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As filed with the Securities and Exchange Commission on December 12, 1995
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Registration No. 33-54230
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 7 TO FORM S-3
(CONVERTED FROM FORM S-1)
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
LA-MAN CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 38-2286268
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2180 West State Road 434, Suite 6136, Longwood, Florida 32779 (407) 865-5995
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(Address, including zip code, and telephone number, including area code, of
registrant's office)
J. William Brandner
2180 West State Road 434, Suite 6136, Longwood, Florida 32779 (407) 865-5995
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(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
Marshall S. Harris, Esq.
Smith, Mackinnon, Harris, Greeley Bowdoin & Edwards, P.A.
255 South Orange Ave., Suite 800
Orlando, Florida 32801 (407) 843-7300
Approximate date of commencement of proposed sale to the public: From time to
time after this Registration Statement becomes effective in light of market
conditions and other factors.
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. [ ]
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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. [ ]
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If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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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EXPLANATORY NOTE
This Post-Effective Amendment No. 7 on Form S-3 relates to a Registration
Statement of the Registrant originally filed on Form S-1, as amended
("Registration No. 33-54230), that was declared effective by the Securities and
Exchange Commission (the "Commission") on January 6, 1994 and that covered,
among other securities of the Registrant, 620,000 Redeemable Common Stock
Purchase Warrants ("Redeemable Warrants") and 620,000 shares of Common Stock of
the Registrant issuable upon exercise of such warrants. On November 3, 1995,
the Registrant filed a Post-Effective Amendment No. 6 on Form S-3 (which was
declared effective on November 14, 1995) to such Registration Statement, which
converted the Registration Statement from Form S-1 to Form S-3 and which
included a Prospectus Supplement updating and supplementing the original January
6, 1994 Prospectus of the Registrant included as part of the Registration
Statement. The Registrant is filing this Post-Effective Amendment No. 7 to the
Registration Statement for the purpose of further supplementing the Registrant's
January 6, 1994 Prospectus, as previously supplemented, with respect to the
following modifications to the terms of the Redeemable Warrants: (a) the
extension from January 6, 1996 to January 6, 1997 of the expiration date of the
Redeemable Warrants; (b) the increase of the exercise price of the Redeemable
Warrants from $3.90 per share to $5.00 per share for the period commencing July
1, 1996; and (c) the increase of the redemption price of the Redeemable Warrants
from $.05 per warrant to $.07 per warrant payable upon any redemption by the
Registrant on or after July 1, 1996.
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PROSPECTUS SUPPLEMENT SUBJECT TO COMPLETION: Dated December __, 1995
LA-MAN CORPORATION
SECOND SUPPLEMENT TO JANUARY 6, 1994 PROSPECTUS
On January 13, 1994, La-Man Corporation, a Nevada corporation (the
"Company"), completed an underwritten public offering (the "1994 Offering") of
310,000 Units ("Unit" or "Units") of the Company's securities, each Unit
consisting of two shares of Common Stock, par value $.001 per share ("Common
Stock"), of the Company and two Redeemable Common Stock Purchase Warrants
("Redeemable Warrants"). Each Redeemable Warrant entitles the registered holder
to purchase one share of Common Stock at an exercise price of $3.90 per share,
subject to adjustment, for a period of twenty-four months from January 6, 1994,
the date on which the Company's Registration Statement on Form S-1 covering the
Units was declared effective by the Securities and Exchange Commission (the
"Commission"). On November 14, 1995, the Company's Post-Effective Amendment No.
6 to such Registration Statement was declared effective by the Commission, which
amendment converted such Registration Statement from Form S-1 to Form S-3 and
included a Prospectus Supplement updating and supplementing the January 6, 1994
Prospectus ("1994 Prospectus") covering the Units sold in the 1994 Offering.
The securities of the Company included in the Registration Statement are
comprised of: (a) 620,000 shares of Common Stock included in the Units; (b)
620,000 Redeemable Warrants included in the Units; (c) 620,000 shares of Common
Stock issuable upon exercise of the Redeemable Warrants; (d) 150,000 previously
issued Series SD Common Stock Purchase Warrants ("SD Warrants") by the holders
thereof; and (e) 150,000 shares of Common Stock issuable upon exercise of the
Registered SD Warrants. In November 1994, the Company purchased from All Pro
Marketing, Inc. for $2,500.00 (or $.05 per warrant), and retired, 50,000 of such
registered SD Warrants.
The information contained in this Prospectus Supplement further supplements
the 1994 Prospectus (which, as supplemented by the November 14, 1995 supplement,
is hereinafter referred to as the "Prospectus") as follows. Unless the context
otherwise requires, capitalized terms used but not defined herein have the
meanings ascribed to them in the Prospectus:
(a) The information contained in the Prospectus under "RISK FACTORS"
is supplemented by the information contained in this Prospectus Supplement under
"RISK FACTORS."
(b) The information contained in the Prospectus under "DESCRIPTION OF
SECURITIES" is supplemented by the information contained
herein under "DESCRIPTION OF SECURITIES."
The Company's Common Stock is quoted on the NASDAQ Small Cap Market under
the trading symbol "LAMN" but is not traded on any exchange. The high and low
bid prices for the Common Stock on December ____, 1995 were $______ and
$_______, based on quotes supplied by the NASDAQ Small Cap Market to the
National Quotation Bureau, Inc. and reported to the Company by the National
Quotation Bureau, Inc. Such market quotations reflect inter-dealer prices,
without retail mark-up, mark-down or commissions and may not necessarily
represent actual transactions. The Redeemable Warrants have not been actively
traded, and thus no quoted trading prices of the Redeemable Warrants are
available.
THE DATE OF THIS PROSPECTUS SUPPLEMENT IS DECEMBER ____, 1995.
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AVAILABLE INFORMATION
The Company has filed with the Commission a Post-Effective Amendment No. 7
on Form S-3 to the Company's previously filed Registration Statement under the
Securities Act with respect to the securities offered hereby, which was
converted from Form S-1 to Form S-3 pursuant to the filing of Post-Effective
Amendment No. 6 thereto (which became effective November 14, 1995) and which
also supplemented the 1994 Prospectus filed as part of such earlier Registration
Statement. This Prospectus Supplement omits certain information included in the
Registration Statement. For further information about the Company and its
securities, reference is made to the Registration Statement and to the exhibits
filed as a part thereof or otherwise incorporated therein. Each summary in this
Prospectus Supplement of information included in the Registration Statement or
any exhibit thereto is qualified in its entirety by this reference to such
information or exhibit.
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 and information statements, and other information
with the Commission. Such reports, proxy and information statements, and any
other information filed by the Company with the Commission can be inspected at
the public reference facilities of the Commission located at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549 and at its
regional offices located at Northwestern Atrium Center, 500 West Madison Street,
Room 1400, Chicago, Illinois 60661 and at 7 World Trade Center, 13th Floor, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates.
INCORPORATION BY REFERENCE
The following documents filed or to be filed with the Commission by the
Company are incorporated herein by reference: (a) the Company's Annual Report on
Form 10-KSB for the fiscal year ended June 30, 1995 ("1995 Annual Report")
including the portions of the Company's proxy statement dated October 6, 1995
("1995 Proxy Statement") incorporated by reference in the 1995 Annual Report;
(b) the Company's Quarterly Report on Form 10-QSB for the three-month period
ended September 30, 1995; (c) the Company's Report on Form 10-C dated September
7, 1995 of change in number of shares of Common Stock outstanding; (d) the
Company's Current Report on Form 8-K dated September 7, 1995 with respect to the
acquisition by the Company of Don Bell Industries, Inc. (the "September 7, 1995
Form 8-K"); and (e) all documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14, or 15(d) of the Exchange Act, as amended, prior to the
filing of a post-effective amendment which indicates that all securities offered
hereby have been sold or which deregisters all such securities then remaining
unsold, which documents shall be deemed to be incorporated by reference in the
Registration Statement and to be part thereof from the date of filing such
documents.
