As filed with the Securities and Exchange Commission on April 8, 1996
Registration No. 333-329
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
--------
PRE-EFFECTIVE AMENDMENT NO. 2 TO
Form S-2
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
S.O.I. INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 2500 59-2158586
(State or jurisdiction (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification No.)
16910 Dallas Parkway, Suite 100, Dallas, Texas 75248, (214) 248-1922
(Address and telephone number of principal executive offices)
Kevin B. Halter, Jr., 16910 Dallas Parkway, Suite 100, Dallas, Texas 75248
(214) 248-1922
(Name, address and telephone number, including area code, of agent for service)
Copies to:
Morgan F. Johnston, Esq.
16910 Dallas Parkway, Suite 100
Dallas, Texas 75248
(214) 248-1922
------------
Approximate date of proposed sale to the public: As soon as practicable
after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, check the following box. [ ]
If the registrant elects to deliver its latest annual report to
security holders, or a complete and legible facsimile thereof, pursuant to Item
11(a)(1) of this Form, check the following box. [ X ]
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
class of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered per share (1) offering price (1) fee
- --------------------------------------------------------------------------------
Common Stock 781,631 $1.62 $1,266,242 $436.64
(1) Estimated solely for purpose of calculating registration fee.
------------
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.
<PAGE>
PROSPECTUS
781,631 Shares
S.O.I. INDUSTRIES, INC.
Common Stock
(par value $.0002 per share)
358,304 shares of Common Stock offered hereby are offered by S.O.I.
Industries, Inc. (the "Company") to creditors and suppliers of goods and
services to the Company or its affiliates. 423,327 shares of Common Stock
offered hereby are being sold by the Selling Stockholder. See "Selling
Stockholder." Any or all of the 423,327 shares of Common Stock may be sold from
time to time to purchasers directly by the Selling Stockholder. Alternatively,
the Selling Stockholder may from time to time offer the shares of Common Stock
through underwriters, dealers or agents, who may receive compensation in the
form of underwriting discounts, concessions or commissions from the Selling
Stockholder or the purchasers of shares of Common Stock for whom they may act as
agents. The Company will not receive any of the proceeds from the sale of shares
by the Selling Stockholder.
The Common Stock is traded on the American Stock Exchange (the "AMEX")
under the symbol "SOI." On March 27, 1996, the last reported sales price of the
Common Stock on the AMEX was $2.00 per share.
See "Risk Factors" on page 3 for a discussion of certain risk factors which
should be considered in connection with an investment in the Company.
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.
Price to Public (1) Proceeds to
Company(1)
- --------------------------------------------------------------------------------
Per Share......................... $1.62 n/a
(1) Estimated in accordance with Rule 457. The Company is paying substantially
all of the expenses of the offering, estimated to be approximately
$10,387.45
The date of this Prospectus is ________, 1996
1
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information filed by the Company may be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, as well as at the Regional Offices
of the Commission at Seven World Trade Center, 13th Floor, New York, New York
10048, and Northwestern Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, Illinois 60661-2511. Copies of such material may be obtained from the
Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Company's common stock is listed
on the AMEX and the reports, proxy statements and other information filed by the
Company with the AMEX may be inspected at the public reference facilities
maintained by the AMEX.
The Company has filed with the Commission a Registration Statement on
Form S-2 under the Securities Act of 1933, as amended (the "Securities Act").
This Prospectus does not contain all of the information set forth in such
Registration Statement. For further information with respect to the Company and
the Common Stock being offered, reference is hereby made to the Registration
Statement and to the exhibits thereto.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
The Company will deliver with this Prospectus its Annual Report to
Security Holders for the year ended June 30, 1995 and the Company will provide
without charge to each person to whom this Prospectus is delivered, upon written
or oral request, a copy of the Company's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1995,as amended and the quarter ended December 31,
1995.
The following documents and information filed by the Company with the
Commission pursuant to the Exchange Act are hereby incorporated by reference:
(1) the Company's Annual Report on Form 10-KSB for the year ended June 30, 1995,
(2) the Company's Form 10-KSB/A for the year ended June 30, 1995, filed on
November 14, 1995, (3) the Company's Form 10-KSB/A-2 for the year ended June 30,
1995 filed on March 1, 1996, (4) the Company's Form 10-KSB/A-3 for the year
ended June 30, 1995 filed on March 13, 1996, (5) the Company's Annual Report to
Security Holders for the year ended June 30, 1995 (6) the Company's Form 10-QSB
for the quarter ended September 30, 1995, (7) the Company's Form 10-QSB/A for
the quarter ended September 30, 1995, filed on January 19, 1996, (8) the
Company's Form 10-QSB for the quarter ended December 31, 1995 and (9) the
Company's Form 8-K filed on April 4, 1996.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
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.
