such entity. Gary DeGroote currently serves as a director of the Company. Does not include 40,000 options exercisable within 60 days which Gary DeGroote beneficially owns.
(5)	David Sutherland-Yoest is the sole director and shareholder of D.S.Y. Investments Ltd. and is deemed to beneficially own the shares owned by such entity. David Sutherland-Yoest is the Chairman of the Board and the Chief Executive Officer of the Company.
(6)	The general partner of Environmental Opportunities Fund II (Institutional), L.P. is EOF II Mgt. Co. LLC. The members of EOF II Mgt. Co. LLC are Sanders Morris Harris Inc., a subsidiary of Sanders Harris Morris Group Inc., Kenneth Leung, and Bruce McMaken. The member of EOF II Mgt. Co. LLC that has power to direct the voting and disposition of securities held by such entity is Sanders Morris Harris Inc., a subsidiary of Sanders Harris Morris Group Inc.
(7)	The shareholders of GWD Limited are Robert Martyn and James Watt as Trustees of the GWD Trust. Robert Martyn and James Watt as Trustees of the GWD Trust have the power to direct the voting and disposition of the securities held by GWD Limited. Gary DeGroote and his children are the beneficiaries of GWD Trust. Includes 1,562,500 common shares issuable upon conversion of the Series 1 Preferred Shares and 281,250 common shares issuable upon the exercise of warrants. Gary DeGroote currently serves as a director of the Company.
(8)	David Sutherland-Yoest is the Chairman of the Board and the Chief Executive Officer of the Company. Includes 1,000,000 common shares issuable upon the exercise of warrants, 670,000 of which are currently exercisable. Does not include 500,000 common shares owned by David Sutherland-Yoest’s wife, Sherry Sutherland-Yoest and 265,200 common shares owned by David Sutherland-Yoest’s daughter, Christina Sutherland-Yoest which David Sutherland-Yoest may be deemed to beneficially own. David Sutherland-Yoest disclaims beneficial ownership with respect to the shares owned by his wife and his daughter. Does not include 1,000,000 warrants exercisable within 60 days which David Sutherland-Yoest may be deemed to beneficially own.
(9)	The beneficial owner of the securities held by Kevin F. Flynn June 1992 Non-exempt Trust is Kevin F. Flynn. Includes 333,333 common shares issuable upon conversion of the Series 1 Preferred Shares and 66,667 common shares issuable upon the exercise of warrants.

(10)	Lucien Rémillard is the controlling shareholder of Historia Investments Inc. and is deemed to beneficially own the shares owned by such entity. Lucien Rémillard currently serves as a director of the Company. Does not include 40,000 options exercisable within 60 days which Lucien Rémillard may be deemed to beneficially own.
(11)	Lucien Rémillard is indirectly the controlling shareholder of The Victoria Bank (Barbados) Incorporated, and is deemed to beneficially own the shares owned by such entity. Lucien Rémillard currently serves as a director of the Company. Does not include 40,000 options exercisable within 60 days which Lucien Rémillard beneficially owns.
(12)	The general partner of CERI ACP II Limited Partners, LP is Argentum Investments, LLC. The Managing Members of Argentum Investments, LLC are Daniel Raynor and Walter H. Barandiaran.
(13)	Sam Israel III has power to direct the voting and disposition of securities held by Bayou Superfund LLC. Includes 1,150,334 common shares issuable upon conversion of the Series 1 Preferred Shares and 230,067 common shares issuable upon the exercise of warrants.
(14)	The general partner of Connecticut Capital Assoc. L.P. is Connecticut Capital Management, L.P. Joseph Howard Coale and Lauren B. Coale have power to direct the voting and disposition of securities held by such entity. Includes 1,000,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 200,000 common shares issuable upon the exercise of warrants.

33

(15)	The beneficiaries of the securities held by Vantage Finance Company are the issue of John F. Eulich. Includes 1,000,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 200,000 common shares issuable upon the exercise of warrants.
(16)	Don A. Sanders is a director of the Company. Does not include 40,000 options exercisable within 60 days which Don A. Sanders beneficially owns.
(17)	R. John (Jack) Lawrence has the power to direct the voting and disposition of securities held by the Lawrence Venture Fund. R. John (Jack) Lawrence is a director of the Company. Includes 812,500 common shares issuable upon conversion of the Series 1 Preferred Shares and 146,250 common shares issuable upon the exercise of warrants.
(18)	The general partner of Pequot Scout Fund, L.P. is Pequot Capital Management, Inc. Arthur Samberg has power to direct the voting and disposition of securities held by Pequot Capital Management Inc. Includes 533,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 106,600 common shares issuable upon the exercise of warrants.
(19)	The general partner of Sanders Opportunity Fund (Institutional) L.P. is SOF Management Co., LLC. The members of SOF Management Co., LLC are Sanders Morris Harris Inc., a subsidiary of Sanders Harris Morris Group Inc., and Don A. Sanders. The member of SOF Management Co., LLC that has power to direct the voting and disposition of securities held by such entity is Sanders Morris Harris Inc., a subsidiary of Sanders Harris Morris Group Inc. Includes 268,236 common shares issuable upon conversion of the Series 1 Preferred Shares and 53,647 common shares issuable upon the exercise of warrants.
(20)	Includes 70,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 14,000 common shares issuable upon the exercise of warrants.
(21)	The general partners of Atlas Capital Master Fund, L.P. are Atlas Capital Offshore Fund, Ltd., and Atlas Capital, L.P. The shareholder of Atlas Capital Offshore Fund, Ltd. that has power to direct the voting and disposition of securities held by Atlas Capital Offshore Fund, Ltd. is Robert H. Alpert. The general partner of Atlas Capital, L.P. is Atlas Capital Management, L.P. The general partner of Atlas Capital Management, L.P. is RHA, Inc. The President of RHA, Inc. is Robert H. Alpert. Includes 506,667 common shares issuable upon conversion of the Series 1 Preferred Shares and 101,333 common shares issuable upon the exercise of warrants.
(22)	Includes 372,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 74,400 common shares issuable upon the exercise of warrants.
(23)	The general partner of Environmental Opportunities Fund II, L.P. is EOF II Mgt. Co. LLC. The members of EOF II Mgt. Co. LLC are Sanders Morris Harris Inc., a subsidiary of Sanders Harris Morris Group Inc., Kenneth Leung, and Bruce McMaken. The member of EOF II Mgt. Co. LLC that has power to direct the voting and disposition of securities held by such entity is Sanders Morris Harris Inc., a subsidiary of Sanders Harris Morris Group Inc.
(24)	Does not include the shares beneficially owned by her husband, David Sutherland-Yoest, which Sherry Sutherland-Yoest may be deemed to beneficially own pursuant to rules of the SEC and which are separately listed above.
(25)	The shareholder of XML Limited who has power to direct the voting and disposition of securities held by XML Limited is Jacqueline MacLellan. Includes 500,000 common shares issuable upon the exercise of warrants.
(26)	The general partner of Mercator Focus Fund, LP is Mercator Advisory Group LLC. David Firestone has power to direct the voting and disposition of securities held by Mercator Advisory Group LLC. Includes 410,606 common shares issuable upon conversion of the Series 1 Preferred Shares and 82,121 common shares issuable upon the exercise of warrants.
(27)	Includes 200,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 40,000 common shares issuable upon the exercise of warrants.
(28)	The general partner of Bonanza Master Fund, Ltd. is Bonanza Capital, Ltd. The shareholder of Bonanza Capital, Ltd. is Bernay Box & Co., Inc. The shareholder of Bernay Box & Co., Inc. is

