As filed with the Securities and
Exchange Commission, July 3, 1996
Securities Act File No. 33-90604
Exchange Act File No. 0-24506
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-2 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
DELTA-OMEGA TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Colorado 2842 84-1100774
(State or Other Juris- (Primary Standard (IRS Employer
diction of Incorpo- Industrial Classifi- Identification
ration) cation Code Number) Number)
119 Ida Road
Broussard, Louisiana 70518
(318) 837-3011
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
James V. Janes III, President
119 Ida Road
Broussard, Louisiana 70518
(318) 837-3011
(Name, Address and Telephone Number of Agent for Service)
Copies to:
Roger V. Davidson, Esq.
Cohen Brame & Smith Professional Corporation
1700 Lincoln Street, Suite 1800
Denver, Colorado 80203
(303) 837-8800
Fax (303) 894-0475
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the effective date of this
Registration Statement.
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, check the following box:
[X]
If the registrant elects to deliver its latest annual report
to security holders, or a complete and legible facsimile thereof,
pursuant to Item 11(a)(1) of this Form, check the following box:
[X]
Title of each Class of Common Stock, $0.001 par value (2)
Securities being Registered
Amount being 1,610,000 Shs.
Registered
Proposed $1.25
Maximum Offering
Price Per Share(1)
Proposed Maximum $2,012,500
Aggregate Offering
Price
Amount of $ 693.97
Registration Fee
Title of each Class of Common Stock, $0.001 par value (3)
Securities being Registered
Amount being 1,062,917 Shs.
Registered
Proposed $1.50
Maximum Offering
Price Per Share(1)
Proposed Maximum $1,594,376
Aggregate Offering
Price
Amount of $ 549.78
Registration Fee
Title of each Class of Common Stock, $0.001 par value (4)
Securities being Registered
Amount being 200,000 Shs.
Registered
Proposed $1.00
Maximum Offering
Price Per Share(1)
Proposed Maximum $ 200,000
Aggregate Offering
Price
Amount of $ 68.97
Registration Fee
Title of each Class of Common Stock, $0.001 par value (5)
Securities being Registered
Amount being 150,000 Shs.
Registered
Proposed $1.00
Maximum Offering
Price Per Share(1)
Proposed Maximum $ 150,000
Aggregate Offering
Price
Amount of $ 51.72
Registration Fee
Proposed Maximu
Aggregate Offering
Price
TOTAL . . . . . . $3,956,876
Amount of
Registration Fee
TOTAL . . . . . . $1,364.44 (6)
(1) Estimated solely for the purpose of determining the
registration fee and calculated pursuant to Rule 457(a).
No separate registration fee is required for the warrants
pursuant to Rule 457(g).
(2) Issuable upon conversion of the Series B Convertible
Exchangeable Preferred Shares.
(3) Issuable upon exercise of the Class E Warrants.
(4) Issuable upon exercise of the outstanding Placement Agent
Warrants.
(5) Issuable upon exercise of the Options owned by Fernand Baer.
(6) This Post-Effective Amendment No. 1 results in a decrease in
the Amount of Registration Fee from that set forth in the
original Form S-2 Registration Statement since there has
been a reduction in the number of outstanding Series B
Convertible Exchangeable Preferred Shares, and thus a
reduction in the number of shares of Common Stock issuable
upon conversion of the Series B Convertible Exchangeable
Preferred Shares, from that set forth in the original Form
S-2 Registration Statement. A registration fee of $1,532.54
was paid upon the filing of the original Form S-2
Registration Statement; accordingly, no additional
registration fee is due upon the filing of this
Post-Effective Amendment No. 1.
_________________________
The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
DELTA-OMEGA TECHNOLOGIES, INC.
CROSS REFERENCE SHEET
BETWEEN ITEMS OF FORM S-2 AND PROSPECTUS
Note: The Registrant is a "Small Business Issuer" and pursuant
to Instruction II.C to Form S-2, Registrant has used the
requirements of Regulation S-B instead of Regulation S-K in
preparing this Form S-2.
Item Registration Statement Prospectus
No. Item and Heading Caption
1. Forepart of the Registration Outside Front Cover
Statement and Outside Front Page
Cover Page of Prospectus
2. Inside Front and Outside Inside Front and
Back Cover Pages of Outside Back Cover
Prospectus Pages
3. Summary Information, Risk Prospectus Summary
Factors and Ratio of and Risk Factors
Earnings to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Cover Page; Selling
Offering Price Shareholders; and
Description of Securities
6. Dilution *
7. Selling Security Holders Selling Shareholders
8. Plan of Distribution Plan of
Distribution/Determina-
tion of Offering Price
9. Description of Securities Description of Securi-
to be Registered ties; Plan of
Distribution/Determina-
tion of Offering Price
10. Interests of Named Experts Legal Matters
and Counsel
11. Information with Respect Available Information
to the Registrant
12. Incorporation of Certain Documents Incorporated
Information by by Reference
Reference
13. Disclosure of Commission Indemnification
Position on Indemnification
for Securities Act
Liabilities
* Not applicable or None.
PROSPECTUS
Common Stock
DELTA-OMEGA TECHNOLOGIES, INC.
3,022,917 Shares offered by Selling Shareholders
Certain Selling Shareholders are offering, pursuant to this
Prospectus, up to 3,022,917 shares of Delta-Omega Technologies,
Inc.'s ("Delta-Omega" or the "Company") $.001 par value common
stock (the "Selling Shareholder Shares"), which shares, though
they are being offered by the holders of such Selling Shareholder
Shares, are being registered by the Company on behalf of certain
of its shareholders (the "Selling Shareholders"). Upon the sale
of the Selling Shareholder Shares, the Company will not receive
any of the proceeds from the Selling Shareholder Shares. The
Selling Shareholder Shares consist of the following:
(1) 1,610,000 shares of common stock underlying conversion
rights associated with currently outstanding Series B
Preferred Stock;
(2) 1,262,917 shares of common stock underlying currently
outstanding warrants; and
(3) 150,000 shares underlying an outstanding option. (See
"DESCRIPTION OF SECURITIES.")
The registration statement, of which this Prospectus is a
part, is serving to meet an undertaking made by the Company to
register the resale of the common shares underlying the
conversion rights of the Series B Preferred Stock sold in a
private placement during 1994 and certain other registration
rights.
___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
___________________________
THERE ARE CERTAIN RISKS INVOLVED WITH THE OWNERSHIP OF
THIS COMPANY'S SECURITIES INCLUDING RISKS RELATED TO ITS BUSINESS
AND MARKET FOR ITS SECURITIES. FOR INFORMATION REGARDING CERTAIN
RISKS RELATING TO THE COMPANY, SEE "RISK FACTORS."
__________________________
The Company has been advised by the Selling Shareholders
that they or their successors may sell all or a portion of the
$.001 par value common stock offered hereby from time to time in
the over-the-counter market, if such a market exists, in
privately negotiated transactions, or otherwise, including sales
through or directly to a broker or brokers. Sales will be at
prices and terms then prevailing, if any, or at prices related to
the then current market prices or at negotiated prices. In
connection with any sales, any broker or dealer participating in
such sales may be deemed to be an underwriter within the meaning
of the Securities Act of 1933. (See "PLAN OF DISTRIBUTION.")
The Company will receive no part of the proceeds of such
sales, but will receive funds upon the exercise of the Warrants.
All expenses incurred in connection with this offering, which
expenses are not expected to exceed $12,000, are being borne by
the Company.
The Common Stock of Delta-Omega Technologies, Inc. is traded
"over-the-counter" on the "Bulletin Board" (Symbol: DOTK). On
July 2, 1996, the last sale price of the Company's common
stock was $.78.
The date of this Prospectus is March 31, 1995 as amended
July 3, 1996
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company
under the Securities Exchange Act of 1934 with the Securities and
Exchange Commission (the "Commission") are incorporated herein by
reference.