The Company will furnish without charge, upon written or oral request,
to each person, including any beneficial owner, to whom this Prospectus is
delivered, a copy of any or all of the documents incorporated by reference
herein other than exhibits to such documents (unless such exhibits are
specifically incorporated by reference into such documents). Such requests
should be directed to S.O.I. Industries, Inc., 16910 Dallas Parkway, Suite 100,
Dallas, Texas 75248, telephone number (214) 248-1922, Attn: Corporate
Communications.
2
<PAGE>
RISK FACTORS
In addition to the other information contained in this Prospectus, the
following factors should be considered carefully in evaluating the Company and
its business before purchasing the Common Stock offered hereby.
POTENTIAL ADVERSE EFFECT OF INDUSTRY AND ECONOMIC CONDITIONS UPON OPERATIONS
The operations of certain of the Company's subsidiaries are subject to
fluctuations as a consequence of various factors affecting the construction,
retail and home improvement industries, including interest rates, availability
of credit, general economic conditions, levels of building activity and weather
patterns. The Company anticipates that its sales and operating results will
fluctuate from time to time as a result of these factors.
In addition, one of the Company's subsidiaries, American Quality
Manufacturing Corporation ("AQM"), may be subject to decreased sales and
profitability during the first and fourth quarters of each calendar year,
resulting from the seasonal effect of winter weather on construction. Unusually
long periods of cold or wet weather could have an adverse effect on the
Company's sales and profitability. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Results of Operations."
POTENTIAL ADVERSE EFFECT OF FLUCTUATIONS IN PRICES AND SUPPLIES OF RAW MATERIALS
UPON OPERATIONS
AQM is dependent upon outside suppliers for all of its raw material
needs and, therefore, is subject to fluctuations in prices of raw materials. In
particular, AQM's results of operations are affected significantly by increases
in the market prices of wood and wood products such as particle board. AQM buys
its raw materials at market-based prices from numerous independent suppliers.
Prices of wood and wood products can be adversely affected by, among other
things: (i) an overall shortage of lumber in the United States caused by poor
weather in timber harvesting areas; (ii) governmental restrictions on lumber
harvesting in the Pacific Northwest; (iii) an increase in housing construction;
(iv) increased demand for papermill by-products, which are the primary materials
used in the production of particle board; and (v) increased substitution of
particle board for solid wood.
No assurances can be given that prices will not increase significantly
in the future. If the economy improves, demand for raw materials may increase,
which could further affect prices. The nature of future governmental laws and
regulations relating to timber harvesting and their impact, if any, on wood and
wood product prices and on AQM's business, financial condition and results of
operations cannot be predicted.
POSSIBLE VOLATILITY OF STOCK PRICE
The Common Stock is currently traded on the AMEX. The Company believes
that such factors as quarterly variations in the Company's financial results,
announcements regarding the operations of the Company and developments affecting
the Company or its markets have caused significant fluctuation in the market
price of the Common Stock and could continue to do so in the future. In
addition, the stock market in general has recently experienced extreme price and
volume fluctuations. These fluctuations have often been unrelated to the
operating performance of the Company and its subsidiaries. Broad market
fluctuations may adversely affect the market price of the Common Stock. See
"Price Range of Common Stock."
3
<PAGE>
COMPETITION
The Company and its subsidiaries compete with a number of other
businesses that have greater financial, technical and human resources. Such
companies may develop products or services that may be more effective than the
Company's products or services and may be more successful in marketing their
products or services than the Company. No assurance can be given that the
Company will be able to compete successfully. See "Business."
REQUIREMENTS FOR CONTINUED LISTING ON THE AMEX; DISCLOSURE RELATING TO
LOW-PRICED STOCKS
Under the rules for continued listing on the AMEX, a company is
required to maintain certain minimum requirements. The AMEX will consider
suspending dealings and delisting the Common Stock if, among other things, (i)
the number of shares of Common Stock outstanding (exclusive of certain
affiliates and concentrated holdings) is less than 200,000, (ii) the number of
round lot stockholders of record is less than 300, or (iii) the aggregate market
value of the Common Stock is less than $1,000,000. Failure of the Company to
meet the maintenance requirements of the AMEX could result in the Common Stock
being delisted from the AMEX. The Common Stock would then be traded on the OTC
Bulletin Board maintained by the National Association of Securities Dealers,
Inc., which is generally considered to be a less efficient market than the AMEX.
The Company has no reason to believe that the Company will be delisted from the
AMEX.
In addition, if the Company's securities are delisted, they would be
subject to Rule 15c2-6 promulgated under the Exchange Act that imposes
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally those persons with assets in excess of $1,000,000 or annual income
exceeding $200,000, or $300,000 together with their spouse). For transactions
covered by this rule, the broker-dealer must make a special suitability
determination for the purchaser and 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 Company's securities and may
affect the ability of purchasers in this offering to sell their securities in
the secondary market. The delisting from the AMEX may also cause a decline in
share price, loss of news coverage of the Company, and difficulty in obtaining
subsequent financing.