Documents incorporated in this Prospectus Supplement by reference are or
will be available for inspection and copying at the locations identified in
"AVAILABLE INFORMATION." The Company undertakes to provide without charge to
each person, including any beneficial owner, to whom a Prospectus Supplement is
delivered, upon written or oral request of such person, a copy of any and all
information incorporated by reference in this Prospectus Supplement (not
including exhibits to the information that is incorporated by reference unless
such exhibits are specifically incorporated by reference in the information that
this Prospectus Supplement incorporates). Such request should be directed to
Otto J. Nicols, Vice President and Treasurer, La-Man Corporation, 2180 West
State Road 434, Suite 6136, Longwood, Florida 32779, telephone (407) 865-5995.
ANY STATEMENT CONTAINED IN A DOCUMENT INCORPORATED OR DEEMED TO BE
INCORPORATED BY REFERENCE HEREIN SHALL BE DEEMED TO BE MODIFIED OR SUPERSEDED
FOR THE PURPOSES OF THIS PROSPECTUS SUPPLEMENT TO THE EXTENT THAT A STATEMENT
CONTAINED IN THIS PROSPECTUS SUPPLEMENT (OR IN ANY DOCUMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION SUBSEQUENT TO THE DATE OF THIS PROSPECTUS
SUPPLEMENT WHICH ALSO IS OR IS DEEMED TO BE INCORPORATED BY REFERENCE HEREIN)
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MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY STATEMENT SO MODIFIED OR SUPERSEDED
SHALL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO CONSTITUTE A PART
OF THIS PROSPECTUS SUPPLEMENT. NEITHER THE DELIVERY OF THIS PROSPECTUS
SUPPLEMENT, NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, IMPLY
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY OR THAT THE
INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATES AS OF WHICH SUCH INFORMATION IS GIVEN IN THIS PROSPECTUS
SUPPLEMENT.
SELECTED INFORMATION
The following information is presented herein solely to furnish limited
introductory information regarding the Company, and has been selected from, or
is based on, detailed financial and other information contained in the 1995
Annual Report, including the portions of the 1995 Proxy Statement, and other
documents incorporated by reference herein, is qualified in its entirety by
reference thereto and, therefore, should be read together with such financial
and other information.
MODIFICATION OF REDEEMABLE WARRANTS
Pursuant to a Warrant Agreement dated January 6, 1994 ("Warrant Agreement")
between the Company and Continental Stock Transfer & Trust Company
("Continental"), Continental acts as Warrant Agent (the "Warrant Agent") with
respect to the Redeemable Warrants. Effective December 8, 1995, the Company and
the Warrant Agent entered into an amendment to the Warrant Agreement reflecting
the following modifications of certain terms of the Redeemable Warrants:
(a) The extension of the expiration date of the Redeemable Warrants
from January 6, 1996 to January 6, 1997;
(b) The increase of the exercise price of the Redeemable Warrants from
$3.90 per share to $5.00 per share effective July 1, 1996; and
(c) With respect to redemption of the Redeemable Warrants by the
Company on or after July 1, 1996, an increase in the redemption price from $.05
per warrant to $.07 per warrant.
For a more detailed discussion of the terms of exercise of Redeemable Warrants
and the Company's redemption rights, see "DESCRIPTION OF SECURITIES--Redeemable
Warrants," below.
RISK FACTORS
The purchase of the securities offered by this Prospectus involves a high
degree of risk and should be made only by investors who can afford to bear such
risk. Prospective purchasers should consider the following significant risk
factors relating to such securities and to the nature, operating history,
business and financial condition of the Company.
MARKET OVERHANG; EFFECT OF ISSUANCE OF ADDITIONAL COMMON STOCK
The Company presently has outstanding the following Common Stock purchase
warrants: (a) 620,000 Redeemable Warrants, each of which entitles the registered
holder to purchase one share of Common Stock at an exercise price, subject to
adjustment, of $3.90 per share through June 30, 1996 and, thereafter at $5.00
per share, at any time and from time to time until January 6, 1997; (b) 333,750
SD Warrants, each of which entitles the registered holder thereof to purchase
one share of Common Stock at the exercise price of $.75 per share at any time
and from time to time until the extended expiration date of February 28, 1996;
and (c) 50,000 Series DFRV Common Stock Purchase Warrants ("DFRV Warrants"),
each of which entitles the registered holder thereof to
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purchase one share of Common Stock at the exercise price of $.375 per share at
any time and from time to time until October 15, 1996. All of such warrants are
fully exercisable and freely tradeable as of the date of this Prospectus
Supplement.
The Company also has outstanding options ("Employee Options") for the
purchase of up to an aggregate of 1,144,000 newly issued shares of Common Stock
granted between November 4, 1992 and September 7, 1995 to various present and
former executive officer-employees and non-management employees of the Company
under the Company's stock option plans and stock compensation plan. All but
50,000 of the Employee Options are presently exercisable, and all such options
may be exercised in whole or in part at any time within five years following the
respective dates of grant, at exercise prices ranging between $.50 per share and
$2.25 per share.
Under the terms of a Stock Purchase and Sale Agreement dated as of
September 7, 1995 (the "Don Bell Acquisition Agreement") among the Company, Don
Bell, Worrell Enterprises, Inc. ("Worrell"), and Gary D. Bell ("Bell"), the
Company issued 250,000 shares of Common Stock to Worrell and 25,000 shares of
Common Stock to Bell in partial consideration of the Company's acquisition of
the capital stock of Don Bell, and agreed to pay certain additional
consideration to Worrell and Bell in the event the average trading price of the
Common Stock for any 20 consecutive days prior to December 31, 1996 does not
equal or exceed $4.00 per share. Under the terms of the Don Bell Acquisition
Agreement, the Company has the right to pay any such additional consideration in
the form of cash, promissory notes, or additional newly issued shares of Common
Stock. Also as part of the consideration paid to Worrell under the Don Bell
Acquisition Agreement, the Company issued and delivered to Worrell a convertible
promissory note in the principal amount of $750,000 and bearing interest at the
rate of 8% annually (the "Worrell Note"). The Worrell Note provides that the
outstanding principal obligations of the Company thereunder are convertible into
newly issued shares of Common Stock at the conversion price of $5.00 per share
(subject to certain anti-dilution adjustments).
As additional consideration for services performed by Mathews, Holmquist &
Associates, Inc. (the "Underwriter"), which acted as underwriter of the 1994
Offering, for its services in connection with the 1994 Offering, the Company
granted to the Underwriter options to purchase 31,000 Units ("Unit Purchase
Option"). The Unit Purchase Option is exercisable at a price equal to 120
percent of the public offering price of the Units. The Units to be issued upon
exercise of the Unit Purchase Option are identical to the Units offered in the
1994 Offering except that the warrants issuable upon exercise of the Unit
Purchase Option will be exercisable for $4.68 per share of Common Stock, and are
not redeemable. The Unit Purchase Option is restricted from exercise, sale,
transfer, assignment, or hypothecation except to persons who are both officers
and shareholders of the Underwriter, for a period of one year from the January
6, 1994 effective date of the Form S-1 Registration Statement and thereafter is
exercisable for a period of four years. The exercise price of the Unit Purchase
Option was arbitrarily determined by the Company and the Underwriter and should
not be deemed to reflect any estimate of the intrinsic value of either the Unit
Purchase Option, the Units, or the underlying Common Stock and warrants. The
Unit Purchase Option contains anti-dilution and adjustment provisions in the
event of any merger, acquisition, recapitalization, split-up of shares, stock
dividend, sales, or issuance by the Company of stock or securities convertible
into stock by the Company at a price or conversion price less than the exercise
price of the Unit Purchase Option or less than the market price of the Common
Stock at the time of such sale or indebtedness or similar event, except for
dilution which would result from the effect of the Company's stock option plans,
reasonably acceptable to the Underwriter.
