As filed with the Securities and Exchange Commission on December ____, 1997
SEC Registration No. 333-20590
===========================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Post Effective Amendment No. 1 to
FORM S-2 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
DELTA-OMEGA TECHNOLOGIES, INC.
_______________________________
(Exact Name of Registrant as Specified in its Charter)
Colorado 2842 84-1100774
(State of Other (Primary Standard (IRS Employer Identification
Jurisdiction of Industrial Classification Number)
Incorporation) Code Number)
119 Ida Road
Broussard, Louisiana 70518
(318) 837-3011
_____________________________________________
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
James V. Janes III, President
119 Ida Road
Broussard, Louisiana 70518
(318) 837-3011
_____________________________________________
(Name, Address and Telephone Number of Agent for Service)
Copies to:
Roger V. Davidson, Esq.
Cohen Brame & Smith Professional Corporation
1700 Lincoln Street, Suite 1800
Denver, Colorado 80203
(303) 837-8800
Fax (303) 894-0475
_____________________________________________________________________________
Approximate date of commencement 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: [X]
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]
<TABLE>
<CAPTION>
$ Proposed Proposed Amount
Title of each Class Amount Maximum Maximum Of
of Securities Being Offering Price Aggregate Registration
Being Registered Registered Per Share (1) Offering Price Fee
_____________________________________________________________________________
<S> <C> <C> <C> <C>
Common Stock,
$0.001 par
value (2) 2,471,667 Shs. $ .75 $1,853,750 $561.75
Common Stock,
$0.001 par
value (3) 2,471,667 Shs. $ .75 $1,853,750 $561.75
Common Stock,
$0.001 par
value 138,636 Shs. $ .75 $59,505 $ 18.04
Common Stock,
$0.001 par
value (4) 1,590,700 Shs. $ 1.25 $1,988,375
Common Stock,
$0.001 par
value (5) 1,062,917 Shs. $ 1.50 $1,594,376 $549.78
Common Stock,
$0.001 par
value (6) 200,000 Shs. $ 1.00 $200,000 $ 68.97
Common Stock,
$0.001 par
value (7) 150,000 Shs. $ 1.00 $150,000 $ 51.72
Total $7,699,756 $2,331.14
============================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
and calculated pursuant to Rule 457(a). No separate registration fee
is required for the warrants pursuant to Rule 457(g).
(2) Issuable upon conversion of the Series C Convertible Exchangeable
Preferred Shares.
(3) Issuable upon exercise of the Class Z Warrants.
(4) Issuable upon conversion of the Series B Convertible Exchangeable
Preferred Shares.
(5) Issuable upon exercise of the Class E Warrants.
(6) Issuable upon exercise of the outstanding Placement Agent Warrants.
(7) Issuable upon exercise of the Options owned by Fernand Baer.
* 46,670 outstanding shares with registration rights.
Pursuant to Rule 429, the Registrant has consolidated post-effective
Amendment No. 3 to Form S-2 Registration Statement dated March 13, 1997, File
No. 33-90604 and Form S-2 Registration Statement dated January 21, 1997, File
No. 333-20590 into this Form S-2 Registration Statement because such
prospectus includes all of the information which would currently be required
in a prospectus relations to the securities covered by the earlier statements.
Additionally, this registration statement registers an additional 39,996
shares. There are 8,045,591 shares being carried forward with a filing fee of
$7,699,756 that has previously been paid in the previous registration
statements cited above.
_________________________
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.
Common Stock
DELTA-OMEGA TECHNOLOGIES, INC.
8,085,587 Shares offered by Selling Shareholders
Certain Selling Shareholders are offering, pursuant to this
Prospectus, up to 8,085,587 shares of Delta-Omega Technologies, Inc.'s
("Delta-Omega" or the "Company") $.001 par value common stock (the
"Selling Shareholder Shares"), which shares, though they are being
offered by the holders of such Selling Shareholder Shares, are being
registered by the Company on behalf of certain of its shareholders (the
"Selling Shareholders"). Upon the sale of the Selling Shareholder
Shares, the Company will not receive any of the proceeds from the
Selling Shareholder Shares. Certain Selling Shareholders are offering
common stock to be issued to them upon conversion by them of outstanding
Preferred Stock Warrants and Options. Being offered are:
(1) 2,471,667 shares of common stock underlying conversion rights
associated with currently outstanding Series C Preferred Stock;
and
(2) 2,471,667 shares of common stock underlying the outstanding Class
Z Warrants.
(3) 126,010 shares of common stock currently outstanding.
(4) 1,590,700 shares of common stock underlying conversion rights
associated with currently outstanding Series B Preferred Stock;
(5) 1,262,917 shares of common stock underlying currently outstanding
Class E and Placement Agent Warrants;
(6) 150,000 shares underlying an outstanding option. (See
"DESCRIPTION OF SECURITIES.")
The registration statement, of which this Prospectus is a part, is
serving to meet an undertaking made by the Company to register the
resale of the common shares underlying the conversion rights of the
Series B Preferred Stock sold in a private placement during 1994 and
certain other registration rights.
The registration statement, of which this Prospectus is a part, is
being utilized in part to meet an undertaking made by the Company to
register the resale of the common shares underlying the conversion
rights of the Series C Preferred Stock and the Class Z Warrants sold in
that private placement.
___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
___________________________
THERE ARE CERTAIN RISKS INVOLVED WITH THE OWNERSHIP OF THIS
COMPANY'S SECURITIES INCLUDING RISKS RELATED TO ITS BUSINESS AND MARKET
FOR ITS SECURITIES. FOR INFORMATION REGARDING CERTAIN RISKS RELATING TO
THE COMPANY, SEE "RISK FACTORS."
__________________________
The Company has been advised by the Selling Shareholders that they
or their successors may sell all or a portion of the $.001 par value
common stock offered hereby from time to time in the over-the-counter
market, if such a market exists, in privately negotiated transactions,
or otherwise, including sales through or directly to a broker or
brokers. Sales will be at prices and terms then prevailing, if any, or
at prices related to the then current market prices or at negotiated
prices. In connection with any sales, any broker or dealer
participating in such sales may be deemed to be an underwriter within
the meaning of the Securities Act of 1933. (See "PLAN OF
DISTRIBUTION.")
The Company will receive no part of the proceeds of such sales, but
will receive funds upon the exercise of the Warrants. All expenses
incurred in connection with this offering, which expenses are not
expected to exceed $20,000, are being borne by the Company.
The Common Stock of Delta-Omega Technologies, Inc. is traded
"over-the-counter" on the "Bulletin Board" (Symbol: DOTK). On
December ___, 1997, the last sale price of the Company's common stock
was $._____.
The date of this Prospectus is December _____, 1997.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company under the
Securities Exchange Act of 1934 with the Securities and Exchange
Commission (the "Commission") are incorporated herein by reference.
(1) The Company's Annual Report on Form 10-KSB for the fiscal
year ended August 31, 1997.
Any statement made in a document incorporated by reference herein
shall be deemed to be modified or superseded for purposes of this
Prospectus to the extent that such statement is replaced or modified by
a statement contained in a subsequently dated document incorporated by
reference or contained in this Prospectus.
The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, on the
written or oral request of such person, a copy of any or all of the
documents referred to above which have been or may be incorporated in
this Prospectus by reference, other than exhibits to such documents.
Written or oral requests for such copies should be directed to Marian A.
Bourque, Chief Accounting Officer, Delta-Omega Technologies, Inc., 119
Ida Road, Broussard, Louisiana 70518; telephone (318) 837-3011.
AVAILABLE INFORMATION
The Company is subject to the informational reporting requirements
of the Securities Act of 1933 (the "Act") and in accordance therewith
files reports, proxy statements and other information with the
Commission. These reports, proxy statements and other information can
be inspected and copied at the public reference facilities maintained by
the Commission at 450 Fifth Street, N.W., Washington, DC 20549, and the
Commission's Regional Offices at The Chicago Regional Office, Northwest
Atrium Center, 500 West Madison Street, Suite 1400, Chicago IL
60661-2511, and the New York Regional Office, 7 World Trade Center, 12th
Floor, New York, NY 10048. Copies of such materials can also be
obtained from the Public Reference Section of the Commission at Judicial
Plaza, 450 Fifth Street, N.W., Washington, DC 20549, at prescribed
rates.
The Company has filed with the Commission in Washington, DC, a
Registration Statement under the Act, with respect to the securities
offered hereby. This Prospectus does not contain all of the information
set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission.
For further information with respect to the Company and the securities
offered hereby, reference is made to the Registration Statement,
including the exhibits and financial statements filed therewith or
incorporated therein by reference. Statements contained in this
Prospectus as to the contents of any contract or other document are not
necessarily complete, and in each instance, reference is made to the
copy of such contract or other document filed as an exhibit to the
Registration Statement or incorporated herein by reference, each
statement being qualified in its entirety by such reference. The
Registration Statement, including the exhibits thereto, may be inspected
without charge at the Commission's principal office in Washington, DC,
and copies of any and all parts thereof may be obtained from such office
after payment of the fees prescribed by the Commission.
ANNUAL AND QUARTERLY REPORTS
This Prospectus is accompanied by a copy of the Company's Annual
Report on Form 10-KSB for the fiscal year ended August 31, 1997, as
filed with the Securities and Exchange Commission.
INDEMNIFICATION
Article X of the Registrant's Articles of Incorporation provides
that the corporation may indemnify each current and former director,
officer, and any employee or agent of the corporation, his heirs,
executors, and administrators, against expenses reasonably incurred or
any amounts paid by him in connection with any action, suit, or
proceeding to which he may be made a party by reason of his being or
having been a director, officer, employee or agent of the corporation in
the same manner as is provided by the laws of the State of Colorado.