The Commission has also recently adopted regulations which define a
"penny stock" to be any equity security that has a market price (as defined in
such regulations) less than $5.00 per share or with an exercise price of less
than $5.00 per share, subject to certain exceptions. For any transaction
involving a penny stock, unless exempt, the rules would require the delivery
prior to any transaction in a penny stock, of a disclosure schedule prepared by
the Commission relating to the penny stock market. Disclosure would also have to
be made about commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities and, if the broker-dealer
is the sole market-maker, the broker-dealer must disclose this fact and its
presumed control over the market. Finally, monthly statements must be sent
disclosing recent price information for the penny stock held in the account
together with information on the limited market in penny stocks.
4
<PAGE>
ANTI-TAKEOVER PROVISIONS
The Company's Certificate of Incorporation contains a provision authorizing
the issue of "blank check" preferred stock. The Company is subject to the
provisions of Section 203 of the Delaware General Corporation Law. Such
provisions could impede any merger, consolidation, takeover or other business
combination involving the Company or discourage a potential acquirer from making
a tender offer or otherwise attempting to obtain control of the Company. See
"Description of Capital Stock."
LACK OF CASH DIVIDENDS
At the present time, the Company intends to use any earnings which may be
generated to finance the growth of the Company's business. Accordingly, while
payment of cash dividends rests within the discretion of the Board of Directors,
the Company does not presently intend to pay cash dividends and there can be no
assurance such dividends will be paid in the future. See "Dividend Policy."
POTENTIAL ACQUISITIONS OF BUSINESS ENTERPRISES
Although no specific acquisitions are currently contemplated, the Company
may achieve growth through acquisitions of existing business enterprises in the
future. The Company does not plan to limit such potential acquisitions to any
particular industry. Accordingly, there can be no assurance that the Company can
integrate such businesses into its operations or that it can operate such
businesses on a profitable basis in the future. In addition, there can be no
assurance that future acquisition opportunities will become available, that such
future acquisitions can be accomplished on favorable terms, or that such
acquisitions will result in profitable operations in the future. In addition,
many of the Company's acquisitions are structured as stock exchanges.
Fluctuations in the Common Stock may have an adverse effect on the Company's
ability to make additional acquisitions. See " -- Possible Volatility of Stock
Price."
5
<PAGE>
THE COMPANY
The Company is a holding company engaged, through its subsidiaries and
affiliates, in kitchen and bathroom cabinet production and as a distributor of
commercial steel doors. The significant subsidiary and affiliate of the Company
is as follows:
o American Quality Manufacturing Corporation ("AQM"). The Company owns
approximately 98% of the issued and outstanding common stock of AQM. AQM
believes that it is one of the largest manufacturers of unfinished wood cabinet
products and vanities for the home, including kitchen cabinets, bathroom
cabinets and vanities and storage cabinets. AQM has also recently introduced a
line of finished cabinet products and has designed and developed full-scale
prototypes for several styles of home leisure products, including home
entertainment centers and electronic furniture centers. AQM distributes its
products to the remodeling and new construction markets through a variety of
channels, including home centers and independently owned retailers.
The Company's primary business is to (i) procure goods and services for the
Company and its subsidiaries and affiliates on more favorable terms than the
individual subsidiaries and affiliates could obtain, and (ii) provide management
expertise to the subsidiaries and affiliates, particularly in the areas of
employee benefits, public relations and funds management.
Subsequent Events
- -----------------
On January 4, 1996, the Company accepted the resignation of Sanford M.
Whitman, Vice President, Chief Financial Officer, Treasurer and Assistant
Secretary. Mr. Tim C. Hafer has been appointed to replace Mr. Whitman. Mr. Hafer
has served as the Vice President and Chief Financial Officer of the Company
since January 4, 1996. Mr. Hafer served as the Company's Vice-President of
Finance from February 1, 1994 through January 3, 1996 and was responsible for
financial reporting for the Company. In addition, Mr. Hafer, since April of
1993, serves as the Chief Financial Officer of Halter Capital Corporation, a
privately- held consulting company. Prior to his work at Halter Capital
Corporation, Mr. Hafer was a general practice manager with Coopers & Lybrand
L.L.P. in Dallas, Texas from August 1985 to March of 1993, responsible for the
audits of several public and private companies. Mr. Hafer holds a M.S. and B.S.
in accounting from the University of North Texas and is a licensed CPA.