34

	Bernay Box. The shareholders that have power to direct the voting and disposition of securities held by Bonanza Capital, Ltd. are Bonanza Master Fund, Ltd., Bonanza Capital Ltd., Bernay Box & Co., and Bernay Box. Includes 300,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 60,000 common shares issuable upon the exercise of warrants.
(29)	The general partner of Crestview Capital Fund II, L.P. is Kingsport Capital Partners LLC. Richard Levy and Stewart Flink have power to direct the voting and disposition of securities held by Kingsport Capital Partners LLC. Includes 250,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 50,000 common shares issuable upon the exercise of warrants.
(30)	Sam Israel III has power to direct the voting and disposition of securities held by Bayou No Leverage Fund LLC. Includes 237,667 common shares issuable upon conversion of the Series 1 Preferred Shares and 47,533 common shares issuable upon the exercise of warrants.
(31)	Arthur Samberg has power to direct the voting and disposition of securities held by Pequot Navigator Offshore Fund, Inc. Includes 229,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 45,800 common shares issuable upon the exercise of warrants.
(32)	Don A. Sanders has power to direct the voting and disposition of securities held by Lakefront Partners Ltd. Includes 200,000 common shares issuable upon conversion of the Series 1 Preferred Shares. Does not include 40,000 options exercisable within 60 days that Don A. Sanders beneficially owns. Don A. Sanders serves as a director of the Company.
(33)	Kris Creeden and Kevin Creeden have power to direct the voting and disposition of securities held by C & W Logistics, Inc. Includes 200,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 40,000 common shares issuable upon the exercise of warrants.
(34)	Sam Israel III has power to direct the voting and disposition of securities held by Bayou Accredited Fund LLC. Includes 194,166 common shares issuable upon conversion of the Series 1 Preferred Shares and 38,833 common shares issuable upon the exercise of warrants.
(35)	The general partner of Sanders Opportunity Fund, L.P. is SOF Management Co., LLC. The members of SOF Management Co., LLC are Sanders Morris Harris Inc., a subsidiary of Sanders Harris Morris Group Inc., and Don A. Sanders. The member of SOF Management Co., LLC that has power to direct the voting and disposition of securities held by such entity is Sanders Morris Harris Inc., a subsidiary of Sanders Harris Morris Group Inc. Includes 101,764 common shares issuable upon conversion of the Series 1 Preferred Shares and 20,353 common shares issuable upon the exercise of warrants.
(36)	Includes 70,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 14,000 common shares issuable upon the exercise of warrants.
(37)	Don A. Sanders or an affiliate thereof is the investment advisor for Sanders II Investments Ltd. and has the power to direct investments by Sanders II Investments Ltd. Don A. Sanders is a director of the Company.
(38)	Includes 150,000 common shares issuable upon the exercise of warrants.
(39)	Includes 166,667 common shares issuable upon conversion of the Series 1 Preferred Shares and 33,333 common shares issuable upon the exercise of warrants.
(40)	Includes 166,666 common shares issuable upon conversion of the Series 1 Preferred Shares and 33,333 common shares issuable upon the exercise of warrants.
(41)	The general partner of Atlas Capital (Q.P.) L.P. is Atlas Capital Management, L.P. The general partner of Atlas Capital Management, L.P. is RHA, Inc. The President of RHA, Inc. is Robert H. Alpert. Includes 160,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 32,000 common shares issuable upon the exercise of warrants.
(42)	David F. Dury has power to direct the voting and disposition of securities held by Option Opportunities Corp. Includes 150,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 30,000 common shares issuable upon the exercise of warrants.
(43)	Includes 30,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 6,000 common shares issuable upon the exercise of warrants.

35

(44)	Includes 70,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 14,000 common shares issuable upon the exercise of warrants.
(45)	R. John (Jack) Lawrence has power to direct the voting and disposition of securities held by Lawrence & Company Inc. R. John (Jack) Lawrence is a director of the Company. Includes 125,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 22,500 common shares issuable upon the exercise of warrants.
(46)	Includes 100,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 20,000 common shares issuable upon the exercise of warrants.
(47)	Includes 100,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 20,000 common shares issuable upon the exercise of warrants.
(48)	William P. Hulligan currently serves as the Executive Vice President, North American Operations of the Company. Includes 100,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 20,000 common shares issuable upon the exercise of warrants.
(49)	Matthew G. Stuller, Sr. has power to direct the voting and disposition of securities held by Platinum Business Investment Company, Ltd. Includes 100,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 20,000 common shares issuable upon the exercise of warrants.
(50)	Donald F. Moorehead and Shelley B. Moorehead have power to direct the voting and disposition of securities held by the Donald F. Moorehead and Shelley B. Moorehead Charitable Trust.
(51)	Includes 100,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 20,000 common shares issuable upon the exercise of warrants.
(52)	Larry D. Henk is the President and Chief Operating Officer of the Company. Includes 100,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 20,000 common shares issuable upon the exercise of warrants.
(53)	Includes 100,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 20,000 common shares issuable upon the exercise of warrants.
(54)	Includes 50,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 10,000 common shares issuable upon the exercise of warrants.
(55)	Includes 70,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 14,000 common shares issuable upon the exercise of warrants.
(56)	The beneficial owners of the securities held by the Rosen Family Trust are Albert L. and Rita Rosen. The trustees of the Rosen Family Trust who have power to direct the voting and disposition of securities held by the Rosen Family Trust are Albert L. and Rita Rosen. Includes 25,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 5,000 common shares issuable upon the exercise of warrants.
(57)	Sam Israel III has power to direct the voting and disposition of securities held by Bayou Affiliates Fund LLC. Includes 84,500 common shares issuable upon conversion of the Series 1 Preferred Shares and 16,900 common shares issuable upon the exercise of warrants.
(58)	Tara Walker has power to direct the voting and disposition of securities held by SF Condo Limited and may be deemed to be the beneficial owner of such shares.
(59)	Includes 83,333 common shares issuable upon conversion of the Series 1 Preferred Shares and 16,667 common shares issuable upon the exercise of warrants.
(60)	The member of Precept Capital Master Fund, G.P. that has power to direct the voting and disposition of securities held by Precept Capital Master Fund, G.P. is Precept Capital Management, L.P., by its general partner, Precept Management, LLC, by D. Blair Baker. Includes 80,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 16,000 common shares issuable upon the exercise of warrants.
(61)	Includes 75,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 15,000 common shares issuable upon the exercise of warrants.

