As filed with the Securities and Exchange Commission on _______________,
1996,
Registration No. 33-______________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_____________
FORM S-8
Registration Statement
Under
The Securities Act of 1933, as amended.
_____________
U. S. TECHNOLOGIES INC.
(Exact name of registrant as specified in charter)
Delaware 73-1284747
(State of other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification
Number)
1402 Industrial Blvd.
Lockhart, Texas 78644
(512) 376-1049
(Address and telephone number of registrant's principal executive offices
and place of business)
William Meehan
President and Chief Executive Officer
Lockhart, Texas 78644
(512) 376-1049
(Name, address and telephone of agent for service)
Copies of all communications, including all communications sent to the
agent for service, should be sent to:
Jack D. Bryant
7404 Napier Trail
Austin, Texas 78729
(512) 219-7232
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the Registration Statement becomes
effective.
If the only securities being registered on this Form are being
offered pursuant to dividends or interest reinvestment plans, check the
following line:______
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 line:
x
CALCULATION OF REGISTRATION FEE
Title of each class Amount Proposed Propose
d Amount of
of securities to to be maximum aggregate Registra
tion
be registered registered offering price (1) offer
ing price(1) fee(1)
Common Shares, $0.02
par value per share,
issuable upon exercise
of stock options by
Selling Shareholders600,000* $0.165 $99,000.00 $250.00
Totals 600,000 $0.165 $99,000.00 $250.00
____________________________________________________________
_________________
[1] Based upon the mean between the closing bid and ask
prices for the Common Shares on November 8, 1996, in
accordance with Rule 457(c).
2
PROSPECTUS
U. S. TECHNOLOGIES INC.
600,000 Common Shares,
$0.02 per value per share
All of the $0.02 par value common shares (the "Common
Shares") of U. S. Technologies Inc. (the "Company") are
issuable upon exercise of stock options ("Options") to be
issued by the Company to its officers, directors, employees
and/or consultants. The Options will be issued to such
individuals and/or entities pursuant to written benefit
plans maintained by the Company. The Company will not
receive any proceeds from the sale of the Common Shares sold
by Shareholders, although the Company will receive the
exercise price payable upon any exercise of the options.
A total of 600,000 Common Shares registered hereunder
are issuable upon exercise of stock options issued by the
Company under its Nonqualifying Stock Option Plan (the
"Plan") to employees, directors, and/or other persons
associated with the Company whose services have benefitted
the Company. An aggregate of 600,000 Common Shares underlie
the options, none of which are presently outstanding, but
will be for a period of ten (10) years from the date of
grant. Options must be issued within ten (10) years from
April 30, 1996. The exercise price will be determined by
the Board of Directors of the Company.
The Company's Common Shares are listed with the
National Association of Securities Dealer, Inc. (NASD) and
traded on the OTC Bulletin Board. On November 8, 1996, the
last reported sales price for the Common Shares as reported
on the OTC Bulletin Board was $0.15 and $0.18 asked.
THE SECURITIES OFFERED HEREBY INVOLVE A HIGH DEGREE OF
RISK, IMMEDIATE SUBSTANTIAL DILUTION, LIMITED OPERATIONS,
OPERATING LOSSES, AND CONTINUING NEED FOR WORKING CAPITAL.
See "Risk Factors."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED
BY THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is November 12, 1996.
3
As of the date of this Prospectus, none of the common Shares
underlying the Options described herein have been issued.
The Company anticipates that upon exercise of the
Options, of which there is no assurance, sales by the
holders thereof may be effected from time to time, by or for
the accounts of the Selling Shareholders, on the OTC
Bulletin Board Automated Quotation System ("OTCBB") or in
the over-the-counter market, in negotiated transactions, or
otherwise. Sales will be made through broker/dealers acting
as agents for the Selling Shareholders or to broker/dealers
who may purchase the Common Shares as principals and
thereafter sell the shares from time to time on the OTC
Bulletin Board, in the over-the-counter market, in
negotiated transactions, or otherwise. Sales will be made
either at market prices prevailing at the times of the sales
or at negotiated prices. See "Plan of Distribution."
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year
ended December 31, 1995 (herein collectively, the "Form 10-
K"); and, the Company's Form 8-A Registration Statement
filed with the Commission on June 11, 1987 (File No. 0-
15960) filed under the Securities Exchange Act of 1934, are
hereby incorporated in this Prospectus by reference, and all
documents subsequently filed by the Company pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange
Act of 1934, prior to the termination of the offering
described herein, shall be deemed to be incorporated in this
Prospectus and to be a part hereof from the date of the
filing of such documents. Any statement contained in a
document incorporation by reference herein shall be deemed
to be modified or superseded for all purposes to the extent
that a statement contained in this Prospectus or in any
other subsequently filed document which is also incorporated
herein by reference modifies or replaces such statement.
The Company will provide without charge to each person to
whom this Prospectus is delivered, on written or oral
request of such person, a copy (without exhibits) of any or
all documents incorporation by reference in this Prospectus.
Requests for such copies should be directed to William
Meehan, President, U.S. Technologies Inc., (1) if by
telephone to (512) 376-1049, or (ii) if by mail to P.O. Box
697, Lockhart, Texas 78644.
4
THE COMPANY
General Development of Business
U. S. Technologies Inc. (the "Company") was
incorporated on September 9, 1986, in the State of Delaware
as CareAmerica Inc. From time to time the term "Company" as
used herein refers to U.S. Technologies Inc. by itself or to
collectively refer to U. S. Technologies Inc. and some or
all of its subsidiaries, past and present. The Company was
formed to furnish in-home medical care services. On April
14, 1987, the Company completed a public offering of 660,000
units, each unit consisting of one share of Common Stock and
one Redeemable Warrant, each separately transferable
immediately upon issuance. The foregoing reflects a 1 for 5
reverse split of the Registrant's Common Stock, Warrants and
Options which took place on February 8, 1993, and assumes no
additional shares issued in respect of any fractional shares
which may have resulted from the reverse split.
In 1987 the Company changed business direction from the
medical industry to electronics. On September 1, 1988, the
Company moved its corporate headquarters from Kansas City,
Missouri, to Austin, Texas. The Company's decision to move
its headquarters to Austin, Texas, was made in order to more
effectively monitor the day-to-day activities of its
Subsidiaries. The management of the Company felt that
maintaining offices in Kansas City, Missouri, when its
operating Subsidiaries were in Austin, Texas, was an
unnecessary expense for the Company.
On July 14, 1989, the shareholders of the Company
approved a proposal to change the name of the Corporation
from CareAmerica Inc. to U.S. Technologies Inc. On July 14,
1989, the Company filed a Certificate of Amendment of
Certificate of Incorporation with the Secretary of State of
Delaware causing the name of the corporation to be changed
to U.S. Technologies Inc. Effective with the start of
business July 17, 1989, the Company's Common Stock traded on
the over-the-counter market and listed on the National
Association of Securities Dealers Automated Quotations
(NASDAQ) System. The trading symbol was changed to USXX.
Prior to June, 1994, the Company owned three (3)
additional subsidiaries which had been in operation for
several years: American Microelectronics Inc. ("AMI"),
Republic Technology Corporation ("Republic"), and U.S.
MicroLabs Inc. ("MicroLabs"). AMI was in the electronics
contract manufacturing business. Republic was in the
business of designing and marketing personal computers.
MicroLabs had been inactive for several years, but had at
one time been in the business of developing and marketing
software. AMI was the largest secured creditor of Republic.
The Company was the largest secured creditor of AMI. In
5
June, 1994, AMI foreclosed on its security interest in
Republic and accepted an assignment of all of Republic's
assets (all of which were covered by AMI's security
agreement) in satisfaction of Republic's debts to AMI.
Subsequent thereto the Company foreclosed on its security
interest in AMI and accepted an assignment of AMI's assets
(that were covered by the Company's security agreement) in
satisfaction of AMI's debts to the company. The Company
made a capital contribution of the foreclosed assets to the
newly formed company, Lockhart Technologies, Inc., "LTI" in
exchange for all of the capital stock of that company.
After the foreclosures, the Company sold all of its interest
in AMI, Republic, and MicroLabs for a total consideration of
$1,758.
