As filed with the Securities and Exchange Commission on May 8, 1998
Registration No. 333-45511
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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AMENDMENT NO. 2 TO FORM S-3
REGISTRATION STATEMENT
Under the
Securities Act of 1933
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Altair International Inc.
(Exact name of registrant as specified in its charter)
Province of Ontario, Canada None
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
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William P. Long
President
Altair International Inc.
1725 Sheridan Avenue, Suite 140
Cody, Wyoming 82414
(307) 587-8245
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Brian G. Lloyd, Esq.
Bryan T. Allen, Esq.
PARR, WADDOUPS, BROWN, GEE & LOVELESS
185 South State Street, Suite 1300
Salt Lake City, Utah 84111
(801) 532-7840
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement as
determined by market conditions.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: |_|
If 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, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box: |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: |_|
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: |_|
<TABLE>
CALCULATION OF REGISTRATION FEE
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<CAPTION>
Proposed
Proposed maximum maximum
Title of each class Amount to be offering price per aggregate offering Amount of
of securities to be registered registered(1) share(2) price(2) registration fee(2)
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<S> <C> <C> <C> <C>
Common Shares, no par value.............. 924,973 $8.625 $7,977,892 $2,393*
================================================================================================================================
</TABLE>
* Previously paid.
(1) Includes 644,973 shares which represent the Registrant's estimate of a
presently indeterminate number of shares issuable upon conversion of the
Registrant's 5% Convertible Subordinated Debentures due December 29, 2001.
(2) Estimated pursuant to Rule 457 for the purpose of calculating the
registration fee, based upon the average of the high and low sales prices
for the Common Stock as reported on the Nasdaq National Market on April 6,
1998.
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.
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PROSPECTUS
924,973 Shares
Common Stock
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This Prospectus relates to 924,973 shares of outstanding common shares, no
par value (the "Common Stock"), of Altair International Inc., an Ontario
corporation (the "Company"). All of the shares of Common Stock offered hereby
(the "Shares") are to be sold by persons who are existing security holders of
the Company (the "Selling Security Holders"). Of the Shares offered hereby,
644,973 Shares represent the Company's estimate, pursuant to Rule 416 of the
Securities Act of 1933, as amended (the "Securities Act"), of a presently
indeterminate number of Shares issuable upon conversion of $5,000,000 in
principal amount of 5% Convertible Debentures due December 29, 2001 (the
"Debentures") privately placed by the Company in a transaction completed on
December 29, 1997. Of the remaining Shares, 180,000 Shares are issuable upon the
exercise of warrants (the "Warrants") to purchase shares of Common Stock placed
by the Company in connection with its placement of the Debentures, and 100,000
Shares are currently owned by an existing shareholder of the Company. See
"Selling Security Holders." For purposes of this Prospectus, the number of
Shares beneficially held by the holders of the Debentures has been computed
based on an estimated conversion price of $7.889 per share of Common Stock,
assuming conversion thereof on May 5, 1998. Nonetheless, the number of Shares
available for resale hereunder is subject to adjustment and could materially
differ from the estimated amount depending on the future market price of the
Common Stock and the occurrence of a stock split, stock dividend, or other
transaction resulting in an adjustment in the number of Shares subject to the
terms of the Debentures and the Warrants.
The Company will not receive any of the proceeds from the sale of any of
the Shares hereunder. In the United States, the shares of Common Stock have been
quoted under the symbol ALTIF on the Nasdaq National Market maintained by the
National Association of Securities Dealers ("NASD") since January 26, 1998. From
March 24, 1997 until January 23, 1998, the shares of Common Stock were quoted on
the Nasdaq SmallCap Market. On May 4, 1998, the closing sale price of the Common
Stock, as reported by the Nasdaq National Market, was $8.875 per share. See
"Price Range of Common Stock." Unless otherwise expressly indicated, all
monetary amounts set forth in this Prospectus are expressed in United States
Dollars.
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The Common Stock offered hereby involves a high degree of risk.
See "Risk Factors" on page 6 of this Prospectus.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
All expenses of this offering will be paid by the Company, except for
commissions, fees and discounts of any underwriters, brokers, dealers or agents
retained by the Selling Security Holders. Estimated expenses payable by the
Company in connection with this offering are approximately $25,000. The Shares
may be sold from time to time by the Selling Security Holders in transactions in
the over-the-counter market or otherwise at prices and on terms then prevailing
at the time of sale, at prices related to the then-current market price or in
negotiated transactions. The aggregate proceeds to the Selling Security Holders
from the resale of the Shares will be the purchase price of the Shares sold less
the aggregate agents' commissions and underwriters' discounts, if any. The
Selling Security Holders and any agents, broker-dealers or underwriters that
participate in the distribution of the Shares may be deemed to be
"underwriters," within the meaning of the Securities Act, and any commission
received by, or any profit realized on the resale of Shares purchased by, any
such agents, broker-dealers or underwriters may be deemed to be underwriting
discounts or commissions under the Securities Act. The Company has agreed to
indemnify the Selling Security Holders against certain liabilities, including
liabilities under the Securities Act.
The date of this Prospectus is __________, 1998.
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AVAILABLE INFORMATION
The Company has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act a registration statement on Form S-3 (the
"Registration Statement") with respect to the Shares offered hereby. This
Prospectus, filed as a part of the Registration Statement, does not contain all
the information set forth, or incorporated by reference, in the Registration
Statement and the exhibits and schedules thereto, certain portions of which have
been omitted as permitted by the rules and regulations of the Commission. For
further information regarding the Company and the Shares, reference is made to
the Registration Statement, including the exhibits and schedules thereto.
Statements contained in this Prospectus as to the contents of any contract or
other document referred to herein are not necessarily complete, and, in each
instance, reference is made to the copy of such contract or document filed as an
exhibit to the Registration Statement or documents incorporated therein by
reference, each such statement being qualified in its entirety by such
reference.
The Company is subject to the informational and reporting requirements
of the Securities and Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports, proxy statements and other
information with the Commission. Such reports, proxy statements and other
information filed by the Company, as well as copies of the Registration
Statement and exhibits, may be inspected and copied without charge at the public
reference facilities maintained by the Commission at Judiciary Plaza, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and at the Commission's
regional offices located at Seven World Trade Center, Suite 1300, New York, New
York 10048 and the Citicorp Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661. Copies of such materials may also be obtained from the
Public Reference Section of the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed fees. The Commission maintains a web
site that contains reports, proxy statements, information statements, and other
information regarding registrants, including the Company, at http://www.sec.gov.
In addition, the Company intends to furnish its shareholders with annual reports
which include financial statements that have been audited with a report thereon
by its independent accountants.
The Common Stock is quoted on the Nasdaq National Market. Reports,
proxy statements and other information concerning the Company can be inspected
and copied at the Public Reference Room of the NASD, 1735 K Street, N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission (File No. 1-12497) pursuant to the Exchange Act are incorporated into
this Prospectus by reference:
(a) The Company's Annual Report on Form 10-K for the year ended
December 31, 1997, filed with the Commission on March 31,
1998.
(b) The Company's Current Report on Form 8-K filed on January 13,
1998, as amended by Amendment No. 1 to Current Report on Form
8-K/A, filed on January 21, 1998.
(c) The description of the Common Stock contained in the Company's
Registration Statement on Form 10 filed under the Exchange
Act, including any amendment or report filed under the
Exchange Act for the purpose of updating such description.
All reports and other documents filed by the Company pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus
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and prior to the termination of this offering hereunder shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents.
Any statement contained herein or in a document all or any portion of which
is incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any other subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Any such statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide, without charge, to each person to whom this
Prospectus is delivered, upon written or oral request of any such person, a copy
of any or all of the foregoing documents (other than exhibits to such documents
which are not specifically incorporated by reference in such documents). Written
requests for such copies should be directed to the Company c/o Mineral Recovery
Systems at 230 South Rock Boulevard, Suite 21, Reno, Nevada 89502, U.S.A.,
Attention: Ed Dickinson, Director of Finance. Telephone requests may be directed
to the office of the Director of Finance at (702) 857-1966.
ENFORCEABILITY OF CIVIL LIABILITIES AGAINST FOREIGN PERSONS
The enforcement by purchasers of civil liabilities under the federal
securities laws of the United States may be adversely affected by the fact that
the Company is an Ontario corporation, a majority of its directors are residents
of Canada, and certain of the Company's experts (including its principal
accountants and Canadian legal counsel) are located in Canada. As a result, it
may be difficult for purchasers to effect service of process within the United
States upon such persons or to enforce in the United States court judgments
against such persons from a court of the United States predicated upon civil
liability provisions of the federal securities laws. It is uncertain whether
Canadian courts would (i) enforce judgments of United States courts obtained
against the Company or such directors, officers or experts predicated upon the
civil liability provisions of United States Securities laws or (ii) impose
liability in original actions against the Company or its directors, officers, or
experts predicated upon United States securities laws.
