As filed with the Securities and Exchange Commission on September 6, 1996
Registration No. 33-
------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
Registration Statement Under
THE SECURITIES ACT OF 1933
RENTECH, INC.
(Exact name of Registrant as specified in charter)
Colorado 84-0957421
----------------------------------- -------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1331 17th Street, Suite 720, Denver, Colorado 80202 (303) 298-8008
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(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices and intended principal place of
business)
Dennis L. Yakobson, President, 1331 17th St. Ste. 720, Denver, Colorado
80202 (303) 298-8008
(Name, address and telephone number of agent for service)
Copy to: Loren L. Mall, Esq.
Brega & Winters P.C.
1700 Lincoln Street, Suite 2222
Denver, Colorado 80203
Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date hereof.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. / /
------
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. / X /
------
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please 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 delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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<PAGE>
Page 2
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum Amount of
Title of Shares Amount to be Offering Price Aggregate Registration
to be Registered Registered(1) Per Unit(2) Offering Price Fee
---------------- ------------- ---------------- ---------------- ---------
<S> <C> <C> <C> <C>
Common Stock 5,109,822 $0.41 $2,095,027 $ 722.42
Common Stock 4,935,574 $0.41 $2,023,585 $ 697.79
Underlying Stock
Purchase Warrants
Total 10,045,396 $0.41 $4,118.612 $1,420.21
<FN>
(1) Subject to adjustment pursuant to the anti-dilution provisions as allowed by Rule 416.
(2) Average of the closing bid and asked prices as quoted on NASDAQ on September 3, 1996,
pursuant to Rule 457(c). Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c).
</TABLE>
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the
Registrant shall file a further amendment which specifically states that
this Registration Statement shall thereafter become effective in
accordance with Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date or dates as
the Commission, acting pursuant to said Section 8(a), may determine.<PAGE>
<PAGE>
PAGE 3
Subject to Completion, September 6, 1996
P R O S P E C T U S
-------------------------------------
RENTECH, INC.
10,045,396 Shares Common Stock ($.01 par value)
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK.
SEE RISK FACTORS BEGINNING AT PAGE 3.
This Prospectus relates to 10,045,396 shares of common stock, $.01
par value per share (the "Common Stock"), of RENTECH, INC. (the
"Company") sold by the Company in private placements in August 1996 and
earlier, including 4,935,574 shares of Common Stock issuable upon
exercise of stock purchase warrants issued by the Company to the
purchasers of Common Stock in private placements. The stock purchase
warrants are exercisable at $.25 per share and expire September 20, 1997
or one year after the date of issuance of the warrants. The latter date
may be as late as July 31, 1999. The Shares now held by the Selling
Shareholders and the shares of Common Stock that may be
acquired by the Selling Shareholders upon exercise of the stock purchase
warrants are collectively called the "Shares." The Selling Shareholders
are identified in this Prospectus under the heading "Selling
Shareholders."
The Shares may be offered by Selling Shareholders from time to time:
(i) in transactions in the over-the-counter market, on the automated
inter-dealer system on which shares of Common Stock of the Company are
then listed, in negotiated transactions, or a combination of such methods
of sale, and (ii) at market prices prevailing at the time of sale, at
prices related to such prevailing market prices, or at negotiated prices.
The Selling Shareholders may effect such transactions by selling the
Shares to or through securities broker-dealers. Such broker-dealers may
receive compensation in the form of discounts, concessions, or
commissions from the Selling Shareholders and/or the purchasers of the
Shares for whom such broker-dealers may act as agent or to whom they sell
as principal, or both (which compensation as to a particular broker-
dealer might be in excess of customary commissions). See "Selling
Shareholders" and "Plan of Distribution." Selling Shareholders may also
sell such shares pursuant to Rule 144 or Rule 144A under the Securities
Act of 1933 if the requirements for the availability of such rules have
been satisfied.
None of the proceeds from the sale of the Shares by the Selling
Shareholders will be received by the Company. The Company has, however,
received the net purchase price paid for the Shares upon the purchase of
the Shares in a recent private placement, as described herein under "Use
of Proceeds." The Company intends to use the net proceeds it has
received from the recent private placement for operating expenses. See
"SUMMARY--Use of Proceeds." The Company will receive proceeds with
respect to and to the extent of exercise of the stock purchase warrants.
The Company has agreed to bear all expenses (other than underwriting
discounts, selling commissions and underwriter expense allowance, and
fees and expenses of counsel and other advisers to the Selling Share-
holders) in connection with the registration and sale of the Shares being
offered by the Selling Shareholders. The Company has agreed to indemnify
the Selling Shareholders against certain liabilities, including
liabilities under the Securities Act of 1933, as amended (the "Securities
Act").
The Common Stock of the Company is listed and traded on NASDAQ on
the Small Cap Market under the symbol "RNTK." On September 3, 1996, the
last reported sale price of the Common Stock was $.41 per share.
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.
The date of this Prospectus is ________________, 1996<PAGE>
<PAGE>
Page 4
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith, files reports and other information with the Securities and
Exchange Commission (the "Commission"). Proxy statements, reports and
other information concerning the Company can be inspected and copied at
Room 1024 of the Commission's office at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and the Commission's Regional Offices in Denver
(Suite 4800, 1801 California Street, Denver, Colorado 80202), New York
(Room 1228, 75 Park Place, New York, New York 10007), and Chicago (Suite
1400, Northwestern Atrium Center, 500 West Madison Street, Chicago,
Illinois 60621-2511), and copies of such material can be obtained from
the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. This Prospectus does not
contain all information set forth in the Registration Statement of which
this Prospectus forms a part and exhibits thereto which the Company has
filed with the Commission under the Securities Act and to which reference
is hereby made.
DOCUMENTS INCORPORATED BY REFERENCE
The Company will provide, without charge, to each person to whom a
copy of this Prospectus is delivered, including any beneficial owner,
upon the written or oral request of such person, a copy of any or all of
the documents incorporated by reference herein (other than exhibits to
such documents, unless such exhibits are specifically incorporated by
reference into the information that the Prospectus incorporates).
Requests should be directed to:
Rentech, Inc.
1331 17th Street, Suite 720
Denver, Colorado 80202
Telephone number: (303) 298-8008
Attention: James P. Samuels, Chief Financial Officer
The following documents filed with the Commission by the Company
(File Number 0-19260) are hereby incorporated by reference into this
Prospectus:
1. The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1995;
2. The Company's Quarterly Report on Form 10-QSB for the quarterly
period ended March 31, 1996;
3. The Company's Current Report on Form 8-K dated January 19, 1996;
4. The Company's Current Report on Form 8-K dated February 13, 1996;
5. The Company's Quarterly Report on Form 10-QSB for the quarterly
period ended June 30, 1996;
6. The Company's Current Report on Form 8-K dated September 5, 1996;
and
7. The Company's Amendment No. 1 dated September 5, 1996 to Annual
Report on Form 10-KSB for the fiscal year ended December 31, 1995.
All documents filed with the Commission by the Company pursuant to
Sections 13(a), 13(c), 14, or 15(d) of the Exchange Act subsequent to the
date of this Prospectus and prior to the termination of the offering
registered hereby shall be deemed to be incorporated by reference into
this Prospectus and to be a part hereof from the date of the filing of
such documents. Any statement contained in a document incorporated or
deemed to be incorporated by reference herein shall be deemed to be
modified or superseded for purposes of this Prospectus to the extent that
a statement contained herein or in any subsequently filed document which
also is or is deemed to be incorporated by reference herein modifies or
supersedes such statement. Such statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute
a part of this Prospectus.<PAGE>
<PAGE>
Page 5
SUMMARY
The Company
Rentech, Inc. ("Rentech" or the "Company") was organized as a
Colorado corporation in 1981 to develop and exploit processes for the
conversion of low-value carbon-bearing solids and gases into valuable
liquid hydrocarbons including premium diesel fuel, naphthas and waxes.
The technical feasibility, that is, ability of the Company's conversion
process to convert carbon-burning gases into valuable liquid hydro-
carbons"Rentech Process Technology " or the "Technology"), was
established in the Company's first pilot plant and again in its second
pilot plant operated during 1989.
The Rentech Technology uses as feedstock natural gas from gas wells
that are not producing or that flare gas, or synthesis gas, a mixture of
hydrogen and carbon monoxide gases, produced by gasification of coal.
These sources of fuel are in abundant supply worldwide. The Technology
can provide a means of utilizing gas resources that are currently
unmarketable due to their remote locations or because of the presence of
diluents such as carbon dioxide or nitrogen. Other sources of feedstock
include methane, a gas collected from coal beds, as well as industrial
off gases.
The diesel fuel produced to date by using the Technology has been
tested to have a sulphur content below detectable limits and to have
improved combustion characteristics when compared to commercial No. 2
diesel fuel. Therefore, it is less polluting than presently available
diesel fuel, and, unlike alternative fuels such as methanol or compressed
natural gas, does not require any engine or vehicle modifications for
use. Based upon prices of crude oil at about $18 per barrel, and
commercial No. 2 diesel fuel at approximately $.50 per gallon, management
believes the diesel fuel can be produced and sold at competitive prices
and, particularly in view of the requirements of the federal Clean Air
Act, may be saleable at premium prices. The Technology has the potential
of reducing, in this and other countries, dependency upon imports of
crude oil and petroleum products.
