ROSPECTUS
RCM TECHNOLOGIES, INC.
157,342 Shares of Common Stock
offered by the Company pursuant to
certain outstanding Warrants
1,500,813 Shares of Common Stock
offered by certain Selling Security Holders
This Prospectus relates to an offering by RCM Technologies, Inc. (the
"Company") of 157,342 shares of common stock, $.05 par value per share (the
"Common Stock"), issuable upon the exercise, if at all, of certain outstanding
Class C Warrants (the "Warrants") that were issued by the Company in a public
offering that was completed on August 22, 1989. The Warrants are subject to an
exercise price, after giving effect to certain adjustment events, of $15.00 per
share of Common Stock, and are scheduled to expire on December 31, 1997.
This Prospectus also relates to the potential resale, subject to
material restrictions upon sale, of up to 1,500,813 shares of Common Stock,
previously issued by the Company in private transactions, pursuant to
registration rights granted by the Company in conjunction with such
transactions. These shares are being offered by the holders identified as
"Selling Security Holders" in this Prospectus, including 1,234,201 shares being
offered by certain directors and officers. The shares being offered by the
Selling Security Holders are subject to contractual restrictions on resale prior
to December 7, 1997. Thereafter, the Selling Security Holders have agreed to
further restrictions upon resale of the shares. See "SELLING SECURITY HOLDERS"
and "PLAN OF DISTRIBUTION."
The shares of Common Stock may be offered by the Selling Security
Holders identified in this Prospectus or by donees, pledgees, transferees, or
other successors in interest, for sale from time to time by the holders in
regular brokerage transactions, either directly or through brokers or to
dealers, in private sales or negotiated transactions, or otherwise, at prices
related to then prevailing market prices. The Company will not receive any of
the proceeds of the sale of shares of Common Stock by the Selling Security
Holders although it will receive proceeds from the exercise, if at all, of all
of the Warrants. All expenses of the registration of such securities will be
borne by the Company. The Selling Security Holders, and not the Company, will
pay or assume all applicable brokerage commissions or other costs of sale as may
be incurred in the sale of such securities. See "SELLING SECURITY HOLDERS."
The Company will assume no responsibility for the sale of the shares of
Common Stock, nor can there be any assurances that a liquid trading market will
exist for the sale of the shares of Common Stock.
The Company's Common Stock is included on The NASDAQ National Market
("NASDAQ") under the symbol "RCMT." The closing price of the Company's Common
Stock as reported by NASDAQ on October 28, 1997 was $12.50.
No person is authorized to give any information or to make any
representations, other than as contained herein, in connection with the offer
made in this Prospectus, and any information or representation not contained
herein must not be relied upon as having been authorized by the Company or the
Selling Security Holders. This Prospectus does not constitute an offer to sell
or a solicitation of an offer to buy any security other than the Common Stock
offered by this Prospectus, nor does it constitute an offer to sell or a
solicitation of any offer to buy any shares of Common Stock offered hereby to
any person in any jurisdiction where it is unlawful to make such an offer or
solicitation to such person. Neither the delivery of this Prospectus nor any
sale hereunder shall under any circumstances create any implication that
information contained herein is correct as of any time subsequent to the date
hereof.
------------------------
PURCHASE OF THESE SECURITIES MAY INVOLVE MATERIAL RISKS. A DISCUSSION OF
THESE RISK FACTORS APPEARS ON PAGES 7 - 11.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
============================== ---------------------------- --------------------------- ============================
Underwriting Proceeds to
Discounts the Company
Class of Price to and or the Selling
Security Public Commissions Security
Holders
============================== ---------------------------- --------------------------- ============================
<S> <C> <C> <C>
Shares of $12.50(1) (2) $18,760,162(1)
Common Stock
============================== ============================ =========================== ============================
Shares of $15.00(3) (2) $2,360,130(4)
Common Stock
============================== ============================ =========================== ============================
<FN>
(1) Represents the anticipated sale by the Selling Security Holders at
$12.50 per share, the last reported sales price reported on The NASDAQ
National MarketSM on October 28, 1997. There can be no assurances,
however, that the Selling Security Holders will be able to sell their
shares at this price, or that a liquid market will exist for the
Company's Common Stock. The Company will receive no proceeds upon the
sale of shares of Common Stock by the Selling Security Holders,
although the Company will receive proceeds from the exercise of the
Warrants.
