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<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="right" style="font-size: 10pt; margin-top: 12pt">Registration No.&nbsp;333-______
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt">As filed with the Securities and Exchange Commission<BR>
on August&nbsp;24, 2007
</DIV>


<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt; margin-top: 6pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 1pt solid black; font-size: 1pt">&nbsp;</DIV>






<DIV align="center" style="font-size: 14pt; margin-top: 12pt"><B>UNITED STATES<BR>
SECURITIES AND EXCHANGE COMMISSION</B>
</DIV>

<DIV align="center" style="font-size: 12pt"><B>Washington, D.C. 20549</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 18pt; margin-top: 12pt"><B>FORM S-8</B>
</DIV>


<DIV align="center" style="font-size: 12pt; margin-top: 12pt"><B>REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933</B>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 24pt; margin-top: 12pt"><B>ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.</B>
</DIV>

<DIV align="center" style="font-size: 10pt"><I>(Exact name of registrant as specified in its charter)</I></DIV>


<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="47%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="47%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD align="center" valign="top"><B>Delaware</B><BR>
<I>(State or other jurisdiction of incorporation or <BR>
organization)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top"><B>71-0675758</B><BR>
<I>(I.R.S. Employer Identification No.)</I></TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><B>914 N Jefferson Street <BR>
Springdale, Arkansas</B><BR>
<I>(Address of principal executive offices)</I>
</TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="bottom"><B>72764</B><BR>
<I>(Zip Code)</I></TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>2005 KEY ASSOCIATE AND MANAGEMENT EQUITY INCENTIVE PLAN<BR>
2005 NON-EMPLOYEE DIRECTOR EQUITY INCENTIVE PLAN</B><BR>
<I>(Full title of the plans)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">Joe G. Brooks, Chairman<BR>
Advanced Environmental Recycling Technologies, Inc.<BR>
914 N Jefferson Street<BR>
Springdale, Arkansas 72764<BR>
<I>(Name and address of agent for service)</I></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt">(479)&nbsp;756-7400<BR>
<I>(Telephone number, including area code, of agent for service)</I></DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 12pt"><B>CALCULATION OF REGISTRATION FEE</B></DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="1%">&nbsp;</TD>
    <TD width="54%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="2%">&nbsp;</TD><!-- VRule -->
    <TD width="2%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>

    <TD width="1%">&nbsp;</TD>
</TR><TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="22" style="border-bottom: 3px double #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Proposed maximum</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left"><B>Title of Securities</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount to be</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>aggregate offering</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Amount of</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">    <TD width="1%">&nbsp;</TD>

    <TD nowrap align="left"><B>to be Registered</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>registered (1)</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>price per share</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>price</B></TD>
    <TD style="border-right: 2px solid #000000">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>registration fee</B></TD>
    <TD width="1%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
                    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Class&nbsp;A common stock, $0.01 par value</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD nowrap colspan="3" align="center" style="border-top: 2px solid #000000">1,875,521 shares (2)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">1.415 </TD>
    <TD nowrap style="border-top: 2px solid #000000">(3)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">2,653,862</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">81.47</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Class&nbsp;A common stock, $0.01 par value</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>

<TD colspan="3" align="center" style="border-top: 2px solid #000000">124,479
shares (4)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD nowrap align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">2.153 </TD>
    <TD nowrap style="border-top: 2px solid #000000">(5)</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">268,003</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">8.23</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000"><DIV style="margin-left:15px; text-indent:-15px">Total</DIV></TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD colspan="3" align="center" style="border-top: 2px solid #000000">2,000,000 shares</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">&#151;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">2,921,865</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-right: 2px solid #000000; border-top: 2px solid #000000">&nbsp;</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD align="right" style="border-top: 2px solid #000000">$</TD>
    <TD align="right" style="border-top: 2px solid #000000">89.70</TD>
    <TD style="border-top: 2px solid #000000">&nbsp;</TD>
    <TD width="1%" style="border-top: 2px solid #000000">&nbsp;</TD>
</TR>
<TR style="font-size: 1px" valign="bottom">
    <TD nowrap align="left" colspan="22" style="border-top: 3px double #000000">&nbsp;</TD>
</TR>

<!-- End Table Body -->
</TABLE>
</DIV>



<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>Pursuant to Rule&nbsp;416 under the Securities Act, there are also
registered hereby such indeterminate number of securities as may
become issuable by reason of the anti-dilution provisions of the plans
referred to herein.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Issuable upon grant or vesting of restricted stock awards of the Class&nbsp;A common
stock available for grant under the Registrant&#146;s 2005 Key Associate
and Management Equity Incentive Plan (which covers 1,500,000 shares of
Class&nbsp;A common stock in the aggregate, including issued and
outstanding restricted stock awards) and 2005 Non-Employee Director
Equity Incentive Plan (which covers 500,000 shares of Class&nbsp;A common
stock in the aggregate, including issued and outstanding restricted
stock awards).</TD>
</TR>
<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(h) under the Securities Act. Calculated on the
basis of the average of the highest and lowest sale prices of the
Class&nbsp;A common stock on August&nbsp;23, 2007, as reported by NASDAQ.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>Issued as outstanding restricted stock awards under the 2005 Key
Associate and Management Equity Incentive Plan and the 2005
Non-Employee Director Equity Incentive Plan.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Weighted average market value per share of restricted stock awards
outstanding under the Registrant&#146;s 2005 Key Associate and Management
Equity Incentive Plan and 2005 Non-Employee Director Equity Incentive
Plan, based on the last sale price of the stock on the dates of the
awards.</TD>
</TR>

</TABLE>
</div>


<DIV style="width: 100%; border-bottom: 1pt solid black; margin-top: 10pt; font-size: 1pt">&nbsp;</DIV>
<DIV style="width: 100%; border-bottom: 2pt solid black; font-size: 1pt">&nbsp;</DIV>





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<DIV style="font-family: Helvetica,Arial,sans-serif">








<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXPLANATORY NOTE</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant has prepared this registration statement in accordance with the requirements of
Form S-8 under the Securities Act of 1933, as amended (the &#147;Securities Act&#148;), to register 2,000,000
shares of Class&nbsp;A common stock that have been issued or are issuable upon the grant of restricted
stock awards granted under the Registrant&#146;s 2005 Key Associate and Management Equity Incentive Plan
and 2005 Non-Employee Director Equity Incentive Plan.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This registration statement also includes a prospectus (the &#147;Reoffer Prospectus&#148;) prepared in
accordance with General Instruction C of Form S-8 and in accordance with the requirements of Part&nbsp;I
of Form S-3. This Reoffer Prospectus may be used for reofferings or resales on a continuous or
delayed basis in the future of an aggregate of 124,479 shares of Class&nbsp;A common stock that have
been issued by the Registrant pursuant to restricted stock awards granted under the Registrant&#146;s
2005 Key Associate and Management Equity Incentive Plan and 2005 Non-Employee Director Equity
Incentive Plan.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Part I</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;1. Plan Information.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The document(s) containing the information specified in Part&nbsp;I of Form S-8 will be sent or
given to participants in the Registrant&#146;s 2005 Key Associate and Management Equity Incentive Plan
and 2005 Non-Employee Director Equity Incentive Plan as specified by Rule&nbsp;428(b)(1) under the
Securities Act. Such documents are not being filed with the Securities and Exchange Commission, but
constitute along with the documents incorporated by reference into this registration statement, a
prospectus that meets the requirements of Section 10(a) of the Securities Act.
</DIV>
<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Note: The Reoffer Prospectus referred to in the Explanatory Note follows this page.
</DIV>


</DIV>
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<DIV style="font-family: Helvetica,Arial,sans-serif">






<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Reoffer Prospectus</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Advanced Environmental Recycling Technologies, Inc.</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Securities to be offered:</B>

</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>Up To 124,479 Shares Of Class&nbsp;A Common Stock</B>

</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus covers the resale by the selling stockholders identified on pages 6 and 7 of
some or all of the shares of our Class&nbsp;A common stock they own pursuant to the grant of currently
outstanding restricted stock awards under the Registrant&#146;s 2005 Key Associate and Management Equity
Incentive Plan or 2005 Non-Employee Director Equity Incentive Plan. The shares may be sold from
time to time by the selling stockholders through public or private transactions, at prevailing
market prices or at privately negotiated prices. We will not receive any of the proceeds from the
sale of the shares by the selling stockholders.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will pay all costs and expenses incurred by our company in connection with the registration
of the shares under the Securities Act of 1933. The selling stockholders will pay the costs
associated with any sale of shares, including any discounts, commissions and applicable transfer
taxes.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Class&nbsp;A common stock is traded on the Nasdaq Capital Market under the symbol &#147;<B>AERT</B>&#148;. On
August&nbsp;23, 2007, the last reported sale price of our
Class&nbsp;A common stock was $1.40 per share, as
reported by the Nasdaq Capital Market system.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our principal executive offices are located at 914 N. Jefferson Street, Springdale, Arkansas
72764, and our telephone number is (479)&nbsp;756-7400.
</DIV>

<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>

</DIV>

<DIV align="left" style="font-size: 10pt"><B><I>The securities offered in this prospectus involve a high degree of risk. You should purchase shares
only if you can afford a complete loss. See &#147;Risk Factors&#148; beginning on page 2.</I></B></DIV>



<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>

</DIV>

<DIV align="left" style="font-size: 10pt"><B><I>Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities, or determined if this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.</I></B></DIV>



<DIV align="Center" style="font-size: 10pt; margin-top: 12pt"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV>

</DIV>
<DIV align="center" style="font-size: 10pt">The date of this
prospectus is August&nbsp;24, 2007</DIV>
</DIV>




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<DIV align="right" style="font-size: 10pt; margin-top: 12pt">
</DIV>

<DIV align="left">
<!-- TOC -->
</DIV>
<DIV align="left">
<A name="tocpage"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Table Of Contents</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="88%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#101">Our Business</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#102">Risk Factors</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#103">Special Note Regarding Forward-Looking Statements</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">4</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#104">Use Of Proceeds</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#105">Selling Stockholders</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#106">Plan Of Distribution</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">8</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#107">Legal Matters</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#108">Experts</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">9</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px"><A href="#109">Where You Can Find More Information</A></DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">10</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d49275exv5.htm">Opinion of Akin Gump Strauss Hauer & Feld LLP</A></FONT></TD></TR>
<TR><TD colspan="9"><FONT size="2">&nbsp;<A HREF="d49275exv23w2.htm">Consent of Tullius Taylor Sartain & Sartain LLP</A></FONT></TD></TR>
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->&nbsp;<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left">
<!-- /TOC -->
</DIV>


