As filed with the Securities and Exchange Commission on September ____, 1998
SEC Registration No. 333-________
===========================================================================
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 of Other (Primary Standard (IRS Employer Identification
Jurisdiction of Industrial Classification Number)
Incorporation) Code Number)
119 Ida Road
Broussard, Louisiana 70518
(318) 837-3011
_____________________________________________
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant's Principal Executive Offices)
James V. Janes III, President
119 Ida Road
Broussard, Louisiana 70518
(318) 837-3011
_____________________________________________
(Name, Address and Telephone Number of Agent for Service)
Copies to:
Roger V. Davidson, Esq.
Cohen Brame & Smith Professional Corporation
1700 Lincoln Street, Suite 1800
Denver, Colorado 80203
(303) 837-8800
Fax (303) 894-0475
_____________________________________________________________________________
Approximate date of commencement of proposed sale to the public: As soon
as practicable after the effective date of this Registration Statement.
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, check the following box: [X]
If the registrant elects to deliver its latest annual report to security
holders, or a complete and legible facsimile thereof, pursuant to
Item 11(a)(1) of this Form, check the following box: [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]_______
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]_______
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]_______
If delivery of the prospectus is expected to be made pursuant to Rule
434, check the following box. [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
Proposed Proposed Amount
Title of each Class Amount Maximum Maximum Of
of Securities Being Offering Price Aggregate Registration
Being Registered Registered Per Share Offering Price Fee
_____________________________________________________________________________
<S> <C> <C> <C> <C>
Common Stock,
$0.001 par
value (3) 2,396,667 Shs. $ .75(1) $1,797,500 $544.70(9)
Common Stock,
$0.001 par
value (4) 2,471,667 Shs. $ .75(1) $1,853,750 $561.75(9)
Common Stock,
$0.001 par
value 186,036 Shs. $ .75(1) $139,527 $28.43(9)
Common Stock,
$0.001 par
value (5) 1,335,000 Shs. $ 1.25(1) $1,668,750 $548.52(9)
Common Stock,
$0.001 par
value (6) 200,000 Shs. $ 1.00(1) $200,000 $68.97(9)
Common Stock,
$0.001 par
value (7) 150,000 Shs. $ 1.00(1) $150,000 $51.72(9)
Common Stock,
$0.001 par
value (8) 1,019,747 Shs. $ .3125 $318,671 $94.01
Total $6,128,198 $1,898.10
============================================================================
</TABLE>
(1) Estimated solely for the purpose of determining the registration fee
and calculated pursuant to Rule 457(a). No separate registration fee
is required for the warrants pursuant to Rule 457(g).
(2) Estimated solely for the purpose of determining the registration fee
and calculated pursuant to Rule 457(c). The average of the bid and
asked prices of the Registrant's common stock on August 31, 1998 was
$.3125.
(3) Issuable upon conversion of the Series C Convertible Exchangeable
Preferred Shares.
(4) Issuable upon exercise of the Class Z Warrants.
(5) Issuable upon conversion of the Series B Convertible Exchangeable
Preferred Shares.
(6) Issuable upon exercise of the outstanding Placement Agent Warrants.
(7) Issuable upon exercise of the Options owned by Fernand Baer.
(8) Being registered for resale on behalf of certain selling shareholders.
(9) Registration fee previously paid.
Pursuant to Rule 429, the Registrant has consolidated post-effective
Amendment No. 3 to Form S-2 Registration Statement dated March 13, 1997, File
No. 33-90604 and post-effective Amendment No. 1 to Form S-2 Registration
Statement dated January 23, 1997, File No. 333-20590 into this Form S-2
Registration Statement because such prospectus includes all of the information
which would currently be required in a prospectus relations to the securities
covered by the earlier statements. Additionally, this registration statement
registers an additional 1,019,747 shares. There are 6,739,370 shares being
carried forward with a filing fee of $1,804.09 that has previously been paid
in the previous registration statements cited above.
_________________________
The Registrant hereby amends this Registration Statement on such date
or dates as may be necessary to delay its effective date until the Registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
Common Stock
DELTA-OMEGA TECHNOLOGIES, INC.
7,759,117 Shares offered by Selling Shareholders
Certain Selling Shareholders are offering, pursuant to this Prospectus,
up to 7,759,117 shares of Delta-Omega Technologies, Inc.'s ("Delta-Omega" or
the "Company") $.001 par value common stock (the "Selling Shareholder
Shares"), which shares, though they are being offered by the holders of such
Selling Shareholder Shares, are being registered by the Company on behalf of
certain of its shareholders (the "Selling Shareholders"). Upon the sale of
the Selling Shareholder Shares, the Company will not receive any of the
proceeds from the Selling Shareholder Shares. Certain Selling Shareholders
are offering common stock to be issued to them upon conversion by them of
outstanding Preferred Stock Warrants and Options. Being offered are:
(1) 2,396,667 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) 186,036 shares of common stock currently outstanding.
(4) 1,335,000 shares of common stock underlying conversion rights
associated with currently outstanding Series B Preferred Stock;
(5) 200,000 shares underlying outstanding Placement Agent Warrants.
(6) 150,000 shares underlying an outstanding option.
(7) 1,019,747 shares of common stock sold in 1998 Private Placement
(See "DESCRIPTION OF SECURITIES.")
The registration statement, of which this Prospectus is a part, is
serving to meet an undertaking made by the Company to register the resale of
the common shares underlying the conversion rights of the Series B Preferred
Stock sold in a private placement during 1994 and certain other registration
rights.
The registration statement, of which this Prospectus is a part, is
being utilized in part to meet an undertaking made by the Company to register
the resale of the common shares underlying the conversion rights of the Series
C Preferred Stock and the Class Z Warrants sold in that private placement.
___________________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
___________________________
THERE ARE CERTAIN RISKS INVOLVED WITH THE OWNERSHIP OF THIS COMPANY'S
SECURITIES INCLUDING RISKS RELATED TO ITS BUSINESS AND MARKET FOR ITS
SECURITIES. FOR INFORMATION REGARDING CERTAIN RISKS RELATING TO THE COMPANY,
SEE "RISK FACTORS."
__________________________
The Company has been advised by the Selling Shareholders that they or
their successors may sell all or a portion of the $.001 par value common stock
offered hereby from time to time in the over-the-counter market, if such a
market exists, in privately negotiated transactions, or otherwise, including
sales through or directly to a broker or brokers. Sales will be at prices and
terms then prevailing, if any, or at prices related to the then current market
prices or at negotiated prices. In connection with any sales, any broker or
dealer participating in such sales may be deemed to be an underwriter within
the meaning of the Securities Act of 1933. (See "PLAN OF DISTRIBUTION.")
The Company will receive no part of the proceeds of such sales, but
will receive funds upon the exercise of the Warrants. All expenses incurred
in connection with this offering, which expenses are not expected to exceed
$20,000, are being borne by the Company.
The Common Stock of Delta-Omega Technologies, Inc. is traded
"over-the-counter" on the "Bulletin Board" (Symbol: DOTK). On August 28,
1998, the last sale price of the Company's common stock was $.3125.
The date of this Prospectus is September _____, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents heretofore filed by the Company under the
Securities Exchange Act of 1934 with the Securities and Exchange Commission
(the "Commission") are incorporated herein by reference.