(2) Exclusive of the costs of this offering, including among others,
filing, printing and professional fees, estimated at $50,000, which
will be borne entirely by the Company.
(3) Reflects the exercise price of the Class C Warrants.
(4) Reflects gross proceeds that may be realized by the Company upon the
exercise, if at all, of the Class C Warrants.
</FN>
</TABLE>
The date of this Prospectus is October 29, 1997.
<PAGE>
7
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
the Commission's regional offices at: 7 World Trade Center, Suite 1300, New
York, New York 10048 and Northwest Atrium Center, 500 West Madison Street, Suite
1400, Chicago, Illinois 60661. Copies of such materials may be obtained upon
written request addressed to the Commission at the Public Reference Section, at
450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. In
addition, the Commission maintains a Web site at http://www.sec.gov containing
reports, proxy and information statements and other information regarding
registrants that file electronically with the Commission, including the Company.
The Common Stock is listed on NASDAQ and reports and other information
concerning the Company may also be inspected at the offices of The National
Association of Securities Dealers, Inc. at 1735 K Street, N.W., Washington, D.C.
20006.
In addition, the Company will provide without charge to each person to
whom this Prospectus is delivered, upon either the written or oral request of
such person, the Annual Report to Stockholders for the Company's latest fiscal
year and a copy of any or all of the documents incorporated herein by reference
other than exhibits to such documents. See "INCORPORATION OF DOCUMENTS BY
REFERENCE." Such requests should be directed to Stanton Remer, RCM Technologies,
Inc., 2500 McClellan Avenue, Suite 350, Pennsauken, NJ 08109
The Company has filed with the Commission a registration statement
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission.
For further information, reference is hereby made to the Registration Statement.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission are
incorporated herein by reference:
(a) The Company's Registration Statement on Form S-1, Reg. No. 333-23753 filed
on March 21, 1997, as thereafter amended, which contains a description of the
Company's Common Stock and certain rights relating to the Common Stock,
including any amendments or reports filed for the purpose of updating such
descriptions;
(b) The Company's Annual Report on Form 10-K for the year ended October
31, 1996;
(c) The Company's Annual Report to Stockholders for the year ended
October 31, 1996;
(d) The Company's definitive Proxy Statement for the Annual Meeting of
Stockholders held April 25, 1997;
(e)The Company's Quarterly Reports on Form 10-Q for the quarters
ended January 31, 1997, April 30, 1997 and July 31, 1997;
(f) The Company's Current Report on Form 8-K dated January 21, 1997;
(g) The Company's Current Report on Form 8-K dated September 25, 1997;
(h) The Company's Current Report on Form 8-K dated September 26, 1997;
and
(i) In addition to the foregoing, all documents subsequently filed by
the Company pursuant to Section 13(a), 13(c), 14 and 15(d) of the Act (prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities remaining
unsold), shall be deemed to be incorporated by reference herein and to be a part
hereof from the date of the filing of such reports and documents.
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements (including the notes thereto) appearing
elsewhere in or incorporated by reference into this Prospectus.
THE COMPANY
The Company
The Company is a multi-regional provider of specialty professional
staffing services through its 32 branch offices located in 13 states. The
Company provides contract and temporary personnel in the information technology,
professional engineering and technical, specialty healthcare and general support
sectors of the staffing industry to a diversified base of national, regional and
local customers. During fiscal 1996, the Company provided an average of 2,600
contract and temporary staffing employees on a daily basis to approximately 700
customers, including a number of Fortune 500 companies, governmental units,
public utilities, as well as small to medium size retail, manufacturing,
professional and service organizations. Customers include Air Products &
Chemicals, AT&T, Beth Israel Medical Center, Consolidated Edison, Deloitte &
Touche, Mt. Sinai Hospital, Northeast Utilities, Sandoz Pharmaceuticals and
Sears.
The Company's objective is to become a leading provider of specialty
professional staffing services in selected regional markets throughout the
United States. Management has designed the Company's blend of service offerings,
particularly within the information technology and niche professional
engineering sectors, to meet the varied staffing requirements of many medium and
large corporations. The Company intends to expand internally and to make
acquisitions both in its existing markets and in markets that are determined by
management to have strong growth and specialty staffing requirements.
Additionally, the Company believes it can maximize the benefits of its
acquisitions by rapidly integrating the general and administrative functions of
the acquired companies, fostering a decentralized entrepreneurial environment
and by focusing on the relationships with both its customers and personnel.