<DIV align="left">
<A name="101"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Our Business</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Advanced Environmental Recycling Technologies, Inc. (AERT)&nbsp;develops, manufactures and markets
composite building materials that are used in place of traditional wood products for exterior
applications in building and remodeling homes and for certain other industrial or commercial
building purposes. Our products are made from approximately equal amounts of waste wood fiber and
reclaimed polyethylene plastics, have been extensively tested, and are sold by leading national
companies such as the Weyerhaeuser Company (Weyerhaeuser), Lowe&#146;s Companies, Inc. (Lowe&#146;s) and
Therma-Tru Corporation. Our customers are primarily regional and national door and window
manufacturers, Weyerhaeuser, our primary decking customer, and regional building product
distributors. Since our inception in 1989, we have sold approximately $477&nbsp;million of products into
the North American marketplace through March&nbsp;31, 2007. Our composite building materials are
marketed as a substitute for wood and plastic filler materials for standard door components,
windowsills, brick mould, fascia board, and decking under the trade names LifeCycle<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>,
MoistureShield<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, MoistureShield<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> CornerLoc<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP>, Weyerhaeuser ChoiceDek<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Premium, ChoiceDek<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> Premium
Colors, MoistureShield<SUP style="font-size: 85%; vertical-align: text-top">&#174;</SUP> outdoor decking and Basics&#153; outdoor decking. We operate manufacturing
facilities in Springdale, Lowell, and Tontitown, Arkansas; Junction, Texas and Alexandria,
Louisiana. We also operate a warehouse and reload complex in Lowell, Arkansas.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You should rely only on the information contained in this prospectus or incorporated by
reference into this prospectus. We have not authorized any other person to provide you with
different information. The information contained in this prospectus is accurate only as of the date
of this prospectus, regardless of the time of delivery of this prospectus or of any sale of Class&nbsp;A
common stock.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy,
nor shall there be any sale of these shares by any person in any jurisdiction in which it is
unlawful for that person to make such an offer, solicitation or sale.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->1<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left">
<A name="102"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Risk Factors</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our business is subject to a number of risks, including but not limited to the following:
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We may have insufficient working capital to achieve our growth objectives</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Though we had a working capital surplus of $365,604 at June&nbsp;30, 2007, we had a working capital
deficit of $3,466,129 at December&nbsp;31, 2006, and a deficit of $687,039 at December&nbsp;31, 2005. The
working capital deficit was the result of losses from operations, our decision to finance capital
projects with cash generated from operations, and our need to fund rapid growth in sales.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>We may be unable to secure an adequate quantity and quality of raw materials at economical prices</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The largest component of our raw material costs is scrap polyethylene. The price that we must
pay for these materials is related to the market prices of natural gas and petroleum, which have
been rising and volatile in recent years. Our future profitability is contingent on us being able
to manage raw material costs under these circumstances.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>The loss of one or more of our key customers could cause a substantial reduction in our revenues
and profits</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We could be materially adversely affected if we were to lose one or more of our large existing
customers. Our principal customer for our decking material is Weyerhaeuser, which accounted for 81%
and 77% of our sales in 2006 and 2005, respectively. A few large door and window construction
companies have historically purchased substantially all of our industrial component products. A
loss of any one of our large customers would adversely affect our sales and profitability.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>If we are unable to comply with certain debt covenants, our financial position and operations could
be adversely affected</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our $14.4&nbsp;million bond agreement contains financial covenants which include a current ratio of
not less than 1.00 to 1.00, a requirement that not more than 10% of accounts payable be in excess
of 75&nbsp;days past the invoice date, and a requirement that we maintain a long-term debt service
coverage ratio for the preceding four quarters of at least 2.00 to 1.00. We were not in compliance
with the first two of these covenants at December&nbsp;31, 2006, and were not in compliance with the
second two of these covenants as of June&nbsp;30, 2007; however, the first two of those covenants were
waived by the bondholder as of December&nbsp;31, 2006 through and including December&nbsp;31, 2007, and the
debt service covenant ratio was waived for the quarter ended June&nbsp;30, 2007. There is no assurance
that we will be able to comply with these debt covenants in the future, or that the bondholder will
waive or modify the covenants in the future. If we are unable to comply with the covenants or
obtain a waiver or modification of the covenants in the future, then the bond debt, currently in
the amount of $12.1&nbsp;million, could immediately become due and payable, the bondholder could
foreclose on the property used to secure the debt, and the bondholder could claim our revenues
pledged as part of the bond agreement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In June&nbsp;2007, the Company renewed its $15.0&nbsp;million bank line of credit through September&nbsp;16,
2007. The line is secured by the Company&#146;s inventory, accounts receivable, chattel paper, general
intangibles and other current assets, as well as by fixtures and equipment, and is provided by
Liberty Bank of Arkansas at a variable interest rate of prime plus one hundred basis points, which
was 9.25% at June&nbsp;30, 2007. The full amount of the line is guaranteed as to payment by our largest
stockholder, Marjorie S. Brooks, who also guarantees $4&nbsp;million on our 2003 industrial development
bond owned by Allstate Investments. The revolving credit facility includes debt service coverage
ratio, current ratio, and accounts payable and accounts receivable aging covenants substantially
similar to those under our 2003 bond agreements and customary restrictions on dividends and the
incurrence of additional debt or liens, among other matters.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Restrictions regarding increased manufacturing capabilities could restrain our business growth</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We increased our net sales by $10.5&nbsp;million in 2006, $23.7&nbsp;million in 2005, and $20.1&nbsp;million
in 2004. Our products have seen significant growth, and our customers have significant established
expansion plans. Our primary customers and markets are large, and continued sales growth will
require significant capital expenditures for additional production equipment and manufacturing
facilities. Although our goal is to become the number one composite producer in North America,
there is no assurance that we will be able to secure the necessary financing, attain the necessary
operational execution, or that the equipment and facilities will become operational in a timely
manner to meet that goal.
</DIV>


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</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Our growth is limited by the availability of human capital resources</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Future profitable growth will require us to recruit and retain qualified associates. We
compete with many larger companies in the labor market, many of which offer more attractive
compensation packages than we are able to economically provide. Though we have adopted equity
compensation plans to aid in our efforts to recruit and retain qualified associates, the accounting
treatment for those plans results in a reduction in our earnings.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Declines in construction activity may adversely affect our business</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our products are sold in the home improvement and new home construction markets. These markets
are subject to significant fluctuations in activity and to periodic downturns caused by general
economic conditions, as has been the case since mid-2006. Slowdowns in construction activity have
an adverse effect on the demand for our products.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Fire disruptions may adversely affect our business</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our raw materials and manufacturing processes involve a greater than average risk of fire loss
or disruption. Through the Company&#146;s history, we have experienced several fires, some of which
severely disrupted our manufacturing operations. There was an accidental fire at our Junction,
Texas facility in March&nbsp;2003, which caused substantial damage and temporarily shut down plant
operations. Although we have increased security and increased fire protection equipment at our
facilities, another major fire could occur and materially adversely affect our operations.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Covenants in our bond agreements could restrict our ability to borrow, which could impair the
improvement and expansion of our operations</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Certain covenants in our bond agreements restrict the types and amounts of additional
indebtedness that we may incur, including a requirement that, with certain exceptions, we may only
incur additional indebtedness to the extent it would satisfy a debt incurrence coverage ratio of
250% of income before interest, taxes, depreciation and amortization to debt service. Those
restrictions could inhibit our ability to improve and expand our current operations. Additionally,
our ability to secure adequate working capital to support our day-to-day operations as we grow
could be limited by the covenants in our bond agreements.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B><I>Future sales of shares could be dilutive and impair our ability to raise capital</I></B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The conversion of a significant number of our outstanding derivative securities into Class&nbsp;A
common stock could adversely affect the market price of the stock. As of June&nbsp;30, 2007, there were
warrants outstanding for 2,834,340 shares of Class&nbsp;A common stock at an average exercise price of
$1.67, and options outstanding for 1,529,000 shares of Class&nbsp;A common stock at an average exercise
price of $1.59. The exercise or conversion of a material amount of such securities will result in a
dilution in interest for our other security holders. The convertible securities whether converted
into stock or not, could impair our ability to obtain additional capital because of the potential
for dilution. Also, the holders of such securities may be expected to exercise their rights at a
time when we would in all likelihood be able to obtain needed capital through a new offering of our
securities on terms more favorable than those provided by the outstanding securities.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->3<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="left">
<A name="103"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Special Note Regarding Forward-Looking Statements</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have made statements in this prospectus, including statements under &#147;Our Business&#148; and
&#147;Risk Factors,&#148; which constitute forward-looking statements within the meaning of Section&nbsp;27A of
the Securities Act of 1933 and Section&nbsp;21E of the Securities Exchange Act of 1934. These
forward-looking statements are subject to a number of risks, uncertainties and assumptions,
including, among other things:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to obtain additional debt and equity financing to satisfy
existing debt obligations, provide working capital and support our
growth strategy;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our expectations and estimates concerning future financial
performance, financing plans and the impact of competition;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>general economic and business conditions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>anticipated trends in our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>existing and future regulations affecting our business;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>our ability to improve operating efficiencies and increase sales; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>other risk factors described in the section entitled &#147;Risk Factors&#148; in this prospectus.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;You can identify these forward-looking statements by forward-looking words such as &#147;believe,&#148;
&#147;may,&#148; &#147;could,&#148; &#147;will,&#148; &#147;estimate,&#148; &#147;continue,&#148; &#147;anticipate,&#148; &#147;intend,&#148; &#147;seek,&#148; &#147;plan,&#148; &#147;expect,&#148;
&#147;should,&#148; &#147;would&#148; and similar expressions in this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In light of these risks and uncertainties, the forward-looking events and circumstances
discussed in this prospectus may not occur and actual results could differ materially from those
anticipated or implied in the forward-looking statements.
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->4<!-- /Folio -->
</DIV>
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<DIV style="font-family: Helvetica,Arial,sans-serif">
<DIV align="left">
<A name="104"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Use Of Proceeds</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any of the proceeds from the sale of shares of Class&nbsp;A common stock by the
selling stockholders.
</DIV>
<DIV align="left">
<A name="105"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Selling Stockholders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus covers the resale of up to 124,479 shares of Class&nbsp;A common stock issued to
employees, directors or consultants pursuant to the Registrant&#146;s 2005 Key Associate and Management
Equity Incentive Plan and 2005 Non-Employee Director Equity Incentive Plan.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>2005 Key Associate and Management Equity Incentive Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2007, 20,000 of the 1,500,000 shares of Class&nbsp;A common stock authorized under
the 2005 Key Associate and Management Equity Incentive Plan had been issued pursuant to the
restricted stock awards. The number of shares set forth above is subject to adjustment in
accordance with the anti-dilution provisions of the plan.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>2005 Non-Employee Director Equity Incentive Plan</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As of June&nbsp;30, 2007, 104,479 of the 500,000 shares of Class&nbsp;A common stock authorized under
the 2005 Non-Employee Director Equity Incentive Plan had been issued pursuant to the restricted
stock awards. The number of shares set forth above is subject to adjustment in accordance with the
anti-dilution provisions of the plan.
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Selling Stockholders</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The following table sets forth the names of the selling stockholders, the number of shares of
common stock owned beneficially by each of the selling stockholders as of June&nbsp;30, 2007, and the
number of shares which may be offered for sale in connection with this prospectus (representing all
of the shares issued to each such selling stockholder pursuant to either the 2005 Key Associate and
Management Equity Incentive Plan or the 2005 Non-Employee Director Equity Incentive Plan).
Information set forth herein with respect to each selling stockholder&#146;s beneficial ownership of
common stock has been provided by such selling stockholder. Although the selling stockholders may
offer all, some or none of their Class&nbsp;A common stock, the following table has been prepared on the
assumption that all shares of common stock covered by this prospectus will be sold. Unless
otherwise indicated, the persons and entities named in the table have sole voting and sole
investment power with respect to all shares beneficially owned, subject to community property laws
where applicable. This prospectus may be amended or supplemented from time to time to amend or
supplement the information in the table set forth below.
</DIV>
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</DIV>


