-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, We1JbRHyKO4p4W2wgkcd0OWt3UB7xLJbY6y/EoHKImDr2KrAzzX7j04k64ffIONj Rey+1oVzypMQtw4iXau3JA== 0000950116-96-001510.txt : 19970102 0000950116-96-001510.hdr.sgml : 19970102 ACCESSION NUMBER: 0000950116-96-001510 CONFORMED SUBMISSION TYPE: S-3/A PUBLIC DOCUMENT COUNT: 2 FILED AS OF DATE: 19961231 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: MET PRO CORP CENTRAL INDEX KEY: 0000065201 STANDARD INDUSTRIAL CLASSIFICATION: INDUSTRIAL & COMMERCIAL FANS & BLOWERS & AIR PURIFYING EQUIP [3564] IRS NUMBER: 231683282 STATE OF INCORPORATION: DE FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: S-3/A SEC ACT: 1933 Act SEC FILE NUMBER: 333-13929 FILM NUMBER: 96688597 BUSINESS ADDRESS: STREET 1: P O BOX 144 STREET 2: 160 CASSELL ROAD CITY: HARLEYSVILLE STATE: PA ZIP: 19438 BUSINESS PHONE: 2157236751 MAIL ADDRESS: STREET 1: 160 CASSELL ROAD STREET 2: BOX 144 CITY: HARLEYSVILLE STATE: PA ZIP: 19438 FORMER COMPANY: FORMER CONFORMED NAME: MET PRO WATER TREATMENT CORP DATE OF NAME CHANGE: 19740924 FORMER COMPANY: FORMER CONFORMED NAME: MET PRO INC DATE OF NAME CHANGE: 19661026 S-3/A 1 As filed with the Securities and Exchange Commission on December 31, 1996 Registration No. 33-13929 SECURITIES AND EXCHANGE COMMISSION AMENDMENT NO. 1 TO FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 MET-PRO CORPORATION (Exact name of registrant as specified in its charter) DELAWARE 23-1683282 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 160 Cassell Road Harleysville, PA 19438 (215) 723-6751 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) William Kacin, President 160 Cassell Road Harleysville, PA 19438 (215) 723-6751 (Name, address, zip code and telephone number, including area code, of agent for service) Copy to: Earl J. Wofsey, Esquire 929 Riverbank Road Stamford, CT 06903 Approximate date of commencement of proposed sale to the public: From time to time after the 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.[ ] If the only securities being registered on this Form are being offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ]__________ 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 registration statement number of the earlier effective registration statement for the same offering. [ ]___________ If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] PROSPECTUS 195,920 Shares Met-Pro Corporation Common Stock This Prospectus relates to 195,920 shares of Common Stock, par value $.10 per share, of Met-Pro Corporation (the "Company") held by the Selling Shareholders (as defined herein), which may be offered for sale from time to time by the Selling Shareholders, or by their permitted pledgees, donees, transferees or other successors in interest, to or through underwriters or directly to other purchasers or through agents in one or more transactions at varying prices determined at the time of sale or at negotiated prices. See "Plan of Distribution". The Company will not receive any proceeds from the sale of shares of Common Stock by the Selling Shareholders. The Common Stock is quoted on the American Stock Exchange under the symbol "MPR". On December 30, 1996, the closing price of the Common Stock, as reported by the American Stock Exchange, was $13 5/8. ------------------------------------------ THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. The date of this Prospectus is December 31, 1996 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Reports, proxy statements and other information concerning the Company filed with the Commission may be inspected and copied at the public reference facilities maintained by the Commission at its office at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices of the Commission at 7 World Trade Center, 13th Floor, New York, NY 10048. Copies of such material can be obtained from the Public Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. The Common Stock is quoted on the American Stock Exchange. Such reports, proxy and information statements and other information can also be inspected and copied at the offices of the American Stock Exchange, 86 Trinity Place, New York, NY 10006. The Company has filed a registration statement on Form S-3 (herein, together with all amendments and exhibits thereto, referred to as the "Registration Statement"), under the Securities Act of 1933, as amended (the "Securities Act"), with respect to the securities offered pursuant to this Prospectus. This Prospectus does not contain all of the information set forth in the Registration Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is made to the Registration Statement and the exhibits filed as a part thereof. Statements contained herein concerning any document filed as an exhibit are not necessarily complete and, in each instance, reference is made to the copy of such document filed as an exhibit to the Registration Statement. Each such statement is qualified in its entirety by such reference. INCORPORATION OF INFORMATION BY REFERENCE The following documents, filed with the Commission (File No. 001-07763) pursuant to the Exchange Act, are hereby incorporated by reference in this Prospectus: (i) Annual Report on Form 10-K of the Company for the fiscal year ended January 31, 1996; (ii) Quarterly Reports on Form 10-Q for the quarters ended April 30, 1996 and July 31, 1996; and (iii) Proxy Statement of the Company relating to the annual meeting of shareholders held on June 5, 1996. All other documents filed by the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to the termination of the offering of the Common Stock pursuant to this Prospectus shall be deemed to be incorporated by reference and to be a part of this Prospectus from the date of filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Any statement so modified or superseded shall not be deemed, except as so modified or superseded, to constitute a part of this Prospectus. The Company will provide without charge to each person to whom a copy of this Prospectus is delivered, upon oral or written request of any such person, a copy of any or all of the documents incorporated herein by reference, other than the exhibits to such documents (unless such exhibits are specifically incorporated by reference in such documents). Requests should be directed to Met-Pro Corporation, 160 Cassell Road, P.O. Box 144, Harleysville, PA 19438; Attn: William Moffitt, Secretary, telephone (215) 723-6751. 2 THE COMPANY Met-Pro Corporation (the "Company") was organized in 1967 and has grown both internally and through acquisitions. It designs, manufactures and distributes products sold for pollution control and fluid handling. The Company operates through seven divisions and three wholly-owned subsidiaries. The Stiles-Kem Division is a leading manufacturer of specialty chemicals for the control of lead and copper leaching, scale, and the discoloration of drinking water caused by the presence of iron and manganese in the source water. Stiles-Kem Division's products for drinking water treatment are food grade and are certified to meet existing state, federal and ANSI/NSF standards for health effects in drinking water. The products are manufactured in the Company's plant in Waukegan, Illinois and are distributed through a network of dealers and distributors located in the United States, Mexico and Canada. The Sethco Division, located on Long Island, New York, designs, manufactures and sells corrosion resistant pumps, filter chambers and filter systems with flow rates to about 200 gallons per minute. These products are used in waste water treatment systems and fume scrubbers for pollution control. They are also widely used in the metal finishing industry, electronics industry and chemical processing industry. Sethco products are sold through a network of non-exclusive distributors, as well as to original equipment manufacturers and catalog houses. The Mefiag Division, operating through two wholly-owned subsidiaries, designs and manufactures filter systems utilizing horizontal disc technology for superior performance, particularly in high efficiency and high-flow applications in the plating and metal finishing industries and elsewhere. Worldwide sales are accomplished through qualified, market-based distributors and original equipment manufacturers located throughout Europe, the United States, South America and other major markets. The Systems Division, located at the Company's principal executive offices in Harleysville, PA, and the original foundation on which Met-Pro was built, designs, manufactures and installs major air and water pollution control systems. Systems Division's air pollution control capabilities include: carbon adsorption systems for the concentration and recovery of volatile solvents, thermal and catalytic oxidation systems and the supply of abatement catalysts. These systems are custom engineered for clients in the automotive, aerospace and furniture industries. These products also have a variety of applications in the painting, pharmaceutical, chemical, electronics, food processing and printing industries. Systems Division also manufactures a full range of catalytic converters for stationary engines and cogeneration plants to greatly reduce smog producing and toxic gases, such as NOx, CO and residual hydrocarbons, which are emitted from these sources. The Duall Division is a leading manufacturer of industrial and municipal air pollution control equipment. Its major products include odor control systems, fume and emergency gas scrubbers, stripping towers and exhaust fans and plating 3 and process tanks. All equipment is fabricated from corrosion resistant materials in the Company's Owosso, Michigan manufacturing facilities. Services include pilot studies, engineering, installation and performance testing. Duall products are sold both domestically and internationally to the metal finishing, waste water treatment, composting, food processing, chemical, printed