The Company's business is licensing the Rentech Technology,
including sale of its proprietary catalyst, in exchange for license fees
and ongoing royalties on the production of liquid hydrocarbons from
conversion plants that use the Technology and are constructed and owned
by licensees. Rentech has licensed its Technology for use in India for
a plant now under final design for construction by its Indian licensee
at Arunachal Pradesh, India. That plant will be the first commercial
plant to use the Company's Technology. Rentech is providing its Indian
licensee engineering design and technical services under contract, and
will provide such services to subsequent licensees for their use in
constructing their plants, together with engineering services and startup
operational support services on a fee basis for licensed plants. In
addition, Rentech may reserve the right to contract for the engineering
and supply the synthesis gas conversion reactor modules that are
essential to use of its Technology in conversion plants.
At present the gas conversion Technology is not generating
sufficient cash flow to sustain the operations of the Company. As
previously announced by management, the Company has been exploring other
business opportunities, with a goal of diversifying into other businesses
and generating cash flow. The Company has obtained capital for near term
operations by making a private placement offering in August 1996 that
provided net proceeds of approximately $723,000. The Company expects
that it will be able to continue operations through the first quarter of
1997, at which time, if the Company is unsuccessful in its efforts to<PAGE>
<PAGE>
Page 6
create revenue necessary to provide for all ongoing expenses and broaden
its business base, the Company expects to suspend the expense side of its
operations to assure its Nasdaq listing and company liquidity. In such
event, the Company will function on a reduced basis until licensing fees
and design contract payments expected in 1997 and thereafter are
collected from the gas conversion licensee and the Company is able to
acquire or merge its entity with another public organization. See "RISK
FACTORS."
The Company intends to continue its business of licensing its
Technology, including attempts to enter into arrangements for a second
plant in India that is now under discussion. At the same time, the
Company expects to acquire other technologies or assets in other fields
of business. Acquisitions are sought both to increase the Company's
total assets in order to maintain the Company's qualifications to remain
listed on the Nasdaq Small Cap Market and to increase the Company's
revenues. The Company expects that it might be able to obtain other
technologies or assets through the issuance of shares of its Common Stock
or whose owners might be able to offset their taxable earnings against
the Company's net operating loss carryforward of approximately $8,500,000
as of December 31, 1995. There are no agreements with any such
companies, and there can be no assurances that any such undertakings will
be concluded. See "RISK FACTOR NO. 3."
The executive offices of the Company are located at 1331 17th
Street, Suite 720, Denver, Colorado 80202, telephone (303) 298-8008,
fax (303) 298-8010.
Use of Proceeds
The 5,109,822 Shares and 4,935,574 Shares of Common Stock issuable
upon conversion of the stock purchase warrants, respectively, are being
offered for the account of Selling Shareholders. The Company will not
receive any proceeds from their sale of their Shares, but it will receive
approximately $1,200,000 if all of the stock purchase warrants are
exercised, of which there is no assurance. The Company intends to use
any net proceeds from the exercise of the warrants for working capital
and general corporate purposes.
RISK FACTORS
The securities offered hereby involve a high degree of risk.
Prospective investors, prior to making an investment, should carefully
consider the following risks and speculative factors inherent in and
affecting the business of the Company and an investment in the Shares.
1. Lack of Profitable Operations. From inception on December 31,
1981, through June 30, 1996, the Company sustained losses aggregating
$7,576,605, including a loss of $1,450,049 for the 1994 fiscal year, a
loss of $2,452,823 for the 1995 fiscal year, and a loss of $267,359 for
the first half of 1996. As of June 30, 1996 and December 31, 1995, the
Company had a working capital deficit of $391,443 and $388,159. A
substantial portion of the losses is attributable to research and
development expenses incurred by the Company in connection with
development of the Technology through 1989. The suspension of the
Company's engineering design contract for the Henan Project in China and
the resulting liquidation of the Company's Future Fuels Pty Ltd.
subsidiary resulted in a loss of the investment in Future Fuels recorded
at approximately $501,000 for the 1995 fiscal year. At December 31, 1992
the Company had working capital of $2,344,607. During 1993 the Company
applied that working capital and approximately $1.5 million raised in
<PAGE>
Page 7
equity financing during the fourth quarter of 1993 to cover the costs
previously incurred in retrofitting its Synhytech plant and demonstrating
use of its Technology under commercial operating conditions in the plant
in order to induce potential licensees to build plants using the
Company's Technology. There are no assurances that licensees will
complete construction of plants to use the Technology, and no assurances
that such completed plants, if any, will be operated profitably by the
licensees. Because the Company's future income depends upon revenues
associated with successful plants or its acquisition of other profitable
business or assets, none of which is assured, there are no assurances
that the Company will be profitable in the future, or that it will be
able to continue in operation as a going concern. The report of the
Company's independent auditors for the fiscal year ended December
31, 1995 notes that the Company has suffered recurring losses from
operations and has a working capital deficiency which raises substantial
doubt about its ability to continue as a going concern.
2. Economic Feasibility of Technology Not Assured. The Company's
demonstration of its Technology in its Synhytech plant was not intended
to test the economic feasibility of the Technology and therefore did not
establish its economic feasibility. Whether any full-scale conversion
plant using the Technology can be profitably operated depends upon the
availability of low-cost feedstock, cost-efficient production of the
liquid hydrocarbons and a ready market for the end products (primarily
premium diesel fuel, naphthas and waxes) at reasonable prices. The fact
that the Synhytech plant could not be operated on a commercial basis
because of inadequacy of the feedstock from the landfill and the
prohibitive cost of bringing in other feedstock gas may hamper
development and construction of additional conversion plants. The diesel
fuel produced by the Technology has not been subjected to long-term
engine tests to determine if there are any adverse effects. No in-depth
cost or price studies have been prepared by independent third parties for
the Company. Any significant decrease in prices of crude oil below
approximately $18 or commercial No. 2 diesel fuel below approximately
$.50 per gallon could have a material adverse effect upon the Company.
3. Business Dependent Upon Acquisition of Other Businesses or
Assets or Merger. While the Company intends to continue its business
related to its Technology, the past revenues have been inadequate to
sustain the Company's operations, and future revenues from the Technology
will also be insufficient in the next 12 months. Thus the Company's
ability to continue its operations as a going concern depends upon its
acquisition of other businesses or assets or its merger with another
successful business, or several such transactions, at least one of which
must be completed before the Company's operating capital has been
exhausted. There are no assurances that any such transactions will be
successfully concluded. See "SUMMARY--Use of Proceeds."
4. Dependence upon Management. At this stage of the Company's
development, success of the Company depends upon the ability of
management to demonstrate and implement the technological and commercial
feasibility of the Technology, as well as to accomplish diversification
of its business. Design of plants and their startup, both of which could
require knowledge unique to the Company's technical personnel, are
required to achieve optimal process plant operations. Moreover, to
successfully compete with its Technology, the Company will be required to
engage in continuous research and development regarding not only the
conversion process and catalyst composition, but also products, markets
and costs. Loss of the services of the executive officers of the
Company, particularly Drs. Charles B. Benham or Mark S. Bohn due to their
technical expertise and knowledge, and Dennis L. Yakobson and Ronald C.
Butz due to their established relationships with licensees and others,
could be expected to have a material adverse effect upon the Company.
<PAGE>
Page 8
The Company's employment contracts with Dr. Benham, Mr. Yakobson and Mr.
Butz expire on March 31, 1997. It has no employment contract with Dr.
Bohn who works for the Company on a part-time basis. The Company has
obtained key-man insurance (as to which the Company is the sole
beneficiary) on the lives of Drs. Benham and Bohn in the amounts of
$500,000 each. The Company's basic proprietary information has been
reduced to tangible form, which will protect the Company in the event of
loss of its technical personnel, but which also will expose the Company
to greater risk of unauthorized dissemination and duplication of that
information notwithstanding controls established by the Company.
5. Loss of Proprietary Information. One of the keys to the
conversion process upon which the Technology depends is the catalyst
developed by the Company. The Company will require any catalyst
manufacturer that it licenses or catalyst joint venture partners to
maintain the confidentiality of the formula and to use it only for the
agreed purposes. In addition, Company personnel having access to the
formula and other proprietary Company information have signed
confidentiality agreements. Finally, the Company requires
confidentiality covenants in its license agreements and design and
construction contracts. However, no assurance can be given that such
persons will not violate the terms of their agreements or that
competitors will not be able to determine the components of the
catalyst or other proprietary Company information. In either event,
the ability of the Company to compete could be materially and adversely
affected.
6. Effect of Competition. The products of the Technology will
compete with other petroleum products, including products produced by
related methods. To a great extent, competition will be based upon
price, although compliance with environmental laws may create demand for
the Company's low aromatic, sulphur-free diesel fuel even at premium
prices. While the Company definitely faces price and product
competition, management is not aware of any competing technology, either
existing or under development, that may be cost effective on the
relatively small scale contemplated to be economically viable for
conversion plants using the Technology. However, others have and are
actively seeking to develop technology that will enable similar results.