The Company has agreed to register, at its expense, under the Securities
Act, the Unit Purchase Option and/or the underlying securities included in the
Unit Purchase Option at the request of the holders of 50% of the Unit Purchase
Option. Such request may be made at any time during a period of four years
beginning January 6, 1995. The Company also granted the Underwriter "piggyback"
registration rights concerning the Unit Purchase Option and the underlying
securities which may be exercised at any time during a period of four years
beginning January 6, 1995.
On November 3, 1995, the Company filed with the Commission a Registration
Statement on Form S-3, which was declared effective by the Commission on
December 1, 1995, registering under the Securities Act the following securities
for sale by the holders thereof: (a) 233,750 previously unregistered SD Warrants
and the
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233,750 shares of Common Stock issuable upon exercise of such SD Warrants; (b)
the 50,000 DFRV Warrants and the 50,000 shares of Common Stock issuable upon
exercise of the DFRV Warrants; and (c) the 275,000 outstanding shares of Common
Stock issued by the Company in connection with the September 7, 1995 acquisition
of Don Bell. The prospectus included as part of such registration statement is
hereinafter referred to as the "1995 Resale Prospectus."
In connection with the Company's acquisition of Stewart Eleemosynary
Marketing Company in January 1994, the Company granted to J. Melvin Stewart,
presently the Chairman of the Board of Directors of the Company and the
president and chief executive officer of certain operating subsidiaries of the
Company, certain one-time demand registration rights with respect to the 316,923
shares of unregistered Common Stock issued to Mr. Stewart in connection with
such acquisition, which demand rights are exercisable until February 13, 1999.
Also, the terms of employment agreements between the Company and certain
director-employees provide for certain demand and piggyback registration rights
with respect to shares of Common Stock owned by the director-employees in the
event their employment is terminated other than for cause following a "Change of
Control" as defined in such employment agreements. See "Effect of Change of
Control" below.
There are presently 2,641,279.67 shares of Common Stock outstanding. At
times in the past, due to the relatively small size of the "public float" in the
Common Stock and the absence of active market makers in the Common Stock, public
trading in the Common Stock has been thin and sporadic. Accordingly, the sale
of the warrants and Common Stock covered by the 1995 Resale Prospectus, the
exercise of outstanding demand registration rights and/or the issuance of
additional shares of Common Stock upon the exercise of the Company's outstanding
warrants or the Employee Options, the exercise of the Unit Purchase Option and
the underlying warrants, or the exercise of the conversion rights under the
Worrell Note, could adversely affect trading prices of the Common Stock and
trading prices, if any, of the remaining unexercised warrants and options.
Also, such issuances of additional shares of Common Stock and warrants could
adversely affect the ability of the Company to obtain financing for future
growth and acquisitions.
EFFECT OF CHANGE IN CONTROL
The Worrell Note provides, among other default events, that in the event
there shall occur a "Change in Control" with respect to the Company, the holder
of the Worrell Note may, by written notice to the Company, declare all principal
and accrued but unpaid interest evidenced by the Worrell Note immediately due
and payable, which obligations shall accrue interest at a rate equal to 10% per
annum from the date of acceleration until paid. "Change of Control" is defined
in the Worrell Note as occurring when, within a period of 12 consecutive months
other than as the result of proxies solicited by, or votes cast by, management
of the Company, (i) there is a change in 35% of the persons who, as of September
7, 1995, constitute the Board of Directors other than as the result of
resignations or (ii) there is an increase of 25% or more in the number of
members of the Board of Directors.
Also, the employment agreements between the Company and five of its
director-employees, i.e., Messrs. J. Melvin Stewart, J. William Brandner, Philip
Howe Hoard, Otto J. Nicols, and Max D. Tavernier ("Management Employment
Agreements"), provide for substantial increases in the amount of severance
payable by the Company to such persons, and grant certain other rights to such
persons, in the event their employment with the Company or its subsidiaries is
terminated other than for cause following a Change of Control, which is defined
as having occurred when: (a) any one person, or any persons acting together
which would constitute a "group" for purposes of Section 13(d) of the Exchange
Act, consummates a tender offer, a plan of open-market purchases or an exchange
offer for shares of Common Stock, or consummates a proxy solicitation, which, in
the judgment of a majority of the members of the Board of Directors of the
Company, is reasonably likely to permit such person or Group to obtain control
of a sufficient number of voting securities of the Company to elect a majority
of the members of the Board of Directors of the Company; or (b) there occurs,
within any period of 12 consecutive months other than as the result of proxies
solicited by, or votes cast by, management of the Company, (i) a change in 35%
of the persons who, as of August 31, 1995, constitute the Board of Directors of
the Company other than as the result of resignations or (ii) an increase of 25%
or more in the number of members of the Board of Directors.
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In addition, the Company's $350,000 line of credit Loan Agreement with The
Bank of Winter Park ("Loan Agreement") provides that the Bank has the right to
accelerate the maturity of any obligations outstanding under the Loan Agreement
in the event of a change in the person serving as President and Chief Executive
Officer of the Company, i.e., Mr. J. William Brandner.
As the result of the acceleration provisions in the Worrell Note and the
Loan Agreement, and the contingent severance benefits and other rights provided
to executive officers of the Company under the Management Employment Agreements,
the occurrence of a Change of Control as defined in or contemplated by such
documents could have a material adverse effect on the financial condition and
operations of the Company, and the trading price of the Common Stock.
OPERATING HISTORY
The Company reported operating income of $250,994, net income of $164,170,
and earnings per share of $.07, for the fiscal year ended June 30, 1995 (the
"1995 Fiscal Year"). However, in its prior 14-year operating history, the
Company produced an operating profit only three times and never in excess of
$100,000. Also, on September 7, 1995, the Company acquired all of the
outstanding capital stock of Don Bell, which reported a net loss of $106,034 for
its fiscal year ended December 31, 1994 and a net loss of $569,896 for its
fiscal year ended December 31, 1993.
The Company's management believes that the significant improvements in the
Company's church and school sign segment (as the result of the full assimilation
of the Company's January 1994 acquisition of Stewart Eleemosynary Marketing
Company), the structure of the Don Bell acquisition which allowed the Company to
assimilate Don Bell's $6 million annual commercial sign business at better than
historic profit margins, together with improvement in operating performance of
the Company's filtration division, and the Company's emerging successful
telemarketing program for long-distance telephone services for commercial
businesses and affinity groups, will enable the Company to continue to operate
profitably and to produce improvements in operating results. However, there can
be no assurances that economic and other events beyond the control of the
Company and its management will not adversely affect the ability of the Company
to improve on or continue the growth and operating results reflected by the
Company's performance in the 1995 Fiscal Year.
USE OF PROCEEDS; MANAGEMENT DISCRETION
Any proceeds received by the Company as the result of the exercise of the
Redeemable Warrants or the SD Warrants offered pursuant to this Prospectus will
be used for general working capital purposes. The Company's management will have
broad discretion with respect to the allocation of such net proceeds to working
capital.