Service to the general staffing sector, while not intended as a primary focus of
the Company's operations, will continue to supplement the Company's specialty
professional services and provide diversification to the Company's customer base
and geographic presence.
The executive offices of the Company are located at 2500 McClellan
Avenue, Suite 350, Pennsauken, New Jersey 08109, and its telephone number is
(609) 486-1777.
THE OFFERING
Securities Being Offered:
This Prospectus relates to an offering by the Company of 157,342 shares of
common stock, $.05 par value per share ("Common Stock"), issuable upon the
exercise, if at all, of certain outstanding Class C Warrants (the "Warrants")
that were issued by the Company in a public offering that was completed on
August 22, 1989. The Warrants are subject to an exercise price, after giving
effect to certain adjustment events, of $15.00 per share of Common Stock, and
are scheduled to expire on December 31, 1997.
This Prospectus also relates to the potential resale, subject to material
resrictions upon sale, of up to 1,500,813 shares, as described under "SELLING
SECURITY HOLDERS" below, of Common Stock, previously issued by the Company in
private transactions, pursuant to registration rights granted by the Company in
conjunction with such transactions. These shares are being offered by the
holders identified as "Selling Security Holders" in this Prospectus, including
1,234,201 shares being offered by certain directors and officers. The shares
being offered by the Selling Security Holders are subject to contractual
restrictions on resale prior to December 7, 1997. Thereafter, the Selling
Security Holders have agreed to further restrictions upon resale of the shares.
See "SELLING SECURITY HOLDERS."
The shares of Common Stock offered by the Selling Security Holders may be
offered for sale from time to time by the holders thereof in regular brokerage
transactions, either directly or through brokers or to dealers, in private sales
or negotiated transactions, or otherwise, at prices related to then prevailing
market prices. The Company will not receive any proceeds from the sale of shares
of Common Stock by the Selling Security Holders although it will receive
proceeds from the exercise, if at all, of the Warrants. All expenses of the
registration of such securities will be borne by the Company. The Selling
Security Holders, and not the Company, will pay or assume all applicable
brokerage commissions or other costs of sale as may be incurred in the sale of
their securities.
The Common Stock is traded on The NASDAQ National Market under the symbol
"RCMT." On October 28, 1997, the closing price on NASDAQ was $12.50.
Number of shares of Common Stock outstanding......................7,582,206(1)
Number of shares of Common Stock which may be
issued upon the exercise of the Warrants............................157,342
Total number of shares of Common Stock
outstanding assuming exercise of the Warrants.....................7,739,548
Total number of shares of Common Stock being offered
by Selling Security Holders.......................................1,500,813
- ---------------------
(1) As of October 28, 1997.
- ---------------------
Use of Proceeds:
The Company will not receive any of the proceeds from the sale of any of the
shares of Common Stock by the Selling Security Holders.
The net proceeds realized by the Company upon the exercise of the Warrants, if
at all, will be used to offset the general working capital requirements of the
Company. Inasmuch as the Company has received no firm commitments for the
exercise of the Warrants, there can be no assurances as to the amount of the net
proceeds to be realized by the Company.
Risk Factors:
The Common Stock offered hereby involves a high degree of risk. See
"RISK FACTORS."
Trading Symbol: Common Stock - RCMT
Class C Warrants - RCMTZ
RISK FACTORS
An investment in the shares of Common Stock involves a high degree of
risk. Prospective investors should carefully consider the following risk factors
in addition to the other information set forth in this Prospectus in connection
with the investment in the shares of Common Stock.
When used in or incorporated by reference into this Prospectus, the
words "estimate," "project," "intend," "expect" and similar expressions are
intended to identify forward-looking statements regarding events and financial
trends which may affect the Company's future operating results and financial
position. Such statements are subject to risks and uncertainties that could
cause the Company's actual results and financial position to differ materially.
Such factors are described in detail below and in the Company's reports filed
with the Commission under the Exchange Act which are incorporated herein by
reference. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date made. The Company
undertakes no obligation to publicly release the result of any revisions to
these forward-looking statements to reflect events or circumstances after the
date made or to reflect the occurrence of unanticipated events.
Ability to Achieve and Manage Growth
The Company has experienced significant growth since the beginning of
fiscal 1995, principally through acquisitions. Continued growth could place
additional demands on its administrative, operational and financial resources.
