<PAGE> 1
As filed with the Securities and Exchange Commission on July 7, 1998.
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
-----------------------
ITEQ, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 41-1667001
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2727 ALLEN PARKWAY, SUITE 760
HOUSTON, TEXAS 77019
(713) 285-2700
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Mark E. Johnson, Chairman and With Copies To:
Chief Executive Officer Richard L. Wynne
2727 Allen Parkway, Suite 760 Porter & Hedges, L.L.P.
Houston, Texas 77019 700 Louisiana, 34th Floor
(713) 285-2700 Houston, Texas 77002
(Name, address, including zip code, (713) 226-0600
and telephone number, including
area code, of agent for service)
Approximate date of commencement of proposed sale to public: From time
to time after the effective date of this Registration Statement.
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. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=========================================================================================================================
Proposed Maximum Proposed Maximum
Offering Price Aggregate
Title of Each Class of Securities to be Amount to be Per Offering Amount of
Registered Registered Share(1) Price(1) Registration Fee
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per share . . . . 742,039 $7.59375 $5,634,859 $1,662
=========================================================================================================================
</TABLE>
(1) Pursuant to Rule 457(c), the registration fee is calculated basis of the
average of the high and low sale prices for the Common Stock on the Nasdaq
National Market on July 2, 1998.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
<PAGE> 2
SUBJECT TO COMPLETION, DATED JULY 7, 1998
PROSPECTUS
742,039 SHARES
ITEQ, INC.
COMMON STOCK
--------------------
The 742,039 shares offered hereby are shares of common stock, par value
$.001 per share (the "Common Stock"), of ITEQ, Inc., a Delaware corporation
("ITEQ" or the "Company"), are owned by certain stockholders of the Company
("Selling Stockholders"). The Company will not receive any part of the
proceeds of the sale of the Common Stock offered hereby.
The Common Stock is traded on the Nasdaq National Market under the symbol
"ITEQ." On July 2, 1998, the closing sale price of the Common Stock on the
Nasdaq National Market was $7.75 per share.
The Common Stock may be offered and sold from time to time by Selling
Stockholders through brokers or dealers or directly to one or more purchasers
in negotiated transactions, at market prices prevailing at the time of sale or
at prices related to such market prices. The Selling Stockholders and brokers
executing selling orders on behalf of the Selling Stockholders may be deemed to
be "underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), in which event commissions received by such brokers may
be deemed to be underwriting commissions under the Securities Act. No Selling
Stockholder is required to make any sales of Common Stock under this
Prospectus. For further information concerning the plan of distribution of the
Common Stock, see "Plan of Distribution."
The expenses of this offering, estimated at $18,000, will be paid by the
Company.
--------------------
PROSPECTIVE PURCHASERS OF THE COMMON STOCK OFFERED HEREBY SHOULD CONSIDER
CAREFULLY THE MATTERS SET FORTH UNDER THE CAPTION "RISK FACTORS" BEGINNING ON
PAGE 3.
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
--------------------
The date of this Prospectus is July ___, 1998.
<PAGE> 3
This Prospectus contains or incorporates by reference "Forward-looking
statements" within the meaning of Section 27A of the Securities Act of 1933, as
amended ("Securities Act"), and Section 21E of the Securities Exchange Act of
1934, as amended (the "Exchange Act"). All statements other than statements of
historical facts so included in this Prospectus including, without limitation,
statements regarding the Company's business strategy, plans, objectives and
beliefs of management for future operations are forward-looking statements.
Although the Company believes the expectations and beliefs reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to have been correct. Important factors that could
cause actual results to differ materially from the Company's expectations are
discussed herein under the captions "Risk Factors."
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Exchange Act,
and in accordance therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the "Commission").
The Registration Statement (defined below), as well as such reports, proxy
statements and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at
its Regional Offices at Seven World Trade Center, New York, New York 10048 and
at Northwest Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained at prescribed
rates from the Public Reference Section of the Commission at 450 Fifth Street,
N.W. Washington, D.C. 20549. The Common Stock is listed and traded on the
Nasdaq National Market and certain of the Company's reports, proxy statements
and other information can be inspected at the offices of the Nasdaq Stock
Market, Inc., 1735 K Street, N.W., Washington, D.C. 20006-1506. The Commission
maintains a site on the World Wide Web that contains certain documents filed
with the Commission electronically. The address of such site is
http://www.sec.gov and the Registration Statement may be inspected at such
site.
