As filed with the Securities and Exchange Commission on
January 21, 1997
SEC Registration No.
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
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 or Other Juris- (Primary Standard (IRS Employer
diction of Incorporation) Industrial Classi- Identification
fication Code Number) 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]
Title of each Class of Common Stock, $0.001 par value (2)
Securities being Registered
Amount being 2,471,667 Shs.
Registered
Proposed $ .75
Maximum Offering
Price Per Share(1)
Proposed Maximum $1,853,750
Aggregate Offering
Price
Amount of $ 561.75
Registration Fee
Title of each Class of Common Stock, $0.001 par value (3)
Securities being Registered
Amount being 2,471,667 Shs.
Registered
Proposed $ .75
Maximum Offering
Price Per Share(1)
Proposed Maximum $1,853,750
Aggregate Offering
Price
Amount of $ 561.75
Registration Fee
Title of each Class of Common Stock, $0.001 par value
Securities being Registered
Amount being 79,340 Shs.
Registered
Proposed $ .75
Maximum Offering
Price Per Share(1)
Proposed Maximum $ 59,505
Aggregate Offering
Price
Amount of $ 18.04
Registration Fee
TOTAL . . . . . .
Proposed Maximum $3,707,005
Aggregate Offering
Price
Amount of $ 1,141.54
Registration Fee
(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.
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.
PROSPECTUS
Common Stock
DELTA-OMEGA TECHNOLOGIES, INC.
5,022,674 Shares offered by Selling Shareholders
Certain Selling Shareholders are offering, pursuant to this
Prospectus, up to 5,022,674 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 their Series C Convertible
Preferred Stock and Class Z Warrants purchased by them as Units
in the Company's private placement which closed on August 31,
1996. 79,340 shares are being offered by three common
shareholders. 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) 79,340 shares of common stock currently outstanding.
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
January 3, 1997, the last sale price of the Company's common
stock was $.63.
The date of this Prospectus is January 21, 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, 1996.
(2) The Company's Quarterly Report on Form 10-QSB for the period
ending November 30, 1996.
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, 1996,
and the Quarterly Report on Form 10-QSB for the quarter ended
November 30, 1996, both 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
This Prospectus and the 10KSB for the year ended August 31,
1996 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 addresses activities, events or
developments that the Company expects, believes or anticipates
will or may occur in the future, including such matters as future
product development, business development marketing arrangements,
future revenue from contracts, business strategies, 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.
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 . . . . . . . . 5,022,674 (1)
Terms of Class Z
Warrants . . . . . .. . . . . . . . Exercisable for $.75 per
share until June 30, 2001
with rights of
oversubscription
Securities Outstanding(2)(3) . . . . 12,745,320 Common Shares
1,610,000 Series B
Preferred Shares
2,471,667 Series C
Preferred Shares
1,062,917 Class E
Warrants
2,471,667 Class Z
Warrants
1,952,007 Options
600,000 Warrants
Nasdaq (Bulletin Board)
Symbol. . . . . . . . . . . . . . . Common Stock: DOTK
Use of Proceeds . . . . . . . . . . Any net proceeds that the
Company may realize upon
the exercise of the Class
Z Warrants 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 C Convertible Preferred Shares and
Class Z Warrants.
(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.")
(3) There is an effective registration statement covering the
resale of the common shares underlying the conversion of the
Series B Preferred Shares, the Class E Warrants and 150,000
Options.
RISK FACTORS
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 and until very recently, has generated only
minimal revenues from sales of its products and services. The
ability of the Company to continue its operations is therefor
dependent on its ability to support operations until such time as
the Company becomes profitable. The Company believes that it has
adequate cash reserves to finance its operations at least through
fiscal 1997. Ultimately, the ability of the Company to succeed
is, accordingly, dependent in a large part upon the development
of its markets and acceptance of its products, technology and
services, and to overcome the numerous difficulties, expenses and
delays typically associated with a company developing new
technologies. Therefor, 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
EFFFTM/Haz-CleanTM and DOT 111/113TM, 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. Applications for trademarks and
trade names are also in progress. However, no assurance can be
given that other entities will not be able to compete with the
Company using similar formulations or processing techniques. 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 President,
James V. Janes, III. The Company has not entered into an
employment agreement with Mr. Janes and the loss of his services
would 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 new
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
During the fourth quarter of fiscal 1996, the Company closed a
private offering of Series C Preferred Stock solely to accredited
investors and raised approximately $1.8 million. All $165,000
borrowed from three of its directors during the second quarter of
fiscal 1996 was substantially converted to units of the private
offering. The offering was closed on August 31, 1996.
Management believes, although no assurances can be made, that the
funds raised in the offering will allow the Company to maintain
its current level of operations for at least twelve months.
Government Contract for DOT 111/ 113TM
On May 17, 1996, the Company announced the award of its first
major contract to supply the United States Air Force with DOT
111/113TM to be utilized for cleaning military aircraft and
aerospace ground equipment. The one-year contract provides for
an optional two-year extension and has the potential to generate
approximately $600,000 annually. During the first quarter of
fiscal 1997, average monthly sales of $45,000 to $50,000 were
generated from this contract.
Soil Remediation Contract for HazCleanTMSR
One of the Company's soil remediation products and a portion of
its soil remediation unit were included as integral parts of a
bid to remediate jet fuel contaminated soil. The contract was
awarded by a major aviation company to Worldwide Remediation,
Inc. ("WRI") of Houston, Texas. The Company, as a subcontractor
to WRI, is furnishing HazCleanTMSR for use as the pre-treatment
agent and will be the active cleaning compound in the soil
washing operation of the project.
Mud Recycling Process
The Company has successfully demonstrated a new technology for
recovering barite and oil from spent drilling muds. This unique
technology has commercial potential for the oil and gas
exploration business. The Company has entered into a Cooperation
Agreement with the SWACO Division of M-I Drilling Fluids L.L.C.
to optimize process parameters and equipment system for its
proprietary process. No estimate of revenues are possible in
this early stage of development because the results of this
technology have to be commercially explored. A full scale
on-site demonstration is scheduled in January 1997.
USE OF PROCEEDS
Any net proceeds that the Company may realize upon the exercise
of the Class Z Warrants 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:
Period from
Name Age Position Which Served
L. G. Schafran 57 Chairman of the 01/96
Board
James V. Janes, III 48 President, CEO and 10/89
Director
Donald P. Carlin 37 Director 10/90
Richard A. Brown 48 Director 10/90
David H. Peipers 39 Director 01/96
Marian A. Bourque 35 Chief Financial 04/96
and Accounting
Officer, Secretary
and Treasurer
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 is currently 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 December 30, 1996, 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.