The Company's ability to achieve and manage its growth will depend on a number
of factors, including the availability of working capital to support such
growth, existing and emerging competition, the Company's ability to maintain
sufficient profit margins and the strength of demand for contract and temporary
personnel in the sectors in which the Company operates. There can be no
assurance that the Company will be able to continue to achieve or manage such
growth effectively and the failure to do so could have a material adverse effect
on the Company's business, financial condition and results of operations.
Risks Associated with Future Acquisitions
A primary element of the Company's growth strategy is to pursue
strategic acquisitions that expand or complement the Company's business. The
Company regularly reviews various strategic acquisition opportunities and
periodically engages in discussions regarding possible acquisitions. As a
result, negotiations may occur from time to time as appropriate opportunities
arise. There can be no assurance that the Company will be able to identify
additional acquisition candidates on terms favorable to the Company or in a
timely manner, enter into acceptable agreements or close any such transactions,
and any failure to do so could have a material adverse effect on the Company's
ability to sustain its growth. In addition, management believes that the Company
will compete for acquisition candidates with other companies. Increased
competition for such acquisition candidates could have the effect of increasing
the cost of pursuing this growth strategy or could reduce the number of
attractive candidates to be acquired. Future acquisitions could divert
management's attention from the daily operations of the Company and require
additional management, operational and financial resources. Moreover, there is
no assurance that the Company will be able to successfully integrate
acquisitions into its business or operate such acquisitions at expected levels
of revenue or profitability. Acquisitions may also have an adverse short-term
effect on the Company's operating results, dependence on retaining key
personnel, amortization of acquired intangible assets and risks associated with
unanticipated problems, liabilities or contingencies.
The Company may require additional debt or equity financing for future
acquisitions, which may not be available at all, or on terms favorable to the
Company. To the extent the Company uses shares of Common Stock for all or a
portion of the consideration to be paid in future acquisitions, dilution may be
experienced by existing stockholders, including the purchasers of Common Stock
in this offering. If the Company does not have cash resources sufficient for
such purpose or is not able to use its Common Stock as consideration for
acquisitions, its growth through acquisitions could be limited.
Dependence on Key Customers and Geographic Concentration
Although the Company provides services to a large number of customers,
approximately 24.6% and 24.3% of the Company's revenues in fiscal 1996 and the
nine months ended July 31, 1997, respectively, were derived from the Company's
top five revenue producing customers, with one customer accounting for
approximately 12.0% of the Company's revenues in each period. Similarly, a
substantial portion of the Company's revenues are currently derived from
services provided to customers in the Northeast, Midwest and California regions
of the United States. The loss of or a reduction in business from any major
customers or a deterioration of general economic conditions in these regions
could adversely affect the Company.
Dependence on Availability of Qualified Temporary Personnel
The Company depends on its ability to attract, train and retain
personnel who possess the skills and experience necessary to meet the staffing
requirements of its customers. To remain competitive, the Company must
continually evaluate and update its database of personnel in each sector in
which it operates. Competition for the services of personnel within all of its
professional specialty groups is intense. Competition for information technology
personnel is particularly intense and demand for their services has, to date,
substantially exceeded their supply. The Company expects such competition to
continue. Factors influencing such competition include compensation, benefits,
growth opportunities, relationships with other specialty staffing companies and
full-time employment opportunities. There can be no assurance that qualified
personnel will continue to be available to the Company in sufficient numbers and
on terms of employment acceptable to the Company. The inability to attract and
retain qualified personnel in sufficient numbers, or to upgrade its base of
qualified personnel to keep pace with changing customer needs and emerging
technologies, could have a material adverse effect on the Company's business,
financial condition and results of operations.
Reliance on Key Personnel
The Company is highly dependent upon the continued services and
experience of its senior members of management, including Leon Kopyt, Chairman
and Chief Executive Officer. The loss of the services of Mr. Kopyt or other
senior members of management could have a material adverse effect on the
Company's business. The Company has employment agreements with Mr. Kopyt and
other senior members of management.
Fluctuations in Quarterly Operating Results
The Company has experienced, and is expected to continue experiencing,
quarterly variations in revenues and operating income as a result of many
factors, including the timing of assignments from customers, future
acquisitions, hiring of personnel and additional selling, general and
administrative expenses incurred to support new business as well as changes in
the Company's revenue mix. In connection with certain engineering projects, the
Company could incur costs in periods prior to recognizing revenues under those
contracts. In addition, the Company must plan its operating expenditures based
on revenue forecasts, and a revenue shortfall below such forecast in any quarter
would likely adversely effect the Company's operating results for the quarter.