circuit, semiconductor, pharmaceutical, battery manufacturing and groundwater remediation markets. Over ninety factory trained manufacturer's representatives sell Duall's systems to industrial and municipal clients. The Keystone Filter Division is an established custom pleater and cartridge manufacturer in the United States. It provides custom designed and engineered products which are currently used in such diverse applications as the nuclear power industry, as components in medical equipment and in indoor air quality equipment. It also provides standard filters for water purification and industrial applications. The Fybroc Division is a world leader in the manufacture of fiberglass reinforced pumps. These pumps provide excellent corrosion resistance for tough applications including pumping of acids, brines, caustics, bleaches and a wide range of waste liquids. Fybroc pumps are sold to many markets including the chemical, steel, pulp and paper, electric utility, aquaculture, aquarium, and industrial and municipal waste treatment industries. Sales, engineering, and customer service are provided through a worldwide distributor network. The Dean Pump Division designs and manufactures high quality pumps that handle a broad range of industrial applications. Users such as the chemical, petrochemical, refinery, pharmaceutical, plastics, pulp and paper, and food processing industries choose Dean Pump products particularly for their high temperature applications. The Company's manufacturing facility in Indianapolis, Indiana produces pumps which are sold through an extensive network of distributors. The Strobic Division, acquired on September 12, 1996, is presently operating as a wholly-owned subsidiary corporation. See "The Company - Recent Events." The Company's principal executive offices are located at 160 Cassell Road, P.O. Box 144, Harleysville, PA 19438, and its telephone number is (215) 723-6751. Recent Events On June 5, 1996, the Company announced a 3-for-2 stock split, which was paid on July 8, 1996 to holders of record on June 18, 1996. On September 12, 1996, Met-Pro Corporation and Met-Pro Acquisition Corporation, a wholly-owned subsidiary of Met-Pro Corporation (collectively, "Met-Pro"), executed an Agreement and Plan of Merger (the "Agreement") with Strobic Air 4 Corporation ("Strobic"), pursuant to which Strobic was merged with and into Met-Pro Acquisition Corporation, which then changed its name to Strobic Air Corporation. The consideration paid by Met-Pro under the Agreement consisted of 195,920 shares of Met-Pro common stock, cash in the amount of approximately $2.15 million, and a promissory note for $250,000. Met-Pro also granted the former Strobic shareholders certain registration rights under the Securities Act. Lynn T. Secrest, one of Strobic's principal former shareholders and its former president, deposited 40,816 shares of Common Stock of Met-Pro and the $250,000 note into escrow to fund indemnification obligations under the Agreement. Met-Pro also entered into a three (3) year employment agreement with Mr. Lynn T. Secrest to serve as vice president and the general manager of Strobic, and obtained Mr. Secrest's covenant not to compete with Met-Pro for a four (4) year period. Met-Pro financed part of the purchase price and obligations of Strobic that were paid at closing with a loan from Mellon Bank, N.A,. in the amount of $3.5 million. Strobic designs, manufactures and holds patents on specialty blowers and industrial fans for applications including laboratories, hospitals, semi-conductor manufacturing clean rooms, pharmaceutical manufacturing and chemical and petrol-chemical plants. Strobic conducts its operations in an approximately 20,000 square foot manufacturing facility on a 2.3 acre parcel that it owns in Bensalem, Pennsylvania, as well as in a contiguous approximately 16,000 square foot facility that it leases. Met-Pro also entered into certain agreements with certain former Strobic stockholders governing the disposition of their Shares (see "Plan of Distribution"). USE OF PROCEEDS The net proceeds from the sale of the Shares offered hereby will be received by the Selling Shareholders. The Company will not receive any proceeds from any sale of the Shares by the Selling Shareholders. SELLING SHAREHOLDERS The persons listed below received the Shares listed after their names in connection with Met-Pro's acquisition of Strobic and propose to sell them from time to time as set forth under the caption "Plan of Distribution" and subject to the restrictions described in that section. 5 The following individuals are the Selling Shareholders: Name and Address Shares Owned Shares Offered - ---------------- ------------ -------------- Eugene L. Dell 792 792 Shanta Kaushik Custodian for Nalini Kaushik 792 792 Madlynne M. Pastor 396 396 Lynn T. Secrest 74,014(1)(2)(3) 74,014(1)(3) Richard P. Secrest 55,411(2)(3) 55,411(3) Ronald H. Secrest 24,539(2)(3) 24,539(3) Frank J. Sobon, Jr. and Anna B. Sobon, JT TEN 396 396 John W. Stone, III 39,580(3) 39,580(3) - --------------------------- (1) Includes Shares held in escrow under the terms of the Agreement. The escrowed Shares may be replaced with the cash value equivalent of such replaced Shares, valued at the average of the closing prices per share as listed on the American Stock Exchange for the ten (10) trading days prior to such replacement. Absent any such replacement, the escrowed Shares may not be offered prior to September 11, 1998. (2) The three Secrests are brothers; however, each of them disclaims ownership of the Shares owned by the others. (3) The sale of these Shares is subject to certain restrictions as set forth in "Plan of Distribution." In addition to their role as shareholders of Strobic, Messrs. Lynn Secrest, Richard Secrest, Ronald Secrest and John Stone were formerly officers and directors of Strobic. Mr. Lynn Secrest is currently employed by Met-Pro as the Vice President and General Manager of the wholly-owned subsidiary of the Company into which Strobic was merged. Except for the foregoing, none of the Selling Shareholders listed above has held any position, office or other material relationship within the past three years with the Company or any of its predecessors or affiliates. DESCRIPTION OF COMMON STOCK The Company's certificate of incorporation authorizes the issuance of up to 10,000,000 shares of Common Stock, par value $.10 per share. The holders of Common Stock (i) have equal rights to dividends from funds legally available therefor, when, as and if declared by the Board of Directors of the Company; (ii) are entitled to share ratably in all of the assets of the Company available for distribution to holders of Common Stock upon liquidation, dissolution or winding up of the affairs of the Company; (iii) do not have preemptive, subscription or conversion rights, and there are no redemption or sinking fund provisions applicable thereto; and (iv) are entitled to one vote per share on all matters upon which shareholders may vote at all meetings of shareholders. All shares of Common Stock now outstanding are fully paid and non-assessable. The holders of shares of Common Stock do not have cumulative voting rights, 6 which means that the holders of more than 50% of such outstanding shares, voting for the election of directors, can elect all of the directors to be elected, if they so choose. Directors are divided into three classes. Each year, one class is elected to hold office for the next three years. The transfer agent for the Company's Common Stock is Chemical Mellon Shareholder Services, L.L.C., Overpark Center, 85 Challenger Road, Ridgefield Park, NJ 07660. PLAN OF DISTRIBUTION Any distribution of the Shares by the Selling Shareholders, or by permitted pledgees, donee, transferees or other successors in interest, may be effected from time to time in one or more of the following transactions: (a) to underwriters who will acquire Shares for their own account and resell them in one or more transactions, including negotiated transactions, at a fixed public offering price or at varying prices determined at the time of sale (any public offering price and any discount or concessions allowed or re-allowed or paid to dealers may be changed from time to time); (b) through brokers, acting as principal or agent, in transactions (which may involve block transactions) on the American Stock Exchange, or on one or more exchanges on which the Common Stock is then listed, in special offerings, exchange distributions pursuant to the rules of the applicable exchanges or in the over-the-counter market, or otherwise, at market prices prevailing at the time of sale, at prices related to such prevailing market prices, at negotiated prices or at fixed prices; or (c) directly or through brokers or agents in private sales at negotiated prices, or by any other legally available means. The Selling Shareholders and such underwriters, brokers, dealers or agents, upon effecting a sale of Shares, may be considered "underwriters" as that term is defined by the Securities Act. Underwriters participating in any offering made pursuant to this Prospectus (as amended or supplemented from time to time) may receive underwriting discounts and commissions, and discounts or concessions may be allowed or re-allowed or paid to dealers, and brokers or agents participating in such transaction may receive brokerage or agent's commissions or fees. At the time a particular offering of Shares is made, to the extent required, a Prospectus Supplement will be distributed which will set forth the amount of Shares, the offering price paid by an underwriter for Shares purchased from the Selling Shareholders, any discounts, commissions and other items constituting compensation from the Selling Shareholders and any discounts, commissions or concessions allowed or re-allowed or paid to dealers. Messrs. Lynn Secrest, Richard Secrest, Ronald Secrest and John Stone as a group and on behalf of their permitted transferees have agreed to the following restrictions on open market resale of the Shares through December 11, 1997: (i) no more than 2,000 Shares may be offered and sold on any trading day, and (ii) no more than a total of 15,000 Shares may be sold in any calendar month. They may make unlimited private sales to persons who agree to abide by the above restrictions. These restrictions do not apply to any sale of Shares in an underwritten public offering of Shares. 