In addition, it may be more difficult under Canadian laws than under United
States laws for a shareholder to maintain a class action or derivative lawsuit;
moreover, compensation of attorneys on a contingency fee basis currently is
prohibited in Ontario and limited in certain other provinces of Canada.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements (including the notes thereto) appearing
elsewhere or incorporated by reference in this Prospectus. This Prospectus
contains "forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, as amended (the "Securities Act"), that involve risks
and uncertainties. See "Forward-Looking Statements." Purchasers of any of the
common shares, no par value, of the Company (the "Common Stock") offered hereby
(the "Shares") are cautioned that the Company's actual results may differ
significantly from the results discussed in the forward-looking statements.
Factors that could cause or contribute to such differences include those factors
discussed herein under "Risk Factors" and elsewhere in this Prospectus
generally.
The Company
Altair International Inc., an Ontario corporation (the "Company"), is a
development stage company primarily engaged in the acquisition and development
of mineral processing equipment for use in the recovery of fine, heavy mineral
particles, including gold, titanium, zircon, and environmental contaminants. The
Company also seeks to acquire or lease mineral deposits suitable for the use of
its mineral processing equipment. In furtherance of these purposes, during 1996,
the Company acquired the rights to a proprietary mineral processing device which
has been modified by the Company and is now marketed as the Altair Centrifugal
Jig (the "CJ"). The acquisition was accomplished through a merger involving the
Company, Fine Gold Recovery Systems, Inc., a wholly-owned subsidiary of the
Company ("Fine Gold"), and Trans Mar, Inc. The CJ is a patented device capable
of segregating and recovering extremely fine mineral particles or contaminants
which are not presently commercially recoverable utilizing conventional
techniques or processes. Potential applications include gold/mineral recovery,
coal cleaning and environmental remediation. In addition, the Company has
leased, and is testing the feasibility of developing mining operations on,
approximately 4,300 acres of property near Camden, Tennessee (the "Tennessee
Property"). Preliminary reports suggest that the Tennessee Property contains
significant amounts of valuable heavy minerals, including titanium and zircon,
and is suitable for a large-scale sand mining operation with a multi-decade
life.
Unless the context requires otherwise, all references to the "Company" in
this Prospectus refer to the Company and each of its subsidiaries. Except as
otherwise expressly indicated, all monetary amounts set forth in this prospectus
are expressed in United States Dollars. The Company's principal office is
located at 1725 Sheridan Avenue, Suite 140, Cody, Wyoming 82414 U.S.A., and the
Company's telephone number is (307) 587-8245.
The Offering
Common Stock offered by the Selling
Shareholders............................ 924,973 Shares (1)
Common Stock outstanding prior to and
after this offering..................... 15,612,153 shares (2)
Use of Proceeds............................. All proceeds of the offering will
be received by the Selling
Security Holders. See "Use of
Proceeds."
Nasdaq National Market trading symbol....... ALTIF
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(1) Includes 644,973 unissued Shares representing the Company's estimate of a
presently indeterminate number of Shares issuable upon conversion of the
Company's 5% Convertible Subordinated Debentures Due December 29, 2001 and
180,000 Shares issuable upon the exercise of warrants to purchase shares of
Common Stock placed by the Company in connection with its sale of such
debentures. See "Selling Security Holders."
(2) Includes 644,973 unissued Shares issuable upon conversion of the Debentures
and 180,000 unissued Shares issuable upon exercise of the Warrants, but
excludes 1,415,000 shares of Common Stock authorized for issuance upon
exercise of outstanding options granted pursuant to the Altair
International Inc. Stock Option Plan and 3,000 shares of Common Stock
reserved for the future grant of stock options under such plan.
4
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Selling Security Holders
All of the Shares are to be sold by persons who are existing security
holders of the Company (the "Selling Security Holders"). Of the Shares offered
hereby, 644,973 Shares represent the Company's estimate of a presently
indeterminate number of Shares issuable upon conversion of $5,000,000 in
principal amount of 5% Convertible Debentures due December 29, 2001 (the
"Debentures") privately placed by the Company in a transaction completed on
December 29, 1997. Of the remaining Shares, 180,000 Shares are issuable upon
exercise of warrants (the "Warrants") to purchase shares of Common Stock placed
by the Company in connection with its private placement of the Debentures, and
100,000 Shares are currently owned by an existing shareholder of the Company.
For purposes of this Prospectus, the number of Shares beneficially held by the
holders of the Debentures has been computed based on an estimated conversion
price of $7.889 per share of Common Stock, assuming conversion thereof on May 5,
1998. Nonetheless, the number of Shares available for resale hereunder is
subject to adjustment and could materially differ from the estimated amount
depending on the future market price of the Common Stock and the occurrence of a
stock split, stock dividends, or similar transaction. See "Selling Security
Holders."
5
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<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus, and certain documents incorporated herein by reference,
contain various forward-looking statements and information that are based on
management's belief, as well as assumptions made by, and information currently
available to, management. When used in these documents, the words "anticipate,"
"estimate," "project," "likely," "believe," "intend," "expect," and similar
expressions are intended to identify forward-looking statements. Although the
Company believes that the expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct. Such statements are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, estimated, projected,
expected or intended. Among the key factors that may have a direct bearing on
the Company's operating results are the risks and uncertainties described under
"Risk Factors," including, among other factors, the absence of operating
revenues or profits, uncertainties regarding the development and
commercialization of the Company's product and service offerings, development
risks associated with the Tennessee Property and the Company's ability to obtain
capital sufficient to continue its operations and pursue its proposed business
strategy.
RISK FACTORS
The following risk factors constitute cautionary statements identifying
important factors, including certain risks and uncertainties that could cause
actual results to differ materially from those reflected in such forward-looking
statements. In addition, actual results could differ materially from those
projected in the forward-looking statements as a result of the matters appearing
elsewhere or incorporated by reference in this Prospectus. The Company cautions
the reader that this list of factors may not be exhaustive. An investment in the
Shares being offered hereby involves a high degree of risk. Before making a
decision to purchase any of the Shares described in this Prospectus, prospective
investors should consider carefully the following risk factors as well as the
other information contained in this Prospectus or incorporated herein by
reference.
Absence of Operating Revenues or Profits. The Company is a development
stage company and has been since its inception. To date, the Company has not
generated revenues from operations or realized a profit. The Company is
presently investing substantial resources in the testing and development of the
CJ and the testing of the Tennessee Property. There can be no assurance that the
CJ, the Tennessee Property, or any other project being undertaken or proposed by
the Company will enable the Company to generate revenues or that the Company
will ever realize a profit from operations.
Operating Losses. The Company has experienced a loss from operations in
every fiscal year since its inception. The Company's losses from operations in
1996 and 1997 were $1,327,226 and $1,831,471, respectively. Consistent with its
history, the Company expects to experience a net loss from operations in 1998
and may continue to experience losses in the future. There can be no assurance
that the Company will ever realize a profit from operations.
Product Development Risks. The CJ is in the development stage. Although
test results on the Series 12 CJ, designed to be capable of processing
approximately 120 tons of solids per day, suggest that commercial use of the
Series 12 CJ is technically feasible at this time, the designed capacity of the
Series 12 CJ is too small for most intended applications of the CJ, except small
placer gold mines or similar operations. Accordingly, even if the Series 12 CJ
performs to design specifications in subsequent tests or at a commercial
facility, the Company believes that, because of its small capacity, the
potential market for the Series 12 CJ is extremely limited. In addition, the
Series CJ has been tested only in a controlled environment and for limited
periods of time. There can be no assurance that performance of the Series 12 CJ
at a commercial facility would match its performance in a test environment or
that the Series 12 CJ will be able to operate cost effectively or with
commercially reasonable maintenance and repair costs.