DEPENDENCE ON MANAGEMENT
The Company is dependent upon the services of J. William Brandner,
President and Chief Executive Officer and a director, and Otto J. Nicols, Vice
President, Treasurer and Chief Financial Officer and a director, of the Company.
The Company is also dependent upon the services of J. Melvin Stewart, Chairman
of the Board of Directors, President of Nevada SEMCO, Inc. (the successor by
merger to Stewart Eleemosynary Marketing Company), J.M. Stewart Corporation, and
J.M. Stewart Industries, Inc., and a director of the Company. The officers of
the Company have principal responsibility for the management of the Company and
for recommendations to the Board of Directors, which exercises final authority
over business decisions. Consequently, the loss of the services of such
officers and directors could be detrimental to the Company. Messrs. Brandner
and Nicols have entered into employment agreements with the Company, and Mr.
Stewart has an employment agreement with J.M. Stewart Corporation.
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BUSINESS AND ECONOMIC FACTORS
The future of the Company, and of the Company's operations, will be subject
to a number of business and other factors beyond management's control, such as
economic slowdowns and increased competition. Unfavorable general economic
conditions could adversely affect the operating results of the Company. There
can be no assurance that the Company would be able to sustain its operations in
the event of an economic slowdown for an extended period of time or if general
economic conditions in the U.S. and in foreign countries were to deteriorate.
LIMITED CURRENT SOURCES OF ADDITIONAL CAPITAL
The Company's management believes that net cash flow from operations and
the availability of funds under the Company's present $350,000 operating line of
credit will be sufficient to enable the Company to satisfy its operating capital
needs. However, the Company has no additional financing commitments. In the
event the Company needs additional financing to pursue future acquisitions and
other expansion of its business, there can be no assurance that such additional
financing on acceptable terms will be available to the Company when and if
needed.
COMPETITION
Each of the Company's current and proposed business segments is
characterized by intense competition. Many companies offer or are engaged in
the development of products or the provision of services which may be or are
competitive with the Company's present or proposed products or services. Most
of these entities have substantially greater financial, technical,
manufacturing, marketing, distribution, and/or other resources than the Company.
There can be no assurance that the Company will be able to compete successfully
with such companies.
ABSENCE OF DIVIDENDS
The Company has not paid and does not anticipate paying any cash dividends
on its Common Stock in the foreseeable future, but instead intends to retain all
working capital and earnings, if any, for use in the Company's business
operations and in the expansion of its business.
SHARES AVAILABLE FOR SALE
Of the total 1,144,000 shares of Common Stock issuable upon exercise of the
Employee Options, 536,000 shares have been registered under the Securities Act
on registration statements filed by the Company with the Commission on Form S-8
(Registration No. 33-77924 and Registration No. 33-81348). Because the grantees
of the options to which such registered shares relate are directors and/or
executive officers of the Company, the resale of any such shares following
exercise of such options (together with all other shares of Common Stock owned
by directors and executive officers of the Company) are subject to certain
resale restrictions and limitations set forth in Rule 144 promulgated by the
Commission under the Securities Act. Likewise, because the 316,923 shares of
Common Stock issued to J. Melvin Stewart in January 1994 in partial
consideration of the Company's acquisition of SEMCO and the shares of Common
Stock issuable upon exercise of conversion rights under the Worrell Note have
not been registered under the Securities Act, resales of such shares are also
subject to the limitations and restrictions of, and are deemed "restricted
securities" under, Rule 144. In general, a person who holds "restricted
securities" (as that term is defined in Rule 144) may not publicly resell such
securities until such person has been the beneficial owner of such securities
for a period of two years (unless such securities are registered under the
Securities Act prior to the expiration of such two-year holding period) and
after such holding period may not sell within any three-month period a number of
restricted securities which exceeds the greater of one percent of the shares
outstanding or the average weekly trading volume during the four calendar weeks
preceding the notice of sale required to be filed by such person under Rule 144.
Sales of shares of Common Stock pursuant to Rule 144 could have an adverse
effect on the market for or trading price of the Company's securities.
7
<PAGE>
FUTURE ISSUANCES OF STOCK BY THE COMPANY
The Company has 50,000,000 shares of Common Stock authorized, of which
2,641,279.67 shares are issued and outstanding. In addition, the Company has
reserved a total of 2,421,750 shares of Common Stock for issuance as follows:
(a) 1,003,750 shares for issuance upon exercise of outstanding warrants; (b)
1,144,000 shares for issuance upon exercise of outstanding Employee Options; (c)
124,000 shares for issuance upon exercise of the Unit Purchase Option and the
warrants underlying the Unit Purchase Option; and (d) 150,000 shares for
issuance upon exercise of conversion rights under the Worrell Note. The
remaining 44,936,970 authorized but unissued and unreserved shares of Common
Stock may be issued without any action or approval by the Company's
stockholders. Although there are no present plans, agreements, or undertakings
with respect to the Company's issuance of any shares of such Common Stock, or
related convertible securities, except as disclosed in this Prospectus
Supplement, any such issuances could be used as a method of discouraging,
delaying, or preventing a change in control of the Company or could dilute the
public ownership of the Company, and there can be no assurance that the Company
will not issue any such additional shares of Common Stock. A shareholder's pro
rata ownership interest in the Company will be reduced to the extent of the
exercise of the outstanding warrants, the Employee Options, the exercise of the
Unit Purchase Option and the warrants underlying such option, or the exercise of
conversion rights under the Worrell Note.
TAX LOSS CARRYFORWARDS
At June 30, 1995, the Company had unused net operating losses to carry
forward against future taxable income of $1,881,000, which are expected to
expire in various amounts through 2009 ("NOLs"). The Company is subject to
certain limitations on the use of its NOLs as provided under Section 382 of the
Internal Revenue Code of 1986, as amended, and there can be no assurance that a
significant amount of the Company's existing NOLs will be available to the
Company.
NO ASSURANCE OF CONTINUED QUALIFICATIONS FOR NASDAQ INCLUSION
There can be no assurance that a regular trading market for the Common
Stock or other securities of the Company, if any, will be sustained. If for any
reason the Company's securities do not remain eligible for continued listing on
NASDAQ or a public trading market is not sustained, purchasers of the securities
may have difficulty selling such securities should they desire to do so.
Under the rules of the NASD, for continued listing, a company must have,
among other things, $2,000,000 in total assets, $1,000,000 in total capital and
surplus, $1,000,000 in market value of public float, and a minimum bid price of
$1.00 per share, all of which requirements are presently satisfied and which the
Company expects to continue to satisfy. As of the date of this Prospectus
Supplement, the Redeemable Warrants are not actively traded due to the absence
of market makers for the Redeemable Warrants. If the Company is unable to
satisfy the requirements for continued quotation on NASDAQ, trading, if any, in
the Company's securities would be conducted in the over-the-counter market in
what are commonly referred to as the "pink sheets" or on the NASD OTC Bulletin
Board. As a result, an investor may find it more difficult to dispose of, or to
obtain accurate quotations as to the price of, the Company's securities.
In addition, if the Company's securities are removed from NASDAQ, the
securities would be subject to a rule that imposes additional sales practice
requirements on broker-dealers who sell such securities to persons other than
established customers (as defined in the rule) and accredited investors
(generally, institutions and, for individuals, an investor with assets in excess
of $1,000,000 or annual income exceeding $200,000 or $300,000 together with such
investor's spouse). For transactions covered by this rule, the broker-dealer
must make a special suitability determination for the purchaser and must have
received the purchaser's written consent to the transaction prior to the
purchase. Consequently, the rule may restrict the ability of broker-dealers to
sell the securities and may affect the ability of purchasers to sell the
securities in the secondary market.