While the effects of seasonality of the Company's business have been obscured by
its growth through acquisitions, the Company usually experiences lower revenues
in its first fiscal quarter due to the slowdown in business associated with the
holiday season.
Increased Costs of Employment
The Company is required to pay unemployment insurance premiums and
workers' compensation benefits for its contract and temporary employees.
Unemployment insurance premiums are set annually by the states in which
employees perform services and could increase periodically. There can be no
assurance that the Company will be able to increase the fees charged to its
customers in a timely manner and by an amount sufficient to cover increased
unemployment insurance premiums. Workers' compensation costs have increased as
various states in which the Company conducts operations have raised benefit
levels and liberalized allowable claims. The Company maintains workers'
compensation insurance for its employees under an insured program in its areas
of operation. There can be no assurance that the Company's actual workers'
compensation obligations will not exceed the amount of its insured coverage or
that the Company will be able to increase the fees charged to its customers
sufficiently to offset increased employment costs.
Liability for Customer and Employee Actions
Providers of contract and temporary staffing services generally place
their employees in the workplace of other businesses. The risk of employee
misconduct is attendant to the Company's business. These risks could include
claims relating to errors and omissions, misuse of proprietary information,
misappropriation of funds, discrimination and harassment, theft of customer
property, other criminal activity or torts and other claims. While the Company
has not historically experienced any material claims of these types, and has
insurance covering certain of these risks, there can be no assurance that the
Company will not experience such claims, incur costs in connection with such
risks in the future, that insurance coverage will continue to be available or
that it will be adequate to cover such liabilities.
Risks Related to Tax Status of Independent Contractors
Generally, the Company treats its technical personnel as employees for
federal and state tax purposes and pays all requisite Social Security taxes
(FICA), payroll taxes, unemployment taxes, workers' compensation insurance
premiums and other employee taxes and similar costs. In certain cases, however,
technical personnel desire to be treated as independent contractors for federal
and state tax purposes with respect to their assignments. In such cases, and if
appropriate, the individual is treated as an independent contractor for tax
purposes. Of the technical personnel, historically, less than 5% were treated as
independent contractors for federal and state tax purposes. The Company believes
that it is in material compliance with all applicable tax regulations concerning
the classification of its technical personnel, and has not, to date, been the
subject of any attempt by any federal or state authority to reclassify any of
the personnel it has treated as independent contractors. There can be no
assurance, however, that federal and state taxing authorities will not challenge
the Company's classification of technical personnel as independent contractors
in the future. If successful, such a challenge could result in the imposition of
additional taxes, interest and penalties, the amount of which could have a
material adverse effect on the Company's financial condition.
Risk of Government Regulations and Legislative Proposals
The Company's costs of operations could increase if there are any
material changes in government regulations. Recent federal and state legislative
proposals have included provisions seeking to extend health insurance benefits
to employees who do not currently receive such benefits. As a result of the wide
variety of national and state proposals currently under consideration, the
impact of such proposals cannot be predicted. There can be no assurance that the
Company will be able to increase the fees charged to its customers in a timely
manner and sufficient amount to cover increased costs related to any new
benefits that may be extended to temporary employees as a result of such
legislation or regulations. It is not possible to predict whether any other
legislation or regulations affecting the Company's operations will be proposed
or enacted at the federal or state level; however, no assurances can be given
that if enacted, such legislation or regulations would not have a material
adverse effect on the Company.
Competitive Market
The temporary staffing industry is highly competitive, with limited
barriers to entry. The Company competes for customers in the geographic regions
in which it operates with national, regional and local, full service and
specialized staffing providers. Certain of the Company's competitors have
greater marketing, financial and other resources, and more established
operations, than the Company. As a result, they may be better able to respond or
adapt to new or emerging technologies and changes in customer requirements or to
devote greater resources to the development, marketing and sales of their
services than the Company. The Company expects that the level of competition
will remain high in the future, which could limit the Company's ability to
maintain its market share or maintain gross margins in the geographic regions in
which it operates, either of which could have a material adverse effect on the
Company's business, financial condition and results of operations.