Amount of
Beneficial Ownership(1)
Common and Options
Name and Address of Preferred and % of
Beneficial Owner Stock Warrants Total Class(2)
L.G. Schafran(3) --- 600,000 600,000 3.44%
54 Riverside Drive #14B
New York, NY 10024
Donald P. Carlin(4) 1,111,127 137,000 1,248,127 7.36%
P.O. Box 51808
Lafayette, La. 70505
Richard A. Brown (5) 629,872 - 0 - 629,872 3.74%
P.O. Box 8706
Longboat Key, FL 34228
James V. Janes, III (6) 201,038 211,500 412,538 2.42%
231 Dr. Charlie Drive
Opelousas, La. 70570
David H. Peipers (7) 1,727,450 130,000 1,857,450 10.95%
610 Tenth Avenue
Suite 605
New York, NY 10020
Moores Pump &
Supply, Inc.(8) 748,617 -0- 748,617 4.45%
P.O. Box 51808
Lafayette, LA 70505
Vernon Taylor, Jr. (9) 1,950,955 165,000 2,115,955 12.45%
1670 Denver
Club Building
Denver, CO 80202
The Winsome Limited 1,596,047 130,000 1,726,047 10.18%
Partnership (10)
F/K/A Crossroads
Limited Partnership
610 Tenth Avenue
Suite 605
New York, NY 10020
GAMI Investments,
Inc. (11) 933,333 933,333 1,866,666 10.51%
Two North Riverside
Plaza, Suite 1100
Chicago, IL 60606
Marian A. Bourque -0- -0- -0- 0%
P.O. Box 81518
Lafayette, LA 70598
All Directors and
Officers as a Group
(Six Persons)(12) 3,669,487 1,078,500 4,747,987 26.52%
(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 December 30, 1996, there were 12,745,320 shares of
common stock, 1,610,000 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 16,826,987 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 136,562 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 155,696 shares of common stock and options
to purchase 137,000 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, 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 23,814
shares 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 a
beneficial owner of 748,617 shares of common stock held by
Moores Pump & Supply, Inc., of which Mr. Carlin is a
principal shareholder. 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 and 11,666 shares of common stock held by Quando
Partnership, of which Mr. Brown has a 1/6 partnership
interest. Mr. Brown also beneficially owns warrants to
purchase 124,472 shares of common stock at an exercise price
of $1.50 per share (6,670 of which are held in a custodial
account for his son), 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.
(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 also owns options to
purchase 10,000 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.
(7) Mr. Peipers owns 131,403 shares of common stock. Mr.
Peipers could be considered a beneficial owner of 1,408,368
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 7,679
common shares and 50,000 shares of preferred stock held by
Cornerhouse Limited Partnership, an affiliate of The Winsome
Limited Partnership.
(8) Moores Pump & Supply, Inc. is an entity for which Donald P.
Carlin is a principal shareholder and director. Moores owns
748,617 shares of common stock.
(9) Mr. Taylor owns 507,054 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 59,901 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 and warrants to purchase 65,000 shares of
common stock held by the Sara Taylor Swift Revocable Trust,
since Mr. Taylor is a trustee of both.
(10) 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
1,408,368 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 7,679 shares of common
stock and 50,000 shares of preferred stock held by
Cornerhouse Limited Partnership, an affiliate of The Winsome
Limited Partnership. The Winsome Limited Partnership also
owns warrants to purchase 20,000 shares of common stock at
an exercise price of $1.50 per share, but these have been
excluded from the calculation of its beneficial ownership
due to the material difference between the exercise price
and the current trading price of the common stock.
(11) GAMI Investments, Inc., a Delaware corporation, owns 933,333
shares of preferred stock and warrants to purchase 933,333
shares of common stock.
(12) The Directors and Officers as a group (six persons)
beneficially own 3,464,487 shares of common stock, 205,000
shares of preferred stock, warrants to purchase 130,000
shares of common stock and stock options to purchase
948,500 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 December 31, 1996, (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 Warrants to common stock.
(a) Shareholder Shares Underlying Series C
Preferred Stock and Class Z Warrants
Number Number
of of
Common Common Number
Shares Shares of Percent
Benefi- Covered Shares of Class
Selling cially By This Owned After If Over
Shareholders Owned Prospectus Offering 1%
Mark Lobel 50,000 50,000 - 0 -
George Kyrkostas 50,000 50,000 - 0 -
Stanley Lobel 309,578 250,000 59,578
Legg Mason Wood 250,000 250,000 - 0 -
Walker C/F Stanley
Lobel IRA Rollover
Winsome Limited 1,593,708 260,000 1,333,708 10.26%
Partnership
f/k/a Crossroads
Limited Partnership
Alfred T. 200,000 200,000 - 0 -
Copeland, Jr.
Lynn Hecht 349,896 213,334 136,562 1.07%
Schafran
Vernon Taylor, 374,455 200,000 174,455
Jr.
Sara Taylor 180,000 130,000 50,000 1.35%
Swift Revocable
Trust dtd
12/20/51 Vernon
Taylor, Jr. TTEE
Marc A. Utay 152,534 152,534 - 0 -
Utay Family 274,134 274,134 - 0 -
Group, LLC*
Edward A. Weihman 93,332 93,332 - 0 -
Joseph Stein, Jr. 66,666 66,666 - 0 -
Gaini Investment, 1,866,666 1,866,666 - 0 -
Inc.
Dakota Capital 133,334 133,334 - 0 -
Partners, LLC
Muriel Siebert 100,000 100,000 - 0 -
F.B. Baer 13,334 13,334 - 0 -
Robert A. Naify 200,000 200,000 - 0 -
Shelter Rock 50,000 50,000 - 0 -
Resources Profit
Sharing Plan Andrew
Carduner & Wendy Carduner,
TTEEs
Lawrence Groo 100,000 100,000 - 0 -
Will K. Weinstein 100,000 100,000 - 0 -
Revocable Trust
Will K. Weinstein,
TTEE
Balestra Capital 172,730 150,000 22,730
Partners
Baer & Co., LLC 314,937 40,000 274,937 2.16%
(b) Selling Shareholders Shares Underlying Class E Warrants
Number Number
of of
Common Common Number
Shares Shares of Percent
Benefi- Covered Shares of Class
Selling cially By This Owned After If Over
Shareholders Owned Prospectus Offering 1%
Baer and 40,340 40,340 - 0 -
Company LLC
Lawrence Groo 67,970 25,000 42,970
Thomas Murphy 10,000 10,000 - 0 -
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,
have been further advised that pursuant to Securities Exchange
Act Release 34-23611 (September 11, 1986), 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 Directors.
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 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 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.
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 reports.
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
_______________________
January 21, 1996
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.
Total
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
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.
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 21st day of
January, 1997.
DELTA-OMEGA TECHNOLOGIES, INC.
By: /s/ 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/ L.G. Schafran Chairman of the Board January 21, 1997
/s/ James V. Janes Director and President January 21, 1997
/s/ Donald P. Carlin Director January 21, 1997
/s/ Richard A. Brown Director January 21, 1997
/s/ David H. Peipers Director January 21, 1997
/s/ Marian A. Bourque Chief Financial Officer January 21, 1997
(Principal Accounting
Officer), Secretary
and Treasurer
File No. 33-________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
DELTA-OMEGA TECHNOLOGIES, INC.