8
<PAGE>
The Commission recently adopted regulations which define a "penny stock" to
be any equity security that has a market price (as defined) of less than $5.00
per share, subject to certain exceptions. For any transaction involving a penny
stock, unless exempt, the rules require the delivery, prior to the transaction,
of a disclosure schedule prepared by the Commission relating to the penny stock
market. The broker-dealer also must disclose the commissions payable to both
the broker-dealer and the registered representative and current quotations for
the securities. Finally, monthly statements must be sent disclosing recent
price information for the penny stock held in the account and information on the
limited market in penny stocks. Certain transactions, such as transactions in
which the customer is an institutional accredited investor and transactions that
are not recommended by the broker-dealer, are exempt from the disclosure
requirements discussed above.
The above-described rules may materially adversely affect the liquidity of
the market for the Company's securities.
BLUE SKY RESTRICTIONS ON EXERCISE OF WARRANTS
The holders of the Redeemable Warrants and SD Warrants offered pursuant to
this Prospectus have the right to sell or exercise such warrants only if a
current prospectus relating to such securities and/or the shares underlying such
securities is then in effect and only if such securities are qualified for sale
or exempt under applicable state securities laws of the states in which the
selling warrantholders reside. There can be no assurance that the Company will
be able to keep this Prospectus Supplement or any prospectus covering any such
securities current, although the Company will use its best efforts to do so.
Also, investors may purchase such warrants in the secondary market or move to
states in which the shares underlying such warrants are not registered or
qualified during the period such warrants are exercisable. In such event, the
Company would be unable to issue shares of Common Stock to those persons
desiring to exercise such warrants unless and until the underlying shares are
qualified for sale in states in which such purchasers reside, or an exemption
from such qualification exists in such states, and the holders of such warrants
would have no choice but to attempt to sell such warrants in a jurisdiction
where such sale is permissible, or allow them to expire unexercised.
Accordingly, the warrants may be deprived of any value if a current prospectus
covering such warrants and the underlying shares of Common Stock is not kept
current or effective or if such securities are not registered or exempt in the
states in which the holders of such warrants reside.
CURRENT PROSPECTUS REQUIREMENT
During the exercise periods of the Redeemable Warrants and SD Warrants
offered pursuant to this Prospectus, the Company must maintain and make
available a current prospectus. There can be no assurance that the Company will
not be prevented by financial or other considerations from maintaining a current
prospectus. In the event a current prospectus is not available, the warrants
may not be exercisable, and the Company will be precluded from redeeming
(calling) the Redeemable Warrants.
SPECULATIVE NATURE OF WARRANTS
The Redeemable Warrants and SD Warrants offered pursuant to this Prospectus
do not confer upon the holders of such warrants any rights of Common Stock
ownership, such as voting or dividend rights or any rights or preferences upon
liquidation or dissolution of the Company, but rather merely represent the right
to acquire shares of Common Stock at a fixed price for a limited period of time.
To the extent any such warrants are not exercised prior to their expiration
date, such warrants will expire and have no further value. There can be no
assurance that the market price of the Common Stock will equal or exceed the
exercise price of such warrants and, consequently, that it will ever be
profitable for investors to buy such warrants or for the holders to exercise
such warrants.
9
<PAGE>
POSSIBLE REDEMPTION OF THE REDEEMABLE WARRANTS
The Company has the right to redeem the Redeemable Warrants, on not less
than thirty (30) days' notice given at any time during which the Redeemable
Warrants are outstanding, at the redemption price of $.05 per warrant (or $.07
per warrant if the date fixed for redemption is July 1, 1996 or later), provided
the fair market value of the Common Stock exceeds $5.00 per share (or $6.41 per
share if the date fixed for redemption is July 1,1996 or later) for twenty (20)
consecutive business days ending within fifteen (15) days of the date of the
notice of redemption, subject to adjustment as specified in the Warrant
Agreement, as amended. Although Redeemable Warrantholders will have the right
to exercise their Redeemable Warrants through the date of redemption, they may
be unable to do so because they lack sufficient funds at the time of redemption,
or they may simply not wish to invest any more money in shares of the Company's
Common Stock at that time. Should a Redeemable Warrantholder fail to exercise
such Redeemable Warrants or to sell such Redeemable Warrants on or prior to the
redemption date, such Redeemable Warrants will have no value beyond their
redemption value. The Company may not redeem the Redeemable Warrants unless the
Company has available a current prospectus with respect to the Redeemable
Warrants.
UNIT PURCHASE OPTION
In connection with the 1994 Offering, the Company sold to the Underwriter,
for nominal consideration, an option to purchase up to an aggregate of 31,000
Units pursuant to the Unit Purchase Option, which units are identical to the
Units offered in the 1994 Offering except that the warrants issuable upon
exercise of the Unit Purchase Option will be exercisable at a price of $4.68 per
share of Common Stock and are not redeemable. The Unit Purchase Option is
exercisable commencing January 6, 1995 and ending four years from such date at
an exercise price of $7.80 per Unit, subject to anti-dilution adjustments. The
holders of the Unit Purchase Option have the opportunity to profit from a rise
in the market price of the Common Stock, if any, without assuming the risk of
ownership, with a resulting dilution in the interest of other shareholders. The
Company may find it more difficult to raise additional equity capital if it
should be needed for the business of the Company while the Unit Purchase Option
is outstanding. At any time at which the holders thereof might be expected to
exercise them, the Company would probably be able to obtain additional capital
on terms more favorable than those provided by the Unit Purchase Option. The
holders of the Unit Purchase Option have the right to require registration under
the Securities Act of the Unit Purchase Option and the Common Stock and warrants
issuable upon exercise thereof, and have certain "piggyback" registration rights
with respect to the Unit Purchase Option and the Common Stock and Warrants
issuable upon exercise thereof. The cost to the Company of effecting any such
registration may be substantial.
ADDITIONAL UNDERWRITING COMPENSATION
The Company agreed with the Underwriter that the Company would pay the
Underwriter a warrant solicitation fee of 10% of the exercise price of
Redeemable Warrants exercised after January 6, 1995 and to the extent not
inconsistent with the guidelines of the NASD and the rules and regulations of
the Commission. Such warrant solicitation fee will be paid to the Underwriter
if (a) the market price of the Company's Common Stock on the date the Warrant is
exercised is greater than the exercise price of the Redeemable Warrant; (b) the
exercise of the Redeemable Warrant was solicited by an NASD member firm; (c)
prior specific written approval for exercise is received from the customer if
the Redeemable Warrant is held in a discretionary account; (d) disclosure of
this compensation arrangement is made prior to or upon the exercise of the
Redeemable Warrant; (e) solicitation of the exercise is not in violation of Rule
l0b-6 of the Exchange Act; and (f) solicitation of the exercise is in compliance
with NASD Notice to Members 81-38. In addition, unless granted an exemption by
the Commission from Rule l0b-6 under the Exchange Act, the Underwriter will be
prohibited from engaging in any market making activities or solicited brokerage
activities with regard to the Company's securities for the period from nine
business days prior to any solicitation of the exercise of any Redeemable
Warrant or nine business days prior to the exercise of any Redeemable Warrant
based on a prior solicitation until the later of the termination of such
solicitation activity or the termination (by waiver or otherwise) of any right
the Underwriter may have to receive a fee for the exercise of the Redeemable
Warrants following such solicitation. As a result, the Underwriter may be
unable to continue
10
<PAGE>
to provide a market for the Company's securities during certain periods while
the Redeemable Warrants are exercisable.