The Company has filed with the Commission a Registration Statement on Form
S-3 (together with any amendments or supplements thereto, the "Registration
Statement") under the Securities Act with respect to the shares offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits thereto, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. For
further information, reference is made to the Registration Statement and the
exhibits thereto. Statements contained in this Prospectus (or in any document
incorporated into this Prospectus by reference) as to the contents of any
contract or other document referred to herein (or therein) are not necessarily
complete, and in each instance reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement, each such
statement being qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents with respect to the Company, which have been filed
by the Company with the Commission pursuant to the Exchange Act, are hereby
incorporated by reference and made a part of this Prospectus: (a) Annual
Report on Form 10-K for the year ended December 31, 1997, as amended by Form
10-K/A dated April 2, 1998 (File No. 0- 27986), (b) Form 8-K filed on January
20, 1998 (File No. 0-27986), (c) Form 8-K filed on March 9, 1998 (File No. 0-
27986), (d) Form 10-Q for the quarter ending March 31, 1998 (File No. 0-27986)
and (e) Form 8-K filed on June 26, 1998 (File No. 0-27896).
Any documents filed by the Company pursuant to Section 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 of the Common Stock covered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of filing of such documents. Any statement
contained in a document or information incorporated or deemed to be
incorporated herein by reference 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 that also is, or is deemed to be,
incorporated herein by reference, modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company undertakes to provide, without charge, to each person,
including any beneficial owner, to whom a copy of this Prospectus is delivered,
upon the written or oral request of such person, a copy of any and all of the
documents or information referred to above that has been or may be incorporated
by reference in this prospectus (excluding exhibits to such documents unless
such exhibits are specifically incorporated by reference). Requests should be
directed to ITEQ, Inc., 2727 Allen Parkway, Suite 760, Houston, Texas 77019,
Attn: Lawrance W. McAfee, Corporate Secretary, telephone (713) 285-2700.
2
<PAGE> 4
THE COMPANY
The Company is a provider of manufactured equipment, engineered
systems and services used in a variety of industries, including those involved
with the treatment, movement and storage of gases and liquids. The Company's
products include shell and tube heat exchangers, large above ground storage
tanks, baghouses, scrubbers, fans, other filtration systems and components,
pressure vessels, bins, silos, stacks and liners and shop built tanks.
The principal executive office of the Company is located at 2727 Allen
Parkway, Suite 760, Houston, Texas 77019, and its telephone number is (713)
285-2700.
RISK FACTORS
Prospective investors should consider the following Risk Factors,
together with the other information contained elsewhere in this Prospectus,
prior to purchasing the securities offered hereby.
DEPENDENCE ON INDUSTRY SPENDING; SEASONALITY
The prospects for the Company depend upon the level of capital and
maintenance expenditures by its industrial customers, in particular those by
petroleum, petrochemical and refining concerns. These industries historically
have been cyclical in nature and vulnerable to general downturns in the
economy. Decreases in industry spending could have a significant adverse
effect upon the demand for the Company's products and services and its results
of operations. The Company historically has experienced quarterly fluctuations
in its operating results due to climatic conditions affecting some of its
operations and the timing of maintenance budgets at some of its customers.
Operating results for the Company in any quarter will be dependent upon the
timing of equipment and system sales, which may vary considerably among
quarters.
ACQUISITIONS; INTEGRATION OF OPERATIONS
Since its inception in 1990, the Company has experienced substantial
growth through acquisitions of businesses. The Company plans to continue to
pursue acquisitions of businesses whose products and services complement those
of the Company. The Company's acquisition strategy involves the potential risks
inherent in assessing the value, strengths, weaknesses, contingent or other
liabilities and potential profitability of acquisition candidates and in
integrating the operations of acquired companies. Although the Company
generally has been successful in pursuing these acquisitions, there can be no
assurance that acquisition opportunities will continue to be available, that it
will have access to the capital required to finance potential acquisitions, that
it will continue to acquire businesses or that any business acquired will be
integrated successfully or prove profitable.