(1) The Company's Annual Report on Form 10-KSB
for the fiscal year ended August 31, 1995;
and
(2) The Company's Quarterly Reports on Form 10-
QSB for the fiscal quarters ended
November 30, 1995 and February 29, 1996; and
(3) The Company's Current Report on Form 8-K
dated January 31, 1996.
Any statement made in a document incorporated by reference
herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that such statement is replaced
or modified by a statement contained in a subsequently dated
document incorporated by reference or contained in this
Prospectus.
The Company hereby undertakes to provide without charge to
each person to whom a copy of this Prospectus has been delivered,
on the written or oral request of such person, a copy of any or
all of the documents referred to above which have been or may be
incorporated in this Prospectus by reference, other than exhibits
to such documents. Written or oral requests for such copies
should be directed to Marian A. Bourque, Chief Accounting
Officer, Delta-Omega Technologies, Inc., 119 Ida Road, Broussard,
Louisiana 70518; telephone (318) 837-3011.
AVAILABLE INFORMATION
The Company is subject to the informational reporting
requirements of the Securities Act of 1933 (the "Act") and in
accordance therewith files reports, proxy statements and other
information with the Commission. These reports, proxy statements
and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth
Street, N.W., Washington, DC 20549, and the Commission's Regional
Offices at The Chicago Regional Office, Northwest Atrium Center,
500 West Madison Street, Suite 1400, Chicago IL 60661-2511, and
the New York Regional Office, 7 World Trade Center, 12th Floor,
New York, NY 10048. Copies of such materials can also be
obtained from the Public Reference Section of the Commission at
Judicial Plaza, 450 Fifth Street, N.W., Washington, DC 20549, at
prescribed rates.
The Company has filed with the Commission in Washington, DC,
a Registration Statement under the Act, with respect to the
securities offered hereby. This Prospectus does not contain all
of the information set forth in the Registration Statement,
certain parts of which are omitted in accordance with the rules
and regulations of the Commission. For further information with
respect to the Company and the securities offered hereby,
reference is made to the Registration Statement, including the
exhibits and financial statements filed therewith or incorporated
therein by reference. Statements contained in this Prospectus as
to the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to
the copy of such contract or other document filed as an exhibit
to the Registration Statement or incorporated herein by
reference, each statement being qualified in its entirety by such
reference. The Registration Statement, including the exhibits
thereto, may be inspected without charge at the Commission's
principal office in Washington, DC, and copies of any and all
parts thereof may be obtained from such office after payment of
the fees prescribed by the Commission.
ANNUAL AND QUARTERLY REPORTS
This Prospectus is accompanied by a copy of the Company's
Annual Report on Form 10-KSB for the fiscal year ended August 31,
1995, and the Company's Quarterly Reports on Form 10-QSB for the
fiscal quarters ended November 30, 1995 and February 29, 1996, as
filed with the Securities and Exchange Commission.
INDEMNIFICATION
Article X of the Registrant's Articles of Incorporation
provides that the corporation may indemnify each current and
former director, officer, and any employee or agent of the
corporation, his heirs, executors, and administrators, against
expenses reasonably incurred or any amounts paid by him in
connection with any action, suit, or proceeding to which he may
be made a party by reason of his being or having been a director,
officer, employee or agent of the corporation in the same manner
as is provided by the laws of the State of Colorado.
Additionally, to the fullest extent permitted by statute, the
Company has limited the liability of directors from actions filed
by shareholders and other third parties.
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.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the
more detailed information and financial statements (including
notes thereto) incorporated by reference in this Prospectus.
THE COMPANY
Delta-Omega Technologies, Inc. was organized under the laws
of the State of Colorado on December 22, 1988 as Barclay's West,
Inc. In November 1989, the Company acquired, via a Share
Exchange Agreement, all of the outstanding securities of Delta-
Omega Technologies, Ltd. On December 22, 1989, the Company
changed its name from Barclay's West, Inc. to Delta-Omega
Technologies, Inc. to reflect the acquisition.
The Company is engaged in the development, manufacture and
marketing of environmentally safe specialty chemicals for use in
a variety of industrial and military applications. These
products are deemed to be environmentally safe because they are
water-based, non-toxic and biodegradable. These products replace
hazardous, flammable, toxic and ozone depleting chemicals in a
broad range of cleaning and emergency response applications. The
Company has also developed a product to remediate hydrocarbon
contamination from soil and water. The Company is developing
proprietary products that address large markets where there is
limited environmentally safe competition, or little or no
existing products that provide effective performance.
Prior to fiscal 1993, Delta-Omega was a development stage
enterprise whose main objective was to conduct research and
development. By that time, the Company had completed a majority
of the research, development and testing of its products. In
September 1992, the Company assumed an operating status, began
operations in September 1993 and in January 1994 began to build
its core staff of marketing, sales, financial and administrative
personnel.
The Company's offices are located at 119 Ida Road,
Broussard, Louisiana 70518; its telephone number is
(318) 837-3011.
The Offering
Securities Offered by
Selling Shareholders 3,022,917 (1)
Terms of Class E Exercisable for $1.50
Warrants per share until June 15, 1997 with
rights of oversubscription
Terms of Placement Exercisable for $1.00
Agent Warrants per share until October 15, 1999
Terms of Options Exercisable for $.90 per share
until September 15, 1997
Securities Outstanding(2) 12,546,807 Common Shares
1,610,000 Preferred Shares
1,862,917 Warrants
1,952,007 Options
Nasdaq (Bulletin Board) Common Stock: DOTK
Symbol
Use of Proceeds Any net proceeds that the Company
may realize upon the exercise of
the Warrants or Options will be
used for working capital. The
Company will not receive any
proceeds from the sale of common
stock by the Selling Shareholders.
Risk Factors An investment in the securities
offered hereby involves a high
degree of risk, including a lack
of liquidity in the market for
the Company's common stock.
Prospective investors should
review carefully and consider the
factors described in "Risk
Factors."
________________________
(1) Includes shares of common stock underlying the
conversion privileges in the Series B Convertible
Exchangeable Preferred Shares, Warrants and Options.
(2) Unless otherwise indicated, all references in the
Prospectus to per share data and number of shares exclude
1,600,000 shares of common stock issuable upon the exercise of
any options granted or which may be granted under the Company's
1991 Stock Option Plan and 1994 Stock Option Plan. (See
"PRINCIPAL SHAREHOLDERS" and "DESCRIPTION OF SECURITIES.")
RISK FACTORS
These securities involve a high degree of risk. Prospective
purchasers should consider carefully, among other factors set
forth in the Prospectus, the following:
Risk Factors Relating to Business of the Company
1. No Assurance that the Company can Continue as a Going
Concern. The Company has experienced recurring net losses and
negative cash flows from operations since its inception and until
very recently has generated only minimal revenues from sales of
its products and services. As noted in the independent auditors'
report on the financial statements for the fiscal year ended
August 31, 1995, these factors raise substantial doubt about the
Company's ability to continue as a going concern. Ultimately,
the success of the Company is dependent in large part upon the
development of its markets and acceptance of its products,
technology and services, and its ability to overcome the numerous
difficulties, expenses and delays typically associated with a
company developing new technologies, none of which can be
assured. Therefore, investors in this offering risk the loss of
their entire investment if the Company is unable to continue in
operation. (See "FINANCIAL STATEMENTS.")
2. Lack of Market Research Concerning the Company's
Products and Services and Possible Lack of Market Acceptance.
The products and services developed by the Company are innovative
and new to the market and there can be no assurance that such
products and services will be sufficiently accepted. The Company
has not obtained or undertaken any formal market research study
with respect to the establishment of its market areas. The
product mix of the Company is reviewed periodically, and changes
to the product mix offered to the market may vary depending on
market acceptance.
3. Possible Loss of Contracts with Significant Suppliers.
Raw materials for the finished product are procured from a number
of sources to provide flexibility. Although the Company has its
own material blending capability, loss of availability of
contract blending facilities could adversely affect the
operations of the Company until it could replace the lost
manufacturing output with an expansion of its own blending
facilities. Such expansion would require an increase in the
Company's overall capital expenditures.