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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="52%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% Beneficially</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>% Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Number of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Name and Address of</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Owned Prior</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Shares</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Following</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Selling</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Beneficially</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to Completion</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>to be</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3"><B>Completion of</B></TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Stockholder (1)</B><BR><BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Owned(2)</B><BR><BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>of Offering(3)</B><BR><BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offered (4)</B><BR><BR></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" colspan="3" style="border-bottom: 1px solid #000000"><B>Offering (3)(5)</B><BR><BR></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD><DIV style="margin-left:15px; text-indent:-15px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Sal Miwa</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">163,424</TD>
    <TD nowrap>(6)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Marjorie S. Brooks</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">11,230,205</TD>
    <TD nowrap>(7)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.0</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">22.0</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jerry Burkett</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">336,735</TD>
    <TD nowrap>(8)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Samuel Milbank</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">498,585</TD>
    <TD nowrap>(9)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.1</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">1.1</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Jim Robason</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">198,718</TD>
    <TD nowrap>(10)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Michael Tull</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">1,005,938</TD>
    <TD nowrap>(11)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.2</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">2.2</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Ed Carda</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8,639</TD>
    <TD nowrap>(12)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Melinda Davis</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">234,903</TD>
    <TD nowrap>(13)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">13,424</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom" style="background: #cceeff">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Tim Kizer</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">8,639</TD>
    <TD nowrap>(12)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">5,256</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD><DIV style="margin-left:15px; text-indent:-15px">Billy Hufford</DIV></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="right">&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD nowrap>(14)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">20,000</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="right">*</TD>
    <TD>&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">*</TD>
    <TD>&nbsp;</TD>
    <TD>Beneficially owns less than 1%</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(1)</TD>
    <TD>&nbsp;</TD>
    <TD>All selling stockholders are current or former employees or directors of the Company.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(2)</TD>
    <TD>&nbsp;</TD>
    <TD>Indicates total beneficial ownership of Class&nbsp;A and Class&nbsp;B Common Stock in the aggregate.
Where applicable, individual footnote disclosure indicates any holdings of Class&nbsp;B Common Stock
and, unless otherwise indicated, individual footnote disclosures refer to Class&nbsp;A Common Stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(3)</TD>
    <TD>&nbsp;</TD>
    <TD>Indicates percentage of Class&nbsp;A Common Stock beneficially owned. Where applicable, footnote
disclosure indicates in addition the percentage of combined Class&nbsp;A and Class&nbsp;B Common Stock
beneficially owned in the aggregate.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(4)</TD>
    <TD>&nbsp;</TD>
    <TD>The number of shares to be offered represents shares received upon the grant of restricted
stock awards.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(5)</TD>
    <TD>&nbsp;</TD>
    <TD>Assumes the sale of all shares representing restricted stock awards offered hereby.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(6)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 13,424 shares owned directly and 150,000 shares issuable upon exercise of stock
options.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(7)</TD>
    <TD>&nbsp;</TD>
    <TD>As to Class&nbsp;A Common Stock, includes 8,279,827 shares owned directly, 1,121,457 in trusts or
corporations controlled by Mrs.&nbsp;Brooks, 175,000 shares issuable upon exercise of stock options,
323,000 shares issuable upon exercise of Series&nbsp;X and Y warrants owned directly, and 493,333 shares
issuable upon exercise of Series&nbsp;X and Y warrants owned directly through two corporations
controlled by Mrs.&nbsp;Brooks (Razorback Farms, Inc. and Brooks Investment Company). Also includes, as
to Class&nbsp;B Common Stock, 403,946 shares owned directly by Mrs.&nbsp;Brooks and 433,642 shares owned by
two corporations controlled by Mrs.&nbsp;Brooks (Razorback Farms, Inc. is the record owner of 312,320
shares and Southern Mineral and Fibers, Inc. is the record owner of 121,322 shares, representing
approximately 21.3% and 8.3%, respectively, of the Class&nbsp;B common stock). Excludes additional
shares owned by adult children of Mrs.&nbsp;Brooks, including Joe G. Brooks, Stephen W. Brooks and J.
Douglas Brooks, as to which she disclaims a beneficial interest. Owns 23.0% pre-offering and
post-offering of the combined Class&nbsp;A and Class&nbsp;B Common Stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(8)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes, as to Class&nbsp;A Common Stock, 116,424 shares owned directly, 2,000 shares owned by Mr.
Burkett as custodian for his minor child, 10,000 shares owned by a partnership controlled by Mr.
Burkett, and 175,000 shares issuable upon exercise of stock options.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(9)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 382,251 shares owned directly, 41,334 shares issuable upon exercise of Series&nbsp;Y
warrants, and 75,000 shares issuable upon exercise of stock options. Owns 1.0% pre-offering and
post-offering of the combined Class&nbsp;A and Class&nbsp;B Common Stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(10)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 112,918 shares owned directly, 60,800 shares issuable upon exercise of Series&nbsp;X and
Series&nbsp;Y warrants, and 25,000 shares issuable upon exercise of stock options.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(11)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 745,938 shares owned directly, 100,000 shares issuable upon exercise of stock
options, and 160,000 shares issuable upon exercise of Series&nbsp;X and Series&nbsp;Y warrants. Owns 2.1%
pre-offering and post-offering of the combined Class&nbsp;A and Class&nbsp;B Common Stock.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(12)</TD>
    <TD>&nbsp;</TD>
    <TD>Includes 5,256 shares issued pursuant to restricted stock awards and 3,383 shares issuable
upon vesting of restricted</TD>
</TR>

</TABLE>



<P align="center" style="font-size: 10pt"><!-- Folio -->6<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">




<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>stock awards.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(13)</TD>
    <TD>&nbsp;</TD>
    <TD>Represents 32,436 shares owned directly, 66,667 shares in a trust controlled by Ms.&nbsp;Davis,
75,000 shares issuable upon exercise of stock options, and 60,800 shares issuable upon exercise of
Series&nbsp;X and Series&nbsp;Y warrants.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(14)</TD>
    <TD>&nbsp;</TD>
    <TD>Issued pursuant to a restricted stock award.</TD>
</TR>

</TABLE>




<P align="center" style="font-size: 10pt"><!-- Folio -->7<!-- /Folio -->
</DIV>

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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left">
<A name="106"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Plan Of Distribution</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;This prospectus covers the resale of shares of Class&nbsp;A common stock by the selling
stockholders and their pledgees, donees, assignees and other successors in interest (all of whom
may be &#147;selling stockholders&#148;). The selling stockholders may sell their shares on the Nasdaq
Capital Market, in the over-the-counter market or through any other facility on which the shares
are traded, or in private transactions. These sales may be at market prices or at negotiated
prices. The selling stockholders may use the following methods when selling shares:
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>ordinary brokerage transactions and transactions in which the broker or dealer solicits purchasers;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>block trades in which the broker or dealer attempts to sell the shares
as agent, but may position and resell a portion of the block as
principal to facilitate the transaction;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>purchases by a broker dealer as principal and resale by the broker
or dealer for its account in connection with this prospectus;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>privately negotiated transactions;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any combination of these methods of sale; or</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>any other legal method.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders may also pledge their shares, enter into put or call options or enter
into other transactions with broker-dealers or others which require delivery to those persons of
shares covered by this prospectus.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Brokers, dealers or other agents participating in the distribution of the shares of Class&nbsp;A
common stock may receive compensation in the form of discounts or commissions from the selling
stockholders, as well as the purchaser if they act as agent for the purchaser. The discount or
commission in a particular transaction could be more than the customary amount. We know of no
existing arrangements between any selling stockholder and any underwriter, broker, dealer or agent
relating to the sale or distribution of the shares.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders and any brokers or dealers that participate in the sale of the shares
may be deemed to be underwriters within the meaning of the Securities Act. Any discounts,
commissions or other compensation received by these persons and any profit on the resale of the
shares by them as principals might be deemed to be underwriters&#146; compensation. The selling
stockholders may agree to indemnify any broker, dealer or agent that participates in the sale of
the shares against various liabilities, including liabilities under the Securities Act.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;At the time a particular offer of shares is made, to the extent required we will file a
supplement to this prospectus which identifies the number of shares being offered, the name of the
selling stockholders, the name of any participating broker or dealer, the amount of discounts and
commissions, and any other material information.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders and any other person participating in a distribution will be subject
to the applicable provisions of the Exchange Act and its rules and regulations. For example, the
anti-manipulative provisions of Regulation&nbsp;M may limit the ability of the selling stockholders or
others to engage in stabilizing and other market making activities.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The selling stockholders may also sell their shares in accordance with Rule&nbsp;144 under the
Securities Act, rather than in connection with this prospectus, so long as they meet the criteria
and conform to the requirements of the rule.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will not receive any of the proceeds from the sale of the shares by the selling
stockholders. We will pay the registration and other offering expenses related to this offering,
but the selling stockholders will pay all underwriting discounts and brokerage commissions incurred
in connection with the offering.
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->8<!-- /Folio -->
</DIV>

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<DIV align="left">
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</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Legal Matters</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our outside counsel, Akin, Gump, Strauss, Hauer &#038; Feld, L.L.P., San Antonio, Texas has issued
a legal opinion concerning the validity of the shares offered by this prospectus.
</DIV>
<DIV align="left">
<A name="108"></A>
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Experts</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The audited financial statements for the years ended December&nbsp;31, 2006, 2005, and 2004,
incorporated by reference in this prospectus and elsewhere in the registration statement have been
audited by Tullius Taylor Sartain and Sartain, LLP, independent public accountants, as indicated in
their report with respect thereto, and are included herein in reliance upon the said firm as
experts in accounting and auditing in giving said report.
</DIV>


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<DIV align="left">
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</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Where You Can Find More Information</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We file annual, quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any document that we file at the SEC&#146;s public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to the public at the
SEC&#146;s web site at http://www.sec.gov. In addition, reports, proxy statements and other information
concerning us can be inspected and copied at the offices of Nasdaq, Report Section, 1735 K Street,
N.W., Washington, D.C. 20006.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We have filed with the SEC a registration statement on Form S-8 under the Securities Act
covering the shares of Class&nbsp;A common stock to be sold under this prospectus. The SEC permits us to
omit from this prospectus certain information, exhibits, and undertakings contained in the
registration statement.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<I>The SEC allows us to incorporate by reference the information that we file with them, which
means that we can disclose important information to you by referring you to those documents instead
of having to repeat the information in this prospectus. The information incorporated by reference
is considered to be part of this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under sections </I><I>13(a)</I><I>, </I><I>13(c)</I><I>, 14 or </I><I>15(d)</I><I> of
the Securities Exchange Act of 1934 until the selling stockholders sell all the shares.</I>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Annual Report on Form 10-K for the fiscal year ended December&nbsp;31, 2006;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Quarterly Reports on Form 10-Q for the quarters ended March&nbsp;31, 2007 and June&nbsp;30, 2007;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Current Reports on Form 8-K filed June&nbsp;1, 2007, June&nbsp;13, 2007 and
August&nbsp;2, 2007; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="6%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left"><B>&#149;</B></TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The description of the Class&nbsp;A Common Stock contained in our
registration statement on Form 8-A, effective November&nbsp;13, 1989, under
the Securities Exchange Act of 1934 (Registration No.&nbsp;1-10367),
including any amendment or report filed hereafter for the purpose of
updating such description.</TD>
</TR>

</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We will provide to each person, including any beneficial owner, to whom a prospectus is
delivered, a copy of any or all of the information that has been incorporated by reference in the
prospectus, at no cost, upon written or oral request to:
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Joe G. Brooks, Chairman of the Board<BR>
Advanced Environmental Recycling Technologies, Inc.<BR>
914 North Jefferson Street (72764)<BR>
Post Office Box 1237<BR>
Springdale, Arkansas 72765<BR>
(479)&nbsp;756-7400
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>You should rely only on the information incorporated by reference or provided in this prospectus or
any supplement. We have not authorized anyone else to provide you with different information. The
selling stockholders will not make an offer of these shares in any state where the offer is not
permitted.</I></B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt"><B><I>This prospectus is part of a registration statement that we filed with the SEC. More information
about the shares sold by the selling stockholders is contained in that registration statement and
the exhibits filed along with the registration statement. You may read and copy the full
registration statement and its exhibits at the SEC&#146;S public reference rooms or their web site.</I></B>
</DIV>

</DIV>


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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Disclosure of Commission Position on Indemnification for Securities Act Liabilities</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145 of the Delaware General Corporation Law permits us to indemnify directors,
officers, employees or agents against judgments, fines, amounts paid in settlement, and reasonable
costs, expenses and counsel fees paid or incurred in connection with any proceeding, other than an
action by or in the right of us, to which such director, officer or employee or his legal
representative may be a party, provided such director, officer or employee shall have acted in good
faith and shall have reasonably believed (a)&nbsp;in the case of a civil proceeding, that his conduct
was in or not opposed to our best interests, or (b)&nbsp;in the case of a criminal proceeding, that he
had no reasonable cause to believe his conduct was unlawful. In connection with an action by or in
the right of us against a director, officer, employee or agent, we have the power to indemnify such
director, officer, employee or agent for reasonable expenses incurred in connection with such suit
(a)&nbsp;if such person acted in good faith and in a manner not opposed to our best interest, and (b)&nbsp;if
found liable to us, only if ordered by a court of law. Section&nbsp;145 provides that such section is
not exclusive of any other indemnification rights granted by us to directors, officers, employees
or agents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Certificate of Incorporation provides for mandatory indemnification of directors, officers
and employees to the fullest extent permitted by Section&nbsp;145, unless we prove that the person
seeking indemnification did not meet the standard set forth above. Our Certificate permits us to
indemnify agents to the extent authorized from time to time by our Board of Directors. The right to
indemnification is a contract right and includes the right to be paid by us the expenses incurred
in defending any such proceeding in advance of its final disposition, provided that the indemnitee
undertakes to repay all amounts so advanced if it is ultimately determined that such indemnitee is
not entitled to be indemnified for such expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Our Certificate of Incorporation also contains a provision eliminating the liability of a
director to us or our stockholders for monetary damages for breach of fiduciary duty as a director,
other than liability for (a)&nbsp;breach of the director&#146;s duty of loyalty to us or our stockholders,
(b)&nbsp;acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c)&nbsp;unlawful payment of a dividend or unlawful stock purchase or redemption, or
(d)&nbsp;any transaction from which the director derived an improper personal benefit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also maintain directors and officers liability insurance for the benefit of
our directors and officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the registrant pursuant to the foregoing
provisions, we have been informed 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.
</DIV>