The Company presently has two wholly owned
subsidiaries: Lockhart Technologies, Inc., a Texas
corporation ("LTI") and Newdat, Inc., an Arizona corporation
("Newdat"). Newdat owns an eighty percent (80%) interest in
SensonCorp Limited, an Arizona corporation ("Senson"). The
Company acquired Newdat on January 23, 1995, in exchange for
7,053,728 shares of the Company's common stock.
6
LTI was incorporated on June 29, 1994. LTI was
capitalized by the Company by the contribution of certain
assets, tangible and intangible, which the Company received
through its foreclosure of AMI. The assets were valued at
$1,764,580. LTI operates an electronics contract
manufacturing facility located inside a minimum security
prison facility located in Lockhart, Texas. LTI has an
Industry Work Program Agreement (the "IWPA"), which includes
a lease agreement, with Wackenhut Corrections Corporation,
The Texas Department of Criminal Justice, Division of
Pardons, and Paroles and the City of Lockhart, Texas. The
IWPA and Lease were assigned to LTI by American
Microelectronics Inc., a corporation formerly owned by the
Company. Wackenhut Corrections Corporation has not yet
formally ratified the assignment of the IWPA from American
Microelectronics Inc. to LTI, but has continued full
cooperation with LTI over the past 28 months. The Industry
Work Program Agreement provides and encourages LTI to
recruit and hire qualified employees from the 500 male
residents presently in this facility. Prospective resident
employees are provided vocational and educational training
by Wackenhut and the Texas Department of Criminal Justice,
Division of Pardons and Paroles tailored to the Company's
specifications. The Company is required to pay resident
employees at a rate prevailing in the area for similar work,
but at no time less the Federal Minimum Wage rate. The
lease agreement provides for approximately 27,800 square
feet of manufacturing and office space through January 31,
1997 and provides for automatic three year extensions unless
notification is given by either party at least six months
prior to the expiration of each term. LTI has been notified
by Wackenhut that it wishes to review the terms of the
second three year lease in the near future. The Company
does not anticipate any material changes in the terms of the
renewal option. The lease provides for annual rental rates
of $1 per year for the primary term and the first automatic
three year extension.
On September 5, 1996, the Company was notified by
NASDAQ that effective September 6, 1996, the Company's
securities would be deleted from the Nasdaq Small Cap Market
because the Nasdaq Listing Qualifications Panel lacked
confidence in the Company's short term plan to maintain
compliance with the listing requirements. The Company's
securities are presently trading on the OTC Bulletin Board
under the same trading symbol "USXX".
Principal Products, Services and Revenue Sources
The Company furnishes direction, administrative and
consulting services to its Subsidiaries, and raises funds as
appropriate for their operation and expansion.
7
LTI offers contract manufacturing services for
electronic circuit boards. LTI does not manufacture the
actual circuit boards; LTI purchases them from board
manufacturers. Electrical components placed on the boards
are furnished by LTI's customers in kit form or purchased
directly from electrical supply houses or parts
manufacturers. LTI places the components on the board,
solders the connections and, if requested, tests the
assembled board. LTI also performs electro-mechanical
assembly.
The electronic circuit board is the basic element for
manufacturing electronic circuitry today. Individual
electrical components such as resistors, capacitors and
solid state devices are mounted on the circuit board. Such
electrical components are "packaged" as "through-hole" or
"surface mount" devices. Through-hole components have wire
leads which are placed through holes on the board. The wire
leads are soldered to the board on the reverse side.
Surface mount components are smaller and have much shorter
leads or metallic ends which are soldered directly to small
metal pads on top of the board.
LTI's services may be used by any business that uses
electronic circuit boards. LTI presently assembles products
utilized in computers, computer peripherals, security and
communications systems, medical equipment and electronic
testing devices. LTI markets its services through two (2)
in-house salespeople and five manufacturing representative
sales people. It has increased the sales force by 350% over
the past six months and is attempting to expand its contract
manufacturing business by including larger runs and turnkey
operations.
Newdat, Inc. is an Arizona corporation which has
developed to market ready status a device for measuring (in
real time during production) the thickness of coatings on
wire, e.g., measuring the thickness of the zinc coating on
galvanized wire. This device has wide ranging alternative
applications. For example it can also be used to detect
flaws in wire and cable during production or while in use,
e.g., elevator or ski lift cables. Newdat is also
developing a high speed tape backup unit for computers,
utilizing a helical scan technology. Newdat also owns an
eighty percent (80%) interest in SensonCorp Limited "Senson"
which is presently marketing a line of environmentally
friendly chemical coatings developed by a major Australian
chemical company. Senson has exclusive rights to
manufacture and market these products in North America. The
coatings have a variety of applications, all with non toxic
anti-corrosion capability using vapor phase corrosion
inhibitors. Over the past half year, the Company's
management has consolidated much of Newdat's engineering
8
business in Lockhart as a control measure and cost saving
exercise.
The Company successfully concluded an agreement in the third
quarter of 1996 to acquire an 85% ownership interest in the
QuakeAlarm technology from Komen Holdings Pty., a new South
Wales Holding Company in exchange for 3,536,000 shares of
the Company's common stock. This technology, which has been
developed and prototyped, is a fully integrated early
warning earthquake alarm that can detect the first sign of
an imminent earthquake. The QuakeAlarm can alert the user
before humans begin to feel the earthquake by sensing the
quake's "P" (primary) wave, which precedes the "S" (shock)
waves which cause the damage. The purchase of the majority
ownership gives the Company exclusive manufacturing and
marketing right to the product worldwide. The Company plans
to commence production of the QuakeAlarm immediately and
market this product through several marketing
representatives worldwide.
Another potential business opportunity for LTI is a product
which it has developed on behalf of a customer. The product
is an energy saving device which has been developed for a
local company and is presently in field testing. The
product offers LTI the opportunity to undertake long
production run work which will enable combining the building
of circuit boards and coils with electro-mechanical
assembly.
LTI has entered into an exclusive three year agreement with
an Austin, Texas, original computer equipment manufacturer
"OEM" for the assembly, testing and shipping to end users a
new line of computers using the MAC operating system. The
OEM estimated that approximately 60,000 units will be
produced during the first year of the contract and
approximately 120,000 units during the second year.
Raw Materials
Some of the components and raw materials used by the
Company's subsidiaries are available from a limited number
of suppliers and/or are susceptible to non availability due
to periodic shortages. While component purchasing lead
times are improving due to greater competition. In some
instances there may be lead times of several months or
longer to obtain and sustain an adequate supply of
components. While parts are generally available, delays in
obtaining some parts could jeopardize orders and increase
the cost of operations for LTI and Newdat. LTI has
experienced prolonged or significant shortages in the past.
However, from time to time parts shortages may be expected
to cause temporary delays in production of some products.
Senson's raw materials include chemical stocks which are
generally available and management does not presently
9
anticipate any restrictions or delays in production due to
shortages in raw materials.
Patents, Trademarks, Licenses, Franchises and Concessions
The Company and LTI do not have any patents,
trademarks, licenses, franchises or concessions; however,
they may apply for some in the future. Because of the rapid
pace of technological change, the Company believes that
copyright, trademark and other legal protections are less
significant in its industry than such factors as innovative
skills, technological expertise and marketing abilities.
Newdat, Inc. holds U.S. and Canadian patents relating
to its wire measurement technology. These patents; covering
the same technology, reveal a new technology for measuring
the thickness of zinc and similar coatings on wire as well
as nondestructive electromagnetic testing of other
properties of wire. It is difficult to ascertain the value
of these patents. The novel parts of the device are its
ability to sense changes in external and internal
structures, including the on-line measurement of metallic
coating being applied to wire. The Company believes that
the rapid pace of change in high technology fields today
makes the ability to continuously innovate and develop new
technologies as important in some instances as the patents
themselves.
Senson's conformal coatings are widely protected by
patents, in particularly the "phased" emission of VPCI's
from the coatings.
Working Capital Practices
The Company's subsidiaries are discouraged from
carrying excess quantities of raw materials or purchased
parts because most of their products are produced to demand;
therefore, components and parts can usually be ordered as
needed. LTI has an agreement which allows one of its
suppliers to purchase materials from LTI's inventory when
they have needs for certain items. This procedure is to be
extended to other customers and known users of certain of
LTI's inventory. In a determined effort to limit inventory
holdings, LTI has introduced a heavy hand in its write-off
program and has made a allowance for a $395,000 complemented
with a determination to find buyers for slow moving items.