For a 30-month period that commenced January 6, 1994, the Underwriter has a
preferential right to purchase for its account or to sell for the account of the
Company any securities of the Company with respect to which the Company may seek
a public or private offering for cash. The Company will consult with the
Underwriter with regard to any such offering and will offer to the Underwriter
the opportunity to purchase or sell any such securities on terms not less
favorable to the Company than it can secure elsewhere. The Underwriter shall
have a minimum of thirty (30) business days in which to accept such offer.
The Underwriter's discount, the non-accountable expense allowance, and the
Unit Purchase Option (including the Units underlying such option and the
warrants included in such Units), are deemed to be underwriting compensation in
connection with the 1994 Offering. In addition, any profit realized on the sale
of securities issuable upon the exercise of the Unit Purchase Option may be
deemed additional underwriting compensation.
The Company has agreed to indemnify the Underwriter and others against
certain liabilities, including liabilities under the Securities Act. Insofar as
indemnification for liabilities arising under the Securities Act may be provided
to officers, directors, or persons controlling the Company, the Company has been
informed that in the opinion of the Commission, such indemnification is against
public policy and therefore unenforceable.
DESCRIPTION OF SECURITIES
COMMON STOCK
The Company is authorized to issue 50,000,000 shares of Common Stock, $.001
par value per share, of which 2,641,279.67 shares are issued and outstanding.
Each outstanding share of Common Stock is entitled to one vote on all matters
that may be voted upon by the owners thereof at meetings of the stockholders.
The holders of Common Stock (i) have equal ratable rights to dividends from
funds legally available therefor when, as, and if declared by the Board of
Directors of the Company; (ii) are entitled to share ratably in all of the
assets of the Company available for distribution to holders of Common Stock upon
liquidation, dissolution, or winding up of the affairs of the Company; (iii) do
not have preemptive, subscription, or conversion rights, or redemption or
sinking funds provisions applicable thereto; and (iv) are entitled to one non-
cumulative vote per share on all matters on which stockholders may vote at all
meetings of stockholders.
There are no provisions in the Articles of Incorporation or Bylaws of the
Company that would delay, defer or prevent a Change in Control of the Company.
However, certain material agreements to which the Company is a party could have
the effect of delaying, deferring or preventing such a Change in Control. See
"RISK FACTORS - Effect of Change in Control."
REDEEMABLE WARRANTS
The 620,000 Redeemable Warrants were issued pursuant to the Warrant
Agreement, which was amended effective December 8, 1995 to reflect certain
modifications by the Company of the expiration date, exercise price and
redemption price. See "MODIFICATION OF REDEEMABLE WARRANTS" above. The
Redeemable Warrants are evidenced by warrant certificates in registered
form.
Each Redeemable Warrant entities the registered holder to purchase one
share of Common Stock at an exercise price, subject to adjustment, of $3.90 per
share or, on or after July 1, 1996 at an exercise price of $5.00 per share, at
any time until the close of business on January 6, 1997, subject to earlier
redemption as follows: If the fair market value (the last reported sale price)
of the Common Stock for any period of 20 consecutive business days (or such
other period to which the Underwriter may consent), ending within 15 days of the
notice of redemption, shall exceed $5.00 (or $6.41 if the date fixed for
redemption is July 1, 1996 or later), then upon at least
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<PAGE>
30 days' prior written notice, the Company will be able to call all (but not
less than all) of the Redeemable Warrants for redemption at a price of $.05 (or
$.07 if the date fixed for redemption is July 1, 1996 or later) per Redeemable
Warrant. The warrants underlying the Unit Purchase Option granted to the
Underwriter are not subject to redemption and are exercisable by the holder
thereof at an exercise price per share of $4.68.
The exercise price of the Redeemable Warrants was determined by negotiation
between the Company and the Underwriter and should not be construed to be
predictive or to imply that any price increases will occur in the Company's
securities. The exercise price of the Redeemable Warrants and the number and
kind of Common Stock or other securities to be obtained upon exercise of the
Redeemable Warrants are subject to adjustment in certain circumstances including
a stock split, stock dividend, subdivision, combination or recapitalization of,
the Common Stock or the sale of Common Stock at less than the market price of
the Common Stock. Additionally, an adjustment would be made upon the sale of
all or substantially all of the assets of the Company so as to enable Redeemable
Warrantholders to purchase the kind and the number of shares of Common Stock
that might otherwise have been purchased upon exercise of such Redeemable
Warrants. No adjustment for previously paid cash dividends, if any, will be
made upon exercise of the Redeemable Warrants.
The Redeemable Warrants do not confer upon the holder any voting or any
other rights of a shareholder of the Company. Upon notice to the Redeemable
Warrantholders, the Company has the right to reduce the exercise price or extend
the expiration date of the Redeemable Warrants, subject to compliance with Rule
13e-4 under the Exchange Act.
The Redeemable Warrants may be exercised upon surrender of the Redeemable
Warrant certificate on or prior to the January 7, 1997 extended expiration date
(or earlier redemption date) of such Redeemable Warrants at the offices of the
Warrant Agent, with the form of "Election to Purchase" as set forth on the
reverse side of the Warrant certificate completed and executed as indicated,
accompanied by payment of the full exercise price (by official bank or certified
check or money order payable to the order of the Company) for the number of
Redeemable Warrants being exercised.
SD WARRANTS
In August and October 1992, in connection with the issuance of the
Company's 10% Subordinated Debentures ("Debentures") in the aggregate principal
amount of $200,000, the Company issued an aggregate of 50,000 SD Warrants to
five persons to purchase an aggregate of 50,000 shares of Common Stock at an
exercise price of $.75 per share. Such Debentures were not repaid upon the
original maturity, and the Company obtained the written agreement of the holders
of such Debentures in the aggregate principal amount of $200,000 to extend the
maturity date thereof to October 27, 1993. In consideration of the extension,
the Company issued a total of 20,000 additional SD Warrants to such Debenture
holders.
In October 1992, the Company entered into a Consulting and Marketing
Service Agreement with each of All Pro Marketing, Inc. and K.A.M. Group, Inc.
(the "Consultants"). The Company agreed to issue 50,000 SD Warrants to each of
the Consultants. Pursuant to such agreements, the Consultants assisted the
Company in preparation of marketing plans and provided marketing advice,
participated in meetings with prospective marketing and financial sources, and
communicated with potential financial sources. All Pro Marketing, Inc. also
assisted with negotiations pertaining to the January 1994 acquisition of SEMCO
which negotiations the Company believes were instrumental in completing such
acquisition. On September 9, 1993, the Company agreed to issue 140,000 SD
Warrants to All Pro Marketing, Inc. for the additional consulting services.
In August and September, 1993, in connection with the issuance of the
Debentures in the aggregate principal amount of $295,000, the Company issued an
aggregate of 73,750 SD Warrants to five persons.
The SD Warrants entitle the registered holders thereof to purchase one
share of Common Stock at the exercise price of $.75 per share. The number of
securities purchasable on exercise of the SD Warrants, and the purchase prices
therefor, are subject to adjustment from time to time in the event that the
Company shall: (1) pay
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<PAGE>
a dividend in, or make a distribution of, shares of Common Stock, (2) subdivide
its outstanding shares of Common Stock into a greater number of shares, (3)
combine its outstanding shares of Common Stock into a smaller number of shares,
or (4) spin-off a subsidiary by distributing, as a dividend or otherwise, shares
of the subsidiary to its stockholders. In any such case, the total number of
shares and the number of shares or other units of such total securities
purchasable on exercise of the SD Warrants immediately prior thereto shall be
adjusted so that the holder shall be entitled to receive, at the same aggregate
exercise price, the number of shares and the number of shares or other units of
such securities that the holder would have owned or would have been entitled to
receive immediately following the occurrence of any of the events described
above had the SD Warrant been exercised in full immediately prior to the
occurrence (or applicable record date) of such event. The SD Warrants do not
confer upon the holder any voting or other rights of a shareholder of the
Company.