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</DIV>
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<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;2. Incorporation of Documents by Reference.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Registrant will
provide to you without charge, upon written or oral request to the person
set forth below, the documents incorporated by reference in Item&nbsp;3 of Part&nbsp;II of this registration
statement, which are incorporated by reference in the Section 10(a) prospectus. The Registrant
will also provide to you without charge, upon written or oral request to the person set forth
below, any other documents required to be delivered to you pursuant to Rule&nbsp;428(b):
</DIV>

<DIV align="center" style="font-size: 10pt; margin-top: 6pt">Joe G. Brooks, Chairman of the Board<BR>
Advanced Environmental Recycling Technologies, Inc.<BR>
914 North Jefferson Street (72764)<BR>
Post Office Box 1237<BR>
Springdale, Arkansas 72765<BR>
(479)&nbsp;756-7400
</DIV>


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>Part II</B>
</DIV>


<DIV align="Center" style="font-size: 10pt; margin-top: 6pt"><B>INFORMATION REQUIRED IN THE REGISTRATION STATEMENT</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;3. Incorporation of Documents by Reference.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The documents
listed below are expressly incorporated by reference in this registration
statement as of the August&nbsp;24, 2007 date of this registration statement. All documents subsequently
filed by us with the SEC pursuant to Sections&nbsp;13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934 prior to the filing of a post-effective amendment to this registration statement that
indicates that all Class&nbsp;A Common Stock to which this registration Statement relates has been sold
or that deregisters all such Class&nbsp;A Common Stock then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof from the date of
filing such reports and documents.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
following documents that we have filed with the SEC are incorporated herein by reference:
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our annual report on Form 10-K for the year ended December&nbsp;31, 2006.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(b)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our quarterly reports on Form 10-Q for the quarters ended March&nbsp;31, 2007 and June&nbsp;30, 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(c)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Our current reports on Form 8-K filed on June&nbsp;1, 2007, June&nbsp;13, 2007 and August&nbsp;2, 2007.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="4%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(d)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The description of the Class&nbsp;A Common Stock contained in our registration Statement on
Form 8-A, effective November&nbsp;13, 1989, under the Securities Exchange Act of 1934
(Registration No.&nbsp;1-10367), including any amendment or report filed hereafter for the
purpose of updating such description.</TD>
</TR>
</TABLE>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;4. Description of Securities.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;5. Interests of Named Experts and Counsel.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Not applicable.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;6. Indemnification of Directors and Officers.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Section&nbsp;145
of the Delaware General Corporation Law permits the Registrant to indemnify
directors, officers, employees or agents against judgments, fines, amounts paid in settlement, and
reasonable costs, expenses and counsel fees paid or incurred in connection with any proceeding,
other than an action by or in the right of the Registrant, to which such director, officer or
employee or his legal representative may be a party, provided such director, officer or employee
shall have acted in good faith and shall have reasonably believed (a)&nbsp;in the case of a civil
proceeding, that his conduct was in or not opposed to the best interests of the Registrant, or (b)
in the case of a criminal proceeding, that he had no reasonable cause to believe his conduct was
unlawful. In connection with an action by or in the right of the Registrant against a director,
officer, employee or agent, the Registrant has the power to indemnify such director, officer,
employee or agent for reasonable
</DIV>

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</DIV>
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<DIV align="left" style="font-size: 10pt; margin-top: 6pt">expenses incurred in connection with such suit (a)&nbsp;if such person acted in good faith and in a
manner not opposed to the best interest of the Registrant, and (b)&nbsp;if found liable to the
Registrant, only if ordered by a court of law. Section&nbsp;145 provides that such section is not
exclusive of any other indemnification rights granted by the Registrant to directors, officers,
employees or agents.
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Certificate of Incorporation of the Registrant provides for mandatory indemnification of
directors, officers and employees to the fullest extent permitted by Section&nbsp;145, unless the
Registrant proves that the person seeking indemnification did not meet the standard set forth
above. The Certificate permits the Registrant to indemnify agents to the extent authorized from
time to time by the Board of Directors. The right to indemnification is a contract right and
includes the right to be paid by the Registrant the expenses incurred in defending any such
proceeding in advance of its final disposition, provided that the indemnitee undertakes to repay
all amounts so advanced if it is ultimately determined that such indemnitee is not entitled to be
indemnified for such expenses.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Certificate of Incorporation of the Registrant also contains a provision eliminating the
liability of a director to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, other than liability for (a)&nbsp;breach of the director&#146;s duty of loyalty
to the corporation or its stockholders, (b)&nbsp;acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c)&nbsp;unlawful payment of a dividend or
unlawful stock purchase or redemption, or (d)&nbsp;any transaction from which the director derived an
improper personal benefit.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;We also maintain directors and officers liability insurance for the benefit of our directors
and officers.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;7. Exemption from Registration Claimed.</B>
</DIV>


<DIV align="left" style="font-size: 10pt; margin-top: 6pt">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All of the restricted securities issued by us to the selling stockholders who are reoffering
and reselling such restricted securities pursuant to this registration Statement were issued in
reliance upon the exemption from registration under Section&nbsp;4(2) of the Securities Act relating to
sales by an issuer not involving any public offering, or was not subject to registration as not
involving the payment of any consideration for restricted stock awards and so not involving an
offer or sale under applicable law. We believe, due to the nature of the relationship of these
persons to us and the isolated nature of the transactions, that each issuance of the shares of
Class&nbsp;A common stock as restricted stock awards held by such persons was exempt from registration
under the Securities Act as a private placement pursuant to Section&nbsp;4(2) of that Act or was not
subject to registration as not involving the payment of any consideration for restricted stock
awards and so not involving an offer or sale under applicable law.
</DIV>


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</DIV>


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<DIV style="font-family: Helvetica,Arial,sans-serif">



<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;8. Exhibits.</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="4%">&nbsp;</TD>
    <TD width="4%">&nbsp;</TD>
    <TD width="92%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Exhibit</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Class&nbsp;A Common Stock Certificate (a)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Key Associate and Management Equity Incentive Plan (b)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Non-Employee Director Equity Incentive Plan (b)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Akin Gump Strauss Hauer &#038; Feld LLP (c)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Akin Gump Strauss Hauer &#038; Feld LLP (included in Opinion filed as Exhibit&nbsp;5)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Tullius Taylor Sartain &#038; Sartain LLP (c)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Powers of attorney (included in Signature Page, Page 19 of this Registration statement)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to the exhibits to the registration statement on Form&nbsp;S-1 (No.
33-29593) filed November&nbsp;8, 1989.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to the exhibits to the Registrant&#146;s DEF14-A filed July&nbsp;11, 2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(c)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herewith.</TD>
</TR>
</TABLE>


<P align="center" style="font-size: 10pt"><!-- Folio -->14<!-- /Folio -->
</DIV>



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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV align="left" style="font-size: 10pt; margin-top: 12pt"><B>Item&nbsp;9. Undertakings.</B>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="2%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">(a)</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The undersigned registrant hereby undertakes:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">1.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>To include any propectus required by section 10(a)(3) of the
Securities Act of 1933;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than 20% change in the maximum aggregate offering price set forth in the
&#147;Calculation of Registration Fee&#148; table in the effective registration
statement.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Provided however, That:</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="20%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on Form S-8, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="20%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii)
of this section do not apply if the registration statement is on Form
S-3 or Form F-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or is
contained in a form of prospectus filed pursuant to Rule 424(b) that is
part of the registration statement.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">2.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">3.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">4.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements required
by Item&nbsp;8.A. of Form 20-F at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise required by
Section&nbsp;10(a)(3) of the Act need not be furnished, <I>provided </I>that the registrant
includes in the prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (a)(4) and other information necessary
to ensure that all other information in the prospectus is at least as current as the
date of those financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be filed to
include financial statements and information required by Section&nbsp;10(a)(3) of the Act
or Rule&nbsp;3-19 of this chapter if such financial statements and information are
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Form F-3.</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">5.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:</TD>
</TR>

</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->15<!-- /Folio -->
</DIV>
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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the registrant is relying on Rule&nbsp;430B (230.430B of this
chapter):</TD>
</TR>
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="20%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">A.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each prospectus filed by the registrant pursuant
to Rule&nbsp;424(b)(3)shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of and
included in the registration statement; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="20%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">B.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Each prospectus required to be filed pursuant to
Rule&nbsp;424(b)(2), (b)(5), or (b)(7) as part of a registration statement in
reliance on Rule&nbsp;430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x)&nbsp;for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed
to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in
the offering described in the prospectus. As provided in Rule&nbsp;430B, for
liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that
was part of the registration statement or made in any such document
immediately prior to such effective date; or</TD>
</TR>
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>If the registrant is subject to Rule&nbsp;430C, each prospectus
filed pursuant to Rule 424(b) as part of a registration statement relating to
an offering, other than registration statements relying on Rule&nbsp;430B or other
than prospectuses filed in reliance on Rule&nbsp;430A, shall be deemed to be part
of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale
prior to such first use, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first
use.</TD>
</TR>
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">6.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such purchaser:</TD>
</TR>
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">i.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule&nbsp;424;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">ii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iii.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and</TD>
</TR>

<TR>
    <TD style="font-size: 6pt">&nbsp;</TD>
</TR><TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="14%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">iv.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>Any other communication that is an offer in the offering made
by the undersigned registrant to the purchaser.</TD>
</TR>
</TABLE>
</DIV>


<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">7.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant&#146;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
benefit plan&#146;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</TD>
</TR>
</TABLE>
</DIV>


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</DIV>


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<DIV style="font-family: Helvetica,Arial,sans-serif">




<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">&nbsp;</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.</TD>
</TR>

</TABLE>
</DIV>

<DIV style="margin-top: 6pt">
<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">

<TR valign="top" style="font-size: 10pt; color: #000000; background: transparent">
    <TD width="8%" style="background: transparent">&nbsp;</TD>
    <TD width="3%" nowrap align="left">8.</TD>
    <TD width="1%">&nbsp;</TD>
    <TD>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 Act and will be
governed by the final adjudication of such issue.</TD>
</TR>
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->17<!-- /Folio -->
</DIV>



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<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV style="margin-top: 6pt"><TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">



</TABLE>
</DIV>



<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>SIGNATURES</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">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-8 and has
duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Springdale, State of Arkansas, on
August&nbsp;24, 2007.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="10%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="85%">&nbsp;</TD>
</TR>
<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><B>ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.</B></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Joe G. Brooks</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Joe G. Brooks,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Chairman, Chief Executive Officer and President</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Stephen W. Brooks</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Stephen W. Brooks,</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Chief Operating Officer</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Bob Thayer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Bob Thayer</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Senior Vice President and Chief Financial Officer</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">/s/ Eric Barnes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR style="font-size: 1px">
    <TD valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD colspan="3" valign="top" align="left" style="border-top: 1px solid #000000">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Eric Barnes</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top"><I>Controller and Chief Accounting Officer</I></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD colspan="3" valign="top" align="left"><DIV style="width: 100%; border-bottom: 1px solid #000000; font-size: 1px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<P align="center" style="font-size: 10pt"><!-- Folio -->18<!-- /Folio -->
</DIV>