Additionally, to the fullest extent permitted by statute, the Company
has limited the liability of directors from actions filed by
shareholders and other third parties.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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 Act and is, therefore,
unenforceable.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more
detailed information and financial statements (including notes thereto)
incorporated by reference in this Prospectus.
The Company
Delta-Omega Technologies, Inc. was organized under the laws of the
State of Colorado on December 22, 1988 as Barclay's West, Inc. In
November 1989, the Company acquired, via a Share Exchange Agreement, all
of the outstanding securities of Delta-Omega Technologies, Ltd. On
December 22, 1989, the Company changed its name from Barclay's West,
Inc. to Delta-Omega Technologies, Inc. to reflect the acquisition.
The Company is engaged in the development, manufacture and
marketing of environmentally safe specialty chemicals for use in a
variety of industrial and military applications. These products are
deemed to be environmentally safe because they are water-based, non-
toxic and biodegradable. These products replace hazardous, flammable,
toxic and ozone depleting chemicals in a broad range of cleaning and
emergency response applications. The Company has also developed a
product to remediate hydrocarbon contamination from soil and water. The
Company is developing proprietary products that address large markets
where there is limited environmentally safe competition, or little or no
existing products that provide effective performance.
Prior to fiscal 1993, Delta-Omega was a development stage
enterprise whose main objective was to conduct research and development.
By that time, the Company had completed a majority of the research,
development and testing of its products. In September 1992, the Company
assumed an operating status, began operations in September 1993 and in
January 1994 began to build its core staff of marketing, sales,
financial and administrative personnel.
The Company's offices are located at 119 Ida Road, Broussard,
Louisiana 70518; its telephone number is (318) 837-3011.
The Offering
Securities Offered by
Selling
Shareholders 8,085,587 (1)
Terms of Class Z Warrants Exercisable for $.75 per share
until June 30, 2001 with rights
of oversubscription
Terms of Class E Warrants Exercisable for $1.50 per share
until June 15, 1999 with rights
of oversubscription
Terms of Placement Agent Warrants Exercisable for $1.00 per share
until October 15, 1999
Terms of Options Exercisable for $.90 per share
until September 15, ^ <2001>
Securities Outstanding
(2) 13,230,235 Common Shares
1,590,700 Series B Preferred Shares
2,471,667 Series C Preferred Shares
1,062,917 Class E Warrants
2,471,667 Class Z Warrants
2,248,371 Options
800,000 Warrants
Nasdaq (Bulletin Board) Symbol Common Stock: DOTK
Use of Proceeds Any net proceeds that the Company
may realize upon the exercise and
of the Warrants and Options
will be used for working capital.
The Company will not receive any
proceeds from the sale of common
stock by the Selling Shareholders.
Risk Factors An investment in the securities
offered hereby involves a high
degree of risk, including a lack
of liquidity in the market for the
Company's common stock.
Prospective investors should
review carefully and consider the
factors described in "Risk
Factors."
________________________
(1) Includes shares of common stock underlying the conversion
privileges in the Series B and Series C Convertible Preferred
Shares and Class E and Class Z Warrants and Options.
(2) Unless otherwise indicated, all references in the Prospectus to
per share data and number of shares exclude 1,600,000 shares of
common stock issuable upon the exercise of any options granted or
which may be granted under the Company's 1991 Stock Option Plan
and 1994 Stock Option Plan. (See "PRINCIPAL SHAREHOLDERS" and
"DESCRIPTION OF SECURITIES.")
RISK FACTORS
This Prospectus and the 10KSB for the year ended August 31, 1997
incorporated by reference herein include certain statements that may be
deemed to be "forward-looking statements" within the meaning of Section
27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"). All statements, other than statements of historical
facts, included in this Prospectus that address activities, events or
developments that the Company expects, believes or anticipates will or
may occur in the future, including such matters as availability of
future capital, product development, business strategies, project sales,
costs of sales, expansion and growth of the Company's operations and
other such matters are forward-looking statements. These statements are
based on certain assumptions and analyses made by the Company in light
of its experience and perception of historical trends, current
conditions, expected future developments and other factors it believes
are appropriate in the circumstances. Such statements are subject to a
number of assumptions, risks and uncertainties, including the risk
factors discussed below, general economic and business conditions, the
business opportunities (or lack thereof) that may be presented to and
pursued by the Company, changes in law or regulations and other factors,
many of which are beyond the control of the Company. Prospective
investors are cautioned that any such statements are not guarantees of
future performance and that actual results or developments may differ
materially from those projected in the forward-looking statements.
These securities involve a high degree of risk. Prospective
purchasers should consider carefully, among other factors set forth in
the Prospectus, the following:
Risk Factors Relating to Business of the Company
1. Possible Failure of the Company. Since the Company commenced
operations in March, 1989, it has continued to operate regularly at a
loss, has generated negative cash flows and until very recently, has
generated only minimal revenues from sales of its products and services.
As noted in the independent auditors' report on the financial statements
for the fiscal year ended August 31, 1997, these factors raise
substantial doubt about the Company's ability to continue as a going
concern. The ability of the Company to continue its operations is
therefore dependent on its ability to support operations until such time
as the Company becomes profitable. The Company does not have sufficient
working capital available to maintain operations at their current
levels. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Ultimately, the ability of the
Company to continue as a going concern is dependent upon obtaining
additional capital investments or generation of adequate sales revenue
and profitability from operations. Therefore, investors in this
offering risk the loss of their entire investment if the Company is
unable to continue in operation. ("See "FINANCIAL STATEMENTS.")
2. Lack of Market Research Concerning the Company's Products and
Services and Possible Lack of Market Acceptance. The products and
services developed by the Company are innovative and new to the market
and there can be no assurance that such products and services will be
sufficiently accepted. The Company has not obtained or undertaken any
formal market research study with respect to the establishment of its
market areas. The product mix of the Company is reviewed periodically,
and changes to the product mix offered to the market may vary depending
on market acceptance.
3. Possible Loss of Contracts with Significant Suppliers. Raw
materials for the finished product are procured from a number of sources
to provide flexibility. Although the Company has its own material
blending capability, loss of availability of contract blending
facilities could adversely affect the operations of the Company until it
could replace the lost manufacturing output with an expansion of its own
blending facilities. Such expansion would require an increase in the
Company's overall capital expenditures.
4. Government Regulation and Industry Specifications. The
Company engages in the development of products and provides services
which may be regulated by, or subject to the requirements of, various
governmental and private agencies, including the U.S. Environmental
Protection Agency and the Food and Drug Administration, military
specifications, military technical orders, and specific industry
standards. Continual compliance with these requirements is expected to
be time-consuming and expensive. Failure to obtain necessary
governmental approvals may have a material adverse effect upon the
Company's operations. The Company's products are currently considered
to be non-toxic and non-hazardous, and accordingly unregulated. There
can be no assurance, however, that all of the constituents utilized in
the Company's products will remain excluded as a subject of regulatory
guidelines or from lists of proscribed toxic substances in reportable
quantities. In the event that any of the substances used in the
Company's products becomes the subject of regulatory guidelines or
becomes listed as a toxic substance, the Company could suffer an adverse
impact due to a possible impairment, or total loss, of its perceived
competitive advantage until suitable replacement constituents are
identified and implemented.
5. Limited Patent Protection. Multi-Foam EFFF(TM)/Haz-Clean(TM)
and DOT 111/1139(TM), two of the Company's proprietary products
pertinent to its business operations, are currently protected by United
States Patent Numbers 5,061,383 and 5,308,550, respectively. Patent
applications are pending on Omni-Clean SD and CreoSolv. The Company has
also filed two patents with the United States Patent and Trademark
Office, a base fluid upgrading (BFU) application (Serial No. 918,597)
and a mud recycling process (MRP) (Serial No. 788,393). Both patent
pending applications are for treating drilling fluids used in the oil
and gas industry.
The Company is also in the process of filing two more patents,
a wellbore chemical cleaner and a continuation-in-part of co-pending MRP
application Serial No. 788,993.
To the best of Management's knowledge, the company's products
and services do not infringe upon any patents held by others.
6. Limited Marketing Capabilities. The Company has only limited
marketing capabilities and must rely on its own internal marketing
efforts since its prior efforts to utilize large regional and national
independent distributors had only limited success. The Company is
continuing to explore new avenues for the marketing of its products.
The Company may change its marketing plans in the future if current
marketing efforts are unsuccessful. The success of the Company is
directly tied to the success of its marketing efforts.
7. Product Liability. It is possible that personal injuries may
arise from the use of the Company's products. The Company currently
maintains product liability insurance for products it develops and
sells. However, the Company could be materially adversely affected by
any product liability claims that may be awarded in excess of policy
limits. Management believes that the likelihood of personal injury is
low.
8. Success Dependent on Key Personnel. Success of the Company
depends on the active participation of its Chairman, Larry G. Schafran
and its President, James V. Janes, III. The Company has not entered
into an employment agreement with either of these individuals and the
loss of their services could adversely affect the development of the
Company's business and its likelihood of success. (See "MANAGEMENT.")
9. Lack of Management Experience. Except for it's Chairman of
the Board of Directors, the Company's management, although experienced
in various phases of business, marketing and the chemical industry,
including product research and development, has limited experience
operating as managers and executive officers and has only minimal
experience in manufacturing and marketing. (See "MANAGEMENT.")