_______________________
EXHIBITS
TO
FORM S-2
Registration Statement
Under
The Securities Act of 1933
INDEX TO EXHIBITS
Sequentially
Exhibit Number in Numbered
Form S-2 Description 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
EXHIBIT NO. 4.1
FORM OF COMMON STOCK PURCHASE WARRANTS
EXHIBIT NOS. 5.0 AND 24.1
OPINION OF COHEN BRAME & SMITH PROFESSIONAL CORPORATION
EXHIBIT NO. 10.1
WARRANT AGREEMENT WITH AMERICAN SECURITIES TRANSFER, INC.
EXHIBIT NO. 24.2
CONSENT OF ARTHUR ANDERSEN L.L.P.
CLASS Z
WARRANT FOR COMMON STOCK
DELTA-OMEGA TECHNOLOGIES, INC.
NUMBER WARRANTS
This is to certify that, for value received and subject to the
terms and conditions herein set forth, (name of holder) or
registered assigned (the "Warrant Holder"), is entitled to
purchase, pursuant to the Warrant, commencing July 1, 1996 and
ending at 5:00 P.M., Eastern Time, June 30, 2001, unless called,
at the price of $.75 per share, as adjusted from time to time as
herein set forth (the "Purchase Price"), shares of Common Stock,
par value $0.001 per share (the "Common Stock"), of Delta-Omega
Technologies, Inc. (the "Company"), a Colorado corporation (such
shares of Common Stock purchasable upon exercise of the Warrant
are herein called the "Warrant Stock"). Notwithstanding
anything contained herein to the contrary, this Warrant may not
be exercised unless a Registration Statement covering the Warrant
Stock is in effect with the Securities and Exchange Commission.
1. Term of Warrant. This Warrant may be exercised in whole at
any time commencing July 1, 1996 and ending at 5:00 p.m., Eastern
Time, on June 30, 2001, unless extended at the sole discretion of
the Board of Directors, or called pursuant to the call provision
(the "Expiration Date").
2. Call Provisions. The Warrant may be called after July 1,
2000 and at any time, notwithstanding the date, that the Common
Stock of the Company has a closing bid price on whatever market
it is traded on of $2.00 per share or more on 10 consecutive
trading days during the Term of Warrant after first giving the
Warrant Holders notice in writing. If called, the Warrant
Holders shall have 30 days from the date of the notice to
exercise the Warrants or they shall expire.
3. Oversubscription Rights. The Company will issue to those
persons who exercise a Class Z Warrant (an "Eligible
Warrantholder"), a Right to subscribe for the purchase of any
shares underlying the Class Z Warrants that remain unexercised on
the Expiration Date (collectively, the "Additional Shares"), at
$.75 per Additional Share (the "Right"). An Eligible
Warrantholder who holds Rights (a "Rights Holder"), will be
entitled to subscribe for a number of Additional Shares without
limitation subject to availability and to allotment as described
below.
After 5:00 P.M. Eastern Time, on the Expiration Date, any
Additional Shares available for purchase will be allotted pro
rata as nearly as practicable to the Rights Holders based upon
the ratio of the number of Additional Shares subscribed for by
each person to the total number of Additional Shares subscribed
for by all Rights Holders. Any determination by the Company in
respect to allotments will be final and conclusive. To the extent
that Additional Shares are not filled, payments received by the
Company with respect thereto will be refunded without interest.
4. Adjustment for Change in Capitalization. The number of
shares purchasable upon exercise of this Warrant is subject to
adjustment if the Company shall, prior to exercise of any
Warrants, effect one or more stock splits, stock dividends, or
other increases or reductions of the number of shares of its
Common Stock outstanding without receiving compensations
therefore in money, services or property or upon the occurrence
of certain other events.
5. Reservation of Common Stock. The Company agrees that the
number of shares of Common Stock sufficient to provide for the
exercise of the Warrant upon the basis herein set forth will at
all time during the term of this Warrant be reserved for the
exercise thereof.
6. Manner of Exercise. Exercise may be made of all or any part
of the Warrant by surrendering it, with the Subscription Form
provided for herein duly executed by the Warrant Holder or by the
Warrant Holder's duly authorized attorney, plus payment of the
Purchase Price, in cash, or by wire transfer of funds, or by bank
check, or by certified check, either at the office of the
Company's Warrant Agent, American Securities Transfer, Inc., 938
Quail Street, Suite 101, Lakewood, Colorado 80215, or by mailing
to the Warrant Agent, American Securities Transfer, Inc., P.O.
Box 1596, Denver, Colorado 80201-1596, or at such other office or
agency as the company may designate.
7. Issuance of Common Stock Upon Exercise. The Company, at its
expense, shall cause to be issued, within ten days after exercise
of this Warrant, a certificate or certificates in the name
requested by the Warrant Holder of the number of shares of Common
Stock (or other securities or property or combination thereof) to
which the Warrant Holder is entitled upon such exercise. All
shares of Common Stock or other securities delivered upon the
exercise of the Warrant shall be validly issued, fully paid and
non-assessable. Irrespective of the date of issuance and delivery
of a certificate or certificates for any shares of Common Stock
or other securities or property or combination thereof issuable
upon the exercise of this Warrant, each person (including a
corporation) in whose name any such certificate or certificates
is to be issued will for all purposes be deemed to have become
the holder of record of the Common Stock, the securities, and/or
property represented thereby on the date on which a duly executed
notice of exercise of this Warrant and payment for the number of
shares of Warrant Stock as to which this Warrant Holder has
exercised are delivered to the Company as provided for above.
8. No Right as Stockholder. The Warrant Holder is not, by
virtue of ownership of the Warrant, entitled to any rights
whatsoever of a stockholder of the Company.
9. Assignment. This Warrant is freely assignable by the Warrant
Holder hereof upon presenting the Transfer Agent with evidence of
an exemption from registration.
IN WITNESS WHEREOF, the Company has caused this Warrant
certificate to be signed by its President and by its Secretary,
each by a facsimile of his signature, and has caused a facsimile
of its corporate seal to be imprinted hereon.
Dated:
[SEAL]
/s/ James V. Janes III
James V. Janes, III, President
/s/ Marian A. Bourque
Marian A. Bourque, Secretary
Countersigned:
American Securities Transfer, Inc.
P.O. Box 1596
Denver, Colorado, 80201
By /s/ American Securities Transfer, Inc.
[REVERSE OF WARRANT]
DELTA-OMEGA TECHNOLOGIES, INC.
TRANSFER FEE $10.00 PER CERTIFICATE
STATEMENT OF OTHER TERMS OF WARRANT
1. Notwithstanding that the number of Shares purchasable upon
the exercise of a Warrant may have been adjusted pursuant to the
terms of the Warrant Agreement, the Company shall nonetheless not
be required to issue fractional Shares upon exercise of a Warrant
or to distribute Share Certificates that evidence fractional
shares. In lieu of fractional shares there shall be returned to
the exercising registered holder of a Warrant upon such exercise
an amount in cash, in United States dollars, equal to the amount
in excess of that required to purchase the largest number of full
Shares.