<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">


<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>POWER OF ATTORNEY</B>
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">The undersigned directors and officers of Advanced Environmental Recycling Technologies, Inc.
hereby constitute and appoint Joe G. Brooks our true and lawful attorney-in-fact and agent with
full power to execute in our name and behalf in the capacities indicated below any and all
amendments to this registration statement on Form S-8 to be filed with the Securities and Exchange
Commission and hereby ratify and confirm all that such attorney-in-fact and agent shall lawfully do
or cause to be done by virtue thereof.
</DIV>

<DIV align="left" style="font-size: 10pt; margin-top: 6pt">Pursuant to the requirements of the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities and on the date indicated.
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="center"><B>Signature</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Title</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center"><B>Date</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/ Joe
G. Brooks
&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px"><DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Joe
G. Brooks
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Chairman of the board, CEO and President
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>

<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Stephen
W. Brooks&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Stephen
W. Brooks
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Vice-chairman of the board and Chief
operating officer
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Marjorie
S. Brooks&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>

<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Marjorie
S. Brooks
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Secretary, treasurer and director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Hisao
Sal Miwa&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Hisao
Sal Miwa
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Jerry
B. Burkett&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Jerry
B. Burkett
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Michael
M. Tull&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Michael
M. Tull
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>

<P align="center" style="font-size: 10pt"><!-- Folio -->19<!-- /Folio -->
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="40%">&nbsp;</TD>
    <TD width="3%">&nbsp;</TD>
    <TD width="14%">&nbsp;</TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Melinda
Davis&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Melinda
Davis
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Jim
Robason&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Jim
Robason
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Tim
Kizer&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Tim
Kizer
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Edward
P. Carda&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Edward
P. Carda
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<tr>
    <TD>&nbsp;</TD>
</tr>
<TR valign="bottom"><!-- Blank Space -->

<TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">/s/
Peter
S. Lau&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD align="center" valign="top"><DIV style="margin-left:0px; text-indent:-0px">
<DIV style="font-size: 1pt; border-top: 1px solid #000000">&nbsp;</DIV>&nbsp;Peter
S. Lau
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="center" valign="top">Director
</TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">August&nbsp;24, 2007</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>


<P align="center" style="font-size: 10pt"><!-- Folio -->20<!-- /Folio -->
</DIV>
<!-- PAGEBREAK -->
<P><HR noshade><P>
<H5 align="left" style="page-break-before:always"><A HREF="#tocpage">Table of Contents</A></H5><P>
<DIV style="font-family: Helvetica,Arial,sans-serif">
<P align="right" style="font-size: 10pt"><!-- Folio --><!-- /Folio -->

<DIV align="center" style="font-size: 10pt; margin-top: 18pt"><B>EXHIBIT INDEX</B>
</DIV>

<DIV align="center">
<TABLE style="font-size: 10pt" cellspacing="0" border="0" cellpadding="0" width="100%">
<!-- Begin Table Head -->
<TR valign="bottom">
    <TD width="7%">&nbsp;</TD>
    <TD width="5%">&nbsp;</TD>
    <TD width="88%">&nbsp;</TD>
</TR>
<TR style="font-size: 8pt" valign="bottom">
    <TD nowrap align="left" style="border-bottom: 1px solid #000000"><B>Exhibit No.</B></TD>
    <TD>&nbsp;</TD>
    <TD nowrap align="center" style="border-bottom: 1px solid #000000"><B>Description of Exhibit</B></TD>
</TR>

<!-- End Table Head -->
<!-- Begin Table Body -->
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Form of Class&nbsp;A Common Stock Certificate (a)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Key Associate and Management Equity Incentive Plan (b)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">4.3
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">2005 Non-Employee Director Equity Incentive Plan (b)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">5
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Opinion of Akin Gump Strauss Hauer &#038; Feld LLP (c)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.1
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Akin Gump Strauss Hauer &#038; Feld LLP (included in Opinion filed as Exhibit&nbsp;5)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">23.2
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Consent of Tullius Taylor Sartain &#038; Sartain LLP (c)</TD>
</TR>
<TR valign="bottom"><!-- Blank Space -->
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">&nbsp;</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">&nbsp;</TD>
</TR>
<TR valign="bottom">
    <TD valign="top"><DIV style="margin-left:0px; text-indent:-0px">24
</DIV></TD>
    <TD>&nbsp;</TD>
    <TD align="left" valign="top">Powers of attorney (included in Signature Page, Page 19 of this registration statement)</TD>
</TR>
<!-- End Table Body -->
</TABLE>
</DIV>



<DIV align="left">
<DIV style="font-size: 3pt; margin-top: 16pt; width: 18%; border-top: 1px solid #000000">&nbsp;</DIV>
</DIV>

<TABLE width="100%" border="0" cellpadding="0" cellspacing="0" style="font-size: 10pt">
<TR>
    <TD width="3%"></TD>
    <TD width="1%"></TD>
    <TD width="96"></TD>
</TR>

<TR valign="top">
    <TD nowrap align="left">(a)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to the exhibits to the registration statement on Form&nbsp;S-1 (No.
33-29593) filed November&nbsp;8, 1989.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(b)</TD>
    <TD>&nbsp;</TD>
    <TD>Incorporated by reference to the exhibits to the Registrant&#146;s DEF14-A filed July&nbsp;11, 2005.</TD>
</TR>

<TR style="font-size: 3pt"><TD>&nbsp;</TD></TR>

<TR valign="top">
    <TD nowrap align="left">(c)</TD>
    <TD>&nbsp;</TD>
    <TD>Filed herewith.</TD>
</TR>