General Economic Risks
Demand for professional staffing services is significantly affected by
the general level of economic activity. When economic activity slows, customers
may delay or cancel plans that involve the hiring of permanent or contract
technical personnel. The Company is unable to predict the level of economic
activity at any particular time, and fluctuations in the general economy could
adversely affect the Company's business, operating results and financial
condition.
Effect of Certain Anti-Takeover Provisions
Certain provisions of the Company's Articles of Incorporation, as
amended (the "Articles of Incorporation"), Amended and Restated Bylaws (the
"Bylaws"), the Nevada General Corporation Law, the Company's Stockholder Rights
Plan (the "Rights Plan") and the Second Amended and Restated Termination
Benefits Agreement between the Company and its Chief Executive Officer (the
"Benefits Agreement") could delay or frustrate the removal of incumbent
directors and could make difficult a change in control transaction including a
merger, tender offer or proxy contest involving the Company, even if such events
could be viewed as beneficial by the Company's stockholders. For example, the
Bylaws provide for a classified Board of Directors and the Articles of
Incorporation deny the right of stockholders to amend the Bylaws without the
consent of the Board and require advance notice of stockholder nominations of
directors. The Company is also subject to provisions of the Nevada General
Corporation Law that prohibit a publicly held Nevada corporation from engaging
in a broad range of business combinations with a person who, together with
affiliates and associates, owns 10% or more of the corporation's outstanding
voting shares (an "interested stockholder") for three years after the person
became an interested stockholder, unless the business combination is approved in
a prescribed manner. In addition, the Rights Plan provides for substantial
dilution of a "acquiring person" as defined therein in the event a person or
group of persons acquires beneficial ownership of 15% or more of the outstanding
Common Stock of the Company or in the event of a merger or sale of assets which
is not approved by the "continuing directors," of the Company as defined in the
Rights Plan. Furthermore, in the event a "change in control" (as defined in the
Benefits Agreement) which results in the termination of the Chief Executive
Officer, the Company would be required to make substantial payments and, in
certain circumstances, reduce the exercise price of options issued to the Chief
Executive Officer.
USE OF PROCEEDS
The Company will not realize any proceeds from the sale of shares of
Common Stock by the Selling Security Holders. Other than with respect to
ordinary brokerage commissions or other costs of sale, the costs of this
offering, including among others, printing, blue sky and professional fees,
estimated at $50,000, will be borne entirely by the Company. See "SELLING
SECURITY HOLDERS."
Although the Company will not realize any proceeds from the resale of
the shares by the Selling Security Holders, gross proceeds will be realized by
the Company to the extent shares are issued upon the exercise of outstanding
Warrants. The gross proceeds which may be realized by the Company upon the
exercise of all of the Warrants will be $2,360,130. Inasmuch as the Company has
received no firm commitments for their exercise, there can be no assurance that
any or a substantial portion of the Warrants will be exercised.
Management cannot predict with any certainty the amount of proceeds, if
any, which may be generated from the exercise of the Warrants. The net proceeds
which may be realized by the Company, if any, upon the exercise of the Warrants
will not be utilized for any specific purpose other than to contribute to the
Company's working capital and be used to continue the operations of the Company
in accordance with the business strategy identified by management from time to
time.
<PAGE>
18
SELLING SECURITY HOLDERS
The shares of Common Stock offered by this Prospectus are being sold
for the account of the Selling Security Holders identified in the following
table (the "Selling Security Holders").
The following table sets forth the name of each Selling Security
Holder, the nature of his position, office, or other material relationship to
the Company for the past three years, if any, and the number of shares of Common
Stock of each such Selling Security Holder (1) owned of record as of October
3,1997; (2) which are to be offered hereunder; (3) which are to be owned by each
such Selling Security Holder assuming the sale of all shares offered hereunder;
and (4) the percentage of outstanding shares of Common Stock to be owned by each
Selling Security Holder before and after the sale of the shares to be offered
hereunder. There can be no assurance that any of the Selling Security Holders
will offer for sale or sell any or all of the Common Stock offered by them
pursuant to this Prospectus.