2. If any Shares issuable upon the exercise of this Warrant
require registration or approval of any governmental authority,
including, without limitation, the filing of necessary
registration statements or amendments or supplements thereto
under the Securities Act of 1933, as amended, or the taking of
any action under the laws of the United States of America or any
political subdivision thereof before such Shares may be validly
issued, then the Company covenants that it will in good faith and
as expeditiously as possible endeavor to secure such registration
or approval or to take such other action as the case may be;
PROVIDED, HOWEVER, there is no assurance such registration or
approval can be obtained, and in no event shall such Shares be
issued and the Company is hereby authorized to suspend the
exercise of all Warrants, for the period during which it is
endeavoring to obtain such registration or approval or to take
such other action.
3. This Warrant Certificate may be exchanged and is
transferable at the corporate trust department of the Warrant
Agent in Denver, Colorado, by the registered holder hereof or by
his duly authorized representative or attorney , upon surrender
of the Warrant Certificate duly endorsed or accompanied (if so
required by the Company or the Warrant Agent) by a written
instrument, or instruments, of transfer satisfactory to the
Company or the Warrant Agent. If the right to purchase less than
all of the Shares covered hereby shall be so transferred, the
registered holder hereof shall be entitled to receive a new
Warrant Certificate or Warrant Certificates covering in the
aggregate the remaining whole number of Shares.
4. No Warrant Holder, as such, shall be entitled to vote or
receive dividends or be deemed the holder of Shares for any
purpose, nor shall anything contained in this Warrant Certificate
be construed to confer upon any Warrant Holder, as such, any of
the rights of a shareholder of the Company or any right to vote,
give or withhold consent to any action by the Company (whether
upon any recapitalization, issue of stock, reclassification of
stock, consolidation, merger, conveyance or otherwise), receive
notice of meetings or other action affecting shareholders (except
as provided in the Warrant Agreement), receive dividends or
subscription rights, or otherwise, until this Warrant shall have
been exercised and the Shares purchasable upon the exercise
hereof shall have been deliverable as provided in the Warrant
Agreement.
5. The Company and the Warrant Agent may deem and treat the
registered holder hereof as the absolute owner of this Warrant
Certificate (notwithstanding any notations of ownership or
writing hereon made by any one other than the Company or the
Warrant Agent) for all purposes and shall not be affected by any
notice to the contrary.
6. This Warrant shall be binding upon any successor or assigns
of the Company.
SUBSCRIPTION FORM
(To Be Executed By the Warrant Holder if He Desires to Exercise
the Warrant in
Whole or in Part)
To: DELTA-OMEGA TECHNOLOGIES, INC.
c/o American Securities Transfer, Inc.
P.O. Box 1596
Denver, Colorado 80201-1596
The undersigned _______________________________________ hereby
irrevocably elects to exercise the right of purchase represented
by the within Warrant Certificate for, and to purchase
thereunder, ___ Shares provided for therein and tender payment
herewith to the order of DELTA-OMEGA TECHNOLOGIES, INC., in the
amount of $ . The undersigned requests that certificates
for such Shares be issued as follows:
Name(s):
Address:
Soc. Sec. No. or other I.D. No., if any
Deliver to:
Address:
and, if said number of Shares shall not be all the Shares
purchasable hereunder, that a new Warrant Certificate for the
balance remaining of the shares purchasable under the Warrant
Certificate be registered in the name of, and delivered to, the
undersigned at the address stated above.
This exercise was solicited by and is being effected through
_______________________________, a registered securities
broker-dealer who is a member of the National Association of
Securities Dealers, Inc. If not applicable, write in "N/A".
Date:________________________, 19______.
Signature:X_____________________________________________________
Signature:X_____________________________________________________
Signature(s) Guaranteed: Notice: The signature(s) of this
subscription must correspond with the name(s) as written upon the
face of the Warrant Certificate in every particular, without
alteration or enlargement or any change whatever.
By:______________________________________________________
ASSIGNMENT FORM
(To Be Signed Only Upon Assignment)
For Value Received, the undersigned hereby sells, assigns and
transfers unto
_________________________________________________________________
_________________________________________________________________
_________________________________________________________________
Warrants evidenced by the within Warrant Certificate and appoints
______________to transfer said Warrant Certificate and Warrants
on the books of DELTA-OMEGA TECHNOLOGIES, INC., with the full
power of substitution in the premises.
Date:________________________, 19______.
Signature:X_____________________________________________________
Signature:X_____________________________________________________
Signature(s) Guaranteed: Notice: The signature(s) of this
assignment must correspond with the name(s) as written upon the
face of the Warrant Certificate in every particular, without
alteration or enlargement or any change whatever.
By:
The signature(s) should be guaranteed by an eligible guarantor
institution, (Banks, Stockbrokers, Savings and Loan Associations
and Credit Unions with membership in an approved signature
guarantee Medallion Program), pursuant to S.E.C. Rule 17Ad-15.
January 21, 1997
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
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; and 79,340 shares of common
stock currently outstanding. Each share that is being offered and
that underlies the Series C Convertible Preferred Stock, the Class
Z Warrants 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 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 Registration Statement on Form S-2, File
No. 333___________ (the "Registration Statement"), under the
Securities Act of 1933, as amended (the "Act"), and filed with the
Securities and Exchange Commission (the "Commission") on January
21, 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 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 in accordance with the terms of
the Warrant Agreement and, subject to due execution of the
Warrant Agreement by the Company and the Warrant Agent, the
effectiveness of the Registration Statement, and compliance
with applicable blue sky laws, when issued and delivered in
accordance with the Warrant Agreement and as set forth 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 Opinions." 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 Professional Corporation
Cohen Brame & Smith Professional Corporation
WARRANT AGREEMENT
BETWEEN
DELTA-OMEGA TECHNOLOGIES, INC.
AND
AMERICAN SECURITIES TRANSFER, INC.
Warrant Agent
July 15, 1996
THIS AGREEMENT (the "Agreement") is dated as of July 15,
1996, between Delta-Omega Technologies, Inc., a Colorado
corporation (the "Company"), and American Securities Transfer,
Inc., Denver, Colorado (the "Warrant Agent").
WHEREAS, the Company desires to provide an opportunity to
certain Warrantholders to acquire the common shares underlying up
to 2,000,000 Class "Z" Common Stock Purchase Warrants, each
Warrant entitling the holder thereof to purchase one share of
common stock; and
WHEREAS, the Company desires to provide for issuance of
warrant certificates (the "Warrant Certificates") representing up
to 2,000,000 Class "Z" Common Stock Purchase Warrants; and
WHEREAS, the Company desires the Warrant Agent to act on
behalf of the Company, and the Warrant Agent is willing to so
act, in connection with the issuance, registration, transfer and
exchange of Warrant Certificates and exercise of the Warrants.