</TABLE>





</DIV>

</BODY>
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sv8
Table of Contents
Registration No. 333-______
As filed with the Securities and Exchange Commission
on August 24, 2007
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-8
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware
(State or other jurisdiction of incorporation or
organization)
71-0675758
(I.R.S. Employer Identification No.)
914 N Jefferson Street
Springdale, Arkansas
(Address of principal executive offices)
72764
(Zip Code)
2005 KEY ASSOCIATE AND MANAGEMENT EQUITY INCENTIVE PLAN
2005 NON-EMPLOYEE DIRECTOR EQUITY INCENTIVE PLAN
(Full title of the plans)
Joe G. Brooks, Chairman
Advanced Environmental Recycling Technologies, Inc.
914 N Jefferson Street
Springdale, Arkansas 72764
(Name and address of agent for service)
(479) 756-7400
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
Proposed
maximum
Proposed maximum
Title of Securities
Amount to be
offering
aggregate offering
Amount of
to be Registered
registered (1)
price per share
price
registration fee
Class A common stock, $0.01 par value
1,875,521 shares (2)
$
1.415
(3)
$
2,653,862
$
81.47
Class A common stock, $0.01 par value
124,479
shares (4)
$
2.153
(5)
$
268,003
$
8.23
Total
2,000,000 shares
—
$
2,921,865
$
89.70
(1)
Pursuant to Rule 416 under the Securities Act, there are also
registered hereby such indeterminate number of securities as may
become issuable by reason of the anti-dilution provisions of the plans
referred to herein.
(2)
Issuable upon grant or vesting of restricted stock awards of the Class A common
stock available for grant under the Registrant's 2005 Key Associate
and Management Equity Incentive Plan (which covers 1,500,000 shares of
Class A common stock in the aggregate, including issued and
outstanding restricted stock awards) and 2005 Non-Employee Director
Equity Incentive Plan (which covers 500,000 shares of Class A common
stock in the aggregate, including issued and outstanding restricted
stock awards).
(3)
Estimated solely for the purpose of computing the registration fee
pursuant to Rule 457(h) under the Securities Act. Calculated on the
basis of the average of the highest and lowest sale prices of the
Class A common stock on August 23, 2007, as reported by NASDAQ.
(4)
Issued as outstanding restricted stock awards under the 2005 Key
Associate and Management Equity Incentive Plan and the 2005
Non-Employee Director Equity Incentive Plan.
(5)
Weighted average market value per share of restricted stock awards
outstanding under the Registrant's 2005 Key Associate and Management
Equity Incentive Plan and 2005 Non-Employee Director Equity Incentive
Plan, based on the last sale price of the stock on the dates of the
awards.
Table of Contents
EXPLANATORY NOTE
The Registrant has prepared this registration statement in accordance with the requirements of
Form S-8 under the Securities Act of 1933, as amended (the "Securities Act"), to register 2,000,000
shares of Class A common stock that have been issued or are issuable upon the grant of restricted
stock awards granted under the Registrant's 2005 Key Associate and Management Equity Incentive Plan
and 2005 Non-Employee Director Equity Incentive Plan.
This registration statement also includes a prospectus (the "Reoffer Prospectus") prepared in
accordance with General Instruction C of Form S-8 and in accordance with the requirements of Part I
of Form S-3. This Reoffer Prospectus may be used for reofferings or resales on a continuous or
delayed basis in the future of an aggregate of 124,479 shares of Class A common stock that have
been issued by the Registrant pursuant to restricted stock awards granted under the Registrant's
2005 Key Associate and Management Equity Incentive Plan and 2005 Non-Employee Director Equity
Incentive Plan.
Part I
INFORMATION REQUIRED IN THE SECTION 10(a) PROSPECTUS
Item 1. Plan Information.
The document(s) containing the information specified in Part I of Form S-8 will be sent or
given to participants in the Registrant's 2005 Key Associate and Management Equity Incentive Plan
and 2005 Non-Employee Director Equity Incentive Plan as specified by Rule 428(b)(1) under the
Securities Act. Such documents are not being filed with the Securities and Exchange Commission, but
constitute along with the documents incorporated by reference into this registration statement, a
prospectus that meets the requirements of Section 10(a) of the Securities Act.
Note: The Reoffer Prospectus referred to in the Explanatory Note follows this page.
Table of Contents
Reoffer Prospectus
Advanced Environmental Recycling Technologies, Inc.
Securities to be offered:
Up To 124,479 Shares Of Class A Common Stock
This prospectus covers the resale by the selling stockholders identified on pages 6 and 7 of
some or all of the shares of our Class A common stock they own pursuant to the grant of currently
outstanding restricted stock awards under the Registrant's 2005 Key Associate and Management Equity
Incentive Plan or 2005 Non-Employee Director Equity Incentive Plan. The shares may be sold from
time to time by the selling stockholders through public or private transactions, at prevailing
market prices or at privately negotiated prices. We will not receive any of the proceeds from the
sale of the shares by the selling stockholders.
We will pay all costs and expenses incurred by our company in connection with the registration
of the shares under the Securities Act of 1933. The selling stockholders will pay the costs
associated with any sale of shares, including any discounts, commissions and applicable transfer
taxes.
Our Class A common stock is traded on the Nasdaq Capital Market under the symbol "
AERT
". On
August 23, 2007, the last reported sale price of our
Class A common stock was $1.40 per share, as
reported by the Nasdaq Capital Market system.
Our principal executive offices are located at 914 N. Jefferson Street, Springdale, Arkansas
72764, and our telephone number is (479) 756-7400.
The securities offered in this prospectus involve a high degree of risk. You should purchase shares
only if you can afford a complete loss. See "Risk Factors" beginning on page 2.
Neither the Securities and Exchange Commission nor any state securities commission has approved or
disapproved of these securities, or determined if this Prospectus is truthful or complete. Any
representation to the contrary is a criminal offense.
The date of this
prospectus is August 24, 2007
Table of Contents
Table Of Contents
Our Business
1
Risk Factors
2
Special Note Regarding Forward-Looking Statements
4
Use Of Proceeds
5
Selling Stockholders
5
Plan Of Distribution
8
Legal Matters
9
Experts
9
Where You Can Find More Information
10
Opinion of Akin Gump Strauss Hauer & Feld LLP
Consent of Tullius Taylor Sartain & Sartain LLP
Table of Contents
Our Business
Advanced Environmental Recycling Technologies, Inc. (AERT) develops, manufactures and markets
composite building materials that are used in place of traditional wood products for exterior
applications in building and remodeling homes and for certain other industrial or commercial
building purposes. Our products are made from approximately equal amounts of waste wood fiber and
reclaimed polyethylene plastics, have been extensively tested, and are sold by leading national
companies such as the Weyerhaeuser Company (Weyerhaeuser), Lowe's Companies, Inc. (Lowe's) and
Therma-Tru Corporation. Our customers are primarily regional and national door and window
manufacturers, Weyerhaeuser, our primary decking customer, and regional building product
distributors. Since our inception in 1989, we have sold approximately $477 million of products into
the North American marketplace through March 31, 2007. Our composite building materials are
marketed as a substitute for wood and plastic filler materials for standard door components,
windowsills, brick mould, fascia board, and decking under the trade names LifeCycle
®
,
MoistureShield
®
, MoistureShield
®
CornerLoc
®
, Weyerhaeuser ChoiceDek
®
Premium, ChoiceDek
®
Premium
Colors, MoistureShield
®
outdoor decking and Basics™ outdoor decking. We operate manufacturing
facilities in Springdale, Lowell, and Tontitown, Arkansas; Junction, Texas and Alexandria,
Louisiana. We also operate a warehouse and reload complex in Lowell, Arkansas.
You should rely only on the information contained in this prospectus or incorporated by
reference into this prospectus. We have not authorized any other person to provide you with
different information. The information contained in this prospectus is accurate only as of the date
of this prospectus, regardless of the time of delivery of this prospectus or of any sale of Class A
common stock.
This prospectus does not constitute an offer to sell, or a solicitation of an offer to buy,
nor shall there be any sale of these shares by any person in any jurisdiction in which it is
unlawful for that person to make such an offer, solicitation or sale.
1
Table of Contents
Risk Factors
Our business is subject to a number of risks, including but not limited to the following:
We may have insufficient working capital to achieve our growth objectives
Though we had a working capital surplus of $365,604 at June 30, 2007, we had a working capital
deficit of $3,466,129 at December 31, 2006, and a deficit of $687,039 at December 31, 2005. The
working capital deficit was the result of losses from operations, our decision to finance capital
projects with cash generated from operations, and our need to fund rapid growth in sales.
We may be unable to secure an adequate quantity and quality of raw materials at economical prices
The largest component of our raw material costs is scrap polyethylene. The price that we must
pay for these materials is related to the market prices of natural gas and petroleum, which have
been rising and volatile in recent years. Our future profitability is contingent on us being able
to manage raw material costs under these circumstances.
The loss of one or more of our key customers could cause a substantial reduction in our revenues
and profits
We could be materially adversely affected if we were to lose one or more of our large existing
customers. Our principal customer for our decking material is Weyerhaeuser, which accounted for 81%
and 77% of our sales in 2006 and 2005, respectively. A few large door and window construction
companies have historically purchased substantially all of our industrial component products. A
loss of any one of our large customers would adversely affect our sales and profitability.
If we are unable to comply with certain debt covenants, our financial position and operations could
be adversely affected
Our $14.4 million bond agreement contains financial covenants which include a current ratio of
not less than 1.00 to 1.00, a requirement that not more than 10% of accounts payable be in excess
of 75 days past the invoice date, and a requirement that we maintain a long-term debt service
coverage ratio for the preceding four quarters of at least 2.00 to 1.00. We were not in compliance
with the first two of these covenants at December 31, 2006, and were not in compliance with the
second two of these covenants as of June 30, 2007; however, the first two of those covenants were
waived by the bondholder as of December 31, 2006 through and including December 31, 2007, and the
debt service covenant ratio was waived for the quarter ended June 30, 2007. There is no assurance
that we will be able to comply with these debt covenants in the future, or that the bondholder will
waive or modify the covenants in the future. If we are unable to comply with the covenants or
obtain a waiver or modification of the covenants in the future, then the bond debt, currently in
the amount of $12.1 million, could immediately become due and payable, the bondholder could
foreclose on the property used to secure the debt, and the bondholder could claim our revenues
pledged as part of the bond agreement.
In June 2007, the Company renewed its $15.0 million bank line of credit through September 16,
2007. The line is secured by the Company's inventory, accounts receivable, chattel paper, general
intangibles and other current assets, as well as by fixtures and equipment, and is provided by
Liberty Bank of Arkansas at a variable interest rate of prime plus one hundred basis points, which
was 9.25% at June 30, 2007. The full amount of the line is guaranteed as to payment by our largest
stockholder, Marjorie S. Brooks, who also guarantees $4 million on our 2003 industrial development
bond owned by Allstate Investments. The revolving credit facility includes debt service coverage
ratio, current ratio, and accounts payable and accounts receivable aging covenants substantially
similar to those under our 2003 bond agreements and customary restrictions on dividends and the
incurrence of additional debt or liens, among other matters.
Restrictions regarding increased manufacturing capabilities could restrain our business growth
We increased our net sales by $10.5 million in 2006, $23.7 million in 2005, and $20.1 million
in 2004. Our products have seen significant growth, and our customers have significant established
expansion plans. Our primary customers and markets are large, and continued sales growth will
require significant capital expenditures for additional production equipment and manufacturing
facilities. Although our goal is to become the number one composite producer in North America,
there is no assurance that we will be able to secure the necessary financing, attain the necessary
operational execution, or that the equipment and facilities will become operational in a timely
manner to meet that goal.
2
Table of Contents
Our growth is limited by the availability of human capital resources
Future profitable growth will require us to recruit and retain qualified associates. We
compete with many larger companies in the labor market, many of which offer more attractive
compensation packages than we are able to economically provide. Though we have adopted equity
compensation plans to aid in our efforts to recruit and retain qualified associates, the accounting
treatment for those plans results in a reduction in our earnings.
Declines in construction activity may adversely affect our business
Our products are sold in the home improvement and new home construction markets. These markets
are subject to significant fluctuations in activity and to periodic downturns caused by general
economic conditions, as has been the case since mid-2006. Slowdowns in construction activity have
an adverse effect on the demand for our products.
Fire disruptions may adversely affect our business
Our raw materials and manufacturing processes involve a greater than average risk of fire loss
or disruption. Through the Company's history, we have experienced several fires, some of which
severely disrupted our manufacturing operations. There was an accidental fire at our Junction,
Texas facility in March 2003, which caused substantial damage and temporarily shut down plant
operations. Although we have increased security and increased fire protection equipment at our
facilities, another major fire could occur and materially adversely affect our operations.
Covenants in our bond agreements could restrict our ability to borrow, which could impair the
improvement and expansion of our operations
Certain covenants in our bond agreements restrict the types and amounts of additional
indebtedness that we may incur, including a requirement that, with certain exceptions, we may only
incur additional indebtedness to the extent it would satisfy a debt incurrence coverage ratio of
250% of income before interest, taxes, depreciation and amortization to debt service. Those
restrictions could inhibit our ability to improve and expand our current operations. Additionally,
our ability to secure adequate working capital to support our day-to-day operations as we grow
could be limited by the covenants in our bond agreements.
Future sales of shares could be dilutive and impair our ability to raise capital
The conversion of a significant number of our outstanding derivative securities into Class A
common stock could adversely affect the market price of the stock. As of June 30, 2007, there were
warrants outstanding for 2,834,340 shares of Class A common stock at an average exercise price of
$1.67, and options outstanding for 1,529,000 shares of Class A common stock at an average exercise
price of $1.59. The exercise or conversion of a material amount of such securities will result in a
dilution in interest for our other security holders. The convertible securities whether converted
into stock or not, could impair our ability to obtain additional capital because of the potential
for dilution. Also, the holders of such securities may be expected to exercise their rights at a
time when we would in all likelihood be able to obtain needed capital through a new offering of our
securities on terms more favorable than those provided by the outstanding securities.
3
Table of Contents
Special Note Regarding Forward-Looking Statements
We have made statements in this prospectus, including statements under "Our Business" and
"Risk Factors," which constitute forward-looking statements within the meaning of Section 27A of
the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These
forward-looking statements are subject to a number of risks, uncertainties and assumptions,
including, among other things:
•