(1) The Company's Annual Report on Form 10-KSB for the fiscal
year ended August 31, 1997.
(2) The Company's Quarterly Reports on Form 10-QSB for 11/30/97,
2/28/98 and 5/31/98.
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. In addition, such materials filed electronically by the Company with
the Commission are available at the Commission's world wide web site at
http://www.sec.gov.
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 copies of the Company's Annual Report
on Form 10-KSB for the fiscal year ended August 31, 1997 and the Company's
Quarterly Reports on Form 10-QSB for the three months ended November 30, 1997,
February 28, 1998 and May 31, 1998, as filed with the Securities and Exchange
Commission.
INDEMNIFICATION
Article X of the Registrant's Articles of Incorporation provides that the
corporation may indemnify each current and former director, officer, and any
employee or agent of the corporation, his heirs, executors, and
administrators, against expenses reasonably incurred or any amounts paid by
him in connection with any action, suit, or proceeding to which he may be made
a party by reason of his being or having been a director, officer, employee or
agent of the corporation in the same manner as is provided by the laws of the
State of Colorado. Additionally, to the fullest extent permitted by statute,
the Company has limited the liability of directors from actions filed by
shareholders and other third parties.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons
of the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Act and is, therefore, unenforceable.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the more detailed
information and financial statements (including notes thereto) incorporated by
reference in this Prospectus.
The Company
Delta-Omega Technologies, Inc. was organized under the laws of the State
of Colorado on December 22, 1988 as Barclay's West, Inc. In November 1989,
the Company acquired, via a Share Exchange Agreement, all of the outstanding
securities of Delta-Omega Technologies, Ltd. On December 22, 1989, the
Company changed its name from Barclay's West, Inc. to Delta-Omega
Technologies, Inc. to reflect the acquisition.
The Company is engaged in the development, manufacture and marketing of
environmentally safe specialty chemicals for use in a variety of industrial
and military applications. These products are deemed to be environmentally
safe because they are water-based, non-toxic and biodegradable. These
products replace hazardous, flammable, toxic and ozone depleting chemicals in
a broad range of cleaning and emergency response applications. The Company
has also developed a product to remediate hydrocarbon contamination from soil
and water. The Company is developing proprietary products that address large
markets where there is limited environmentally safe competition, or little or
no existing products that provide effective performance.
Prior to fiscal 1993, Delta-Omega was a development stage enterprise
whose main objective was to conduct research and development. By that time,
the Company had completed a majority of the research, development and testing
of its products. In September 1992, the Company assumed an operating status,
began operations in September 1993 and in January 1994 began to build its core
staff of marketing, sales, financial and administrative personnel.
The Company's offices are located at 119 Ida Road, Broussard, Louisiana
70518; its telephone number is (318) 837-3011.
The Offering
Securities Offered by
Selling
Shareholders 7,759,117 (1)
Terms of Class Z Warrants Exercisable for $.75 per share
until June 30, 2001 with rights
of oversubscription
Terms of Placement Agent Warrants Exercisable for $1.00 per share
until October 15, 1999
Terms of Options Exercisable for $.90 per share
until September 15, 2001
Securities Outstanding
(2) 14,620,678 Common Shares
1,335,000 Series B Preferred Shares
2,396,667 Series C Preferred Shares
2,471,667 Class Z Warrants
2,145,752 Options
800,000 Warrants
Trading Symbol Common Stock: DOTK
Use of Proceeds Any net proceeds that the Company
may realize upon the exercise and
of the Warrants and Options
will be used for working capital.
The Company will not receive any
proceeds from the sale of common
stock by the Selling Shareholders.
Risk Factors An investment in the securities
offered hereby involves a high
degree of risk, including a lack
of liquidity in the market for the
Company's common stock.
Prospective investors should
review carefully and consider the
factors described in "Risk
Factors."
________________________
(1) Includes shares of common stock underlying the conversion
privileges in the Series B and Series C Convertible Preferred
Shares and Class Z Warrants and Options.
(2) Unless otherwise indicated, all references in the Prospectus
to per share data and number of shares exclude 1,600,000 shares of
common stock issuable upon the exercise of any options granted or
which may be granted under the Company's 1991 Stock Option Plan
and 1994 Stock Option Plan. (See "PRINCIPAL SHAREHOLDERS" and
"DESCRIPTION OF SECURITIES.")
RISK FACTORS
This Prospectus and the documents incorporated by reference herein
include certain statements that may be deemed to be "forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933,
as amended (the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"). All statements, other than
statements of historical facts, included in this Prospectus that address
activities, events or developments that the Company expects, believes or
anticipates will or may occur in the future, including such matters as
availability of future capital, product development, business strategies,
project sales, costs of sales, expansion and growth of the Company's
operations and other such matters are forward-looking statements. These
statements are based on certain assumptions and analyses made by the Company
in light of its experience and perception of historical trends, current
conditions, expected future developments and other factors it believes are
appropriate in the circumstances. Such statements are subject to a number of
assumptions, risks and uncertainties, including the risk factors discussed
below, general economic and business conditions, the business opportunities
(or lack thereof) that may be presented to and pursued by the Company,
changes in law or regulations and other factors, many of which are beyond
the control of the Company. Prospective investors are cautioned that any
such statements are not guarantees of future performance and that actual
results or developments may differ materially from those projected in the
forward-looking statements.
These securities involve a high degree of risk. Prospective purchasers
should consider carefully, among other factors set forth in the Prospectus,
the following:
Risk Factors Relating to Business of the Company
1. Possible Failure of the Company. Since the Company commenced
operations in March, 1989, it has continued to operate regularly at a
loss, has generated negative cash flows and until very recently, has
generated only minimal revenues from sales of its products and services.
As noted in the independent auditors' report on the financial statements
for the fiscal year ended August 31, 1997, these factors raise
substantial doubt about the Company's ability to continue as a going
concern. The ability of the Company to continue its operations is
therefore dependent on its ability to support operations until such time
as the Company becomes profitable. The Company does not have sufficient
working capital available to maintain operations at their current
levels. These factors raise substantial doubt about the Company's
ability to continue as a going concern. Ultimately, the ability of the
Company to continue as a going concern is dependent upon obtaining
additional capital investments or generation of adequate sales revenue
and profitability from operations. Therefore, investors in this
offering risk the loss of their entire investment if the Company is
unable to continue in operation. ("See "FINANCIAL STATEMENTS.")
2. Lack of Market Research Concerning the Company's Products and
Services and Possible Lack of Market Acceptance. The products and
services developed by the Company are innovative and new to the market
and there can be no assurance that such products and services will be
sufficiently accepted. The Company has not obtained or undertaken any
formal market research study with respect to the establishment of its
market areas. The product mix of the Company is reviewed periodically,
and changes to the product mix offered to the market may vary depending
on market acceptance.
3. Possible Loss of Contracts with Significant Suppliers. Raw
materials for the finished product are procured from a number of sources
to provide flexibility. Although the Company has its own material
blending capability, loss of availability of contract blending
facilities could adversely affect the operations of the Company until it
could replace the lost manufacturing output with an expansion of its own
blending facilities. Such expansion would require an increase in the
Company's overall capital expenditures.