4. Government Regulation and Industry Specifications. The
Company engages in the development of products and provides
services which may be regulated by, or subject to the
requirements of, various governmental and private agencies,
including the U.S. Environmental Protection Agency and the Food
and Drug Administration, military specifications, military
technical orders, and specific industry standards. Continual
compliance with these requirements is expected to be time-
consuming and expensive. Failure to obtain necessary
governmental approvals may have a material adverse effect upon
the Company's operations. The Company's products are currently
considered to be non-toxic and non-hazardous, and accordingly
unregulated. There can be no assurance, however, that all of the
constituents utilized in the Company's products will remain
excluded as a subject of regulatory guidelines or from lists of
proscribed toxic substances in reportable quantities. In the
event that any of the substances used in the Company's products
becomes the subject of regulatory guidelines or becomes listed as
a toxic substance, the Company could suffer an adverse impact due
to a possible impairment, or total loss, of its perceived
competitive advantage until suitable replacement constituents are
identified and implemented.
5. Limited Patent Protection. Multi-Foam EFFFTM/Haz-
CleanTM and DOT 111/113TM, two of the Company's proprietary
products pertinent to its business operations, are currently
protected by United States Patent Numbers 5,061,383 and
5,308,550, respectively. Patent applications are pending on
Omni-Clean SD and CreoSolv. Applications for trademarks and
trade names are also in progress. However, no assurance can be
given that other entities will not be able to compete with the
Company using similar formulations or processing techniques. To
the best of Management's knowledge, the Company's products and
services do not infringe upon any patents held by others.
6. Limited Marketing Capabilities. The Company has only
limited marketing capabilities and must rely on its own internal
marketing efforts since its prior efforts to utilize large
regional and national independent distributors had only limited
success. The Company is continuing to explore new avenues for
the marketing of its products. The Company may change its
marketing plans in the future if current marketing efforts are
unsuccessful. The success of the Company is directly tied to the
success of its marketing efforts.
7. Product Liability. It is possible that personal
injuries may arise from the use of the Company's products. The
Company currently maintains product liability insurance for
products it develops and sells. However, the Company could be
materially adversely affected by any product liability claims
that may be awarded in excess of policy limits. Management
believes that the likelihood of personal injury is low.
8. Success Dependent on Key Personnel. Success of the
Company depends on the active participation of its President,
James V. Janes, III. The Company has not entered into an
employment agreement with Mr. Janes and the loss of his services
would adversely affect the development of the Company's business
and its likelihood of success. (See "MANAGEMENT.")
9. Lack of Management Experience. Except for it's new
Chairman of the Board of Directors, the Company's management,
although experienced in various phases of business, marketing and
the chemical industry, including product research and
development, has limited experience operating as managers and
executive officers and has only minimal experience in manufactur-
ing and marketing. (See "MANAGEMENT.")
10. Competition. The Company's products are subject to
intense competition from numerous firms currently engaged in
chemical research and product development. Many of these
companies are substantially larger than the Company and have
substantially greater resources, operating histories and
experience. There can be no assurance that the Company will be
able to compete successfully with these other companies or
achieve profitable operations.
Risk Factors Relating to this Offering
1. Absence of Public Market for Company's Securities.
Although there presently exists a sporadic, limited market for
the Company's common stock, there can be no assurance that any
market can be sustained. The investment community could show
little or no interest in the Company in the future. As a result,
purchasers of the Company's common stock may have difficulty in
reselling such securities should they desire to do so.
2. Potential Material Adverse Effect On Company's
Securities Resulting From Penny Stock Regulations. Due to
certain regulations promulgated by the Securities and Exchange
Commission pertaining to penny stocks, which regulations define a
penny stock to be any equity security that has a market price (as
defined) of less than $5.00 per share subject to certain
exceptions, and the fact that the Company's common stock could be
subject to these regulations, the liquidity of the Company's
securities could be materially adversely affected. Such material
adverse effects could include, among other things, impaired
liquidity with respect to the Company's securities, and
burdensome transactional requirements (including, but not limited
to, waiting periods, account and activity reviews, disclosure of
additional personal financial information and substantial written
documentation) associated with transactions in the Company's
securities.
3. Offering Price was Arbitrarily Determined. The
offering price is likely the market price in the over-the-counter
market. There is no direct relationship between the offering
price and the Company's assets, book value, shareholders' equity
or any other recognized criterion of value.
4. Dividends. No dividends have been paid on the Common
Stock since inception and none are contemplated at any time in
the foreseeable future. Seven percent cumulative annual
dividends are payable on the Series B Convertible Exchangeable
Preferred Stock. Further, seven percent cumulative annual
dividends are payable on the Series C Convertible Voting
Preferred Stock being offered by the Company in a private
placement. All dividends on issued and outstanding series of
preferred stock have been paid in the form of restricted shares
of common stock pursuant to the authority granted the Company's
Board of Directors in the pertinent designation of rights and
preferences. Unless and until the Company is profitable, it is
unlikely that it will pay dividends in cash. (See "DESCRIPTION
OF SECURITIES.")
RECENT DEVELOPMENTS
Reference should also be made to the Company's Quarterly
Reports on Form 10-QSB for the quarters ended November 30, 1995
and February 29, 1996, for discussion of the termination of the
acquisition of Tuboscope Vetco Environmental Services, Inc. and
of the granting of options and warrants to Larry G. Schafran, the
new Chairman of the Board.
Changes in Management
During January 1996, the Board of Directors appointed two
new directors, Larry G. Schafran and David H. Peipers. Both Mr.
Schafran and Mr. Peipers and/or their families have been long-
term investors in Delta-Omega Technologies Ltd. and agreed to
come on board at the request of the Board of Directors. One
of the Company's former directors, Michael A. Bruce elected not
to stand for re-election and Donald P. Carlin stepped down as
Chairman and was replaced by Mr. Schafran. At the annual
directors meeting, James V. Janes III, a director since 1989, was
elected President and Chief Executive Officer. In conjunction
with these changes, Messrs. Carlin and Brown returned 250,000 and
436,000 options respectively which were previously granted to
them.
During February 1996, the Company's former chief financial
officer and secretary, Brian Hebert resigned to join Mr. Carlin
in his private businesses and Marian A. Bourque, C.P.A., who was
Mr. Hebert's assistant, was appointed as Chief Financial Officer
and Secretary.
As a result of these management changes and other factors,
the Company is not actively pursuing participation as a service
company in the soil washing business. It will continue to market
chemical products and other services to this business segment.
UL Listing
During February 1996, the Company received two (2) UL
listings for its firefighting foams marketed under the tradename
VulcanTM. While sales of the firefighting foam products have
steadily increased over the years, the Company's marketing
efforts were hampered by its lack of UL listings. As a result of
the Company's firefighting foam's unique properties which did not
fit into any previous UL category, the Company was required to
spend several years developing the VulcanTM series of foam
concentrates and over $200,000 conforming to the listing
procedures and completing the testing process required for
Underwriters' Laboratories to allow Vulcan'sTM inclusion in the
UL listings.
Liquidity and Capital Resources
During the second quarter of fiscal 1996, the Company
determined to raise up to a total of $1.5 million pursuant to a
private placement solely to accredited investors. As an interim
measure to improve liquidity, the Company borrowed approximately
$165,000 from three of its directors which sum is to be either
converted to units of the private placement or reimbursed from
the proceeds thereof. As of the date of this Prospectus, the
private placement has not closed.
Management believes, although no assurances can be made,
that the Company will be successful in its efforts to raise
sufficient funds from the private placement or from other
borrowings from directors to maintain its current level of
operations. If the Company is unable to raise these funds, the
Company would be required to curtail or cease operations and/or
sell certain of its properties to attempt to satisfy its
obligations.
Government Contract for DOT 111/113TM
On May 17, 1996, the Company announced the award of its
first major contract to supply the United States military forces
with DOT 111/113TM to be utilized for cleaning military aircraft
and aerospace ground equipment. The one-year contract provides
for an optional two-year extension and has a total estimated
minimum sales value of approximately $500,000 annually. This
award will have a material positive impact on the Company's
liquidity once receivables become due, which management estimates
will occur during the month of July, 1996. Shipments have
commenced pursuant to the terms of this contract.