NOW THEREFORE, in consideration of the promises and the
mutual agreements hereinafter set forth, it is agreed that:
1. Warrants/Warrant Certificates. Each Warrant shall
entitle the holder (the "Registered Holder" or, in the aggregate,
the "Registered Holders") in whose name the Warrant Certificate
shall be registered on the books maintained by the Warrant Agent
to purchase one share of common stock of the Company on exercise
thereof, subject to modification and adjustment as provided in
Section 8. Warrant Certificates representing the right to
purchase Warrant Shares shall be executed by the Company's
President, attested to by the Company's Secretary, and delivered
to the Warrant Agent upon execution of this Agreement.
Subject to the provisions of Sections 3, 5, and 6, the
Warrant Agent shall deliver Warrant Certificates, in required
whole number denominations, to Registered Holders in connection
with any transfer or exchange permitted under this Agreement.
Except as provided in Section 6 hereof, no Warrant Certificates
shall be issued except (i) Warrant Certificates initially issued
hereunder, (ii) Warrant Certificates issued on or after the
initial issuance date, upon the exercise of any Warrants, to
evidence the unexercised warrants held by the exercising
Registered holder, and (iii) Warrant Certificates issued after
the initial issuance date, upon any transfer or exchange of
Warrant Certificates, or replacements of lost or mutilated
Warrant Certificates.
2. Form and Execution of Warrant Certificates. The
Warrant Certificates shall be substantially in the form attached
as Exhibit A. The Warrant Certificates shall be dated as of the
date of their issuance, whether on initial issuance, transfer or
exchange, or in lieu of mutilated, lost, stolen or destroyed
Warrant Certificates.
Each such Warrant Certificate shall be numbered serially in
accordance with the common stock initially attached thereto with
the letter "WZ" appearing on each "Z" Warrant Certificate. The
Warrant Certificates may immediately be detached, and, in such
event, the Warrant Certificates may be issued by number preceded
by the letter "WZ" without regard to the number of the
certificate representing the common stock initially attached
thereto.
The Warrant Certificates shall be manually countersigned by
the Warrant Agent, and shall not be valid for any purpose unless
so countersigned. In the event any officer of the Company who
executed the Warrant Certificates shall cease to be an officer of
the Company before the date of issuance of the Warrant
Certificates, or before countersignature and delivery by the
Warrant Agent, such Warrant Certificates may be countersigned,
issued and delivered by the Warrant Agent with the same force and
effect as though the person who signed such Warrant Certificates
had not ceased to be an officer of the Company.
3. Exercise/Over Subscription Procedures. Subject to the
provisions of Sections 4 and 8, the Class Z Warrants, when
evidenced by a Warrant Certificate, may be exercised at a price
(the "Exercise Price") of $.75 per share of common stock, in
whole or in part, at any time during the period (the "Exercise
Period") commencing immediately, and terminating on June 30, 2001
(the "Expiration Date") unless extended by a majority vote of the
Company's Board of Directors, but such vote notwithstanding, in
no case shall the Exercise Period be extended beyond the
Expiration Date. The Company shall promptly notify the Warrant
Agent of any such extension of the Exercise Period. A Warrant
shall be deemed to have been exercised immediately prior to the
close of business on the date (the "Exercise Date") of the
surrender for exercise of the Warrant Certificate. The exercise
form shall be executed by the Registered Holder thereof, or his
attorney duly authorized in writing, and will be delivered
together with payment to the Warrant Agent, either by delivering
to its operations offices located at 938 Quail Street, Suite 101,
Lakewood, Colorado 80215, or by mailing to its post office box at
P.O. Box 1596, Denver, Colorado 80201-1596 (the "Operations
Office"), in cash, by wire transfer, or by official bank or
certified check, of an amount equal to the aggregate Exercise
Price, in lawful money of the United States of America.
Unless Warrant Shares may not be issued as provided herein,
the person entitled to receive the number of Warrant Shares
deliverable on such exercise shall be treated, for all purposes,
as the holder of such Warrant Shares as of the close of business
on the Exercise Date. Upon the receipt of any Warrant for
exercise, as set forth herein, the Warrant Agent shall promptly
verbally notify the Company, with confirmation in writing of such
fact, of the name and address of the exercising Registered
Holder, and of the number of Warrant Shares to be delivered upon
such exercise. In addition, the Warrant Agent shall also, at
such time, verify that all of the conditions precedent to the
issuance of the Warrant Shares set forth in Section 4 have been
satisfied as of the Exercise Date. If any one of the conditions
precedent set forth in Section 4 are not satisfied as of the
Exercise Date, the Warrant Agent shall request written
instructions from the Company as to whether to return the Warrant
and Exercise Price to the exercising Registered Holder, or to
hold the same until all such conditions have been satisfied. The
Company shall not be obligated to issue any fractional share
interests in Warrant Shares issuable or deliverable on the
exercise of any Warrant, or scrip or cash therefor, and such
fractional shares shall be of no value whatsoever. If more than
one Warrant shall be exercised at one time by the same Registered
Holder, the number of full Shares which shall be issuable on
exercise thereof shall be computed on the basis of the aggregate
number of full shares issuable on such exercise.
Within ten (10) days after the Exercise Date, pursuant to a
Stock Transfer Agreement dated _____________, 19___, between the
Company and the Warrant Agent, the Warrant Agent shall cause to
be issued and delivered to the person or persons entitled to
receive the same, a certificate or certificates for the number of
Warrant Shares deliverable on such exercise. No adjustment shall
be made in respect of cash dividends on Warrant Shares delivered
on exercise of any Warrant. The Warrant Agent shall promptly
notify the Company, in writing, of any exercise and of the number
of Warrant Shares delivered, and shall cause payment of an amount
in cash equal to the Exercise Price to be promptly made to the
order of the Company. The parties contemplate such payments will
be made by the Warrant Agent to the Company on a weekly basis and
will consist of collected funds only. The Warrant Agent shall
hold any proceeds collected, and not yet paid to the Company, in
a federally insured account at all times relevant hereto.
Simultaneously with the issuance of the Warrant Shares, upon
exercise of Class "Z" Common Stock Purchase Warrants, the
transfer agent shall deliver to the exercising Warrantholders
notice of his/her/its rights to acquire additional shares as part
of the Class "Z" Warrants over subscription rights. Should a
Class "Z" Registered Holder exercise the over subscription right,
the Warrant Agent shall accept the over subscription form, and
deposit the over subscription payment in escrow pending the
termination of the Class "Z" Warrant Exercise Period. Upon
termination of the Class "Z" Warrant offering, all over
subscriptions shall be filled to the extent that unexercised
Class "Z" Warrant Shares are available. Warrant Shares will be
issued to over subscribers, and escrowed funds delivered to the
Company. Should there be an excess of over subscriptions,
Warrant Shares shall be delivered pro rata to over subscribers
based on the number of shares subscribed for, and any unfilled
subscription price shall be refunded to the over subscribers
based on the number of subscribed for Warrant Shares that were
not delivered.