36

(62)	The general partner of Pequot Navigator Onshore Fund, L.P. is Pequot Capital Management Inc. Arthur Samberg has power to direct the voting and disposition of securities held by Pequot Capital Management Inc. Includes 71,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 14,200 common shares issuable upon the exercise of warrants.
(63)	Includes 25,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 5,000 common shares issuable upon the exercise of warrants.
(64)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(65)	Pershing LLC acts as Custodian and has the power to direct investments. The beneficial owner of the securities held by such entity is Anthony Jacobs. Includes 65,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 13,000 common shares issuable upon the exercise of warrants.
(66)	David Feals served as the Executive Vice President and Chief Financial Officer of the Company prior to August 15, 2003. Does not include 250,000 options exercisable within 60 days which David Feals beneficially owns.
(67)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(68)	Don A. Sanders is the Executor of the Estate of John Drury, and serves as a director of the Company.
(69)	The general partner of Mercator Momentum Fund III, LP is Mercator Advisory Group, LLC. David Firestone has power to direct the voting and disposition of securities held by Mercator Advisory Group LLC. Includes 51,515 common shares issuable upon conversion of the Series 1 Preferred Shares and 10,303 common shares issuable upon the exercise of warrants.
(70)	Larry J. Martin has power to direct the voting and disposition of securities held by Westwind Interests Ltd. Includes 50,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 10,000 common shares issuable upon the exercise of warrants.
(71)	Includes 25,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 5,000 common shares issuable upon the exercise of warrants.
(72)	Includes 40,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 8,000 common shares issuable upon the exercise of warrants.
(73)	Includes 40,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 8,000 common shares issuable upon the exercise of warrants.
(74)	The general partner of Mercator Momentum Fund, LP is Mercator Advisory Group, LLC. David Firestone has power to direct the voting and disposition of securities held by Mercator Advisory Group, LLC. Includes 37,879 common shares issuable upon conversion of the Series 1 Preferred Shares and 7,576 common shares issuable upon the exercise of warrants.
(75)	The members of Brady Inc. Profit Sharing Plan & Trust who have power to direct the voting and disposition of securities held by Brady Inc. Profit Sharing Plan & Trust are Thomas Brady and Daniel Brady. Includes 30,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 6,000 common shares issuable upon the exercise of warrants.
(76)	The beneficial owner of the securities held by the Bernard C. Byrd, Jr. Trust is Bernard C. Byrd, Jr. The trustee of the Bernard C. Byrd, Jr. Trust who has power to direct the voting and disposition of securities held by the Bernard C. Byrd, Jr. Trust is Bernard C. Byrd, Jr. Includes 33,667 common shares issuable upon conversion of the Series 1 Preferred Shares and 6,733 common shares issuable upon the exercise of warrants.
(77)	The shareholder of Highland Holdings, Inc. that has power to direct the voting and disposition of securities held by Highland Holdings, Inc. is Moorehead Property Company, Ltd. The general partner of Moorehead Property Company, Ltd. is Shelley B. Moorehead. Does not include 1,925,000 common shares held by the husband of Shelley B. Moorehead, Donald F. Moorehead, Jr.

37

(78)	Includes 33,333 common shares issuable upon conversion of the Series 1 Preferred Shares and 6,667 common shares issuable upon the exercise of warrants.
(79)	Includes 7,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 1,400 common shares issuable upon the exercise of warrants.
(80)	Includes 32,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 6,400 common shares issuable upon the exercise of warrants.
(81)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(82)	Andrew C. Dewey has power to direct the voting and disposition of securities held by Dewey Investment Partnership Ltd./A.C. Dewey & Company. Includes 27,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 5,400 common shares issuable upon the exercise of warrants.
(83)	Includes 27,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 5,400 common shares issuable upon the exercise of warrants.
(84)	Includes 27,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 5,400 common shares issuable upon the exercise of warrants.
(85)	Includes 25,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 5,000 common shares issuable upon the exercise of warrants.
(86)	Includes 25,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 5,000 common shares issuable upon the exercise of warrants.
(87)	The beneficial owners of the securities held by this trust are Randall C. Fowler and Karen D. Fowler. The trustees of who have power to direct the voting and disposition of securities held by this trust are Randall C. Fowler and Karen D. Fowler. Includes 20,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 4,000 common shares issuable upon the exercise of warrants.
(88)	Includes 20,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 4,000 common shares issuable upon the exercise of warrants.
(89)	The general partners of LAD Investments are Leonard Olin, Ann Olin, and David Gordon. The shareholder of LAD Investments who has power to direct the voting and disposition of securities held by LAD Investments is Leonard Olin. Includes 20,000 common shares issuable upon conversion of the Series 1 Preferred Shares and includes 4,000 common shares issuable upon the exercise of warrants.
(90)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(91)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(92)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(93)	Beneficial ownership of the securities is held by Bernard C. Byrd, P.W. Davis IV, P.W. David III, Heath R. Byrd and J. Carter. Bernard Byrd, Jr. has power to direct the voting and disposition of securities held by HRAmerica Inc. Includes 18,333 common shares issuable upon conversion of the Series 1 Preferred Shares and 3,667 common shares issuable upon the exercise of warrants.
(94)	The beneficial owners of the securities held by the Marx Family Trust Dtd. are Melville Marx and Carol Marx. The trustees of the Marx Family Trust Dtd. who have power to direct the voting and disposition of securities held by the Marx Family Trust Dtd. are Melville Marx and Carol Marx. Includes 16,667 common shares issuable upon conversion of the Series 1 Preferred Shares and 3,333 common shares issuable upon the exercise of warrants.
(95)	Includes 16,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 3,200 common shares issuable upon the exercise of warrants.

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(96)	Pershing LLC acts as Custodian and has the power to direct investments. The beneficial owner of the securities held by such entity is John Unger. Includes 15,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 3,000 common shares issuable upon the exercise of warrants.
(97)	Includes 18,750 common shares issuable upon the exercise of warrants.
(98)	Includes 18,750 common shares issuable upon the exercise of warrants.
(99)	Includes 18,750 common shares issuable upon the exercise of warrants.