The original expiration date of the SD Warrants was July 31, 1995.
However, as the result of the exercise of certain demand registration rights by
certain holders of the SD Warrants, the Company agreed to extend the expiration
date of the SD Warrants to February 28, 1996. Accordingly, all SD Warrants not
previously exercised will expire on such date.
A total of 333,750 SD Warrants are outstanding as of the date of this
Prospectus Supplement, of which 100,000 of such warrants and the 100,000 shares
of Common Stock issuable upon their exercise were registered in connection with
the 1994 Offering. The remaining 233,750 SD Warrants, and the 233,750 shares of
Common Stock issuable upon exercise of the SD Warrants, were registered for sale
by the holders thereof under a registration statement on Form S-3 filed by the
Company on November 3, 1995 and declared effective by the Commission on December
1, 1995.
REGISTRATION RIGHTS
The Unit Purchase Option issued to the Underwriter includes demand and
piggyback registration rights with respect to the Unit Purchase Option and the
securities underlying the Unit Purchase Option for a period of four years,
commencing January 6, 1995. In connection with the SEMCO acquisition, the
Company granted J. Melvin Stewart a one-time demand registration right for the
316,923 unregistered shares of Common Stock issued to him in the acquisition,
exercisable during a four-year period beginning February 13, 1994. Also, the
Management Employment Agreements grant certain demand and piggyback registration
rights to the director-employees who are parties to such agreements in the event
their employment is terminated other than for cause following a "Change of
Control" as defined in the such agreements. See "RISK FACTORS - Effect of
Change of Control." Any exercise of such registration rights may result in
dilution in the interest of the Company's shareholders, hinder efforts by the
Company to arrange future financing, and/or have an adverse effect on the market
price of the Company's Common Stock and outstanding warrants.
EXPERTS
The financial statements incorporated by reference in this Prospectus
Supplement have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the periods set forth in their report,
incorporated herein by reference and are incorporated herein in reliance upon
such report given upon the authority of said firm as experts in auditing and
accounting.
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<TABLE>
<S> <C>
=================================================== =======================================================
NO DEALER, SALESPERSON OR OTHER 310,000 UNITS
PERSON IS AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED IN THIS PROSPECTUS SUPPLEMENT
AND ANY INFORMATION OR REPRESENTATION NOT Each Unit Consisting of
CONTAINED HEREIN MUST NOT BE RELIED UPON AS Two Shares of Common Stock and
HAVING BEEN AUTHORIZED BY THE COMPANY. Two Redeemable Common Stock
THIS PROSPECTUS SUPPLEMENT DOES NOT Purchase Warrants
CONSTITUTE AN OFFER OF ANY SECURITIES OTHER
THAN THE REGISTERED SECURITIES TO WHICH IT
RELATES OR AN OFFER TO ANY PERSON IN ANY
JURISDICTION WHERE SUCH OFFER WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS SUPPLEMENT NOR ANY SALES MADE LA-MAN
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES,
CREATE ANY IMPLICATION THAT THE
INFORMATION HEREIN IS CORRECT AS OF ANY TIME
SUBSEQUENT TO THE DATE HEREOF OR THAT ___________________________
THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF PROSPECTUS SUPPLEMENT
THE COMPANY SINCE SUCH DATE. ___________________________
TABLE OF CONTENTS LA-MAN CORPORATION
2180 West State Road 434
Second Supplement to January 6, 1994 Prospectus.. 1 Suite 6136
Available Information ........................... 2 Longwood, Florida 32779
Incorporation By Reference ...................... 2 (407) 865-5995
Selected Information ............................ 3
Modification of Redeemable Warrants ............. 3
Risk Factors .................................... 3
Description of Securities ....................... 11
Experts ......................................... 13
December __, 1995
=================================================== =======================================================
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets forth the costs and expenses payable by the
Company in connection with this Registration Statement. All amounts are
estimates.
<TABLE>
<S> <C>
Printing.......... $ 1,000.00
Legal Expenses.... $ 7,500.00
Accounting Fees... $ 1,000.00
Miscellaneous..... $ 4,500.00
Total........ $14,000.00
==========
</TABLE>
The above amounts do not include expenses in connection with the
public offering of Units in January 1994 reported by the Company on its Reports
of Sales of Securities and Use of Proceeds Therefrom (Form SR) previously filed
with the Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Bylaws of the Company provide for indemnification of officers,
directors, employees, and other corporate agents to the fullest extent permitted
by the General Corporation Law of Nevada, as amended from time to time, which
makes provision for indemnification of officers, directors, and other corporate
agents in terms sufficiently broad to permit indemnification of such persons,
under certain circumstances, for liabilities (including reimbursement of
expenses incurred) arising under the Securities Act of 1933, as amended.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in such
Act and is, therefore, unenforceable.
ITEM 16. EXHIBITS.
4.1* Specimen of Common Stock Certificate
4.2* Specimen of Redeemable Common Stock Purchase Warrant Certificate (as
revised)
4.3* Form of Series SD Common Stock Purchase Warrant Certificate
4.4* Form of Series SD Common Stock Purchase Warrant Certificate (as amended)
4.5* Warrant Agreement dated as of January 6, 1994 between the Company and
Continental Stock Transfer & Trust Company, as Warrant Agent.
4.6 Amendment No. 1 to Warrant Agreement, dated as of December 8, 1995,
between the Company and Continental Stock Transfer & Trust Company, as
Warrant Agent.
5.1* Opinion of O'Connor & Associates, P.C., counsel for the Company.
5.2* Opinion of Jimmerson, Davis & Santoro, P.C., counsel for the Company.
23.1 Consent of BDO Seidman, LLP
23.2* Consent of O'Connor & Associates, P.C. (included in Opinion filed as
Exhibit 5.1)
23.3* Consent of Jimmerson, Davis & Santoro, P.C. (included in Opinion filed
as Exhibit 5.2)
24.1* Power of Attorney.
_____________________
* Previously filed as an exhibit to Form S-1 Registration Statement, as
amended (Registration No. 33-54230).
II-1
<PAGE>
ITEM 7. UNDERTAKINGS.
(a) Undertaking related to 415 offering: The undersigned Registrant hereby
undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933, as amended (the "Act");
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the Registration Statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above 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
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act") that are incorporated by reference
in the Registration Statement.
(2) That, for the purpose of determining any liability under the 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.
(b) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers, and controlling persons of the Registration
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer,
or controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Post-Effective
Amendment No. 7 to Form S-3 (converted from Form S-1) Registration Statement
(Registration No. 33-54230) to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Longwood, State of Florida, on this
8th day of December, 1995.
LA-MAN CORPORATION
By: /s/ J. William Brandner
-----------------------------------
J. William Brandner, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on December 8, 1995.
Signature Title
- --------- -----
/s/ J. William Brandner President, Chief Executive
- ------------------------------- Officer and Director
J. William Brandner
* Director
- -------------------------------
Gary Donald Bell
Director
- -------------------------------
Ithiel C. Clemons
* Director
- -------------------------------
Edwin M. Freakley
* Director
- -------------------------------
Thomas N. Grant
* Executive Vice President, Secretary
- ------------------------------- and Director
Philip Howe Hoard
/s/ Otto J. Nicols Vice President, Treasurer, Chief
- ------------------------------- Financial Officer
Otto J. Nicols and Director
* Director
- -------------------------------
Robert M. Smither
* Chairman of the Board and Director
- -------------------------------
J. Melvin Stewart
Vice President - Sales and
- ------------------------------- Marketing, Director
Max D. Tavernier, Jr.