7 The Company has agreed to process to effectiveness a registration statement under the Securities Act covering the resale of the Shares and to amend it from time to time as required to incorporate current significant information until all the Shares have been sold, but not later than September 11, 1999. All costs, expenses and fees in connection with the registration statement and amendments to it will be borne by the Company. Commissions and discounts, if any, attributable to the sale of the Shares will be borne by the Selling Shareholders. The Selling Shareholders may agree to indemnify any agent, dealer or broker-dealer that participates in transactions involving sales of the Shares against certain liabilities, including liabilities arising under the Securities Act. The Company and the Selling Shareholders have agreed to indemnify each other and certain other persons against certain liabilities in connection with the offering of the Shares, including liabilities arising under the Securities Act. Whenever the Company proposes to file a registration statement under the Securities Act at any time or from time to time prior to September 11, 1999 involving an underwritten public offering, the Company has agreed to include in any such registration statement any of the Shares that are so requested by the Selling Shareholders; provided however, that if in the written opinion of the underwriter or managing underwriter the inclusion of any of such Shares would materially and adversely affect such public offering, then the number of such Shares to be included shall be proportionately reduced. The Company has granted an option to the Selling Shareholders and their permitted transferees to "put" all, or at the sole option of the Selling Shareholders, less than all, unsold Shares to the Company on September 12, 1999 at a price of $12.25 per Share. LEGAL MATTERS The validity of the Shares offered hereby will be passed upon for the Company by Earl J. Wofsey, Esquire, corporate counsel of the Company. Earl J. Wofsey is the beneficial owner of 195,714 shares of the Company's Common Stock and options to purchase an additional 13,500 shares. Prior to June 5, 1996, he was a Director of the Company. EXPERTS The financial statements and the related supplemental schedules of the Company incorporated in this Prospectus by reference to the Annual Report on Form 10-K for the year ended January 31, 1996 have been audited by Margolis & Company P.C., independent accountants, as stated in its report, which is incorporated herein by reference, and has been so incorporated in reliance upon the report of such firm, given upon its authority as experts in accounting and auditing. The financial statements of Strobic Air Corporation for the year ended October 31, 1995 and the nine months ended July 31, 1996 have been audited by Margolis & Company P.C., and are included herein in reliance upon the report of such firm, given upon its authority as experts in accounting and auditing. 8 STROBIC AIR CORPORATION FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 1996 F-1 STROBIC AIR CORPORATION TABLE OF CONTENTS FOR THE NINE MONTHS ENDED JULY 31, 1996 - ------------------------------------------------------------------------------- PAGE NUMBER ------ Independent Auditor's Report 2 Financial Statements: Balance sheet 3 Operations 4 Stockholders' equity 5 Cash flows 6 Notes to financial statements 7 to 11 F-2 [LETTERHEAD OF MARGOLIS & COMPANY P.C.] INDEPENDENT AUDITOR'S REPORT September 4, 1996, except for Note 9 as to which the date is September 12, 1996 Officers and Directors Strobic Air Corporation Bensalem, Pennsylvania We have audited the accompanying balance sheet of Strobic Air Corporation as of July 31, 1996, and the related statements of operations, stockholders' equity and cash flows for the nine months then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strobic Air Corporation as of July 31, 1996, and the results of its operations and its cash flows for the nine months then ended in conformity with generally accepted accounting principles. /s/ Margolis & Company P.C. Certified Public Accountants F-3 STROBIC AIR CORPORATION BALANCE SHEET JULY 31, 1996 - -------------------------------------------------------------------------------- ASSETS Current assets: Cash $ 75,012 Accounts receivable, net of allowance of $5,000 1,126,499 Inventories 860,210 Deferred tax asset 18,600 Prepaid expenses and other current assets 18,256 ---------- Total current assets 2,098,577 Property, plant and equipment, net 610,462 Other assets 95,037 ---------- $2,804,076 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Note payable, bank line-of-credit $ 540,000 Demand note payable, individual 100,000 Current portion of long-term debt 75,167 Accounts payable 437,647 Accrued expenses 325,539 Accrued income taxes 179,336 ---------- Total current liabilities 1,657,689 Long-term debt 101,858 Deferred tax liability 37,200 ---------- Total liabilities 1,796,747 ---------- Commitments Stockholders' equity: Common stock, no par value; 5,000 shares authorized, 2,505 shares issued 75,614 Retained earnings 937,715 ---------- 1,013,329 Less treasury stock, at cost, 30 shares 6,000 ---------- Net stockholders' equity 1,007,329 ---------- $2,804,076 ========== The notes to financial statements are an integral part of the above statement. F-4 STROBIC AIR CORPORATION STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED JULY 31, 1996 - -------------------------------------------------------------------------------- Gross sales, net of discounts and allowances of $37,000 $5,143,874 Less commissions 505,597 ---------- Net sales 4,638,277 Cost of goods sold 3,355,345 ---------- Gross profit 1,282,932 ---------- Operating expenses: Selling 241,891 General and administrative 515,905 Research and development 53,924 ---------- 811,720 ---------- Income from operations 471,212 Interest expense 52,641 ---------- Income before taxes on income 418,571 Provision for taxes on income 199,800 ---------- Net income $ 218,771 ========== The notes to financial statements are an integral part of the above statement. F-5 STROBIC AIR CORPORATION STATEMENT OF STOCKHOLDERS' EQUITY FOR THE NINE MONTHS ENDED JULY 31, 1996 - -------------------------------------------------------------------------------- COMMON RETAINED TREASURY STOCK EARNINGS STOCK TOTAL ------- --------- ------- ---------- Balance, October 31, 1995 $75,614 $ 723,894 ($6,000) $ 793,508 Net income 218,771 218,771 Dividends paid ( 4,950) ( 4,950) ------- --------- ------- ---------- Balance, July 31, 1996 $75,614 $ 937,715 ($6,000) $1,007,329 ======= ========= ======= ========== The notes to financial statements are an integral part of the above statement. F-6 STROBIC AIR CORPORATION STATEMENT OF CASH FLOWS FOR THE NINE MONTHS ENDED JULY 31, 1996 - -------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH Cash flows from operating activities: Net income $218,771 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 80,231 Deferred income taxes ( 15,200) Allowance for doubtful accounts ( 4,250) (Increase) decrease in operating assets: Accounts receivable 94,977 Inventories ( 61,882) Prepaid expenses and other current assets 17,298 Increase (decrease) in operating liabilities: Accounts payable 107,966 Accrued expenses (322,307) Accrued income taxes 150,063 -------- Net cash provided by operating activities 265,667 -------- Cash flows from investing activities: Acquisitions of property and equipment ( 117,983) Increase in other assets ( 19,441) -------- Net cash (used in) investing activities ( 137,424) -------- Cash flows from financing activities: Net borrowings under line-of-credit 20,000 Reduction of long-term debt ( 68,756) Payment of dividends ( 4,950) -------- Net cash (used in) financing activities ( 53,706) -------- Net increase in cash 74,537 Cash at beginning of period 475 -------- Cash at end of period $ 75,012 ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the period for: Interest $ 46,532 -------- Income taxes $ 63,359 -------- The notes to financial statements are an integral part of the above statement. F-7 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS FOR THE NINE MONTHS ENDED JULY 31, 1996 - -------------------------------------------------------------------------------- 1. Nature of Business and Summary of Significant Accounting Policies Nature of business - Strobic Air Corporation (the "Company") develops, engineers and assembles air moving equipment and specializes in corrosive, toxic and high temperature exhaust systems and clean room recirculation systems. The Company's products are sold throughout the United States. Inventories - Inventories are stated at the lower of cost (first-in, first-out) or market. Patents and trademarks - Patents and trademarks are amortized on a straight-line basis over five years. Property, plant and equipment - Property, plant and equipment is recorded at cost. Depreciation is computed using straight-line and accelerated methods over estimated useful lives. Expenditures for maintenance and repairs are charged to expense as incurred. Renewals and betterments are capitalized. Revenue recognition - Revenues are recognized when products are shipped. Advertising - Advertising costs are charged to operations in the period incurred and amounted to $82,710 for the nine months ended July 31, 1996. Use of estimates - The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Inventories Inventories consisted of the following: Finished goods $ 11,430 Work in process 106,116 Raw materials 742,664 ------- $860,210 ======== F-8 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE NINE MONTHS ENDED JULY 31, 1996 - -------------------------------------------------------------------------------- 3. Property, Plant and Equipment Property, plant and equipment consisted of the following: Land $ 100,000 Building 350,000 Building improvements 113,358 Leasehold improvements 21,998 Machinery and equipment 869,663 Tooling 163,533 Automotive and delivery equipment 58,812 --------- 1,677,364 Less accumulated depreciation 1,066,902 --------- $ 610,462 ========== Depreciation charged to operations amounted to $79,441. 