LEVERAGE AND LIQUIDITY
At March 31, 1998, the Company had total indebtedness of approximately
$89 million and debt as a percentage of total capitalization of 48%. The
degree to which the Company is leveraged could have important consequences,
including the following: (i) the possible impairment of the Company's ability
to obtain financing in the future for working capital, capital expenditures and
general corporate purposes; (ii) the necessity for a substantial portion of the
Company's cash flow from operations to be dedicated to the payment of principal
and interest on its indebtedness; and (iii) the potential for increased
vulnerability of the Company to economic downturns and possible limitation of
its ability to withstand competitive pressures.
COMPETITION
The Company's markets are fragmented and highly competitive. The
Company competes with many United States- based and international companies in
its global markets. Although none of the Company's competitors is considered
dominant, there are competitors that have significantly greater resources than
the Company, which, among other things, could be a competitive disadvantage to
the Company in securing certain projects.
INTERNATIONAL EXPANSION
The Company's successful expansion into foreign markets will depend on
numerous factors, many of which are beyond its control. In addition, foreign
expansion may increase the Company's exposure to certain risks inherent in
doing business outside the United States, including currency fluctuations,
restrictions on the repatriation of profits, compliance with foreign laws and
standards and political risks. Although most of the Company's contracts with
respect to international export sales to date have been denominated in United
States dollars, no assurance can be made that future contracts will be
denominated in United States dollars; therefore, the Company may be subject to
foreign exchange risks in the future.
3
<PAGE> 5
POTENTIAL FOR PRODUCT LIABILITY CLAIMS
Certain of the Company's products are used in potentially hazardous
environments. Although the Company carries insurance in amounts that it
considers adequate, catastrophic occurrences at locations where the Company's
products are used could in the future result in significant product liability
claims against the Company.
ENVIRONMENTAL REGULATIONS
The Company is subject to various foreign, federal, state and local
laws and regulations relating to the protection of the environment. These laws
may provide for retroactive, strict liability for damages to natural resources
or threats to public health and safety, rendering a party liable for
environmental damage without regard to its negligence or fault. Sanctions for
noncompliance may include revocation of permits, corrective action orders,
administrative or civil penalties and criminal prosecution. The Company's
business involves environmental management and issues typically associated with
historical manufacturing operations. To date, the Company's cost of complying
with environmental laws and regulations has not been material, but the fact
that such laws or regulations are changed frequently makes predicting the cost
or impact of such laws and regulations on its future operations uncertain. In
addition, further increases in the costs of environmental compliance may cause
traditional aboveground storage tank ("AST") customers to curtail their storage
operations resulting in a decrease in the utilization of ASTs. The
modification of existing laws or regulations or the adoption of new laws or
regulations could adversely affect the Company.
YEAR 2000
Certain computer programs and microprocessors use two digits rather
than four to define the applicable year. Any of the Company's computer
programs that have date-sensitive software and microprocessors may recognize a
date using "00" as the year 1900 rather than the year 2000. This phenomenon
could cause a disruption of operations, including, among other things, a
temporary inability to utilize manufacturing equipment, send invoices or engage
in similar, normal business activities. The Company is currently in the
process of evaluating its computer software programs and operating systems to
ensure such programs and systems will be able to process transactions in the
year 2000. However, the Company does not expect that the costs to modify its
programs and systems will be material to its financial condition or results of
operations. The Company does not currently have information concerning the year
2000 compliance of its suppliers and customers. In the event the Company's
significant suppliers or customers do not successfully and timely achieve year
2000 compliance, the Company's operations could be adversely affected.