It must be presumed that research in this area will continue and that
other persons will attempt, perhaps successfully, to reproduce the
catalyst and copy the Technology or develop a similar process,
particularly if the commercial viability of the process is confirmed.
The most likely competition will come from major corporations in the oil
and gas and synthetic fuel industries that have vastly greater technical
and financial resources than the Company.
7. Effect of Patent Infringement. To the knowledge of management,
no portion of the Technology infringes upon any previously issued and
unexpired United States patent. However, no patent searches have been
conducted, and no such assurance can be given. In the event it should be
determined that the Company's patents or proprietary processes are
infringing upon another patent, the Company will be compelled to seek a
license from the holder of that patent or to modify its Technology to
avoid such infringement, or both, neither of which may be possible.
Several U.S. patents have been issued to the Company, but it is possible
that third parties could infringe upon those patents, either innocently
or deliberately. In either case, to protect the Technology the Company
may be compelled to seek legal redress. The license agreement entered
into by the Company requires that the Company both prosecute and defend
infringement actions at its cost. In the event the Company does not have
sufficient funds for that purpose, it could incur substantial economic
loss, including termination of license agreements and loss of all or
portions of the economic benefit attributable to ownership of the
<PAGE>
Page 9
Technology and equity interests in conversion plants. The Company does
not now have and may never have adequate funds for that purpose.
8. Limited Protection Afforded by Patents. The Company has filed a
United States patent application with several claims covering certain
process applications, products produced, and materials used in its
process.
Several patents have been issued, and other claims are still pending.
U.S. patents that may be issued have a term of 20 years. The Company
presently requires non-disclosure agreements from all persons having
access to its proprietary information. Its patents and any future
patents it may be granted as well as its non-disclosure agreements will
be difficult and expensive to enforce, and may not be upheld by the
courts, especially those of foreign nations. Inability to protect any
patents or enforce it non-disclosure agreements, especially in foreign
countries where much of the Company's business may be established, could
enable others to take advantage of the Company's Technology without
compensating it, causing it substantial economic loss.
9. Need for Inexpensive Feedstock to Produce Products that Are
Competitively Priced. Successful exploitation of the Company's
Technology depends upon the availability of substantial quantities of
carbon-bearing, low-cost feedstock for plants that use the Technology.
Management believes such feedstock gas will be readily available from
sources such as natural gas wells that are not producing gas because of
remote locations, and from other sources such as synthesis gas produced
by gasification of coal, as well as industrial off gases. However, in
the event low-cost gas cannot be obtained, then plants using the
Technology may not be able to produce products for sale at competitive
prices. Although the cost of diesel fuel produced at the plants may
require that it be sold at prices somewhat higher than competing diesel
fuels, management expects that many users, particularly those subject to
the increasingly strict mandates of the Clean Air Act, will pay that
premium. At prices for crude oil at approximately $18 per barrel and
diesel fuel at approximately $.50 per gallon, management believes that
the diesel fuel produced using the Technology can be priced
competitively. However, no such assurance can be given. Also, should
oil or commercial No. 2 diesel fuel prices both decrease significantly,
any market for the Company's diesel fuel that may hereafter exist could
be adversely affected.
10. Lack of End Product Purchase Contracts. The Company has
previously contacted various potential purchasers of the products of the
Technology, primarily users of diesel fuel, but has no contracts for
purchase of the end products of its Technology. The Company's licensees
are responsible for marketing products from plants constructed by them.
Because the diesel fuel produced is relatively non-polluting, it is
believed that metropolitan transportation districts and other users of
fuel in urban areas having air pollution problems may be interested in
purchasing such fuel, possibly at a premium over the price of commercial
diesel fuel. However, no such assurance can be given.
11. Risk of Joint Ventures. While the Company does not presently
anticipate investing in the construction of gas conversion plants that
use its technology, such investments are possible in the future. The
Company may enter into joint ventures with third parties for construction
and operation of conversion process plants, catalyst manufacturing plants
or both. Joint ventures under certain circumstances may involve risks
not otherwise present including, for example, the possibility that a
co-venturer may become insolvent or bankrupt; that any such co-venturer
may at any time have economic, business interests or goals that are
<PAGE>
Page 10
inconsistent with the business interests or goals of the Company; or that
such co-venturer may be in a position to take action contrary to the
instructions or requests of the Company or contrary to its policies or
objectives. Among other things, actions by such a co-venturer might have
the result of subjecting the property, the other co-venturers or both to
liabilities in excess of those contemplated.
12. Liabilities Imposed by Environmental Laws. Some of the
products of the Technology contain small amounts of toxic substances,
such as alcohols, aldehydes, ethers and aromatics. Also, owners of
conversion plants, including the Company, if it acquires any such
ownership, will be subject to the risk of releases of hazardous materials
into the environment. Although management expects to adopt stringent
operational controls and procedures in conversion plants in which it has
a controlling equity interest and to require appropriate warnings
regarding possible product toxicity, no assurance can be given that the
Company will be able, in all instances, to comply with applicable
environmental laws. Any such failure could result in substantial
liability to the Company.
13. Risk of Currency Exchange Rates. In its offshore operations,
the Company expects it will usually be paid design contract fees, license
fees, royalties and other compensation denominated in the currency of the
subject country. The Company will thus be subject to the risk of
fluctuation of currency exchange rates. Whenever possible, however,
management intends to negotiate payment in U.S. dollars. In addition,
some countries may have laws that could adversely affect the ability of
the Company to remove funds from that country, may impose taxes upon such
removal, or limit the amount of the payments that a licensee can make to
the Company.
14. Uninsured Losses. The Company has obtained insurance of the
types and in the amounts management believes are customarily obtained for
businesses similarly situated. However, certain types of losses
(generally clean-up costs for environmental contamination or losses of a
catastrophic nature such as damage to a process plant in which the
Company holds an interest caused by fire, explosion, war, earthquakes and
floods) are either uninsurable or not economically insurable. Should an
uninsured or partially insured loss occur, the Company could suffer a
loss of invested capital and any profits that might otherwise have been
anticipated.
15. No Expectation of Dividends. No dividends have been paid on
the Company's Common Stock since inception, and it is highly unlikely
that any dividends will be paid in the near term due to existing capital
needs. However, if the business plan is successful, the Company may
generate substantial revenue from license fees and royalties related to
its Technology, as well as revenues from new businesses or assets, which,
barring unanticipated capital commitments, is expected to allow payment
of dividends. No assurance can be given, however, that the Company will
ever pay, or be in a position to pay dividends.
16. Potential Dilution Due to Exercise of Stock Options and
Additional Private Offerings. The Company has reserved 842,280 shares of
Common Stock for issuance upon exercise of presently outstanding stock
options and 1,032,000 for issuance upon purchase under outstanding stock
purchase warrants. The Company may issue additional shares of its Common
Stock to raise operating capital or acquire other businesses or assets.
Issuances of additional shares of Common Stock will reduce the percentage
ownership interest in the Company represented by shares of Common Stock
acquired by purchasers and may dilute the value of their interest in the
Company.
<PAGE>
Page 11
17. Potential Dilution of Shareholder Rights by Issuance of
Preferred Stock. The Company is authorized to issue up to 1,000,000
shares of preferred stock, par value $10 per share. The preferred stock
may be issued in one or more series, the terms of which will be
determined at the time of issuance by the board of directors without any
requirement for shareholder approval. Such rights may include voting
rights, preferences as to dividends and, upon liquidation, conversion and
redemption rights, and mandatory redemption provisions pursuant to
sinking funds or otherwise. No preferred stock is currently outstanding,
and the Company has no present plans for issuance thereof. However, any
issuance of preferred stock could affect the rights of the holders of
Common Stock and therefore reduce the value of the Common Stock. Rights
could be granted to holders of preferred stock hereafter issued which
could reduce the attractiveness of the Company as a potential takeover
target. See "DESCRIPTION OF SECURITIES - Preferred Stock."
18. Deterrence of Tender Offers by Fair Price Provisions. The
Company's Articles of Incorporation include provisions designed to assure
shareholders, to the extent possible, that any hostile takeover attempt
or merger of the Company with a significant shareholder or its affiliate
will result in shareholders receiving a fair value for their securities.
These provisions include grouping of the board of directors into three
classes with staggered terms; a requirement that directors may be removed
without cause only with the approval of the holders of 66-2/3% of the
outstanding voting power of the capital stock of the Company; and a
requirement that the holders of not less than 66-2/3% of the voting power
of the outstanding capital stock of the Company approve certain business
combinations of the Company with any holder of more than 10% of such
voting power or an affiliate of any such holder unless the transaction is
either approved by at least a majority of the uninterested and
unaffiliated members of the board of directors or unless certain minimum
price and procedural requirements are met. These provisions could deter
a hostile tender offer by a third party for the purchase of some or all
of the Company's outstanding securities and could have the effect of
entrenching management. See "DESCRIPTION OF SECURITIES - Fair Price
Provisions."
<PAGE>
<PAGE>
Page 12
SELLING SHAREHOLDERS
The shares of Common Stock owned by the Selling Shareholders and the
shares of Common Stock (the "Shares") underlying stock purchase warrants
held by them are being offered by the Selling Shareholders identified in
the following table.