On February 26, 1996, the Company announced that it had accomplished a
major turnaround at its subsidiary, AQM, and projects AQM to report net income
for both the current quarter ending March 31, 1996 and for the quarter ending
June 30, 1996. The Company made the above Safe Harbor Statement under the
Private Securities Litigation Reform Act of 1995 based upon the following: The
Company reported operating losses for the six months ended December 31, 1995 of
approximately $1.2 million. AQM's operating losses for the same period was
approximately $700,000. The Company anticipates that AQM's financial statements
for the third quarter ended March 31, 1996 will reflect an operating profit
based upon the unaudited results of AQM for the months of January and February
of 1996 which reflected an operating profit. In addition, the Company announced
that AQM received a major contract from McCoy's Building Products, based in
Texas ("McCoys"). This contract is expected to generate approximately $5 million
in sales for AQM for the calendar year ended December 31, 1996. However, the
Company has no assurance that the McCoy's contract will generate the additional
sales as currently expected due to every changing economic conditions, product
demand and market acceptance risks of AQM's products and the impact of
competitive products and pricing.
6
<PAGE>
On March 4, 1996, Adrian S. Jacoby, on behalf of the Company, filed a
shareholder derivative action against Kevin B. Halter, Kevin B. Halter, Jr.,
Halter Capital Corporation, Securities Transfer Corporation, Gary C. Evans and
James Smith alleging breaches of fiduciary duty, fraud, and violations of state
securities laws in their actions as directors of the Company. The plaintiff
seeks unspecified actual and exemplary damages, a constructive trust against the
assets of the defendants and an accounting of the affairs of the defendants. The
plaintiff has brought this suit allegedly to vindicate the wrongs done to the
Company by the individual defendants and their affiliated companies and any
damages which are awarded will be on behalf of, and for the benefit of, the
Company and all of its shareholders. The case is entitled Adrian S. Jacoby et al
v. Kevin B. Halter et al, cause no. 96-2169-G, in the 134th Judicial District
for the District Court of Dallas County, Texas. Even though the Company is a
nominal defendant in the lawsuit, the plaintiff seeks no relief or damages
against the Company. As a procedural matter in lawsuits of this type, the
Company is named as a nominal defendant. This is done to make the Company a
party to the action but the plaintiff seeks no damages from the Company.
Therefore, the lawsuit will not a material impact on the operations or financial
condition of the Company.
On April 3, 1996, the Company announced that the Company and its Board
of Directors have filed a lawsuit against Sanford Whitman, the former CFO of the
Company, Blake Beckham, Attorney at Law, Beckham & Thomas, L.L.P. and a
countersuit against Richard Abrons and Adrian Jacoby seeking damages in excess
of $14 million. Additionally, a motion for contempt and sanctions was filed
against Sanford Whitman, Richard Abrons and Adrian Jacoby.
The Company will deliver with this Prospectus its Annual Report to
Security Holders for the year ended June 30, 1995 and the Company will provide
without charge to each person to whom this Prospectus is delivered, upon written
or oral request, a copy of the Company's Quarterly Report on Form 10-QSB for the
quarter ended September 30, 1995. Such requests should be directed to S.O.I.
Industries, Inc., 16910 Dallas Parkway, Suite 100, Dallas, Texas 75248,
telephone number (214) 248-1922, Attn: Corporate Communications.
OFFERING/ PLAN OF DISTRIBUTION
The Company will offer to creditors of, and suppliers of goods and
services to, the Company and AQM the shares of Common Stock registered hereunder
(i) in consideration of the forgiveness of the debt owed by the Company or AQM
to such creditor or (ii) as payment for goods and services rendered to the
Company or AQM. Any or all of the shares of Common Stock may be sold from time
to time by the Company to creditors or suppliers of goods and services to the
Company or AQM. The Common Stock would be valued at the average of the closing
price of the Common Stock as listed on the American Stock Exchange over the five
trading days prior to issuance. The Company has not engaged underwriters to
participate in the Offering.
Upon effectiveness of this Registration Statement, the Company will
contact the trade creditors with an offer to such creditors to take their
payment in stock. It is anticipated that the Company will contact most, if not
all of the existing creditors of the Company and AQM and as of January 1, 1996,
the Company and AQM owed approximately $1,500,000.00 to existing trade
creditors. This offer will remain open for approximately 30-45 days. Any
creditors who decide to take stock in lieu of their receivable will be issued
stock pursuant to this Registration Statement on a first-come first-served
basis. Once the offering period ceases, any stock not issued to creditors under
this Registration Statement will be deregistered and withdrawn.