4
<PAGE> 6
SELLING STOCKHOLDERS
The following table sets forth certain information, as of the date
hereof, with respect to the number of shares of Common Stock beneficially owned
and being offered hereby by the Selling Stockholders:
<TABLE>
<CAPTION>
SHARES
SHARES BENEFICIALLY NUMBER OF BENEFICIALLY
OWNED PRIOR TO SHARES BEING OWNED AFTER
NAME(1) OFFERING OFFERED OFFERING
- ---- --------------------- --------------- ------------------
<S> <C> <C> <C>
Lee Gottschlich . . . . . . . . . . . . . . 228,993 228,993 --
Durwill Dennis . . . . . . . . . . . . . . 184,546 184,546 --
Irv Gottschlich . . . . . . . . . . . . . . 169,707 169,707 --
Owen Gilbert . . . . . . . . . . . . . . . 19,824 19,824 --
RBC Dominion Securities Inc.
in trust for Owen Gilbert . . . . . . . . 19,503 19,503 --
Dave Reich . . . . . . . . . . . . . . . . 22,132 22,132
RBC Dominion Securities Inc.
in trust for Dave Reich . . . . . . . . . 17,195 17,195 --
Matthew Sampson . . . . . . . . . . . . . . 20,675 20,675 --
RBC Dominion Securities Inc.
in trust for Matthew Sampson . . . . . . 17,910 17,910 --
Bruce Schelske . . . . . . . . . . . . . . 633 633 --
Nesbitt Burns Inc.
in trust for Bruce Schelske . . . . . . . 40,921 40,921 --
</TABLE>
- -----------------
(1) Each Selling Stockholder is an employee of G.L.M. Tanks & Equipment
Ltd., which was acquired by the Company on June 9, 1998.
PLAN OF DISTRIBUTION
The Common Stock offered hereby may be sold by the Selling
Stockholders from time to time (i) on the Nasdaq National Market or otherwise
at prices current at the time of sale or at prices related to such market
prices, either directly or through brokers or to dealers, to the extent that
such prices are obtainable and satisfactory to the Selling Stockholders or (ii)
to the extent the same may be available, pursuant to Rule 144 under the
Securities Act. It is anticipated that any commissions with respect to such
sales will not exceed regular brokerage commissions. The Selling Stockholders,
and brokers executing selling orders on behalf of the Selling Stockholders and
dealers to whom the Selling Stockholders may sell, may be deemed "underwriters"
within the meaning of the Securities Act. Any profit represented by the excess
of the selling price over the cost of the shares sold in the case of dealers,
or any commission received in the case of brokers, may be deemed to be
underwriting discounts or commissions under the Securities Act.
All the shares of Common Stock covered by this Prospectus have been
registered for sale under the Securities Act in satisfaction of contractual
arrangements between the Company and each of the Selling Stockholders. The
Selling Stockholders have informed the Company that while they are included
among the Selling Stockholders as to all of the shares of Common Stock
beneficially owned by them pursuant to such contractual arrangements, none has
any present intention of disposing of any of the shares, whether in the manner
described above or otherwise. However, such intention is subject to change at
any time, and each Selling Stockholder reserves the right to sell shares or buy
additional shares from time to time, subject to applicable legal and
contractual restrictions, including those referred to in the following
paragraph.
All of the Selling Stockholders are subject to stock restriction
agreements which provide that (a) prior to June 9, 1999, such Selling
Stockholder will not sell more than 33% of the shares of Common Stock covered
by this Prospectus and (b) prior to June 7, 2000, such Selling Stockholder will
not sell more than 67% of the shares of Common Stock covered by this
Prospectus.
5
<PAGE> 7
DESCRIPTION OF CAPITAL STOCK
The Company's Certificate of Incorporation, as amended (the
"Certificate of Incorporation"), provides for authorized capital stock of
41,000,000 shares, consisting of 40,000,000 shares of Common Stock, par value
$.001 per share, and 1,000,000 shares of preferred stock, par value $.01 per
share ("Preferred Stock"). The following summary description of the capital
stock of the Company is a summary, does not purport to be complete or to give
effect to applicable statutory or common law, is subject in all respects to the
applicable provisions of the Certificate of Incorporation, and the information
is qualified in its entirety by this reference.