4. Debt Short-Term Debt The Company has a $1,000,000 line-of-credit with CoreStates Bank, N.A. pursuant to which $540,000 was outstanding at July 31, 1996. The rate of interest on borrowings under the revolving credit loan is the bank's prime lending rate which was at 8.25% on July 31, 1996. Total aggregate borrowings under the revolving credit loan are limited to 80% of eligible accounts receivable plus 40% of eligible inventory. The revolving credit loan is payable upon demand and is collateralized by accounts receivable, inventories and equipment. On October 31, 1995, the Company executed a demand note in the amount of $100,000 for consulting and other services rendered prior to that date. The note accrues interest at the prime rate. Long-Term Debt Mortgage payable, CoreStates Bank, N.A. due in monthly installments of $3,000 including interest at 9%, maturing in August, 1999, collateralized by real estate located in Bensalem, PA $ 95,475 Note payable, CoreStates Bank, N.A., due in monthly installments of $3,883, plus interest at 7.5%, maturing in April, 1998, collateralized by equipment, inventories, accounts receivable and real estate 81,550 -------- 177,025 Less current portion 75,167 -------- $101,858 ======== F-9 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE NINE MONTHS ENDED JULY 31, 1996 - -------------------------------------------------------------------------------- 4. Debt - Continued Long-Term Debt - Continued Maturities of long-term debt are as follows: NINE MONTHS ENDED JULY 31, 1997 $ 75,167 1998 66,196 1999 34,177 2000 1,485 -------- $177,025 ======== Interest expense was $52,641 for the nine months ended July 31, 1996. 5. Related Party Transactions The Company's related party transactions with S.A.C. Sales Corp., which is affiliated to common ownership by a shareholder of Strobic Air Corporation, for the nine months ended July 31, 1996, were as follows: Commissions earned by affiliate $136,907 ======== Administrative fees charged to affiliate $ 5,400 ======== Product sales to affiliate $297,632 ======== Purchases from affiliate $113,910 ======== Amounts due from or to this affiliate were as follows: Accounts receivable $ 21,558 ======== Commissions payable $ 11,875 ======== 6. Income Taxes The provision for income taxes consisted of the following: Current: Federal $161,000 State 54,000 -------- 215,000 Deferred ( 15,200) -------- $199,800 ======== F-10 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE NINE MONTHS ENDED JULY 31, 1996 - -------------------------------------------------------------------------------- 6. Income Taxes - Continued Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company's net deferred tax liability consisted of the following: Deferred tax asset: Inventory cost capitalization $14,900 Other 3,700 -------- 18,600 Deferred tax liability: Accelerated depreciation ( 37,200) -------- ($18,600) ======== 7. Commitments and Contingencies Leases The Company has a monthly lease for a production facility in Bensalem, Pennsylvania requiring monthly payments of $4,000, plus real estate taxes, through October, 1997. The Company has various equipment and automobile leases. The future minimum rental payments under these noncancellable leases are as follows: TWELVE MONTHS ENDED JULY 31, ------------------- 1997 $53,403 1998 12,394 Rental expense under all operating leases was $32,470. Purchases As of July 31, 1996, the Company had outstanding purchase commitments totaling $50,000. F-11 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE NINE MONTHS ENDED JULY 31, 1996 - -------------------------------------------------------------------------------- 8. Financial Instruments Concentrations of credit risk: Financial instruments which subject the Company to concentrations of credit risk consist of cash and accounts receivable. The Company's cash is maintained in a high quality financial institution. Concentrations of credit risk related to accounts receivable are limited due to the large number of customers and their dispersion among different industries and geographic regions. Fair value of financial instruments: The carrying amounts and related fair value of the Company's financial instruments are as follows: CARRYING FAIR AMOUNT VALUE -------- -------- Assets: Cash $ 75,012 $ 75,012 Liabilities: Note payable, bank 540,000 540,000 Note payable, individual 100,000 100,000 Long-term debt 177,025 177,025 The following methods and assumptions were used to estimate the fair value of each financial instrument: Cash - The carrying amount approximates fair value because of the short maturity of this instrument. Note payable, bank line-of-credit; note payable, individual; and long-term debt - The fair value is based on the present value of expected future payments discounted at rates available to the Company under similiar borrowing arrangements. 9. Subsequent Event On September 12, 1996, the Company entered into an agreement and plan of merger whereby it agreed to be merged with and into Met-Pro Acquisition Corporation, a wholly-owned subsidiary of Met-Pro Corporation, as part of a tax-free reorganization. F-12 STROBIC AIR CORPORATION FINANCIAL STATEMENTS FOR THE YEAR ENDED OCTOBER 31, 1995 F-13 STROBIC AIR CORPORATION TABLE OF CONTENTS FOR THE YEAR ENDED OCTOBER 31, 1995 - -------------------------------------------------------------------------------- PAGE NUMBER ------ Independent Auditor's Report 2 Financial Statements: Balance sheet 3 Operations 4 Stockholders' equity 5 Cash flows 6 Notes to financial statements 7 to 11 F-14 [LETTERHEAD OF MARGOLIS & COMPANY P.C.] INDEPENDENT AUDITOR'S REPORT September 4, 1996, except for Note 9 as to which the date is September 12, 1996 Officers and Directors Strobic Air Corporation Bensalem, Pennsylvania We have audited the accompanying balance sheet of Strobic Air Corporation as of October 31, 1995, and the related statements of operations, stockholders' equity, and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Strobic Air Corporation as of October 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. /s/ Margolis & Company P.C. Certified Public Accountants F-15 STROBIC AIR CORPORATION BALANCE SHEET OCTOBER 31, 1995 - -------------------------------------------------------------------------------- ASSETS Current assets: Cash $ 475 Accounts receivable, net of allowance for doubtful accounts of $5,000 1,217,226 Inventories 798,328 Deferred tax asset 16,000 Prepaid expenses and other current assets 35,554 ---------- Total current assets 2,067,583 Property, plant and equipment, net 571,920 Other assets 76,386 ---------- $2,715,889 ========== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Note payable, bank line-of-credit $ 520,000 Demand note payable, individual 100,000 Current portion of long-term debt 87,309 Accounts payable 329,681 Accrued expenses 647,846 Accrued income taxes 29,273 ---------- Total current liabilities 1,714,109 Long-term debt 158,472 Deferred tax liability 49,800 ---------- Total liabilities 1,922,381 ---------- Commitments Stockholders' equity: Common stock, no par value; 5,000 shares authorized, 2,505 shares issued 75,614 Retained earnings 723,894 ---------- 799,508 Less treasury stock, at cost, 30 shares 6,000 ---------- Net stockholders' equity 793,508 ---------- $2,715,889 ========== The notes to financial statements are an integral part of the above statement. F-16 STROBIC AIR CORPORATION STATEMENT OF OPERATIONS FOR THE YEAR ENDED OCTOBER 31, 1995 - -------------------------------------------------------------------------------- Gross sales, net of discounts and allowances of $30,000 $6,225,488 Less commissions 671,568 ---------- Net sales 5,553,920 Cost of goods sold 3,893,099 ---------- Gross profit 1,660,821 ---------- Operating expenses: Selling 395,868 General and administrative 748,081 Research and development 150,486 ---------- 1,294,435 ---------- Income from operations 366,386 Other expense 214,009 ---------- Income before taxes on income 152,377 Provision for taxes on income 59,000 ---------- Net income $ 93,377 ========== The notes to financial statements are an integral part of the above statement. F-17 STROBIC AIR CORPORATION STATEMENT OF STOCKHOLDERS' EQUITY - -------------------------------------------------------------------------------- COMMON RETAINED TREASURY STOCK EARNINGS STOCK TOTAL ------ -------- -------- ----- Balance, October 31, 1994 $75,614 $632,992 ($6,000) $702,606 Net income 93,377 93,377 Dividends paid (2,475) (2,475) ------- -------- ------- -------- Balance, October 31, 1995 $75,614 $723,894 ($6,000) $793,508 ======= ======== ======= ======== The notes to financial statements are an integral part of the above statement. F-18 STROBIC AIR CORPORATION STATEMENT OF CASH FLOWS FOR THE YEAR ENDED OCTOBER 31, 1995 - -------------------------------------------------------------------------------- INCREASE (DECREASE) IN CASH Cash flows from operating activities: Net income $ 93,377 Adjustments to reconcile net income to net cash (used in) operating activities: Depreciation and amortization 111,981 Deferred income taxes 3,000 Loss on sale of equipment 33,669 (Increase) decrease in operating assets: Accounts receivable ( 161,159) Inventories 113,198 Prepaid expenses and other current assets ( 3,668) Increase (decrease) in operating liabilities: Accounts payable ( 251,044) Accrued expenses 43,745 Accrued income taxes 29,168 -------- Net cash (used in) operating activities ( 12,267) -------- Cash flows from investing activities: Proceeds from sale of property and equipment 13,300 Acquisitions of property and equipment ( 61,473) Increase in other assets ( 14,387) -------- Net cash (used in) investing activities ( 62,560) -------- Cash flows from financing activities: Net borrowings under line-of-credit 45,000 Reduction of long-term debt ( 99,018) Payment of dividends ( 2,475) -------- Net cash (used in) financing activities ( 56,493) -------- Net (decrease) in cash ( 106,786) Cash at beginning of year 107,261 -------- Cash at end of year $ 475 ======== SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION Cash paid during the year for: Interest $ 77,624 -------- Income taxes $ 24,336 -------- The notes to financial statements are an integral part of the above statement. F-19 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS FOR THE YEAR ENDED OCTOBER 31, 1995 - -------------------------------------------------------------------------------- 1. Nature of Business and Summary of Significant Accounting Policies Nature of business - Strobic Air Corporation (the "Company") develops, engineers and assembles air moving equipment and specializes in corrosive, toxic and high temperature exhaust systems and clean room recirculation systems. The Company's products are sold throughout the United States. Inventories - Inventories are stated at the lower of cost (first-in, first-out) or market. Patents and trademarks - Patents and trademarks are amortized on a straight-line basis over five years. Property, plant and equipment - Property, plant and equipment is recorded at cost. Depreciation is computed using straight-line and accelerated methods over estimated useful lives. Expenditures for maintenance and repairs are charged to expense as incurred. Renewals and betterments are capitalized. Revenue recognition - Revenues are recognized when products are shipped. Advertising - Advertising costs are charged to operations in the year incurred and amounted to $165,888 for the year ended October 31, 1995. Use of estimates - The presentation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. 2. Inventories Inventories consisted of the following: Work in process $ 86,415 Raw materials 711,913 ------- $798,328 ======== F-20 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED OCTOBER 31, 1995 - -------------------------------------------------------------------------------- 3. Property, Plant and Equipment Property, plant and equipment consisted of the following: Land $ 100,000 Building 350,000 Building improvements 113,358 Machinery and equipment 801,686 Tooling 135,525 Automotive and delivery equipment 58,812 ---------- 1,559,381 Less accumulated depreciation 987,461 ---------- $ 571,920 ========== Depreciation charged to operations amounted to $111,251. 4. Debt Short-Term Debt The Company has a $1,000,000 line-of-credit with CoreStates Bank, N.A. pursuant to which $520,000 was outstanding at October 31, 1995. The rate of interest on borrowings under the revolving credit loan is the bank's prime lending rate which was 8.75% on October 31, 1995. Total aggregate borrowings under the revolving credit loan are limited to 80% of eligible accounts receivable plus 40% of eligible inventory. The revolving credit loan is payable upon demand and is collateralized by accounts receivable, inventories and equipment. The revolving credit loan is subject to certain covenants, including maintenance of prescribed amounts of net worth ratios. On October 31, 1995, the Company executed a demand note in the amount of $100,000 for consulting and other services rendered prior to that date. The note accrues interest at the prime rate. Long-Term Debt Mortgage payable, CoreStates Bank, N.A. due in monthly installments of $3,000 including interest at 9%, maturing in August, 1999, collateralized by real estate located in Bensalem, PA $115,281 Note payable, CoreStates Bank, N.A., due in monthly installments of $3,883, plus interest at 7.5%, maturing in April, 1998, collateralized by furniture and fixtures, equipment, inventories, accounts receivable and real estate 116,500 Note payable, CoreStates Bank, N.A., due in monthly installments of $2,333, plus interest at 7.95%, maturing in April, 1996, collateralized by, equipment, inventories, accounts receivable and real estate 14,000 -------- 245,781 Less current portion 87,309 -------- $158,472 ======== F-21 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED OCTOBER 31, 1995 - -------------------------------------------------------------------------------- 4. Debt - Continued Long-Term Debt - Continued Maturities of long-term debt are as follows: YEAR ENDED OCTOBER 31, 1996 $ 87,309 1997 75,814 1998 55,255 1999 27,403 -------- $245,781 ======== 5. Related Party Transactions The Company's related party transactions with S.A.C. Sales Corp., which is affiliated to common ownership by a shareholder of Strobic Air Corporation, for the year ended October 31, 1995, were as follows: Commissions earned by affiliate $157,329 ======== Warranty fees earned by affiliate $ 3,200 ======== Administrative fees charged to affiliate $ 7,200 ======== Product sales to affiliate $527,545 ======== Purchases from affiliate $ 48,326 ======== Amounts due from or to this affiliate were as follows: Accounts receivable $ 97,176 ======== Commissions payable $ 2,540 ======== F-22 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED OCTOBER 31, 1995 - -------------------------------------------------------------------------------- 6. Income Taxes The provision for income taxes consisted of the following: Current: Federal $36,000 State 20,000 ------- 56,000 Deferred 3,000 ------- $59,000 ======= The Company utilized approximately $4,000 of research and development credits to reduce its current federal income tax expense. Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The Company's net deferred tax liability consisted of the following: Deferred tax asset: Inventory cost capitalization $16,000 Deferred tax liability: Accelerated depreciation ( 49,800) -------- ($33,800) ======== 7. Commitments and Contingencies Leases The Company has various equipment and automobile leases. The future minimum rental payments under these noncancellable leases are as follows: 1996 $9,272 1997 4,294 Rental expense under all operating leases was $32,727. 8. Other Expense Other expense consisted of the following: Interest expense $ 77,215 Loss on sale of equipment 33,669 Litigation settlements (see Note 9) 103,125 ------- $214,009 ======== F-23 STROBIC AIR CORPORATION NOTES TO FINANCIAL STATEMENTS - CONTINUED FOR THE YEAR ENDED OCTOBER 31, 1995 - -------------------------------------------------------------------------------- 9. Litigation Settlements Included in other expenses (see Note 8) are the settlements in 1995 of two disputes. The first involved a former customer and was settled with the assistance of the American Arbitration Association. The total cost of this settlement was $23,125. The second suit involved a sales agent who had been terminated by the Company. The total cost of this settlement as $80,000. 10. Financial Instruments Concentrations of credit risk: Financial instruments which subject the Company to concentrations of credit risk consist of cash and accounts receivable. The Company's cash is maintained in a high quality financial institution. Concentrations of credit risk related to accounts receivable are limited due to the large number of customers and their dispersion among different industries and geographic regions. Fair value of financial instruments: The carrying amounts and related fair value of the Company's financial instruments are as follows: CARRYING FAIR AMOUNT VALUE -------- ----- Assets: Cash $ 475 $ 475 Liabilities: Note payable, bank 520,000 520,000 Note payable, individual 100,000 100,000 Long-term debt 245,781 245,781 The following methods and assumptions were used to estimate the fair value of each financial instrument: Cash and note payable, individual - The carrying amount approximates fair value because of the short maturity of these instruments. Note payable, bank and long-term debt - The fair value is based on the present value of expected future payments discounted at rates available to the Company under similar borrowing arrangements. 11. Subsequent Event On September 12, 1996, the Company entered into an agreement and plan of merger whereby it agreed to be merged with and into Met-Pro Acquisition Corporation, a wholly-owned subsidiary of Met-Pro Corporation, as part of a tax-free reorganization. F-24 MET-PRO CORPORATION PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL CONDITION (UNAUDITED) JANUARY 31, 1996 (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------- PRO FORMA MET-PRO STROBIC AIR ------------------------------- CORPORATION CORPORATION TOTAL ADJUSTMENTS CONSOLIDATED ------------ ------------- ---------- -------------- ------------ ASSETS Current assets: Cash and short-term investments $7,415,375 $113,726 $7,529,101 ($208,730)(H) $6,479,695 (840,676)(L) Accounts receivable, net of allowance for doubtful accounts 8,941,157 1,178,783 10,119,940 10,119,940 Notes receivable, ESOT 400,000 400,000 400,000 Inventories 10,302,844 850,938 11,153,782 11,153,782 Prepaid expenses, deposits and other current assets 559,238 14,867 574,105 574,105 Deferred income taxes 649,947 649,947 649,947 ------------ ----------- ------------ ----------- ------------- Total current assets 28,268,561 2,158,314 30,426,875 (1,049,406) 29,377,469 Property, plant and equipment, at cost, net 14,433,565 556,421 14,989,986 150,000 (I) 15,139,986 Costs in excess of net assets of businesses acquired 3,725,118 3,725,118 3,973,537 (K) 7,758,655 60,000 (J) Other assets 1,199,343 76,165 1,275,508 1,000,000 (D) 2,284,258 8,750 (G) ------------ ----------- ------------ ----------- ------------- Total assets $47,626,587 $2,790,900 $50,417,487 $4,142,881 $54,560,368 ============ =========== ============ =========== =============