4. Government Regulation and Industry Specifications. The
Company engages in the development of products and provides services
which may be regulated by, or subject to the requirements of, various
governmental and private agencies, including the U.S. Environmental
Protection Agency and the Food and Drug Administration, military
specifications, military technical orders, and specific industry
standards. Continual compliance with these requirements is expected to
be time-consuming and expensive. Failure to obtain necessary
governmental approvals may have a material adverse effect upon the
Company's operations. The Company's products are currently considered
to be non-toxic and non-hazardous, and accordingly unregulated. There
can be no assurance, however, that all of the constituents utilized in
the Company's products will remain excluded as a subject of regulatory
guidelines or from lists of proscribed toxic substances in reportable
quantities. In the event that any of the substances used in the
Company's products becomes the subject of regulatory guidelines or
becomes listed as a toxic substance, the Company could suffer an adverse
impact due to a possible impairment, or total loss, of its perceived
competitive advantage until suitable replacement constituents are
identified and implemented.
5. Limited Patent Protection. Multi-Foam
EFFF(TM)/Haz-Clean(TM) and DOT 111/1139(TM), two of the Company's
proprietary products pertinent to its business operations, are currently
protected by United States Patent Numbers 5,061,383 and 5,308,550,
respectively. The Company has also filed two patents with the United
States Patent and Trademark Office, a base fluid upgrading (BFU)
application (Serial No. 918,597) and a mud recycling process (MRP)
(Serial No. 788,393). Both patent pending applications are for treating
drilling fluids used in the oil and gas industry.
The Company is also in the process of filing one more patent,
a continuation-in-part of co-pending MRP application Serial No. 788,993.
To the best of Management's knowledge, the Company's products
and services do not infringe upon any patents held by others.
6. Limited Marketing Capabilities. The Company has only limited
marketing capabilities and must rely on its own internal marketing
efforts since its prior efforts to utilize large regional and national
independent distributors had only limited success. The Company is
continuing to explore new avenues for the marketing of its products.
The Company may change its marketing plans in the future if current
marketing efforts are unsuccessful. The success of the Company is
directly tied to the success of its marketing efforts.
7. Product Liability. It is possible that personal injuries may
arise from the use of the Company's products. The Company currently
maintains product liability insurance for products it develops and
sells. However, the Company could be materially adversely affected by
any product liability claims that may be awarded in excess of policy
limits. Management believes that the likelihood of personal injury is
low.
8. Success Dependent on Key Personnel. Success of the Company
depends on the active participation of its Chairman, Larry G. Schafran
and its President, James V. Janes, III. The Company has not entered
into an employment agreement with either of these individuals and the
loss of their services could adversely affect the development of the
Company's business and its likelihood of success. (See "MANAGEMENT.")
9. Lack of Management Experience. Except for it's Chairman of
the Board of Directors, the Company's management, although experienced
in various phases of business, marketing and the chemical industry,
including product research and development, has limited experience
operating as managers and executive officers and has only minimal
experience in manufacturing and marketing. (See "MANAGEMENT.")
10. Competition. The Company's products are subject to intense
competition from numerous firms currently engaged in chemical research
and product development. Many of these companies are substantially
larger than the Company and have substantially greater resources,
operating histories and experience. There can be no assurance that the
Company will be able to compete successfully with these other companies
or achieve profitable operations.
Risk Factors Relating to this Offering
1. Absence of Public Market for Company's Securities. Although
there presently exists a sporadic, limited market for the Company's
common stock, there can be no assurance that any market can be
sustained. The investment community could show little or no interest
in the Company in the future. As a result, purchasers of the Company's
common stock may have difficulty in reselling such securities should
they desire to do so.
2. Potential Material Adverse Effect On Company's Securities
Resulting From Penny Stock Regulations. Due to certain regulations
promulgated by the Securities and Exchange Commission pertaining to
penny stocks, which regulations define a penny stock to be any equity
security that has a market price (as defined) of less than $5.00 per
share subject to certain exceptions, and the fact that the Company's
common stock could be subject to these regulations, the liquidity of the
Company's securities could be materially adversely affected. Such
material adverse effects could include, among other things, impaired
liquidity with respect to the Company's securities, and burdensome
transactional requirements (including, but not limited to, waiting
periods, account and activity reviews, disclosure of additional personal
financial information and substantial written documentation) associated
with transactions in the Company's securities.
3. Offering Price was Arbitrarily Determined. The offering price
is likely the market price in the over-the-counter market. There is no
direct relationship between the offering price and the Company's assets,
book value, shareholders' equity or any other recognized criterion of
value.
4. Dividends. No dividends have been paid on the Common Stock
since inception and none are contemplated at any time in the foreseeable
future. Further, seven percent cumulative annual dividends are also
payable on the Series B Convertible Exchangeable Preferred Stock. Seven
percent cumulative annual dividends are also payable on the Series C
Convertible Voting Preferred Stock. All dividends on issued and
outstanding series of preferred stock have been paid in the form of
restricted shares of common stock pursuant to the authority granted the
Company's Board of Directors in the pertinent designation of rights and
preferences. Unless and until the Company is profitable, it is unlikely
that it will pay dividends in cash. (See "DESCRIPTION OF SECURITIES.")
RECENT DEVELOPMENTS
Liquidity and Capital Resources
Since the Company commenced operations, it has incurred recurring losses
and negative cash flows from operations. The Company does not have sufficient
working capital available to maintain operations at their current levels.
These factors raise substantial doubt about the Company's ability to continue
as a going concern. The Company's ability to continue as a going concern is
dependent upon obtaining additional capital investments or generation of
adequate sales revenue and profitability from operations.
To enhance its liquidity, the Company completed a private offering to
accredited and sophisticated investors in March 1998. The Company sold
986,413 shares of treasury common stock and raised approximately $740,000.
The Company has paid overdue trade accounts payable and intends to use the
remaining proceeds to fund operations until sufficient sales are generated.
If operations do not generate sufficient sales, management has the option to
sell the remaining common stock, approximately 1 million shares, authorized by
the board of directors, or restructure the organization's personnel and
associated expenses to minimize negative cash flow.
For its immediate capital requirements, the Company expects to negotiate
loans from board of director members or consider a private placement offering
consisting of the above mentioned authorized common stock until sufficient
funds are generated from operations.
Drilling Mud Recycling Process (MRP)
The Company has successfully field tested a unique technology for
recovering barite and oil from spent drilling muds. This process technology
utilizes a proprietary cleaning mixture which separates the oil from the
barite within an aqueous medium. The process recovers more than 95% of the
barite at high purity levels. This material can be reused as a constituent in
the production of water or oil based drilling muds. The synthetic oil
recovered in this process can be sold or reused in mud applications. The mud
recycling process (MRP) offers significant cost savings over current
management practices involving spent drilling muds. The market value of the
recovered barite and oils is expected to more than offset processing costs.
The Company is currently in contact with major drilling mud companies to
optimize the MRP technology to their specific needs and reuse markets.