10. Competition. The Company's products are subject to intense
competition from numerous firms currently engaged in chemical research
and product development. Many of these companies are substantially
larger than the Company and have substantially greater resources,
operating histories and experience. There can be no assurance that the
Company will be able to compete successfully with these other companies
or achieve profitable operations.
Risk Factors Relating to this Offering
1. Absence of Public Market for Company's Securities. Although
there presently exists a sporadic, limited market for the Company's
common stock, there can be no assurance that any market can be
sustained. The investment community could show little or no interest
in the Company in the future. As a result, purchasers of the Company's
common stock may have difficulty in reselling such securities should
they desire to do so.
2. Potential Material Adverse Effect On Company's Securities
Resulting From Penny Stock Regulations. Due to certain regulations
promulgated by the Securities and Exchange Commission pertaining to
penny stocks, which regulations define a penny stock to be any equity
security that has a market price (as defined) of less than $5.00 per
share subject to certain exceptions, and the fact that the Company's
common stock could be subject to these regulations, the liquidity of the
Company's securities could be materially adversely affected. Such
material adverse effects could include, among other things, impaired
liquidity with respect to the Company's securities, and burdensome
transactional requirements (including, but not limited to, waiting
periods, account and activity reviews, disclosure of additional personal
financial information and substantial written documentation) associated
with transactions in the Company's securities.
3. Offering Price was Arbitrarily Determined. The offering price
is likely the market price in the over-the-counter market. There is no
direct relationship between the offering price and the Company's assets,
book value, shareholders' equity or any other recognized criterion of
value.
4. Dividends. No dividends have been paid on the Common Stock
since inception and none are contemplated at any time in the foreseeable
future. Further, seven percent cumulative annual dividends are also
payable on the Series B Convertible Exchangeable Preferred Stock. Seven
percent cumulative annual dividends are also payable on the Series C
Convertible Voting Preferred Stock. All dividends on issued and
outstanding series of preferred stock have been paid in the form of
restricted shares of common stock pursuant to the authority granted the
Company's Board of Directors in the pertinent designation of rights and
preferences. Unless and until the Company is profitable, it is unlikely
that it will pay dividends in cash. (See "DESCRIPTION OF SECURITIES.")
RECENT DEVELOPMENTS
Liquidity and Capital Resources
Since the Company commenced operations, it has incurred recurring
losses and negative cash flows from operations. The Company does not
have sufficient working capital available to maintain operations at
their current levels. These factors raise substantial doubt about the
Company's ability to continue as a going concern. The Company's ability
to continue as a going concern is dependent upon obtaining additional
capital investments or generation of adequate sales revenue and
profitability from operations.
To obtain additional capital, the Company has the option to call
the Class E Common Stock Purchase Warrants with 30 days written notice
to the holders. If the Class E Warrants are called by the Company, the
amount of funds generated from exercise of the warrants is
undeterminable due to the material difference between the call price and
the current trading price of the common stock. The Company is also
considering the initiation of a private offering of Series D Convertible
Preferred Stock solely to accredited investors in the second quarter of
fiscal 1998. For its immediate capital requirements, the Company
expects to negotiate loans from board of directors until sufficient
funds are generated from operations or successful completion of the
above mentioned sources occurs. The Company anticipates having to
negotiate the loans during the second quarter of fiscal 1998.
Drilling Mud Recycling Process (MRP)
The Company has successfully field tested a unique technology for
recovering barite and oil from spent drilling muds. This process
technology utilizes a proprietary cleaning mixture which separates the
oil from the barite within an aqueous medium. The process recovers more
than 95% of the barite at high purity levels. This material can be
reused as a constituent in the production of water or oil based drilling
muds. The synthetic oil recovered in this process can be sold or reused
in mud applications. The mud recycling process (MRP) offers significant
cost savings over current management practices involving spent drilling
muds. The market value of the recovered barite and oils is expected to
more than offset processing costs. The Company is currently in contact
with major drilling mud companies to optimize the MRP technology to
their specific needs and reuse markets.
Demilitarization
Although there is no assurance the Company expects to finalize in
the second quarter an exclusive worldwide license agreement with
Gradient Technology, Inc., for a leading edge portfolio of patent
pending demil "conversion" technologies to address the U.S. Government's
drive toward "resource recovery and reuse" in Demilitarization
operations. Demilitarization or "demil" is a term used to describe the
removal of conventional munitions, including bombs, rockets, torpedoes
and shells from the inventory of stored ammunition. The blending of
these licensed technologies with the Company's highly advanced chemical
process and separation know-how should position the Company to offer
cost efficient explosive conversion and/or recovery services to the U.S.
Government.
USE OF PROCEEDS
Any net proceeds that the Company may realize upon the exercise of
Warrants and Options will be used for working capital.
The Company will not receive any proceeds from the sale of the
common stock by the Selling Shareholders.
DIVIDEND POLICY
The Company has not paid cash dividends since its inception. The
Company does not anticipate paying any cash dividends on its common
stock in the foreseeable future. The payment of future dividends on the
common stock will be at the discretion of the Board of Directors of the
Company and will depend upon, among other things, the Company's
earnings, capital requirements, financial condition and restrictions
contained in loan agreements, if any.
Seven percent cumulative annual dividends are payable on both the
Series B Convertible Exchangeable Preferred Stock and the Series C
Convertible Preferred Stock. All dividends on issued and outstanding
series of preferred stock have been paid in the form of restricted
shares of common stock pursuant to the authority granted the Company's
Board of Directors in the pertinent designation of rights and
preferences. Unless and until the Company is profitable, it is unlikely
that it will pay dividends in cash. (See "DESCRIPTION OF SECURITIES.")
MANAGEMENT
The executive officers and directors of the Company and their ages
and positions with the Company or its subsidiaries are as follows:
<TABLE>
<CAPTION>
Period from
Name Age Position Which Served
_____ _____ _________ _______________
<S> <C> <C> <C>
L. G. Schafran 58 Chairman of the Board 01/96
James V. Janes, III 49 President, CEO and 10/89
Director
Donald P. Carlin 38 Director 10/90
Richard A. Brown 49 Director 10/90
David H. Peipers 40 Director 01/96
Marian A. Bourque 37 Chief Financial 04/96
and Accounting
Officer, Secretary
and Treasurer
</TABLE>
The Company has no knowledge of any arrangement or understanding
in existence between any executive officer named above and any other
person pursuant to which any such executive officer was or is to be
elected to such office or offices. All officers of the Company serve
at the pleasure of the Board of Directors. No family relationship
exists among the directors or executive officers of the Company. All
Officers of the Company will hold office until the next Annual Meeting
of the Company's shareholders. There is no person who is not a
designated Officer who is expected to make any significant contribution
to the business of the Company.
L. G. Schafran - Chairman of the Board of Directors. Chairman of the
Board of Directors of the Company since February 1996, Mr. Schafran was
until recently a Director and Chairman of the Executive Committee of
Dart Group Corporation and its two principal affiliates, Trak Auto
Corporation and Crown Books Corporation. Mr. Schafran is also a
Director or Trustee of Capsure Holdings Corp., Glasstech, Inc., National
Income Realty Trust, Oxigene, Inc. and Publicker Industries, Inc. Mr.
Schafran earned a B.B.A. from the University of Wisconsin in 1960 and a
M.B.A. also from the University of Wisconsin in 1961.
Donald P. Carlin - Director. A Director of the Company since October
1990, Mr. Carlin has been a director of Oxigene, Inc., a publicly held
company involved in cancer research, since 1992. Since 1982, Mr. Carlin
has been Chief Executive Officer and a principal shareholder of the
Moores Companies, a group of South Louisiana companies in the oil field
service and real estate industries. Mr. Carlin earned a B.S. degree
from the University of Southwestern Louisiana in 1981.
Richard A. Brown - Director. A Director of the Company since October
1990, and Chairman of the Board from 1991 to 1995, Mr. Brown has been
the sole proprietor of the venture capital firm Eagle Ventures since
1989. Mr. Brown has been a Director of Oxigene, Inc. a publicly held
company involved in cancer research, since 1988 and a Director of
Angiosonics, Inc., a company involved with cardiac intervention devices,
since 1992. From 1986 until 1989, Mr. Brown was President of Eagle
Financial Group, Inc., a venture capital and investment banking firm.
Prior to 1986, Mr. Brown was engaged in the financing and analysis of
development stage companies involved in medical electronic technology.
Mr. Brown earned a B.A. degree from Hamilton College in 1970.
James V. Janes, III, - Director and President. A Director of the
Company since February 1990, and President since January 1996, Mr. Janes
was General Manager of Delta-Omega Technologies, Ltd., the Company's
wholly owned subsidiary, from November 1989 to December 1990. From 1977
to 1989, Mr. Janes was President of Janes Industries, Inc., a Louisiana
corporation licensed as a general contractor. Mr. Janes has also served
on the boards of directors of Southland Federal Savings Bank, Opelousas,
Louisiana since 1986, and St. Landry Home Builders Association,
Opelousas, Louisiana since 1983. Mr. Janes served in the U.S. Air
Force, earning the Distinguished Flying Cross, and between 1973 and 1977
was an instructor and evaluator with the 58th TAC Fighter Squadron at
Eglin Air Force Base in Florida. Mr. Janes earned a B.S. from
Northwestern State University in 1970.
David H. Peipers - Director. A Director of the Company since February
1996, Mr. Peipers is a co-founder and Chairman of Bedminster
Bioconversion Corporation, a private company which designs and develops
large scale composting facilities for the treatment of organic waste
streams. He is also an active private investor in and director of
various companies, including Segrets, Inc., Cyto Ltd., and SK
Technologies. Mr. Peipers earned an A.B. from Harvard College in 1978
and a J.D. from Harvard Law School in 1981.