See accompanying explanatory notes to pro forma consolidated condensed financial statements. F-25 MET-PRO CORPORATION PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL CONDITION (UNAUDITED) - CONTINUED JANUARY 31, 1996 (NOTE 1)
- --------------------------------------------------------------------------------------------------------------------------- PRO FORMA MET-PRO STROBIC AIR ------------------------------- CORPORATION CORPORATION TOTAL ADJUSTMENTS CONSOLIDATED ------------ ------------- ---------- -------------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $620,000 $620,000 ($620,000)(L) $0 Notes payable - stockholders 140,000 140,000 140,000 Current portion of long-term debt $1,178,177 80,914 1,259,091 700,000 (F) 1,878,177 (80,914)(L) Accounts payable 2,307,034 403,384 2,710,418 2,710,418 Accrued salaries, wages and expenses 6,353,886 427,812 6,781,698 6,781,698 Customers' advances 411,409 411,409 411,409 Accrued income taxes 68,765 68,765 68,765 ------------ ----------- ------------ ----------- ------------ Total current liabilities 10,250,506 1,740,875 11,991,381 (914) 11,990,467 Long-term debt 1,692,962 139,762 1,832,724 2,800,000 (F) 4,742,962 250,000 (A) (139,762)(L) Other non-current liabilities 101,345 101,345 101,345 Deferred income taxes 569,196 33,800 602,996 60,000 (J) 662,996 ------------ ----------- ------------ ----------- ------------ Total liabilities 12,614,009 1,914,437 14,528,446 2,969,324 17,497,770 ------------ ----------- ------------ ----------- ------------ Stockholders' equity: Common stock, Met-Pro Corporation 475,922 475,922 19,592 (C) 495,514 Common stock, Strobic Air Corporation 75,614 75,614 (75,614) 0 Additional paid-in capital 7,442,810 7,442,810 2,380,428 (C) 9,823,238 Retained earnings 28,142,539 806,849 28,949,388 (806,849) 27,792,539 (350,000)(E) Foreign currency adjustment 209,333 209,333 209,333 ------------ ----------- ------------ ----------- ------------ 36,270,604 882,463 37,153,067 1,167,557 38,320,624 Less: treasury stock, at cost 1,258,026 6,000 1,264,026 (6,000) 1,258,026 ------------ ----------- ------------ ----------- ------------ Net stockholders' equity 35,012,578 876,463 35,889,041 1,173,557 37,062,598 ------------ ----------- ------------ ----------- ------------ Total liabilities and stockholders' equity $47,626,587 $2,790,900 $50,417,487 $4,142,881 $54,560,368 =========== =========== ============ ========== ===========
See accompanying explanatory notes to pro forma consolidated condensed financial statements. F-26 MET-PRO CORPORATION PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE YEAR ENDED JANUARY 31, 1996 (NOTE 2)
- ---------------------------------------------------------------------------------------------------------------------------- PRO FORMA MET-PRO STROBIC AIR ------------------------------- CORPORATION CORPORATION TOTAL ADJUSTMENTS CONSOLIDATED ----------- ----------- ---------- -------------- -------------- Net sales $54,067,320 $5,553,920 $59,621,240 $59,621,240 Cost of goods sold 35,625,610 3,893,099 39,518,709 ($288,000)(M) 39,230,709 ------------- ------------ ------------ ------------ ------------ Gross profit 18,441,710 1,660,821 20,102,531 288,000 20,390,531 ------------- ------------ ------------ ------------ ------------ Operating expenses: Selling 4,489,905 395,868 4,885,773 64,000 (N) 4,949,773 General and administrative 6,287,848 975,782 7,263,630 7,500 (O) 7,240,607 250,000 (P) 263,863 (R) 99,338 (S) (100,000)(T) (58,000)(V) (222,000)(W) (127,840)(X) (33,669)(Y) (25,000)(Z) (77,215)(AA) ------------- ------------ ------------ ------------ ------------ 10,777,753 1,371,650 12,149,403 40,977 12,190,380 ------------- ------------ ------------ ------------ ------------ Income from operations 7,663,957 289,171 7,953,128 247,023 8,200,151 Other income (expenses), net 561,060 (136,794) 424,266 (41,000)(Q) 486,391 103,125 (U) ------------- ------------ ------------ ------------ ------------ Income before taxes on income 8,225,017 152,377 8,377,394 309,148 8,686,542 Provision for taxes on income 3,331,132 59,000 3,390,132 123,659 (AB) 3,513,791 ------------- ------------ ------------ ------------ ------------ Net income $4,893,885 $93,377 $4,987,262 $185,489 $5,172,751 ============= ============ ============ ============ ============ Net income per share, fully diluted $0.69 $0.71 ============= ============ Weighted average number of common shares outstanding after giving effect to 3-for-2 stock split on July 8, 1996 7,051,527 195,920 (B) 7,247,447 ============= ============ ============
See accompanying explanatory notes to pro forma consolidated condensed financial statements. F-27 MET-PRO CORPORATION Explanatory Notes to Pro Forma Consolidated Condensed Financial Statements For the Year Ended January 31, 1996 1. The pro forma consolidated condensed balance sheet is based on the individual balance sheets of Met-Pro Corporation and Strobic Air Corporation to reflect the acquisition of Strobic Air Corporation by Met-Pro Corporation (which took place on September 12, 1996) as if it had taken place on January 31, 1996, after giving effect to pro forma adjustments to reflect the following: Met-Pro Corporation paid $2,399,980 for 100% of the common stock of Strobic Air Corporation of which $2,149,980 was paid on the date of the transaction and $250,000 (A) was in the form of a promissory note payable on April 2, 1998. Interest is payable on the promissory note at the rate of 5.9% per annum. In addition, Met-Pro Corporation exchanged 195,920 (B) shares of its common stock having an aggregate value of $2,400,020 (C). As part of the transaction, Met-Pro Corporation entered into a non-compete transaction with one of the stockholders of Strobic Air Corporation for which he was paid $1,000,000 (D). In addition, a sign-on bonus of $350,000 (E) was paid to this stockholder. Total cash required at settlement amounted to $3,499,980. Met-Pro Corporation financed this transaction with a bank on an unsecured basis. The bank financing, in the aggregate amount of $3,500,000 (F), is comprised of two notes, one with a floating interest rate and one with a fixed interest rate, in the amount of $1,750,000 each. Each loan is payable in equal quarterly installments aggregating $175,000, commencing on December 31, 1996. Met-Pro Corporation incurred financing fees of $8,750 (G) related to this financing. Met-Pro Corporation incurred approximately $200,000 (H) in costs associated with the transaction, which was funded internally. For purposes of the pro forma financial statements, Strobic Air Corporation's building was written up by $150,000 (I) to estimated fair value. The increase in deferred taxes of $60,000 (J) included on the pro forma balance sheet is the result of differences between the book basis and tax basis of the assets acquired, in compliance with Financial Accounting Standards Board Statement No. 109, Accounting for Income Taxes. As a result of this acquisition, Met-Pro Corporation has increased the costs in excess of net assets of businesses acquired by $3,973,537 (K) as of January 31, 1996. In connection with the acquisition, Met-Pro Corporation repaid all of the outstanding debt of Strobic Air Corporation, which at January 31, 1996 amounted to $840,676 (L). F-28 MET-PRO CORPORATION Explanatory Notes to Pro Forma Consolidated Condensed Financial Statements For the Year Ended January 31, 1996 2. The pro forma consolidated condensed statement of operations is based on the individual statements of Met-Pro Corporation for the year ended January 31, 1996 and Strobic Air Corporation for the year ended October 31, 1995, after giving effect to the pro forma adjustments necessary to reflect the acquisition described in Note 1, as if it had taken place on February 1, 1995. The pro forma adjustments are as follows: (M) Increase of $288,000 in gross margins for sales of inventory to affiliate owned by stockholder of Strobic Air Corporation. (N) Increase in commissions of $64,000 related to gross margins described in (M) above. (O) Additional depreciation on the write-up of Strobic Air Corporation's building amounting to $7,500. (P) Amortization of covenant not to compete of $250,000. (Q) Reduction in interest income by $41,000 due to the cash outlay by Met-Pro Corporation to acquire Strobic Air Corporation and repay its debt. (R) Interest expense increase of $263,863 as a result of bank financing of $3,500,000 and $250,000 note payable to Strobic Air Corporation stockholder. (S) Amortization of costs in excess of net assets of businesses acquired over 40 years amounting to $99,338. (T) Reduction in salary of Strobic Air Corporation stockholder of $100,000. (U) During the year ended October 31, 1995, Strobic Air Corporation settled two litigation matters totaling $103,125, which for purposes of this pro forma are considered to be non-recurring. (V) Legal fees relating to litigation described in (U) above and other non-recurring professional fees amounting to $58,000 in the aggregate. F-29 MET-PRO CORPORATION Explanatory Notes to Pro Forma Consolidated Condensed Financial Statements For the Year Ended January 31, 1996 (W) Non-recurring expenses of Strobic Air Corporation stockholders amounting to $222,000. (X) Non-recurring royalty payments amounting to $127,840. (Y) Reduction in general and administrative expenses for loss on sale of equipment amounting to $33,669 not considered to be a recurring charge. (Z) Reduction in insurance expense of $25,000 based on estimated savings from duplicate coverages between the two companies. (AA) Reduction in interest expense of $77,215 resulting from repayment of Strobic Air Corporation's debt by Met-Pro Corporation. (AB) Tax effect of the above adjustments to result in an assumed effective consolidated income tax rate of 40%. F-30 MET-PRO CORPORATION PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL CONDITION (UNAUDITED) JULY 31, 1996 (NOTE 1)