Demilitarization
The Company finalized in the second quarter of 1998 an exclusive
worldwide license agreement with Gradient Technology, Inc., for a leading edge
portfolio of patent pending demil "conversion" technologies to address the
U.S. Government's drive toward "resource recovery and reuse" in
Demilitarization operations. Demilitarization or "demil" is a term used to
describe the removal of conventional munitions, including bombs, rockets,
torpedoes and shells from the inventory of stored ammunition. The blending of
these licensed technologies with the Company's highly advanced chemical
process and separation know-how should position the Company to offer cost
efficient explosive conversion and/or recovery services to the U.S.
Government.
The Company's partner, Gradient Technology, Inc. submitted a bid to the
U.S. Navy Surface Warfare Center in April 1998, research and development funds
for conversion of Explosive D into a commercially viable product.
In late June, agents of the Crane Division, Naval Surface Warfare Center
located in Crane, Indiana, contacted Gradient Technology, Inc., to schedule a
government audit. The audit process is one of the final steps before a
project is awarded. The Company expects the audit will be concluded in the
next quarter. There is not any assurance that the Crane Division will award
Gradient Technology, Inc. a project.
Resignation of a Director
Donald P. Carlin resigned as a director of the Company effective as of
June 1, 1998.
USE OF PROCEEDS
Any net proceeds that the Company may realize upon the exercise of
Warrants and Options will be used for working capital.
The Company will not receive any proceeds from the sale of the common
stock by the Selling Shareholders.
DIVIDEND POLICY
The Company has not paid cash dividends since its inception. The Company
does not anticipate paying any cash dividends on its common stock in the
foreseeable future. The payment of future dividends on the common stock will
be at the discretion of the Board of Directors of the Company and will depend
upon, among other things, the Company's earnings, capital requirements,
financial condition and restrictions contained in loan agreements, if any.
Seven percent cumulative annual dividends are payable on both the Series
B Convertible Exchangeable Preferred Stock and the Series C Convertible
Preferred Stock. All dividends on issued and outstanding series of preferred
stock have been paid in the form of restricted shares of common stock pursuant
to the authority granted the Company's Board of Directors in the pertinent
designation of rights and preferences. Unless and until the Company is
profitable, it is unlikely that it will pay dividends in cash. (See
"DESCRIPTION OF SECURITIES.")
MANAGEMENT
The executive officers and directors of the Company and their ages and
positions with the Company or its subsidiaries are as follows:
<TABLE>
<CAPTION>
Period from
Name Age Position Which Served
_____ _____ _________ _______________
<S> <C> <C> <C>
L. G. Schafran 59 Chairman of the Board 01/96
James V. Janes, III 50 President, CEO and 10/89
Director
Richard A. Brown 50 Director 10/90
David H. Peipers 41 Director 01/96
Marian A. Bourque 38 Chief Financial 04/96
and Accounting
Officer, Secretary
and Treasurer
</TABLE>
The Company has no knowledge of any arrangement or understanding in
existence between any executive officer named above and any other person
pursuant to which any such executive officer was or is to be elected to such
office or offices. All officers of the Company serve at the pleasure of the
Board of Directors. No family relationship exists among the directors or
executive officers of the Company. All Officers of the Company will hold
office until the next Annual Meeting of the Company's shareholders. There is
no person who is not a designated Officer who is expected to make any
significant contribution to the business of the Company.
L. G. Schafran - Chairman of the Board of Directors. Chairman of the
Board of Directors of the Company since February 1996, Mr. Schafran was until
recently a Director and Chairman of the Executive Committee of Dart Group
Corporation and its two principal affiliates, Trak Auto Corporation and Crown
Books Corporation. Mr. Schafran is also a Director or Trustee of Capsure
Holdings Corp., Glasstech, Inc., National Income Realty Trust, Oxigene, Inc.
and Publicker Industries, Inc. Mr. Schafran earned a B.B.A. from the
University of Wisconsin in 1960 and a M.B.A. also from the University of
Wisconsin in 1961.
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 July 23, 1998, the common stock
ownership of each person known by the Company to be the beneficial owner of
five percent or more of the Company's common and preferred stock ("Principal
Shareholders"), all Directors and Officers individually and all Directors and
Officers of the Company as a group. Except as noted, each person has sole
voting and investment power with respect to the shares shown. All shares are
"restricted securities" and as such are subject to limitations on resale. The
shares may be sold pursuant to Rule 144 under certain circumstances. There
are no contractual arrangements or pledges of the Company's securities, known
to the Company, which may at a subsequent date result in a change of control
of the Company.
<TABLE>
<CAPTION>
Amount of Beneficial
Ownership(1)
________________________
Name and Address Common and Options Percent
of Beneficial Preferred and Of
Owner Stock Warrants Total Class (2)
________________ ____________ __________ _____ _________
<S> <C> <C> <C> <C>
L. G. Schafran (3)
54 Riverside Drive #14B
New York, NY 10024 --- 600,000 600,000 3.17%
Richard A. Brown (4)
P. O. Box 8706
Longboat Key, FL 34228 618,206 -0- 618,206 3.37%
James V. Janes, III (5)
231 Dr. Charlie Drive
Opelousas, LA 70570 201,038 221,500 412,538 2.22%
David H. Peipers (6)
610 Tenth Avenue,
Suite 605
New York, NY 10020 1,747,561 130,000 1,877,561 10.13%
Vernon Taylor, Jr. (7)
1670 Denver Club Bldg.
Denver, CO 80202 2,086,001 165,000 2,251,001 12.16%
The Winsome Limited
Partnership (8)
f/k/a Crossroads Limited
Partnership
610 Tenth Ave.,
Suite 605
New York, NY 10020 1,616,158 130,000 1,746,158 9.45%
GAMI Investments, Inc. (9)
Two North Riverside Plaza
Suite 1100
Chicago, IL 60606 1,019,748 933,333 1,953,081 10.13%
Marian A. Bourque
P. O. Box 81518
Lafayette, LA
70598-1518 -0- -0- -0- 0%
All Directors
and Officers as
a Group
(Six Persons) (10) 2,566,805 951,500 3,518,305 18.23%
</TABLE>
(1) Rule 13d-3 under the Exchange Act, 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 July 23, 1998, there were 14,620,678 shares of common stock,
1,335,000 shares of Series B Convertible Exchangeable Preferred Stock and
2,396,667 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 18,352,345 shares of capital stock entitled to vote upon ordinary
matters and the percentages in this column are based upon such number of
shares.
(3) Mr. Schafran owns options to purchase 600,000 shares of common
stock. Mr. Schafran also owns warrants to purchase 600,000 shares of common
stock at an exercise price of $2.00 per share, but these have been excluded
from the calculation of his beneficial ownership due to the material
difference between the exercise price and the current trading price of the
common stock . Mr. Schafran's wife owns 242,479 shares of common stock,
203,376 shares of preferred stock and warrants to purchase 106,667 shares
of common stock. Mr. Schafran disclaims beneficial ownership of the stock
owned by his wife.
(4) 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.
(5) 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 common shares held in joint tenancy with his mother. Mr.
Janes' wife owns 156,000 shares of common stock. Mr. Janes disclaims
beneficial ownership of the stock owned by his wife.