The Company may deem and treat the Registered Holder of the
Warrants, at any time, as the absolute owner thereof for all
purposes, and the Company shall not be affected by any notice to
the contrary. The Warrants shall not entitle the holder thereof
to any of the rights of shareholders, or to any dividend declared
on the common stock unless the holder shall have exercised the
Warrants and purchased the shares of common stock prior to the
record date fixed by the Board of Directors of the Company for
the determination of holders of common stock entitled to such
dividend or other right.
4. Reservation of Shares and Payment of Taxes. The
Company covenants that it will, at all times, reserve and have
available from its authorized common stock such number of shares
as shall then be issuable on the exercise of all outstanding
Warrants. The Company covenants that all Warrant Shares, which
shall be so issuable, shall be duly and validly issued, fully
paid and nonassessable, and free from all taxes, liens and
charges with respect to the issue thereof.
No Warrants may be exercised, nor may Warrant Shares be
issued by the Company's transfer agent or delivered by the
Warrant Agent unless on the Exercise Date the Warrant Shares may
legally be issued and delivered to the exercising Registered
Holder under the securities laws of the state in which such
Registered Holder resides. Warrant Shares shall be issued with
the normal Rule 144 restrictive legend unless a registration
statement relating to the underlying shares is in effect on the
Exercise Date. The Company agrees to provide the Warrant Agent
with copies of the registration statement (if any), or necessary
legal opinions to allow for the issuance of the Warrant Shares.
If any shares of common stock, to be reserved for the
purpose of exercise of Warrants hereunder, require any other
registration with or approval of any government authority under
any federal or state law before such shares may be validly issued
or delivered, then the Company covenants that it will secure such
registration or approval, as the case may be.
The Registered Holder shall pay all documentary, stamp or
similar taxes, and other government charges that may be imposed
with respect to the issuance of the Warrants, or the issuance,
transfer or delivery of any Warrant Shares on exercise of the
Warrants. In the event the Warrant Shares are to be delivered in
a name other than the name of the Registered Holder of the
Warrant Certificate, no such delivery shall be made unless the
person requesting the same has paid to the Warrant Agent the
amount of any such taxes or charges incident thereto.
In the event the Warrant Agent ceases to also serve as the
stock transfer agent for the Company, the Warrant Agent is
irrevocably authorized to requisition the Company's new transfer
agent from time to time for Certificates of Warrant Shares
required upon exercise of the Warrants, and the Company will
authorize such transfer agent to comply with all such
requisitions. The Company will file with the Warrant Agent a
statement setting forth the name and address of its new transfer
agent, for shares of common stock or other capital stock issuable
upon exercise of the Warrants, and of each successor transfer
agent.
5. Registration of Transfer. The Warrant Certificates may
be transferred in whole or in part. Warrant Certificates to be
exchanged shall be surrendered to the Warrant Agent at its
corporate office. The Company shall execute, and the Warrant
Agent shall countersign, issue and deliver in exchange therefor,
the Warrant Certificate or Certificates which the holder making
the transfer shall be entitled to receive.
The Warrant Agent shall keep transfer books at its corporate
office, which shall register Warrant Certificates and the
transfer thereof. On due presentment for registration of
transfer of any Warrant Certificate at such office, the Company
shall execute, and the Warrant Agent shall issue and deliver to
the transferee or transferees a new Warrant Certificate or
Certificates representing an equal aggregate number of Warrants.
All Warrant Certificates presented for registration of transfer
or exercise shall be duly endorsed, or be accompanied by a
written instrument or instruments, or transfer in form
satisfactory to the Warrant Agent. The established transfer fee
for any registration of transfer of Warrant Certificates shall be
paid by the Registered Holder or the person presenting the
Warrant Certificate for transfer. The Company may also require
payment of a sum sufficient to cover any tax or other government
charge that may be imposed in connection therewith.
All Warrant Certificates so surrendered, or surrendered for
exercise, or for exchange in case of mutilated Warrant
Certificates, shall be promptly cancelled by the Warrant Agent,
and thereafter retained by the Warrant Agent until termination of
the agency created by this Agreement. Prior to due presentment
for registration of transfer thereof, the Company and the Warrant
Agent may treat the Registered Holder of any Warrant Certificate
as the absolute owner thereof (notwithstanding any notations of
ownership or writing thereon made by anyone other than the
Company or the Warrant Agent) , and the parties hereto shall not
be affected by any notice to the contrary.
6. Loss or Mutilation. On receipt by the Company and the
Warrant Agent of evidence satisfactory as to the ownership of and
the loss, theft, destruction or mutilation of any Warrant
Certificate, the Company shall execute, and the Warrant Agent
shall countersign and deliver in lieu thereof, a new Warrant
Certificate representing an equal aggregate number of Warrants.
In the case of loss, theft or destruction of any Warrant
Certificate, the individual requesting reissuance of a new
Warrant Certificate shall be required to indemnify the Company
and Warrant Agent, and also to post an open-penalty insurance
bond. In the event a Warrant Certificate is mutilated, such
Certificate shall be surrendered and cancelled by the Warrant
Agent prior to delivery of a new Warrant Certificate. Applicants
for a new Warrant Certificate shall also comply with such other
regulations, and pay such other reasonable charges as the Company
may prescribe.
7. Call Option. 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, the Company shall have the right
and option, upon written notice to each Class "Z" Registered
Holder, to, at any time thereafter, call all of the Class "Z"
Warrants remaining outstanding and unexercised at the date fixed
for such call in such notice (the "Call Date") , which Call Date
shall be not less than 30 days after the date of such notice;
provided, however, that the Class "Z" Registered Holders shall in
any event have the right during the 30 day period immediately
following the date of such notice to exercise the Class "Z"
Warrants in accordance with the provisions of Section 3 hereof.
In the event any Class "Z" Warrants are exercised during such 30
day period, this call option shall be deemed not to have been
exercised by the Company as to the Class "Z" Warrants so
exercised by the holders thereof. Said notice of call shall
require each Class "Z" Registered Holder to surrender to the
Company, on the Call Date, at the corporate office of the Warrant
Agent (or its successor), his/her/its Certificate or Certificates
representing the Class "Z" Warrants to be called.
Notwithstanding the fact that any Class "Z" Warrants called have
not been surrendered for cancellation on the Call Date, after the
Call Date, such Class "Z" Warrants shall be deemed to be expired,
and all rights of the holders of such unsurrendered Class "Z"
Warrants shall cease and terminate. The Company shall notify the
Warrant Agent verbally, with confirmation in writing, of the call
of the Class "Z" Warrants and of the Call Date, and the Company
shall instruct the Warrant Agent accordingly as to the procedures
to be followed by the Warrant Agent in connection with the call
of the Class "Z" Warrants.