LTI offers selected customers a 2% discount if bills are
paid within ten days.
Dependence on Customers
LTI has broadened its customer base during 1995 and
1996 and is less dependent on key customers than previously.
However, it is now seeking longer production runs than in
10
the recent past and if it is successful, dependence on one
or more customers is inevitable. The loss of any one of
such customers would have a material adverse effect on LTI
and the Company. Management believes that this situation
will abate as LTI's customer base expands.
Backlog
At October 31, 1996, LTI's backlog (which represents
that portion of outstanding contracts not yet included in
revenue) was approximately $1,140,000. It is anticipated
that 100% of the backlog will be delivered before April 30,
1997.
At October 31, 1996, Newdat had no backlog as the wire
measurement devices have not passed through their Beta site
testing phases, and are therefore not offered for sale.
At October 31, 1996, Senson's had no backlog and at
this time Senson should be able to meet its marketing needs
as the Company manufactures in large batches.
Because LTI and Newdat receive price commitments from
their vendors, their costs normally do not increase relative
to backlog orders. Engineering changes in products by any
of LTI's customers or other events beyond the control of LTI
could result in the cancellation or suspension of some of
LTI's present backlog.
Competitive Conditions
LTI, Newdat and Senson are in competition with a large
number of firms. Most of their competitors are
substantially larger and have greater financial resources.
LTI's business is capital intensive, i.e., a significant
investment in equipment is necessary. The greater financial
resources of many of LTI's competitors gives those
competitors an advantage over LTI. Newdat and Senson have
products which face competition from other products. The
Company believes the products of Newdat and Senson have
features and qualities which give them a competitive
advantage. However, the existing control of the market
place by their competitors and the financial resources which
such competition can apply to their competitive marketing
efforts are significant negative factors against the ability
of Newdat and Senson to successfully complete in their
markets. Positive factors pertaining to LTI's competitive
position are the experience of LTI's new management team and
what LTI believes is its ability to address the growing need
for mixed technology circuit boards, i.e., circuit boards
containing both through-hole and surface mount components.
LTI has automated equipment for the assembly of circuit
boards using surface mount and through-hole components.
However, LTI's surface mount equipment is limited in
11
capacity. If LTI is able to sustain and increase its volume
of business, further investments in capital equipment will
be required. The Company will require additional debt
and/or lease financing to acquire additional equipment and
expanded receivables financing to fund any growth in sales.
Terms of possible lease agreements and/or the cost of
borrowed funds may be prohibitive.
Research and Development Activities
Newdat acquired products of which one had already been
developed. Newdat is limiting further research and
development to support the latest possible entry of its
proprietary products into market, and then the support and
enhancement of those products in the field.
Number of Persons Employed
As of October 31, 1996, the Company had two salaried
employees. Several employees of LTI devoted a significant
portion of their time to the affairs of the Company.
As of October 31, 1996, LTI had approximately 69
regular employees. LTI employees include residents from the
minimum security prison facility where the Company is
located.
As of October 31, 1996, Newdat had no employees.
As of October 31, 1996, Senson had 1 part time
employee.
None of the Company's employees are represented by a
union. The Company believes that its relationship with its
employees is good.
Regulation
The Company is subject to Food and Drug Administration
("FDA") regulations relating to medically related devices
which its subsidiary, LTI manufactures. These regulations
are generally applicable to companies producing medical
electronics. The products that are subject to FDA
regulation are not a significant portion of LTI's business.
All of the Company's subsidiaries are subject to OSHA.
USE OF PROCEEDS
The Company will not receive any of the proceeds from
the sale of the Common Shares by the Grantees of the
options. However, the Company may receive proceeds from
exercise of the Options, of which there is no assurance.
All net proceeds received by the Company from exercise of
12
the Options shall be added to working capital of the Company
and utilized for any valid corporate purpose. It is
presently anticipated that the proceeds may be utilized for
payment of outstanding accounts payable and general and
administrative expenses.
13
RISK FACTORS
The purchase of these securities involves a high degree
of risk. Prospective investors should carefully consider
the following factors, among others set forth in this
Prospectus, before making a decision to purchase the Common
Shares offered hereby.
1. Going Concern. The Company incurred significant
losses during the years ended December 31, 1995, 1994 and
1993 and had a working capital deficiency at December 31,
1993. The Company's auditors, Brown, Graham & Company P.C.,
have rendered a "going concern" opinion in its report. The
Company's consolidated financial statements have been
presented on the basis that the Company is a going concern
which contemplates the realization of assets and the
satisfaction of liabilities in the normal course of
business. The Company's continued existence is dependent
upon its ability to resolve its liquidity problems, which it
plans to resolve principally from profitable operations,
accounts receivable based borrowing, long-term debt or
equity financing and the continued support and forbearance
of its vendors and creditors. (See Risk Factors - Future
Capital Needs and Possible Loss of Facilities)
2. NASDAQ Maintenance Requirements - the Common Stock
and Redeemable Warrants have been deleted from the Nasdaq
SmallCap Stock Market. The Company's Common Stock was
deleted effective September 6, 1996, because the Common
Stock was trading at $.125 per share, which was below the
required minimum bid price of $1.00 per share. Although,
the Company did meet the alternative minimum bid price test
requirement of $2,000,000 in capital and surplus and
$1,000,000 in market value of public float the Nasdaq
Listing Qualifications Panel was of the opinion that the
Company's plan to ensure long term compliance did not
convince them that the Company would be able to continue
meeting the minimum requirements. The company has requested
that the Review Committee of the Nasdaq Listing and Hearing
Review Committee review this decision and reverse their
decision. As of this date no determination has been made by
the review committee. The Common Stock is presently trading
on the OTC Bulletin Board.
Broker/Dealer Sales of the Company's Securities on the OTC
Bulletin Board are subject to Securities and Exchange
Commission Rules that impose additional sales practice
requirements on broker/dealers who sell such securities to
persons other than established customers and accredited
investors (generally institutions with assets in excess of
$5,000,000 or individuals with a net worth in excess of
$1,000,000 or an annual income exceeding $200,000 or
$300,000 jointly with their spouse). The Company's
Redeemable Warrants and Common Stock are subject to these
14
rules. For transactions covered by the Rules, the
broker/dealer must make a special suitability determination
for the purchaser, and receive the purchaser's written
agreement to the transaction prior to the sale, deliver a
notice to the customer of the hazards involved in investing
in such securities, and comply with additional regulations
which became operative on January 3, 1993. Consequently,
the Rule may affect the ability of broker/dealers to sell
the Company's securities and also may affect the ability of
purchasers in this offering to sell their shares in the
secondary market.
3. Operating Losses. The Company has accumulated a
deficit of $8,345,220 since its inception through the year
ending December 31, 1995. There is no assurance that the
Company will operate profitably in the future.
4. Absence of Dividends. No dividends have been
declared or paid by the Company on its Common Stock. The
Company intends to devote all available funds to the
operation of its business and, accordingly, does not intend
to pay any cash dividends in the foreseeable future.
5. Future Capital Needs. The circuit board contract
assembly business is capital intensive. LTI, the Company's
principal Subsidiary, has need for replacement of some of
its surface mount equipment to remain competitive with some
of its competition. LTI is presently seeking some of this
equipment and is also attempting to finance this equipment.
If LTI is unable to finance the equipment, such an event
could have a material adverse impact on the Company's future
operations and its ability to compete in the industry. If
LTI increases its volume of business, further investments in
capital equipment or replacement thereof and facilities
expansion may be required. There can be no assurance that
additional financing will be available on favorable terms.
6. Competition. The Company has competitors and
potential competitors, many of whom may have considerably
greater financial and other resources than the Company.
7. Product Development. The Company and LTI do not
have any patents, trademarks, licenses, franchises or
concessions; however, they may apply for some in the future.
Because of the rapid pace of technological change, the
Company believes that copyright, trademark and other legal
protections are less significant in its industry than such
factors as innovative skills, technological expertise and
marketing abilities.