- ----------------------------------------------------------------------------------------------------------------- PRO FORMA MET-PRO STROBIC AIR ------------------------------- CORPORATION CORPORATION TOTAL ADJUSTMENTS CONSOLIDATED ------------ ------------- ---------- -------------- ------------ ASSETS Current assets: Cash and short-term investments $5,678,113 $ 75,012 $5,753,125 ($208,730)(H) $4,727,370 (817,025)(L) Accounts receivable, net of allowance for doubtful accounts 11,549,755 1,126,499 12,676,254 12,676,254 Notes receivable, ESOT 400,000 400,000 400,000 Inventories 11,348,811 860,210 12,209,021 12,209,021 Prepaid expenses, deposits and other current assets 417,139 18,256 435,395 435,395 Deferred income taxes 649,947 18,600 668,547 668,547 ------------ ----------- ------------ ----------- ------------- Total current assets 30,043,765 2,098,577 32,142,342 (1,025,755) 31,116,587 Property, plant and equipment, at cost, net 15,106,290 610,462 15,716,752 150,000 (I) 15,866,752 Costs in excess of net assets of businesses acquired 3,680,953 3,680,953 3,842,671 (K) 7,583,624 60,000 (J) Other assets 947,671 95,037 1,042,708 1,000,000 (D) 2,051,458 8,750 (G) ------------ ----------- ------------ ----------- ------------- Total assets $49,778,679 $2,804,076 $52,582,755 $4,035,666 $56,618,421 ============ =========== ============ =========== =============
See accompanying explanatory notes to pro forma consolidated condensed financial statements. F-31 MET-PRO CORPORATION PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF FINANCIAL CONDITION (UNAUDITED) - CONTINUED JULY 31, 1996 (NOTE 1)
- --------------------------------------------------------------------------------------------------------------------------- PRO FORMA MET-PRO STROBIC AIR ------------------------------- CORPORATION CORPORATION TOTAL ADJUSTMENTS CONSOLIDATED ------------ ------------- ---------- -------------- ------------ LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Short-term debt $640,000 $640,000 ($640,000)(L) $0 Current portion of long-term debt $1,031,559 75,167 1,106,726 700,000 (F) 1,731,559 (75,167)(L) Accounts payable 3,020,498 437,647 3,458,145 3,458,145 Accrued salaries, wages and expenses 7,603,303 325,539 7,928,842 7,928,842 Customers' advances 673,084 673,084 673,084 Accrued income taxes 179,336 179,336 179,336 ------------ ----------- ------------ ----------- ------------ Total current liabilities 12,328,444 1,657,689 13,986,133 (15,167) 13,970,966 Long-term debt 1,251,589 101,858 1,353,447 2,800,000 (F) 4,301,589 250,000 (A) (101,858)(L) Other non-current liabilities 137,140 37,200 174,340 174,340 Deferred income taxes 552,552 552,552 60,000 (J) 612,552 ------------ ----------- ------------ ----------- ------------ Total liabilities 14,269,725 1,796,747 16,066,472 2,992,975 19,059,447 ------------ ----------- ------------ ----------- ------------ Stockholders' equity: Common stock, Met-Pro Corporation 713,863 713,863 19,592 (C) 733,455 Common stock, Strobic Air Corporation 75,614 75,614 (75,614) 0 Additional paid-in capital 7,397,662 7,397,662 2,380,428 (C) 9,778,090 Retained earnings 29,249,679 937,715 30,187,394 (937,715) 28,899,679 (350,000)(E) Foreign currency adjustment 229,053 229,053 229,053 ------------ ----------- ------------ ----------- ------------ 37,590,257 1,013,329 38,603,586 1,036,691 39,640,277 Less: treasury stock, at cost 2,081,303 6,000 2,087,303 (6,000) 2,081,303 ------------ ----------- ------------ ----------- ------------ Net stockholders' equity 35,508,954 1,007,329 36,516,283 1,042,691 37,558,974 ------------ ----------- ------------ ----------- ------------ Total liabilities and stockholders' equity $49,778,679 $2,804,076 $52,582,755 $4,035,666 $56,618,421 =========== =========== ============ ========== ===========
See accompanying explanatory notes to pro forma consolidated condensed financial statements. F-32 MET-PRO CORPORATION PRO FORMA CONSOLIDATED CONDENSED STATEMENT OF OPERATIONS (UNAUDITED) FOR THE SIX MONTHS ENDED JULY 31, 1996 (NOTE 1)
- --------------------------------------------------------------------------------------------------------------------------- PRO FORMA MET-PRO STROBIC AIR ------------------------------- CORPORATION CORPORATION TOTAL ADJUSTMENTS CONSOLIDATED ------------ ------------- ---------- -------------- ------------ Net sales $28,491,576 $3,207,137 $31,698,713 $31,698,713 Cost of goods sold 18,515,559 2,304,363 20,819,922 ($175,000)(M) 20,644,922 ------------- ------------ ------------ ------------ ------------ Gross profit 9,976,017 902,774 10,878,791 175,000 11,053,791 ------------- ------------ ------------ ------------ ------------ Operating expenses: Selling 2,506,250 157,440 2,663,690 74,000 (N) 2,737,690 General and administrative 2,951,178 473,268 3,424,446 3,750 (O) 3,525,588 125,000 (P) 131,500 (R) 48,033 (S) 13,000 (T) (90,000)(U) (65,000)(V) (12,500)(W) (52,641)(X) ------------- ------------ ------------ ------------ ------------ 5,457,428 630,708 6,088,136 175,142 6,263,278 ------------- ------------ ------------ ------------ ------------ Income from operations 4,518,589 272,066 4,790,655 (142) 4,790,513 Other income (expenses), net 239,193 0 239,193 (20,500)(Q) 218,693 ------------- ------------ ------------ ------------ ------------ Income before taxes on income 4,757,782 272,066 5,029,848 (20,642) 5,009,206 Provision for taxes on income 1,879,324 141,200 2,020,524 (8,257)(Y) 2,012,267 ------------- ------------ ------------ ------------ ------------ Net income $2,878,458 $130,866 $3,009,324 $(12,385) $2,996,939 ============= ============ ============ ============ ============ Net income per share, fully diluted $0.41 $0.41 ============= ============ Weighted average number of common shares outstanding 7,036,522 195,920 (B) 7,232,442 ============= ============ ============
See accompanying explanatory notes to pro forma consolidated condensed financial statements. F-33 MET-PRO CORPORATION Explanatory Notes to Pro Forma Consolidated Condensed Financial Statements For the Six Months Ended July 31, 1996 1. The pro forma consolidated condensed balance sheet is based on the individual balance sheets of Met-Pro Corporation and Strobic Air Corporation to reflect the acquisition of Strobic Air Corporation by Met-Pro Corporation (which took place on September 12, 1996) as if it had taken place on July 31, 1996, after giving effect to pro forma adjustments to reflect the following: Met-Pro Corporation paid $2,399,980 for 100% of the common stock of Strobic Air Corporation of which $2,149,980 was paid on the date of the transaction and $250,000 (A) was in the form of a promissory note payable on April 2, 1998. Interest is payable on the promissory note at the rate of 5.9% per annum. In addition, Met-Pro Corporation exchanged 195,920 (B) shares of its common stock having an aggregate value of $2,400,020 (C). As part of the transaction, Met-Pro Corporation entered into a non-compete transaction with one of the stockholders of Strobic Air Corporation for which he was paid $1,000,000 (D). In addition, a sign-on bonus of $350,000 (E) was paid to this stockholder. Total cash required at settlement amounted to $3,499,980. Met-Pro Corporation financed this transaction with a bank on an unsecured basis. The bank financing, in the aggregate amount of $3,500,000 (F), is comprised of two notes, one with a floating interest rate and one with a fixed interest rate, in the amount of $1,750,000 each. Each loan is payable in equal quarterly installments aggregating $175,000, commencing on December 31, 1996. Met-Pro Corporation incurred financing fees of $8,750 (G) related to this financing. Met-Pro Corporation incurred approximately $200,000 (H) in costs associated with the transaction which was funded internally. For purposes of the pro forma financial statements, Strobic Air Corporation's building was written up by $150,000 (I) to estimated fair value. The increase in deferred taxes of $60,000 (J) included on the pro forma balance sheet is the result of differences between the book basis and tax basis of the assets acquired, in compliance with Financial Accounting Standards Board Statement No. 109, Accounting for Income Taxes. As a result of this acquisition, Met-Pro Corporation has increased the costs in excess of net assets of businesses acquired by $3,842,671 (K) as of July 31, 1996. In connection with the acquisition, Met-Pro Corporation repaid all of the outstanding debt of Strobic Air Corporation, which amounted to $817,025 (L) at July 31, 1996. F-34 MET-PRO CORPORATION Explanatory Notes to Pro Forma Consolidated Condensed Financial Statements For the Six Months Ended July 31, 1996 2. The pro forma consolidated condensed statement of operations is based on the individual statements of Met-Pro Corporation and Strobic Air Corporation for the six months ended July 31, 1996, after giving effect to the pro forma adjustments necessary to reflect the acquisition described in Note 1, as if had taken place on February 1, 1996. The pro forma adjustments are as follows: (M) Increase of $175,000 in gross margins for sales of inventory to affiliate owned by stockholder of Strobic Air Corporation. (N) Increase in commissions of $74,000 related to gross margins described in (M) above. (O) Additional depreciation on the write-up of Strobic Air Corporation's building amounting to $3,750. (P) Amortization of covenant not to compete of $125,000. (Q) Reduction in interest income by $20,500 due to the cash outlay by Met-Pro Corporation to acquire Strobic Air Corporation and repay its debt. (R) Interest expense increase of $131,500 as a result of bank financing of $3,500,000 and $250,000 