8. Adjustment of Exercise Price and Shares. The Exercise
Price shall be subject to adjustment as follows:
(a) In the event, prior to the expiration of the
Warrants by exercise or by their terms, the Company shall issue
any shares of its common stock as a share dividend, or shall
subdivide the number of outstanding shares of common stock into a
greater number of shares, then, in either of such events, the
Exercise Price per share of common stock purchasable pursuant to
the Warrants in effect at the time of such action shall be
reduced proportionately, and the number of shares purchasable
pursuant to the Warrants shall be increased proportionately.
Conversely, in the event the Company shall reduce the number of
shares of its outstanding common stock by combining such shares
into a smaller number of shares, then, in such event, the
Exercise Price per share purchasable, pursuant to the Warrants in
effect at the time of such action, shall be increased
proportionately, and the number of shares of common stock at that
time purchasable pursuant to the Warrants shall be decreased
proportionately. Any dividend paid or distributed on the common
stock in shares of any other class of the Company, or securities
convertible into shares of common stock shall be treated as a
dividend paid in common stock to the extent that shares of common
stock are issuable on the conversion thereof.
(b) In the event the Company, at any time while the
Warrants shall remain unexpired and unexercised, shall sell all
or substantially all of its property, or dissolves, liquidates or
winds up its affairs, prompt, proportionate, equitable, lawful
and adequate provision shall be made as part of the terms of any
such sale, dissolution, liquidation or winding up such that the
holder of a Warrant may thereafter receive, on exercise thereof,
in lieu of each share of common stock of the Company which he
would have been entitled to receive, the same kind and amount of
any share, securities, or assets as may be issuable,
distributable or payable on any such sale, dissolution,
liquidation or winding up with respect to each share of common
stock of the Company; provided, however, that in the event of any
such sale, dissolution, liquidation or winding up, the right to
exercise this Warrant shall terminate on a date fixed by the
Company, such date to be not earlier than 5:00 p.m., Mountain
Standard Time, on the 30th day next succeeding the date on which
notice of such termination or the right to exercise the Warrants
has been given by mail to the Registered Holders thereof at such
addresses as may appear on the books of the Company.
(c) Notwithstanding the provisions of this Section 7,
no adjustment on the Exercise Price shall be made whereby such
Price is adjusted in an amount less than $.02 or until the
aggregate of such adjustments shall equal or exceed $.05.
(d) In the event, prior to the expiration of the
Warrants by exercise or by their terms, the Company shall
determine to take a record of the holders of its Common Stock for
the purpose of determining shareholders entitled to receive any
share dividend or other right which will cause any change or
adjustment in the number, amount, price or nature of the share of
Common Stock or other, securities or assets deliverable on
exercise of the Warrants pursuant to the foregoing provisions,
the Company shall give to the Registered Holders of the Warrants
at the addresses as may appear on the books of the Company at
least 10 days' prior written notice to the effect that it intends
to take such a record. Such notice shall specify the date as of
which such record is to be taken; the purpose for which such
record is to be taken; and the number, amount, price and nature
of the Common Shares or other shares, securities or assets which
will be deliverable on exercise of the Warrants after the action
for which such record will be taken has been completed. Without
limiting the obligation of the Company to provide notice to the
Registered Holders of the Warrant Certificates of any corporate
action hereunder, the failure of the Company to give notice shall
not invalidate such corporate action of the Company.
(e) No adjustment of the Exercise Price shall be made
as a result of or in connection with (i) the sale of additional
shares of Common Stock for less than the exercise price of the
Warrants or the current market price of the Company's securities,
(ii) the issuance of Common Stock of the Company pursuant to
options, warrants and share purchase agreements outstanding or in
effect on the date hereof, (iii) the establishment of additional
option plans of the Company, the modification, renewal or
extension or any plan now in effect or hereafter created, or the
issuance of Common Stock on exercise of any options pursuant to
such plans, (iv) the issuance of Common Stock in connection with
an acquisition or merger of any type in which the Company is the
surviving corporation (therefore, the anti-dilution provisions of
this Section 8 will not apply in the event such a merger or
acquisition is undertaken by the Company), or (v) in connection
with compensation arrangements for officers, employees or agents
or the Company or any subsidiary, and the like.
(f) This Warrant Agent Agreement shall be incorporated
by reference on the Warrant Certificates.
Before taking any action which would cause an
adjustment reducing the Exercise Price below the then par value
of the shares of Common Stock issuable upon exercise of the
Warrants, the Company will take any corporate action which may,
in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue fully paid and
non-assessable shares of such Common Stock at such adjusted
Exercise Price.
Upon any adjustment of the Exercise Price required to
be made pursuant to this Section 8, the Company within 30 days
thereafter shall (A) cause to be filed with the Warrant Agent a
certificate setting forth the Exercise Price after such
adjustment and setting forth in reasonable detail the method of
calculation and the facts upon which such calculation is based,
and (B) cause to be mailed to each of the Registered Holders of
the Warrant Certificates written notice of such adjustment.
9. Duties, Compensation and Termination of Warrant Agent.
The Warrant Agent shall act hereunder as agent and in a
ministerial capacity for the Company, and its duties shall be
determined solely by the provisions hereof. The Warrant Agent
shall not, by issuing and delivering Warrant Certificates or by
any other act hereunder, be deemed to make any representations as
to the validity, value or authorization of the Warrant
Certificates or the Warrants represented thereby or of the Common
Stock or other property delivered on exercise of any Warrant.
The Warrant Agent shall not at any time be under any duty or
responsibility to any holder of the Warrant Certificates to make
or cause to be made any adjustment of the Exercise Price or to
determine whether any fact exists which may require any such
adjustments.
The Warrant Agent shall not (i) be liable for any recital or
statement of fact contained herein or for any action taken or
omitted by it in reliance on any Warrant Certificate or other
document or instrument believed by it in good faith to be genuine
and to have been signed or presented by the proper party or
parties, (ii) be responsible for any failure on the part of the
Company to comply with any of its covenants and obligations
contained in this Agreement except for its own negligence or
willful misconduct, or (iii) be liable for any act or omission in
connection with this Agreement except for its own negligence or
willful misconduct.
The Company agrees to indemnify the Warrant Agent against
any and all losses, expenses and liabilities which the Warrant
Agent may incur in connection with the delivery of copies of the
Company's prospectus to exercising Registered Holders upon the
exercise of any Warrants as set forth in Section 4.
The Warrant Agent may at any time consult with counsel
satisfactory to it (which may be counsel for the Company) and
shall incur no liability responsibility for any action taken or
omitted by it in good faith in accordance with the opinion or
advice of such counsel. Any notice, statement, instruction,
request, direction, order or demand of the Company shall be
sufficiently evidenced by an instrument signed by its President
and attested by its Secretary or Assistant Secretary. The
Warrant Agent shall not be liable for any action taken or omitted
by it in accordance with such notice, statement, instruction,
request, order or demand.