Newdat, Inc. holds U.S. and Canadian patents relating
to its wire measurement technology. These patents; covering
the same technology, reveal a new technology for measuring
the thickness of zinc and similar coatings on wire as well
15
as nondestructive electromagnetic testing of other
properties of wire. It is difficult to ascertain the value
of these patents. The novel parts of the device are its
ability to sense changes in external and internal
structures, including the on-line measurement of metallic
coating being applied to wire. The Company believes that
the rapid pace of change in high technology fields today
makes the ability to continuously innovate and develop new
technologies as important in some instances as the patents
themselves.
Senson's conformal coatings are widely protected by
patents, in particularly the "phased" emission of VPCI's
from the coatings.
8. Possible Shortage of Working Capital to Market New
Product. Senson and Newdat have no working capital of their
own and will have to rely upon the Company or intercompany
loans from LTI to market its new product.
9. Product Protection. The Company and LTI do not
have any patents, trademarks, licenses, franchises or
concessions; however, they may apply for same in the future.
The Company believes that copyright, trademark and other
legal protections are less significant in its industry than
such factors as innovative skills, technological expertise
and marketing abilities.
Newdat, Inc. holds U.S. and Canadian patents relating
to its wire measurement technology. These patents; covering
the same technology, reveal a new technology for measuring
the thickness of zinc and similar coatings on wire as well
as nondestructive electromagnetic testing of other
properties of wire. It is difficult to ascertain the value
of these patents. The novel parts of the device are its
ability to sense changes in external and internal
structures, including the on-line measurement of metallic
coating being applied to wire. The Company believes that
the rapid pace of change in high technology fields today
makes the ability to continuously innovate and develop new
technologies as important in some instances as the patents
themselves.
Senson's conformal coatings are widely protected by
patents, in particularly the "phased" emission of VPCI's
from the coatings.
10. Backlog. At October 31, 1996, LTI's backlog
(which represents that portion of outstanding contracts not
yet included in revenue) was approximately $1,140,000. It
is anticipated that 100% of the backlog will be delivered
before April 30, 1997.
16
At October 31, 1996, Newdat had no backlog as the wire
measurement devices have not passed through their Beta site
testing phases, and are therefore not offered for sale.
At October 31, 1996, Senson's had no backlog and at
this time Senson should be able to meet its marketing needs
as the Company manufactures in large batches.
Because LTI and Newdat receive price commitments from
their vendors, their costs normally do not increase relative
to backlog orders. Engineering changes in products by any
of LTI's customers or other events beyond the control of LTI
could result in the cancellation or suspension of some of
LTI's present backlog.
11. Importance of Volume Production. The business of
the Company's principal Subsidiary, LTI, is the contract
assembly of surface mount, through-hole and mixed technology
circuit boards. That business is capital intensive,
requiring a substantial investment in automated equipment.
Hence, the Company has significant fixed costs. Because of
these fixed costs, the Company must have a significant
volume of work to cover manufacturing costs and to sustain
profitability. In this regard, production problems or
planning misjudgments could have a material adverse effect
on the Company.
12. Raw Materials. Some of the components and raw
materials used by LTI and Senson are available from only one
supplier and/or are subject to unavailability due to general
shortages. In some instances, there may be lead times of
several months or longer to obtain and sustain an adequate
supply of components. While parts are generally available,
delays in obtaining some parts can jeopardize orders and
increase the Company's cost of operations.
13. Reliance on a Few Customers. The Company's
principal Subsidiary, LTI, is largely dependent on a few
customers for a significant portion of its cash flow. The
loss of any one of these customers may have a material
adverse impact on the Company.
14. Dependence on Key Personnel. The success of the
Company depends, in part, on the continued availability of
the executive officers, senior staff members and key
technical employees of its Subsidiaries. The unavailability
of certain of these people, or the Company's inability to
attract and retain other key employees, could severely
affect the Company's ability to carry on its business.
There is no assurance that these officers or employees will
remain with the Company or that the Company will be able to
attract and retain other key employees.
17
15. Effect of Possible Bankruptcy, Reorganization or
Similar Proceeding. In the event of a bankruptcy,
reorganization or similar proceeding, the purchasers of the
shares offered pursuant to this Prospectus could lose their
entire investment, even if the Company were to survive.
16. Litigation Involving the Company. There is
litigation pending against the Company and some of its
subsidiaries.
17. Shares Eligible for Future Sale. As of the date
of this Prospectus, the Company has issued and outstanding
21,257,263 shares of Common Stock. 18,742,737 are authorized
but unissued at this time.
18. Shares Issuable Upon Exercise of Redeemable
Warrants. In connection with a public offering, the Company
issued and sold 660,000 Common Stock Purchase Warrants (the
"Redeemable Warrants") to purchase 660,000 shares of the
Company's Common Stock at $10.00 per share at any time until
5:00 p.m., Denver, Colorado, time on April 14, 1992, (the
"Warrant Expiration Date") unless extended by the Company.
(By action of the Board of Directors the expiration date of
the Redeemable Warrants was extended through December 31,
1996). The Redeemable Warrants expire after the Warrant
Expiration Date. The Redeemable Warrants are redeemable by
the Company upon 30 days notice at any time upon the payment
of a redemption premium of $0.005 per Redeemable Warrant
provided that, prior to such redemption, the shares of
Common Stock have traded in the public market for a period
of not less than twenty (20) consecutive trading days at a
closing bid price of not less than $12.50. Upon the
redemption of the Redeemable Warrants, if the holder does
not exercise the Redeemable Warrants, the Redeemable
Warrants will lose all value. There is no assurance that
the Company's Common Stock will ever trade at a level high
enough to cause the exercise of the Redeemable Warrants.
The exercise of the Redeemable Warrants will result in
additional shares of Common Stock being issued with a
resulting dilution in the interests of other shareholders
and could adversely affect the market price of the Common
Stock.
19. Possible Income Tax Consequences Upon Expiration
of Any Unexercised Warrants. The Internal Revenue Service
has taken a position that upon the expiration of warrants
which were not exercised, the issuer of the warrants should
realize taxable income in the year of expiration in an
amount equal to the consideration received upon issuance of
such warrants. If this position should prevail in the
courts, the Company may become liable for federal income
taxes on the amount of the proceeds realized from the sale
of the Redeemable Warrants which expire unexercised.
18
20. Possible loss of Facilities. LTI's operations are
located in a minimum security prison facility under a lease
agreement with Wackenhut Corrections Corporation, The Texas
Department of Criminal Justice, Division of Pardons and
Paroles and the City of Lockhart, Texas, to lease
approximately 27,800 square feet of manufacturing and office
space under an operating lease through January 31, 1997 and
provides for an automatic three year extension. LTI has
been notified by Wackenhut that they wish to renegotiate the
terms of the second renewal option period. These
negotiations will take place within the next thirty days.
The Company does not anticipate that the terms of the
contract will change materially. However, if the company
were not able to renegotiate reasonable terms or was forced
to vacate the current premises, this would have a material
adverse impact on the Company.
FOR ALL OF THE AFORESAID REASONS, AND OTHERS SET FORTH
HEREIN, THE PURCHASE OF THE SECURITIES OFFERED HEREBY
INVOLVE A HIGH DEGREE OF RISK. ANY PERSON CONSIDERING AN
INVESTMENT IN THE SECURITIES OFFERED HEREBY SHOULD BE AWARE
OF THESE AND OTHER FACTORS SET FORTH IN THIS PROSPECTUS.
THE SECURITIES SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN
AFFORD TO ABSORB A TOTAL LOSS OF THEIR INVESTMENT IN THE
COMPANY AND HAVE NO NEED FOR A RETURN ON THEIR INVESTMENT.
PLAN OF DISTRIBUTION
Upon the exercise of any of the Options, sale of shares
may be effected from time to time in transactions (which may
include block transactions) in OTCBB, in over-the-counter
market, in negotiated transactions, through the writing of
options on the Common Shares, or a combination of such
methods of sale, at fixed prices which may be charged, at
market prices prevailing at the time of sale, or at
negotiated prices. Sales may be effected by selling Common
Shares directly to purchasers or to or through
broker/dealers which may act as agents or principals. Such
broker/dealers may receive compensation in the form of
discounts, concessions, or commissions from the sellers
and/or the purchasers of Common Shares for whom such
broker/dealers may act as agents or to whom they sell as
principal, or both. Sellers and any broker/dealer that act
in connection with the sale of Common Shares might be deemed
to be "underwriters" within the meaning of Section 2(11) of
the Act of any commission received by them and any profit on
the resale of the Common Shares as principal might be deemed
to be underwriting discounts and commissions under the Act.