(6) Mr. Peipers owns 131,403 shares of common stock. Mr. Peipers
could be considered a beneficial owner of 1,421,662 shares of common stock,
130,000 shares of preferred stock and warrants to purchase 130,000 shares of
common stock held by The Winsome Limited Partnership F/K/A Crossroads Limited
Partnership, of which Mr. Peipers is General Partner. Mr. Peipers could also
be considered a beneficial owner of 14,496 common shares and 50,000 shares of
preferred stock held by Cornerhouse Limited Partnership, an affiliate of The
Winsome Limited Partnership.
(7) Mr. Taylor owns 530,915 shares of common stock, 200,000 shares of
preferred stock and warrants to purchase 100,000 shares of common stock. Mr.
Taylor could be considered a beneficial owner of 435,000 shares of common
stock held by a family member and 284,000 shares of common stock held by a
corporation for which Mr. Taylor is an officer. Mr. Taylor could also be
considered a beneficial owner of 114,439 shares of common stock and 400,000
shares of preferred stock held by the Ruth and Vernon Taylor Foundation and
65,000 shares of preferred stock, warrants to purchase 65,000 shares of
common stock and 56,647 shares of common stock held by the Sara Taylor Swift
Revocable Trust, since Mr. Taylor is a trustee of both.
(8) The Winsome Limited Partnership F/K/A Crossroads Limited
Partnership, is an entity for which David H. Peipers is the General Partner.
The Winsome Limited Partnership owns 1,421,662 shares of common stock, 130,000
shares of preferred stock and warrants to purchase 130,000 shares of common
stock. The Winsome Limited Partnership could also be considered a beneficial
owner of 14,496 shares of common stock and 50,000 shares of preferred stock
held by Cornerhouse Limited Partnership, an affiliate of The Winsome Limited
Partnership.
(9) GAMI Investments, Inc., a Delaware corporation, owns 933,333 shares
of preferred stock, warrants to purchase 933,333 shares of common stock and
86,415 shares of common stock.
(10) The Directors and Officers as a group (six persons) beneficially
own 2,386,805 shares of common stock, 180,000 shares of preferred stock,
warrants to purchase 130,000 shares of common stock and stock options to
purchase 811,500 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 July 23, 1998,
(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
<TABLE>
<CAPTION>
Number of Number of Number of Percent
Common Shares Common Shares Shares Of
Selling Beneficially Covered By This Owned After Class If
Shareholders Owned Prospectus Offering Over 1%
____________ _____________ _____________ ____________ _________
<S> <C> <C> <C> <C>
Mark Lobel 77,556 50,000 27,556
George Kyrkostas 52,556 50,000 2,556
Stanley Lobel * 299,811 250,000 49,811
Legg Mason Wood
Walker C/F Stanley
Lobel IRA
Rollover* 297,585 250,000 47,585
Winsome Limited
Partnership f/k/a
Crossroads Limited
Partnership* 1,681,662 260,000 1,421,662 9.55%
Alfred T.
Copeland, Jr. 210,226 200,000 10,226
Lynn Hecht
Schafran* 416,710 213,334 203,376 1.37%
Vernon
Taylor, Jr.* 1,449,915 200,000 1,249,915 8.43%
Sara Taylor Swift
Revocable Trust
dtd 12/20/51 Vernon
Taylor, Jr.*
TTEE 186,647 130,000 56,647
Marc A. Utay* 160,251 152,534 7,717
Utay Family Group,
LLC* 288,005 274,134 13,871
Edward A.
Weihman 98,104 93,332 4,772
Joseph
Stein, Jr. 70,075 66,666 3,409
GAMI Investment,
Inc.* 1,962,108 1,866,666 95,442
Dakota Capital
Partners, LLC 140,151 133,334 6,817
Muriel Siebert 105,113 100,000 5,113
F.B. Baer* 23,334 13,334 10,000
Robert A. Naify 209,374 200,000 9,374
Shelter Rock
Resources Profit
Sharing Plan Andrew
Carduner & Wendy
Carduner, TTEEs 52,343 50,000 2,343
Lawrence Groo* 104,687 100,000 4,687
Will K. Weinstein
Revocable Trust
Will K. Weinstein,
TTEE 104,687 100,000 4,687
Baer & Co.,
LLC * 40,000 40,000 - 0 -
b. Selling Shareholder Common Shares Underlying Class Z Warrants
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
Balestra
Capital
Partners 82,030 75.000 7,030
c. Shareholder Common Shares Covered by Prospectus
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
Baer and
Company LLC* 80,336 80,336 - 0 -
Lawrence Groo* 67,970 25,000 42,970
Balestra Capital 75,000 75,000 - 0 -
Parnters*
Brian Herbert, 5,700 5,700 - 0 -
Sr.
d. Selling Shareholder Shares Underlying Series B Preferred Stock
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
Allen & Company
Incorporated 597,115 250,000 347,115 2.33%
Baer, Fernand B.,
Jr.* 19,874 15,000 4,874
Bender,
Susan J. 128,052 100,000 28,052
Brown,
JoAnn (1) * 10,543 10,000 543
Brown, JoAnn
C/F Alexander J. Brown,
a minor (2) * 79,554 10,000 69,554
Carlin,
Bonnie 32,223 25,000 7,223
The Cornerhouse
Limited
Partnership* 64,496 50,000 14,496
LEGG Mason Wood
Walker Cust Stanley
Lobel* 125,119 125,119 - 0 -
Levy, Frank 74,076 50,000 24,076
Miller,
Mark Timothy 56,817 50,000 6,817
Morris Lobel &
Sons, Inc. 32,013 24,881 7,132
Schafran, Lynn * 25,000 25,000 - 0 -
The Ruth & Vernon
Taylor
Foundation 514,439 400,000 114,439
Taylor,
Vernon, Jr.* 100,000 100,000 - 0 -
Trapp, Peter 25,000 25,000 - 0 -
Wight Investment
Partners 45,160 35,000 10,160
Worthington,
Lucinda 51,180 40,000 11,180
e. Shares Underlying Placement Agent Warrants
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
Gilford
Securities,
Inc. 100,000 100,000 - 0 -
FBB Corp.
(3)* 100,000 100,000 - 0 -
f. Shares Underlying Options
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
FBB Corp
(3)* 150,000 150,000 - 0 -
g. Shareholder Common Shares Covered by the 1998 Private Placement
Number of Number of Number of Percent
Common Shares Common Shares Shares Owned Class
Selling Beneficially Covered by This After If Over
Shareholders Owned Prospectus Offering 1%
____________ _______________ ________________ __________ ________
GAMI
Investements* 86,415 86,415 - 0 -
Geneve, Bordier
& Cie 100,000 100,000 - 0 -
Lone Star
Securities Fund
L.L.C. 666,667 666,667 - 0 -
Miller, Ken 66,666 66,666 - 0 -
Solo, David M. 66,666 66,666 - 0 -
Wylie, James Jr.
& Karen 33,333 33,333 - 0 -
</TABLE>
* These shareholders are listed in more than one Selling Shareholder
section.
(1) Wife of Richard Brown, a Director. Ms. Brown disclaims any
beneficial ownership of the shares held by Richard Brown.
(2) Son of Richard Brown, a Director.
(3) A corporation controlled by Fernand B. Baer.
Information set forth in the tables regarding the securities owned by
each Selling Shareholder is provided to the best knowledge of the Company
based on information furnished to the Company by the respective Selling
Shareholder and/or available to the Company through its stock transfer
records. No Selling Shareholder is obligated to sell his or her shares.