<TABLE>
<CAPTION>
Number of Shares
Number of to be Beneficially Owned
Name of Number of Shares Shares That On Completion of the
Offering
Selling Beneficially Owned May Be % of
Shareholder Record Indirect Offered(1) Record Indirect Class
- ----------- ------ -------- ---------- ------ -------- -----
<S> <C> <C> <C> <C> <C> <C>
Charles B. Benham(2) 275,440 --- 320,880 115,000 --- *
Mark S. Bohn(3) 443,431 --- 91,046 352,385 --- 3.2
Ronald C. Butz(4) 164,151 --- 160,440 238,154 --- 2.1
Stephen Bushansky 31,250 --- 62,500 --- --- *
C. David Callahan 31,250 --- 62,500 --- --- *
Kenneth D. Carlson 31,250 --- 62,500 --- --- *
William Carmichael 250,000 --- 500,000 --- --- *
Conch Bar Enterprises, Inc. 125,000 --- 250,000 --- --- 1.1
Bartley W. Conroy 81,224 --- 162,448 2,226 --- 0
D.S.N. Enterprises, Ltd. 125,000 --- 250,000 --- --- 0
Gulf Coast Consultants, Inc. 265,555 --- 265,555 --- --- 0
Gulf Coast Trust 62,500 --- 125,000 --- --- 0
Hauser Chemical Research, Inc. 17,143 --- 17,143 --- --- 0
Kent T. Hultquist 62,500 --- 125,000 --- --- 0
Donald Hunter 125,000 --- 250,000 --- --- 0
C.E. Husted 35,000 --- 70,000 --- --- 0
IMC, Inc. 50,461 --- 50,461 --- --- 0
Leslie N. & Ann Johnson 125,000 --- 250,000 --- --- 0
Paul D. Jorgensen 102,500 --- 125,000 40,000 --- *
Fred E. Karp 31,250 --- 62,500 --- --- 0
Tommy L. Keith 125,000 --- 250,000 --- --- *
James Kuo 6,089 --- 6,089 --- --- 0
Joseph F. Lambright 250,000 --- 500,000 --- --- 0
William H. Lacy 100,000 --- 100,000 --- --- 0
Laredo Properties 125,000 --- 250,000 --- --- 0
Loren L. Mall 180,952 --- 350,000 130,952 --- 1.2
Roger Mariani 31,250 --- 62,500 --- --- 0
Mark G. Milask 125,000 --- 250,000 --- --- 0
Dr. Mohan S. Misra 120,000 --- 240,000 --- --- 0
Neil J. Montagino 125,000 --- 250,000 --- --- *
Will A. Mosley 31,250 --- 62,500 --- --- 0
Philip S. Mushlin 165,000 --- 250,000 40,000 --- *
Stanley E. Norfleet 62,500 --- 125,000 --- --- *
Craig K. Olson 31,250 --- 62,500 --- --- *
Satish B. Parekh 286,494 --- 200,000 186,494 --- 1.2
Russell A. Pareti 31,250 --- 62,500 --- --- 0
Kevin S. Parson 125,000 --- 250,000 --- --- 0
Ned F. Parson 125,000 --- 250,000 --- --- 0
Rebecca C. & Gary R. Perrine 125,000 --- 250,000 --- --- 0
Ralph Riggs 62,500 --- 125,000 --- --- 0
Rodriguez Family Partners, Ltd. 250,000 --- 500,000 --- --- 0
James P. Samuels 125,000 --- 250,000 --- --- 0
Schneider Holdings Co. 125,000 --- 250,000 --- --- 1.2
Norman Seif 31,250 --- 62,500 --- --- 0
Jay Thomas Smith 31,250 --- 62,500 --- --- 0
Michael Gary Solomon 125,000 --- 250,000 --- --- 0
Robert John Stalberger 31,250 --- 62,500 --- --- 0
Superior Reporting Services, 31,250 --- 62,500 --- --- 0
Inc.
Dr. Erich W. Tiepel(5) 122,402 --- 162,448 41,178 --- 2.8
Sampson Junior Williams 162,500 --- 100,000 100,000 --- *
Dennis L. Yakobson(6) 404,354 --- 166,200 238,154 --- 2.1
----------
Total 10,045,396
<FN>
*Less than 1%
(1) Includes shares covered by presently exercisable stock purchase warrants.
(2) Does not include 297,322 shares subject to options to purchase.
(3) Does not include 177,928 shares subject to options to purchase.
(4) Does not include 257,322 shares subject to options to purchase.
(5) Does not include 233,106 shares subject to options to purchase.
(6) Does not include 263,082 shares subject to options to purchase.
/TABLE
<PAGE>
<PAGE>
Page 13
Charles H. Benham, Mark S. Bohn, Ronald C. Butz and Dennis L.
Yakobson are officers and directors of the Company. Erich W. Tiepel is a
director. Loren L. Mall is associated with Brega & Winters P.C. which
serves as general counsel for the Company. To the knowledge of the
Company, none of the other Selling Shareholders nor any officers,
directors or employees of a Selling Shareholder have held any office,
position or other material relationship with the Company, its
predecessors or affiliates during the past three years.
Each Selling Shareholder have represented that he purchased the
Common Stock for investment and with no present intention of distributing
or reselling such Shares unless registered for resale. However, in
recognition of the fact that holders of restricted securities may wish to
be legally permitted to sell their Shares when they deem appropriate, the
Company has filed with the Commission under the Securities Act a Form S-3
registration statement of which this Prospectus forms a part with respect
to the resale of the Shares from time to time in the over-the-counter
market or in privately negotiated transactions.. The Company has agreed
to prepare and file such amendments and supplements to the Registration
Statement and to use its best efforts to obtain effectiveness of the
Registration Statement and to keep the Registration Statement effective
until all the Shares offered hereby have been sold pursuant thereto,
until such Shares are no longer, by reason of Rule 144 under the
Securities Act or any other rule of similar effect, required to be
registered for the sale thereof by the Selling Shareholders, or for a
period of 180 days, whichever occurs first.
Certain of the Selling Shareholders, their associates and affiliates
may from time to time be customers of, engage in transactions with,
and/or perform services for the Company or its subsidiaries in the
ordinary course of business.
PLAN OF DISTRIBUTION
The sale of the Shares by the Selling Shareholders may be effected
from time to time (i) in transactions in the over-the-counter market, in
negotiated transactions, or through a combination of such methods of
sale, and (ii) at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. The
Selling Shareholders may effect such transactions by selling the Shares
to or through broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions, or commissions from
the Selling Shareholders and/or the purchasers of the Shares for which
such broker-dealers may act as agent or to whom they may sell, as
principal, or both (which compensation as to a particular broker-dealer
may be in excess of customary compensation). Selling Shareholders may
also sell such shares pursuant to Rule 144 or Rule 144A under the
Securities Act of 1933 if the requirements for the availability of such
rules have been satisfied.
The Selling Shareholders and any broker-dealers who act in
connection with the sale of the Shares hereunder may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act,
and any commissions received by them and profit on any resale of the
Shares as principal might be deemed to be underwriting discounts and
commissions under the Securities Act.
<PAGE>
<PAGE>
Page 14
The Company has advised the Selling Shareholders that they and any
securities broker-dealers or others who may be deemed to be statutory
underwriters will be subject to the Prospectus delivery requirements
under the Securities Act of 1933. The Company has also advised the
Selling Shareholders that in the event of a "distribution" of his or its
shares, such Selling Shareholders, any "affiliated purchasers," and any
broker-dealer or other person who participates in such distribution may
be subject to Rule 10b-6 under the Securities Exchange Act of 1934 ("1934
Act") until his or its participation in that distribution is completed.
A "distribution" is defined in Rule 10b-6(c)(5) as an offering of
securities "that is distinguished from ordinary trading transactions by
the magnitude of the offering and the presence of special selling efforts
and selling methods." The Company has also advised the Selling
Shareholders that Rule 10b-7 under the 1934 Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purpose of pegging,
fixing or stabilizing the price of the Common Stock in connection with
this offering.
DESCRIPTION OF COMMON STOCK AND PREFERRED STOCK
As of the date of this Prospectus, the Company had 16,222,788 shares
of its Common Stock issued and outstanding. The shares of Common Stock
covered by this Prospectus are fully paid and nonassessable. Holders of
the Common Stock have no preemptive rights. Each stockholder is entitled
to one vote for each share of Common Stock held of record by such
stockholder. There is no right to cumulate votes for election of
directors. Upon liquidation of the Company, the assets then legally
available for distribution to holders of the Common Stock will be
distributed ratably among such shareholders in proportion to their stock
holdings. Holders of Common Stock are entitled to dividends when, as and
if declared by the Board of Directors out of funds legally available
therefor.
The authorized capital stock of the Company consists of 100,000,000
shares of Common Stock, $.01 par value per share, and 1,000,000 shares of
preferred stock, $10 par value per share. A quorum for purposes of
meetings of common shareholders consists of a majority of the issued and
outstanding shares of Common Stock, and once a quorum is established,
action of a routine nature may properly be taken by a majority of the
shares represented in person or by proxy at the meeting. Most major
corporate transactions such a mergers, consolidations, sales of all or
substantially all assets, and certain amendments to the articles of
incorporation require approval by the holders of two-thirds of the issued
and outstanding shares entitled to vote. The Company's board of
directors is authorized to issue shares of Common Stock and preferred
stock without approval of shareholders. Shares of preferred stock may be
issued in one or more series, the terms of which will be determined at
the time of issuance by the board of directors without any requirement
for shareholder approval. Such rights may include voting rights,
preferences as to dividends, and upon liquidation, conversion and
redemption rights, and mandatory redemption provisions pursuant to
sinking funds or otherwise. No shares of preferred stock are issued and
outstanding.
