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OMB Number: 3235-0145
Expires: December 31, 2005
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SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Schedule 13D
INFORMATION TO BE INCLUDED IN STATEMENTS FILED
PURSUANT TO RULE 13d-1(A) AND AMENDMENTS THERETO
FILED PURSUANT TO RULE 13d-2(a)
(Amendment No. __)
Environmental Tectonics Corporation
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(Name of Issuer)
Common Stock
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(Title of Class of Securities)
294092-10-1
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(CUSIP Number)
William W. Matthews, Esq.
Klehr, Harrison, Harvey, Branzburg & Ellers LLP
260 South Broad Street
Philadelphia, PA 19102
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(Name, Address And Telephone Number Of Person
Authorized To Receive Notices And Communications)
February 19, 2003
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
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CUSIP No. 294092-10-1 13D Page 2 of 11
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---------------- ---------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES
ONLY):
---------------- ---------------------------------------------------------------
William F. Mitchell
---------------- ---------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
---------------- ---------------------------------------------------------------
3. SEC USE ONLY
---------------- ---------------------------------------------------------------
4. SOURCE OF FUNDS*
---------------- ---------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
---------------- ---------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------- ---------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF
SHARES 1,469,198 shares of Common Stock
BENEFICIALLY ---------------------------------------------------------------
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON 2,344,550 shares of Common Stock
WITH ---------------------------------------------------------------
9. SOLE DISPOSITIVE POWER
1,469,198 shares of Common Stock
---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0- shares of Common Stock
---------------- ---------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
3,813,748 shares of Common Stock
---------------- ---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
---------------- ---------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
53.3%
---------------- ---------------------------------------------------------------
14. TYPE OF REPORTING PERSON
IN
---------------- ---------------------------------------------------------------
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CUSIP No. 294092-10-1 13D Page 3 of 11
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---------------- ---------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES
ONLY):
---------------- ---------------------------------------------------------------
Pete L. Stephens, M.D.
---------------- ---------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
---------------- ---------------------------------------------------------------
3. SEC USE ONLY
---------------- ---------------------------------------------------------------
4. SOURCE OF FUNDS*
---------------- ---------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
---------------- ---------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
United States
---------------- ---------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF
SHARES -0- shares of Common Stock
BENEFICIALLY ---------------------------------------------------------------
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON 682,600 shares of Common Stock
WITH ---------------------------------------------------------------
9. SOLE DISPOSITIVE POWER
682,600 shares of Common Stock
---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0- shares of Common Stock
---------------- ---------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
682,600 shares of Common Stock
---------------- ---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
---------------- ---------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
9.5%
---------------- ---------------------------------------------------------------
14.
TYPE OF REPORTING PERSON
IN
---------------- ---------------------------------------------------------------
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CUSIP No. 294092-10-1 13D Page 4 of 11
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---------------- ---------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES
ONLY):
---------------- ---------------------------------------------------------------
Emerald Advisers, Inc.
23-2664857
---------------- ---------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
---------------- ---------------------------------------------------------------
3. SEC USE ONLY
---------------- ---------------------------------------------------------------
4. SOURCE OF FUNDS*
---------------- ---------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
---------------- ---------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Pennsylvania
---------------- ---------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF
SHARES -0- shares of Common Stock
BENEFICIALLY ---------------------------------------------------------------
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON 865,550 shares of Common Stock
WITH ---------------------------------------------------------------
9. SOLE DISPOSITIVE POWER
1,461,240 shares of Common Stock
---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
-0- shares of Common Stock
---------------- ---------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,461,240 shares of Common Stock
---------------- ---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
---------------- ---------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
20.4%
---------------- ---------------------------------------------------------------
14. TYPE OF REPORTING PERSON
CO
---------------- ---------------------------------------------------------------
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CUSIP No. 294092-10-1 13D Page 5 of 11
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---------------- ---------------------------------------------------------------
1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES
ONLY):
---------------- ---------------------------------------------------------------
ETC Asset Management, LLC
63-1280098
---------------- ---------------------------------------------------------------
2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) |X|
(b) |_|
---------------- ---------------------------------------------------------------
3. SEC USE ONLY
---------------- ---------------------------------------------------------------
4. SOURCE OF FUNDS*
---------------- ---------------------------------------------------------------
5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) |_|
---------------- ---------------------------------------------------------------
6. CITIZENSHIP OR PLACE OF ORGANIZATION
Alabama
---------------- ---------------------------------------------------------------
7. SOLE VOTING POWER
NUMBER OF
SHARES -0- shares of Common Stock
BENEFICIALLY ---------------------------------------------------------------
OWNED BY
EACH 8. SHARED VOTING POWER
REPORTING
PERSON 1,079,020 shares of Common Stock, of which 437,820
WITH shares are issuable upon exercise of warrants.
---------------------------------------------------------------
9. SOLE DISPOSITIVE POWER
1,079,020 shares of Common Stock, of which 437,820
shares are issuable upon exercise of warrants.
---------------------------------------------------------------
10. SHARED DISPOSITIVE POWER
43,900 shares of Common Stock.