In 1997, the Company designed and constructed a Series 30 CJ, designed to
be capable of processing 500 tons of solids per day, which intended capacity the
Company believes is sufficient for heavy mineral sands processing, coal washing,
and many other intended commercial applications. With respect to the use of the
Series 30 CJ for heavy mineral sands processing, the Series 30 CJ has been
installed for testing at a mineral recovery plant operated by a large heavy
mineral sands producer located in Florida (the "Florida Testing"). The Florida
Testing, and related adjustment and modification of the Series 30 CJ, is
scheduled to be completed during the late summer or fall of 1998. Depending upon
the results of the Florida Testing, the Company hopes that it can begin
marketing the Series 30 CJ for heavy minerals sands recovery within three months
of the date such testing is complete. Nevertheless, there can be no assurance
that test results will suggest the Series 30 CJ is capable of processing the
volume of heavy mineral sands it is designed to process or capable of recovering
minerals with commercially acceptable efficiency and maintenance costs. If not,
the Company expects that marketing of the Series 30 CJ for heavy mineral sands
processing will be delayed. Moreover, even if the Series 30 CJ or larger CJ
performs to design specifications, there can be no assurance that the Series 30
CJ will be able to recover minerals from heavy minerals sands in a
cost-effective manner or otherwise prove attractive to end users. In addition,
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the introduction of new technologies by competitors could render the Series 30
CJ or larger CJ obsolete or unmarketable or require costly alterations to make
it marketable.
With respect to coal washing, the larger volume series 30 CJ has not yet
been tested to evaluate its ability to remove fine pyrite particles and ash from
coal fines in either a laboratory environment or at a commercial production
facility. The Company expects to have installed a Series 30 CJ at an independent
coal production facility by the end of August, 1998 and expects that testing
will take a minimum of six months. Depending upon the results of such testing,
the Company hopes to begin marketing the Series 30 CJ for coal washing within
three months of the date such testing is complete. Nevertheless, there can be no
assurance that the test results will suggest that the Series 30 CJ is capable of
processing the volume of coal it is designed to process or capable of removing
fine pyrite particles and ash from coal fines with acceptable efficiency or with
reasonable maintenance costs. If not, the Company expects that marketing of the
Series 30 CJ for coal washing will be delayed. Moreover, even if the Series 30
CJ or larger CJ performs to design specifications, there can be no assurance
that the Series 30 CJ will be able to wash coal fines in a cost-effective manner
or otherwise prove attractive to end users. In addition, the introduction of new
technologies by competitors could render the Series 30 CJ or larger CJ obsolete
or unmarketable or require costly alterations to make it marketable.
Property Development Risks. The Tennessee Property is currently in the
exploratory stage. The Company is engaged in pre-feasibility testing to
determine the size and quality of mineral deposits on the Tennessee Property. If
the results of such tests suggest that the deposits are amenable to large-scale,
low-cost mining, the Company will undertake a feasibility study of the Tennessee
Property. Such a feasibility study would involve the actual design, pricing, and
analysis of equipment and facilities that would be used to mine the Tennessee
Property. The Company expects that completion of a feasibility study will take
12-18 months and that, if the feasibility study suggests that cost-effective
mining of the Tennessee Property is feasible, a mine would not be operational
for 24-36 months after completion of the study. There can be no assurance that
the pre-feasibility testing or the feasibility study will indicate that the
Tennessee Property contains minable quantities of heavy minerals or that such
deposits are amenable to large-scale, low-cost mining, as contemplated by the
Company. Even if the testing and studies suggest that mining is economically
feasible on the Tennessee Property, there can be no assurance that the Company
will be able to obtain the capital, resources, and permits necessary to mine the
Tennessee Property. Nor can there be any assurance that market factors, such as
a decline in the price of, or demand for, minerals recoverable at the Tennessee
Property, will not have an adverse effect on the development of mining
operations on such property.
Dependence on Third Party Manufacturers. The Company currently
contracts with a machine shop located in central California for assembly of the
CJ. If the Company completes testing and develops a final production model of
the CJ, of which there can be no assurance, the Company does not currently have
the know-how or resources to establish its own manufacturing facility.
Management is considering options for manufacture of the CJ, including
manufacturing under contract, exclusive licensing or a joint venture. There can
be no assurance that the Company will obtain suitable manufacturing capacity or
that such manufacturing capacity, if found, will produce affordable,
high-quality units capable of sustaining high reliability and low maintenance
costs in a production environment.
Sufficiency and Price of Capital. Due to, among other factors,
unanticipated expenses of development, the absence of manufacturers or licensees
interested in entering into an alliance, increases in costs of necessary capital
equipment, necessary or discretionary acquisitions of equipment, properties,
intellectual property rights or companies, general and industry market factors,
or other unforeseen events affecting the Company's use of and need for capital,
the Company's existing capital may prove insufficient to complete testing and
development of the CJ, the Tennessee Property, or other new or ongoing projects.
In addition, depending on market factors affecting the costs of capital
generally, the performance of the Company, the Company's capital needs, the
market perception of mining stocks, the economics of projects being pursued,
industry perception of the Company's ability to recover minerals with the CJ or
otherwise, and other factors affecting the availability of capital and/or price
of obtaining capital, the Company may unable to obtain necessary capital, may be
forced to pay a price for capital that is higher than the Company is presently
paying or is generally available in the industry, or limit the Company's growth,
expenditures or capital inflow. If the Company is unable to obtain sufficient
capital or is forced to pay a high price for capital, the Company may be unable
to pursue or fully exploit existing or future development opportunities. Also,
because of their size, resources, history and other factors, certain competitors
of the Company may have better access to capital than the Company and, as a
result, may be able to exploit opportunities more easily or thoroughly than the
Company.
Alternative Technologies. There can be no assurance that the
centrifugal jig process will prove superior, either technically or commercially,
to alternative technologies. Various mineral processing technologies perform
many functions similar or identical to those for which the CJ is designed.
Minerals processing technologies are generally predicated on the physical and
chemical characteristics of the materials being processed. Contrasts in size,
specific gravity, hardness, magnetic susceptibility, and electrical conductivity
are physical characteristics that the processor exploits to selectively extract
and concentrate mineral constituents. Variations in chemical reactivity and
molecular affinity are also used to selectively segregate feed components.
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The CJ competes in an arena in which particle specific gravity is the
primary criteria for particle segregation and capture. Competing technologies in
this arena include spiral and cones, froth flotation processes, and heavy media
separation processes. Spirals and cones are mechanical gravity separation
devices commercially used in the recovery of heavy minerals from sand-sized
feeds and are most effective when feed sizes are larger than 150 mesh. Froth
floatation is a minerals beneficiation process used to selectively separate
sulfide particles by introducing chemical agents which attach to certain
sulfides; once attached, the sulfides are separated by floatation. This method
may be effective on particles as small as 200 mesh. Heavy media separation is a
process in which a feed containing both dense and light particles is fed into a
solution whose specific gravity is midway between the particles to be separated.
The light particles float to the surface of the solution, while the heavy
particles sink. Heavy media separation is effective primarily in the removal of
ash from coal and in small scale analytic laboratory applications. The Company
believes that, in certain applications, the CJ may prove more efficient, cost
effective, or adaptable than the spirals and cones, froth flotation devices, or
heavy media separation devices. Nevertheless, results from further tests or
actual operations may reveal that these alternative technologies may prove
better adapted to any or all of the uses for which the CJ is intended. Moreover,
regardless of test results, consumers may view any or all of such alternative
technologies as technically superior to, or more cost effective than, the CJ.
Competing Products. The Company believes that the CJ currently faces
several forms of competition in the commercial segregation of dense particles
contained in feeds between 150 and 400 mesh, including the Kelsey Jig and the
Knelsen batch concentrator unit, which are currently being used worldwide. As of
mid-1995, according to the Kelsey jig's manufacturer, Geologics Pty. Ltd., 36
Kelsey jigs were in service at 28 sites worldwide, including two machines at one
site in the United States. Knelsen units have been installed in various mining
applications, primarily gold, throughout the world. There is no assurance that
competitors, many of whom may have significant capital and resources, will not
develop, or are not now in the process of developing, superior or less expensive
alternatives to the CJ.
Dependence on Commodities Markets. If the CJ is successfully developed
and manufactured, of which there can be no assurance, the Company intends to use
the CJ to separate and recover valuable, heavy mineral particles at deposits
owned or leased by the Company, including the Tennessee Property, and market the
CJ to other companies. Active international markets exist for gold, titanium,
zicron, and many other minerals potentially recoverable with the CJ. Prices of
certain minerals have fluctuated widely, and are beyond the control of the
Company. A significant decline in the price of minerals being produced or
expected to be produced, among other factors, could have a material adverse
effect on the Company. In addition, a general economic downturn in the mining or
mineral industries or the global economy may have an adverse effect on the
Company.
Risk of Development, Construction and Mining Operations. In connection
with the development of a mineral resource property, the ability to meet cost
estimates and construction and production time estimates cannot be assured.
Technical considerations, delays in obtaining governmental approvals and
permits, inability to obtain financing or other factors could cause delays in
developing mineral resource properties.