7
<PAGE>
The Offering is not being made in any states or other jurisdictions in
which it is unlawful to do so, nor is the Company selling or accepting any
offers to purchase any Common Stock from persons who are residents of such
states or other jurisdictions. The Company may delay the commencement of the
Offering in certain states or other jurisdictions in order to comply with the
securities law requirements of such states or other jurisdictions. It is not
anticipated that there will be any changes in the terms of the Offering. The
Company may, if it so determines in its sole discretion, decline to make
modifications to the terms of the Offering requested by certain states or other
jurisdictions, in which event residents in such states or other jurisdictions
will not be eligible to participate in the Offering.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the 358,304 shares of
Common Stock offered by the Company as the Company is offering the shares of
Common Stock registered hereunder (i) in consideration of the forgiveness of the
debt owed by the Company or AQM to trade creditors or (ii) as payment for goods
and services rendered to the Company or AQM. It is anticipated that the Company
will use a portion of the shares to pay existing creditors of the Company and
AQM and as of January 1, 1996, the Company and AQM owed approximately
$1,500,000.00 to existing trade creditors.
In addition, the Company will not receive any of the proceeds from the sale of
shares by the Selling Stockholder.
DIVIDEND POLICY
The present policy of the Company is to retain earnings to provide funds
for the operation and expansion of its business. The Company has not paid cash
dividends on the Common Stock and does not anticipate that it will do so in the
foreseeable future. In addition, certain covenants in the Company's existing or
future credit agreements may contractually limit cash amounts available for
dividends on the Common Stock.
DESCRIPTION OF CAPITAL STOCK
The Certificate of Incorporation, as amended (the "Certificate of
Incorporation") of the Company authorizes the issuance of 50,000,000 shares of
Common Stock, par value $.0002 per share. Holders of Common Stock are entitled
to one vote for each share on each matter submitted to a vote of stockholders.
All outstanding shares of Common Stock of record are fully paid, validly issued
and nonassessable and the holders of Common Stock have no preemptive rights to
subscribe for or to purchase any additional securities issued by the Company.
The Certificate of Incorporation provides for cumulative voting. Upon
liquidation, dissolution or winding up of the Company, the holders of Common
Stock are entitled to share ratably in the distribution of assets remaining
after payment of debts and expenses. There are no conversion, sinking fund or
redemption provisions, or any restrictions on alienability with respect to the
Common Stock.
Preferred Stock
- ---------------
The Company's Certificate of Incorporation authorize 10,000,000 shares of
preferred stock, par value $.00001 per share (the "Preferred Stock"). The
Certificate of Incorporation also provides that Preferred Stock may be issued in
one or more series as may be determined from time to time by the Board of
Directors. All shares of any one series of Preferred Stock will be identical
except as to the date of issue and dates from which dividends on shares of the
series issued on different dates will cumulate, if cumulative. The Certificate
of Incorporation also grants the Board of Directors the power to authorize the
issuance of one or more series of Preferred Stock, and to fix by resolution or
resolutions providing for the issue of each such series the voting powers,
designations, preferences, and relative, participating, optional, redemption,
conversion, exchange or other special rights, qualifications, limitations or
restrictions of such series, and the number of shares in each series, to the
full extent now or hereafter permitted by law.
8
<PAGE>
Anti-Takeover Provisions
- ------------------------
The Company's Certificate of Incorporation and Section 203 of the Delaware
General Corporation Law (the "DGCL") contain certain provisions that may make
the acquisition of control of the Company by means of a tender offer, open
market purchase, proxy fight or otherwise more difficult.
Business Combinations
---------------------
The Company is a Delaware corporation and is subject to Section 203 of the
DGCL. In general, subject to certain exceptions, Section 203 of the DGCL
prohibits a publicly held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three years after
the date of the transaction in which the person became an interested
stockholder, unless upon consummation of such transaction, the interested
stockholder owned 85% of the voting stock of the corporation outstanding at the
time the transaction commenced (excluding for purposes of determining the number
of shares outstanding those shares owned by (x) persons who are directors and
also officers and (y) employee stock plans in which employee participants do not
have the right to determine confidentially whether shares held subject to the
plan will be tendered in a tender or exchange offer) or unless the business
combination is, or the transaction in which such person became an interested
stockholder was, approved in a prescribed manner. A "business combination"
includes mergers, asset sales and other transactions resulting in a financial
benefit to the interested stockholder. An "interested stockholder" is a person
who, together with affiliates and associates, owns (or, in the case of
affiliates and associates of the issuer, did own within the last three years)
15% or more of the corporation's voting stock other than a person who owned such
shares on December 23, 1987.
Blank Check Preferred Stock
---------------------------
The existence of authorized and unissued Preferred Stock may enable the
Board of Directors to render more difficult or to discourage an attempt to
obtain control of the Company by means of a merger, tender offer, proxy contest
or otherwise. For example, if in the due exercise of its fiduciary obligations,
the Board of Directors were to determine that a takeover proposal is not in the
Company's best interests, the Board of Directors could cause shares of Preferred
Stock to be issued without stockholder approval in one or more private offerings
or other transactions that might dilute the voting or other rights of the
proposed acquirer or insurgent stockholder or stockholder group or create a
substantial voting block in institutional or other hands that might undertake to
support the position of the incumbent Board of Directors. In this regard, the
amended Certificate of Incorporation will grant the Board of Directors broad
power to establish the designations, powers, preferences and rights of each
series of Preferred Stock.