(100)	Pershing LLC acts as Custodian and has the power to direct investments. The beneficial owner of the securities held by such entity is Arlene Kuhn. Includes 15,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 3,000 common shares issuable upon the exercise of warrants.
(101)	Pershing LLC acts as Custodian and has the power to direct investments. The beneficial owner of the securities held by such entity is Gerald Kissner. Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(102)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(103)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(104)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(105)	The beneficial owners of the securities held by the Atlantis Software Company Employee Profit Sharing Plan are Rune Medhus and Elisa Medhus. The members of Atlantis Software Company Employee Profit Sharing Plan who have power to direct the voting and disposition of securities held by Atlantis Software Company Employee Profit Sharing Plan are Rune Medhus and Elisa Medhus. Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(106)	Pershing LLC acts as Custodian and has the power to direct investments. The beneficial owner of the securities held by such entity is Don S. Cook. Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(107)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(108)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(109)	The beneficial owner of the held securities and the member who has power to direct the voting and disposition of held securities is Dr. William Grose. Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(110)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(111)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(112)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(113)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(114)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.

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(115)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(116)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(117)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(118)	The trustees of this trust who have power to direct the voting and disposition of securities held by the trust are Robert J. Santoski Jr. and Paula Santoski. Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(119)	The general partner of Searing Ltd. is Searing Management, LLC. The Manager of Searing Management, LLC is Scott S. Brown who has voting and dispositive control over the shares. The beneficial owners of the held securities are Scott Brown, Cynthia S. Brown, Robert G. Brown, Vicky B. Parker, Markell B. Rowe, and Cindi B. Leech. Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(120)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(121)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(122)	The trustees of this trust who have power to direct the voting and disposition of securities held by the trust are Samantha Leigh Santoski and Paula Santoski. The beneficial owner of the securities held by such trust is Samantha Leigh Santoski. Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(123)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(124)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(125)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(126)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(127)	Includes 10,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 2,000 common shares issuable upon the exercise of warrants.
(128)	Includes 8,333 common shares issuable upon conversion of the Series 1 Preferred Shares and 1,667 common shares issuable upon the exercise of warrants.
(129)	[Richard Levy and Stewart Flink] have the power to direct the voting and disposition of securities. Includes 8,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 1,600 common shares issuable upon the exercise of warrants.
(130)	Pershing LLC acts as Custodian and has the power to direct investments. The beneficial owner of the securities held by such entity is Charlie R. Epps. Includes 7,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 1,400 common shares issuable upon the exercise of warrants.
(131)	Includes 2,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 400 common shares issuable upon the exercise of warrants.
(132)	The trustee of the Cynthia B. Darraugh Residuary Trust who has power to direct the voting and disposition of securities held by the Cynthia B. Darraugh Residuary Trust is Scott S. Brown. The beneficial owner of the securities held by such trust is Cynthia Brown Darragh Leech. Includes

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	1,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 200 common shares issuable upon the exercise of warrants.
(133)	The trustee of the Victoria B. Parker Residuary Trust who has power to direct the voting and disposition of securities held by the Victoria B. Parker Residuary Trust is Scott S. Brown. The beneficial owner of the securities held by such trust is Victoria B. Parker. Includes 1,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 200 common shares issuable upon the exercise of warrants.
(134)	The trustee of the Markell B. Rowe Residuary Trust who has power to direct the voting and disposition of securities held by the Markell B. Rowe Residuary Trust is Markell B. Rowe. Includes 1,000 common shares issuable upon conversion of the Series 1 Preferred Shares and 200 common shares issuable upon the exercise of warrants.

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PLAN OF DISTRIBUTION

      The selling shareholders may offer and sell all or a portion of the shares covered by this prospectus from time to time in one or more transactions on the Nasdaq SmallCap Market or on any automated quotation system or national securities exchange on which the common shares may then be listed or traded, in the over-the-counter market, in negotiated transactions, through the writing of non-traded and exchange-traded call options, in hedging transactions and in settlement of other transactions in standardized or over-the-counter options, in connection with short sales, by pledge to secure obligations, or otherwise, at prices related to the then prevailing market price or at negotiated prices. The shares may be sold directly or through brokers or dealers.

      When we refer to selling shareholders in this section we are referring to the selling shareholders named in the table in the Selling Shareholders section of this prospectus and their pledgees, donees, transferees or other successors-in-interest selling shares received from a named selling shareholder as a gift, partnership distribution or other non-sale-related transfer after the date of this prospectus.

      In effecting sales, brokers and dealers engaged by selling shareholders may arrange for other brokers or dealers to participate. Brokers or dealers may receive compensation in the form of commissions, concessions or discounts from selling shareholders (or, if any such broker-dealer acts as agent for the purchaser of such shares, from such purchaser) in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. Broker-dealers may agree with the selling shareholders to sell a specified number of such shares at a stipulated price per share, and, to the extent such broker-dealer is unable to do so acting as agent for a selling shareholder, to purchase as principal any unsold shares at the price required to fulfill the broker-dealer’s commitment to such selling shareholder. Broker-dealers who acquire shares as principal may thereafter resell such shares from time to time in transactions (which may involve crosses and block transactions and sales to and through other broker-dealers) in the over-the-counter market or otherwise at prices and on terms then prevailing at the time of sale, or in negotiated transactions and, in connection with such resales, may receive compensation from the purchasers of such shares as described above.

      In connection with the distribution of the shares, the selling shareholders may enter into hedging transactions with broker-dealers. In connection with such transactions, broker-dealers may engage in short sales of the shares in the course of hedging the positions they assume with the selling shareholders. The selling shareholders may also sell the shares short and redeliver the shares to close out the short positions. The selling shareholders may also enter into options or other transactions with broker-dealers that require the delivery to the broker-dealer of the shares. The selling shareholders may also loan or pledge the shares to a broker-dealer and the broker-dealer may sell the shares so loaned or upon a default the broker-dealer may effect sales of the pledged shares. In addition to the foregoing, the selling shareholders may enter into, from time to time, other types of hedging transactions.

      The selling shareholders and any broker-dealers participating in a distribution of the shares pursuant to this prospectus may be deemed to be “underwriters” within the meaning of Section 2(11) of the Securities Act of 1933. Any compensation received by a selling shareholder or a broker-dealer and any profit on the resale of shares sold by them while acting as principals may be deemed to be underwriting commissions or discounts under the Securities Act of 1933. Since selling shareholders may be deemed to be underwriters, the selling shareholders will be subject to the prospectus delivery requirements of the Securities Act of 1933.