PLAN OF DISTRIBUTION/DETERMINATION OF OFFERING PRICE
The common stock offered hereby may be sold by the Selling Shareholders
or by pledgees, donees, transferees or other successors-in-interest (including
sales after exercise of warrants). Such sales may be made in the
over-the-counter market, in privately negotiated transactions, or otherwise,
at prices and at terms then prevailing, at prices related to the then current
market prices or at negotiated prices. The common stock may be sold by one or
more of the following methods: (a) a block trade in which the broker or
dealer so engaged will attempt to sell the common stock as agent, but may
position and resell a portion of the block as principal in order to consummate
the transaction; (b) a purchase by a broker or dealer as principal, and the
resale by such broker or dealer for its account pursuant to this Prospectus,
including resale to another broker or dealer; or (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers. In
effecting sales, brokers or dealers engaged by a Selling Shareholder may
arrange for other brokers or dealers to participate. Any such brokers or
dealers will receive commissions or discounts from a Selling Shareholder in
amounts to be negotiated immediately prior to the sale. Such brokers or
dealers and any other participating brokers or dealers may be deemed to be
"underwriters" within the meaning of the Securities Act. 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 one-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 Commission. However, if
the shares have been held for more than two 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 Rule 10b-5 and Regulation M under the
Exchange Act 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 Exchange Act. Any Selling
Shareholders who may be "affiliated purchasers" of the Company as defined
under Regulation M pursuant to Securities Exchange Act Release 34-38067
(December 20, 1996) have been advised that they must coordinate their sales
under this Prospectus with each other and the Company for purposes of
Regulation M.
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 B Convertible Exchangeable Preferred Stock
The Series B Convertible Exchangeable Preferred Stock is from a
designated series of the Company's authorized voting preferred stock. The
Series was sold for $1.00 per share, and has an established declared dividend
of $.07 per annum per share, due on the 30th day of June of each year. The
dividend accumulates if not paid when due. The dividend may be paid in cash
or in stock at the sole discretion of the Board of directors. If paid in
stock, the common shares issued will be valued at the average bid price for
the 30 days preceding the June 30 payment date. Once the price per share of
common stock is determined, a number of common shares equal to the total
dollar value of the dividend which was to be paid on June 30 will be issued,
with any fractional shares of the common stock dividend rounded up.
Call Provision
At any time on or after June 30, 1996, and before June 30, 1999, the
Company at its sold option may call the Series B Preferred for redemption at a
redemption price of $1.00 per share plus accumulated unpaid dividends. The
call shall provide for written notice of not less than 30 nor more than 60
days of the proposed redemption date during which call period the Series B
holder may either exercise his conversion rights as discussed below and
convert each share of Series B Preferred to one share of common stock, or at
the expiration of the call period his rights as a shareholder shall expire
upon receipt of the redemption price.
Conversion Rights
The holder of any shares of this Series B Preferred at his sole option
may, at any time until June 30, 1999 (subject to the call provision), convert
any or all of the shares of the Series B Preferred Stock held by him into one
fully paid and non-assessable share of the Company's $.001 par value common
stock for each share of Series B Preferred Stock converted. Accordingly,
assuming all dividends have been paid, the 2,000,000 shares of Series B
Preferred Stock offered herein may be converted to an equal number of common
shares. After June 30, 1999, all rights of conversion cease. The conversion
rate is subject to adjustments for such things as stock dividends, stock
splits, and reclassifications in the normal course.
Exchange Rights
At the sole option of the Company on any dividend payment date on or
after June 30, 1995 and before June 30, 1999, it may exchange for the Series B
Preferred Stock in whole for the Company's secured promissory note which bears
interest at 8% per annum, and is payable in equal quarterly installments of
principal and interest payable on September 30, December 31, March 31, and
June 30 of each year with the note due in full on or before June 30, 1999.
This note shall be senior to all other debt of the Company except bank
debt and purchase money financing secured by the object purchased, and a
security agreement shall be established accordingly.
Holders of outstanding shares of this Series B Convertible Exchangeable
Preferred Stock will be entitled to receive $1.00 principal amount of the note
in exchange for each share of this Series held by them at the time of
exchange, plus an amount equal to any accrued but unpaid cash dividends. The
Company will mail to each holder of record of the shares of this Series
written notice of its intention to exchange no less than 30 nor more than 60
days prior to the date fixed for the exchange (the "exchange date"). Each
such notice shall state: (i) the exchange date; (ii) the place or places where
certificates for such shares are to be surrendered for exchange into the note;
and (iii) that dividends on the shares to be exchanged will cease to accrue on
such exchange date. Prior to giving notice of intention to exchange, the
Company shall execute and deliver to the Exchange Agent the original note and
security agreement in conformity with the Designation. The Company will cause
the note and security agreement to be authenticated on the dividend payment
date on which the exchange is effective, and the Company will pay interest on
the note at the rate and on the dates specified in such note f rom the
exchange date. There is no penalty for prepayment.
Series C Convertible Preferred Stock
The Series C Convertible Preferred Stock is from a designated series of
the Company's authorized voting Preferred Stock. A total of 3,000,000
preferred shares have been designated as Series C Preferred Stock. The Series
has an established dividend of 7% per annum per share, due on the 30th day of
June of each year, commencing in 1997. The dividend accumulates if not paid
when due. The dividend may be paid in cash or in stock at the sole direction
of the Board of Directors. If paid in stock, the common shares issued will be
valued at the average bid price for the 30 days preceding the June 30 payment
date. Once the price per share of Common Stock is determined, a number of
common shares equal to the total dollar value of the dividend which was to be
paid on June 30, will be issued with any fractional shares of the common stock
dividend rounded up.
Call Provision
At any time on or after June 30, 1999, and before June 30, 2001, the
Company at its sole option may call the Series C Preferred for redemption at a
redemption price of $.75 per share plus accumulated unpaid dividends. The
call shall provide for written notice of not less than 30 nor more than 60
days of the proposed redemption date during which call period the Series C
holder may either exercise his conversion rights and convert each share of
Series C Preferred to one share of Common Stock, or at the expiration of the
call period his rights as a shareholder shall expire upon receipt of the
redemption price.
Conversion Rights
The holder of any shares of this Series C Preferred at his sole option
may, at any time until June 30, 2001 (subject to the call provision), convert
each share of the Series C Preferred Stock to one (1) fully paid and
non-assessable share of the Company's $.001 par value Common Stock. After
June 30, 2001, all rights of conversion cease. The conversion rate is subject
to adjustments for such things as stock dividends, stock splits, and
reclassifications in the normal course.
Class Z Warrants
Each Class Z Warrant entitles the holder to purchase one share of common
stock at $.75 per share for a period commencing July 1, 1996 and ending at
5:00 p.m., Eastern Time, on June 30, 2001. The Class Z Warrants are callable
by the company upon thirty days written notice at any time on or after July 1,
2000 and at any time, notwithstanding the date, that the common stock of the
company has a closing bid price on ten consecutive trading days of $2.00 per
share or more. Should the Company properly call the Warrant pursuant to
either of the call provisions, the Warrant holder must exercise the Warrants
within the thirty day notice period or they shall expire. Should the Warrant
holder exercise the Warrants, he must tender the exercise price along with his
Warrant certificate duly executed to the transfer agent as set forth in the
certificate within the notice period and the number of shares exercised will
be issued to him. The Class Z Warrants have been issued pursuant to a Warrant
Agreement between the Company and American Securities Transfer, Inc. (the
"Warrant Agent"). The Company has authorized and reserved for issuance the
shares of common stock issuable upon exercise of the Class Z Warrants.