Government Regulation. The Company's present exploration of the
Tennessee Property, and testing of the CJ, and any prospective testing,
construction or mining activities the Company may conduct are subject to
numerous federal, state, and local laws and regulations concerning mine and
machine safety and environmental protection, including without limitation the
Clean Air Act, the Clean Water Act, the Resource Conservation and Recovery Act,
and the Comprehensive Environmental Response Compensation Liability Act. Some of
the laws and regulations that would pertain to mining, construction, or testing
operations require, among other things, maintenance of air and water quality
standards, the protection of threatened endangered and other species of wildlife
and vegetation, the preservation of certain cultural resources, and the
reclamation of exploration, mining and processing sites. These laws are
continually changing and, as a general matter, are becoming more restrictive.
Although compliance with federal state or local ordinances, regulations, and
permitting requirements represents a small part of the Company's present budget,
continued compliance may necessitate significant capital expenditures. In the
event the Company fails to comply, or is delayed in coming into compliance with
any such ordinances or regulations, the Company may be subject to substantial
fees or may be required to expend significant capital to ensure compliance.
There can be no assurance that the Company will be able to comply with all
applicable laws and regulations, or that compliance or permitting will be
obtained without substantial delays or expenses.
Uncertainty of Obtaining Environmental Permits. The Company has not
obtained any permits that may be required by various federal, state, and local
mining and environmental agencies to begin construction and mining at the
Tennessee Property or any other property. With respect to mining of the
Tennessee Property, the Company has hired an outside consulting firm to conduct
a pre-feasibility study, which is expected to be completed in late 1998. If such
pre-feasibility study indicates the Tennesee Property is amenable to
large-scale, low-cost mining, the Company will undertake a thorough feasibility
study, which would involve the actual design, pricing, and analysis or equipment
and facilities for the proposed mine. Because the Company has not yet determined
that mining of the Tennessee Property is economically feasible or commenced
design of a mining facility, the Company is not in a position to definitively
ascertain which federal, state and local mining and environmental laws or
regulations would apply to a mine on the Tennessee Property. Nevertheless, the
Company anticipates that compliance with the Clean Air Act, the Clean Water Act,
8
<PAGE>
the Resource Conservation and Recovery Act, and the Comprehensive Environmental
Response Compensation Liability Act would be necessary if the Company determined
to commence construction and operation of a mine on the Tennessee Property. See
"--Government Regulation."
In addition to these federal laws and regulations, the Company
anticipates that, if the Tennesee Property is developed, the Company would be
required to obtain a surface mining permit from the State of Tennessee under the
Tennesee Mineral Surface Mining Law of 1972. The application for such a permit
must be preceded by public notice and must include, among other things, a filing
fee, a reclamation and revegetation plan, and a bond to cover the costs of
reclamation. Depending on the nature of water use at the proposed mine, the
Company may also be required to obtain a water discharge permit under the
Tennessee Water Quality Control Act.
There can be no assurance that the Company will be able to obtain all
permits, licenses, and approvals necessary to conduct mining operations on the
Tennessee Property or otherwise. Although the Company is not aware of specific
circumstances which would signficantly delay, or increase the cost of,
developing the Tennessee Property, the Company has not obtained sufficient
mineral and economic feasibility information to enable it to develop definitive
plans with respect to the precise design and nature, if any, of mining
operations on the Tennessee Property, which plans may affect the cost and
difficulty of complying with governing environmental and land use law. Moreover,
the Company has not commenced any of the environmental, cultural, and other
studies required by governing environmental and regulatory laws, which studies
are designed to reveal the existence of factors that may increase the cost and
difficulty of obtain necessary permits and approvals. In addition, the Company
has not contacted Benton County officials with regard to its proposed mining
operations and can provide no assurance that, either coincidentally or
specifically in response to the Company's proposed commencement of mining
operations, Benton County will not promulgate land use restrictions prior to the
commencement of operations on the Tennessee Property. Accordingly, the Company
may be substantially delayed in obtaining, or may have to expend substantial
resources in order to obtain, the permits, licenses or approvals necessary to
commence mining operations on the Tennessee Property or elsewhere.
Environmental Regulation and Liability. Any proposed mining operation
of the Company on the Tennessee Property or any other property will be subject
to environmental regulation by federal, state, and local authorities. Under
federal law and applicable state law, the Company may be jointly and severally
liable with prior property owners for the treatment, cleanup, remediation,
and/or removal of substances discovered on the Tennessee Property or any other
property used by the Company, which are deemed by the federal and/or state
government to be toxic or hazardous ("Hazardous Substances"). Liability may be
imposed, among other things, for the improper release, discharge, storage, use,
disposal, or transportation of Hazardous Substances. The Company might use
Hazardous Substances and, although the Company intends to employ all reasonably
practicable safeguards to prevent any liability under applicable laws relating
to Hazardous Substances, mineral exploration and extraction by its very nature
will subject the Company to substantial risk that remediation will be required.
Enforceability of Civil Liabilities Against Foreign Persons. The
Company is an Ontario corporation, a majority of its directors are residents of
Canada, and certain of the Company's experts (including its principal
accountants and Canadian legal counsel) are located in Canada. As a result, it
may be difficult for purchasers to effect service of process within the United
States upon such persons or to enforce court judgments against such persons from
a court of the United States predicated upon civil liability provisions of the
federal securities laws. It is uncertain whether Canadian courts would (i)
enforce judgments of United States courts obtained against the Company or such
directors, officers or experts predicated upon the civil liability provisions of
United States securities laws or (ii) impose liability in original actions
against the Company or its directors, officers, or experts predicated upon
United States securities laws.
Patents for the Centrifugal Jig. Initial patents on the CJ have been
issued in the United States, South Africa, United Kingdom, Australia, and
Canada. Patent applications are pending in Germany, France, and Japan. A second
series of patents have been issued with respect to a critical component of the
CJ in the United States, Australia, Canada, Great Britain, General European, and
South Africa. The Company filed an application in the United States seeking a
third patent for a critical component of the CJ on May 15, 1997 and intends to
file applications in Canada and certain European nations. There can be no
assurance that pending patent applications will be granted or that persons in
countries in which the Company has not patented the CJ, or certain critical
components, will not develop and market an infringing product. The cost of, and
other obstacles to, enforcing the Company's patents, especially outside of North
America, may also limit the Company's ability to prevent infringing products
from entering the market.
Dependence on Key Personnel. The continued success of the Company is
dependent to a significant extent on the services of Dr. William P. Long,
President and Chief Executive Officer of the Company, and Mr. C. Patrick Costin,
Vice President of the Company and President of Fine Gold and Mineral Recovery
Systems, Inc., the Company's subsidiaries. The loss or unavailability of Mr.
Long or Mr. Costin could have a material adverse effect on the Company. No key
man insurance is carried on the lives of such key officers. In addition to the
individuals identified above, the Company employs a Director of Finance, a
senior process engineer, a technician, a metallurgist, a geologist, and a
part-time administrative assistant. There are no other employees of the Company
9
<PAGE>
or its subsidiaries. Aside from Dr. Long, Mr. Costin and the Director of
Finance, the Company has no employment agreements with any of its personnel.
Competition for such personnel is intense, and there can be no assurance that
the Company will be able to attract and maintain all personnel necessary for the
development and operation of its business. The loss of the services of key
personnel or an inability to attract, retain and motivate qualified personnel
could have a material adverse effect on the business, financial condition or
results of operations of the Company.
Acquisition Risks. The Company is currently evaluating, and plans to
continue to evaluate, additional opportunities for the license or acquisition of
additional mining products or properties, as well as the possible acquisition
of, or development of strategic relations with, other companies who may have
products, assets, manufacturing capabilities, or other qualities that are
compatible with the Company's business objectives. The Company must compete for
attractive acquisition or strategic alliance candidates with numerous other
companies, many of whom have significantly greater financial and technological
resources than the Company. There can be no assurance that the Company will be
able to successfully identify attractive acquisition or strategic alliance
opportunities. Such acquisitions and alliances, if identified and completed, of
which there can be no assurance, could involve the incurrence of additional
debt, amortization expenses related to goodwill and intangible assets or the
dilutive issuance of equity securities, all of which could adversely affect the
Company's operating results or financial condition. Accordingly, future
acquisitions and alliances may have an adverse effect on the Company's operating
results and financial condition, particularly in the fiscal quarters immediately
following the consummation of such transactions, while the operations of the
acquired or combined business are being integrated into the Company's
operations. There can be no assurance that capital sought by the Company to
pursue such opportunities can be obtained on terms favorable to the Company, if
at all. The failure of the Company to obtain such financing could restrict its
ability to pursue such business opportunities. Further, there can be no
assurance that any particular acquisition or alliance will be successfully
integrated into the Company's operations or will achieve profitability.