      The selling shareholders have not advised us of any specific plans for the distribution of the shares covered by this prospectus. When and if we are notified by the selling shareholders that any material arrangement has been entered into with a broker-dealer or underwriter for the sale of a material portion of the shares covered by this prospectus, a prospectus supplement or post-effective amendment to the registration statement will be filed with the Securities and Exchange Commission to include any material information regarding the plan of distribution that is not included herein.

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      We have advised the selling shareholders that the anti-manipulation rules promulgated under the Securities Exchange Act of 1934, including Regulation M, may apply to sales of the shares offered by the selling shareholders.

      We will pay all costs relating to the registration of the shares, including registration and filing fees, the fees and expenses of compliance with state securities laws, printing expenses, and our legal and accounting fees. Any commissions or other fees payable to broker-dealers or underwriters in connection with any sale of the shares, and any legal fees of counsel to the selling shareholders, will be paid by the selling shareholders.

      The selling shareholders have agreed that, upon receipt by them of a notice from us that this prospectus needs to be amended or updated, they will cease making further sales of common shares under the registration statement of which this prospectus forms a part until they have received from us an amended or updated prospectus.

      The selling shareholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the common shares covered by this prospectus against liabilities, including liabilities arising under the Securities Act of 1933.

      Each selling shareholder has agreed to indemnify us, our directors and officers, any person or entity who controls us, any underwriter and any other selling shareholder against liabilities and expenses to which any of these persons or entities may become subject under the Securities Act of 1933, the Securities Exchange Act of 1934 or other federal, state, Canadian or provincial securities laws arising out of or based upon the information set forth in the registration statement (including this prospectus) or any documents filed under state or provincial securities laws, if the liability arises out of information furnished in writing to us by the selling shareholder or someone acting on its behalf for use in connection with the preparation of the registration statement or other documents referred to above. In no event will the liability of any selling shareholder under the indemnity agreement described above exceed the aggregate net proceeds received by the selling shareholder in the offering, except in the event of fraud by the selling shareholder.

      We have agreed to indemnify each selling shareholder, its heirs, personal representatives and assigns, each of such selling shareholder’s officers, directors, partners, employees and affiliates, any person or entity who controls such selling shareholder, any underwriter and any other selling shareholder against liabilities and expenses to which any of these persons or entities may become subject under the Securities Act of 1933, the Securities Exchange Act of 1934 or other federal, state, Canadian or provincial securities laws arising out of or based upon the information set forth in the registration statement (including this prospectus) or any documents filed under state or provincial securities laws, if the liability arises out of information furnished by us for use in connection with the preparation of the registration statement or other documents referred to above. In no event will our liability under the indemnity agreement described above apply to amounts paid in settlement of any such liability if such settlement is effected without our consent nor shall we be liable in any such case to a particular indemnified party for any such liability to the extent that it arises out of or is based upon a violation which occurs in reliance upon and in conformity with written information furnished expressly for use in connection with such registration by such indemnified party.

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EXPENSES OF THE ISSUE

      Set forth below are expenses to be paid by us in connection with the issuance and distribution of the common shares being registered on behalf of the selling shareholders. All amounts shown are estimates except for the registration listing fees.

SEC Registration Fee	$	26,459
Accounting fees and expenses	$	100,000
Legal fees and expenses	$	200,000
Printing and engraving expenses	$	25,000
Miscellaneous	$	10,000
Total	$	361,459

LEGAL MATTERS

      The legality and validity of the common shares being offered by this prospectus is being passed upon by Blake, Cassels & Graydon LLP.

EXPERTS

      The consolidated financial statements of Capital Environmental Resource Inc. as of December 31, 2002 and 2001 and for the three years ended December 31, 2002 incorporated in this prospectus by reference to our Annual Report on Form 20-F/A for the year ended December 31, 2002 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP Toronto, Canada, independent auditors, given on the authority of said firm as experts in auditing and accounting.

      The combined financial statements of the North Central Florida District of Allied Waste Industries, Inc. as of December 31, 2002 and 2001 and for the three years ended December 31, 2002, incorporated in this prospectus by reference to our Report on Form 6-K dated December 11, 2003, have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP Phoenix, Arizona, independent auditors, given on the authority of said firm as experts in auditing and accounting.

      The consolidated financial statements of Florida Recycling Services, Inc. as of December 31, 2002, 2001 and 2000 and for the three years ended December 31, 2002 incorporated in this prospectus by reference to our Report on Form 6-K dated December 11, 2003, have been so incorporated in reliance on the report of Shepard Schwartz & Harris LLP, independent auditors, given on the authority of such firm as experts in auditing and accounting.

INDEPENDENT AUDITORS

      In October 2003, we appointed BDO Dunwoody, LLP, Toronto, Ontario, as auditors, effective for the fiscal year commencing January 1, 2003. PricewaterhouseCoopers LLP, Toronto, Canada, ceased being our auditors effective for the fiscal year commencing January 1, 2003.

WHERE YOU CAN FIND MORE INFORMATION

      We file annual reports on Form 20-F, reports of foreign private issuer on Form 6-K and other information with the Securities and Exchange Commission, which we also refer to as the SEC. You may read and copy any of our SEC filings at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference room. Our filings with the SEC are also available to the public from commercial document retrieval services. Some of our SEC filings are also available at the website maintained by the SEC at http://www.sec.gov.

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      Our common shares are quoted on the Nasdaq SmallCap Market. You may inspect any periodic reports and other information we file with the Securities and Exchange Commission at the offices of the Nasdaq Stock Market, Inc., 9801 Washingtonian Blvd., Fifth Floor, Gaithersburg, MD 20878.

      As a foreign private issuer, we are exempt from the rules under the Securities Exchange Act of 1934 which prescribe the furnishing and content of proxy statements, and our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions contained in Section 16 of the Securities Exchange Act of 1934.

      This prospectus is part of a registration statement on Form F-3 that we filed with the Securities and Exchange Commission under the Securities Act of 1933. This prospectus does not contain all the information contained in the registration statement. For further information about us and our common shares, you should read the registration statement and the exhibits filed with the registration statement.