LEGAL OPINIONS
Brega & Winters, P.C., 1700 Lincoln Street, Suite 2222, Denver,
Colorado 80203 has rendered an opinion as to the legality of the Shares
to be issued upon exercise of the stock purchase warrants.
<PAGE>
<PAGE>
Page 15
EXPERTS
The financial statements incorporated in this prospectus by
reference from the Company's Annual Report on Form 10-KSB for the fiscal
years ended December 31, 1995 and 1994, have been audited by BDO Seidman,
LLP, independent certified public accountants, as stated in their report,
which is incorporated herein, and has been so incorporated in reliance
upon such report given upon the authority of the firm as experts in
accounting and auditing.
NO DEALER, SALESMAN, OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED
IN THIS PROSPECTUS IN CONNECTION WITH THE OFFERING HEREIN CONTAINED AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE SELLING SHAREHOLDERS
THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION
OF AN OFFER TO BUY, THE SECURITIES OFFERED HEREBY IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN
NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT
ANY INFORMATION CONTAINED HEREIN IS CORRECT AS TO ANY OF THE TIME
SUBSEQUENT TO ITS DATE. HOWEVER, THE COMPANY HAS UNDERTAKEN TO AMEND THE
REGISTRATION STATEMENT OF WHICH THIS PROSPECTUS IS A PART TO REFLECT ANY
FACTS OR EVENTS ARISING AFTER THE EFFECTIVE DATE THEREOF WHICH
INDIVIDUALLY OR IN THE AGGREGATE REPRESENT A FUNDAMENTAL CHANGE IN THE
INFORMATION SET FORTH IN THE REGISTRATION STATEMENT. IT IS ANTICIPATED,
HOWEVER, THAT MOST UPDATED INFORMATION WILL BE INCORPORATED HEREIN BY
REFERENCE TO THE COMPANY'S REPORTS FILED UNDER THE SECURITIES EXCHANGE
ACT OF 1934. SEE "DOCUMENTS INCORPORATED BY REFERENCE."
ALL DEALERS EFFECTING TRANSACTIONS IN THE REGISTERED SECURITIES,
WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE REQUIRED TO
DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF DEALERS
TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
Available Information 2
Documents Incorporated by Reference 2
Summary 2
Risk Factors 3
Selling Shareholders 7
Plan of Distribution 8
Description of Common Stock and Preferred Stock 9
Legal Opinions 9
Experts 9
/TABLE
<PAGE>
<PAGE>
Page 16
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
<TABLE>
<CAPTION>
Item 14. Other Expenses of Issuance and Distribution.
------- -------------------------------------------
<S> <C>
Registration Fee - Securities and Exchange Commission $ 1,420.21
Legal Fees and Disbursements* 10,000.00
Accounting Fees and Disbursements* 1,000.00
Legal Fees and Expenses in Connection with Blue Sky Filings* 7,500.00
Miscellaneous* 190.00
----------
Total $20,110.21
==========
---------------
<FN>
*Estimated.
</TABLE>
Item 15. Indemnification of Directors and Officers.
------- -----------------------------------------
The only charter provision, bylaw, contract, arrangement or statute
under which any director, officer or controlling person of Registrant is
insured and indemnified in any manner as such is as follows:
(a) Registrant has the power under the Colorado Corporation Code to
indemnify any person who was or is a party or is threatened to be made a
party to any action, whether civil, criminal, administrative or
investigative, by reason of the fact that such person is or was a
director, officer, employee, fiduciary, or agent of Registrant or was
serving at its request in a similar capacity for another entity, against
expenses (including attorneys' fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection
therewith if he acted in good faith and in a manner he reasonably
believed to be in the best interest of the corporation and, with respect
to any criminal action or proceeding, had no reasonable cause to believe
his conduct was unlawful. In case of an action brought by or in the
right of Registrant such persons are similarly entitled to
indemnification if they acted in good faith and in a manner reasonably
believed to be in the best interests of Registrant but no indemnification
shall be made if such person was adjudged to be liable for negligence or
misconduct in the performance of his duty to Registrant unless and to the
extent the court in which such action or suits was brought determines
upon application that despite the adjudication of liability, in view of
all circumstances of the case, such person is fairly and reasonably
entitled to indemnification. Such indemnification is not deemed
exclusive of any other rights to which those indemnified may be entitled
under the Articles of Incorporation, Bylaws, agreement, vote of
shareholders or disinterested directors, or otherwise.
(b) The Articles of Incorporation and Bylaws of Registrant
generally require indemnification of officers and directors to the
fullest extent allowed by law.
<PAGE>
<PAGE>
Page 17
(c) Paragraph 3 of the Certificate of the Selling Shareholders,
filed as Exhibit 1.1 to this Registration Statement, contains provisions
by which Registrant and its controlling persons are indemnified against
certain losses, claims, expenses and liabilities under the Securities Act
of 1933, as amended.
Item 16. Exhibits.
------- --------
The following exhibits are filed as part of this Registration
Statement:
<TABLE>
<CAPTION>
Exhibit Sequential
Number Page Number
------ -----------
<S> <C> <C>
1 Form of Certificate of Selling Shareholders. 17
3.1 Restated and Amended Articles of Incorporation,
dated January 4, 1991 (incorporated herein by
reference from the exhibits to Amendment No. 2
to Registrant's Form S-18 Registration Statement
No. 33-37150-D filed with the Securities and
Exchange Commission on January 18, 1991.
3.2 Articles of Amendment dated April 5, 1991 to the
Articles of Incorporation (incorporated herein by
reference from the exhibits to Registrant's report
filed on Form 8-K dated August 10, 1993).
3.3 Bylaws as amended, (incorporated herein by reference
from the exhibits to Registrant's Form S-18
Registration Statement No. 33-37150-D filed with the
Securities and Exchange Commission on January 18,
1991).
4 Form of Warrant to Purchase Shares of Common Stock. 18
5 Opinion of Brega & Winters, P.C. 25
23.1 Consent of Independent Certified Public Accountants 26
23.2 Consent of Brega & Winters P.C. (included in
Exhibit 5.1).
99 Report of Independent Certified Public Accountants 20
(incorporated herein by reference from the exhibits
to Registrant's Amendment No. One to Annual Report
on Form 10-KSB/A filed with the Securities and
Exchange Commission on September 6, 1996.)
</TABLE>
Item 17. Undertakings.
------- ------------
I. 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:
<PAGE>
<PAGE>
Page 18
(i) to include any 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;
(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; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(a) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that
is incorporated by reference in the registration statement 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.
(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 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. 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 a 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 shall be governed by the final adjudication of such issue.
<PAGE>
<PAGE>
Page 19
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Denver, State of Colorado, on
the day of 1996.
RENTECH, INC.
By: (Signature)
-----------------------------------
Dennis L. Yakobson, President
GENERAL POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, each person whose signature appears
below, hereby authorizes, constitutes and appoints Dennis L. Yakobson and
Ronald C. Butz and each of them, his true and lawful attorney-in-fact and
agents with full power of substitution and resubstitution, for him and in
his name, place and stead, in any and all capacities, to sign this
Registration Statement for the registration under the Securities Act of
1933, as amended, of securities of Rentech, Inc. and any and all pre-
effective and post-effective amendments to this Registration Statement,
together with any and all exhibits thereto and other documents required
to be filed with respect hereto and thereto and to file the same with the
Securities and Exchange Commission and any other regulatory authority,
granting unto said attorneys-in-fact and agents and each of them, full
power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents or
each of them, or their or his substitute or substitutes, may lawfully do
or cause to be done by virtue hereof and incorporate such changes as any
of the said attorneys-in-fact deems appropriate.
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) September 5
------------------ President; Chief Executive -------------, 1996
Dennis L. Yakobson Officer; and Director
(Signature) September 5
------------------ Vice President-Research and -------------, 1996
Charles B. Benham Development; and Director
(Signature) September 5
------------------ Vice President, Treasurer; and -------------, 1996
Mark S. Bohn Director
(Signature) September 5
------------------ Vice President, Chief Operating -------------, 1996
Ronald C. Butz Officer, Secretary and Director
(Signature) September 5
------------------ Director -------------, 1996
D. Barry McKennitt
(Signature) September 5
------------------ Director -------------, 1996
Erich W. Tiepel
(Signature) September 5
------------------ Vice President-Finance, and -------------, 1996
James P. Samuels Chief Financial Officer<PAGE>
<PAGE>
Page 20
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Sequential
No. Document Page Number
<S> <C> <C>
1 Form of Certificate of Selling Shareholders. 17
3.1 Restated and Amended Articles of Incorporation,
dated January 4, 1991 (incorporated herein by
reference from the exhibits to Amendment No. 2
to Registrant's Form S-18 Registration Statement
No. 33-37150-D filed with the Securities and
Exchange Commission on January 18, 1991.