<TABLE>
<CAPTION>
Amount of Shares Percentage of Percentage
to be Owned After Common Stock to of Common Stock
Name and Relationship Number of Shares Number of Shares Sales of Shares be Owned before to be Owned
to RCM Technologies, Inc. Owned as of 10/3/97 to be Offered Offered Hereunder Sales (1) after Sales
<S> <C> <C> <C> <C> <C> <C>
Limeport Investments LLC(2) 138,312 138,312(3) 0 1.8% 0
Martin Blaire(4) 571,468 571,468(3)(6) 0 7.5% 0
Barry S. Meyers(4) 607,468 607,468(3)(6) 0 7.9% 0
Peter Kaminsky 80,265 55,265(7) 25,000 1.0% *
Alexander Valcic 6,905 6,425(5) 480 * *
Howard Ross 55,084 55,084(5) 0 * 0
Marie Tarmy 23,557 23,557(5) 0 * 0
Angela F. Trotman 7,471 7,471(8) 0 * 0
Richard E. Serodio 1,867 1,867(8) 0 * 0
Michael D. O'Keefe 1,867 1,867(8) 0 * 0
Amarly Corporation 11,204 11,204(8) 0 * 0
Alumax Inc. 20,825 0 * 0
20,825(3)
Total 1,500,813
- ----------------------------------------------------------
<FN>
Less than 1%.
(1) Based upon 7,582,206 shares of Common Stock outstanding as of October 6, 1997.
(2) Does not include 2,600 shares of Common Stock held by Peter Kuhlmann, a principal of Limeport
Investments LLC.
(3) Resale of the shares being offered hereunder are subject to contractual restrictions on resale prior to
December 7, 1997.
(4) Director of the Company.
(5) Resale of the shares being offered hereunder may not commence until March 11, 1998.
(6) Resale of the shares being offered hereunder are subject to the following limitations: (i) through
March 11, 1998, resale shall be limited to only those shares with an
aggregate value of $258,000; (ii) from March 11, 1998 to March 11,
1999, resales shall be limited to that number of shares that could have
been sold during this period under Rule 144 under the Securities Act
(as that Rule was in effect as of the closing of such transaction in
March 1996; however, no greater than 50,000 shares per week per holder;
and (iii) after March 11, 1999, resales are unlimited.
(7) Resale of the shares being offered hereunder may not commence until March 2,
1998. (8) Resale of the shares being offered hereunder may not commence until
January 21, 1998.
</FN>
</TABLE>
<PAGE>
PLAN OF DISTRIBUTION
Warrants
The Company is offering shares of Common Stock issuable upon exercise
of 786,709 outstanding Class C Warrants. The Class C Warrants were issued by the
Company in a public offering that was completed on August 22, 1989. The Class C
Warrants were issued pursuant to the terms of a Warrant Agreement between the
Company and American Stock Transfer & Trust Company (the "Warrant Agent"). As
adjusted by subsequent recapitalizations of the Company, each five Class C
Warrants entitle the registered holder thereof to purchase one share of Common
Stock at an exercise price of $15.00 per share. The Class C Warrants were
initially scheduled to expire on January 31, 1990, however, the expiration date
has been extended by the Company's Board of Directors to December 31, 1997. The
exercise price and number of shares issuable upon exercise of the Class C
Warrants is subject to adjustment in the event of a recapitalization, stock
dividend, stock split or merger.
The Class C Warrants can be exercised by surrendering to the Warrant
Agent a Class C Warrant Certificate signed by the holder thereof or his duly
authorized agent with the form of election to purchase on the reverse side of
the certificate completed and signed. Surrendered Warrant Certificates must be
accompanied by payment in full of the aggregate exercise price for the Class C
Warrants to be exercised, which payment may be in the form of cash or certified
check. Upon exercise, the Company will issue such fully paid and non-assessable
shares of Common Stock as are specified on the Class C Warrant Certificate as
tendered.
Selling Security Holders
The Selling Security Holders may be offering shares of Common Stock for
their own account, and not for the account of the Company. The Company will not
receive any proceeds from the sale of the shares of Common Stock by the Selling
Security Holders.
The Selling Security Holders may be offering, subject to material
restrictions, for sale up to 1,500,813 shares of Common Stock previously issued
by the Company in private transactions pursuant to registration rights granted
by the Company in conjunction with such transactions.
Each Selling Security Holder will, prior to any sales, agree (a) not to
effect any offers or sales of the Common Stock in any manner other than as
specified in this Prospectus, (b) to inform the Company of any sale of Common
Stock at least one business day prior to such sale and (c) not to purchase or
induce others to purchase Common Stock in violation of Regulation M under the
Exchange Act.