---------------- ---------------------------------------------------------------
11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
1,079,020 shares of Common Stock, of which 437,820 shares are
issuable upon exercise of warrants.
---------------- ---------------------------------------------------------------
12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES |_|
---------------- ---------------------------------------------------------------
13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
14.2%. Calculated based on issued and outstanding shares of
Common Stock on February 11, 2003, as provided by the Company's
Chief Financial officer (7,157,239), increased by the shares to
be issued upon the exercise of warrants (437,820) for a total
of 7,595,059.
---------------- ---------------------------------------------------------------
14. TYPE OF REPORTING PERSON
OO (Limited Liability Company)
---------------- ---------------------------------------------------------------
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CUSIP No. 294092-10-1 13D Page 6 of 11
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Item 1. Security and Issuer.
This statement relates to the common stock (the "Common Stock") of
Environmental Tectonics Corporation (the "Company"). The Company's principal
offices are located at County Line Industrial Park, Southampton, Pennsylvania
18966.
Item 2. Identity and Background.
(a) This statement is being filed by (i) William F. Mitchell with
respect to shares beneficially owned by him; (ii) Pete L. Stephens, M.D. with
respect to shares beneficially owned by him, (iii) Emerald Advisers, Inc., a
Pennsylvania corporation ("Emerald"), with respect to shares beneficially owned
by it; and (iv) ETC Asset Management, LLC, an Alabama limited liability company
("EAM"), with respect to shares beneficially owned by it. Mr. Mitchell, Dr.
Stephens, Emerald and EAM are collectively referred to herein as the "Filing
Persons." The undersigned hereby file this statement on Schedule 13D on behalf
of the Filing Persons pursuant to Rule 13d-1(k)(1)-(2) under the Securities
Exchange Act of 1934, as amended (the "Act"). The Filing Persons are making this
single, joint filing because they may be deemed to constitute a "group" within
the meaning of Section 13(d)(3) of the Act.
(b) The business address of Mr. Mitchell and Dr. Stephens is County
Line Industrial Park, Southampton, Pennsylvania 18966. The business address of
Emerald is 1703 Oregon Pike, Suite 101, Lancaster, Pennsylvania 17601. The
business address of ETC is 50 Midtown Park East, Mobile, Alabama 36606.
(c) Mr. Mitchell's principal occupation is Chief Executive Officer and
Chairman of the Board of the Company. Dr. Stephens is a retired physician who
engaged in the practice of medicine for over 30 years. The principal business of
Emerald is that of an Investment Adviser registered under Section 203 of the
Investment Advisers Act of 1940. EAM is a limited liability company that was
formed to own and manage its members' investment in the Company.
(d) During the last five years, none of the Filing Persons have been
convicted in a criminal proceeding (excluding traffic violations or similar
misdemeanors).
(e) During the last five years, none of the Filing Persons have been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction as a result of which he or it was or is subject to a judgment,
decree or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
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CUSIP No. 294092-10-1 13D Page 7 of 11
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(f) Each of Mr. Mitchell and Dr. Stephens is a citizen of the United
States.
Item 3. Source and Amount of Funds or Other Consideration.
The Filing Persons are submitting this statement in connection with a
Stockholders Voting Agreement which they entered into as of February 19, 2003
(the "Voting Agreement"). There was no purchase of securities made by the Filing
Persons in connection with the Voting Agreement. Accordingly, the requirements
of this item are not applicable.
Item 4. Purpose of Transaction.
Pursuant to the rules of the American Stock Exchange, any time an
issuer contemplates issuing securities that are exercisable or convertible into
shares of its Common Stock equal to at least 20% of its issued and outstanding
shares of Common Stock, any of which have an exercise price that is less than
the greater of book value or the fair market value of the Common Stock, the
issuer's shareholders must approve the issuance of such securities. As the
Transaction (as defined in Item 6) obligates the Company to issue securities in
excess of these limits, the Company must obtain its shareholders' approval of
the Transaction. In connection with the closing the Transaction, the Filing
Persons entered into the Voting Agreement. The Filing Persons entered into the
Voting Agreement because they believed that it was in the best interests of the
Company for the Transaction to be consummated.
Item 5. Interest in Securities of the Issuer.
(a) Mr. Mitchell beneficially owns 3,813,748 shares of Common Stock,
which constitutes 53.3% of the Common Stock outstanding (based upon 7,157,239
shares of Common Stock issued and outstanding as of February 11, 2003, as
reported by the Company's Chief Financial Officer).
Dr. Stephens beneficially owns 682,600 shares of Common Stock, which
constitutes 9.5% of the Common Stock outstanding (based upon 7,157,239 shares of
Common Stock issued and outstanding as of February 11, 2003, as reported by the
Company's Chief Financial Officer).
Emerald beneficially owns 1,461,240 shares of Common Stock, which
constitutes 20.4% of the Common Stock outstanding (based upon 7,157,239 shares
of Common Stock issued and outstanding as of February 11, 2003, as reported by
the Company's Chief Financial Officer).