our ability to obtain additional debt and equity financing to satisfy
existing debt obligations, provide working capital and support our
growth strategy;
•
our expectations and estimates concerning future financial
performance, financing plans and the impact of competition;
•
general economic and business conditions;
•
anticipated trends in our business;
•
existing and future regulations affecting our business;
•
our ability to improve operating efficiencies and increase sales; and
•
other risk factors described in the section entitled "Risk Factors" in this prospectus.
You can identify these forward-looking statements by forward-looking words such as "believe,"
"may," "could," "will," "estimate," "continue," "anticipate," "intend," "seek," "plan," "expect,"
"should," "would" and similar expressions in this prospectus.
In light of these risks and uncertainties, the forward-looking events and circumstances
discussed in this prospectus may not occur and actual results could differ materially from those
anticipated or implied in the forward-looking statements.
4
Table of Contents
Use Of Proceeds
We will not receive any of the proceeds from the sale of shares of Class A common stock by the
selling stockholders.
Selling Stockholders
This prospectus covers the resale of up to 124,479 shares of Class A common stock issued to
employees, directors or consultants pursuant to the Registrant's 2005 Key Associate and Management
Equity Incentive Plan and 2005 Non-Employee Director Equity Incentive Plan.
2005 Key Associate and Management Equity Incentive Plan
As of June 30, 2007, 20,000 of the 1,500,000 shares of Class A common stock authorized under
the 2005 Key Associate and Management Equity Incentive Plan had been issued pursuant to the
restricted stock awards. The number of shares set forth above is subject to adjustment in
accordance with the anti-dilution provisions of the plan.
2005 Non-Employee Director Equity Incentive Plan
As of June 30, 2007, 104,479 of the 500,000 shares of Class A common stock authorized under
the 2005 Non-Employee Director Equity Incentive Plan had been issued pursuant to the restricted
stock awards. The number of shares set forth above is subject to adjustment in accordance with the
anti-dilution provisions of the plan.
Selling Stockholders
The following table sets forth the names of the selling stockholders, the number of shares of
common stock owned beneficially by each of the selling stockholders as of June 30, 2007, and the
number of shares which may be offered for sale in connection with this prospectus (representing all
of the shares issued to each such selling stockholder pursuant to either the 2005 Key Associate and
Management Equity Incentive Plan or the 2005 Non-Employee Director Equity Incentive Plan).
Information set forth herein with respect to each selling stockholder's beneficial ownership of
common stock has been provided by such selling stockholder. Although the selling stockholders may
offer all, some or none of their Class A common stock, the following table has been prepared on the
assumption that all shares of common stock covered by this prospectus will be sold. Unless
otherwise indicated, the persons and entities named in the table have sole voting and sole
investment power with respect to all shares beneficially owned, subject to community property laws
where applicable. This prospectus may be amended or supplemented from time to time to amend or
supplement the information in the table set forth below.
5
Table of Contents
% Beneficially
Number of
% Beneficially
Number of
Owned
Name and Address of
Shares
Owned Prior
Shares
Following
Selling
Beneficially
to Completion
to be
Completion of
Stockholder (1)
Owned(2)
of Offering(3)
Offered (4)
Offering (3)(5)
Sal Miwa
163,424
(6)
*
13,424
*
Marjorie S. Brooks
11,230,205
(7)
22.0
13,424
22.0
Jerry Burkett
336,735
(8)
*
13,424
*
Samuel Milbank
498,585
(9)
1.1
13,424
1.1
Jim Robason
198,718
(10)
*
13,424
*
Michael Tull
1,005,938
(11)
2.2
13,424
2.2
Ed Carda
8,639
(12)
*
5,256
*
Melinda Davis
234,903
(13)
*
13,424
*
Tim Kizer
8,639
(12)
*
5,256
*
Billy Hufford
20,000
(14)
*
20,000
*
*
Beneficially owns less than 1%
(1)
All selling stockholders are current or former employees or directors of the Company.
(2)
Indicates total beneficial ownership of Class A and Class B Common Stock in the aggregate.
Where applicable, individual footnote disclosure indicates any holdings of Class B Common Stock
and, unless otherwise indicated, individual footnote disclosures refer to Class A Common Stock.
(3)
Indicates percentage of Class A Common Stock beneficially owned. Where applicable, footnote
disclosure indicates in addition the percentage of combined Class A and Class B Common Stock
beneficially owned in the aggregate.
(4)
The number of shares to be offered represents shares received upon the grant of restricted
stock awards.
(5)
Assumes the sale of all shares representing restricted stock awards offered hereby.
(6)
Includes 13,424 shares owned directly and 150,000 shares issuable upon exercise of stock
options.
(7)
As to Class A Common Stock, includes 8,279,827 shares owned directly, 1,121,457 in trusts or
corporations controlled by Mrs. Brooks, 175,000 shares issuable upon exercise of stock options,
323,000 shares issuable upon exercise of Series X and Y warrants owned directly, and 493,333 shares
issuable upon exercise of Series X and Y warrants owned directly through two corporations
controlled by Mrs. Brooks (Razorback Farms, Inc. and Brooks Investment Company). Also includes, as
to Class B Common Stock, 403,946 shares owned directly by Mrs. Brooks and 433,642 shares owned by
two corporations controlled by Mrs. Brooks (Razorback Farms, Inc. is the record owner of 312,320
shares and Southern Mineral and Fibers, Inc. is the record owner of 121,322 shares, representing
approximately 21.3% and 8.3%, respectively, of the Class B common stock). Excludes additional
shares owned by adult children of Mrs. Brooks, including Joe G. Brooks, Stephen W. Brooks and J.
Douglas Brooks, as to which she disclaims a beneficial interest. Owns 23.0% pre-offering and
post-offering of the combined Class A and Class B Common Stock.
(8)
Includes, as to Class A Common Stock, 116,424 shares owned directly, 2,000 shares owned by Mr.
Burkett as custodian for his minor child, 10,000 shares owned by a partnership controlled by Mr.
Burkett, and 175,000 shares issuable upon exercise of stock options.
(9)
Includes 382,251 shares owned directly, 41,334 shares issuable upon exercise of Series Y
warrants, and 75,000 shares issuable upon exercise of stock options. Owns 1.0% pre-offering and
post-offering of the combined Class A and Class B Common Stock.
(10)
Includes 112,918 shares owned directly, 60,800 shares issuable upon exercise of Series X and
Series Y warrants, and 25,000 shares issuable upon exercise of stock options.
(11)
Includes 745,938 shares owned directly, 100,000 shares issuable upon exercise of stock
options, and 160,000 shares issuable upon exercise of Series X and Series Y warrants. Owns 2.1%
pre-offering and post-offering of the combined Class A and Class B Common Stock.
(12)
Includes 5,256 shares issued pursuant to restricted stock awards and 3,383 shares issuable
upon vesting of restricted
6
Table of Contents
stock awards.
(13)
Represents 32,436 shares owned directly, 66,667 shares in a trust controlled by Ms. Davis,
75,000 shares issuable upon exercise of stock options, and 60,800 shares issuable upon exercise of
Series X and Series Y warrants.
(14)
Issued pursuant to a restricted stock award.
7
Table of Contents
Plan Of Distribution
This prospectus covers the resale of shares of Class A common stock by the selling
stockholders and their pledgees, donees, assignees and other successors in interest (all of whom
may be "selling stockholders"). The selling stockholders may sell their shares on the Nasdaq
Capital Market, in the over-the-counter market or through any other facility on which the shares
are traded, or in private transactions. These sales may be at market prices or at negotiated
prices. The selling stockholders may use the following methods when selling shares:
•
ordinary brokerage transactions and transactions in which the broker or dealer solicits purchasers;
•
block trades in which the broker or dealer attempts to sell the shares
as agent, but may position and resell a portion of the block as
principal to facilitate the transaction;
•
purchases by a broker dealer as principal and resale by the broker
or dealer for its account in connection with this prospectus;
•
privately negotiated transactions;
•
any combination of these methods of sale; or
•
any other legal method.
The selling stockholders may also pledge their shares, enter into put or call options or enter
into other transactions with broker-dealers or others which require delivery to those persons of
shares covered by this prospectus.
Brokers, dealers or other agents participating in the distribution of the shares of Class A
common stock may receive compensation in the form of discounts or commissions from the selling
stockholders, as well as the purchaser if they act as agent for the purchaser. The discount or
commission in a particular transaction could be more than the customary amount. We know of no
existing arrangements between any selling stockholder and any underwriter, broker, dealer or agent
relating to the sale or distribution of the shares.
The selling stockholders and any brokers or dealers that participate in the sale of the shares
may be deemed to be underwriters within the meaning of the Securities Act. Any discounts,
commissions or other compensation received by these persons and any profit on the resale of the
shares by them as principals might be deemed to be underwriters' compensation. The selling
stockholders may agree to indemnify any broker, dealer or agent that participates in the sale of
the shares against various liabilities, including liabilities under the Securities Act.
At the time a particular offer of shares is made, to the extent required we will file a
supplement to this prospectus which identifies the number of shares being offered, the name of the
selling stockholders, the name of any participating broker or dealer, the amount of discounts and
commissions, and any other material information.
The selling stockholders and any other person participating in a distribution will be subject
to the applicable provisions of the Exchange Act and its rules and regulations. For example, the
anti-manipulative provisions of Regulation M may limit the ability of the selling stockholders or
others to engage in stabilizing and other market making activities.
The selling stockholders may also sell their shares in accordance with Rule 144 under the
Securities Act, rather than in connection with this prospectus, so long as they meet the criteria
and conform to the requirements of the rule.
We will not receive any of the proceeds from the sale of the shares by the selling
stockholders. We will pay the registration and other offering expenses related to this offering,
but the selling stockholders will pay all underwriting discounts and brokerage commissions incurred
in connection with the offering.
8
Table of Contents
Legal Matters
Our outside counsel, Akin, Gump, Strauss, Hauer & Feld, L.L.P., San Antonio, Texas has issued
a legal opinion concerning the validity of the shares offered by this prospectus.
Experts
The audited financial statements for the years ended December 31, 2006, 2005, and 2004,
incorporated by reference in this prospectus and elsewhere in the registration statement have been
audited by Tullius Taylor Sartain and Sartain, LLP, independent public accountants, as indicated in
their report with respect thereto, and are included herein in reliance upon the said firm as
experts in accounting and auditing in giving said report.
9
Table of Contents
Where You Can Find More Information
We file annual, quarterly and special reports, proxy statements and other information with the
SEC. You may read and copy any document that we file at the SEC's public reference room at 450
Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to the public at the
SEC's web site at http://www.sec.gov. In addition, reports, proxy statements and other information
concerning us can be inspected and copied at the offices of Nasdaq, Report Section, 1735 K Street,
N.W., Washington, D.C. 20006.
We have filed with the SEC a registration statement on Form S-8 under the Securities Act
covering the shares of Class A common stock to be sold under this prospectus. The SEC permits us to
omit from this prospectus certain information, exhibits, and undertakings contained in the
registration statement.
The SEC allows us to incorporate by reference the information that we file with them, which
means that we can disclose important information to you by referring you to those documents instead
of having to repeat the information in this prospectus. The information incorporated by reference
is considered to be part of this prospectus, and later information that we file with the SEC will
automatically update and supersede this information. We incorporate by reference the documents
listed below and any future filings made with the SEC under sections
13(a)
,
13(c)
, 14 or
15(d)
of
the Securities Exchange Act of 1934 until the selling stockholders sell all the shares.
•
Annual Report on Form 10-K for the fiscal year ended December 31, 2006;
•
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007;
•
Current Reports on Form 8-K filed June 1, 2007, June 13, 2007 and
August 2, 2007; and
•
The description of the Class A Common Stock contained in our
registration statement on Form 8-A, effective November 13, 1989, under
the Securities Exchange Act of 1934 (Registration No. 1-10367),
including any amendment or report filed hereafter for the purpose of
updating such description.
We will provide to each person, including any beneficial owner, to whom a prospectus is
delivered, a copy of any or all of the information that has been incorporated by reference in the
prospectus, at no cost, upon written or oral request to:
Joe G. Brooks, Chairman of the Board
Advanced Environmental Recycling Technologies, Inc.
914 North Jefferson Street (72764)
Post Office Box 1237
Springdale, Arkansas 72765
(479) 756-7400
You should rely only on the information incorporated by reference or provided in this prospectus or
any supplement. We have not authorized anyone else to provide you with different information. The
selling stockholders will not make an offer of these shares in any state where the offer is not
permitted.
This prospectus is part of a registration statement that we filed with the SEC. More information
about the shares sold by the selling stockholders is contained in that registration statement and
the exhibits filed along with the registration statement. You may read and copy the full
registration statement and its exhibits at the SEC'S public reference rooms or their web site.
10
Table of Contents
Disclosure of Commission Position on Indemnification for Securities Act Liabilities
Section 145 of the Delaware General Corporation Law permits us to indemnify directors,
officers, employees or agents against judgments, fines, amounts paid in settlement, and reasonable
costs, expenses and counsel fees paid or incurred in connection with any proceeding, other than an
action by or in the right of us, to which such director, officer or employee or his legal
representative may be a party, provided such director, officer or employee shall have acted in good
faith and shall have reasonably believed (a) in the case of a civil proceeding, that his conduct
was in or not opposed to our best interests, or (b) in the case of a criminal proceeding, that he
had no reasonable cause to believe his conduct was unlawful. In connection with an action by or in
the right of us against a director, officer, employee or agent, we have the power to indemnify such
director, officer, employee or agent for reasonable expenses incurred in connection with such suit
(a) if such person acted in good faith and in a manner not opposed to our best interest, and (b) if
found liable to us, only if ordered by a court of law. Section 145 provides that such section is
not exclusive of any other indemnification rights granted by us to directors, officers, employees
or agents.
Our Certificate of Incorporation provides for mandatory indemnification of directors, officers
and employees to the fullest extent permitted by Section 145, unless we prove that the person
seeking indemnification did not meet the standard set forth above. Our Certificate permits us to
indemnify agents to the extent authorized from time to time by our Board of Directors. The right to
indemnification is a contract right and includes the right to be paid by us the expenses incurred
in defending any such proceeding in advance of its final disposition, provided that the indemnitee
undertakes to repay all amounts so advanced if it is ultimately determined that such indemnitee is
not entitled to be indemnified for such expenses.
Our Certificate of Incorporation also contains a provision eliminating the liability of a
director to us or our stockholders for monetary damages for breach of fiduciary duty as a director,
other than liability for (a) breach of the director's duty of loyalty to us or our stockholders,
(b) acts or omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (c) unlawful payment of a dividend or unlawful stock purchase or redemption, or