USE OF PROCEEDS
Any net proceeds that the Company may realize upon the
exercise of the Warrants or Options will be used for working
capital.
The Company will not receive any proceeds from the sale of
the common stock by the Selling Shareholders.
DIVIDEND POLICY
The Company has not paid cash dividends since its inception.
The Company does not anticipate paying any cash dividends on its
common stock in the foreseeable future. The payment of future
dividends on the common stock will be at the discretion of the
Board of Directors of the Company and will depend upon, among
other things, the Company's earnings, capital requirements,
financial condition and restrictions contained in loan
agreements, if any.
Seven percent cumulative annual dividends are payable on the
Series B Convertible Exchangeable Preferred Stock. Further,
seven percent cumulative annual dividends are payable on the
Series C Convertible Voting Preferred Stock being offered by the
Company in a private placement. All dividends on issued and
outstanding series of preferred stock have been paid in the form
of restricted shares of common stock pursuant to the authority
granted the Company's Board of Directors in the pertinent
designation of rights and preferences. Unless and until the
Company is profitable, it is unlikely that it will pay dividends
in cash. (See "DESCRIPTION OF SECURITIES.")
MANAGEMENT
The executive officers and directors of the Company and
their ages and positions with the Company or its subsidiaries are
as follows:
Period from
Name Age Position Which Served
L. G. Schafran 57 Chairman of the 01/96
Board
James V. Janes,
III 48 President, CEO and 10/89
Director
Donald P. Carlin 37 Director 10/90
Richard A. Brown 48 Director 10/90
David H. Peipers 39 Director 01/96
Marian A. Bourque 35 Chief Financial 04/96
and Accounting
Officer, Secretary
and Treasurer
The Company has no knowledge of any arrangement or
understanding in existence between any executive officer named
above and any other person pursuant to which any such executive
officer was or is to be elected to such office or offices. All
officers of the Company serve at the pleasure of the Board of
Directors. No family relationship exists among the directors or
executive officers of the Company. All Officers of the Company
will hold office until the next Annual Meeting of the Company's
shareholders. There is no person who is not a designated Officer
who is expected to make any significant contribution to the
business of the Company.
L. G. Schafran -- Chairman of the Board of Directors. Chairman
of the Board of Directors of the Company since February 1996, Mr.
Schafran is currently a Director and Chairman of the Executive
Committee of Dart Group Corporation and its two principal
affiliates, Trak Auto Corporation and Crown Books Corporation.
Mr. Schafran is also a Director or Trustee of Capsure Holdings
Corp., Glasstech, Inc., National Income Realty Trust, Oxigene,
Inc. and Publicker Industries, Inc. Mr. Schafran earned a B.B.A.
from the University of Wisconsin in 1960 and a M.B.A. also from
the University of Wisconsin in 1961.
Donald P. Carlin -- Director. A Director of the Company since
October 1990, Mr. Carlin has been a director of Oxigene, Inc., a
publicly held company involved in cancer research, since 1992.
Since 1982, Mr. Carlin has been Chief Executive Officer and a
principal shareholder of the Moores Companies, a group of South
Louisiana companies in the oil field service and real estate
industries. Mr. Carlin earned a B.S. degree from the University
of Southwestern Louisiana in 1981.
Richard A. Brown -- Director. A Director of the Company since
October 1990, and Chairman of the Board from 1991 to 1995, Mr.
Brown has been the sole proprietor of the venture capital firm
Eagle Ventures since 1989. Mr. Brown has been a Director of
Oxigene, Inc. a publicly held company involved in cancer
research, since 1988 and a Director of Angiosonics, Inc., a
company involved with cardiac intervention devices, since 1992.
From 1986 until 1989, Mr. Brown was President of Eagle Financial
Group, Inc., a venture capital and investment banking firm.
Prior to 1986, Mr. Brown was engaged in the financing and
analysis of development stage companies involved in medical
electronic technology. Mr. Brown earned a B.A. degree from
Hamilton College in 1970.
James V. Janes, III, -- Director and President. A Director of
the Company since February 1990, and President since December
1995, Mr. Janes was General Manager of Delta-Omega Technologies,
Ltd., the Company's wholly owned subsidiary, from November 1989
to December 1990. From 1977 to 1989, Mr. Janes was President of
Janes Industries, Inc., a Louisiana corporation licensed as a
general contractor. Mr. Janes has also served on the boards of
directors of Southland Federal Savings Bank, Opelousas, Louisiana
since 1986, and St. Landry Home Builders Association, Opelousas,
Louisiana since 1983. Mr. Janes served in the U.S. Air Force,
earning the Distinguished Flying Cross, and between 1973 and 1977
was an instructor and evaluator with the 58th TAC Fighter
Squadron at Eglin Air Force Base in Florida. Mr. Janes earned a
B.S. from Northwestern State University in 1970.
Michael R. Bruce -- Director. A Director of the Company since
June 1991, Mr. Bruce has been President of American Asset
Management, a New York investment advisory firm, since October
1993. Mr. Bruce was a principal of Johnston Bruce Asset
Management, New York, from 1989 through 1993. From 1984 through
1989, Mr. Bruce was a partner of Adler and Shaykin, a private
investment partnership, and from 1981 through 1984, he was Vice
President of Eberstadt Asset Management where specialty chemical
company analysis and investment was a principal activity. Mr.
Bruce earned a B.A. from Hamilton College in 1969.
David H. Peipers -- Director. A Director of the Company since
February 1996, Mr. Peipers is a co-founder and Chairman of
Bedminster Bioconversion Corporation, a private company which
designs and develops large scale composting facilities for the
treatment of organic waste streams. He is also an active private
investor in and director of various companies, including Segrets,
Inc., Cyto Ltd., and SK Technologies. Mr. Peipers earned an A.B.
from Harvard College in 1978 and a J.D. from Harvard Law School
in 1981.
Marian A. Bourque -- Chief Financial and Accounting Officer,
Secretary and Treasurer. Chief Financial and Accounting Officer,
Secretary and Treasurer of the Company since April 1996, Ms.
Bourque was Controller of the Company from December 1994 to April
1996. Her past associations include Broussard, Poche, Lewis and
Breaux CPA Firm, where she was active in the Management Advisory
Department and Adobe Oil & Gas, where she was the Accounts
Payable Supervisor. Ms. Bourque, a Certified Public Accountant,
earned a B.S. in Accounting from the University of Southwestern
Louisiana in 1993.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of June 30, 1996,
the common stock ownership of each person known by the Company to
be the beneficial owner of five percent or more of the Company's
securities, and all Directors and Officers of the Company
individually and as a group. Except as noted, each person has
sole voting and investment power with respect to the shares
shown.
Amount of
Beneficial Ownership
Series B
Name and Address Common Preferred Percent of
of Beneficial Owner Stock(1) Stock (2) Class(1)
Richard A. Brown(3) 754,344 -0- 5.95%
P.O. Box 8706 Record and
Longboat Key, FL 34228 Beneficial
Donald P. Carlin(4) 1,231,686 25,000 9.88%
P.O. Box 51808 Record and
Lafayette, La. 70505 Beneficial
James V. Janes, III(5) 598,538 -0- 4.69%
231 Charlie Drive Record and
Opelousas, La. 70570 Beneficial
L.G. Schafran(7) 600,000 -0- 4.56%
54 Riverside Drive, Record and
Unit 14B Beneficial
New York, NY 10024
The Crossroads 1,562,538 50,000 12.78%
Limited Partnership(8) Record and
c/o Peipers & Co., Inc. Beneficial
610 5th Avenue, Unit 605
New York, NY 10020
Moores Pump & 1,052,328 -0- 8.29%
Supply, Inc.(9) Record and
P.O. Box 51808 Beneficial
Lafayette, La. 70505
David H. Peipers(10) 1,562,538 50,000 12.78%
6 Tenth Avenue, #605
New York, NY 10020
Marian A. Bourque -0- -0- 0%
P.O. Box 81518
Lafayette, La. 70598-1518
Vernon Taylor(11) 1,236,832 500,000 13.31%
1670 Denver Club Bldg.
Denver, CO 80202
All Directors(12) 4,747,106 75,000 37.84%
and Officers Record and
as a Group Beneficial
(Six Persons)
(1) Except as noted below in this footnote, calculations assume
exercise and conversion of all new warrants, options and
preferred stock conversion rights into the underlying shares
of common stock. All common and preferred shares held by
the Officers, Directors and Principal Shareholders listed
above are "restricted securities" and as such are subject to
limitations on resale. The shares may be sold pursuant to
Rule 144 under certain circumstances.