The Company agrees to pay the Warrant Agent all compensation
for its services hereunder and to reimburse the Warrant Agent for
its expenses as set forth in the attached fee schedule. The
Company further agrees to indemnify the Warrant Agent against any
and all losses, expenses and liabilities, including judgments,
costs and counsel fees, for any action taken or omitted by the
Warrant Agent in the execution of its duties and powers
hereunder, excepting losses, expenses and liabilities arising as
a result of the Warrant Agent's negligence or willful misconduct.
The Warrant Agent may resign its duties or the Company may
terminate the Warrant Agent and the Warrant Agent shall be
discharged from all further duties and liabilities hereunder
(except liabilities arising as a result of the Warrant Agent's
own negligence or willful misconduct), on 30 days' prior written
notice to the other party. At least 15 days prior to the date
such resignation is to become effective, the Warrant Agent shall,
at the expense of the Company, cause a copy of such notice of
resignation to be mailed to the Registered Holder of each Warrant
Certificate. On such resignation or termination the Company
shall appoint a new warrant agent. If the Company shall fail to
make such appointment within a period of 30 days after it has
been notified in writing of the resignation by the Warrant Agent,
then the Registered Holder of any Warrant Certificate, including
the Placement Agent, may apply to any court of competent
jurisdiction for the appointment of a new warrant agent. All
costs incurred by any Registered Holder in connection with the
appointment of a new warrant agent, including but not limited to
all legal fees and out-of-pocket expenses, shall be borne and
paid for by the Company. Any new warrant agent, whether
appointed by the Company or by such court, shall be a bank or
trust Company or professional transfer agent having a capital and
surplus, as shown by its last published report to its
shareholders, of not less than $1,000,000.
After acceptance in writing of an appointment of a new
warrant agent is received by the Company, such new warrant agent
shall be vested with the same powers, rights, duties and
responsibilities as if it had been originally named herein as the
Warrant Agent, without any further assurance, conveyance, act or
deed; provided, however, if it shall be necessary or expedient to
execute and deliver any further assurance, conveyance, act or
deed, the same shall be done at the expense of the Company and
shall file a notice of appointment of a new warrant agent with
the resigning Warrant Agent and shall forthwith cause a copy of
such notice to be mailed to the Registered Holder of each Warrant
Certificate. No further action shall be required for
establishment and authorization of such successor warrant agent.
The Warrant Agent, its officers or directors and its
subsidiaries or affiliates may buy, hold or sell Warrants or
other securities of the Company and otherwise deal with the
Company in the same manner and to the same extent and with like
effect as though it were not Warrant Agent. Nothing herein shall
preclude the Warrant Agent from acting in any other capacity for
the Company or for any other legal entity.
10. Modification of Agreement. The Warrant Agent and the
Company may, by supplemental agreement, make any changes or
corrections in this Agreement (i) that they shall deem
appropriate to cure any ambiguity, or to correct any defective or
inconsistent provision or mistake or error herein contained, or
(ii) that they may deem necessary or desirable, and which shall
not adversely affect the interests of the holders of Warrant
Certificates; provided, however, this Agreement shall not
otherwise be modified, supplemented or altered in any respect,
except with the consent in writing of the Registered Holders of
Warrant Certificates representing not less than 51% of the
Warrants outstanding. Additionally, except as provided in
Section 7, no change in the number or nature of the Warrant
Shares purchasable on exercise of a Warrant, the Exercise Price
therefor, or the Expiration Date of a Warrant shall be made
without the consent in writing of the Registered Holder of the
Warrant Certificate representing such Warrant, other than such
changes as are specifically prescribed or allowed by this
Agreement.
11. Notices. All notices, demands, elections, opinions or
request (however characterized or described) required or
authorized hereunder shall be deemed given sufficiently if in
writing and sent by registered or certified mail, return receipt
requested, postage prepaid, or by tested telex, telegram or cable
to, in the case of the Company:
Delta-Omega Technologies, Inc.
Attn: James V. Janes III, President
119 Ida Road
Broussard, Louisiana 70518-3423
and in the case of the Warrant Agent:
if by delivery, to:
American Securities Transfer, Inc.
938 Quail Street, Suite 101
Lakewood, Colorado 80215
if by United States mail, to:
American Securities Transfer, Inc.
P.O. Box 1956
Denver, Colorado 80201-1596
and if the Registered Holder of a Warrant Certificate, at the
address of such holder as set forth on the books maintained by
the Warrant Agent.
12. Binding Agreement. This Agreement shall be binding
upon and inure to the benefit of the Company, the Warrant Agent
and their respective successors and assigns, and the Registered
Holders from time to time of Warrant Certificates. Nothing in
this Agreement is intended or shall be construed to confer upon
any other person any right, remedy or claim, or to impose on any
other person any duty, liability or obligation.
13. Further Instruments. The parties shall execute and
deliver any and all such other instruments, and shall take any
and all other actions as may be reasonably necessary to carry out
the intention of this Agreement.
14. Severability. If any provision of this Agreement shall
be held, declared or pronounced void, voidable, invalid,
unenforceable, or inoperative for any reason by any court of
competent jurisdiction, government authority or otherwise, such
holding, declaration or pronouncement shall not adversely affect
any other provision of this Agreement, which shall otherwise
remain in full force and effect, and be enforced in accordance
with its terms, and the effect of such holding, declaration or
pronouncement shall be limited to the territory or jurisdiction
in which made.
15. Waiver. All the rights and remedies of either party
under this Agreement are cumulative and not exclusive of any
other rights and remedies as provided by law. No delay or
failure on the part of either party in the exercise of any right
or remedy arising from a breach of this Agreement shall operate
as a waiver of any subsequent right or remedy arising from a
subsequent breach of this Agreement. The consent of any party
where required hereunder to act or occur, shall not be deemed to
be a consent to any other action or occurrence.
16. General Provisions. This Agreement shall be construed
and enforced in accordance with, and governed by, the laws of the
State of Colorado. Except as otherwise expressly stated herein,
time is of the essence in performing hereunder. This Agreement
embodies the entire agreement and understanding between the
parties, and supersedes all prior agreements and understandings
relating to the subject matter hereof, and this Agreement may not
be modified or amended, or any term or provisions hereof waived
or discharged, except in writing signed by the party against whom
such amendment, modification, waiver or discharge is sought to be
enforced. The headings of this Agreement are for convenience in
reference only and shall not limit or otherwise affect the
meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all
of which taken together shall constitute one and the same
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first written above.
THE COMPANY:
DELTA-OMEGA TECHNOLOGIES, INC.
(CORPORATE SEAL) By: /s/ James V. Janes III
James V. Janes III
Its: President
ATTEST:
THE WARRANT AGENT:
AMERICAN SECURITIES TRANSFER, INC.
By: /s/ American Securities Transfer, Inc.
CONSENT OF ARTHUR ANDERSEN L.L.P.
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our
report dated October 2, 1996 included in Delta-Omega
Technology, Inc.'s Form 10-KSB for the year ended August 31, 1996
and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
January 21, 1997