The Warrants contain the usual anti-dilution provisions so as to avoid
dilution of the equity interest represented by the underlying Common Stock
upon the occurrence of certain events such as share dividends or splits. The
anti-dilution provisions do not apply in the event shares are issued for
reasonable consideration as determined by the Board of Directors. In the
event of liquidation, dissolution or winding up of the Company, holders of the
Warrants will not be entitled to participate in the assets of the Company.
Holders of the Warrants will have no voting, preemptive, liquidation or other
rights of a shareholder, and no dividends will be declared on the Warrants.
The Class Z Warrants also have over subscription privileges so that
persons who elect to exercise their Class Z Warrants may also subscribe for
any shares which underlie any Warrants not exercised at the expiration of the
warrant term.
The Warrants may not be exercised unless the registration statement
covering the shares underlying the Warrants of which this Prospectus forms a
part, is then effective.
Placement Agent Warrants
Each Placement Agent Warrant entitles the holder to purchase one share of
the Company's common stock at the price of $1.00 per share, at any time until
5:00 p.m. on October 15, 1999. There is no provision for the call or
redemption of the Placement Agent Warrants. The Placement Agent Warrants have
been issued pursuant to a Warrant Agreement between the Company and American
Securities Transfer, Inc., and the Company has authorized and reserved for
issuance the shares of common stock issuable upon the exercise of the
Placement Agent Warrants.
The Placement Agent Warrants contain the customary anti-dilution
provisions so as to avoid dilution of the equity interest represented by the
underlying common stock upon the occurrence of certain events such as share
dividends or splits. The anti-dilution provisions will not apply in the event
that a merger or acquisition is undertaken by the Company prior to the
exercise of the Placement Agent Warrants. In the event of a liquidation,
dissolution or winding up of the Company, holders of the Placement Agent
Warrants will not be entitled to participate in any distribution of the assets
of the Company. Holders of the Placement Agent Warrants will have no voting,
redemptive, liquidation or other rights of a shareholder, and no dividends
will be declared or paid to holders of the Placement Agent Warrants. The
Placement Agent Warrants were issued pursuant to the Placement Agent Agreement
entered into by and between Gilford Securities, Inc. and the Company as part
of the private placement of the Series B Convertible Exchangeable Preferred
Stock, which private placement was closed during October 1994. As part of the
Agreement, the Placement Agent Agreements were issued to Gilford Securities,
Inc. and persons appointed by Gilford Securities, Inc., who in turn may not
reassign the Warrants prior to October 15, 1995.
The exercise price and number of shares of common stock or other
securities issuable on exercise of the Warrants are also subject to adjustment
in certain circumstances, including a stock dividend, stock split,
recapitalization, reorganization, merger or consolidation of the Company.
The Warrants may be exercised upon surrender of the Warrant Certificate
on or prior to the expiration date at the offices of the Company, with the
exercise form of the Warrant completed and executed as indicated, accompanied
by full payment of the exercise price (by certified check payable to the
Company) for the number of Warrants being exercised. The Warrantholders do
not have the rights or privileges of holders of common stock.
Warrant Agent
The Warrant Agent for the Warrants is American Securities Transfer, Inc.,
Denver, Colorado.
Fernand Baer Options
As payment to Fernand Baer for his investment banking services, the
Company granted Mr. Baer or his assignee 150,000 options. Each option
entitles the holder to purchase one share of restricted common stock at the
price of $.90 per share, at any time until 5:00 p.m. on September 15, 2002.
General
The exercise prices and number of shares of common stock or other
securities issuable on exercise of the Warrants are also subject to adjustment
in certain circumstances, including a stock dividend, stock split,
recapitalization, reorganization, merger or consolidation of the Company.
The Warrants may be exercised upon surrender of the Warrant Certificate
on or prior to the expiration date at the offices of the Company, with the
exercise form of the Warrant completed and executed as indicated, accompanied
by full payment of the exercise price (by certified check payable to the
Company) for the number of Warrants being exercised. The Warrantholders do
not have the rights or privileges of holders of common stock.
Warrant Agent
The Warrant Agent for the Warrants is American Securities Transfer, Inc.,
Denver, Colorado.
LEGAL MATTERS
The validity of the issuance of the common stock offered hereby will be
passed upon for the Company by Cohen Brame & Smith Professional Corporation,
1700 Lincoln Street, Suite 1800, Denver, Colorado 80203. A director of the
firm beneficially owns approximately 9,000 shares of the Company's common
stock.
EXPERTS
The consolidated financial statements incorporated by reference in this
Prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their report with respect thereto, and are
included herein in reliance upon the authority of said firm as experts in
auditing and accounting in giving said report. Reference is made to said
report which includes an explanatory paragraph to describe certain factors
which raise substantial doubt about the Company's ability to continue as a
going concern as described in Note A to the financial statements.
======================================================================
No dealer, salesman or other person is authorized to give any information or
to make any representations not contained in this Prospectus in connection
with the offer made hereby, and if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. This Prospectus does not constitute an offer to sell or a
solicitation of any offer to buy the securities offered hereby to any person
in any state or other jurisdiction in which such offer or solicitation would
be unlawful. The delivery of this Prospectus at any time does not imply that
information contained herein is correct as of any time subsequent to its date.
TABLE OF CONTENTS
Page
DOCUMENTS INCORPORATED BY REFERENCE -2-
AVAILABLE INFORMATION -2-
ANNUAL AND QUARTERLY REPORTS -3-
INDEMNIFICATION -3-
PROSPECTUS SUMMARY -4-
RISK FACTORS -6-
RECENT DEVELOPMENTS -9-
USE OF PROCEEDS -10-
DIVIDEND POLICY -11-
MANAGEMENT -11-
PRINCIPAL SHAREHOLDERS -13-
SELLING SHAREHOLDERS -16-
PLAN OF DISTRIBUTION/DETERMINATION OF OFFERING PRICE -25-
DESCRIPTION OF SECURITIES -26-
LEGAL MATTERS -32-
EXPERTS -32-
DELTA-OMEGA
TECHNOLOGIES, INC.
COMMON STOCK
_______________________
PROSPECTUS
_______________________
______________, 1998
II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the estimated expenses, other than the
possible discounts and commissions, in connection with the offering described
in this Registration Statement.
Total
________
Registration Fee Under Securities Act of 1933 $1,898.10
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 3,001.90*
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. scetion
7-108-403 (improper distribution of assets, dividends or share repurchases) or
any transaction whereby the director derived an improper personal benefit.
C.R.S. section 7-108-402.
Item 16. Exhibits and Financial Statement Schedules
(a) The following exhibits are filed as part of this Registration
Statement pursuant to Item 601 of Regulation S-B:
3.1 Articles of Incorporation and Bylaws (Incorporated by
reference to Exhibit 3 to the Company's Registration
Statement (SEC File No. 33-45527).