Sellers of the Common Stock may agree to indemnify any
agent, dealer or broker/dealer that participates in
transactions involving sales of Common Shares against
certain liabilities, including liabilities arising under the
Act. The Company will indemnify certain other persons
19
against certain liabilities in connection with the offering
of the Common Shares, including liabilities arising under
the Act.
20
COMMISSION POSITION OF INDEMNIFICATION
FOR SECURITIES ACT LIABILITIES
Under Delaware Corporation Act and the Company's
Articles of Incorporation, as amended, the Company's
Officers and Directors may be indemnified against certain
liabilities which they may incur in their capacities as
such.
Section 145 of the General Corporation Law of Delaware
provides as follows:
(a) A corporation may indemnify any person who was or
is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding,
whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation)
by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses
(including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him
in connection with such action, suit or proceeding if he
acted in good faith and in a manner he reasonably believed
to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or
proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not,
of itself, create a presumption that the person did not act
in good faith and in a manner which he reasonably believed
to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that this
conduct was unlawful.
(b) A corporation may indemnify any person who was or
is a party or is threatened to be made party to any
threatened, pending or completed action or suit by or in the
right of the corporation to procure a judgment in its favor
by reason of the fact that he is or was a director, officer,
employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against expenses
(including attorney's fees) actually and reasonably incurred
by him in connection with the defense or settlement of such
action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the corporation and except that no
indemnification shall be made in respect of any claim, issue
21
or matter as to which such person shall have been adjudged
to be liable to the corporation unless and only to the
extent that the Court of Chancery or the court in which such
action or suit was brought shall determine upon application
that, despite the adjudication of liability but in lieu of
all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the
Court of Chancery or such other court shall deem proper.
(c) To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding
referred to in subsections (a) and (b) of this section, or
in defense of any claim, issue or matter therein, he shall
be indemnified against expenses (including attorney's fees)
actually and reasonably incurred by him in connection
therewith.
(d) Any indemnification under subsection (a) and (b)
of this section (unless ordered by a court) shall be made by
the corporation only as authorized in the specific case upon
a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances
because he has met the applicable standard of conduct set
forth in subsections (a) and (b) of this section. Such
determination shall be made (1) by the board of directors by
a majority vote of a quorum consisting of directors who were
not parties to such action, suit or proceeding, or (2) if
such a quorum is not obtainable, or, even if obtainable a
quorum of disinterested directors so directs, by independent
legal counsel in a written opinion; or (3) by the
stockholders.
(e) Expenses incurred by an officer or director in
defending a civil or criminal action, suit or proceeding may
be paid by the corporation in advance of the final
disposition of such action, suit or proceeding upon receipt
of an undertaking by or on behalf of such director or
officer to repay such amount if it shall ultimately be
determined that he is not entitled to be indemnified by the
corporation as authorized in this section. Such expenses
incurred by other employees and agents may be so paid upon
such terms and conditions, if any, as the board of directors
deems appropriate.
(f) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections
of this section shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement
of expenses may be entitled under any bylaw, agreement, vote
of stockholders or disinterested directors or otherwise,
both as to action in his official capacity and as to action
in another capacity while holding such office.
22
(g) A corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by
him in any such capacity, or arising out of his status as
such, whether or not the corporation would have the power to
indemnify him against such liability under this section.
(h) For purposes of this section, references to the
"corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any
constituent of a constituent) absorbed in a consolidation or
merger which, if its separate existence had continued, would
have had power and authority to indemnify its directors,
officers, and employees or agents, so that any person who is
or was a director, officer, employee or agent of such
constituent corporation, or is or was serving at the request
of such constituent corporation as a director, officer,
employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same
position under this section with respect to the resulting or
surviving corporation as he would have with respect to such
constituent corporation if its separate existence had
continued.
(i) For purposes of this section, references to "other
enterprises" shall include employee benefit plans;
references to "fines" shall include any excise taxes
assessed on a person with respect to any employee benefit
plan; and references to "serving at the request of the
corporation" shall include any service as a director,
officer, employee, or agent of the corporation which imposes
duties on, or involves services by, such director, officer,
employee or agent with respect to an employee benefit plan,
its participants or beneficiaries; and a person who acted in
good faith and in a manner he reasonably believed to be in
the interest of the participants and beneficiaries of an
employee benefit plan shall be deemed to have acted in a
manner "not opposed to the best interest of the corporation"
as referred to in this section.
(j) The indemnification and advancement of expenses
provided by, or granted pursuant to, this section shall,
unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of
the heirs, executors and administrators of such a person.
The Company's Articles of Incorporation and Bylaws
provide:
23
Article IV of the Bylaws
Section 1. Right to Indemnification
Each person who was or is made a party or is threatened
to be made a party to or is involved (including, without
limitation, as a witness) in any actual or threatened
action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that
he or she is or was a director or officer of the corporation
or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation
or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee
benefit plans, whether the basis of such proceeding is
alleged action in an official capacity as a director,
officer, employee or agent or in any other capacity while
serving as a director, officer, employee or agent, shall be
indemnified and held harmless by the corporation to the full
extent authorized by the Delaware General Corporation Law,
as the same exists or may hereafter be amended (but, in the
case of any such amendment, only to the extent that such
amendment permits the corporation to provide broader
indemnification rights than said law permitted the
corporation to provide prior to such amendment), or by other
applicable law as then in effect, against all expense,
liability and loss (including attorney's fees judgments,
fines, ERISA, excise taxes or penalties and amounts to be
paid in settlement) actually and reasonably incurred or
suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased
to be a director, officer, employee or agent and shall inure
to the benefit of his or her heirs, executors and
administrators; provided, however, that except as provided
in Section 2 of this Article with respect to proceedings
seeking to enforce rights to indemnification, the
corporation shall indemnify any such person seeking
indemnification in connection with a proceeding (or part
thereof) initiated by such person only if such proceeding
(or part thereof) was authorized by the Board of Directors
of the corporation. The right to indemnification conferred
in this Section 1 shall be a contract right and shall
include the right to be paid by the corporation the expenses
incurred in defending any such proceeding in advance of its
final disposition; provided, however, that, if the Delaware
General Corporation Law requires, the payment of such
expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other
capacity in which service was or is rendered by such person
while a director or officer, including, without limitation,
service to an employee benefit plan) in advance of the final
disposition of a proceeding shall be made only upon delivery
to the corporation of an undertaking, by or on behalf of
such director or officer, to repay all amounts so advanced
24
if it shall ultimately be determined that such director or
officer is not entitled to be indemnified under this Section
1 or otherwise.
Section 2. Right of Claimant to Bring Suit.
If a claim under Section 1 of this Article is not paid
in full by the corporation within sixty days after a written
claim has been received by the corporation, except in the
case of a claim for expenses incurred in defending a
proceeding in advance of its final disposition, in which
case the applicable period shall be twenty days, the
claimant may at any time thereafter bring suit against the
corporation to recover the unpaid amount of the claim and,
to the extent successful in whole or in part, the claimant
shall be entitled to be paid also the expense of prosecuting
such claim. It shall be a defense to any such action (other
than an action brought to enforce a claim for expenses
incurred in defending any proceeding in advance of its final
disposition where the required undertaking, if any is
required, has been tendered to the corporation) that the
claimant has not met the standards of conduct which make it
permissible under the Delaware General Corporation Law of
the corporation to indemnify the claimant for the amount
claimed, but the burden of proving such defense shall be on
the corporation. Neither the failure of the corporation
(including its Board of Directors, independent legal counsel
or its stockholders) to have made a determination prior to
the commencement of such action that indemnification of the
claimant is proper in the circumstances because he or she
has met the applicable stand of conduct set forth in the
Delaware General Corporation Law nor an actual determination
by the corporation (including its Board of Directors,
independent legal counsel, or its stockholders) that the
claimant has not met such applicable standard of conduct
shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of
conduct.
Section 3. Nonexclusivity of Rights.