Marian A. Bourque - Chief Financial and Accounting Officer, Secretary
and Treasurer. Chief Financial and Accounting Officer, Secretary and
Treasurer of the Company since April 1996, Ms. Bourque was Controller of
the Company from December 1994 to April 1996. Her past associations
include Broussard, Poche, Lewis and Breaux CPA Firm, where she was
active in the Management Advisory Department and Adobe Oil & Gas, where
she was the Accounts Payable Supervisor. Ms. Bourque, a Certified
Public Accountant, earned a B.S. in Accounting from the University of
Southwestern Louisiana in 1993.
PRINCIPAL SHAREHOLDERS
The following table sets forth, as of November 30, 1997, the
common stock ownership of each person known by the Company to be the
beneficial owner of five percent or more of the Company's common and
preferred stock ("Principal Shareholders"), all Directors and Officers
individually and all Directors and Officers of the Company as a group.
Except as noted, each person has sole voting and investment power with
respect to the shares shown. All shares are "restricted securities" and
as such are subject to limitations on resale. The shares may be sold
pursuant to Rule 144 under certain circumstances. There are no
contractual arrangements or pledges of the Company's securities, known
to the Company, which may at a subsequent date result in a change of
control of the Company.
<TABLE>
<CAPTION>
Amount of Beneficial
Ownership(1)
________________________
Name and Address Common and Options Percent
of Beneficial Preferred and Of
Owner Stock Warrants Total Class (2)
________________ ____________ __________ _____ _________
<S> <C> <C> <C> <C>
L. G. Schafran (3)
54 Riverside Drive #14B
New York, NY 10024 --- 600,000 600,000 3.35%
Donald P. Carlin (4)
P. O. Box 51808
Lafayette, LA 70505 560,229 -0- 560,229 3.24%
Richard A. Brown (5)
P. O. Box 8706
Longboat Key, FL 34228 618,206 -0- 618,206 3.57%
James V. Janes, III (6)
231 Dr. Charlie Drive
Opelousas, LA 70570 201,038 221,500 412,538 2.36%
David H. Peipers (7)
610 Tenth Avenue,
Suite 605
New York, NY 10020 1,747,561 130,000 1,877,561 10.78%
Vernon Taylor, Jr. (8)
1670 Denver Club Bldg.
Denver, CO 80202 2,086,001 165,000 2,251,001 12.89%
The Winsome Limited
Partnership (9)
f/k/a Crossroads Limited
Partnership
610 Tenth Ave.,
Suite 605
New York, NY 10020 1,616,158 130,000 1,746,158 10.02%
GAMI Investments, Inc. (10)
Two North Riverside Plaza
Suite 1100
Chicago, IL 60606 933,333 933,333 1,866,666 10.24%
Marian A. Bourque
P. O. Box 81518
Lafayette, LA
70598-1518 -0- -0- -0- 0%
All Directors
and Officers as
a Group
(Six Persons) (11) 3,127,034 951,500 4,078,534 22.35%
</TABLE>
(1) Rule 13d-3 under the Securities Exchange Act of 1934, involving
the determination of beneficial owners of securities, includes as
beneficial owners of securities, among others, any person who
directly or indirectly, through any contract, arrangement,
understanding, relationship or otherwise has, or shares, voting
power and/or investment power with respect to such securities;
and, any person who has the right to acquire beneficial ownership
of such security within sixty days through means, including but
not limited to, the exercise of any option, warrant or conversion
of a security. In making this calculation, options and warrants
which are significantly "out-of-the-money" and therefore unlikely
to be exercised within sixty days are not included in the
calculation of beneficial ownership. For this purpose, the
Company deems options and warrants with an exercise price above
$.75 as unlikely to be exercised within the next sixty days. Any
securities not outstanding which are subject to such options,
warrants or conversion privileges are deemed to be outstanding
for the purpose of computing the percentage of outstanding
securities of the class owned by such person, but are not be
deemed to be outstanding for the purpose of computing the
percentage of the class by any other person.
(2) As of November 30, 1997, there were 1,590,700 shares of common
stock, 1,590,700 shares of Series B Convertible Exchangeable
Preferred Stock and 2,471,667 shares of Series C Convertible
Exchangeable Preferred Stock issued and outstanding. Each share
of the Series B and Series C Convertible Exchangeable Preferred
Stock is entitled to one vote and votes together with the common
stock as a single class except upon matters relating to the
amendment of rights and preferences for the preferred stock.
Accordingly, there are 17,292,602 shares of capital stock entitled
to vote upon ordinary matters and the percentages in this column
are based upon such number of shares.
(3) Mr. Schafran owns options to purchase 600,000 shares of common
stock. Mr. Schafran also owns warrants to purchase 600,000 shares
of common stock at an exercise price of $2.00 per share, but
these have been excluded from the calculation of his beneficial
ownership due to the material difference between the exercise
price and the current trading price of the common stock . Mr.
Schafran's wife owns 242,479 shares of common stock, 131,667
shares of preferred stock and warrants to purchase 116,557 shares
of common stock. Mr. Schafran disclaims beneficial ownership of
the stock owned by his wife.
(4) Mr. Carlin owns 350,006 shares of common stock. Mr. Carlin also
owns warrants to purchase 10,015 shares of common stock at an
exercise price of $1.50 per share, and 103,667 options to purchase
common stock at an exercise price of $2.00 per share, but these
have been excluded from the calculation of his beneficial
ownership due to the material difference between the exercise
price and the current trading price of the common stock. Mr.
Carlin could be considered a beneficial owner of 27,223shares of
common stock and 25,000 shares of preferred stock held by his wife
and 30,000 shares of common stock held by his children. Mr.
Carlin could also be considered beneficial owner of 128,000 shares
of common stock held by C&M Land Account of which Mr. Carlin is a
principal shareholder and director.
(5) Mr. Brown owns 551,526 shares of common stock . Mr. Brown could
be considered a beneficial owner of 66,680 shares of common stock
held in custodial account for his son Alexander J. Brown.
(6) Mr. Janes owns 194,078 shares of common stock and options to
purchase 211,500 shares of common stock. He could be considered
a beneficial owner of 6,960 shares held in joint tenancy with his
mother. Mr. Janes' wife owns 156,000 shares of common stock. Mr.
Janes disclaims beneficial ownership of the stock owned by his
wife.
(7) Mr. Peipers owns 131,403 shares of common stock. Mr. Peipers
could be considered a beneficial owner of 1,421,662 shares of
common stock, 130,000 shares of preferred stock and warrants to
purchase 130,000 shares of common stock held by The Winsome
Limited Partnership F/K/A Crossroads Limited Partnership, of which
Mr. Peipers is General Partner. Mr. Peipers could also be
considered a beneficial owner of 14,496 common shares and 50,000
shares of preferred stock held by Cornerhouse Limited
Partnership, an affiliate of The Winsome Limited Partnership.
(8) Mr. Taylor owns 530,915 shares of common stock, 200,000 shares of
preferred stock and warrants to purchase 100,000 shares of common
stock. Mr. Taylor could be considered a beneficial owner of
435,000 shares of common stock held by a family member and 284,000
shares of common stock held by a corporation for which Mr. Taylor
is an officer. Mr. Taylor could also be considered a beneficial
owner of 114,439 shares of common stock and 400,000 shares of
preferred stock held by the Ruth and Vernon Taylor Foundation and
65,000 shares of preferred stock, warrants to purchase 65,000
shares of common stock and 56,647 shares of common stock held by
the Sara Taylor Swift Revocable Trust, since Mr. Taylor is a
trustee of both.
(9) The Winsome Limited Partnership F/K/A Crossroads Limited
Partnership, is an entity for which David H. Peipers is the
General Partner. The Winsome Limited Partnership owns 1,421,662
shares of common stock, 130,000 shares of preferred stock and
warrants to purchase 130,000 shares of common stock. The Winsome
Limited Partnership could also be considered a beneficial owner of
14,496 shares of common stock and 50,000 shares of preferred stock
held by Cornerhouse Limited Partnership, an affiliate of The
Winsome Limited Partnership.
(10) GAMI Investments, Inc., a Delaware corporation, owns 933,333
shares of preferred stock and warrants to purchase 933,333 shares
of common stock.
(11) The Directors and Officers as a group (six persons) beneficially
own 2,922,034 shares of common stock, 205,000 shares of preferred
stock, warrants to purchase 130,000 shares of common stock and
stock options to purchase 821,500 shares of common stock.
SELLING SHAREHOLDERS
The following tables show for the Selling Shareholders (i) the
number of common shares of the Company beneficially owned by them as of
November 30, 1997, (ii) the number of common shares covered by this
Prospectus and (iii) the number of common shares and percentage of class
ownership after the offering. In the case of Table a., the table
assumes the (i) conversion of the preferred stock to common stock, and
(ii) the exercise of the Class Z and Class E Warrants to common stock.
a. Shareholder Shares Underlying Series C Preferred Stock and
Class Z Warrants
<TABLE>
<CAPTION>
Number of Number of Number of Percent
Common Shares Common Shares Shares Of
Selling Beneficially Covered By This Owned After Class If
Shareholders Owned Prospectus Offering Over 1%
____________ _____________ _____________ ____________ _________
<S> <C> <C> <C> <C>
Mark Lobel 2,556 50,000 22,556
George Kyrkostas 52,556 50,000 2,556
Stanley Lobel * 50,000 250,000 - 0 -
Legg Mason Wood
Walker C/F Stanley
Lobel IRA
Rollover* 297,585 250,000 47,585
Winsome Limited
Partnership f/k/a
Crossroads Limited
Partnership 1,682,864 260,000 1,422,864 10.55%
Alfred T.