Possible Issuance of Substantial Amounts of Additional Shares Without
Stockholder Approval. The Company's Articles of Incorporation authorize the
issuance of an unlimited number of shares of Common Stock. All such shares may
be issued without any action or approval by the Company's stockholders. In
addition, the Company has a stock option plan which has potential for dilution
of the ownership interests of the Company's stockholders. Any shares of Common
Stock issued would further dilute the percentage ownership of the Company held
by existing stockholders.
Possible Volatility of Stock Price. The Common Stock was listed on the
Alberta Stock Exchange up through April 23, 1998 and has been listed on the
Nasdaq National Market since January 26, 1998. Between March 24, 1997 and
January 23, 1998, the Common Stock was listed on the Nasdaq SmallCap Market.
Trading in the Common Stock has been characterized by a high degree of
volatility. See "Price Range of Common Stock." Trading in the Common Stock to
date has been dominated by a small number of firms which make a market in such
securities. To the extent that the market for the Common Stock continues to be
dominated by a small number of market makers, the market may continue to
experience a high degree of volatility. Such market dominance and volatility may
adversely affect the price and liquidity of the Common Stock in the future. In
addition, the trading price of the Common Stock could fluctuate widely in
response to variations in quarterly financial results, announcements by the
Company or its competitors, industry trends, general economic conditions or
other events or factors. Among other factors, it is possible that in some future
quarters the Company's operating results will be below the expectations of
public market analysts and investors. Regardless of the general outlook for the
Company's business, the announcement of financial or research and development
results that differ from analyst and investor expectations could have a material
and adverse effect on the market price of the Common Stock.
Shares Eligible for Future Sales. The resale of "restricted
securities," as well as securities held by "affiliates" of the Company, is
generally subject to the provisions of Rule 144 promulgated under the Securities
Act ("Rule 144"). In general, under Rule 144 as currently in effect, a person
(or persons whose shares are aggregated) who has beneficially owned restricted
securities for at least one year (including the holding period of any prior
owner except an affiliate), including persons who may be deemed "affiliates" of
the Company, would be entitled to sell within any three-month period a number of
shares that does not exceed the greater of 1% of the number of shares of Common
Stock then outstanding or the average weekly trading volume of the Common Stock
during the four calendar weeks preceding the filing of a Form 144 with respect
to such sale. In addition, a person who is not deemed to have been an affiliate
of the Company at any time during the 90 days preceding a sale, and who has
beneficially owned the shares proposed to be sold for at least two years
(including the holding period of any prior owners except an affiliate), would be
entitled to sell such shares under Rule 144(k) without regard to the
requirements described above. The Company is unable to predict the effect that
future sales under Rule 144 may have on the then prevailing market price of
Common Stock. In addition, shares issued upon exercise of options granted
pursuant to the Company's employee stock option plan are presently registered
under the Securities Act and, subject to certain restrictions on resale by
affiliates, may be sold without restriction. It can be expected that the sale of
any substantial number of shares of Common Stock will have a depressive effect
on the market price of the Common Stock.
Absence of Dividends. The Company has never declared or paid dividends
on the Common Stock. Moreover, the Company currently intends to retain any
future earnings for use in its business and, therefore, does not anticipate
paying dividends on the Common Stock in the foreseeable future.
10
<PAGE>
PRICE RANGE OF COMMON STOCK
United States. In the United States, from March 24, 1997 until January 23,
1998, the shares of Common Stock were quoted on the Nasdaq SmallCap Market under
the symbol "ALTIF." The follow table sets forth in United States dollars, for
the periods indicated, the high and low sales prices for the Common Stock, as
report by the Nasdaq SmallCap Market.
Fiscal Year Ended Low High
December 31, 1997:
-------- -------
1st Quarter (beginning March 24, 1997)..... $8.5625 $12.25
2nd Quarter................................ 4.75 9.625
3rd Quarter................................ 5.125 9.875
4th Quarter................................ 7.75 16.625
Fiscal 1998
1st Quarter (through January 23, 1998)..... $13.75 $15.625
Beginning on January 26, 1998, the Common Stock began trading on the Nasdaq
National Market under the symbol "ALTIF." The last sale price of the Common
Stock, as reported on the Nasdaq National Market, on May 5, 1998 was $8.875 per
share. As of May 4, 1998, the number of shares of Common Stock outstanding was
14,787,180 (excluding shares reserved for issuance upon conversion of the
Debentures and Exercise of the Warrants). In addition, the Company has reserved
1,418,000 shares of Common Stock for issuance upon exercise of options that have
been, or may be, granted under its employee stock option plan and has reserved
an estimated 824,973 shares of Common Stock for issuance upon conversion of the
Debenture and exercise of the Warrants.
Canada. In Canada, the Common Stock was publicly traded under the symbol
"AIL" on the Alberta Stock Exchange (the "ASE") up through April 23, 1998. The
Company voluntarily delisted from the ASE on that date due to increased focus on
operations in the United States and diminished trading volume on the ASE. The
following tables set forth, on a quarterly basis, the high and low closing sales
prices during the last two fiscal years for shares of the Common Stock on the
ASE. All amounts are stated in Canadian dollars, the currency in which the
prices are quoted by the ASE.
Low High
----------- -----------
Fiscal Year Ended
December 31, 1997:
1st Quarter....................... $Cdn. 7.75 $Cdn. 16.55
2nd Quarter....................... 6.90 13.00
3rd Quarter....................... 7.40 13.50
4th Quarter....................... 11.10 23.50
Fiscal Year Ended
December 31, 1996:
1st Quarter....................... $Cdn. 1.78 $Cdn. 4.25
2nd Quarter....................... 2.70 6.50
3rd Quarter....................... 3.98 6.20
4th Quarter....................... 5.30 11.40
SELLING SECURITY HOLDERS
The following table sets forth, as of the date of this Prospectus, the name
of each Selling Security Holder, certain beneficial ownership information with
respect to the Selling Security Holders, the number of Shares that may be sold
from time to time by each Selling Security Holder pursuant to this Prospectus,
and the amount (and, if one percent or more, the percentage) of Common Stock to
be owned by each Selling Security Holder if all Shares are sold. There can be no
assurance that any of the Shares offered hereby will be sold. The percentages
set forth below have been computed based on the number of outstanding shares of
Common Stock as of May 5, 1998, which was 15,612,153 shares of Common Stock,
including 824,973 unissued Shares which represent the Company's estimate of the
presently indeterminate number of Shares issuable upon conversion of the
Warrants and the Debentures. The Company believes the persons named in the table
have sole voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, subject to community property laws, where
applicable.
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<PAGE>
For purposes of this Prospectus, the number of Shares beneficially owned by
the holders of the Debentures has been computed based on the Company's estimate
of the number of Shares issuable upon conversion of the Debentures, assuming
conversion on May 5, 1998, at a conversion price of $7.889 per share of Common
Stock, which price is approximately 92% of $8.575, the average market price of
the Common Stock on the Nasdaq National Market on the five trading days
immediately prior to May 5, 1998. The use of such hypothetical conversion price
and date is not intended, and should in not way be construed to, constitute a
prediction as to the future market price of the Common Stock or an indication of
any Debenture holder's intention to convert Debentures on such date. The
Registration Statement includes, in accordance with Rule 416 under the
Securities Act, such indeterminate number of additional Shares as may be
issuable upon conversion of the Debentures (i) to prevent dilution thereof
resulting from stock splits, stock dividends, or similar transactions and (ii)
by reason of changes in the conversion price or conversion rate of the
Debentures.
For purposes of this Prospectus, the Company has assumed that the number of
Shares beneficially owned under each of the Warrants is equal to the number of
Shares stated on the face thereof. The Registration Statement includes, in
accordance with Rule 416 promulgated under the Securities Act, such
indeterminate number of additional shares of Common Stock as may become issuable
upon exercise of the Warrants (i) to prevent dilution thereof resulting from
stock splits, stock dividends, or similar transactions and (ii) by reason of
changes in the exercise price of the Warrants in accordance with the terms
thereof.
<TABLE>
<CAPTION>
Shares Beneficially
Owned upon
Beneficial Ownership Completion of
Prior to Offering Offering (1)
------------------------- ------------------
Number of
Number of Shares being Number
Beneficial Owner Shares Percent (2) Offered of Shares Percent (2)
- --------------------------------------------- ------------- --------- ---------- ------- --------
<S> <C> <C> <C> <C> <C>
Leonardo, L.P.(3) 431,984 2.8 431,984 0 --
GAM Arbitrage Investments Inc.(4) 43,198 * 43,198 0 --
AG Supper Fund International Partners, L.P.(4) 43,198 * 43,198 0 --
Raphael, L.P.(4) 43,198 * 43,198 0 --
Ramius Fund, Ltd.(5) 71,998 * 71,998 0 --
Baldwin Enterprises, Inc.(6) 86,397 * 86,397 0 --
Prudential Securities Incorporated(7) 105,000 * 105,000 0 --
MBRT Trust(8) 162,500 1.0 100,000 62,500 *
--------- --------- ------
All Selling Security Holders as a group 987,473 6.3 924,973 62,500 *
</TABLE>
---------------------------
* Represents less than one percent of the outstanding shares of Common
Stock.