*By: /s/ J. William Brandner
--------------------------
J. William Brandner
Attorney-in-Fact
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EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
4.6 Amendment No. 1 to Warrant Agreement, dated as of December 8, 1995,
between the Company and Continental Stock Transfer & Trust Company,
as Warrant Agent.
23.1 Consent of BDO Seidman, LLP
<PAGE>
EXHIBIT 4.6
AMENDMENT NO. 1 TO WARRANT AGREEMENT
BETWEEN THE COMPANY AND
CONTINENTAL STOCK TRANSFER & TRUST COMPANY, AS WARRANT AGENT.
<PAGE>
AMENDMENT NO. 1 TO WARRANT AGREEMENT
This Amendment No. 1 to Warrant Agreement, dated as of December 8, 1995
("Amendment"), by and between LA-MAN CORPORATION, a Nevada corporation (the
"Company"), and CONTINENTAL STOCK TRANSFER & TRUST COMPANY, as Warrant Agent
(the "Warrant Agent").
W I T N E S S E T H:
WHEREAS, the Company and the Warrant Agent are parties to a Warrant Agreement
dated as of January 6, 1994 (the "Warrant Agreement"), in connection with up to
713,000 Common Stock Purchase Warrants ("Warrants") registered under the
Securities Act of 1933, as amended, pursuant to a Registration Statement on Form
S-1 (Registration No. 33-54230), as amended by post-effective amendment nos. 1-7
thereto (the "Registration Statement"), initially declared effective by the
Securities and Exchange Commission on January 6, 1994; and
WHEREAS, pursuant to the Warrant Agreement the Warrant Agent acts on behalf of
the Company in connection with transfer, exchange and redemption of the
Warrants, the issuance of certificates representing the Warrants ("Warrant
Certificates"), the exercise of the Warrants and the rights of the holders
thereof; and
WHEREAS, the Company has determined to modify certain terms of the Warrants
pertaining to (a) the expiration date of the Warrants, (b) the exercise price of
the Warrants and (c) the redemption price of the Warrants; and
WHEREAS, the Company and the Warrant Agent desire to amend the terms of the
Warrant Agreement in order to conform the terms and provisions thereof to the
modification of the expiration date, exercise price and redemption price of the
Warrants;
NOW, THEREFORE, in consideration of the premises and mutual agreements
hereinafter set forth, and for the purpose of amending certain terms and
provisions of the Warrants and the Warrant Certificates and the respective
rights and obligations of the Company, the holders of the Warrant Certificates
and the Warrant Agent, the Company and the Warrant Agent hereby agree as
follows:
1. DEFINITIONS. Unless otherwise defined in this Amendment, capitalized terms
used herein shall have the meanings ascribed to them in the Warrant
Agreement.
<PAGE>
2. AMENDMENTS TO WARRANT AGREEMENT.
2.01 The definition of "Purchase Price" contained in Section 1(f) of the
Warrant Agreement is hereby amended by deleting such definition in its entirety
and substituting the following in lieu thereof:
"(f) "Purchase Price" shall mean the purchase price to be paid upon
the exercise of each Warrant in accordance with the terms hereof, which
price shall be $3.90 per share through June 30, 1996 and, thereafter, $5.00
per share, subject to adjustment from time to time pursuant to the
provisions of Section 9 hereof, and subject to the Company's right to
reduce the Purchase Price upon notice to all warrantholders."
2.02 The definition of "Redemption Price" contained in Section 1(g) of the
Warrant Agreement is hereby amended by deleting such definition in its entirety
and substituting the following in lieu thereof:
"(g) "Redemption Price" shall mean the price at which the Company
may, at its option, redeem the Warrants, in accordance with the terms
hereof, which price shall be $.05 per Warrant if the date fixed for
redemption is June 30, 1996 or earlier and, thereafter, $.07 per Warrant."
2.03 The definition of "Warrant Expiration Date" contained in Section 1(j)
of the Warrant Agreement is hereby amended by deleting such definition in its
entirety and substituting the following in lieu thereof:
"(j) "Warrant Expiration Date" shall mean 5:00 P.M. (New York time)
on January 6, 1997, or the Redemption Date as defined in Section 8,
whichever is earlier; provided that if such date shall in the State of New
York be a holiday or day on which banks are authorized to close, then 5:00
P.M. (New York time) on the next following day which in the State of New
York is not a holiday or a day on which banks are authorized to close. The
Company shall have the right to extend the expiration date of the
Warrants."
2.04 Section 8(a) of the Warrant Agreement is hereby amended by deleting
such subsection in its entirety and substituting in lieu thereof the following:
"(a) On not less than thirty (30) days notice given at any time
during which the Warrants are outstanding, the Warrants may be redeemed, at
the option of the Company, at the Redemption Price then in effect, provided
the Fair Market Value of the Common Stock shall exceed $5.00 per share (or
$6.41 per share if the date fixed for redemption is July 1, 1996 or later)
for twenty (20) consecutive business days (or such other period as MHA may
consent to), ending within fifteen (15) days of the date of the notice of
redemption (the "Target Price"), subject to adjustment as set forth in
Section 8(f) below. All Warrants must be redeemed if any Warrants are
redeemed."
2
<PAGE>
2.05 Section 17 of the Warrant Agreement is hereby amended by changing the
address of the Company stated therein from "7450 South Homestead Drive,
Hamilton, Indiana 46742" to "2180 West State Road 434, Suite 6136, Longwood,
Florida 32779."
3. SURVIVAL OF WARRANT AGREEMENT. Except as hereinabove amended, all terms
and provisions of the Warrant Agreement shall remain in full force and effect
following the execution and delivery of this Amendment.
4. GOVERNING LAW. This Amendment shall be governed by and construed in
accordance with the laws of the State of Nevada, without reference to the
principles of conflict of laws thereof.
5. BINDING EFFECT. This Amendment shall be binding upon and inure to the
benefit of the Company and the Warrant Agent and their respective successors and
assigns and the holders from time to time of the Warrant Certificates. Nothing
in this Amendment is intended or shall be construed to confer upon any other
person any right, remedy or claim, in equity or at law, or to impose upon any
other person any duty, liability or obligation.
6. COUNTERPARTS. This Amendment may be executed in counterparts, which taken
together shall constitute a single document.
(SIGNATURES CONTAINED ON FOLLOWING PAGE)
3
<PAGE>
IN WITNESS WHEREOF, the Company and the Warrant Agent have caused this
Amendment to be duly executed as of the date first above written.
LA-MAN CORPORATION CONTINENTAL STOCK TRANSFER & TRUST COMPANY,
as Warrant Agent
By: /s/ J. William Brandner By: /s/ William F. Seegraber
-------------------------- ----------------------------------------
J. William Brandner Name: William F. Seegraber
President Title: Vice President
4
<PAGE>
EXHIBIT 23.1
CONSENT OF BDO SEIDMAN, LLP
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
<PAGE>
CONSENT OF INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANTS
La-Man Corporation
Longwood, Florida
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement of our report dated September
7, 1995 relating to the consolidated financial statements of La-Man Corporation
and subsidiaries appearing in the Company's Annual Report on Form 10-KSB for the
year ended June 30, 1995.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
/s/ BDO Seidman, LLP
------------------------
BDO SEIDMAN, LLP
Orlando, Florida
December 8, 1995