COMMON STOCK
Holders of Common Stock are entitled to one vote per share in the
election of directors and on all other matters on which stockholders are
entitled or permitted to vote. Holders of Common Stock are not entitled to
cumulative voting rights. Therefore, subject to the voting rights that may be
granted to holders of Preferred Stock, pursuant to the Company's Bylaws (the
"Bylaws") holders of a plurality of the shares of Common Stock present in
person or represented by proxy at the meeting and entitled to vote can elect
all of the directors of the Company. Subject to the terms of any outstanding
series of Preferred Stock, the holders of Common Stock are entitled to
dividends in such amounts and at such times as may be declared by the Company's
board of directors out of funds legally available therefor. The Common Stock
is not subject to any calls or assessments. Upon liquidation or dissolution,
holders of Common Stock are entitled to share ratably in all net assets
available for distribution to stockholders after payment of any liquidation
preferences to holders of Preferred Stock. Holders of Common Stock have no
redemption conversion or preemptive rights.
PREFERRED STOCK
Shares of Preferred Stock may be issued without stockholder approval.
The board of directors is authorized to issue up to 1,000,000 shares of
Preferred Stock in one or more series and to determine, with respect to any
series of Preferred Stock, the terms and rights of such series, including,
without limitations (i) the number of shares and the name of the series, (ii)
the rate and times at which dividends will be payable on the shares of the
series, and the status of such dividends as cumulative or non-cumulative and as
participating or non-participating, (iii) the prices, times and terms, if any,
at or upon which shares of the series will be subject to redemption, (iv) the
rights, if any, to convert such shares into, or to exchange such shares for,
shares of any other class of stock of the Company, (v) the terms of the sinking
fund or redemption or purchase account, if any, to be provided for shares of
the series, (vi) the rights and preferences, if any, of shares of the series
upon any liquidation, dissolution or winding up of the affairs of, or upon any
distribution of the assets of, the Company, (vii) the limitations, if any,
applicable while the series is outstanding, on the payment of dividends or
making of distributions on, or the acquisition of, the Common Stock or any
other class of stock which does not rank senior to the shares of the series,
and (viii) the voting rights, if any, to be provided for shares of the series.
The Company has no current plans for issuance of any shares of Preferred Stock.
Any issuance of shares of Preferred Stock may adversely affect the voting
powers or rights of the holders of Common Stock.
EXPERTS
The audited consolidated financial statements of the Company
incorporated by reference into this Prospectus and elsewhere in the
registration statement have been audited by Arthur Andersen LLP, independent
public accountants, as indicated in their report appearing in the Annual Report
on Form 10-K for the year ended December 31, 1997, which referred to the report
of other auditors of Astrotech International Corporation and are included
herein in reliance upon the authority of said firms as experts in accounting
and auditing in giving said report.
The audited consolidated financial statements and schedules of
Astrotech incorporated by reference into this Prospectus have been audited by
PricewaterhouseCoopers L.L.P., independent accountants, as indicated in their
report appearing in the Annual Report on Form 10-K for the year ended December
31, 1997, and have been so included in reliance upon such report given upon the
authority of the firm as experts in accounting and auditing.
LEGAL MATTERS
Certain legal matters in connection with the Common Stock offered
hereby have been passed upon for the Company by Porter & Hedges, L.L.P.,
Houston, Texas.
6
<PAGE> 8
================================================================================
NO PERSONS HAVE BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS IN CONNECTION WITH
THE OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE
COMPANY OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL, NOR A SOLICITATION OF AN OFFER TO BUY, ANY SECURITIES IN ANY JURISDICTION
TO OR FROM ANY PERSON TO OR FROM WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER
OR SOLICITATION IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY DISTRIBUTION OF SECURITIES 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 THE INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
----------------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Documents by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Selling Stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Description of Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
</TABLE>
================================================================================
================================================================================
742,039 SHARES
ITEQ, INC.