3.2 Articles of Amendment dated April 5, 1991 to the
Articles of Incorporation (incorporated herein by
reference from the exhibits to Registrant's report
filed on Form 8-K dated August 10, 1993).
3.3 Bylaws as amended, (incorporated herein by
reference from the exhibits to Registrant's Form
S-18 Registration Statement No. 33-37150-D filed
with the Securities and Exchange Commission on
January 18, 1991).
4 Form of Warrant to Purchase Shares of Common Stock. 18
5 Opinion of Brega & Winters P.C. 25
23.1 Consent of Independent Certified Public Accountants 26
23.2 Consent of Brega & Winters, P.C.
(included in Exhibit 5.1).
99 Report of Independent Certified Public Accountants 20
(incorporated herein by reference from the exhibits
to Registrant's Amendment No. One to Annual Report
on Form 10-KSB/A filed with the Securities and
Exchange Commission on September 6, 1996.)
</TABLE>
APPENDIX
On the Prospectus cover there is a red herring running vertically on the
left-hand side of the page. It reads as follows:
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with
the Securities and Exchange Commission. These securities may not be sold
nor may offers to buy be accepted prior to the time the registration
statement becomes effective. This prospectus shall not constitute an
offer to sell or the solicitation of an offer to buyer nor shall there be
any sale of these securities in any state in which such offer, solici-
tation or sale would be unlawful prior to registration or qualification
under the securities laws of any such state.
<PAGE>
Page 21
EXHIBIT 1
CERTIFICATE OF SELLING SHAREHOLDER
The undersigned selling shareholder ("Holder") has requested that
RENTECH, INC. (the "Company"), include in a Registration Statement on
Form S-3 certain shares of the Company's common stock (the "Securities")
desired to be sold by the Holder. To induce the Company to register such
Securities for public sale by the Holder:
1. The Holder represents and warrants to and covenants with the
Company that: (i) the Holder has fully and accurately completed the
Registration Statement Questionnaire for use by the Company in
preparation of the Registration Statement and the answers and information
contained therein are true and correct as of the date hereof and will be
true and correct as of the effective date of the Registration Statement
and at all times thereafter; (ii) the Holder understands that a current
prospectus is required to be delivered to any purchaser of the
Securities; (iii) the Holder has not entered into any agreement, written
or oral, for the sale of any of the Securities upon terms different from
those set forth in the Registration Statement; (iv) the Holder is aware
of and agrees to abide by the provisions of Rule 10b-6 under the
Securities Exchange Act of 1934 ("1934 Act"), which provides, in essence,
that the Holder, under certain circumstances, may not bid for or purchase
any of the Securities covered by the Registration Statement or any
security of the same class, or any right to purchase any such security,
and may not attempt to induce any person to purchase any such security or
right until all Securities covered by such Registration Statement and
owned by such Holder shall have been sold or withdrawn; and (v) the
Holder is aware of and agrees to abide by the provisions of Rule 10b-7
under the 1934 Act which provides that any person who offers to buy or
buys the common stock of the Company for the purpose of maintaining or
stabilizing the market price of such common stock to facilitate the sale
of the Securities may be deemed to have violated rules prohibiting
manipulation of market prices for securities.
2. The Holder agrees to promptly give notice to the Company in the
event any of the information provided by the Holder in the Registration
Statement Questionnaire or any of the information relating to the
Securities owned by the Holder included in the Registration Statement,
or to the plan of distribution as set forth in the Registration Statement
(copies of which are enclosed), should become materially false or
misleading. The Holder acknowledges and agrees that there may
occasionally be times when the Company must temporarily suspend the use
of the prospectus and that the Holder will not be able to sell any of the
Securities during the suspension period.
3. To the extent permitted by law, the Holder will indemnify and
hold harmless the Company and its officers, directors and any person who
controls the Company within the meaning of the Securities Act of 1933, as
amended, for any claims, damages or liabilities (and actions related
thereto) arising out of any untrue or alleged untrue statement of any
material fact or based upon the omission or alleged omission to state a
material fact required to be stated in the Registration Statement,
prospectus or amendments or to make statements therein not misleading,
but only to the extent that such untrue or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished by Holder for use in connection with
such registration.
Dated this day of , 1996.
------- --------------------------
------------------------------ ------------------------------
Signature Signature (if held jointly)
------------------------------ ------------------------------
Print or Type Name Print or Type Name
<PAGE>
Page 22
EXHIBIT 4
THE SECURITIES REPRESENTED BY THIS CERTIFICATE, AND THE SECURITIES ISSUED
UPON EXERCISE HEREOF, MAY NOT BE OFFERED FOR SALE, SOLD OR OTHERWISE
TRANSFERRED EXCEPT PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT FILED
UNDER THE SECURITIES ACT OF 1933 (THE "ACT"), OR PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE ACT WHICH SHALL BE ESTABLISHED TO THE
SATISFACTION OF THE COMPANY.
Void after 3:30 P.M., Denver Time, on , 199
--------------- --
Warrant to Purchase
Shares
------------
of Common Stock
WARRANT TO PURCHASE SHARES OF COMMON STOCK
OF
RENTECH, INC.
This Is to Certify That, FOR VALUE RECEIVED,
--------------------------
-------------------------------------------------------------------------
or registered assigns ("Holder"), is entitled to purchase, subject to the
provisions of this Warrant, from RENTECH, INC., a Colorado corporation
("Company"), at any time not later than 3:30 P.M., Denver time, on
, 199 , one year after the date of this
-------------------------- ---
Warrant, (the "Expiration Date") shares of
common stock, having $.01 par value per share, of the Company ("Common
Stock") at an exercise price, subject to adjustment as set forth below,
of $0.25 per share. The number of shares of Common Stock to be received
upon the exercise of this Warrant and the price to be paid for a share of
Common Stock are subject to adjustment from time to time as hereinafter
set forth. The shares of the Common Stock deliverable upon such exercise,
and as adjusted from time to time, are hereinafter sometimes referred to
as "Warrant Stock" and the exercise price of a share of Common Stock in
effect at any time and as adjusted from time to time is hereinafter
sometimes referred to as the "Exercise Price."
(a) Exercise of Warrant. Subject to the provisions of Section (p)
hereof, this Warrant may be exercised in whole or in part at any time or
from time to time not later than 3:30 P.M., Denver Time, on
, 199 , or if that date falls on a day on which
-------------------- banking institutions are authorized by law to close,
then on the next succeeding day which shall not be such a day, by
presentation and surrender hereof to the Company with the Purchase Form
annexed hereto duly executed and accompanied by payment of the Exercise
Price for the number of shares specified in such form, together with all
federal and state taxes applicable upon such exercise. If this Warrant
should be exercised in part only, the Company shall, upon surrender of
this Warrant for cancellation, execute and deliver a new Warrant evi-
dencing the right of the Holder to purchase the balance of the shares
purchasable hereunder. Upon receipt by the Company of this Warrant at
the office or agency of the Company, in proper form for exercise, the
Holder shall be deemed to be the holder of record of the shares of Common
<PAGE>
Page 23
Stock issuable upon such exercise, notwithstanding that the stock trans
fer books of the Company shall then be closed or that certificates repre-
senting such securities shall not then be actually delivered to the
Holder. The Exercise Price shall be paid in cash.
(b) Reservation of Shares. The Company hereby agrees that at all
times there shall be reserved for issuance and/or delivery upon exercise
of this Warrant such number of shares of its Common Stock as shall be
required for issuance or delivery upon exercise of this Warrant.
(c) Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant.
With respect to any fraction of a share called for upon any exercise
hereof, the Company shall pay to the Holder an amount in cash equal to
such fraction multiplied by the current market value of such fractional
share, determined as follows:
(1) If the Common Stock is listed on a national securities
exchange or admitted to unlisted trading privileges on such exchange, the
current value shall be the last reported sale price of the Common Stock
on the composite tape of such exchange on the last trading day prior to
the date of exercise of this Warrant or if no such sale is made on such
day, the average closing bid and asked prices for such day on the
composite tape of such exchange; or
(2) If the Common Stock is not so listed or admitted to
unlisted trading privileges, the current value shall be the mean of the
last reported bid and asked prices reported by the National Association
of Securities Dealers Quotation System (or, if not so quoted on NASDAQ,
by the National Quotation Bureau, Inc.) on the last trading day prior to
the date of the exercise of this Warrant; or
(3) If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported,
the current value shall be an amount, not less than book value, deter
mined in such reasonable manner as may be prescribed by the Board of
Directors of the Company, such determination to be final and binding on
the Holder.
(d) Exchange, Assignment or Loss of Warrant. This Warrant is
assignable and exchangeable, without expense, at the option of the
Holder, upon presentation and surrender hereof to the Company or at the
office of its stock transfer agent, if any, for other Warrants of differ-
ent denominations entitling the holder thereof to purchase in the aggre-
gate the same number of shares of Common Stock purchasable hereunder.
Any such assignment shall be made by surrender of this Warrant to the
Company or at the office of its stock transfer agent, if any, with the
Assignment Form annexed hereto duly executed and funds sufficient to pay
any transfer tax; whereupon the Company shall, without charge, execute
and deliver a new Warrant in the name of the assignee named in such
instrument of assignment and this Warrant promptly shall be canceled.