(1) Assuming the sale by each Selling Security Holder of all of the Shares
offered hereunder by such Selling Security Holder. There can be no
assurance that any of the Shares offered hereby will be sold.
(2) The percentages set forth have been computed taking into account the
824,973 unissued Shares issuable upon conversion of the Debentures and
exercise of the Warrants.
(3) Includes 386,984 Shares which represent the Company's estimate of the
presently indeterminate number of Shares issuable upon conversion of
Debentures held by such entity and 45,000 Shares of Common Stock
issuable by the Company upon exercise of Warrants held by such entity.
(4) Includes 38,698 Shares which represent the Company's estimate of the
presently indeterminate number of Shares issuable upon conversion of
Debentures held by such entity and 4,500 Shares of Common Stock
issuable by the Company upon exercise of Warrants held by such entity.
(5) Includes 64,498 Shares which represent the Company's estimate of the
presently indeterminate number of Shares issuable upon conversion of
Debentures held by such entity and 7,500 Shares of Common Stock
issuable by the Company upon exercise of Warrants held by such entity.
(6) Includes 71,397 Shares which represent the Company's estimate of the
presently indeterminate number of Shares issuable upon conversion of
Debentures held by such entity and 9,000 Shares of Common Stock
issuable by the Company upon exercise of Warrants held by such entity.
(7) Includes 105,000 Shares issuable by the Company upon exercise of
Warrants held by such entity.
(8) The MBRT Trust is an irrevocable trust established by William P. Long,
President, Chief Executive Officer, and a director of the Company, and
is administered by an independent trustee for the benefit of the
children of Mr. Long. Mr. Long disclaims any beneficial interest in the
shares of Common Stock owned by the MBRT Trust. Prior to the offering
contemplated by this Prospectus, the MBRT Trust owned 162,500 shares of
Common Stock. If all 100,00 Shares being offered by the MBRT Trust in
connection with this Prospectus are sold, of which there can be no
assurance, the MBRT Trust will own 62,500 shares of Common Stock, which
is less than one percent of the outstanding shares of Common Stock,
after completion of the offering.
12
<PAGE>
Placement of Debentures and Warrants. The Debentures and Warrants were
acquired in a private placement completed on December 29, 1997, pursuant to the
terms of a Securities Purchase Agreement dated as of December 24, 1997 (the
"Purchase Agreement"). Pursuant to the Purchase Agreement and related documents,
the Company placed the Debentures and Warrants with a small number of
institutional investors in a transaction exempt from the registration
requirements under the Securities Act. The following descriptions do not purport
to be complete and are qualified by reference to the definitive agreements,
Debentures, and Warrants filed as exhibits to the Company's Current Report on
Form 8-K filed with the Commission on January 13, 1998, as amended by Amendment
No. 1 to Current Report on Form 8-K/A, filed on January 21, 1998.
The Debentures have an aggregate face value and "issue price" of $5,000,000
and bear interest at a rate of five percent per annum, payable in cash or shares
of Common Stock, at the Company's option. The Debentures are subordinated to the
present and future senior indebtedness of the Company, which includes
indebtedness related to loans from financial institutions, the acquisition of
property or assets, or letters of credit. The Company may redeem the Debentures
at a price equal to 110% of the unpaid principal amount to be redeemed, plus any
accrued interest and other charges, provided that, among other conditions, the
Registration Statement is effective and the market price per share of Common
Stock is less than $6.50 per share.
Subject to certain restrictions set forth in the Debentures, the Debentures
are each convertible into the number of shares of Common Stock equal to the
quotient of (a) the sum of the principal amount of such Debenture and all
accrued but unpaid interest and charges, divided by (b) the lesser of (i) an
amount equal to 92% of the average market price for one share of Common Stock
for the five preceding trading days and (ii) $14.36875 (subject to an increase
of $.50 on each of December 29, 1999 and December 29, 2000). In addition, the
Company may require conversion of all or part of the Debentures if, among other
conditions, the Registration Statement is effective and the market price per
share of Common Stock equals or exceeds $18.679 (subject to an increase of $.65
on each of December 29, 1999 and December 29, 2000). In the preparation of its
financial statements, the Company has determined that the Debentures contain
both debt and equity components. The Company has accounted for the present value
of the interest portion as a liability, which amounted to $828,031 as of
December 31, 1997. The present value of the principal and the holders'
conversion option have been classified as a component of shareholders' equity
and was $4,171,969 as of December 31, 1997.
The number of Shares being offered for resale hereunder by holders of the
Debentures is based upon an estimate by the Company of the number of Shares
issuable upon conversion of the Debentures assuming conversion on May 5, 1998 at
a conversion price of $7.889. Notwithstanding the foregoing, due to certain
limitations on conversion and the variable nature of the conversion price, the
actual number of Shares to be offered for resale by holders of Debentures may
materially differ from the number of Shares indicated in this Prospectus. The
use of such hypothetical conversion price and date is not intended and should in
no way be construed to constitute a prediction as to the future market price of
the Common Stock or an indication of the intent of the holders of the Debentures
to convert on such date.
As part of the placement of the Debentures, each purchaser of a Debenture
received its pro rata share of warrants ("Debenture Warrants") to purchase
75,000 shares of the Common Stock on or before December 29, 1999 at a price
equal to $16.7188 per share. The Company also issued to Prudential Securities,
Incorporated, the placement agent which arranged the placement of the
Debentures, warrants (the "Placement Warrants") to purchase 105,000 Shares on or
before December 29, 1999, at a price equal to $16.7188 per share. (The Debenture
Warrants and Placement Warrants collectively constitute the "Warrants"). For
purposes of this Prospectus, the Company has assumed that the number of Shares
issuable upon exercise of each of the Warrants is the number stated on the face
thereof. Nonetheless, the number of Shares issuable upon conversion of the
Warrants, and available for resale hereunder, is subject to adjustment and could
materially differ from the estimated amount depending on the future market price
of the Common Stock and the occurrence of a stock split, stock dividend, or
similar transaction resulting in an adjustment in the number of Shares subject
to the terms of the Warrants.
Pursuant to a Registration Rights Agreement dated as of December 24, 1997
(the "Registration Rights Agreement") entered into in conjunction with the
Purchase Agreement, the Company is obligated to cause to be effective within 150
days, of December 29, 1997 a registration statement covering the resale of
shares of Common Stock issuable upon conversion of the Debentures and exercise
of the Warrants. Pursuant to the Registration Rights Agreement, the holders of
the Debentures and Warrants have the right, at their own expense, to select
investment bankers or managers to administer their interest in such registered
offering. However, the Selling Security Holders have represented to the Company
that none intends at this time to commission an underwriter or manager to
facilitate the offering or sale of its Shares offered hereunder. If the
registration statement contemplated by the Registration Rights Agreement is not
declared effective within 150 days of December 29, 1997, the Company shall be
obligated to pay each holder of the Debentures or Warrants an amount equal to
two percent (2%) of the principal amount of the relevant Debentures per month.
In addition, subject to the terms and conditions of the Purchase Agreement,
the Company has the right to cause the initial purchasers of the Debentures to
purchase up to an additional $5,000,000 aggregate principal amount of 5%
Convertible Subordinated Debentures (the "Put Debentures"). If issued, the Put
13
<PAGE>
Debentures will be accompanied by warrants to purchase an aggregate number of
shares of Common Stock equal to the product of (i) 75,000 multiplied by (ii) the
quotient of the principal amount of all Put Debentures divided by $5,000,000
(the "Put Warrants"). The exercise price for the Put Warrants shall be an amount
equal to 125% of the closing price per share of Common Stock on the Nasdaq Small
Cap Market or the Nasdaq National Market, as applicable, on the date immediately
prior to the date the Put Warrants are issued. As of the date of the Prospectus,
the Company has not issued the Put Debentures or issued the Put Warrants, and
this Prospectus does not relate to any shares of Common Stock issuable in
relation thereto.
USE OF PROCEEDS
All proceeds from any sale of the Shares offered hereby, less commissions
and other customary fees and expenses, will be paid directly to the Selling
Security Holders selling such Shares. The Company will not receive any proceeds
from the sale of any of the Shares offered hereby.