note payable to Strobic Air Corporation stockholder. (S) Amortization of costs in excess of net assets of businesses acquired over 40 years amounting to $48,033. (T) Increase in salary of Strobic Air Corporation stockholder of $13,000. (U) Non-recurring professional fees relating to sale of Strobic Air Corporation amounting to $90,000. (V) Non-recurring expenses of Strobic Air Corporation stockholders amounting to $65,000. (W) Reduction in insurance expense of $12,500 based on estimated savings from duplicate coverages between the two companies. F-35 MET-PRO CORPORATION Explanatory Notes to Pro Forma Consolidated Condensed Financial Statements For the Six Months Ended July 31, 1996 (X) Reduction in interest expense of $52,641 resulting from repayment of Strobic Air Corporation's debt by Met-Pro Corporation. (Y) Tax effect of the above adjustments to result in an assumed effective consolidated income tax rate of 40%. F-36 No dealer, salesman or other person has been authorized to give any information or to make any representation not contained in or incorporated by reference in this Prospectus and, if given or made, such information or representation must not be relied upon as having been authorized by the Company, the Selling Shareholders or any underwriter. This Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of the securities offered hereby in any jurisdiction to any person to whom it is unlawful to make such an offer in such jurisdiction. Neither the delivery of this Prospectus nor any sale made hereunder shall, under any circumstances, create any implication that the information herein is correct as of any time subsequent to the date hereof or that there has been no change in the affairs of the Company since such date. December 31, 1996 MET-PRO CORPORATION 195,920 shares Common Stock ($.10 par value) PROSPECTUS ----------------- TABLE OF CONTENTS Page Available Information 2 Incorporation of Certain Documents by Reference 2 The Company 3 Use of Proceeds 5 Selling Shareholders 5 Description of Common Stock 6 Plan of Distribution 7 Legal Matters 8 Experts 8 PART II INFORMATION NOT REQUIRED IN PROSPECTUS Item 14. Other Expenses of Issuance and Distribution. The following is a list of the estimated expenses to be incurred by the Registrant in connection with the issuance and distribution of the shares of Common Stock being registered hereby. SEC Registration Fee $ 753.40 Legal Fees $ 5,000.00* Accountants' Fees and Expenses $ 5,000.00* Miscellaneous $ 2,500.00* ---------- Total $13,253.40* * Estimated, subject to change Item 15. Indemnification of Directors and Officers. The Company has adopted the provisions of Section 102(b)(7) of the Delaware General Corporation Act (the "Delaware Act") which eliminate or limit the personal liability of a director to the Company or its shareholders for monetary damages for breach of fiduciary duty under certain circumstances. Furthermore, under Section 145 of the Delaware Act, the Company may, and in certain circumstances shall, indemnify each of its directors and officers against expenses (including reasonable costs, disbursements and counsel fees) in connection with any proceeding involving such person by reason of having been an officer or director, to the extent such person acted in good faith and in a manner reasonably believed to be in, or not opposed to, the best interest of the Company, and, with respect to any criminal action or proceeding, had no reasonable cause to believe such person's conduct was unlawful. The determination of whether indemnification is proper under the circumstances, unless made by a court, shall be made by a majority of a quorum of disinterested members of the Board of Directors, independent legal counsel or the shareholders of the Company. The Company has purchased directors and officers liability insurance providing for up to $2,000,000 of coverage, subject to certain deductibles. Item 16. Exhibits. Exhibit Number Description Filing 2 Agreement and Plan of Merger dated September 12, 1996 by and between Met-Pro Corporation, II-1 Met-Pro Acquisition Corporation, Strobic Air Corporation, Lynn T. Secrest, Ronald H. Secrest, Richard P. Secrest and John W. Stone III 5 Opinion and consent of Earl J. Wofsey, Esquire 23(a) Consent of Margolis & Company P.C. The following exhibits listed in Rule 601 of Regulation S-K have been omitted because they are not required, or inapplicable or they do not exist: Exhibits 1, 3, 4, 6 through 14, 16 through 22, 24 through 29. Item 17. Undertakings. The undersigned registrant hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement. (i) To include any Prospectus required by Section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the Prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraph is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at the time shall be deemed to be the initial bona fide offering thereof. II-2 (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. The undersigned registrant hereby undertakes that for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefits 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 the time shall be deemed to be the initial bona fide offering thereof. The undersigned registrant hereby undertakes to deliver or cause to be delivered with the Prospectus, to each person to whom the Prospectus is sent or given, the latest annual report to securityholders that is incorporated by reference in the Prospectus and furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of 1934; and, where interim financial information required to be presented by Article 3 of Regulation S-X is not set forth in the Prospectus, to deliver, or cause to be delivered to each person to whom the Prospectus is sent or given, the latest quarterly report that is specifically incorporated by reference in the Prospectus to provide such interim financial information. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue. The undersigned registrant undertakes that: (1) For purposes of determining any liability under the Securities Act of 1933, the information omitted from the form of Prospectus filed as part of this registration statement in reliance upon Rule 430A and contained in a form of Prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act of 1933 shall be deemed to be part of this II-3 registration statement as of the time it was declared effective. (2) For the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of Prospectus 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. II-4 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 S-3 and has duly caused this Registration Statement or amendment thereto to be signed on its behalf by the undersigned, thereunto duly authorized in the Town of Harleysville, Commonwealth of Pennsylvania. MET-PRO CORPORATION By: /s/ William L. Kacin * -------------------------------------------- December 30, 1996 William L. Kacin President and Chief Executive Officer and Director Pursuant to the requirements of the Securities Act of 1933 as amended, this Registration Statement or amendment thereto has been signed by the following persons in the capacities and on the dates indicated: /s/ William L. Kacin * -------------------------------------------- December 30, 1996 William L. Kacin President and Chief Executive Officer and Director /s/ William F. Moffitt * -------------------------------------------- December 30, 1996 William F. Moffitt Vice President-Finance, Secretary and Treasurer; Chief Financial Officer; Chief Accounting Officer; and Director II-5 /s/ Walter A. Everett* -------------------------------------------- December 30, 1996 Walter A. Everett Director; Chairman of the Board /s/ Thomas F. Hayes* -------------------------------------------- December 30, 1996 Thomas F. Hayes Director /s/ Richard P. Klopp* -------------------------------------------- December 30, 1996 Richard P. Klopp Director /s/ Alan Lawley* -------------------------------------------- December 30, 1996 Alan Lawley Director *William L. Kacin and William F. Moffitt, pursuant to Powers of Attorney (executed by each of the officers and directors listed above and indicated as signing above, and filed with the Securities and Exchange Commission, Washington, D.C.), by signing their names hereto does hereby sign and execute this Amendment to the Registration Statement on behalf of each of the persons named above, and does hereby sign and execute this Amendment to the Registration Statement on their own behalfs in the capacities of President, Chief Executive Officer and Director of the Issuer, and Vice President-Finance, Secretary, Treasurer, Chief Financial Officer, Chief Accounting Officer, and Director of the Issuer, respectively. By: /s/ William L. Kacin -------------------------------------------- December 30, 1996 William L. Kacin By: /s/ William F. Moffitt -------------------------------------------- December 30, 1996 William F. Moffitt II-6 Exhibit Index Sequentially Exhibit Numbered Number Description Page - ------ ----------- ------------- 23(a) Consent of Margolis & Company P.C. EX-23.(A) 2 INDEPENDENT AUDITOR'S CONSENT Exhibit 23(a) [LETTERHEAD OF MARGOLIS & COMPANY P.C.] INDEPENDENT AUDITOR'S CONSENT To The Board of Directors Met-Pro Corporation Harleysville, Pennsylvania We hereby consent to the use in this Form S-3 Registration Statement and the Prospectus forming a part thereof of Met-Pro Corporation relating to the offering of 195,920 shares of Common Stock of Met-Pro Corporation offered by the Selling Shareholders identified herein of our reports dated September 4, 1996 with respect to the financial statements of Strobic Air Corporation, and February 19, 1996 with respect to the financial statements of Met-Pro Corporation. We also consent to the reference to us as "Experts" in such Registration Statement. /s/ MARGOLIS & COMPANY P.C. MARGOLIS & COMPANY P.C. Bala Cynwyd, Pennsylvania December 30, 1996 -----END PRIVACY-ENHANCED MESSAGE-----