This Warrant may be divided or combined with other Warrants which carry
the same rights upon presentation hereof at the office of the Company or
at the office of its stock transfer agent, if any, together with a
written notice specifying the names and denominations in which new
Warrants are to be issued and signed by the Holder hereof. The term
"Warrant" as used herein includes any Warrants issued in substitution for
or replacement of this Warrant, or into which this Warrant may be divided
or exchanged. Upon receipt by the Company of evidence satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in
the case of loss, theft or destruction) of reasonably satisfactory
indemnification including a surety bond, and upon surrender and cancella-
<PAGE>
<PAGE>
Page 24
tion of this Warrant, if mutilated, the Company will execute and deliver
a new Warrant of like tenor and date. Any such new Warrant executed and
delivered shall constitute an additional contractual obligation on the
part of the Company, whether or not this Warrant so lost, stolen,
destroyed, or mutilated shall be at any time enforceable by anyone.
(e) Rights of the Holder. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder of the Company, either at law
or equity, and the rights of the Holder are limited to those expressed in
this Warrant and are not enforceable against the Company except to the
extent set forth herein.
(f) Officer's Certificate. Upon request by the Holder, and if the
Exercise Price is adjusted as required by the provisions of Section (f)
hereof, the Company shall forthwith file in the custody of its Secretary
or an Assistant Secretary at its principal office, and with its stock
transfer agent, if any, an officer's certificate showing the adjusted
Exercise Price determined as herein provided and setting forth in
reasonable detail the facts requiring such adjustment and the calculation
thereof. Each such officer's certificate shall be made available at all
reasonable times for inspection by the Holder and the Company shall, upon
request after each such adjustment, mail a copy of such certificate to
the Holder.
(g) Notices to Holders. So long as this Warrant shall be
outstanding and unexercised (i) if the Company shall pay any dividend or
make any distribution upon the Common Stock, or (ii) if the Company shall
offer to all holders of Common Stock for subscription or purchase by them
any shares of stock of any class or any other rights, or (iii) if any
capital reorganization of the Company, reclassification of the capital
stock of the Company, consolidation or merger of the Company with or into
another corporation, sale, lease or transfer of all or substantially all
of the property and assets of the Company to another corporation, or
voluntary or involuntary dissolution, liquidation or winding up of the
Company shall be effected, then, in any such case, the Company shall
cause to be delivered to the Holder, at least 30 days prior to the date
specified in (x) or (y) below, as the case may be, a notice containing a
brief description of the proposed action and stating the date on which
(x) a record is to be taken for the purpose of such dividend, distri-
bution or rights, or (y) such reclassification, reorganization, consoli-
dation, merger, conveyance, lease, dissolution, liquidation or winding up
is to take place and the date, if any, is to be fixed, as of which the
holders of Common Stock of record shall be entitled to exchange their
shares of Common Stock for securities or other property deliverable upon
such reclassification, reorganization, consolidation, merger, conveyance,
dissolution, liquidation or winding up.
(h) Dissolution. If, at any time prior to the expiration of this
Warrant and prior to the exercise thereof, any dissolution, liquidation
or winding up of the Company shall be proposed, the Company shall cause
at least 30 days' notice to be mailed by certified mail to the registered
Holder of this Warrant Certificate at his address as it appears on the
books of the Company. Such notice shall specify the date as of which
holders of record of Common Stock shall participate in any distribution
or shall be entitled to exchange their Common Stock for securities or
other property, deliverable upon such dissolution, liquidation or winding
up, as the case may be; to the end that, during such period of 30 days,
the holders of this Warrant may exercise this Warrant and purchase Common
Stock (or other stock substituted therefor as hereinbefore provided) and
be entitled in respect of shares so purchased to all of the rights of the
other holders of Common Stock of the Company. In case of a dissolution,
liquidation or winding up of the Company, all purchase rights under this
Warrant shall terminate at the close of business on the date as of which
<PAGE>
Page 25
holders of record of the Common Stock shall be entitled to participate in
a distribution of the assets of the Company in connection with such
dissolution, liquidation or winding up (provided that in no event shall
said date be less than 30 days after completion of service by certified
mail of notice as aforesaid). Any Warrant not exercised prior to such
time shall be void and no rights shall exist thereunder. In any such
case of termination of purchase rights, a statement thereof shall be
included in the notice provided for herein.
(i) Spin-Offs. In the event the Company spins-off a subsidiary or
stock held in another corporation as an investment by distributing to the
shareholders of the Company, as a dividend or otherwise, the stock of the
subsidiary or other corporation, the Company shall reserve, for the life
of the Warrant, shares of the subsidiary or other corporation to be
delivered to the holders of the Warrants upon exercise to the same extent
as if they were owners of record of the Warrant Stock on the record date
for payment of the shares of the subsidiary or other corporation.
(j) Registration Rights.
(1) Automatic Registration Rights. If the Company files a
registration statement with the Securities and Exchange Commission for
the Common Stock acquired by the holders of its Nonsubordinated 10%
Convertible Promissory Notes ("Notes") through exercise of the Notes,
under conditions provided by the terms of the Notes, the Company shall
include in the registration statement, and one time only, use its best
efforts to cause to be registered under the Securities Act of 1933, as
amended, all of the Common Stock of such holders that they have acquired
by exercise of their warrants. The Company will include in the
registration process only such shares of Common Stock as have been
acquired by exercise of the Warrants no later than twenty (20) days after
mailing the Company's notice of its intent to file a registration
statement to the holders of the Notes. The Company will file only one
registration statement for holders of Common Stock acquired upon
conversion of the Notes and exercise of the Warrants.
(2) Piggy-Back Registration. Subject to Section (k)(7)(D)
below, if at any time the Company proposes to register any of its Common
Stock under the Act in connection with the public offering of such
securities solely for cash on a form that would also permit the
registration of the Common Stock of the holders that they acquire through
conversion of the Notes and warrants, the Company shall, each such time,
promptly give each Holder written notice of such determination. Upon the
written request of any Holder given within twenty (20) days after mailing
of any such notice by the Company, the Company shall use its best efforts
to cause to be registered under the Act all of such Common Stock so
acquired that each such Holder has requested to be registered.
(3) Obligations of the Company. Whenever required to use its
best efforts to effect the registration of any Common Stock, the Company
shall, as expeditiously as reasonably possible:
(A) Prepare and file with the Securities and Exchange
Commission ("SEC") a registration statement with respect to such Warrant
Stock and use its best efforts to cause such registration statement to
become and remain effective; provided, however, that in connection with
any proposed registration intended to permit an offering of any
securities from time to time (i.e., a so-called "shelf registration"),
the Company shall in no event be obligated to cause any such registration
to remain effective for more than one year.
<PAGE>
Page 26
(B) Prepare and file with the SEC such amendments and
supplements to such registration statement and the prospectus used in
connection with such registration statement as may be necessary to comply
with the provisions of the Act with respect to the disposition of all
securities covered by such registration statement.
(C) Furnish to the Holders such numbers of copies of a
prospectus, including a preliminary prospectus, in conformity with the
requirements of the Act, and such other documents as they may reasonably
request in order to facilitate the disposition of Warrant Stock owned by
them.
(D) Use its best efforts to register and qualify the
securities covered by such registration statement under such other
securities or blue-sky laws of such jurisdictions as shall be reasonably
appropriate for the distribution of the securities covered by the
registration statement, provided that the Company shall not be required
in connection therewith or as a condition thereto to qualify to do
business or to file a general consent to service of process in any such
states or jurisdictions, and further provided that (anything in this
Section (k) to the contrary notwithstanding with respect to the bearing
of expenses) if any jurisdiction in which the securities shall be
qualified shall require that expenses incurred in connection with the
qualification of the securities in that jurisdiction be borne by selling
shareholders pro rata, to the extent required by such jurisdiction.
(4) Furnish Information. It shall be a condition precedent to
the obligations of the Company to take any action that the Holders shall
furnish to the Company such information regarding them, the Warrant Stock
held by them, and the intended method of disposition of such securities
as the Company shall reasonably request and as shall be required in
connection with the action to be taken by the Company.
(5) Company Registration Expenses. In the case of any
registration effected pursuant to Section (k)(1), the Company shall bear
any additional registration and qualification fees and expenses
(excluding underwriters' discounts, commissions and expenses), and any
additional costs and disbursements of counsel for the Company that result
from the inclusion of securities held by the Holders in such
registration; provided, however, that if any such cost or expense is
attributable solely to one selling Holder and does not constitute a
normal cost or expense of such a registration, such cost or expense shall
be paid by that selling Holder. In addition, each selling Holder shall
bear the fees and costs of its own counsel.
(6) Delay of Registration. No Holder shall have any right to
take any action to restrain, enjoin, or otherwise delay any registration
as the result of any controversy that might arise with respect to the
interpretation or implementation of this Section (l).