PLAN OF DISTRIBUTION
The Company has not retained any underwriter, broker or dealer to
facilitate the offer or sale of the Shares offered hereby. No underwriting
commissions or discounts will be paid by the Company in connection therewith.
Pursuant to the Registration Rights Agreement, the holders of the Debentures and
the Warrants have the right, at their own expense, to select an investment
banker or bankers and manager or manager to administer their interest in the
offering. The Selling Security Holders have represented to the Company that none
intends at this time to commission an underwriter or manager to facilitate the
offering or sale its Shares offered hereunder. It is the Company's understanding
that those Selling Security Holders electing to offer or sell the Shares intend
to do so in transactions on the Nasdaq National Market in negotiated
transactions or in a combination of such methods of sale, at prices related to
the prevailing market prices or at negotiated prices. The Selling Security
Holders may effect such transactions by selling the Shares to or through
broker-dealers, and such broker-dealers may receive compensation in the form of
discounts or commissions from the Selling Security Holders and/or the purchasers
of the Shares for whom such broker-dealers may act as agents or to whom they
sell as principal, or both (which compensation as to a particular broker-dealer
may be in excess of customary commissions). The Company will receive no proceeds
from the sale of any of the Shares.
In order to comply with the securities laws of certain states, if
applicable, the Shares will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Shares may not be sold unless they have been registered or qualified for sale in
the applicable state or an exemption from the registration or qualification
requirement is available.
INDEMNIFICATION
The Company's By-laws, as amended, provide that, subject to the provisions
of the Business Corporation Act, Ontario (the "Act"), every director and officer
of the Company and his heirs, executors, administrators and other legal personal
representatives shall, from time to time, be indemnified and saved harmless by
the Company from and against any liability and all costs, charges, and expenses
that such director or officer sustains or incurs in respect of any action, suit
or proceeding that is proposed or commenced against him for or in respect of
anything done or permitted by him in respect of the execution of the duties of
his office and all other costs, charges, and expenses that he sustains or incurs
in respect of the affairs of the Company, except such costs, charges, or
expenses as are occasioned by his own wilful neglect or default. In addition,
the board of directors of the Company has passed, and the Company's shareholders
have confirmed, several special By-laws authorizing the board of directors,
among other things, to borrow money and issue bonds or debentures and to secure
any such borrowing by mortgaging or pledging all or part of the Company's
assets. The special By-laws further authorize the board of directors to delegate
the foregoing powers to any director or officer and to give indemnities to any
such director or other person acting on behalf of the registrant and secure any
such person against loss by giving him by way of security a mortgage or charge
upon all of the currently owned or subsequently acquired property, undertakings,
and rights of the Company.
Pursuant to an employment agreement with William P. Long, President, Chief
Executive Officer and a director of the Company, the Company has agreed to
assume all liability for and to indemnify, protect, save and hold Dr. Long
harmless from and against any and all losses, costs, expenses, attorneys' fees,
claims, demands, liability, suits, and actions of every kind and character which
may be imposed upon or incurred by Dr. Long on account of, arising directly or
indirectly from, or in any way connected with or related to Dr. Long's
activities as an officer or director of the Company. In addition, Mineral
Recovery Systems, Inc. ("MRS"), a wholly-owned subsidiary of the Company, has
agreed to assume all liability for and to indemnify, protect, save, and hold
harmless Patrick Costin (Vice President of the Company and President of MRS)
from and against any and all losses, costs, expenses, attorneys' fees, claims,
demands, liabilities, suits and actions of every kind and character which may be
imposed on or incurred by Mr. Costin on account of, arising directly or
indirectly from, or in any way connected with Mr. Costin's activities as
manager, officer or director of MRS or the Company.
14
<PAGE>
In addition, pursuant to the Registration Rights Agreement, the Company has
agreed to indemnify the holders of the Warrants and Debentures, and such persons
have agreed to indemnify the Company and its officers, directors, and
controlling persons, for certain liabilities which might arise under the
Securities Act or state law in connection with the Registration Statement and
related offering.
Indemnification may be granted pursuant to any other agreement, bylaw, or
vote of the Company's shareholders or directors. In addition to the foregoing,
the Company maintains insurance through a commercial carrier against certain
liabilities which may be incurred by its directors and officers. The foregoing
description is necessarily general and does not describe all details regarding
the indemnification of officers, directors or controlling persons of the
Company.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions or otherwise, the Company has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer,
or controlling person of the Company 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 Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
LEGAL MATTERS
The validity of the Shares being offered hereby are being passed upon for
the Company by Beach, Hepburn, Ontario, Canada.
EXPERTS
The financial statements and schedules of the Company included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997, and
incorporated by reference in this Registration Statement, have been audited by
McGovern, Hurley, Cunningham, independent public accountants, as indicated in
their reports with respect thereto, and are incorporated herein in reliance upon
the authority of said firm as experts in giving accounting and auditing said
reports.
Future financial statements of the Company and the reports thereon by
McGovern, Hurley, Cunningham also will be incorporated by reference in the
Registration Statement in reliance upon the authority of that firm as experts in
accounting and auditing in giving those reports; provided, however, only to the
extent that said firm has audited those financial statements and consented to
the use of their reports thereon.
15
<PAGE>
======================================== ===================================
No person has been authorized to give
any information or make any 924,973 Shares
representation other than those
contained in, or incorporated by
reference into, this Prospectus, and, if
given or made, such information or
representations must not be relied upon
as having been authorized by the Company
or any Selling Security Holder. This
Prospectus does not constitute an offer
to sell or solicitation of any offer to
buy, nor shall there be any sale of the
Shares by anyone, in any state in which
such offer, solicitation or sale would
be unlawful prior to registration or
qualification of the Shares under the
securities laws of any state, or in ALTAIR
which the person making such offer or INTERNATIONAL INC.
solicitation is not qualified to do so,
or to any person to whom it is unlawful COMMON STOCK
to make such offer or solicitation.
Neither delivery of this Prospectus nor
any sale made hereunder shall, under any
circumstances, create any implication
that there has been no change in the
information herein or the affairs of the
Company since the date hereof.
_______________
----------------------- PROSPECTUS
_______________
TABLE OF CONTENTS
Page
----
Available Information..................2
Incorporation of Certain Documents
by Reference.........................2
Enforceability of Civil Liabilities
Against Foreign Persons..............3
Prospectus Summary.....................4
Forward-Looking Statements.............6
Risk Factors...........................6
Price Range of Common Stock...........11
Selling Security Holders..............11
Use of Proceeds.......................14
Plan of Distribution..................14
Indemnification.......................14
Legal Matters.........................15
Experts...............................15
--------------------
________ __, 1998
======================================= ===================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the various expenses of the offering, sale
and distribution of the Shares being registered pursuant to this registration
statement (the "Registration Statement"). All of the expenses listed below will
be borne by the Company. All of the amounts shown are estimates, except the SEC
and NASD registration fees.
Amount
------
SEC registration fees................................. $ 2,829.00
NASD registration fees................................ 1,471.00
Accounting fees and expenses.......................... 1,500.00
Legal fees and expenses............................... 10,000.00
Blue sky fees and expenses............................ 1,000.00
Miscellaneous expenses................................ 8,200.00
--------------------
Total............................................ $ 25,000.00
====================
Item 15. Indemnification of Directors and Officers
Subsection 136(1) of the Business Corporation Act, Ontario (the "Act")
provides that a corporation may indemnify a director or officer of the
corporation, a former director or officer of the corporation or a person who
acts or acted at the corporation's request as a director or officer of a body
corporate of which the corporation is or was a shareholder or creditor, and his
heirs and legal representatives, against all costs, charges and expenses,
including an amount paid to settle an action or satisfy a judgment, reasonably
incurred by him or her in respect of any civil, criminal or administrative
action or proceeding to which he is made a party by reason of being or having
been a director or officer of such corporation or body corporation, if,
(a) he acted honestly and in good faith with a view to the best interests
of the corporation; and
(b) in the case of a criminal or administrative action or proceeding that
is enforced by a monetary penalty, he had reasonable grounds for
believing that his or her conduct was lawful.
Subsection 136(2) of the Act provides that a corporation may, with the
approval of the court, indemnify a person referred to in subsection 136(1) of
the Act in respect of an action by or on behalf of the corporation or body
corporate to procure a judgment in its favor, to which the person is made a
party by reason of being or having been a director or an officer of the
corporation or body corporate, against all costs, charges and expenses
reasonably incurred by the person in connection with such action if he fulfills
the conditions set out in clauses 136(1)(a) and 136(1))(b) of the Act.