COMMON STOCK
(PAR VALUE $.001 PER SHARE)
----------------------------------
PROSPECTUS
----------------------------------
______________, 1998
================================================================================
<PAGE> 9
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
<TABLE>
<S> <C>
SEC registration fee . . . . . . . . . . . . . . . . . . $ 1,662
Blue Sky fees and expenses . . . . . . . . . . . . . . . 0
Legal fees and expenses . . . . . . . . . . . . . . . . 10,000
Accounting fees and expenses . . . . . . . . . . . . . . 5,000
Miscellaneous . . . . . . . . . . . . . . . . . . . . . 1,038
--------
Total Expenses . . . . . . . . . . . . $ 18,000
========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Under Delaware law, a corporation may include provisions in its
certificate of incorporation that will relieve its directors of monetary
liability for breaches of their fiduciary duty to the corporation, except under
certain circumstances, including a breach of the director's duty of loyalty,
acts or omissions of the director not in good faith or which involve
intentional misconduct or a knowing violation of law, the approval of an
improper payment of a dividend or an improper stock purchase or redemption or
any transaction from which the director derived an improper personal benefit.
The Certificate of Incorporation provides that the Company's directors are not
liable to the Company or its stockholders for monetary damages for breach of
their fiduciary duty, subject to the described exceptions specified by Delaware
law.
Section 145(a) of the General Corporation Law of the State of Delaware
("DGCL") grants to the Company the authority to indemnify each officer and
director of the Company against liabilities and expenses incurred by reason of
the fact that he is or was an officer or director of the Company if he acted in
good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the Company and, with respect to any criminal action or
proceeding, had no reasonable cause to believe his conduct was unlawful. The
determination as to whether a person seeking indemnification has met the
required standard of conduct is to be made (i) by a majority vote of the
directors who are not parties to such action, suit, or proceeding, even through
less than a quorum, or (ii) if there are no such directors, or if such
directors so direct, by independent legal counsel in a written opinion, if such
a quorum does not exist or if the disinterested directors so direct, or (iii)
by the stockholders. The Certificate of Incorporation provides for
indemnification of each officer and director of the Company to the fullest
extent permitted by Delaware law.
In a suit brought to obtain a judgment in the corporation's favor,
whether by the Company itself or derivatively by a stockholder, Section 145(b)
of the DGCL only allows the Company to indemnify for expenses, including
attorneys' fees, actually and reasonably incurred in connection with the
defense or settlement of the case, and the Company may not indemnify for
amounts paid in satisfaction of a judgment or in settlement of the claim. In
any such action, no indemnification may be paid in respect of any claim, issue
or matter as to which such persons shall have been adjudged liable to the
Company except as otherwise approved by the Delaware Court of Chancery or the
court in which the claim was brought. According to the statute, in any other
type of proceeding, the indemnification may extend to judgments, fines and
amounts paid in settlement, actually and reasonably incurred in connection with
such other proceeding, as well as to expenses (including attorneys' fees).
Section 145 of the DGCL also allows the Company to purchase and
maintain insurance on behalf of its directors and officers against liabilities
that may be asserted against, or incurred by, such persons in any such
capacity, whether the Company would have the authority to indemnify such person
against liability under the provisions of Section 145. The Company intends to
purchase and maintain a directors' and officers' liability policy for such
purposes.
Insofar as indemnification for liabilities under the Securities Act
may be permitted to directors, officers or persons controlling the Registrant
pursuant to the foregoing provisions, the Registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and therefore is unenforceable.
<PAGE> 10
ITEM 16. EXHIBITS
(a) EXHIBITS
The exhibits listed in the Exhibit Index below are filed as part of
the Registration Statement:
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
5.1 Opinion of Porter & Hedges, L.L.P.
23.1 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of PricewaterhouseCoopers L.L.P.
24.1 Powers of Attorney (included on signature page hereto.)
</TABLE>
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales
are being made, a post-effective amendment to this registration
statement:
(i) to include any prospectus required by section
10(a)(3) of the Securities Act of 1933 (the "Securities Act");
(ii) to reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement;
PROVIDED, HOWEVER, that clauses (a)(1)(i) and (a)(1)(ii) of this
paragraph do not apply if the information required to be included in a
post-effective amendment by those clauses is contained in periodic
reports filed with or furnished to the Securities and Exchange
Commission by the registrant pursuant to Section 13 or Section 15(d)
of the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act, each such post- effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof; 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;
(b) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act, 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.