(7) Indemnification. In the event any Common Stock is
included in a registration statement:
(A) To the extent permitted by law, the Company will
indemnify and hold harmless each Holder requesting or joining in a
registration, any underwriter (as defined in the Act) for it, and each
such person, if any, who controls such Holder or underwriter within the
meaning of the Act, against any losses, claims, damages, or liabilities,
joint or several, to which they may become subject under the Act or
otherwise, insofar as such losses, claims, damages, or liabilities (or
actions in respect thereof) arise out of or are based on any untrue or
alleged untrue statement of any material fact contained in such
registration statement, including any preliminary prospectus or final
<PAGE>
Page 27
prospectus contained therein or any amendments or supplements thereto, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein, or necessary to
make the statements therein not misleading; and will reimburse each such
Holder, such underwriter, or controlling person for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability, or action; provided,
however, that the indemnity agreement contained in this Section (k)(6)(A)
shall not apply to amounts paid in settlement of any such loss, claim,
damage, liability, or action if such settlement is effected without the
consent of the Company (which consent shall not be unreasonably withheld)
nor shall the Company be liable in any such case for any such loss,
claim, damage, liability, or action to the extent that it arises out of
or is based upon an untrue statement or alleged untrue statement or
omission or alleged omission made in connection with such registration
statement, preliminary prospectus, final prospectus, or amendments or
supplements thereto, in reliance upon and in conformity with written
information furnished expressly for use in connection with such
registration by any such Holder, underwriter, or controlling person.
(B) To the extent permitted by law, each Holder
requesting or joining in a registration will indemnify and hold harmless
the Company, each of its directors, each of its officers who have signed
the registration statement, each person, if any, who controls the Company
within the meaning of the Act, and each agent and any underwriter for the
Company (within the meaning of the Act) against any losses, claims,
damages, or liabilities to which the Company or any such director,
officer, controlling person, agent, or underwriter may become subject,
under the Act or otherwise, insofar as such losses, claims, damages, or
liabilities (or actions in respect thereto) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in such registration statement, including any preliminary
prospectus or final prospectus contained therein or any amendments or
supplements thereto, or arise out of or are based upon the omission or
alleged omission to state therein a material fact required to be stated
therein or necessary to make the statements therein not misleading, in
each case to the extent, but only to the extent, that such untrue
statement or alleged untrue statement or omission or alleged omission was
made in such registration statement, preliminary or final prospectus, or
amendments or supplements thereto, in reliance upon and in conformity
with written information furnished by such Holder expressly for use in
connection with such registration; and each such Holder will reimburse
any legal or other expenses reasonably incurred by the Company or any
such director, officer, controlling person, agent, or underwriter in
connection with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the indemnity agreement
contained in this Section(l)(6)(B) shall not apply to amounts paid in
settlement of any such loss, claim, damage, liability, or action if such
settlement is effected without the consent of such Holder (which consent
shall not be unreasonably withheld).
(C) Promptly after receipt by an indemnified party under
this Section (k)(7) of notice of the commencement of any action, such
indemnified party will, if a claim in respect thereof is to be made
against any indemnifying party under this paragraph, notify the
indemnifying party in writing of the commencement thereof and the
indemnifying party shall have the right to participate in, and, to the
extent the indemnifying party so desires, jointly with any other
indemnifying party similarly noticed, to assume the defense thereof with
counsel mutually satisfactory to the parties. The failure to notify an
indemnifying party promptly of the commencement of any such action, if
prejudicial to his ability to defend such action, shall relieve such
indemnifying party of any liability to the indemnified party under this
<PAGE>
Page 28
paragraph, but the omission to so notify the indemnifying party will not
relieve him of any liability that he may have to any indemnified party
otherwise than under this paragraph.
(D) Underwriting Requirements. In connection with any
offering involving an underwriting of shares of Common Stock being issued
by the Company or being sold by persons other than the Holders exercising
piggy-back registration rights (the "Initial Sellers"), the Company shall
not be required under Section (k)(2) to include any of the Holders'
Common Stock acquired by exercise of the Notes and warrants in such
underwriting unless they accept the terms of the underwriting as agreed
upon between the Company or the Initial Sellers and the underwriters
selected by it or them, and then only in such quantity as will not, in
the written opinion of the underwriters, jeopardize the success of the
offering by the Company or by the Initial Sellers. If the total amount
of securities that all Holders request to be included in such offering
exceeds the amount of securities that the underwriters reasonably believe
compatible with the success of the offering, the Company shall only be
required to include in the offering so many of the securities of the
selling Holders as the underwriters believe will not jeopardize the
success of the offering (the securities so included to be apportioned pro
rata among the selling Holders according to the total amount of
securities owned by said selling Holders, or in such other proportions as
shall mutually be agreed to by such selling Holders), provided that no
such reduction shall be made with respect to any securities offered by
the Company or the Initial Sellers for its or their own account.
(8) Termination of the Company's Obligations. The Company
shall have no obligations pursuant to this Section (k) more than one (1)
year after the date of this Agreement.
(9) Lockup Agreement. In consideration for the Company
agreeing to its obligations under this Section(l), each Holder agrees in
connection with any registration of the Company's securities that, upon
the request of the Company or the underwriters managing any underwritten
offering of the Company's securities, not to sell, make any short sale
of, loan, grant any option for the purchase of, or otherwise dispose of
any Warrant Stock (other than those included in the registration) without
the prior written consent of the Company or such underwriters, as the
case may be, for such period of time (not to exceed 90 days from the
effective date of such registration) as the Company or the underwriters
may specify.
(10) Notice. Any notices or certificates by the Company to
the Holder and by the Holder to the Company shall be deemed delivered if
in writing and delivered personally (including by telex, telecopier,
telegram or other acknowledged receipt) or three business days following
deposit in the United States mails, sent by registered or certified mail,
return receipt requested, addressed as follows:
Holder:
------------------------------
------------------------------
------------------------------
Company: Rentech, Inc.
1331 17th Street, Suite 720
Denver, Colorado 80202
Attention: President
Any person may change the address for the giving of notice by notice duly
given effective five (5) business days thereafter.
<PAGE>
Page 29
(k) Amendments and Waivers. Any term, condition or provision of
this Warrant may be amended and the observance thereof may be waived
(either generally or in a particular instance and either retroactively or
prospectively), with the written consent of the Company and the Holders.
(l) Entire Agreement. This Warrant constitutes the entire
agreement among the parties thereto and supersedes any and all prior
agreements whether written or oral regarding the subject matter hereof.
(m) Transfer to Comply with the Securities Act of 1933.
(1) This Warrant or the Warrant Stock or any other security
issued or issuable upon exercise of this Warrant may not be offered or
sold except in conformity with the Securities Act of 1933, as amended,
and then only against receipt of an agreement of such person to whom such
offer of sale is made to comply with the provisions of this Section (p)
with respect to any resale or other disposition of such securities.
(2) The Company may cause the following legend to be set forth
on each certificate representing Warrant Stock or any other security
issued or issuable upon exercise of this Warrant not theretofore
distributed to the public or sold to underwriters for distribution to the
public pursuant to Section (l) hereof, unless counsel for the Company is
of the opinion as to any such certificate that such legend is
unnecessary:
The securities represented by this certificate may not be
offered for sale, sold or otherwise transferred except pursuant
to an effective registration statement made under the
Securities Act of 1933 (the "Act"), or pursuant to an exemption
from registration under the Act the availability of which is to
be established to the satisfaction of the Company.
(n) Applicable Law. This Warrant shall be governed by, and
construed in accordance with, the laws of the state of Colorado.
ATTEST: RENTECH, INC.
------------------------- By:
Ronald C. Butz, Secretary -----------------------------------
Ronald C. Butz, Secretary Dennis E. Yakobson, President
[SEAL] Date:
---------------------------------
<PAGE>
<PAGE>
Page 30
EXHIBIT 5
Brega & Winters P.C. Attorneys at Law
One Norwest Center, 1700 Lincoln Street, Suite 2222
Denver, Colorado 80202
(303) 866-9400
FAX: (303) 861-9109
September 6, 1996
Rentech, Inc.
1331 17th Street, Suite 720
Denver, Colorado 80202
Re: Registration Statement on Form S-3
Gentlemen:
This firm has represented Rentech, Inc., a Colorado corporation (the
"Company") in connection with its proposed offering by selling
shareholders of approximately 10,045,396 Shares of Common Stock, $.01 par
value (the "Shares"), pursuant to a Registration Statement on Form S-3.
In connection with such representation, we have reviewed the Company's
articles of incorporation, bylaws, minute books and the applicable laws
of the State of Colorado.
Based on such review, we are of the opinion that the shares issued
to the selling shareholders identified in the registration statement are
fully paid and non-assessable.
We hereby consent to the reference to our firm under the heading
"LEGAL OPINIONS" in the Registration Statement on Form S-3 and the
related Prospectus and to the filing of this opinion with the Securities
and Exchange Commission as an exhibit to the Registration Statement.
Very truly yours,
(Signature)
BREGA & WINTERS P.C.
<PAGE>
Page 31
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Rentech, Inc.
1331 17th Street, Suite 720
Denver, CO 80202
We consent to the incorporation by reference in the Registration
Statement of Rentech, Inc. on Form S-3 of our report dated September
5, 1996 relating to the consolidated Financial Statements appearing in
the Annual Report on Form 10-KSB of Rentech, Inc. for the years ended
December 31, 1995 and 1994, and to the reference to us under the
heading "Experts" in the Prospectus, which is part of such Registration
Statement.
(Signature)
BDO Seidman, LLP
September 5, 1996
-----------------
Denver, Colorado