Rule 13d-3 under the Securities Exchange Act of 1934, which
governs the determination of beneficial ownership of
securities, includes as beneficial owners of securities (i)
any person who, directly or indirectly, through any
contract, arrangement, understanding, relationship or
otherwise, has, or shares, voting power and/or investment
power with respect to such securities, and (ii) any person
who has the right to acquire beneficial ownership of such
securities within sixty days through means including, but
not limited to, the exercise of any option, warrant or
conversion of a security. Any securities not outstanding
which are subject to such options, warrants or conversion
privileges shall be deemed to be outstanding for the purpose
of computing the percentage of outstanding securities of the
class owned by such person, but shall not be deemed to be
outstanding for the purpose of computing the percentage of
the class by any other person.
(2) The amounts shown for preferred stock ownership are
expressed in terms of the number of shares of common stock
into which the preferred shares are convertible.
(3) Mr. Brown owns 551,526 shares of common stock and warrants
to purchase 117,802 shares of common stock. Mr. Brown could
be considered the beneficial owner of 66,680 shares of
common stock and 6,670 shares of common stock underlying
warrants held in a custodial account for his son, Alexander
J. Brown, and 11,666 shares of common stock held by Quando
Partnership, of which Mr. Brown has a 1/6 partnership
interest.
(4) Mr. Carlin owns 156,696 shares of common stock, warrants to
purchase 10,015 shares of common stock and options to
purchase 137,000 shares of common stock. Mr. Carlin could
be considered a beneficial owner of 21,358 shares of common
stock and 25,000 shares of preferred stock held by his wife,
Bonnie Carlin, 10,000 shares of common stock held by his
daughter, Claire Carlin and 10,000 shares of common stock
held by his son, Christopher Carlin. Mr. Carlin could also
be considered a beneficial owner of 748,617 shares of common
stock held by Moores Pump & Supply, Inc. of which Mr. Carlin
is a principal shareholder. Mr. Carlin could also be
considered a beneficial owner of 128,000 shares of common
stock owned by C & M Land Account, of which Mr. Carlin is a
principal shareholder and director.
(5) Mr. Janes owns 302,858 shares of common stock and options to
purchase 221,500 shares of common stock. He could be
considered a beneficial owner of 67,220 common shares held
in joint tenancy with his wife and 6,960 common shares held
in joint tenancy with his mother. Mr. Janes owns no
preferred shares.
(6) Mr. Schafran owns options to purchase 600,000 shares of
common stock. Mr. Schafran's wife owns 88,000 shares of
common stock and 25,000 shares of preferred stock. Mr.
Schafran disclaims beneficial ownership of the stock owned
by his wife.
(7) The Crossroads Limited Partnership owns 1,408,368 common
shares and warrants to purchase 20,000 shares of common
stock. Crossroads can be considered a beneficial owner of
131,403 shares of common stock held by David Peipers, its
General Partner and 2,767 shares of common stock and 50,000
preferred shares held by Cornerhouse Partners, an affiliate
of Crossroads.
(8) Moores Pump and Supply, Inc. is an entity of which Donald P.
Carlin is a principal shareholder and director. Moores owns
748,617 shares of common stock. Moores could be considered
a beneficial owner of 156,696 shares of common stock,
warrants to purchase 10,015 shares of common stock and
options to purchase 137,000 shares of common stock owned by
Mr. Carlin.
(9) David H. Peipers owns 131,403 common shares. Mr. Peipers
could be considered a beneficial owner of 1,408,368 shares
of common stock and warrants to purchase 20,000 shares of
common stock held by The Crossroads Limited Partnership, of
which Mr. Peipers is General Partner, and 2,767 shares of
common stock and 50,000 preferred shares held by Cornerhouse
Partners, an affiliate of Crossroads.
(10) Mr. Taylor owns 497,229 shares of common stock and 100,000
shares of preferred stock. Mr. Taylor could be considered
beneficial owner of 435,000 shares of common stock held by a
family member, 284,000 shares of common stock held by a
corporation for which Mr. Taylor is an officer and 20,603
shares of common stock and 400,000 shares of preferred stock
held by the Ruth and Vernon Taylor Foundation for which Mr.
Taylor is trustee.
(11) All Directors, Officers and Principal Shareholder as a Group
(Eight Persons) own of record and beneficially 4,870,951
common shares, 75,000 preferred shares, warrants to
purchase 154,487 shares of common stock and options to
purchase 958,500 shares of common stock.
SELLING SHAREHOLDERS
The following table shows for the Selling Shareholders
(i) the number and percentage of common shares of the Company
beneficially owned by them as of April 30, 1996, and (ii) the
number of common shares covered by this Prospectus. In each case
the table assumes the (i) conversion of the preferred stock to
common stock, and (ii) the exercise of the Class E Warrants and
the Placement Agent Warrants to common stock.
(a) Selling Shareholder Shares Underlying Series B
Preferred Stock
Number Number
of of
Common Common Number
Shares Shares of Percent
Benefi- Covered Shares of Class
Selling cially By This Owned After If Over
Shareholders Owned Prospectus Offering 1%
Allen & Company
Incorporated* 543,617 250,000 293,617 2.34%
Baer, Fernand B. 334,564 15,000 319,564 2.55%
Jr.
Balestra Capital
Partners 157,993 150,000 7,993
Bender, Susan J. 104,592 100,000 4,592
Brown, JoAnn (1)* 117,209 10,000 107,209
Brown, JoAnn C/F
Alexander J. Brown,
a minor (2)* 10,000 10,000 -0-
Carlin, Bonnie (3) 26,358 25,000 1,358
The Cornerhouse
Limited Partner-
ship 52,767 50,000 2,767
Cuskley, Kevin P. 26,148 25,000 1,148
Hebert, Bria 30,000 15,000 15,000
Hebert, Brian Sr. 15,961 5,700 10,261
Hocker, Richard 52,296 50,000 2,296
LeBlanc, Michelle M. 6,800 4,300 2,500
Levy, Frank 62,347 50,000 12,347
Miller, Mark
Timothy* 162,057 50,000 112,057
Morris Lobel &
Sons, Inc. 157,813 150,000 7,813
Schafran, Lynn* 91,500 25,000 66,500
The Ruth & Vernon
Taylor Foundation 420,603 400,000 20,603
Taylor, Vernon Jr. 104,729 100,000 4,729
Trapp, Peter 26,169 25,000 1,169
Universal Partners,
L.P. 26,122 25,000 1,122
Wight Investment
Partners 36,949 35,000 1,949
Worthington,
Lucinda 41,796 40,000 1,796
(b) Selling Shareholders Shares Underlying Class E Warrants
Number Number
of of
Common Common Number
Shares Shares of Percent
Benefi- Covered Shares of Class
Selling cially By This Owned After If Over
Shareholders Owned Prospectus Offering 1%
Aboudi, Joseph and
Lillian 8,148 4,445 3,703
Allen & Company,
Inc.* 65,912 44,445 21,467
Baer & Company 85,990 15,330 70,660
Baer, F. B. 15,000 5,000 10,000
Baer, Fernand B.
Jr.* 194,458 34,458 160,000 1.28%
Bear Stearns
Securities Corp. 38,173 38,173 -0-
Bergeaux, Gerald 2,833 333 2,500
Bernard, Allen P. 10,015 10,015 -0-
Brown, JoAnn
F.(1)* 113,876 6,667 107,209
Brown, JoAnn F.