The right to indemnification and the payment of
expenses incurred in defending a proceeding in advance of
its final disposition conferred in this Section shall not be
exclusive of any other right which any person may have or
hereafter acquire under any statue, provision of the
Certificate of Incorporation, Bylaws, agreement, vote of
stockholders or disinterested directors or otherwise.
25
Section 4. Insurance, Contracts and Funding
The corporation may maintain insurance, at its expense,
to protect itself and any director, officer, employee or
agent of the corporation or another corporation,
partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the
corporation would have the power to indemnify such person
against such expense, liability or loss under the Delaware
General Corporation Law. The corporation may enter into
contracts with any director or officer of the corporation
furtherance of the provisions of this Section and may create
a trust fund, grant a security interest or use other means
(including, without limitation, a letter of credit) to
ensure the payment of such amounts as may be necessary to
effect indemnification as provided in this Section.
Section 5. Indemnification of Employees and Agents of the
Corporation.
The corporation may, by action of its Board of
Directors from time to time, provide indemnification and pay
expenses in advance of the final disposition of a proceeding
to employees and agents of the corporation with the same
scope and effect as the provisions of this Section with
respect to the indemnification and advancement of expenses
of directors and officers of the corporation.
Article 11 of the Articles of Incorporation
To the full extent that the Delaware General
Corporation Law, as it exists on the date hereof or may
hereafter be amended, permits the limitation or elimination
of the liability of directors, a director of the corporation
shall not be liable to the corporation or its stockholders
for monetary damages for breach of fiduciary duty as a
director. Any amendment to or repeal of this Article 11
shall not adversely affect any right or protection of a
director of the corporation for or with respect to any acts
or omission of such director occurring prior to such
amendment or repeal.
26
Position of the Commission
Insofar as indemnification for liabilities arising
under the Act may be permitted Officers, Directors and
controlling persons of the Company pursuant to the forgoing
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 the Securities Act of 1933, as amended (the "1933 Act)")
and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the
payment by the Company of expenses incurred or paid by a
Officer, Director or controlling person of the Company in
the successful defense of any action, suit or proceeding) is
asserted by such Officer, Director or controlling person in
connection with the securities being registered, the Company
will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed
in the 1933 Act and will be governed by the final
adjudication of such issue.
OPINION OF COUNSEL
The validity of the Common Shares offered hereby has
been passed upon for the Company by Jack D. Bryant, Attorney
at Law, 7404 Napier Trail, Austin, Texas 78729.
EXPERTS
The consolidated financial statements and financial
statements schedules of U. S. Technologies Inc. as of
December 31, 1995 and 1994 and for each of the three years
in the period ended December 31, 1995 incorporated in this
Prospectus by reference to the Annual Report on Form 10-K,
have been so incorporated in reliance on the report of
Brown, Graham & Company, P.C. independent accountants, given
on the authority of that firm as experts in accounting and
auditing.
AVAILABLE INFORMATION
The Company is subject to the informational
requirements of the Securities Exchange Act of 1934 and in
accordance therewith files reports, proxy statements and
other information with the Securities and Exchange
Commission (the "Commission"). Information concerning the
Company can be inspected and copied at the offices of the
Commission, 450 Fifth Street, N.W., Washington D.C., 20549.
Copies of such material can be obtained from the Public
27
Reference Section of the Commission at Room 1024, 450 Fifth
Street, N.W., Washington D.C., 20549, at prescribed rates.
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESENTATION MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN
OFFER TO BUY ANY SECURITIES OTHER THAN THE COMMON SHARES
OFFERED BY THIS PROSPECTUS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY COMMON SHARES IN ANY CIRCUMSTANCES IN WHICH SUCH
OFFER OR SOLICITATION IS UNLAWFUL. NEITHER THE DELIVERY OF
THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF
OR THAT THE INFORMATION CONTAINED BY REFERENCE HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
28
PART II.
Information Required in the Registration Statement.
Item 3. Incorporation of documents by reference.
Included in Prospectus.
Item 4. Description of Securities.
Not applicable.
Item 5. Interest of Named Experts and Counsel.
Included in Prospectus.
Item 6. Indemnification of Directors and Officers.
Included in Prospectus.
Item 7. Exemption from Registration.
Not applicable.
Item 8. Exhibits
(a) Exhibits
Exhibit No. Document.
5 * Opinion of Jack D. Bryant, 7404 Napier Trail,
Austin, Texas 78729, regarding the legality
of the securities registered under this
Registration Statement.
10.1 * 1996 Stock Option Plan.
24.1 * Consent of counsel for the Company (set
forth in the opinion of counsel included as
Exhibit 5).
24.2 * Consent of Brown, Graham & Company P.C.,
independent public accountants for the
Company.
* Filed herewith.
29
Item 9. Undertakings.
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 to include any material information
with respect to the plan of distribution not previously
disclosed in the Registration Statement or any material
change to such information in the Registration Statement;
2. that, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering
of such securities at that time shall be deemed to be the
initial bona fide offering thereof; and,
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.
The undersigned registrant hereby undertakes that, for
the purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934 that is incorporated by
reference in the 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.
30
U. S. TECHNOLOGIES INC.
FORM S-8
EXHIBIT INDEX
Exhibit
No. Description Page
1.1 Articles of Incorporation of the Company
1.2 Bylaws of the Company
5 * Opinion of Jack D. Bryant, 7404 Napier Trail,
Austin, Texas 78729, regarding the legality of
the securities registered under this Registration
Statement. 22
10.1 * Nonqualifying Stock Option Plan 23
24.1 * Consent of counsel for the Company (set forth
30
in the opinion of counsel included as Exhibit 5
to this Registration Statement)
24.2 * Consent of Brown, Graham & Company P.C., Certified
Public 31
Accountants for the Company.
* Filed herewith.
Exhibits 1.1 and 1.2 were filed as exhibits to the
Company Registration Statement on Form S-1, SEC File No. 33-
47835 and SEC File No. 33-11720. Such exhibits are
incorporated herein by reference pursuant to Rule 12b-32.:
31
EXHIBIT 5
November 12, 1996
U. S. Technologies Inc.
1402 Industrial Blvd.
Lockhart, Texas 78644
RE: Registration Statement on
Form S-8 (S.E.C. File No.
33-_____________)
Covering Public Offering
of Common Shares of U. S.
Technologies, Inc.
Gentlemen:
I have acted as counsel for U. S. Technologies Inc., a
Delaware corporation (the "Company"), in connection with the
registration by the Company of an aggregate of 600,000
Common Shares, par value $0.02 per share, underlying options
issuable to any employee, director, general partner,
officer, or consultant or advisor of the Company (the
"Options"), all as more fully set forth in the Registration
Statement on Form S-8 to be filed by the Company.
In such capacity, I have examined, among other
documents, the Articles of Incorporation, as amended, Bylaws
and minutes of meetings of its Board of Directors and
shareholders, and the
1996 Qualifying Stock Option Plan of the Company.
Based upon the foregoing, and subject to such further
examinations as I have deemed relevant and necessary, I am
of the opinion that:
1. The Company is a corporation duly organized and
validly existing under the laws of the State of
Delaware.
2. The Options and underlying Common Shares have been
legally and validly authorized under the Articles
of Incorporation, as amended, of the Company, and
when issued and paid for upon exercise of the
Options, the Common Shares underlying the Options
will constitute duly and validly issued and
outstanding, fully paid and nonassessable Common
Shares of the Company.
32
Yours truly,
Jack D. Bryant
33
EXHIBIT 10.1
U. S. TECHNOLOGY INC
1996 STOCK OPTION PLAN
ARTICLE I
PURPOSE
U. S. TECHNOLOGY INC (the "Company"), is largely
dependent for the successful conduct of its business on the
initiative, effort and judgment of its officers and employees.
This Stock Option Plan (the "Plan") is intended to provide the
key employees of the Company an incentive through stock
ownership in the Company and encourage them to remain in the
Company's employ. Moreover, since the Incentive Stock Options
and Non-Qualified Stock Options provided for in the Plan are
subject to various alternative provisions of the Internal
Revenue Code of 1986, as amended (the "Code"), the Committee
(as hereinafter defined) will have considerable latitude in
shaping options granted under the Plan to the particular
circumstances of the optionee, thus recognizing the full
incentive value of the option.