Copeland, Jr. 210,226 200,000 10,226
Lynn Hecht
Schafran 455,813 213,334 242,479 1.8%
Vernon
Taylor, Jr. 1,564,354 200,000 1,364,354 10.16%
Sara Taylor Swift
Revocable Trust
dtd 12/20/51 Vernon
Taylor, Jr.
TTEE 186,647 130,000 56,647
Marc A. Utay 160,251 152,534 7,717
Utay Family Group,
LLC* 288,005 274,134 13,871
Edward A.
Weihman 98,104 93,332 4,772
Joseph
Stein, Jr. 70,075 66,666 3,409
GAMI Investment,
Inc. 1,962,108 1,866,666 95,442
Dakota Capital
Partners, LLC 140,151 133,334 6,817
Muriel Siebert 105,113 100,000 5,113
F.B. Baer 13,334 13,334 - 0 -
Robert A. Naify 209,374 200,000 9,374
Shelter Rock
Resources Profit
Sharing Plan Andrew
Carduner & Wendy
Carduner, TTEEs 52,343 50,000 2,343
Lawrence Groo 104,687 100,000 4,687
Will K. Weinstein
Revocable Trust
Will K. Weinstein,
TTEE 104,687 100,000 4,687
Balestra Capital
Partners * 200,212 150,000 50,212
Baer & Co.,
LLC * 40,000 40,000 - 0 -
b. Shareholder Common Shares Covered by Prospectus
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
Baer and
Company LLC 80,336 80,336 - 0 -
Lawrence Groo 67,970 25,000 42,970
Thomas Murphy 10,000 10,000 - 0 -
Brian Hebert 17,160 15,000 2,160
Michelle
Leblanc 4,919 4,300 619
c. Selling Shareholder Shares Underlying Series B Preferred Stock
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
Allen & Company
Incorporated * 597,115 250,000 347,115 2.57%
Baer, Fernand B.,
Jr.* 15,000 15,000 - 0 -
Balestra Capital
Partners * 150,000 150,000 - 0 -
Bender,
Susan J. 128,052 100,000 28,052
Brown,
JoAnn (1) * 10,543 10,000 543
Brown, JoAnn
C/F Alexander J. Brown,
a minor (2) * 10,543 10,000 543
Carlin,
Bonnie (3) 52,223 25,000 27,223
The Cornerhouse
Limited
Partnership* 50,000 50,000 - 0 -
Cuskley,
Kevin P. 32,013 25,000 7,013
Hebert,
Brian, Sr. 17,298 5,700 11,598
Hocker,
Richard 64,025 50,000 14,025
LEGG Mason Wood
Walker Cust Stanley
Lobel* 125,119 125,119 - 0 -
Levy, Frank 74,076 50,000 24,076
Miller,
Mark Timothy * 56,817 50,000 6,817
Morris Lobel &
Sons, Inc. 32,013 24,881 7,132
Schafran, Lynn * 42,912 25,000 17,912
The Ruth & Vernon
Taylor
Foundation 400,000 400,000 - 0 -
Taylor,
Vernon, Jr. 100,000 100,000 - 0 -
Trapp, Peter 32,034 25,000 7,034
Universal
Partners, L.P. 31,987 25,000 6,987
Wight Investment
Partners 45,160 35,000 10,160
Worthington,
Lucinda 51,180 40,000 11,180
d. Selling Shareholders Shares Underlying Class E Warrants
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
Aboudi, Joseph
and Lillian 8,148 4,445 3,703
Allen &
Company, Inc.* 44,445 44,445 - 0 -
Baer & Company* 85,990 15,330 70,660
Baer, F.B. * 15,000 5,000 10,000
Baer, Fernand B.,
Jr.* 233,337 34,458 198,879 1.50%
Bear Stearns
Securities Corp. 38,173 38,173 - 0 -
Bergeaux, Gerald 333 333 - 0 -
Bernard, Allen P. 10,015 10,015 - 0 -
Brown,
JoAnn F. (1)* 75,678 6,667 69,011
Brown JoAnn F.
C/F Alexander J.
Brown, a minor* 73,195 6,670 66,525
Brown,
Richard A. 669,328 117,802 551,526 4.13%
Bruce, Michael R.
and Sandra S. 8,445 8,445 - 0 -
Bucchi, Phillip R.
and Edith A. 1,000 1,000 - 0 -
Carcano, Felix 160,801 160,801 - 0 -
Carlin,
Donald P. 518,021 10,015 508,006 3.84%
Cede & Co. 7,143,984 1 7,143,983 54.0%
Chehebar, Joey 4,074 2,223 1,851
Churchill
Associates, L.P. 2 1 1
Copeland, Alfred T.,
Jr. 10,227 1 10,226
Datrix Corp. 167,500 167,500 - 0 -
The Crossroads
Limited Partners
and David
Peipers* 4,242 4,242 - 0 -
The Crossroads
Limited
Partnership* 15,758 15,758 - 0 -
Ari Dani Corp. 10,184 5,556 4,628
Deutschmann,
Jacob H. 15,501 15,501 - 0 -
Edwards, Perrin D.
and Annie I.
Gines 5,001 5,001 - 0 -
Esses, Sara 8,519 2,223 6,296
Finsilver, Joan 4,074 2,223 1,851
Forwand, Barry 6,111 3,334 2,777
Giles, Edward M. 8,889 8,889 - 0 -
Goldstein, Walter
and Batya 43,704 4,445 39,259
Groo, A.
Lawrence* 6,080 1,393 4,687
Herzog Heine
Geduld, Inc. 50,001 50,001 - 0 -
Jeffrey, John B. 1,100 100 1,000
Jeffrey,
Richard R. 36,253 7,023 29,230
Jeffrey,
Robert C. 1,300 100 1,200
Johnston,
Richard 8,223 8,223 - 0 -
Kavouras, Thomas
and Lulu 8,519 2,223 6,296
Khermouch, Sherrie
and Raymond 1 1 - 0 -
Kleinhandler,
Naomi 21,853 2,223 19,630
Klotz, Jeffrey
and Elizabeth 3,001 2,223 778
Lehmann, Aaron 4,000 4,000 - 0 -
Lewco Securities
Corp. 19,000 19,000 - 0 -
Ciera Limited 4,074 2,223 1,851
Lobel, David 10,001 3,334 6,667
Lobel, Stanley* 58,697 8,886 49,811
McDonald,
William D.
and Carol F. 87,034 11,111 75,923
McNeely, Loren 1,667 1,667 - 0 -
Middlegate
Securities,
Ltd. 37,750 37,750 - 0 -
Miller, Mark
Timothy* 6,720 6,720 - 0 -
Mizrahi, David 4,074 2,223 1,851
Murphy, Robert M. 2 1 1
Ostrofsky,
Steven 45,008 5,003 40,005
Quigley, John G. 2,223 2,223 - 0 -
First River
Road Corp. 1 1 - 0 -
Roob Peck
McCooey Clearing
Corp. 16,667 16,667 - 0 -
Rutberg, Frederic D.
and Phillip F.
Heller 24,505 1,502 23,003
Samberg,
Arthur J. 69,628 8,889 60,739
Schafran, Lynn
Hecht* 234,457 9,890 224,567 1.7%
Scheer, Perry J. 18,217 16,467 1,750
Smith Barney,
Inc. 22,501 22,501 - 0 -
Spear Leeds
& Kellogg 5,500 5,500 - 0 -
Tawil, Joseph
and Ruth 8,148 4,445 3,703
Terzi, Ronald
and Esther 4,074 2,223 1,851
Tosyd, Inc. 4,873 4,500 373
Trask, Robert W. 835 835 - 0 -
Travis, Brian A.
and Joanne
Carcano 47,500 47,500 - 0 -
Travis, Brian
and Joanne
Carcano 39,698 37,198 2,500
Travis, Dorothy
and Brian 6,651 6,651 - 0 -
e. Shares Underlying Placement Agent Warrants
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
Gilford
Securities,
Inc. 100,000 100,000 - 0 -
FBB Corp.
(4)* 100,000 100,000 - 0 -
f. Shares Underlying Options
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
FBB Corp
(4)* 150,000 150,000 - 0 -
* These shareholders are listed in more than one Selling Shareholder
section.
</TABLE>
(1) Wife of Richard Brown, a Director. Ms. Brown disclaims any
beneficial ownership of the shares held by Richard Brown.
(2) Son of Richard Brown, a Director.
(3) Wife of Donald J. Carlin, a Director.
(4) A corporation controlled by Fernand B. Baer.
Information set forth in the tables regarding the securities owned
by each Selling Shareholder is provided to the best knowledge of the
Company based on information furnished to the Company by the respective
Selling Shareholder and/or available to the Company through its stock
transfer records. No Selling Shareholder is obligated to sell his or
her shares.