Indemnification
---------------
The Certificate of Incorporation provides that the Company shall advance
expenses to and indemnify each director and officer of the Company to the
fullest extent permitted by law and will limit the liability of directors to
corporations and their stockholders for monetary damages in certain
circumstances.
The holders of Common Stock are entitled to receive dividends, when and if
declared by the Board of Directors, out of funds legally available therefor. See
"Dividend Policy."
9
<PAGE>
SELLING STOCKHOLDER
The following table provides certain information with respect to the
shares of Common Stock held by the Selling Stockholder.
<TABLE>
<CAPTION>
Number of Number of
Shares of Common Number of Shares of Common
Stock Beneficially Shares of Common Stock Beneficially
Owned Before the Stock Registered Owned After the
Name Offering Hereunder Offering
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Digital Communications 423,327 423,327 -0-
Technology Corporation
</TABLE>
Digital Communications Technology Corporation is a major stockholder of
the Company. The same directors which serve on the Board of the Company also
serve on the Board of Digital Communications Technology Corporation. The Company
owns approximately 17% of Digital Communications Technology Corporation's common
stock and Digital Communications Technology Corporation owns approximately 24%
of the comon stock of the Company.
Any or all of the shares of Common Stock may be sold from time to time
to purchasers directly by the Selling Stockholder. Alternatively, the Selling
Stockholder may from time to time offer the shares of Common Stock through
underwriters, dealers or agents, who may receive compensation in the form of
underwriting discounts, concessions or commissions from the Selling Stockholder
or the purchasers of shares of Common Stock for whom they may act as agents. The
Selling Stockholder and any underwriters, dealers or agents that participate in
the distribution of shares of Common Stock may be deemed to be underwriters, and
any profit on the sale of shares of Common Stock by them and any discounts,
commissions or concessions received by any such underwriters, dealers or agents
might be deemed to be underwriting discounts and commissions under the
Securities Act. At the time a particular offering of shares of Common Stock is
made, to the extent required, a Prospectus Supplement will be distributed which
will set forth the aggregate amount and type of Common Stock being offered and
the terms of the offering, including the name or names of any underwriters,
dealers or agents, any discounts, commissions and other items constituting
compensation from the Selling Stockholder and any discounts, commissions or
concessions allowed or reallowed or paid to dealers.
The Selling Stockholder may be subject to applicable provisions of the
Exchange Act and the rules and regulations thereunder, including without
limitation Rules 10b-2, 10b-6 and 10b-7, which provisions may limit the timing
of purchases and sales of any of the securities by the Selling Stockholder.
Pursuant to an agreement entered into with the Selling Stockholder at
the time the Common Stock was issued, the Company will pay substantially all of
the expenses incident to the registration offering and sale of the Common Stock
to the public other than commissions and discounts of underwriters, dealers or
agents, if any. Such expenses (excluding such commissions and discounts) are
estimated to be $10,387.45.
EXPERTS
The financial statements of the Company and DCT as of June 30, 1995,
and for the year then ended included herein in this Prospectus and the
Registration Statement have been audited by Coopers & Lybrand L.L.P.,
independent accountants, and have been included herein in reliance upon the
reports of Coopers & Lybrand L.L.P. and upon the authority of said firm as
experts in accounting and auditing.
10
<PAGE>
The financial statements of the Company and DCT as of June 30, 1994 and
for the year then ended included herein in this Prospectus and the Registration
Statement have been audited by Morrison, Brown, Argiz & Company, and have been
included herein in reliance upon the reports of Morrison, Brown, Argiz & Company
and upon the authority of said firm as experts in accounting and auditing.
The financial statements of the Company's significant subsidiary, AQM,
as of June 30, 1994 and for the six month period ended June 30, 1994 included
herein in this Prospectus and the Registration Statement have been audited by
S.W. Hatfield + Associates, and have been included herein in reliance upon the
report of S.W. Hatfield + Associates and upon the authority of said firm as
experts in accounting and auditing.
DISCLOSURE OF COMMISSION POSITION ON INDEMNIFICATION FOR
SECURITIES ACT LIABILITIES
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Commission, such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the 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 Securities Act and will be governed by the final
adjudication of such issue.
11
<PAGE>
No dealer, salesman or any other
person has been authorized to give any
information or to make any
representation other than those
contained in this Prospectus in
connection with the offering herein
contained, and if given or made, such
information or representation must not
be relied upon as having been authorized
by the Company. This Prospectus does not
constitute an offer to sell any security
other than the registered securities to
which it relates, or an offer to or
solicitation of any person in any
jurisdiction in which such offer or
solicitation would be unlawful. Neither
the delivery of this Prospectus nor any
sale made hereunder shall, under any
circumstance, create an implication that
there has been no change in the facts
herein set forth since the date hereof.