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CUSIP No. 294092-10-1 13D Page 8 of 11
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EAM beneficially owns 1,079,020 shares of Common Stock, which
constitutes 14.2% of the Common Stock outstanding (based upon 7,157,239 shares
of Common Stock issued and outstanding as of February 11, 2003, as reported by
the Company's Chief Financial Officer, plus 437,820 shares of Common Stock
issuable upon exercise of warrants).
(b) Mr. Mitchell has the sole voting power and power to dispose of
1,469,198 shares of Common Stock. Mr. Mitchell shares voting power with respect
to 2,344,550 shares of Common Stock pursuant to the terms of the Voting
Agreement.
Dr. Stephens has the sole power to dispose of 682,600 shares of Common
Stock. Dr. Stephens shares voting power with respect to 682,600 shares of Common
Stock pursuant to the terms of the Voting Agreement.
Emerald shares voting power pursuant to the terms of the Voting
Agreement and has sole dispositive power with respect to 1,461,240 shares of
Common Stock.
(c) EAM shares voting power with respect to 1,079,020 shares of Common
Stock pursuant to the terms of the Voting Agreement, 437,820 shares of which are
issuable upon exercise of its warrants. EAM has sole dispositive power with
respect to 1,079,020 shares of Common Stock. EAM shares dispositive power with
respect to 26,900 shares of Common Stock with Allied Williams Co., Inc., a
Delaware corporation whose business address is 50 Midtown Park East, Mobile,
Alabama 36606. Allied Williams Co., Inc. is a holding company that owns and
operates diversified services companies. EAM shares dispositive power with
respect to 26,900 shares of Common Stock with Equity Management, LLC, an Alabama
limited liability company whose business address is 50 Midtown Park East,
Mobile, Alabama 36606. Equity Management, LLC, owns and manages various
investments. During the last five years, neither Allied Williams Co., Inc. nor
Equity Management, LLC have been (i) convicted in a criminal proceeding
(excluding traffic violations or similar misdemeanors) or (ii) a party to a
civil proceeding of a judicial or administrative body of competent jurisdiction
as a result of which it was or is subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws or finding any violation with respect to
such laws.
(d) In the past 60 days or since the most recent filing on Schedule 13D
by such parties, the parties to this Agreement effected the following
transactions:
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CUSIP No. 294092-10-1 13D Page 9 of 11
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On February 13, 2003, Mr. Mitchell, gifted 39,600 shares of Common
Stock to his children and grandchildren. On December 31, 2002, Mr. Mitchell
gifted 35,000 shares of Common Stock to Drexel University.
Pursuant to the Transaction, on February 19, 2003, EAM was issued
warrants to purchase 105,000 shares of Common Stock. The warrants have an
exercise price per share equal to the lesser of (i) $4.00 or (ii) two-thirds of
the average daily high and low closing price of the Common Stock during the
25-day trading period immediately preceding the date of exercise.
(e) N/A
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer.
The Filing Persons are submitting this statement in connection with
their execution of the Voting Agreement. A copy of the Voting Agreement is
attached to this statement and is made a part hereof. Under the terms of the
Voting Agreement, each Filing Person agreed to vote his or its shares of Common
Stock in favor of the approval and adoption of a series of transactions pursuant
to which the Company issued (i) a $10,000,000 convertible subordinated secured
promissory note and (ii) warrants to purchase an aggregate of 803,048 shares of
Common Stock (subject to adjustment) (collectively, the "Transaction") at any
meeting of the shareholders of the Company at which the Transaction is submitted
to a vote of the Company's shareholders.
In order to ensure such vote, each of the Filing Persons executed and
delivered to Mr. Mitchell an irrevocable proxy granting Mr. Mitchell the right
to vote all shares of Common Stock now owned or hereafter registered in the name
of such parties, provided that, Emerald may transfer any of its shares of Common
Stock prior to the termination of the Agreement and such transferred shares
shall no longer be subject to the Agreement unless the transferee consents to
applicability of the Agreement to such transferred shares. This Voting Agreement
and the related proxies relate solely to the approval of the Transaction and are
not effective with respect to any other matters presented to the shareholders of
the Company for a vote. The Voting Agreement and the proxies remain in effect
only until the earlier of (i) June 18, 2003 and (ii) the day immediately
following the date of any meeting of the Company's shareholders at which the
Transaction is approved by the Company's shareholders.
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CUSIP No. 294092-10-1 13D Page 10 of 11
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Item 7. Material to be Filed as Exhibits.
Attached hereto as Exhibit 99.1 is a copy of the Voting Agreement.
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CUSIP No. 294092-10-1 13D Page 11 of 11
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SIGNATURE
---------
After reasonable inquiry and to the best of their knowledge and belief,
each of the parties set forth below certifies that the information set forth in
this statement is true, complete and correct.
Date: March 3, 2003
/s/ William F. Mitchell
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William F. Mitchell
/s/ Pete L. Stephens, M.D.
----------------------------------
Pete L. Stephens, M.D.
EMERALD ADVISERS, INC.
By: /s/ Ken Mertz
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Ken Mertz, President
ETC Asset Management, LLC
By: /s/ T. Todd Martin, III
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T. Todd Martin, III
Manager