PLAN OF DISTRIBUTION/DETERMINATION OF OFFERING PRICE
The common stock offered hereby may be sold by the Selling
Shareholders or by pledgees, donees, transferees or other successors-in-
interest (including sales after exercise of warrants). Such sales may
be made in the over-the-counter market, in privately negotiated
transactions, or otherwise, at prices and at terms then prevailing, at
prices related to the then current market prices or at negotiated
prices. The common stock may be sold by one or more of the following
methods: (a) a block trade in which the broker or dealer so engaged
will attempt to sell the common stock as agent, but may position and
resell a portion of the block as principal in order to consummate the
transaction; (b) a purchase by a broker or dealer as principal, and the
resale by such broker or dealer for its account pursuant to this
Prospectus, including resale to another broker or dealer; or
(c) ordinary brokerage transactions and transactions in which the broker
solicits purchasers. In effecting sales, brokers or dealers engaged by
a Selling Shareholder may arrange for other brokers or dealers to
participate. Any such brokers or dealers will receive commissions or
discounts from a Selling Shareholder in amounts to be negotiated
immediately prior to the sale. Such brokers or dealers and any other
participating brokers or dealers may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended. Any gain
realized by such a broker or dealer on the sale of shares which it
purchases as a principal may be deemed to be compensation to the broker
or dealer in addition to any commission paid to the broker by a Selling
Shareholder.
The securities covered by this Prospectus may be sold under
Rule 144 instead of under this Prospectus. None of the common stock
currently qualifies for sale under Rule 144. In general, under Rule
144, "restricted securities" may be sold after a two-year holding period
in ordinary market transactions through a broker or with a market maker
subject to volume limitations as follows: within any three-month
period, a number of shares may be sold which does not exceed the greater
of 1% of the number of outstanding shares of Common Stock or the average
of the weekly trading volume of the Common Stock during the four
calendar weeks prior to such sale. Sales under Rule 144 require the
filing of a Form 144 with the Securities and Exchange Commission.
However, if the shares have been held for more than three years by a
person who is not an "affiliate", there is no limitation on the manner
of sale or the volume of shares that may be sold and no such filing is
required. The Company will not receive any portion of the proceeds of
the securities sold by the Selling Shareholders, but will receive
amounts upon exercise of Warrants, if any are exercised, which funds
will be used for working capital. There is no assurance that the
Selling Shareholders will sell any or all of the common stock offered
hereby.
The Selling Shareholders have been advised by the Company that
during the time each is engaged in distribution of the securities
covered by this Prospectus, each must comply with Rules 10b-5 and 10b-6
under the Securities Exchange Act of 1934, as amended, and pursuant
thereto: (i) each must not engage in any stabilization activity in
connection with the Company's securities; (ii) each must furnish each
broker through which securities covered by this Prospectus may be
offered the number of copies of this Prospectus which are required by
each broker; and (iii) each must not bid for or purchase any securities
of the Company or attempt to induce any person to purchase any of the
Company's securities other than as permitted under the Securities
Exchange Act of 1934, as amended. Any Selling Shareholders who may be
"affiliated purchasers" of the Company as defined in Rule 10b-6, under
Regulation M pursuant to Securities Exchange Act Release 34-38057 (March
7, 1997) have been advised that they must coordinate their sales under
this Prospectus with each other and the Company for purposes of Rule
10b-6.
DESCRIPTION OF SECURITIES
Common Stock
The authorized common stock of the Company consists of 100,000,000
shares of $.001 par value common stock. All shares have equal voting
rights, one vote per share, and are not assessable. Voting rights are
not cumulative; therefore, the holders of more than 50% of the common
stock of the Company could, if they chose to do so, elect all the Direc-
tors.
Upon liquidation, dissolution or winding up of the Company, the
assets of the Company, after satisfaction of all liabilities and
distribution to preferred shareholders, if any, will be distributed pro
rata to the holders of the common stock. The holders of the common
stock do not have preemptive rights to subscribe for any securities of
the Company and have no right to require the Company to redeem or
purchase their shares. The shares of common stock presently outstanding
are, and the shares of common stock to be sold pursuant to this offering
will be, upon issuance, fully paid and non-assessable.
Holders of common stock are entitled to dividends, when and if
declared by the Board of Directors of the Company, out of funds legally
available therefor. The Company has not paid any cash dividends on its
common stock, and it is unlikely that any such dividends will be
declared in the foreseeable future.
Preferred Stock
The authorized preferred stock of the Company consists of
40,000,000 shares at $.001 par value per share. The preferred stock is
voting and may be issued in series as determined by the Board of
Directors. As is required by law, each series must designate the number
of shares in the series and each share of a series must have identical
rights of (1) dividend, (2) redemption, (3) rights in liquidation, (4)
sinking fund provisions for the redemption of shares, and (5) terms of
conversion.
Series B Convertible Exchangeable Preferred Stock
The Series B Convertible Exchangeable Preferred Stock is f rom a
designated series of the Company's authorized voting preferred stock.
The Series was sold for $1.00 per share, and has an established declared
dividend of $.07 per annum per share, due on the 30th day of June of
each year. The dividend accumulates if not paid when due. The dividend
may be paid in cash or in stock at the sole discretion of the Board of
directors. If paid in stock, the common shares issued will be valued at
the average bid price for the 30 days preceding the June 30 payment
date. Once the price per share of common stock is determined, a number
of common shares equal to the total dollar value of the dividend which
was to be paid on June 30 will be issued, with any fractional shares of
the common stock dividend rounded up.
Call Provision
At any time on or after June 30, 1996, and before June 30, 1999,
the Company at its sold option may call the Series B Preferred for
redemption at a redemption price of $1.00 per share plus accumulated
unpaid dividends. The call shall provide for written notice of not less
than 30 nor more than 60 days of the proposed redemption date during
which call period the Series B holder may either exercise his conversion
rights as discussed below and convert each share of Series B Preferred
to one share of common stock, or at the expiration of the call period
his rights as a shareholder shall expire upon receipt of the redemption
price.
Conversion Rights
The holder of any shares of this Series B Preferred at his sole
option may, at any time until June 30, 1999 (subject to the call
provision), convert any or all of the shares of the Series B Preferred
Stock held by him into one fully paid and non-assessable share of the
Company's $.001 par value common stock for each share of Series B
Preferred Stock converted. Accordingly, assuming all dividends have
been paid, the 2,000,000 shares of Series B Preferred Stock offered
herein may be converted to an equal number of common shares. After June
30, 1999, all rights of conversion cease. The conversion rate is
subject to adjustments for such things as stock dividends, stock splits,
and reclassifications in the normal course.
Exchange Rights
At the sole option of the Company on any dividend payment date on
or after June 30, 1995 and before June 30, 1999, it may exchange for the
Series B Preferred Stock in whole for the Company's secured promissory
note which bears interest at 8% per annum, and is payable in equal
quarterly installments of principal and interest payable on September
30, December 31, March 31, and June 30 of each year with the note due in
full on or before June 30, 1999.
This note shall be senior to all other debt of the Company except
bank debt and purchase money financing secured by the object purchased,
and a security agreement shall be established accordingly.
Holders of outstanding shares of this Series B Convertible
Exchangeable Preferred Stock will be entitled to receive $1.00 principal
amount of the note in exchange for each share of this Series held by
them at the time of exchange, plus an amount equal to any accrued but
unpaid cash dividends. The Company will mail to each holder of record
of the shares of this Series written notice of its intention to exchange
no less than 30 nor more than 60 days prior to the date fixed for the
exchange (the "exchange date"). Each such notice shall state: (i) the
exchange date; (ii) the place or places where certificates for such
shares are to be surrendered for exchange into the note; and (iii) that
dividends on the shares to be exchanged will cease to accrue on such
exchange date. Prior to giving notice of intention to exchange, the
Company shall execute and deliver to the Exchange Agent the original
note and security agreement in conformity with the Designation. The
Company will cause the note and security agreement to be authenticated
on the dividend payment date on which the exchange is effective, and the
Company will pay interest on the note at the rate and on the dates
specified in such note from the exchange date. There is no penalty for
prepayment.
Series C Convertible Preferred Stock
The Series C Convertible Preferred Stock is from a designated
series of the Company's authorized voting Preferred Stock. A total of
3,000,000 preferred shares have been designated as Series C Preferred
Stock. The Series has an established dividend of 7% per annum per
share, due on the 30th day of June of each year, commencing in 1997.
The dividend accumulates if not paid when due. The dividend may be paid
in cash or in stock at the sole direction of the Board of Directors. If
paid in stock, the common shares issued will be valued at the average
bid price for the 30 days preceding the June 30 payment date. Once the
price per share of Common Stock is determined, a number of common shares
equal to the total dollar value of the dividend which was to be paid on
June 30, will be issued with any fractional shares of the common stock
dividend rounded up.
Call Provision
At any time on or after June 30, 1999, and before June 30, 2001,
the Company at its sole option may call the Series C Preferred for
redemption at a redemption price of $.75 per share plus accumulated
unpaid dividends. The call shall provide for written notice of not less
than 30 nor more than 60 days of the proposed redemption date during
which call period the Series C holder may either exercise his conversion
rights and convert each share of Series C Preferred to one share of
Common Stock, or at the expiration of the call period his rights as a
shareholder shall expire upon receipt of the redemption price.
Conversion Rights
The holder of any shares of this Series C Preferred at his sole
option may, at any time until June 30, 2001 (subject to the call
provision), convert each share of the Series C Preferred Stock to one
(1) fully paid and non-assessable share of the Company's $.001 par value
Common Stock. After June 30, 2001, all rights of conversion cease. The
conversion rate is subject to adjustments for such things as stock
dividends, stock splits, and reclassifications in the normal course.
Class E Common Stock Purchase Warrants
Each Class E Common Stock Purchase Warrant entitles the holder to
purchase one share of the Company's common stock at $1.50 per share at
anytime until 5:00 p.m. June 15, 1999. The Class E Common Stock
Purchase Warrants are callable by the Company upon 30 days written
notice. The Class E Common Stock Purchase Warrants have been issued
pursuant to a Warrant Agreement between the Company and American
Securities Transfer, Inc. (the "Warrant Agent"). The Company has
authorized and reserved for issuance the shares of common stock issuable
upon exercise of the Class E Common Stock Purchase Warrants.