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INCORPORATION OF INFORMATION BY REFERENCE

      The Securities and Exchange Commission allows us to “incorporate by reference” information into this document, which means that we can disclose important information to you by referring you to another document filed separately with the Securities and Exchange Commission. The information incorporated by reference is considered to be part of this document, except for any information superseded by information in this document. This prospectus incorporates by reference the following documents that we have previously filed with the Securities and Exchange Commission:

      (a) Our Annual Report on Form 20-F for the fiscal year ended December 31, 2002, filed with the Securities and Exchange Commission on July 15, 2003, and as amended by Amendment No. 1 to Annual Report on Form 20-F/A for the fiscal year ended December 31, 2002, filed with the Securities and Exchange Commission on November 28, 2003;

      (b) Our Reports of Foreign Private Issuer on Forms 6-K filed with the Securities and Exchange Commission on October 16, 2003, November 14, 2003, November 26, 2003, November 28, 2003, December 2, 2003 and December 11, 2003; and

      (c) The description of our common shares contained in our Registration Statement on Form 8-A filed with the Securities and Exchange Commission on May 4, 1999.

      The documents listed above contain important information about us and our finances. The more detailed information contained in the Form 20-F/A and Forms 6-K qualify this entire prospectus. Statements in this prospectus may modify or supersede statements in the Form 20-F/A and Forms 6-K and therefore the modified or superseded part of the original statement is not part of this prospectus.

      We incorporate by reference into this prospectus all subsequent annual reports on Form 20-F, Form 40-F or Form 10-K and all subsequent filings by us on Form 10-Q and 8-K after the date of this prospectus and before we terminate this offering. We also may incorporate by reference into this prospectus our reports on Form 6-K filed after the date of this prospectus and before we terminate this offering that we identify in the Form 6-K as being incorporated into this registration statement. We may modify or supersede any statement in this prospectus by statements in documents we incorporate by reference after the date of this prospectus. When that happens, the modified or superseded part of the original statement is not part of this prospectus.

      You may request a copy of any of the documents incorporated by reference in this prospectus at no cost. We will not include exhibits to the documents that you request unless the exhibits are specifically incorporated by reference into those documents. You may make your request for any of the documents incorporated by reference in this prospectus by writing or telephoning us at the following address: Capital Environmental Resource Inc., 1005 Skyview Drive, Burlington, Ontario, Canada L7P 5B1 Attention: General Counsel. Our telephone number is (905) 319-1237. Our web site address is http://www.capitalenvironmental.com. The information on our web site does not form a part of this prospectus.

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56,486,746 Common Shares

Capital Environmental Resource Inc.

PROSPECTUS

December     , 2003

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 8.      Indemnification of Directors and Officers.

      Pursuant to the Business Corporations Act (Ontario), a corporation may indemnify a director or officer of the corporation, a former director or officer of the corporation or a person who acts or acted at the corporation’s request as a director or officer of a body corporate of which the corporation is or was a shareholder or creditor, and his or her heirs and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, reasonably incurred by him or her in respect of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been a director or officer of such corporation or body corporate, if:

      (a) he or she acted honestly and in good faith with a view to the best interest of the corporation; and

      (b) in the case of a criminal or administrative action or proceeding that is enforced by a monetary penalty, he or she had reasonable grounds for believing that his or her conduct was lawful.

      Also, under the Business Corporations Act (Ontario), a corporation may, with the approval of the court, indemnify a person referred to in the preceding paragraph in respect of an action by or on behalf of the corporation or body corporate to procure a judgment in its favor, to which the person is made a party by reason of being or having been a director or an officer of the corporation or body corporate, against all costs, charges and expenses reasonably incurred by the person in connection with such action if he or she fulfils the conditions set out in paragraphs (a) and (b) above.

      Further, the Business Corporations Act (Ontario) provides that, despite anything noted above, a person referred to in the first paragraph is entitled to indemnity from the corporation in respect of all costs, charges and expenses reasonably incurred by him in connection with the defense of any civil, criminal or administrative action or proceeding to which he or she is made a party by reason of being or having been a director or officer of the corporation or body corporate, if the person seeking indemnity:

      (i) was substantially successful on the merits in his or her defense of the action or proceeding; and

      (ii) fulfils the conditions set out in paragraphs (a) and (b) above.

      Lastly, the Business Corporations Act (Ontario) provides that a corporation may purchase and maintain insurance for the benefit of any person referred to in the first paragraph against any liability incurred by the person:

      (i) in his or her capacity as a director or officer of the corporation, except where the liability relates to the person’s failure to act honestly and in good faith with a view to the best interests of the corporation; or

      (ii) in his or her capacity as a director or officer of another body corporate where the person acts or acted in that capacity at the corporation’s request, except where the liability relates to the person’s failure to act honestly and in good faith with a view to the best interests of the body corporate.

      The by-laws of Capital Environmental Resource Inc. (“the Company”) provide that the Company shall indemnify a director or officer, a former director or officer, or a person who acts or acted at the Company’s request as a director or officer of a body corporate of which the Company is or was a shareholder or creditor, and the heirs and legal representatives of such person to the extent permitted by the Business Corporations Act (Ontario).

      The Company maintains a directors’ and officers’ liability insurance policy with a policy limit of $20.0 million that is subject to a $1.0 million deductible in respect of any claim. In addition, the Company is a co-insurer for up to 20% of the amount paid in respect of securities related claims. The policy

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provides protection to the Company’s directors and officers against liability incurred by them in their capacities as directors and officers of the Company and its subsidiaries.

Item 9. Exhibits

Exhibit
Number		Description
	4.1	Form of Common Share Certificate
	5.1	Opinion of Blake, Cassels & Graydon LLP as to the legality of the common shares being registered hereby
	23.1	Consent of Capital Environmental Resource Inc.’s former auditor — PricewaterhouseCoopers LLP, Toronto, Canada
	23.2	Consent of Blake, Cassels & Graydon LLP (included in Exhibit 5.1)
	23.3	Consent of Allied Waste Industries, Inc.’s auditor — PricewaterhouseCoopers LLP, Phoenix, Arizona
	23.4	Consent of Florida Recycling Services, Inc.’s auditor — Shepard Schwartz & Harris LLP
	24.1	Power of Attorney (included on signature page)

Item 10. Undertakings

      The undersigned registrant hereby undertakes:

      1. To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

      (a) to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

      (b) to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereto) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of the prospectus filed with the Securities and Exchange Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and

      (c) to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (a) and (b) do not apply if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 which are incorporated by reference in the registration statement.

      2. That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      3. To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

II-2

      4. To file a post-effective amendment to the registration statement to include any financial statements required by Item 8.A of Form 20-F (17 CFR 249.220f) at the start of any delayed offering or throughout a continuous offering. Financial statements and information otherwise required by Section 10(a)(3) of the Securities Act of 1933 need not be furnished, provided that the registrant includes in the prospectus, by means of a post-effective amendment, financial statements required pursuant to this paragraph (4) and other information necessary to ensure that all other information in the prospectus is at least as current as the date of those financial statements. Notwithstanding the foregoing, with respect to registration statements on Form F-3, a post-effective amendment need not be filed to include financial statements and information required by Section 10(a)(3) of the Securities Act of 1933 or Rule 3-19 of Regulation S-X if such financial statements and information are contained in periodic reports filed with or furnished to the Securities and Exchange Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the Form F-3.