The Common Stock may be sold from time to time by the Selling Security
Holders identified in this Prospectus (see "SELLING SECURITY HOLDERS") or by
pledgees, donees, transferees or other successors in interest. Such sales may be
made on NASDAQ, on the over-the-counter market or otherwise at prices and at
terms then prevailing or at prices related to the then current market price, or
in negotiated private transactions. The Common Stock may be sold by one or more
of the following: (a) a block trade in which the broker or dealer so engaged
will attempt to sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction; (b) purchases by a
broker or dealer for its account pursuant to this Prospectus; and (c) ordinary
brokerage transactions and transactions in which the broker solicits purchases.
In effecting sales, brokers or dealers engaged by the Selling Security Holders
may arrange for other brokers or dealers to participate. Brokers or dealers will
receive commissions or discounts from Selling Security Holders in amounts to be
negotiated immediately prior to the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters" within the
meaning of the Act in connection with such sales. The Company will not receive
any of the proceeds from the sale of these shares, although it has paid the
expenses of preparing this Prospectus and the related Registration Statement.
The Selling Security Holders have been advised that they are subject to the
applicable provisions of the Exchange Act.
Restrictions Upon Resale
All of the 1,500,813 shares of Common Stock being offered by the
Selling Security Holders are subject to contractual restrictions on resale prior
to December 7, 1997, and, additionally, of these shares, further material
restrictions exist as follows: 55,265 shares may not be sold prior to March 2,
1998; 85,066 shares may not be sold prior to March 11, 1998; 22,409 shares may
not be sold prior to January 21, 1998; and 1,178,936 shares are subject to the
following further limitations: (i) through March 11, 1998, resale shall be
limited to only those shares with an aggregate value of $258,000; (ii) from
March 11, 1998 to March 11, 1999, resales shall be limited to that number of
shares that could have been sold during this period under Rule 144 under the
Securities Act (as that Rule was in effect as of the closing of such transaction
in March 1996), however, no greater than 50,000 shares per week per holder; and
(iii) after March 11, 1999, resales are unlimited
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed
upon by Buchanan Ingersoll Professional Corporation, Philadelphia, Pennsylvania.
The validity of the Common Stock being offered hereby, has been passed upon for
the Company by Schreck Morris, Las Vegas, Nevada.
STATEMENT OF INDEMNIFICATION
The Company's Articles of Incorporation provide that the Company shall,
to the full extent permitted by the Nevada General Corporation Law, indemnify
all persons whom it has the power to indemnify pursuant thereto, including
officers and directors of the Company. The Articles of Incorporation also
authorize the Company to maintain insurance to cover such liabilities. The
Company recently purchased Directors' and Officers' Liability Insurance to
protect directors and officers of the Company from any liability asserted
against them for acts taken or omissions occurring in their capacities as such.
The Company policy has an aggregate liability limit of $5,000,000. The Company
is not required to maintain such insurance and there can be no assurance that
the Company will continue to maintain such insurance or coverage in such
amounts.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K of RCM Technologies, Inc. for the year ended
October 31, 1996 have been so incorporated in reliance on the report of Grant
Thornton LLP, independent certified public accountants, given on the authority
of said firm as experts in auditing and accounting.
<PAGE>
No dealer, salesperson or other person has been authorized in connection with
this offering to give any information or to make any representations other than
those contained in this Prospectus. This Prospectus does not constitute an offer
or a solicitation in any jurisdiction to any person to whom it is unlawful to
make such an offer or solicitation. Neither the delivery of this Prospectus nor
any sale made hereunder shall, under any circumstances, create an implication
that there has been no change in the circumstances of the Company or the facts
herein set forth since the date hereof.
----------------------
TABLE OF CONTENTS
Page
Available Information...............................2
Incorporation of Documents by
Reference.........................................3
Prospectus Summary..................................4
Risk Factors........................................7
Use of Proceeds....................................12
Selling Security Holders...........................13
Plan of Distribution...............................14
Legal Matters......................................15
Statement of Indemnification.......................15
Experts............................................16
RCM TECHNOLOGIES, INC.
PROSPECTUS
October 29, 1997
-------------------------------
157,342 Shares of Common Stock Offered
by the Company pursuant to
Certain Outstanding Warrants
-------------------------------
1,500,813 Shares of Common Stock
Offered by certain
Selling Security Holders