C/F Alexander J.
Brown, a minor* 70,850 6,670 64,180
Brown, Richard A. 747,674 117,802 629,872 5.02%
Bruce, Michael R.
and Sandra S. 159,112 8,445 150,667
Bucchi, Phillip R.
and Edith A. 1,000 1,000 -0-
Carcano, Felix 160,801 160,801 -0-
Carlin, Donald
P. 1,231,686 10,015 1,221,671 9.74%
Cede & Co. 5,635,799 1 5,635,798 44.92%
Chehebar, Joey 4,074 2,223 1,851
Churchill
Associates, L.P. 2 1 1
Copeland, Alfred
T. Jr. 1 1 -0-
Datrix Corp. 167,500 167,500 -0-
The Crossroads
Limited
Partners and
David Peipers 1,546,780 4,242 1,542,538 12.29%
The Crossroads
Limited
Partnership 15,758 15,758 -0-
Ari Dani Corp. 10,184 5,556 4,628
Deutschmann, Jacob
H. 15,501 15,501 -0-
Edwards, Perrin D.
and Anne I.
Gines 5,001 5,001 -0-
Esses, Sara 8,519 2,223 6,296
Finsilver, Joan 4,074 2,223 1,851
Forwand, Barry 12,778 3,334 9,444
Giles, Edward M. 8,889 8,889 -0-
Goldstein, Walter
and Batya 43,704 4,445 39,259
Groo, A.
Lawrence* 69,363 1,393 67,970
Herzog Heine
Geduld, Inc 50,001 50,001 -0-
Jeffrey, John B. 1,100 100 1,000
Jeffrey, Richard
R. 36,253 7,023 29,230
Jeffrey, Robert
C. 1,300 100 1,200
Johnston, Richard 8,223 8,223 -0-
Kavouras, Thomas
and Lulu 8,519 2,223 6,296
Khermouch, Sherrie
and Raymond 1 1 -0-
Kleinhandler,
Naomi 21,853 2,223 19,630
Klotz, Jeffrey
and Elizabeth 3,001 2,223 778
Lehmann, Aaron 24,000 4,000 20,000
Lewco Securities
Corp. 19,000 19,000 -0-
Ciera Limited 17,407 2,223 19,630
Lobel, David 10,001 3,334 6,667
Lobel, Stanley 46,848 8,886 37,962
McDonald, William
D. and Carol F. 87,034 11,111 75,923
McNeely, Loren 1,667 1,667 -0-
Middlegate
Securities,
Ltd. 37,750 37,750 -0-
Miller, Mark
Timothy* 118,777 6,720 112,057
Mizrahi, David 4,074 2,223 1,851
Murphy, Robert
M. 2 1 1
Ostrofsky,
Steven 45,008 5,003 40,005
Quigley, John G. 2,223 2,223 -0-
First River Road
Corp. 1 1 -0-
Roob Peck McCooey
Clearing Corp. 16,667 16,667 -0-
Rutberg, Fredric
D. and Philip F.
Heller 24,505 1,502 23,003
Samberg, Arthur
J. 69,628 8,889 60,739
Schafran, Lynn
Hecht* 31,390 9,890 21,500
Scheer, Perry
J. 18,217 16,467 1,750
Smith Barney,
Inc. 22,501 22,501 -0-
Spear Leeds &
Kellogg 5,500 5,500 -0-
Tawil, Joseph
and Ruth 8,148 4,445 3,703
Terzi, Ronald and
Esther 4,074 2,223 1,851
Tosyd, Inc. 4,873 4,500 373
Trask, Robert W. 835 835 -0-
Travis, Brian A.
and Joanne
Carcano 71,500 47,500 24,000
Travis, Brian and
Joanne Carcano 39,698 37,198 2,500
Travis, Dorothy
and Brian 6,651 6,651 -0-
(c) Shares Underlying Placement Agent Warrants
Number Number
of of
Common Common Number
Shares Shares of Percent
Benefi- Covered Shares of Class
Selling cially By This Owned After If Over
Shareholders Owned Prospectus Offering 1%
Gilford
Securities,
Inc. 100,000 100,000 -0-
FBB Corp.(4)* 100,000 100,000 -0-
(d) Shares Underlying Options
Number Number
of of
Common Common Number
Shares Shares of Percent
Benefi- Covered Shares of Class
Selling cially By This Owned After If Over
Shareholders Owned Prospectus Offering 1%
FBB Corp.(4)* 150,000 150,000 -0-
* These shareholders are listed in more than one Selling
Shareholder section.
(1) Wife of Richard Brown, a Director. Ms. Brown disclaims any
beneficial ownership of the shares held by Richard Brown.
(2) Son of Richard Brown, a Director.
(3) Wife of Donald J. Carlin, a Director.
(4) A corporation controlled by Fernand B. Baer.
Information set forth in the tables regarding the securities
owned by each Selling Shareholder is provided to the best
knowledge of the Company based on information furnished to the
Company by the respective Selling Shareholder and/or available to
the Company through its stock transfer records. No Selling
Shareholder is obligated to sell his or her shares.
PLAN OF DISTRIBUTION/DETERMINATION OF OFFERING PRICE
The common stock offered hereby may be sold by the Selling
Shareholders or by pledgees, donees, transferees or other
successors-in-interest (including sales after exercise of
warrants). Such sales may be made in the over-the-counter
market, in privately negotiated transactions, or otherwise, at
prices and at terms then prevailing, at prices related to the
then current market prices or at negotiated prices. The common
stock may be sold by one or more of the following methods: (a) a
block trade in which the broker or dealer so engaged will attempt
to sell the common stock as agent, but may position and resell a
portion of the block as principal in order to consummate the
transaction; (b) a purchase by a broker or dealer as principal,
and the resale by such broker or dealer for its account pursuant
to this Prospectus, including resale to another broker or dealer;
or (c) ordinary brokerage transactions and transactions in which
the broker solicits purchasers. In effecting sales, brokers or
dealers engaged by a Selling Shareholder may arrange for other
brokers or dealers to participate. Any such brokers or dealers
will receive commissions or discounts from a Selling Shareholder
in amounts to be negotiated immediately prior to the sale. Such
brokers or dealers and any other participating brokers or dealers
may be deemed to be "underwriters" within the meaning of the
Securities Act of 1933, as amended. Any gain realized by such a
broker or dealer on the sale of shares which it purchases as a
principal may be deemed to be compensation to the broker or
dealer in addition to any commission paid to the broker by a
Selling Shareholder.
The securities covered by this Prospectus may be sold under
Rule 144 instead of under this Prospectus. None of the common
stock currently qualifies for sale under Rule 144. In general,
under Rule 144, "restricted securities" may be sold after a two-
year holding period in ordinary market transactions through a
broker or with a market maker subject to volume limitations as
follows: within any three-month period, a number of shares may
be sold which does not exceed the greater of 1% of the number of
outstanding shares of Common Stock or the average of the weekly
trading volume of the Common Stock during the four calendar weeks
prior to such sale. Sales under Rule 144 require the filing of a
Form 144 with the Securities and Exchange Commission. However,
if the shares have been held for more than three years by a
person who is not an "affiliate", there is no limitation on the
manner of sale or the volume of shares that may be sold and no
such filing is required. The Company will not receive any
portion of the proceeds of the securities sold by the Selling
Shareholders, but will receive amounts upon exercise of Warrants,
if any are exercised, which funds will be used for working
capital. There is no assurance that the Selling Shareholders
will sell any or all of the common stock offered hereby.