ARTICLE II
ADMINISTRATION
The Plan shall be administered by the Board of Directors
(the "Board") of the Company or the Board, at its option, may
delegate the administration of the Plan to a committee of the
Board (the Board and the Committee are hereinafter
collectively or alternatively referred to as the "Committee")
subject to the provisions of this Article II. All members of
the Committee shall be Directors of the Company and shall be
selected by (and serve at the pleasure of) the Board. Subject
to the express provisions of the Plan, the Committee shall
have plenary authority, in its discretion, to recommend to
the Board the individuals within the class set forth in
Article IV to whom, and the time and price per share at which,
options shall be granted, and the number of shares to be
subject to each option. In making such determination, the
Committee may take into account the nature of the services
rendered by the respective employees, their present and
potential contributions to the Company's success and such
other factors as the Committee in its discretion shall deem
relevant. Subject to the express provisions of the Plan, the
Committee shall also have plenary authority to interpret the
Plan, to prescribe, amend and rescind rules and regulations
regulating it, to recommend to the Board the terms and
provisions of the respective options (which need not be
identical) and to make all other determinations necessary or
2
advisable for the administration of the Plan. The Committee's
determination on the matters referred to in this Article II
shall be final, conclusive and binding upon all optionees.
ARTICLE III
AMOUNT OF STOCK AND DURATION OF PLAN
The aggregate amount (subject to adjustment as provided
in Article VIII) of stock which may be purchased pursuant to
options granted under this Plan shall be 600,000 shares of the
Company's Common Stock. Any option granted hereunder must be
granted within ten (10) years from the date of approval of
adoption of the Plan by the Board or the date on which this
Plan is approved by the Company's shareholders, whichever is
earlier. Shares subject to options under the Plan may, in the
sole discretion of the Board, be either authorized and
unissued shares or issued shares which have been acquired by
the Company and are being held in its treasury. When options
have been granted under the Plan and have lapsed unexercised
or partially unexercised, the shares which were subject
thereto may be reoptioned under the Plan.
ARTICLE IV
ELIGIBILITY AND PARTICIPATION
All officers and employees of the Company shall be
eligible to receive Stock Options under the Plan.
ARTICLE V
TERMS AND CONDITIONS OF OPTIONS
Each option granted under the Plan shall be evidenced by
a Stock Option Agreement (the "Agreement"), the form of which
shall have been approved by the Committee and Counsel to the
Company. The Agreement shall be executed by the Company and
the optionee and shall set forth the terms and conditions of
the option, which terms and conditions shall include, but not
by way of limitation, the following:
1. Option Price. The option price shall be determined
by the Committee, but shall not in any event be less than the
greater of the (i) par value of the Company's Common Stock or
(ii) the fair market value of the Company's Stock on the date
that the option is granted.
2. Term of Option. The term of the option shall be
selected by the Committee, but in no event shall such term
exceed ten (10) years.
3. Transferability. Options granted hereunder shall not
be transferable otherwise than by will or operation of the
3
laws of descent and distribution. During the lifetime of the
optionee, options granted hereunder shall be executable only
by the optionee.
4. Termination of Employment. In the event of an
optionee's termination of employment with the Company for any
reason other than death, all options granted hereunder shall
thereupon terminate. The Committee may, in its discretion,
direct that certain Agreements contain provision permitting
exercise of an option after an optionee's retirement. Upon
the termination of an optionee's employment by reason of his
death, such optionee's option(s) shall terminate to the extent
it was not executable at the date of his death. To the extent
such options were then executable by the optionee, optionee's
estate or the beneficiaries thereof shall be entitled to
exercise such options for a period of three (3) months from
the date of his death, (unless the option(s) should sooner
terminate according to its own provisions) but not thereafter.
Notwithstanding the other provisions of this subparagraph 4,
no option shall be exercised more than ten (10) years from the
date upon which it is granted.
5. Other Conditions. At its sole discretion, the
Committee may impose other conditions upon the options granted
hereunder, including, but not by way of limitation, percentage
limitations upon the exercise of options granted hereunder.
If the Plan and the shares of Common Stock reserved for
options hereunder have not been registered under the
Securities Act of 1933, as amended (the "Act"), the Committee
shall satisfy itself that the exemption from registration
afforded by Section 4(2) of the Act will be available.
4
ARTICLE VI
INCENTIVE STOCK OPTIONS
The Committee and the Board, in recommending and granting
stock options hereunder, shall have the discretion to
determine that certain options shall be Incentive Stock
Options, as defined in Section 422A of the Code and the
regulations thereunder, while other options shall be Non-
Qualified Stock Options. Neither the members of the
Committee, the members of the Board nor the Company shall be
under any obligation or incur any liability to any person by
reason of the determination by the Committee or the Board
whether an option granted under the Plan shall be an Incentive
Stock Option or a Non-Qualified Stock Option. The provisions
of this Article VI shall be applicable to all Incentive Stock
Options at any time granted or outstanding under the Plan.
All Incentive Stock Options granted or outstanding under
the Plan shall be granted and held subject to and in
compliance with the terms and conditions specifically set
forth in Articles II, III, IV, and V hereof and, in addition,
subject to and in compliance with the following further terms
and conditions:
1. The option price of all Incentive Stock Options shall
not be less than one hundred percent (100%) of the fair market
value of the Company's Common Stock at the time the option is
granted (notwithstanding any provision of Article V hereof to
the contrary);
2. No Incentive Stock Option shall be granted to any
person who, at the time of the grant, owns stock possessing
more than ten percent (10%) of the total combined voting power
of the Company. Such ownership limitation will be waived if
(i) the option price is at least one hundred ten percent
(110%) of the fair market value of the Company's Common Stock
at the time the option is granted; and (ii) the option by its
terms must not be executable more than five (5) years from the
date it is granted; and,
3. The aggregate fair market value of all shares of
Common Stock (determined at the time of the grant of the
option) executable for the first time by an employee during
any calendar year shall not exceed $100,000.
ARTICLE VII
EXERCISE OF OPTIONS
Options granted hereunder may be exercised only by
tendering to the Company written notice of exercise
accompanied by the aggregate purchase price for the shares
with respect to which the option is being exercised. No
5
option shall be executable unless the shares issuable on the
exercise thereof have been registered under the Act, or the
Company shall have first received the opinion of its counsel
that registration under the Act is not required in connection
with such issuance. At the time of exercise, if the shares
with respect to which the option is being exercised have not
been registered under the Act, the Company may require the
optionee to give the Company whatever written assurance
counsel for the Company may require that the shares are being
acquired for investment and not with a view to the
distribution thereof, and that the shares will not be disposed
of without the written opinion of such counsel that
registration under the Act is not required. Share
certificates issued to the optionee upon exercise of the
option shall bear a legend to the foregoing effect to the
extent counsel for the Company deems it advisable. The
purchase price of shares of Common Stock of the Company
acquired upon the exercise of any Non-Qualified Stock Option
or Incentive Stock Option granted under the Plan may be paid
by an optionee by the payment of cash, or by the assignment to
the Company of shares of the Company's Common Stock
theretofore owned by the optionee having a value equal to such
option price, or by any combination thereof. For purposes of
the Plan, shares of Common Stock shall be deemed to have a
value equal to the closing bid price for a share for the
trading day upon which such value is being determined.
ARTICLE VIII
ADJUSTMENTS
Subject to any required action by the Company's Directors
and shareholders, the number of shares provided for in each
outstanding option and the price per share thereof, and the
number of shares provided for in the Plan, shall be
proportionately adjusted for any increase or decrease in the
number of issued shares of the Company's Common Stock
resulting from a subdivision or consolidation of shares or the
payment of a stock dividend (but only on the Common Stock) or
any other increase or decrease in the number of such shares
effected without receipt of consideration by the Company.