(d) any transaction from which the director derived an improper personal benefit.
We also maintain directors and officers liability insurance for the benefit of
our directors and officers.
Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers or persons controlling the registrant pursuant to the foregoing
provisions, we have been informed 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.
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Item 2. Incorporation of Documents by Reference.
The Registrant will
provide to you without charge, upon written or oral request to the person
set forth below, the documents incorporated by reference in Item 3 of Part II of this registration
statement, which are incorporated by reference in the Section 10(a) prospectus. The Registrant
will also provide to you without charge, upon written or oral request to the person set forth
below, any other documents required to be delivered to you pursuant to Rule 428(b):
Joe G. Brooks, Chairman of the Board
Advanced Environmental Recycling Technologies, Inc.
914 North Jefferson Street (72764)
Post Office Box 1237
Springdale, Arkansas 72765
(479) 756-7400
Part II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
The documents
listed below are expressly incorporated by reference in this registration
statement as of the August 24, 2007 date of this registration statement. All documents subsequently
filed by us with the SEC pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange
Act of 1934 prior to the filing of a post-effective amendment to this registration statement that
indicates that all Class A Common Stock to which this registration Statement relates has been sold
or that deregisters all such Class A Common Stock then remaining unsold, shall be deemed to be
incorporated by reference in this registration statement and to be a part hereof from the date of
filing such reports and documents.
The
following documents that we have filed with the SEC are incorporated herein by reference:
(a)
Our annual report on Form 10-K for the year ended December 31, 2006.
(b)
Our quarterly reports on Form 10-Q for the quarters ended March 31, 2007 and June 30, 2007.
(c)
Our current reports on Form 8-K filed on June 1, 2007, June 13, 2007 and August 2, 2007.
(d)
The description of the Class A Common Stock contained in our registration Statement on
Form 8-A, effective November 13, 1989, under the Securities Exchange Act of 1934
(Registration No. 1-10367), including any amendment or report filed hereafter for the
purpose of updating such description.
Item 4. Description of Securities.
Not applicable.
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145
of the Delaware General Corporation Law permits the Registrant to indemnify
directors, officers, employees or agents against judgments, fines, amounts paid in settlement, and
reasonable costs, expenses and counsel fees paid or incurred in connection with any proceeding,
other than an action by or in the right of the Registrant, to which such director, officer or
employee or his legal representative may be a party, provided such director, officer or employee
shall have acted in good faith and shall have reasonably believed (a) in the case of a civil
proceeding, that his conduct was in or not opposed to the best interests of the Registrant, or (b)
in the case of a criminal proceeding, that he had no reasonable cause to believe his conduct was
unlawful. In connection with an action by or in the right of the Registrant against a director,
officer, employee or agent, the Registrant has the power to indemnify such director, officer,
employee or agent for reasonable
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expenses incurred in connection with such suit (a) if such person acted in good faith and in a
manner not opposed to the best interest of the Registrant, and (b) if found liable to the
Registrant, only if ordered by a court of law. Section 145 provides that such section is not
exclusive of any other indemnification rights granted by the Registrant to directors, officers,
employees or agents.
The Certificate of Incorporation of the Registrant provides for mandatory indemnification of
directors, officers and employees to the fullest extent permitted by Section 145, unless the
Registrant proves that the person seeking indemnification did not meet the standard set forth
above. The Certificate permits the Registrant to indemnify agents to the extent authorized from
time to time by the Board of Directors. The right to indemnification is a contract right and
includes the right to be paid by the Registrant the expenses incurred in defending any such
proceeding in advance of its final disposition, provided that the indemnitee undertakes to repay
all amounts so advanced if it is ultimately determined that such indemnitee is not entitled to be
indemnified for such expenses.
The Certificate of Incorporation of the Registrant also contains a provision eliminating the
liability of a director to the Registrant or its stockholders for monetary damages for breach of
fiduciary duty as a director, other than liability for (a) breach of the director's duty of loyalty
to the corporation or its stockholders, (b) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (c) unlawful payment of a dividend or
unlawful stock purchase or redemption, or (d) any transaction from which the director derived an
improper personal benefit.
We also maintain directors and officers liability insurance for the benefit of our directors
and officers.
Item 7. Exemption from Registration Claimed.
All of the restricted securities issued by us to the selling stockholders who are reoffering
and reselling such restricted securities pursuant to this registration Statement were issued in
reliance upon the exemption from registration under Section 4(2) of the Securities Act relating to
sales by an issuer not involving any public offering, or was not subject to registration as not
involving the payment of any consideration for restricted stock awards and so not involving an
offer or sale under applicable law. We believe, due to the nature of the relationship of these
persons to us and the isolated nature of the transactions, that each issuance of the shares of
Class A common stock as restricted stock awards held by such persons was exempt from registration
under the Securities Act as a private placement pursuant to Section 4(2) of that Act or was not
subject to registration as not involving the payment of any consideration for restricted stock
awards and so not involving an offer or sale under applicable law.
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Item 8. Exhibits.
Exhibit No.
Description of Exhibit
4.1
Form of Class A Common Stock Certificate (a)
4.2
2005 Key Associate and Management Equity Incentive Plan (b)
4.3
2005 Non-Employee Director Equity Incentive Plan (b)
5
Opinion of Akin Gump Strauss Hauer & Feld LLP (c)
23.1
Consent of Akin Gump Strauss Hauer & Feld LLP (included in Opinion filed as Exhibit 5)
23.2
Consent of Tullius Taylor Sartain & Sartain LLP (c)
24
Powers of attorney (included in Signature Page, Page 19 of this Registration statement)
(a)
Incorporated by reference to the exhibits to the registration statement on Form S-1 (No.
33-29593) filed November 8, 1989.
(b)
Incorporated by reference to the exhibits to the Registrant's DEF14-A filed July 11, 2005.
(c)
Filed herewith.
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Item 9. Undertakings.
(a)
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 propectus 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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range may
be reflected in the form of prospectus filed with the Commission pursuant to
Rule 424(b) if, in the aggregate, the changes in volume and price represent no
more than 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement.
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:
A.
Paragraphs (a)(1)(i) and (a)(1)(ii) of this
section do not apply if the registration statement is on Form S-8, and
the information required to be included in a post-effective amendment by
those paragraphs is contained in reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by reference
in the registration statement; and
B.
Paragraphs (a)(1)(i), (a)(1)(ii) and (a)(1)(iii)
of this section do not apply if the registration statement is on Form
S-3 or Form F-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in reports
filed with or furnished to the Commission by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934 that
are incorporated by reference in the registration statement, or is
contained in a form of prospectus filed pursuant to Rule 424(b) that is
part of the registration statement.
2.
That, for the purpose of determining any liability under the Securities Act
of 1933, each such post-effective amendment shall be deemed to be a new registration
statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering thereof.
3.
To remove from registration by means of a post-effective amendment any of
the securities being registered which remain unsold at the termination of the
offering.
4.
If the registrant is a foreign private issuer, to file a post-effective
amendment to the registration statement to include any financial statements required
by Item 8.A. of Form 20-F at the start of any delayed offering or throughout a
continuous offering. Financial statements and information otherwise required by
Section 10(a)(3) of the Act need not be furnished,
provided
that the registrant
includes in the prospectus, by means of a post-effective amendment, financial
statements required pursuant to this paragraph (a)(4) and other information necessary
to ensure that all other information in the prospectus is at least as current as the
date of those financial statements. Notwithstanding the foregoing, with respect to
registration statements on Form F-3, a post-effective amendment need not be filed to
include financial statements and information required by Section 10(a)(3) of the Act
or Rule 3-19 of this chapter if such financial statements and information are
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to section 13 or section 15(d) of the Securities Exchange Act of
1934 that are incorporated by reference in the Form F-3.
5.
That, for the purpose of determining liability under the Securities Act of
1933 to any purchaser:
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i.
If the registrant is relying on Rule 430B (230.430B of this
chapter):
A.
Each prospectus filed by the registrant pursuant
to Rule 424(b)(3)shall be deemed to be part of the registration
statement as of the date the filed prospectus was deemed part of and
included in the registration statement; and
B.
Each prospectus required to be filed pursuant to
Rule 424(b)(2), (b)(5), or (b)(7) as part of a registration statement in
reliance on Rule 430B relating to an offering made pursuant to Rule
415(a)(1)(i), (vii), or (x) for the purpose of providing the information
required by section 10(a) of the Securities Act of 1933 shall be deemed
to be part of and included in the registration statement as of the
earlier of the date such form of prospectus is first used after
effectiveness or the date of the first contract of sale of securities in
the offering described in the prospectus. As provided in Rule 430B, for
liability purposes of the issuer and any person that is at that date an
underwriter, such date shall be deemed to be a new effective date of the
registration statement relating to the securities in the registration
statement to which that prospectus relates, and the offering of such
securities at that time shall be deemed to be the initial bona fide
offering thereof. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of
the registration statement will, as to a purchaser with a time of
contract of sale prior to such effective date, supersede or modify any
statement that was made in the registration statement or prospectus that
was part of the registration statement or made in any such document
immediately prior to such effective date; or
ii.
If the registrant is subject to Rule 430C, each prospectus
filed pursuant to Rule 424(b) as part of a registration statement relating to
an offering, other than registration statements relying on Rule 430B or other
than prospectuses filed in reliance on Rule 430A, shall be deemed to be part
of and included in the registration statement as of the date it is first used
after effectiveness. Provided, however, that no statement made in a
registration statement or prospectus that is part of the registration
statement or made in a document incorporated or deemed incorporated by
reference into the registration statement or prospectus that is part of the
registration statement will, as to a purchaser with a time of contract of sale
prior to such first use, supersede or modify any statement that was made in
the registration statement or prospectus that was part of the registration
statement or made in any such document immediately prior to such date of first
use.
6.
That, for the purpose of determining liability of the registrant under the
Securities Act of 1933 to any purchaser in the initial distribution of the
securities: The undersigned registrant undertakes that in a primary offering of
securities of the undersigned registrant pursuant to this registration statement,
regardless of the underwriting method used to sell the securities to the purchaser,
if the securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such purchaser:
i.
Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to Rule 424;
ii.
Any free writing prospectus relating to the offering prepared
by or on behalf of the undersigned registrant or used or referred to by the
undersigned registrant;
iii.
The portion of any other free writing prospectus relating to
the offering containing material information about the undersigned registrant
or its securities provided by or on behalf of the undersigned registrant; and
iv.
Any other communication that is an offer in the offering made
by the undersigned registrant to the purchaser.
7.
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
benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act
of 1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
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securities offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
8.
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 Act and will be
governed by the final adjudication of such issue.
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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-8 and has
duly caused this registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Springdale, State of Arkansas, on
August 24, 2007.
ADVANCED ENVIRONMENTAL RECYCLING TECHNOLOGIES, INC.
/s/ Joe G. Brooks
Joe G. Brooks,
Chairman, Chief Executive Officer and President
/s/ Stephen W. Brooks
Stephen W. Brooks,
Chief Operating Officer
/s/ Bob Thayer
Bob Thayer
Senior Vice President and Chief Financial Officer
/s/ Eric Barnes
Eric Barnes
Controller and Chief Accounting Officer
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POWER OF ATTORNEY
The undersigned directors and officers of Advanced Environmental Recycling Technologies, Inc.
hereby constitute and appoint Joe G. Brooks our true and lawful attorney-in-fact and agent with
full power to execute in our name and behalf in the capacities indicated below any and all
amendments to this registration statement on Form S-8 to be filed with the Securities and Exchange
Commission and hereby ratify and confirm all that such attorney-in-fact and agent shall lawfully do
or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this registration statement has been
signed by the following persons in the capacities and on the date indicated.
Signature
Title
Date
/s/ Joe
G. Brooks
Joe
G. Brooks
Chairman of the board, CEO and President
August 24, 2007
/s/
Stephen
W. Brooks
Stephen
W. Brooks
Vice-chairman of the board and Chief
operating officer
August 24, 2007
/s/
Marjorie
S. Brooks
Marjorie
S. Brooks
Secretary, treasurer and director
August 24, 2007
/s/
Hisao
Sal Miwa
Hisao
Sal Miwa
Director
August 24, 2007
/s/
Jerry
B. Burkett
Jerry
B. Burkett
Director
August 24, 2007
/s/
Michael
M. Tull
Michael
M. Tull
Director
August 24, 2007
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/s/
Melinda
Davis
Melinda
Davis
Director
August 24, 2007
/s/
Jim
Robason
Jim
Robason
Director
August 24, 2007
/s/
Tim
Kizer
Tim
Kizer
Director
August 24, 2007
/s/
Edward
P. Carda
Edward
P. Carda
Director
August 24, 2007
/s/
Peter
S. Lau
Peter
S. Lau
Director
August 24, 2007
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EXHIBIT INDEX
Exhibit No.
Description of Exhibit
4.1
Form of Class A Common Stock Certificate (a)
4.2
2005 Key Associate and Management Equity Incentive Plan (b)
4.3
2005 Non-Employee Director Equity Incentive Plan (b)
5
Opinion of Akin Gump Strauss Hauer & Feld LLP (c)
23.1
Consent of Akin Gump Strauss Hauer & Feld LLP (included in Opinion filed as Exhibit 5)
23.2
Consent of Tullius Taylor Sartain & Sartain LLP (c)
24
Powers of attorney (included in Signature Page, Page 19 of this registration statement)
(a)
Incorporated by reference to the exhibits to the registration statement on Form S-1 (No.
33-29593) filed November 8, 1989.
(b)
Incorporated by reference to the exhibits to the Registrant's DEF14-A filed July 11, 2005.
(c)
Filed herewith.