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TABLE OF CONTENTS
Page
Available Information 2
Incorporation of Certain
Information by Reference 2
Risk Factors 3 S.O.I INDUSTRIES, INC.
The Company 6
The Offering/Plan of
Distribution 7 781,631 Shares
Use of Proceeds 8
Dividend Policy 8 Common Stock
Description of Capital Stock 8
Selling Stockholder 10
Experts 10
Disclosure of Commission Position 11
On Indemnification for
Securities Act Liabilities
- ----------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses of the offering, all of which are to be borne by
the Company, are as follows:
SEC Filing Fee ............. $ 387.45
Printing Expense ........... $ 2,500.00
Accounting Fees and Expenses $ 2,500.00
Legal Fees and Expenses .... $ 5,000.00
Blue Sky Fees and Expenses . -0-
-------------
TOTAL ...................... $ 10,387.45
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation of the Company provides for the
indemnification of officers, directors, agents and employees of the Company to
the fullest extent permitted by the General Corporation Law of the State of
Delaware ("Delaware Code"). Pursuant to Section 145 of the Delaware Code, the
Company generally has the power to indemnify its present and former directors,
officers, employees and agents against expenses incurred by them in connection
with any suit to which they are, or are threatened to be made, a party by reason
of their serving in such positions so long as they acted in good faith and in a
manner they reasonably believed to be in, or not opposed to, the best interests
of the Company, and with respect to any criminal action, they had no reasonable
cause to believe their conduct was unlawful. The Company has the power to
purchase and maintain insurance for such persons. The statute also expressly
provides that the power to indemnify authorized thereby is not exclusive of any
rights granted under any bylaw, agreement, vote of stockholders or disinterested
directors, or otherwise.
The above discussion of the Company's Certificate of Incorporation and
of Section 145 of the Delaware Code is not intended to be exhaustive and is
qualified in its entirety by such Bylaws and the Delaware Code.
ITEM 16. EXHIBITS
2.1 Stock Exchange Agreement dated November 30, 1993 by and between
American Quality Manufacturing Corporation and the Company (5)
3.1 Certificate of Incorporation and Bylaws of the Company (1)
3.2 Certificate of Amendment of the Company (2)
4.0 Specimen Certificate of Common Shares, par value $.0002 (1)
5.0 Opinion of Morgan F. Johnston, Esq. regarding legality. (7)
9.1 Voting Agreement dated December 2, 1993, by and among DeWayne Davis,
Robert L. Ott, Trustee of the Robert L. Ott Revocable Trust, J.R. Ott,
Joanna O. Burger, Sharon Davis, Trustee UA dtd 8/1/88 and Halter
Capital Corporation (6)
<PAGE>
9.2 Voting Agreement dated January 26, 1994, by and between Kwai Chung
Corporation, a Turks and Caicos corporation and Halter Capital
Corporation (6)
9.3 Voting Agreement dated January 26, 1994, by and between M. D. Abel and
Halter Capital Corporation (6)
9.4 Voting Agreement dated January 26, 1994, by and between Stuart G.
Johnston, Jr. and Halter Capital Corporation (6)
9.5 Voting Agreement dated January 26, 1994, by and between Richard A.
Hansen and Halter Capital Corporation (6)
9.6 Voting Agreement dated January 26, 1994, by and between Catherine J.
Alven and Halter Capital Corporation (6)
9.7 Voting Agreement dated January 26, 1994, by and between Edward J. Lott
and Halter Capital Corporation (6)
9.8 Voting Agreement dated January 26, 1994, by and between Gary C. Evans
and Halter Capital Corporation (6)
9.9 Voting Agreement dated January 26, 1994, by and between Evans Equity,
L.L.C. and Halter Capital Corporation (6)
10.1 Lease Agreement for Hialeah, Florida (6)
10.2 Lease Agreement for Ft. Lauderdale, Florida (6)
10.3 Lease Agreement for Indianapolis, Indiana (6)
10.4 Lease Agreement dated January 2, 1994 by and between American
Industries, Inc. and American Quality Manufacturing Corporation (6)
10.5 Lease Agreement dated May 21, 1994 by and among American Quality
Manufacturing Corporation, the Board of County Commissioners, Coffey
County, Kansas and the Company (6)
10.6 Promissory Note between the Company and MagneTech Corporation (3)
10.7 The Company's Employees' Stock Ownership Plan Documents (3) (i)
Employee Stock Option Plan (ii) Stock Purchase Agreement (iii) ESOP
Loan Agreement (iv) Non-negotiable Promissory Loan Documents (3)
22.0 List of Subsidiaries (6)
23.1 Consent of Coopers & Lybrand L.L.P.
23.2 Consent of Morrison, Brown, Argiz & Company.
<PAGE>
23.3 Consent of S. W. Hatfield + Associates.
23.4 Consent of Morgan F. Johnston, Esq. (included in Exhibit 5.0)
(1) These exhibits were previously filed by the Company with the Commission as
Exhibits to its Registration Statement No. 33-1 4668-A and are respectively
incorporated herein by specific reference thereto.