<PAGE> 11
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by registrant
of expenses incurred or paid by a director, officer or controlling person of
the registrant in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a court
of appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Securities Act and will be governed
by the final adjudication of such issue.
<PAGE> 12
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Mark E. Johnson and Lawrance W. McAfee,
and each of them, either of whom may act without joinder of the other, his true
and lawful attorneys-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 any or all pre- and post-effective amendments to this
Registration Statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the Securities and Exchange
Commission, granting unto such attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and 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, and each of them, or the
substitute or substitutes of either of them, may lawfully do or cause to be
done by virtue hereof.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all 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 Houston, State of Texas, on July 6, 1998.
ITEQ, INC.
By: /s/ Mark E. Johnson
-----------------------------------
Mark E. Johnson, Chairman of the
Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities on July 6, 1998.
<TABLE>
<CAPTION>
SIGNATURES TITLE
---------- -----
<S> <C>
/s/ Mark E. Johnson Director, Chairman of the Board and Chief Executive
------------------------------------------ Officer (Principal Executive Officer)
Mark E. Johnson
/s/ John Camardella Director, President and Chief Operating Officer
------------------------------------------
John Camardella
/s/ Lawrance W. McAfee Director, Executive Vice President, Chief Financial
------------------------------------------ Officer and Secretary (Principal Financial
Lawrance W. McAfee Officer and Principal Accounting Officer)
/s/ THOMAS N. AMONETT Director
------------------------------------------
Thomas N. Amonett
/s/ T. William Porter Director
------------------------------------------
T. William Porter
/s/ JAMES L. RAINEY Director
------------------------------------------
James L. Rainey
Director
------------------------------------------
James A. Read
</TABLE>
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------ -----------
<S> <C>
5.1 Opinion of Porter & Hedges, L.L.P.
23.1 Consent of Porter & Hedges, L.L.P. (included in Exhibit 5.1)
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of PricewaterhouseCoopers L.L.P.
24.1 Powers of Attorney (included on signature page hereto)
</TABLE>
<PAGE> 1
EXHIBIT 5.1
July 7, 1998
ITEQ, Inc.
2727 Allen Parkway, Suite 760
Houston, Texas 77019
Re: OPINION AS TO LEGALITY OF COMMON STOCK OF ITEQ, INC.
Gentlemen:
We have examined the certificate of incorporation and bylaws, both as
amended to date, and the corporate proceedings of ITEQ, Inc. ("Company"),
relating to the registration under the Securities Act of 1933, as amended, of
742,039 shares of Common Stock, $.001 par value, which are being registered on
behalf of certain Selling Stockholders and have made such other examinations as
we deem necessary in the premises, and from such examinations we are of the
opinion that:
1. The Company is a validly organized and existing corporation
under the laws of the State of Delaware.
2. The 742,039 shares of Common Stock to be sold by the Selling
Stockholders are validly issued, fully paid and non-assessable outstanding
securities of the Company.
We consent to the use of this opinion and the reference to our firm in
the Registration Statement and Prospectus.
Very truly yours,
/s/ Porter & Hedges, L.L.P.
PORTER & HEDGES, L.L.P.
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our report dated March 5, 1998,
included in the Annual Report on Form 10-K of ITEQ, Inc. (the "Company") for the
year ended December 31, 1997, and to all references to our Firm included in this
registration statement on Form S-3 for the registration of 742,039 shares of the
common stock, par value $.001 per share, of the Company.
ARTHUR ANDERSEN LLP
/S/ ARTHUR ANDERSEN LLP
Houston, Texas
July 2, 1998
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the incorporation by reference in this registration
statement of ITEQ, Inc. on Form S-3 of our report dated December 6, 1996, on
the consolidated financial statements of Astrotech International Corporation
and subsidiaries as of September 30, 1996, and for each of the two years in the
period ended September 30, 1996.
PRICEWATERHOUSECOOPERS L.L.P.
/s/ PRICEWATERHOUSECOOPERS L.L.P.
Pittsburgh, Pennsylvania
July 2, 1998