      5. That, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant’s annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of any employee benefit plan’s annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

      6. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission, such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer, or controlling person of the registrant in the successful defense of any action, suit, or proceeding) is asserted against the registrant by such director, officer, or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has theretofore been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

II-3

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form F-3 and has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Burlington, Ontario, on December 11, 2003.

CAPITAL ENVIRONMENTAL RESOURCE INC.

By:  /s/ DAVID SUTHERLAND-YOEST

David Sutherland-Yoest

President and Chief Executive Officer

POWER OF ATTORNEY

      KNOWN ALL MEN BY THESE PRESENTS that each individual whose signature appears below constitutes and appoints each of David Sutherland-Yoest and Ronald L. Rubin such person’s true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for such person and in such person’s name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this registration statement (or to any other registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933), and to file the same, with all exhibits thereto, and all documents in connection therewith, with the Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that any said attorney-in-fact and agent, or any substitute or substitutes of any of them, may lawfully do or cause to be done by virtue hereof.

      Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/ DAVID SUTHERLAND-YOEST David Sutherland-Yoest	Chairman of the Board, Chief Executive Officer and Director (Principal Executive Director)	December 11, 2003
/s/ RONALD L. RUBIN Ronald L. Rubin	Executive Vice President and Chief Financial Officer (Principal Financial Officer)	December 11, 2003
/s/ GEORGE BOOTHE George Boothe	Chief Accounting Officer (Principal Accounting Officer)	December 11, 2003
/s/ GARY W. DEGROOTE Gary W. DeGroote	Director	December 11, 2003
/s/ R. JOHN LAWRENCE R. John Lawrence	Director	December 11, 2003

II-4

Signature	Title	Date
/s/ GEORGE E. MATELICH George E. Matelich	Director	December 11, 2003
/s/ LUCIEN RÉMILLARD Lucien Rémillard	Director	December 11, 2003
/s/ DON A. SANDERS Don A. Sanders	Director	December 11, 2003
/s/ STANLEY A. SUTHERLAND Stanley A. Sutherland	Director	December 11, 2003
/s/ RONALD L. RUBIN Ronald L. Rubin	Authorized Representative in the U.S.	December 11, 2003

II-5

EXHIBIT INDEX

Exhibit
Number		Exhibit Description
	4.1	Form of Common Share Certificate
	5.1	Opinion of Blake, Cassels & Graydon LLP as to the legality of the common shares being registered hereby
	23.1	Consent of Capital Environmental Resource Inc.’s former auditor — PricewaterhouseCoopers LLP, Toronto, Canada
	23.2	Consent of Blake, Cassels & Graydon LLP (included in Exhibit 5.1)
	23.3	Consent of Allied Waste Industries, Inc.’s auditor — PricewaterhouseCoopers LLP, Phoenix, Arizona
	23.4	Consent of Florida Recycling Services, Inc.’s auditor — Shepard Schwartz & Harris LLP
	24.1	Power of Attorney (included on signature page)

EX-4.1

                                                                     EXHIBIT 4.1

                                 [CAPITAL LOGO]
                                    CAPITAL
                          ENVIRONMENTAL RESOURCE INC.
             INCORPORATED UNDER THE LAWS OF THE PROVINCE OF ONTARIO

NUMBER                                                                    SHARES
00758                                        CUSIP 14008M 10 4
                                               SEE REVERSE FOR
                                             CERTAIN DEFINITIONS


THIS
CERTIFIES
THAT

                         [SPECIMEN, SPECIMEN, SPECIMEN]


IS THE
REGISTERED
HOLDER OF


FULLY PAID AND NON ASSESSABLE COMMON SHARES WITHOUT PAR VALUE IN THE CAPITAL OF

                      CAPITAL ENVIRONMENTAL RESOURCE INC.

transferable only on the books of the Corporation by the holder hereof in person
or by attorney upon surrender of this Certificate properly endorsed

         This Certificate is not valid until countersigned by either of the
         Transfer Agents of the Corporation

         IN WITNESS WHEREOF the Corporation has caused this Certificate to be
         signed by its duly authorized officers

         DATED


                     COUNTERSIGNED AND REGISTERED
                     AMERICAN STOCK TRANSFER & TRUST COMPANY, New York, New York

                     By:
                        -----------------------------------------
                                               AUTHORIZED OFFICER

                     COUNTERSIGNED AND REGISTERED
                     CIBC MELLON TRUST COMPANY, Toronto, Ontario
                     --------------------------------------------
                                                CO-TRANSFER AGENT

                     By:
                        -----------------------------------------
                                              AUTHORIZED OFFICER

THE SHARES REPRESENTED BY THIS CERTIFICATE ARE TRANSFERABLE AT THE OFFICE OF
CIBC MELLON TRUST COMPANY IN TORONTO, ONTARIO, CANADA OR AT THE OFFICE OF
AMERICAN STOCK TRANSFER, A TRUST COMPANY, NEW YORK, NEW YORK, USA



- --------------------------------------------------------------------------------

         The following abbreviations, when used in the inscription on the face
of this certificate shall be construed as though they were written out in full
according to applicable laws or regulations:

         TEN COM -- as tenants in common
         JT TEN  -- as joint tenants with right of survivorship and not as
                    tenants in common

                    Additional abbreviations may also be used though not in
                    the above list.

- --------------------------------------------------------------------------------

         Keep this certificate in a safe place. If it is lost, stolen or
destroyed the Company will require a bond of indemnity as a condition to the
issuance of a replacement certificate.

         The Corporation is authorized to issue shares of more than one class
and series and will furnish to a shareholder, on demand and without charge a
full copy of the text of (i) the rights, privileges, restrictions and conditions
attached to each class authorized to be issued and to each series in so far as
the same have been fixed by the directors, and (ii) the authority of the
directors to fix the rights, privileges, restrictions and conditions of
subsequent series.


For value received ______________ hereby sell, assign and transfer unto


- --------------------------------------------------------------------------------
     (PLEASE PRINT OR TYPEWRITE NAME, ADDRESS, INCLUDING ZIP CODE OR POSTAL
                               CODE OF ASSIGNEE)

- --------------------------------------------------------------------------------
  PLEASE INSERT SOCIAL SECURITY, SOCIAL INSURANCE OR OTHER IDENTIFYING NUMBER
                                  OF ASSIGNEE

                                         ---------------------------------------

                                         ---------------------------------------

- --------------------------------------------------------------------------------



________________________________________________ Shares of the Capital Stock
represented by the within Certificate, and do hereby irrevocably constitute and
appoint.