The Class E Common Stock Purchase Warrants contain the customary
anti-dilution provisions so as to avoid dilution of the equity interest
represented by the underlying common stock upon the occurrence of
certain events such as share dividends or splits. The anti-dilution
provisions will not apply in the event that a merger or acquisition is
undertaken by the Company prior to exercise of the Class E Common Stock
Purchase Warrants. In the event of a liquidation, dissolution or
winding up of the Company, holders of the Class E Common Stock Purchase
Warrants will not be entitled to participate in any distribution of the
assets of the Company. Holders of the Class E Common Stock Purchase
Warrants will have no voting, preemptive, liquidation or other rights of
a shareholder, and no dividends will be declared on the Class E Common
Stock Purchase Warrants.
The Class E Common Stock Purchase Warrants also have over-
subscription privileges so that persons who elect to exercise their
Class E common Stock Purchase Warrants may also subscribe for any shares
which underlie any Class E Common Stock Purchase Warrants not exercised
at the expiration of the Class E Common Stock Purchase Warrant term.
Class Z Warrants
Each Class Z Warrant entitles the holder to purchase one share of
common stock at $.75 per share for a period commencing July 1, 1996 and
ending at 5:00 p.m., Eastern Time, on June 30, 2001. The Class Z
Warrants are callable by the company upon thirty days written notice at
any time on or after July 1, 2000 and at any time, notwithstanding the
date, that the common stock of the company has a closing bid price on
ten consecutive trading days of $2.00 per share or more. Should the
Company properly call the Warrant pursuant to either of the call
provisions, the Warrant holder must exercise the Warrants within the
thirty day notice period or they shall expire. Should the Warrant
holder exercise the Warrants, he must tender the exercise price along
with his Warrant certificate duly executed to the transfer agent as set
forth in the certificate within the notice period and the number of
shares exercised will be issued to him. The Class Z Warrants have been
issued pursuant to a Warrant Agreement between the Company and American
Securities Transfer, Inc. (the "Warrant Agent"). The Company has
authorized and reserved for issuance the shares of common stock issuable
upon exercise of the Class Z Warrants.
The Warrants contain the usual anti-dilution provisions so as to
avoid dilution of the equity interest represented by the underlying
Common Stock upon the occurrence of certain events such as share
dividends or splits. The anti-dilution provisions do not apply in the
event shares are issued for reasonable consideration as determined by
the Board of Directors. In the event of liquidation, dissolution or
winding up of the Company, holders of the Warrants will not be entitled
to participate in the assets of the Company. Holders of the Warrants
will have no voting, preemptive, liquidation or other rights of a
shareholder, and no dividends will be declared on the Warrants.
The Class Z Warrants also have over subscription privileges so that
persons who elect to exercise their Class Z Warrants may also subscribe
for any shares which underlie any Warrants not exercised at the
expiration of the warrant term.
The Warrants may not be exercised unless the registration statement
covering the shares underlying the Warrants of which this Prospectus
forms a part, is then effective.
Placement Agent Warrants
Each Placement Agent Warrant entitles the holder to purchase one
share of the Company's common stock at the price of $1.00 per share, at
any time until 5:00 p.m. on October 15, 1999. There is no provision for
the call or redemption of the Placement Agent Warrants. The Placement
Agent Warrants have been issued pursuant to a Warrant Agreement between
the Company and American Securities Transfer, Inc., and the Company has
authorized and reserved for issuance the shares of common stock issuable
upon the exercise of the Placement Agent Warrants.
The Placement Agent Warrants contain the customary anti-dilution
provisions so as to avoid dilution of the equity interest represented by
the underlying common stock upon the occurrence of certain events such
as share dividends or splits. The anti-dilution provisions will not
apply in the event that a merger or acquisition is undertaken by the
Company prior to the exercise of the Placement Agent Warrants. In the
event of a liquidation, dissolution or winding up of the company,
holders of the Placement Agent Warrants will not be entitled to
participate in any distribution of the assets of the Company. Holders
of the Placement Agent Warrants will have no voting, redemptive,
liquidation or other rights of a shareholder, and no dividends will be
declared or paid to holders of the Placement Agent Warrants. The
Placement Agent Warrants were issued pursuant to the Placement Agent
Agreement entered into by and between Gilford Securities, Inc. and the
Company as part of the private placement of the Series B Convertible
Exchangeable Preferred Stock, which private placement was closed during
October 1994. As part of the Agreement, the Placement Agent Agreements
were issued to Gilford Securities, Inc. and persons appointed by Gilford
Securities, Inc., who in turn may not reassign the Warrants prior to
October 15, 1995.
The exercise price and number of shares of common stock or other
securities issuable on exercise of the Warrants are also subject to
adjustment in certain circumstances, including a stock dividend, stock
split, recapitalization, reorganization, merger or consolidation of the
Company.
The Warrants may be exercised upon surrender of the Warrant
Certificate on or prior to the expiration date at the offices of the
Company, with the exercise form of the Warrant completed and executed as
indicated, accompanied by full payment of the exercise price (by
certified check payable to the Company) for the number of Warrants being
exercised. The Warrantholders do not have the rights or privileges of
holders of common stock.
Warrant Agent
The Warrant Agent for the Warrants is American Securities Transfer,
Inc., Denver, Colorado.
Fernand Baer Options
As payment to Fernand Baer for his investment banking services, the
Company granted Mr. Baer or his assignee 150,000 options. Each option
entitles the holder to purchase one share of restricted common stock at
the price of $.90 per share, at any time until 5:00 p.m. on September
15, 2002.
General
The exercise prices and number of shares of common stock or other
securities issuable on exercise of the Warrants are also subject to
adjustment in certain circumstances, including a stock dividend, stock
split, recapitalization, reorganization, merger or consolidation of the
Company.
The Warrants may be exercised upon surrender of the Warrant
Certificate on or prior to the expiration date at the offices of the
Company, with the exercise form of the Warrant completed and executed as
indicated, accompanied by full payment of the exercise price (by
certified check payable to the Company) for the number of Warrants being
exercised. The Warrantholders do not have the rights or privileges of
holders of common stock.
Warrant Agent
The Warrant Agent for the Warrants is American Securities Transfer,
Inc., Denver, Colorado.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby
will be passed upon for the Company by Cohen Brame & Smith Professional
Corporation, 1700 Lincoln Street, Suite 1800, Denver, Colorado 80203. A
director of the firm beneficially owns approximately 9,000 shares of the
Company's common stock.
EXPERTS
The consolidated financial statements incorporated by reference in
this Prospectus have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report with respect thereto,
and are included herein in reliance upon the authority of said firm as
experts in auditing and accounting in giving said report. Reference is
made to said report which includes an explanatory paragraph to describe
certain factors which raise substantial doubt about the Company's
ability to continue as a going concern as described in Note A to the
financial statements.
======================================================================
No dealer, salesman or other person is authorized to give any
information or to make any representations not contained in this
Prospectus in connection with the offer made hereby, and if given or
made, such information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does not
constitute an offer to sell or a solicitation of any offer to buy the
securities offered hereby to any person in any state or other
jurisdiction in which such offer or solicitation would be unlawful. The
delivery of this Prospectus at any time does not imply that information
contained herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
Page
DOCUMENTS INCORPORATED BY REFERENCE -2-
AVAILABLE INFORMATION -2-
ANNUAL AND QUARTERLY REPORTS -3-
INDEMNIFICATION -3-
PROSPECTUS SUMMARY -4-
RISK FACTORS -6-
USE OF PROCEEDS -9-
DIVIDEND POLICY -9-
MANAGEMENT -9-
PRINCIPAL SHAREHOLDERS -11-
SELLING SHAREHOLDERS -13-
PLAN OF DISTRIBUTION/DETERMINATION OF OFFERING PRICE -14-
DESCRIPTION OF SECURITIES -15-
LEGAL MATTERS -17-
EXPERTS -17-
DELTA-OMEGA
TECHNOLOGIES, INC.
COMMON STOCK
_______________________
PROSPECTUS
_______________________
______________, 1998
II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses, other than
the possible discounts and commissions, in connection with the offering
described in this Registration Statement.
<TABLE>
<CAPTION>
Total
________
<S> <C>
Registration Fee Under Securities Act of 1933 $1,141.54
Printing and Engraving 100.00*
Accounting Fees and Expenses 5,000.00*
Legal Fees and Expenses 7,000.00*
Blue Sky Fees and Expenses (including related legal fees) 1,000.00*
Transfer Agent Fees 2,000.00*
Miscellaneous 3,488.46*
Total 20,000.00
*Estimated
</TABLE>
Item 15. Indemnification of Officers and Directors
Article X of the Company's Articles of Incorporation provides that
the Registrant may indemnify each director, officer, and any employee or
agent of the Registrant and his heirs, executors, and administrators,
against expenses reasonably incurred or any amounts paid by him in
connection with any action, suit, or proceeding to which he may be made
a party by reason of his being or having been a director, officer,
employee or agent of the Registrant in the same manner as is provided by
the laws of the State of Colorado as summarized below.
Under the Colorado Business Corporation Act, a corporation has the
power to indemnify against liability any current or former director,
officer, employee or agent. Colorado Revised Statutes ("C.R.S.")