(2) These exhibits were previously filed by the Company with the Commission as
Exhibits to its Amendment No. 2 to its Registration Statement No.
33-14668-A and are respectively incorporated herein by specific reference
thereto.
(3) These exhibits were previously filed with the Commission by the Company as
Exhibits to its Form 8-K and are respectively incorporated herein by
specific reference thereto.
(4) These exhibits were previously filed with the Commission by the Company as
Exhibits to its Form 10-K for the year ended June 30, 1993 and are
respectively incorporated herein by specific reference thereto.
(5) This exhibit was previously filed by the Company with the Commission as an
Exhibit to its Form 8-K dated February 14, 1994 and is incorporated by
reference herein by specific reference thereto.
(6) These exhibits were previously filed by the Company with the Commission as
Exhibits to its Registration Statement on Form SB-2, as amended, filed on
June 29, 1994, and are incorporated by reference herein by specific
reference thereto.
(7) This exhibit was previously filed by the Company with the Commission as an
Exhibit to its Form S-2, as amended, originally filed January 19, 1996 and
is incorporated by reference herein by specific reference thereto.
ITEM 17. 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:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in the Registration Statement; and
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability under the Securities
Act, 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.
<PAGE>
(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.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission,
such indemnification is against public policy as expressed in the Securities 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 Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-2 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Dallas, State of Texas, on the 4th of April, 1996.
S.O.I. INDUSTRIES, INC.
/s/ Kevin B. Halter
By: Kevin B. Halter, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
Signature
/s/ Kevin B. Halter April 4, 1996
Kevin B. Halter, President
(Principal Executive Officer) and Director
/s/ Kevin B. Halter* April 4, 1996
Tim Hafer, Chief Financial Officer
(Principal Financial and Accounting Officer),
Vice President and Treasurer
/s/ Kevin B. Halter* April 4, 1996
Kevin B. Halter, Jr., Vice President,
Secretary and Director
/s/ Kevin B. Halter* April 4, 1996
Gary C. Evans, Director
/s/ Kevin B. Halter* April 4, 1996
James Smith, Director
* By Kevin B. Halter as power-of-attorney
<PAGE>
EXHIBIT INDEX
Exhibit Sequentially
Number Numbered Page
23.1 Consent of Coopers & Lybrand L.L.P. 19
23.2 Consent of Morrison, Brown, Argiz & Company, P.A. 21
23.3 Consent of S. W. Hatfield + Associates 23
<PAGE>
EXHIBIT 23.1
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this registration statement on Form S-2 (No.
333-329) of our report dated September 25, 1995, on our audit of the
consolidated financial statements of S.O.I. Industries, Inc. and Subsidiaries
and of our report dated August 25, 1995, on our audit of the consolidated
financial statement of Digital Communications Technology Corporation and
Subsidiaries. We also consent to the reference to our firm under the caption
"Experts."
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
Dallas, Texas
April 1, 1996
19
<PAGE>
EXHIBIT 23.2
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As Independent Public Accountants, we hereby consent to the use of our reports
on the Consolidated Financial Statements of S.O.I. Industries, Inc. and Digital
Communications Technology Corporation and Subsidiaries as of June 30, 1994 and
for the year then ended, and to all references to our firm, included in or made
a part of this Pre-effective Amendment No. 2 to Form S-2 registration statement.
/s/ Morrison, Brown, Argiz & Company
Morrison, Brown, Argiz & Company
Certified Public Accountants
Miami, Florida
March 29, 1996
21
<PAGE>
EXHIBIT 23.3
<PAGE>
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We consent to the use in Pre-effective Amendment No. 2 to Form S-2 Registration
Statement under The Securities Act of 1933, as amended, of S.O.I. Industries,
Inc. of our report dates August 24, 1994 on the financial statements of American
Quality Manufacturing Corporation as of June 30, 1994, January 1, 1994, December
31, 1993 and May 31, 1993 and for each of the years ended June 30, 1994, May 31,
1993 and 1992; the six month periods ended June 30, 1994 and December 31, 1993;
and for the transitional month ended June 30, 1993 accompanying the financial
statements incorporated by refernce in such Pre-Effective Amendment No. 2 to
Form S-2 Registration Statement under The Securities Act of 1933, as amended,
and to the use of our name and the statements with respect to us as appearing
under the heading "Experts."
/s/ S.W. Hatfield & Associates
S.W. Hatfield & Associates
Dallas, Texas
April 2, 1996
23
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