________________________________________________ Attorney to transfer the said
stock on the Books of the within-named Corporation with full power of
substitution in the premises.

Dated: __________________________________

                                    X
                                    ____________________________________________
                                    NOTICE: THE SIGNATURE TO THIS ASSIGNMENT
                                    MUST CORRESPOND WITH THE NAME AS WRITTEN
                                    UPON THE FACE OF THE CERTIFICATE. IN EVERY
                                    PARTICULAR, WITHOUT ALTERATION OR
                                    ENLARGEMENT, OR ANY CHANGE WHATEVER.


         in the presence of

________________________________________________
Signature Guaranteed by:

EX-5.1

                                                                     EXHIBIT 5.1

[BLAKE, CASSELS & GRAYDON LLP LOGO]                  Box 25, Commerce Court West
                                                     199 Bay Street
                                                     Toronto, Ontario, Canada
                                                     M5L 1A9

December 11, 2003

Capital Environmental Resource Inc.
1005 Skyview Drive
Burlington, Ontario
L7P 5B1

Dear Sirs:

         RE:      REGISTRATION STATEMENT ON FORM F-3 RELATING TO 56,486,746
                  COMMON SHARES IN THE CAPITAL OF CAPITAL ENVIRONMENTAL RESOURCE
                  INC.

                  Reference is made to the above-captioned Registration
Statement on Form F-3 (the "REGISTRATION STATEMENT") filed by Capital
Environmental Resource Inc. (the "COMPANY") on the date hereof with the
Securities and Exchange Commission under the Securities Act of 1933, as amended,
covering the resale to the public by certain shareholders of the Company of up
to 56,486,746 common shares in the capital of the Company currently consisting
of (i) 21,679,897 outstanding common shares in the capital of the Company (the
"COMMON SHARES"), (ii) 28,146,333 Series 1 preferred shares in the capital of
the Company (the "SERIES 1 PREFERRED SHARES") convertible into the same number
of common shares in the capital of the Company upon shareholder approval, and
(iii) warrants (the "WARRANTS") to acquire 6,660,516 common shares in the
capital of the Company.

                  We are Canadian corporate counsel to the Company and have been
asked to furnish this letter in connection with the Registration Statement. In
doing so, we have examined the minute books and such other corporate records of
the Company as we have considered necessary or relevant for the purposes of the
opinions set out below. We have also examined and relied upon originals or
copies, certified or otherwise authenticated to our satisfaction, of all
corporate records, documents, agreements or other instruments of the Company and
have made all investigations of law and have discussed with the Company's
officers all questions of fact that we have deemed necessary or appropriate.

                  For the purposes of this opinion, we have assumed, with
respect to all documents examined by us, the genuineness and authenticity of all
signatures (whether on originals or copies of documents), the authenticity and
completeness of all documents submitted to us as originals and the conformity to
authentic original documents of all documents submitted to us as certified,
conformed, telecopied or photocopied copies. We have relied exclusively upon the
information provided by the Company with respect to the accuracy of the factual
matters material to this opinion; while we have not performed any independent
check or verification of the factual matters other than as set out in this
opinion, nothing has come to our attention which leads us to believe the
information provided by the Company is incorrect.


Toronto - Ottawa - Montreal* - Quebec City* - Calgary - Vancouver - London, U.K.
                  - Beijing *Associated firm: Lavery, de Billy





[BLAKE, CASSELS & GRAYDON LLP LOGO]                                       Page 2



                  The opinions set out below are limited to the laws of the
Province of Ontario and the laws of Canada applicable therein at the date
hereof, and no opinion is expressed with respect to the laws of any other
jurisdiction.

                  Based and relying on the foregoing and subject to the
qualifications set forth herein, we are of the opinion that on the date hereof:

1.       the Common Shares and the Series 1 Preferred Shares have been duly
         authorized and validly issued as fully paid and non-assessable; and

2.       the Warrants have been duly authorized and validly issued; and

3.       all necessary corporate action has been taken by the Company such that,
         upon the conversion of the Series 1 Preferred Shares into common shares
         in the capital of the Company and upon the exercise of the Warrants to
         acquire common shares in the capital of the Company, such common shares
         when issued will be duly authorized and validly issued as fully paid
         and non-assessable.

We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement and to the reference to our firm in the Prospectus
contained in the Registration Statement under the caption "Legal Matters".


                                                Yours truly,


                                                /s/ Blake, Cassels & Graydon LLP

EX-23.1

                                                                    EXHIBIT 23.1


                       CONSENT OF INDEPENDENT ACCOUNTANTS


We hereby consent to the incorporation by reference in this Registration
Statement on Form F-3 of our reports dated March 20, 2003, except for the effect
of the restatement related to the beneficial conversion feature as described in
Note 1, which is as of November 4, 2003, relating to the consolidated financial
statements and financial statement schedules, which appear in Capital
Environmental Resource Inc.'s Annual Report to Shareholders on Form 20-F/A. We
also consent to the reference to us under the heading "Experts" in such
Registration Statement.



/s/ PricewaterhouseCoopers LLP
Toronto, Canada
December 11, 2003

EX-23.3

                                                                    EXHIBIT 23.3



                       CONSENT OF INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in this Registration
Statement on Form F-3 of our report dated July 9, 2003 relating to the combined
financial statements of the North Central Florida District of Allied Waste
Industries, Inc. as of December 31, 2002 and 2001 and for each of the three
years in the period ended December 31, 2002, which appear in Capital
Environmental Resource Inc.'s Report of Foreign Private Issuer on Form 6-K dated
December 11, 2003. We also consent to the reference to us under the heading
"Experts" in such registration statement.



/s/ PricewaterhouseCoopers LLP

Phoenix, Arizona
December 11, 2003

EX-23.4

                                                                    EXHIBIT 23.4



                       CONSENT OF INDEPENDENT ACCOUNTANTS


We consent to the incorporation by reference in the registration statement on
Form F-3 of Capital Environmental Resource Inc. (the "Registration Statement")
of our report dated April 23, 2003, on our audits of the consolidated financial
statements of Florida Recycling Services, Inc. of Illinois and its subsidiary,
Florida Recycling Services, Inc. of Delaware for the years ended December 31,
2002, 2001 and 2000, which appear in Capital Environmental Resource Inc's.
Report of Foreign Private Issuer on Form 6-K dated December 11, 2003 and to the
reference to us under the heading "Experts" in the Registration Statement.



/s/ Shepard Schwartz & Harris LLP
Chicago, Illinois

December 11, 2003.