The Selling Shareholders have been advised by the Company
that during the time each is engaged in distribution of the
securities covered by this Prospectus, each must comply with
Rules 10b-5 and 10b-6 under the Securities Exchange Act of 1934,
as amended, and pursuant thereto: (i) each must not engage in
any stabilization activity in connection with the Company's
securities; (ii) each must furnish each broker through which
securities covered by this Prospectus may be offered the number
of copies of this Prospectus which are required by each broker;
and (iii) each must not bid for or purchase any securities of the
Company or attempt to induce any person to purchase any of the
Company's securities other than as permitted under the Securities
Exchange Act of 1934, as amended. Any Selling Shareholders who
may be "affiliated purchasers" of the Company as defined in
Rule 10b-6, have been further advised that pursuant to Securities
Exchange Act Release 34-23611 (September 11, 1986), they must
coordinate their sales under this Prospectus with each other and
the Company for purposes of Rule 10b-6.
DESCRIPTION OF SECURITIES
Common Stock
The authorized common stock of the Company consists of
100,000,000 shares of $.001 par value common stock. All shares
have equal voting rights, one vote per share, and are not assess-
able. Voting rights are not cumulative; therefore, the holders
of more than 50% of the common stock of the Company could, if
they chose to do so, elect all the Directors.
Upon liquidation, dissolution or winding up of the Company,
the assets of the Company, after satisfaction of all liabilities
and distribution to preferred shareholders, if any, will be
distributed pro rata to the holders of the common stock. The
holders of the common stock do not have preemptive rights to
subscribe for any securities of the Company and have no right to
require the Company to redeem or purchase their shares. The
shares of common stock presently outstanding are, and the shares
of common stock to be sold pursuant to this offering will be,
upon issuance, fully paid and non-assessable.
Holders of common stock are entitled to dividends, when and
if declared by the Board of Directors of the Company, out of
funds legally available therefor. The Company has not paid any
cash dividends on its common stock, and it is unlikely that any
such dividends will be declared in the foreseeable future.
Preferred Stock
The authorized preferred stock of the Company consists of
40,000,000 shares at $.001 par value per share. The preferred
stock is voting and may be issued in series as determined by the
Board of Directors. As is required by law, each series must
designate the number of shares in the series and each share of a
series must have identical rights of (1) dividend, (2)
redemption, (3) rights in liquidation, (4) sinking fund
provisions for the redemption of shares, and (5) terms of
conversion.
Series B Convertible Exchangeable Preferred Stock
The Series B Convertible Exchangeable Preferred Stock is
from a designated series of the Company's authorized voting
preferred stock. The Series was sold for $1.00 per share, and
has an established declared dividend of $.07 per annum per share,
due on the 30th day of June of each year. The dividend
accumulates if not paid when due. The dividend may be paid in
cash or in stock at the sole discretion of the Board of
Directors. If paid in stock, the common shares issued will be
valued at the average bid price for the 30 days preceding the
June 30 payment date. Once the price per share of common stock
is determined, a number of common shares equal to the total
dollar value of the dividend which was to be paid on June 30 will
be issued, with any fractional shares of the common stock
dividend rounded up.
Call Provision
At any time on or after June 30, 1996, and before June 30,
1999, the Company at its sole option may call the Series B
Preferred for redemption at a redemption price of $1.00 per share
plus accumulated unpaid dividends. The call shall provide for
written notice of not less than 30 nor more than 60 days of the
proposed redemption date during which call period the Series B
holder may either exercise his conversion rights as discussed
below and convert each share of Series B Preferred to one share
of common stock, or at the expiration of the call period his
rights as a shareholder shall expire upon receipt of the
redemption price.
Conversion Rights
The holder of any shares of this Series B Preferred at his
sole option may, at any time until June 30, 1999 (subject to the
call provision), convert any or all of the shares of the Series B
Preferred Stock held by him into one fully paid and non-
assessable share of the Company's $.001 par value common stock
for each share of Series B Preferred Stock converted.
Accordingly, assuming all dividends have been paid, the 2,000,000
shares of Series B Preferred Stock offered herein may be
converted to an equal number of common shares. After June 30,
1999, all rights of conversion cease. The conversion rate is
subject to adjustments for such things as stock dividends, stock
splits, and reclassifications in the normal course.
Exchange Rights
At the sole option of the Company on any dividend payment
date on or after June 30, 1995 and before June 30, 1999, it may
exchange for the Series B Preferred Stock in whole for the
Company's secured promissory note which bears interest at 8% per
annum, and is payable in equal quarterly installments of
principal and interest payable on September 30, December 31,
March 31, and June 30 of each year with the note due in full on
or before June 30, 1999.
This note shall be senior to all other debt of the Company
except bank debt and purchase money financing secured by the
object purchased, and a security agreement shall be established
accordingly.
Holders of outstanding shares of this Series B Convertible
Exchangeable Preferred Stock will be entitled to receive $1.00
principal amount of the note in exchange for each share of this
Series held by them at the time of exchange, plus an amount equal
to any accrued but unpaid cash dividends. The Company will mail
to each holder of record of the shares of this Series written
notice of its intention to exchange no less than 30 nor more than
60 days prior to the date fixed for the exchange (the "exchange
date"). Each such notice shall state: (i) the exchange date;
(ii) the place or places where certificates for such shares are
to be surrendered for exchange into the note; and (iii) that
dividends on the shares to be exchanged will cease to accrue on
such exchange date. Prior to giving notice of intention to
exchange, the Company shall execute and deliver to the Exchange
Agent the original note and security agreement in conformity with
the Designation. The Company will cause the note and security
agreement to be authenticated on the dividend payment date on
which the exchange is effective, and the Company will pay
interest on the note at the rate and on the dates specified in
such note from the exchange date. There is no penalty for
prepayment.
Class E Common Stock Purchase Warrants
Each Class E Common Stock Purchase Warrant entitles the
holder to purchase one share of the Company's common stock at
$1.50 per share at anytime until 5:00 p.m. June 15, 1999. The
Class E Common Stock Purchase Warrants are callable by the
Company upon 30 days written notice. The Class E Common Stock
Purchase Warrants have been issued pursuant to a Warrant Agree-
ment between the Company and American Securities Transfer, Inc.
(the "Warrant Agent"). The Company has authorized and reserved
for issuance the shares of common stock issuable upon exercise of
the Class E Common Stock Purchase Warrants.
The Class E Common Stock Purchase Warrants contain the
customary anti-dilution provisions so as to avoid dilution of the
equity interest represented by the underlying common stock upon
the occurrence of certain events such as share dividends or
splits. The anti-dilution provisions will not apply in the event
that a merger or acquisition is undertaken by the Company prior
to exercise of the Class E Common Stock Purchase Warrants. In
the event of a liquidation, dissolution or winding up of the
Company, holders of the Class E Common Stock Purchase Warrants
will not be entitled to participate in any distribution of the
assets of the Company. Holders of the Class E Common Stock
Purchase Warrants will have no voting, preemptive, liquidation or
other rights of a shareholder, and no dividends will be declared
on the Class E Common Stock Purchase Warrants.
The Class E Common Stock Purchase Warrants also have
over-subscription privileges so that persons who elect to
exercise their Class E Common Stock Purchase Warrants may also
subscribe for any shares which underlie any Class E Common Stock
Purchase Warrants not exercised at the expiration of the Class E
Common Stock Purchase Warrant term.
Placement Agent Warrants
Each Placement Agent Warrant entitles the holder to purchase
one share of the Company's common stock at the price of $1.00 per
share, at any time until 5:00 p.m. on October 15, 1999. There is
no provision for the call or redemption of the Placement Agent
Warrants. The Placement Agent Warrants have been issued pursuant
to a Warrant Agreement between the Company and American
Securities Transfer, Inc., and the Company has authorized and
reserved for issuance the shares of common stock issuable upon
the exercise of the Placement Agent Warrants.
The Placement Agent Warrants contain the customary
antidilution provisions so as to avoid dilution of the equity
interest represented by the underlying common stock upon the
occurrence of certain events such as share dividends or splits.