Subject to any required action by the Company's Directors and
shareholders, if the Company shall be the surviving
corporation in any merger or consolidation, each outstanding
option shall pertain to and apply to the securities to which a
holder of the number of shares of the Company's Common Stock
subject to the option would have been entitled. In the event
(hereinafter collectively referred to as an "Event of Sale or
Liquidation") of: (a) a dissolution or liquidation of the
Company; (b) a merger or consolidation in which the Company is
not the surviving corporation; (c) a sale of all or
substantially all of the assets of the Company; or (d) a sale
of all or substantially all of the outstanding Common Stock of
the Company to on purchaser, then each outstanding option
6
shall terminate, provided, however, that in such event, each
optionee shall have the right immediately prior to any Event
of Sale of Liquidation to exercise his option with respect to
the full number of shares covered thereby, without regard to
any installment provision contained in this Agreement. In the
event of a change in the Company's Common Stock which is
limited to a change of all of its authorized shares with par
value into the same number of shares with a different par
value or without par value, the shares resulting from any such
change shall be deemed to be Common Stock within the meaning
of the Plan. The aforesaid adjustment shall be made by the
Committee whose determination in that respect shall be final,
binding and conclusive. Except as hereinbefore expressly
provided in this Article VIII, the optionee shall have no
rights by reason of subdivision or consolidation of shares of
stock of any class or payment of any stock dividend or any
other increase or decrease in the number of shares of any
class or by reason of any Event of Sale or Liquidation, or
spin-off of assets or stock of another corporation; and any
issue by the Company of shares of stock of any class, or
securities convertible into shares of stock of any class,
shall not affect and no adjustment by reason thereof shall be
made with respect to the number or price of shares of the
Company's Common Stock subject to any option. The grant of an
option pursuant to the Plan shall not affect in any way the
right or power of the Company to make adjustments,
reclassifications, reorganizations or changes of its capital
or business structure or to merge or to consolidate or to
dissolve or liquidate or sell or transfer all or any part of
its business or assets.
ARTICLE IX
AMENDMENT OR DISCONTINUANCE
The Board may at any time amend, rescind or terminate the
Plan, as it shall deem advisable, provided, however, that no
change may be made in options theretofore granted under the
Plan (without the consent of the optionees) which should
impair the optionee's rights. Provided, however, that no
amendment to the Plan will be effective unless and until such
amendment has been approved by the holders of a majority of
the Company's outstanding voting stock (voting as a single
class) present, or represented, and entitled to vote at a duly
constituted meeting of such shareholders.
7
ARTICLE X
SHAREHOLDER APPROVAL
The Plan shall be effective (the "Effective Date") when
it has received the approval of a majority of the Board of
Directors. However, the Plan and all options granted under
the Plan shall be void if the Plan is not approved by the
holders of a majority of the outstanding voting stock of the
Company (voting as a single class) within twelve (12) months
of the Effective Date.
U. S. TECHNOLOGY INC
BY:
William Meehan, President
ATTEST:
____________________________
Secretary
8
INCENTIVE STOCK OPTION AGREEMENT
THIS AGREEMENT is made and entered into by and between U.
S. TECHNOLOGY INC. (the "Company") and _________________
("_________").
WHEREAS, ________________ is a valuable and trusted
employee of the Company and the Company considered it
desirable and in the Company's best interests that
________________________________ be given an inducement to
acquire a propriety interest in the Company and an added
incentive to advance the interests of the Company by
possessing an option to purchase stock of the Company in
accordance with the Incentive Stock Option Plan (the "Plan")
adopted by the Board of Directors (the "Board") of the Company
on _____________________, 19 _____.
NOW THEREFORE, in consideration of the promises, it is
agreed by and between the parties as follows:
1. Grant of Option. The Company hereby grants to
____________ the right, privilege, and option to purchase
_____________________ shares of the Company's Common Stock at
the purchase price of $______ per share, in the manner and
subject to the conditions hereinafter provided and Article VI
of the "Stock Option Plan."
2. Time of Exercise of Options. The aforesaid option
may, until the termination thereof as provided in paragraph 4,
be exercised in any increments, subject to Article VI(1) of
the "Stock Option Plan."
Provided that for this purpose any such previously
granted option not having been exercised in full shall be
deemed to remain outstanding until the expiration of the
period during which under its initial term it could have been
exercised.
3. Method of Exercise. The option shall be exercise by
written notice (the "Notice") from ______________________ to
the Executive Committee (the "Committee") of the Board. The
Notice shall specify the number of shares of stock for which
the option is being exercised and by accompanied by a
cashier's check for payment in full of the option price for
the number of shares specified. The option shall be deemed
exercised as of the time the Notice is actually received by
the Company. The Company shall make immediate delivery of
such shares, provided that if any law or regulation required
the Company to take any action with respect to the shares
specified in such Notice before the issuance thereof, then the
date of delivery of such shares shall be extended for the
period necessary to take such action.
9
4. Termination of Option. Except as otherwise provided,
the option to the extent nor already exercised or expired by
its own terms shall terminate upon the first to occur of the
of the following dates:
(a) Ninety days following the date on which
_____________________, employment (or position as an officer
or director) by the Company is terminated except if such
termination is caused by reason of death or permanent and
total disability.
(b) The expiration of twelve (12) months after the date
on which __________________' employment (or position as an
officer or director) by the Company is terminated, if such
termination is caused by ______________'s death or
_____________________'s permanent and total disability.
(c) Midnight _____________, 199____.
5. Adjustments. Subject to any required action by the
Company's Directors and shareholders, the number of shares
provided for in this option, and the price thereof, shall be
adjusted proportionately upward or downward in accordance with
the provisions of Article VII of the Plan.
6. Rights prior to Exercise of Option. This option is
nontransferable by ____________________ otherwise than by will
or the laws of descent and distribution, and is executable
during _____________________' lifetime only by
______________________. ___________ shall have no rights as a
stockholder with respect to the option shares until payment of
the option price and delivery to them of such shares as herein
provided.
7. Restriction of Disposition. All shares acquired by
______________________ pursuant to this Incentive Stock Option
Agreement may be subject to restriction on sale, encumbrance
and other dispositions pursuant to state or federal law.
8. Notices. The addresses to which all notices required
to be given hereunder shall be sent are, if to the Company:
U.S. Technologies Inc.
P.O. Box 697
1402 Industrial Blvd.
Lockhart, Texas 78644
and if to ____________________:
10
Either party may change his address by giving written notice
to the other party at the indicated address. All notices
given hereunder shall be deemed received when actually
delivered to the indicated address.
9. Stock Option Plan. This Agreement is subject to and
incorporated by reference to all the terms and conditions set
forth in the Plan. In the event of any conflict between the
terms of this Agreement and the Plan, the terms and conditions
of the Plan shall control.
10. Binding Effect. This Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective heirs, executors, administrators, successors and
assigns.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed as of ___________, 199__.
U. S. TECHNOLOGY INC.
BY:
William Meehan, President
ATTEST:
(Seal)
_________________________
Secretary
11
EXHIBIT
24.1
CONSENT OF COUNSEL
I HEREBY CONSENT to the inclusion of my name and references to
Jack D. Bryant, Attorney at Law, beneath the caption "Opinion of
Counsel" in the Prospectus forming a part of the Registration
Statement and to the filing of a copy of our opinion as Exhibit
No. 5 thereto.
Dated this 11th day of November, 1996.
Yours truly,
Jack D. Bryant
30
EXHIBIT 24.3
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration
statement of U.S. Technologies Inc. on Form S-8 of our report
dated April 14, 1996, on our audits of the consolidated financial
statements and financial statement schedules of U.S. Technologies
Inc. and Subsidiaries, as of December 31, 1995 and 1994, and for
the years ended December 31, 1995, 1994 and 1993, which report is
included in the Annual Report on Form 10-K. We also consent to
the reference to our firm under the caption "Experts".
BROWN, GRAHAM AND COMPANY P.C.
Georgetown, Texas
November 12, 1996
31
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
as amended, the Registrant certifies that it has reasonable
grounds to believe that it meets all the requirements for filing
on Form S-8 and has duly caused this Registration Statement or
Amendment thereto be signed on its behalf by the undersigned,
thereunto duly authorized, on the 12th day of November, 1996.
U.S. TECHNOLOGIES INC.
BY:s/ John V. Allen
John V. Allen
Chairman of the Board,
Pursuant to the requirements of the Securities Exchange Act
of 1933, as amended, this Registration Statement or Amendment
thereto has been signed by the following persons in the
capacities and on the dates indicates.
Signature Title Date
s/James Chen Director November 12, 1996
James Chen
s/William Meehan President, Director
November 12, 1996
William Meehan Acting Controller
Acting Principal Accounting Officer
32