Subsection 136(3) of the Act provides that despite anything in section 136
of the Act, a person referred to in subsection 136(1) of the Act is entitled to
indemnity from the corporation in respect of all costs, charges and expenses
reasonably incurred by him in connection with the defense of any civil, criminal
or administrative action or proceeding to which he is made a party by reason of
being or having been a director or officer of the corporation or body corporate,
if the person seeking indemnity,
(a) was substantially successful on the merits in his defense of the
action or proceeding; and
(b) fulfills the conditions set out in clauses 136(1)(a) and 136(1)(b) of
the Act.
Subsection 136(4) of the Act provides that a corporation may purchase and
maintain insurance for the benefit of any person referred to in subsection
136(1) of the Act against any liability incurred by the person,
(a) in his capacity as a director or officer of the corporation, except
where the liability relates to the person's failure to act honestly
and in good faith with a view to the best interests of the
corporation; or
II-1
<PAGE>
(b) in his capacity as a director or officer of another body corporate
where the person acts or acted in that capacity at the corporation's
request, except where the liability relates to the person's failure to
act honestly and in good faith with a view to the best interests of
the body corporate.
Subsection 136(5) of the Act provides that a corporation or a person
referred to in subsection 136(1) of the Act may apply to the court for an order
approving an indemnity under section 136 of the Act and the court may so order
and make any further order it thinks fit.
Subsection 136(6) of the Act provides that upon an application under
subsection 136(5) of the Act, the court may order notice to be given to any
interested person and such person is entitled to appear and be heard in person
or by counsel.
The Company's By-laws, as amended, provide that, subject to the provisions
of the Act, every director and officer of the Company and his heirs, executors,
administrators and other legal personal representatives shall, from time to
time, be indemnified and saved harmless by the Company from and against any
liability and all costs, charges and expenses that such director or officer
sustains or incurs in respect of any action, suit or proceeding that is proposed
or commenced against him for or in respect of anything done or permitted by him
in respect of the execution of the duties of his office and all other costs,
charges and expenses that he sustains or incurs in respect of the affairs of the
Company, except such costs, charges or expenses as are occasioned by his own
wilful neglect or default. In addition, the board of directors of the Company
has passed, and the shareholders have confirmed, several special By-laws
authorizing the board of directors, among other things, to borrow money and
issue bonds or debentures and to secure any such borrowing by mortgaging or
pledging all or part of the Company's assets. The special By-laws further
authorize the board of directors to delegate the foregoing powers to any
director or officer and to give indemnities to any such director or other person
acting on behalf of the Company and secure any such person against loss by
giving him by way of security a mortgage or charge upon all of the currently
owned or subsequently acquired property, undertakings, and rights of the
Company.
Pursuant to an employment agreement with William P. Long, President, Chief
Executive Officer and a director of the Company, the Company has agreed to
assume all liability for and to indemnify, protect, save and hold Dr. Long
harmless from and against any and all losses, costs, expenses, attorneys' fees,
claims, demands, liability, suits and actions of every kind and character which
may be imposed upon or incurred by Dr. Long on account of, arising directly or
indirectly from, or in any way connected with or related to Dr. Long's
activities as an officer and director of the Company. In addition, MRS has
agreed to assume all liability for and to indemnify, protect, save, and hold
harmless Patrick Costin (Vice President of the Company and President of MRS)
from and against any and all losses, costs, expenses, attorneys' fees, claims,
demands, liabilities, suits and actions of every kind and character which may be
imposed on or incurred by Mr. Costin on account of, arising directly or
indirectly from, or in any way connected with Mr. Costin's activities as
manager, officer or director of MRS or the Company.
In addition, pursuant to the Registration Rights Agreement, the Company has
agreed to indemnify the initial holders of the Debentures and Warrants, and such
persons have agreed to indemnify the Company and its officers, directors, and
controlling persons, for certain liabilities which might arise under the
Securities Act or state law in connection with the Registration Statement and
related offering.
Indemnification may be granted pursuant to any other agreement, bylaw, or
vote of the Company's shareholders or directors. In addition to the foregoing,
the Company maintains insurance through a commercial carrier against certain
liabilities which may be incurred by its directors and officers. The foregoing
description is necessarily general and does not describe all details regarding
the indemnification of officers, directors or controlling persons of the
Company.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company
pursuant to the foregoing provisions or otherwise, the Company has been informed
that in the opinion of the Commission such indemnification is against public
policy as expressed in the Securities Act, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the Company of expenses incurred or paid by a director, officer
or controlling person of the Company 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 Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-2
<PAGE>
Item 16. Exhibits.
The following exhibits required by Item 601 of Regulations S-K promulgated
under the Securities Act have been included herewith or have been filed
previously with the Commission as indicated below.
Regulation S-K Description
Exhibit No.
-------------- --------------------------------------------------------
4.1 Articles of Incorporation of the Company (incorporated
by reference to Registration Statement on Form 10-SB
filed with the Commission on November 25, 1996).
4.2 Amendment to Articles of Incorporation of the Company
dated November 6, 1996 (incorporated by reference to
Amendment No. 1 to Registration Statement on Form 10
filed with the Commission on December 23, 1996).
4.3 By-laws of the Company (incorporated by reference to
Registration Statement on Form 10-SB filed with the
Commission of November 25, 1996).
4.4 Form of Common Stock Certificate (incorporated by
reference to Registration Statement on Form 10-SB filed
with the Commission on November 25, 1996).
5 Opinion of Beach, Hepburn as to the legality of the
securities offered.+
23.1 Consent of Beach, Hepburn (included in Exhibit No. 5).+
23.2 Consent of McGovern, Hurley, Cunningham.+
24 Powers of Attorney (included on page II-5 of the
Registration Statement).+
+ Previously filed.
Item 17. Undertakings
(a) The undersigned Company hereby undertakes:
(1) To file, during any period in which offers or sales are being
made of the securities registered hereby, a post-effective amendment to
this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of this 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 this Registration Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by
those paragraphs is contained in periodic reports filed by the Company
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in the Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE>
(b) The undersigned Company hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the Company's
annual report pursuant to Section 13(a) or Section 15(d) of the Exchange Act
that is incorporated by reference in the Registration Statement shall be deemed
to be a new Registration Statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company, the Company has been informed that in the opinion of the Commission
such indemnification is against public policy as expressed in the Securities
Act, and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company 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 Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
II-4
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Company certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing on Form S-3 and has duly caused this Amendment No. 2
to the Registration Statement on Form S-3 to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Cody, State of Wyoming,
on May 8, 1998.
ALTAIR INTERNATIONAL INC.
By /s/ William P. Long
-------------------------------------
William P. Long
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ William P. Long President, Chief Executive Officer, and Director May 8, 1998
- ------------------------------------ (Principal Executive Officer and authorized
William P. Long representative of the Company in the United States)
/s/ C. Patrick Costin Vice President and Chief Financial Officer May 8, 1998
- ----------------------------------- (Principal Financial Officer and Principal
C. Patrick Costin Accounting Officer)
/s/ James I. Golla* Secretary and Director May 8, 1998
- ------------------------------------
James I. Golla
/s/ George E. Hartman* Director May 8, 1998
- ------------------------------------
George E. Hartman
/s/ Robert Sheldon* Director May 8, 1998
Robert Sheldon
</TABLE>
* By: /s/ William P. Long
---------------------------------
William P. Long, Attorney-in-Fact
II-5
<PAGE>
<TABLE>
ALTAIR INTERNATIONAL INC.
EXHIBIT INDEX
<CAPTION>
Regulation S-K Description Sequential System
Exhibit No. Page No.
- ---------------- --------------------------------------------------------------------- --------------------
<S> <C> <C>
4.1 Articles of Incorporation of the Company (incorporated by reference to
Registration Statement on Form 10-SB filed with the Commission on
November 25, 1996). --
4.2 Amendment to Articles of Incorporation of the Company dated
November 6, 1996 (incorporated by reference to Amendment No. 1 to
Registration Statement on Form 10 filed with the Commission on
December 23, 1996). --
4.3 By-laws of the Company (incorporated by reference to Registration
Statement on Form 10-SB filed with the Commission of November 25,
1996).
--
4.4 Form of Common Stock Certificate (incorporated by reference to
Registration Statement on Form 10-SB filed with the Commission on
November 25, 1996). --
5 Opinion of Beach, Hepburn as to the legality of the securities offered. *
23.1 Consent of Beach, Hepburn (included in Exhibit No. 5) *
23.2 Consent of McGovern, Hurley, Cunningham *
24 Powers of Attorney (included on page II-5 of the Registration *
Statement)
</TABLE>
- --------------------
* Previously filed.
II-6