The antidilution provisions will not apply in the event that a
merger or acquisition is undertaken by the Company prior to the
exercise of the Placement Agent Warrants. In the event of a
liquidation, dissolution or winding up of the Company, holders of
the Placement Agent Warrants will not be entitled to participate
in any distribution of the assets of the Company. Holders of the
Placement Agent Warrants will have no voting, redemptive,
liquidation or other rights of a shareholder, and no dividends
will be declared or paid to holders of the Placement Agent
Warrants. The Placement Agent Warrants were issued pursuant to
the Placement Agent Agreement entered into by and between Gilford
Securities, Inc. and the Company as part of the private placement
of the Series B Convertible Exchangeable Preferred Stock, which
private placement was closed during October 1994. As part of the
Agreement, the Placement Agent Warrants were issued to Gilford
Securities, Inc. and persons appointed by Gilford Securities,
Inc., who in turn may not reassign the Warrants prior to October
15, 1995.
General
The exercise prices and number of shares of common stock or
other securities issuable on exercise of the Warrants are also
subject to adjustment in certain circumstances, including a stock
dividend, stock split, recapitalization, reorganization, merger
or consolidation of the Company.
The Warrants may be exercised upon surrender of the Warrant
Certificate on or prior to the expiration date at the offices of
the Company, with the exercise form of the Warrant completed and
executed as indicated, accompanied by full payment of the
exercise price (by certified check payable to the Company) for
the number of Warrants being exercised. The Warrantholders do
not have the rights or privileges of holders of common stock.
Warrant Agent
The Warrant Agent for the Warrants is American Securities
Transfer, Inc., Denver, Colorado.
Fernand Baer Options
As payment to Fernand Baer for his investment banking
services, the Company granted Mr. Baer or his assignee 150,000
options. Each option entitles the holder to purchase one share
of restricted common stock at the price of $.90 per share, at any
time until 5:00 p.m. on September 15, 1997.
Transfer Agent and Registrar
The Transfer Agent and Registrar for the Company's common
stock is American Securities Transfer, Inc., Denver, Colorado.
LEGAL MATTERS
The validity of the issuance of the common stock offered
hereby will be passed upon for the Company by Cohen Brame & Smith
Professional Corporation, 1700 Lincoln Street, Suite 1800,
Denver, Colorado 80203. A director of the firm beneficially owns
approximately 9,000 shares of the Company's common stock.
EXPERTS
The consolidated financial statements incorporated by
reference in this Prospectus have been audited by Arthur Andersen
L.L.P., independent public accountants, as set forth in their
report incorporated herein by reference, and are incorporated
herein in reliance upon such report given upon the authority of
said firm as experts in auditing and accounting.
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses, other
than the possible discounts and commissions, in connection with
the offering described in this Registration Statement.
Registration Fee Under Securities $1,364.44
Act of 1933
Printing and Engraving 1,000.00
Accounting Fees and Expenses 1,000.00
Legal Fees and Expenses 5,000.00
Blue Sky Fees and Expenses 2,000.00
(including related legal fees)
Transfer Agent Fees 1,000.00
Miscellaneous 467.46*
TOTAL $11,831.90
* Estimated
Item 15. Indemnification of Officers and Directors
Article X of the Company's Articles of Incorporation
provides that the Registrant may indemnify each director,
officer, and any employee or agent of the Registrant and his
heirs, executors, and administrators, against expenses reasonably
incurred or any amounts paid by him in connection with any
action, suit, or proceeding to which he may be made a party by
reason of his being or having been a director, officer, employee
or agent of the Registrant in the same manner as is provided by
the laws of the State of Colorado as summarized below.
Under the Colorado Business Corporation Act, a corporation
has the power to indemnify against liability any current or
former director, officer, employee or agent. Colorado Revised
Statutes ("C.R.S.") Section 7-109-101, et seq. Under C.R.S.
Section 7-109-102, a corporation may indemnify a director if (1)
the director conducted himself in good faith, (2) the director
reasonably believed that his conduct was not opposed to the
corporation's best interests, or if acting in his official
capacity, that his conduct was in the corporation's best
interests and (3) in the case of a criminal proceeding, the
director had no reasonable cause to believe his conduct was
unlawful. The Colorado Business Corporation Act also gives each
corporation the power to eliminate or limit the personal
liability of a director of the Corporation or its shareholders
for monetary damages for breach of fiduciary duty as a director
unless the breach of fiduciary duty involves breach of loyalty to
the corporation or its shareholders, acts or omissions involving
intentional misconduct or a knowing violation of law, acts
specified in C.R.S. Section 7-108-403 (improper distribution of
assets, dividends or share repurchases) or any transaction
whereby the director derived an improper personal benefit.
C.R.S. Section 7-108-402.
Item 16. Exhibits and Financial Statement Schedules
(a) The following exhibits are filed as part of this
Registration Statement pursuant to Item 601 of Regulation S-B:
3.1 Articles of Incorporation *
4.1 Form of Common Stock Purchase Warrants (previously
filed)
4.2 Designation of Series of Preferred Stock*
5.0 Opinion of Cohen Brame & Smith Professional Corporation
regarding the legality of the securities being
registered.*
10.1 Warrant Agreement With American Securities Transfer,
Inc. (previously filed)
10.2 US Government (OMB NO. 0704-0817) Purchase Order No.
SP0450-96-D-4103*
24.1 Consent of Cohen Brame & Smith Professional Corporation
(Included in Exhibit 5.0).
24.2 Consent of Arthur Andersen L.L.P.*
* Filed herewith.
Item 17. 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 a Prospectus required by
Section 10(a)(3) of the Securities Act of
1933.
(ii) To reflect in the Prospectus any facts or
events arising after the effective date of
the Registration Statement (or the most
recent post-effective amendment thereof)
which, individually or in the aggregate,
represent a fundamental change in the
information set forth in the Registration
Statement; and
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the registration
statement or any material change to such
information in the Registration Statement.
(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.
(b) 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 provisions in Item 15 hereof, 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 of 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.
SIGNATURES
In accordance with the requirements of the Securities Act of
1933, as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all the requirements for filing
this Post-Effective Amendment No. 1 to Form S-2 and authorizes
this Registration Statement to be signed on its behalf by the
undersigned, at Broussard, Louisiana, on the 2nd day of July,
1996.
DELTA-OMEGA TECHNOLOGIES, INC.
By: /s/ James V. Janes, III
James V. Janes III, President
POWER OF ATTORNEY
Each person whose individual signature appears below hereby
constitutes and appoints James V. Janes, III as his true and
lawful attorney-in-fact with full power of substitution to
execute in the name and on behalf of such person, individually
and in each capacity stated below, and to file, any and
all amendments to this Registration Statement, including any and
all post-effective amendments.
In accordance with the requirements of the Securities Act of
1933, as amended, this Registration Statement was signed by the
following persons in the capacities and on the dates indicated.
Signature Title Date
/s/ L. G. Schafran Chairman of
L. G. Schafran the Board July 2, 1996
/s/ James V. Janes, III Director and July 2, 1996
James V. Janes, III President
/s/ Donald P. Carlin Director July 2, 1996
Donald P. Carlin
Richard A. Brown Director
Richard A. Brown
David H. Peipers Director
David H. Peipers
/s/ Marian A. Bourque Chief Financial July 2, 1996
Marian A. Bourque Officer (Principal
Accounting Officer),
Secretary and
Treasurer
File No. 33-90604
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
DELTA-OMEGA TECHNOLOGIES, INC.
_______________________
EXHIBITS
TO
POST-EFFECTIVE AMENDMENT NO. 1
TO
FORM S-2
Registration Statement
Under
The Securities Act of 1933
INDEX TO EXHIBITS
Exhibit Number
in Form S-2 Description
3.1 Articles of Incorporation
4.1 Form of Common Stock
Purchase Warrants
(previously filed)
4.2 Designation of Series of
Preferred Stock
5.0 Opinion of Cohen Brame
& Smith Professional
Corporation regarding
the legality of the
securities being
registered
10.1 Warrant Agreement With
American Securities
Transfer, Inc.
(previously filed)
10.2 US Government Purchase (OMB NO. 0704-0817)
Order No. SP0450-96-D-4103
24.1 Consent of Cohen Brame & Smith
Professional Corporation
(included in Exhibit 5.0)
24.2 Consent of Arthur
Andersen L.L.P.