Section 7-109-101, et seq. Under C.R.S. Section 7-109-102, a
corporation may indemnify a director if (1) the director conducted
himself in good faith, (2) the director reasonably believed that his
conduct was not opposed to the corporation's best interests, or if
acting in his official capacity, that his conduct was in the
corporation's best interests and (3) in the case of a criminal
proceeding, the director had no reasonable cause to believe his conduct
was unlawful. The Colorado Business Corporation Act also gives each
corporation the power to eliminate or limit the personal liability of a
director of the Corporation or its shareholders for monetary damages for
breach of fiduciary duty as a director unless the breach of fiduciary duty
involves breach of loyalty to the corporation or its shareholders, acts
or omissions involving intentional misconduct or a knowing violation of
law, acts specified in C.R.S. Section 7-108-403 (improper distribution of
assets, dividends or share repurchases) or any transaction whereby the
director derived an improper personal benefit. C.R.S. Section 7-108-402.
Item 16. Exhibits and Financial Statement Schedules
(a) The following exhibits are filed as part of this Registration
Statement pursuant to Item 601 of Regulation S-B:
3.1 Articles of Incorporation and Bylaws (Incorporated by
reference to Exhibit 3 to the Company's Registration
Statement (SEC File No. 33-45527).
4.1 Form of Common Stock Purchase Warrants.**
4.2 Designation of Series C Preferred Stock (Incorporated by
reference to Exhibit 4 to Report on Form 10-KSB for period
ended August 31, 1996).
5.0 Opinion of Cohen Brame & Smith Professional Corporation
regarding the legality of the securities being registered.*
10.1 Warrant Agreement With American Securities Transfer, Inc.**
24.1 Consent of Cohen Brame & Smith Professional Corporation
(Included in Exhibit 5.0).
24.2 Consent of Arthur Andersen LLP*
_________________
* Filed herewith.
** Previously filed.
Item 17. Undertakings
(a) 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 a Prospectus required by
Section 10(a)(3) of the Securities Act of 1933.
(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 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.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered
which remain unsold at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions in
Item 15 hereof, 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 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 of
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication
of such issue.
SIGNATURES
In accordance with 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 this Form S-2
Registration Statement and authorizes this Registration Statement to be
signed on its behalf by the undersigned, at Broussard, Louisiana, on the
30th day of December, 1997.
DELTA-OMEGA TECHNOLOGIES, INC.
By:/s/ James V. Janes, III,
____________________________
James V. Janes, III, President
POWER OF ATTORNEY
Each person whose individual signature appears below hereby
constitutes and appoints James V. Janes, III as his true and lawful
attorney-in-fact with full power of substitution to execute in the name
and on behalf of such person, individually and in each capacity stated
below, and to file, any and all amendments to this Registration
Statement, including any and all post-effective amendments.
In accordance with the requirements of the Securities Act of 1933,
as amended, this Registration Statement was signed by the following
persons in the capacities and on the dates indicated.
Signature Title Date
/s/J. V. Janes, III, Attorney-In-Fact
________________
L. G. Schafran Chairman of the Board December 30, 1997
/s/J.V. Janes, III, Attorney-In-Fact
________________
James V. Janes, III Director and President December 30, 1997
/s/J.V. Janes, III, Attorney-In-Fact
________________
Donald P. Carlin Director December 30, 1997
/s/ J.V. Janes, III, Attorney-In-Fact
________________
Richard A. Brown Director December 30, 1997
/s/J.V. Janes, III, Attorney-In-Fact
________________
David H. Peipers Director December 30, 1997
/s/J.V. Janes, III Attorney-In-Fact
________________
Marian A. Bourque Chief Financial December 30, 1997
Officer (Principal Accounting
Officer), Secretary
and Treasurer
======================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
DELTA-OMEGA TECHNOLOGIES, INC.
_______________________
EXHIBITS
TO
FORM S-2
Post Effective Amendment No. 1
Registration Statement
Under
The Securities Act of 1933
======================================================================
INDEX TO EXHIBITS
Exhibit Number in Sequentially
Form S-2 Description Numbered Page
______________ ______________ ________________
4.1 Form of Common Stock *
Purchase Warrants
5.0 Opinion of Cohen Brame &
Smith Professional
Corporation regarding
the legality of the securities
being registered
(including Consent)
10.1 Warrant Agreement With *
American Securities
Transfer, Inc.
24.2 Consent of Arthur Andersen LLP
*Previously filed
EXHIBIT NOS. 5.0 AND 24.1
OPINION OF COHEN BRAME & SMITH PROFESSIONAL CORPORATION
Delta Omega
S-2
Exhibit 5.0 and 24.1 - CBS Opinion
January ,1998
Delta-Omega Technologies, Inc.
7608 West Highway 90
New Iberia, Louisiana 70560
Re: Registration Statement on Form S-2
Gentlemen:
Delta-Omega Technologies, Inc., a Colorado corporation (the
"Company"), is registering for sale by selling shareholders up to
8,085,587 shares of its common stock represented by up to 2,471,667
shares of common stock underlying conversion rights associated with
currently outstanding Series C Convertible Preferred Stock; 2,471,667
shares of common stock underlying currently outstanding Class Z
Warrants; 138,636 shares of common stock currently outstanding with
registration rights; 1,590,700 shares of common stock underlying
conversion rights associated with currently outstanding Series B
Convertible Preferred Stock; 1,062,917 shares of common stock underlying
currently outstanding Class E warrants; 200,000 shares of common stock
underlying currently outstanding Placement Agent Warrants; and, 150,000
shares of common stock underlying currently outstanding Options. Each
share that is being offered and that underlies the Series C Convertible
Preferred Stock, the Class Z Warrants, the Series B Convertible
Preferred Stock, the Class E Warrants, the Placement Agent Warrants and
the Options is the $0.001 par value common stock of the Company, which
has been authorized for issuance in the Company's Articles of
Incorporation (the "Shares"). The common shares underlying the
conversion rights, the warrants referenced herein, the options
referenced herein and the already outstanding common stock shall be
hereinafter collectively called the "Selling Shareholder Shares."
It is proposed that the Selling Shareholder Shares be
registered pursuant to a post effective Amendment to Registration
Statement on Form S-2, File No. 333-20590 (the "Registration
Statement"), under the Securities Act of 1933, as amended (the "Act"),
and filed with the Securities and Exchange Commission (the "Commission")
on December _____, 1997.
In rendering the following opinion, we have examined and
relied only upon the documents and the reports (verbal and written) as
we deemed necessary in rendering the opinion, including the Articles of
Incorporation of the Company and amendments thereto, the Bylaws of the
Company as amended, and authorizing Minutes of the Company.
We have not undertaken, nor do we intend to undertake, any
independent investigation beyond such documents and records, or to
verify the adequacy or accuracy of such documents and records.
Additionally, we have consulted with Officers and Directors of the
Company, and have obtained such statements and representations with
respect to matters of fact as we considered necessary or appropriate in
the circumstances to render the opinions contained herein. We have not
independently verified the content of the factual statements made to us
in connection therewith, nor the veracity of such representations, nor
do we intend to do so.
Based upon and subject to the foregoing, it is our opinion
that:
(i) The Selling Shareholder Shares to be offered and/or
sold, subject to effectiveness of the Post Effective Amendment
to the Registration Statement ("Registration Statement")and
compliance with applicable blue sky laws, when issued and
delivered against payment therefor in accordance with the terms
of the Registration Statement, will constitute legally issued,
fully paid and nonassessable shares of Common Stock of the
Company.
(ii) The Selling Shareholder Shares to be offered as part of
the Registration Statement have been duly authorized, and, when
duly executed by the Company and authenticated by the Warrant
Agent/Transfer Agent the effectiveness of the Registration
Statement, and compliance with applicable blue sky laws, when
issued and delivered in accordance with in the Registration
Statement, will have been legally issued and will constitute
valid and binding obligations of the Company in accordance with
their terms, subject to:
(a) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general application
(including, without limitation, general principles of
equity, whether considered in a proceeding in equity or at
law), now or hereafter in effect relating to creditors'
rights and claims generally, and/or general laws generally
affecting or relating to the enforcement of creditors'
rights, including, but not limited to Section 547 of the
Federal Bankruptcy Reform Act of 1978; and
(b) the remedy of specific performance and injunctive and
other forms of equitable relief which are subject to
equitable defenses, and to the discretion of the court
before which any proceeding therefore may be brought.
We hereby consent to the filing of this opinion as an exhibit
to the Registration Statement; to the filing of this opinion in
connection with such filings of applications as may be necessary to
register, qualify or establish eligibility for an exemption from
registration or qualification of the securities under the blue sky laws
of any state or. other jurisdiction; and to the reference to this firm
in the Prospectus under the heading "Legal Matters." In giving this
consent, we do not admit that we are in the category of persons whose
consent is required under Section 7 of the Act or the rules and
regulations of the Commission promulgated thereunder.
The opinions set forth herein are based upon the federal laws
of the United States of America, and the laws of the State of Colorado,
all as now in effect. We express no opinion as to whether the laws of
any particular jurisdiction apply, and no opinion to the extent that the
laws of any jurisdiction other than those identified above are
applicable to the subject matter hereof.
The information set forth herein is as of the date of this
letter. We disclaim any undertaking to advise you of changes which may
be brought to our attention after the effective date of the Registration
Statement.
Very sincerely,
/s/ Cohen Brame & Smith
COHEN BRAME & SMITH
Professional Corporation
EXHIBIT NO. 24.2
CONSENT OF ARTHUR ANDERSEN L.L.P.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report
dated October 3,1997 included in Delta-Omega Technology, Inc.'s
Form 10-KSB for the year ended August 31, 1997 and to all references to
our Firm included in this registration statement.
Arthur Anderson LLP
New Orleans, Louisiana
December 29,1997