4.1 Form of Common Stock Purchase Warrants.**
4.2 Designation of Series C Preferred Stock (Incorporated by
reference to Exhibit 4 to Report on Form 10-KSB for period
ended August 31, 1996).
5.0 Opinion of Cohen Brame & Smith Professional Corporation
regarding the legality of the securities being registered.*
10.1 Warrant Agreement With American Securities Transfer, Inc.**
24.1 Consent of Cohen Brame & Smith Professional Corporation
(Included in Exhibit 5.0).
24.2 Consent of Arthur Andersen LLP*
_________________
* Filed herewith.
** Previously filed.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
Registration Statement:
(i) To include a Prospectus required by
Section 10(a)(3) of the Securities Act of 1933.
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
Registration Statement; and
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
Registration Statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which remain unsold
at the termination of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the provisions in Item 15
hereof, or otherwise, the Registrant has been advised that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable. In the event
that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer
or controlling person of the Registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question of whether such indemnification by it is against
public policy as expressed in the Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-2 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, at
Broussard, Louisiana, on the 3rd day of September, 1998.
DELTA-OMEGA TECHNOLOGIES, INC.
By:/s/ James V. Janes, III,
____________________________
James V. Janes, III, President
POWER OF ATTORNEY
Each person whose individual signature appears below hereby constitutes
and appoints James V. Janes, III as his true and lawful attorney-in-fact with
full power of substitution to execute in the name and on behalf of such
person, individually and in each capacity stated below, and to file, any and
all amendments to this Registration Statement, including any and all
post-effective amendments.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/J. V. Janes, III, Attorney-In-Fact
________________
L. G. Schafran Chairman of the Board September 3, 1998
/s/J.V. Janes, III, Attorney-In-Fact
________________
James V. Janes, III Director and President September 3, 1998
/s/ J.V. Janes, III, Attorney-In-Fact
________________
Richard A. Brown Director September 3, 1998
/s/J.V. Janes, III, Attorney-In-Fact
________________
David H. Peipers Director September 3, 1998
/s/J.V. Janes, III Attorney-In-Fact
________________
Marian A. Bourque Chief Financial September 3, 1998
Officer (Principal Accounting
Officer), Secretary
and Treasurer
======================================================================
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
Exhibit Number in
Form S-2 Description
______________ ______________
3.1 Articles of Incorporation and Bylaws (Incorporated
by reference to Exhibit 3 to the Company's
Registration Statement (SEC File No. 33-45527).
4.1 Form of Common Stock Purchase Warrants.**
4.2 Designation of Series C Preferred Stock
(Incorporated by reference to Exhibit 4 to Report
on Form 10-KSB for period ended August 31, 1996).
5.0 Opinion of Cohen Brame & Smith Professional
Corporation regarding the legality of the
securities being registered.*
10.1 Warrant Agreement With American Securities
Transfer, Inc.**
24.1 Consent of Cohen Brame & Smith Professional
Corporation (Included in Exhibit 5.0).
24.2 Consent of Arthur Andersen LLP*
_________________
* Filed herewith.
** Previously filed.
EXHIBIT NOS. 5.0 AND 24.1
OPINION OF COHEN BRAME & SMITH PROFESSIONAL CORPORATION
=============================================================
Delta Omega
S-2
Exhibit 5.0 and 24.1 - CBS Opinion
September 3,1998
Delta-Omega Technologies, Inc.
7608 West Highway 90
New Iberia, Louisiana 70560
Re: Registration Statement on Form S-2
Gentlemen:
Delta-Omega Technologies, Inc., a Colorado corporation (the "Company"),
is registering for sale by selling shareholders up to 7,759,117 shares of its
common stock represented by up to 2,396,667 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; 186,036 shares of common stock currently
outstanding with registration rights; 1,335,000 shares of common stock
underlying conversion rights associated with currently outstanding Series B
Convertible Preferred Stock; 200,000 shares of common stock underlying
currently outstanding Placement Agent Warrants; 150,000 shares of common stock
underlying currently outstanding Options and 1,019,747 shares of common stock
being registered for certain selling security holders. Each share that is
being offered and that underlies the Series C Convertible Preferred Stock, the
Class Z Warrants, the Series B Convertible Preferred Stock, the Placement
Agent Warrants and the Options is the $0.001 par value common stock of the
Company, which has been authorized for issuance in the Company's Articles of
Incorporation (the "Shares"). The common shares underlying the conversion
rights, the warrants referenced herein, the options referenced herein and the
already outstanding common stock shall be hereinafter collectively called the
"Selling Shareholder Shares."
It is proposed that the Selling Shareholder Shares be registered pursuant
to this Registration Statement and the post effective amendments consolidated
into this Registration Statement (post effective Amendment No. 1 to the
Registration Statement on Form S-2, File No. 333-20590, under the Securities
Act of 1933, as amended (the "Act"), and filed with the Securities and
Exchange Commission (the "Commission") on January 23, 1997, and post effective
Amendment No. 3 to the Registration Statement on Form S-2, File No. 33-90604,
under the Act, and filed with the Commission on March 13, 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 post effective Amendments consolidated into the Registration
Statement (collectively 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 the effectiveness of the Registration
Statement, and compliance with applicable blue sky laws, when
issued and delivered in accordance with in the Registration
Statement, will have been legally issued and will constitute
valid and binding obligations of the Company in accordance with
their terms, subject to:
(a) applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws of general application
(including, without limitation, general principles of
equity, whether considered in a proceeding in equity or at
law), now or hereafter in effect relating to creditors'
rights and claims generally, and/or general laws generally
affecting or relating to the enforcement of creditors'
rights, including, but not limited to Section 547 of the
Federal Bankruptcy Reform Act of 1978; and
(b) the remedy of specific performance and injunctive and
other forms of equitable relief which are subject to
equitable defenses, and to the discretion of the court
before which any proceeding therefore may be brought.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement; to the filing of this opinion in connection with such
filings of applications as may be necessary to register, qualify or establish
eligibility for an exemption from registration or qualification of the
securities under the blue sky laws of any state or. other jurisdiction; and to
the reference to this firm in the Prospectus under the heading "Legal
Matters." In giving this consent, we do not admit that we are in the category
of persons whose consent is required under Section 7 of the Act or the rules
and regulations of the Commission promulgated thereunder.
The opinions set forth herein are based upon the federal laws of the
United States of America, and the laws of the State of Colorado, all as now in
effect. We express no opinion as to whether the laws of any particular
jurisdiction apply, and no opinion to the extent that the laws of any
jurisdiction other than those identified above are applicable to the subject
matter hereof.
The information set forth herein is as of the date of this letter. We
disclaim any undertaking to advise you of changes which may be brought to our
attention after the effective date of the Registration Statement.
Very sincerely,
/s/ Cohen Brame & Smith
COHEN BRAME & SMITH
Professional Corporation
EXHIBIT NO. 24.2
CONSENT OF ARTHUR ANDERSEN L.L.P.
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated October 3,1997
included in Delta-Omega Technology, Inc.'s Form 10-KSB for the year ended
August 31, 1997 and to all references to our firm included in this
registration statement.
/s/ Arthur Anderson LLP
New Orleans, Louisiana
September 2,1998
