As filed with the Securities and Exchange Commission on July 9,1996.
REGISTRATION NO. 333-4160
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 1 to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INDUSTRIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
5080
(Primary Standard Industrial
Classification Code Number)
TEXAS 76-0289495
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
7135 ARDMORE
HOUSTON, TEXAS 77054
(713) 747-1025
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
ROBERT E. CONE
INDUSTRIAL HOLDINGS, INC.
7135 ARDMORE
HOUSTON, TEXAS 77054
(713) 747-1025
(Name, address, including zip
code, and telephone number,
including area code,
of agent for service)
COPY TO:
Robert G. Reedy
PORTER & HEDGES, L.L.P.
700 Louisiana, Suite 3500
Houston, Texas 77002
(713) 226-0600
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
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, check the following box. [X]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED
TITLE OF EACH CLASS OF AMOUNT TO OFFERING MAXIMUM AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED BE REGISTERED(1) PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value 1,005,000 $7.06(2) $7,095,300 $2,447(3)
- --------------------------------------------------------------------------------------------------------------------------------
Common Stock underlying warrants and
debenture 690,153 $8.19(4) $5,652,353 $1,950
- --------------------------------------------------------------------------------------------------------------------------------
Total 1,695,153 $---------- $12,747,653 $4,397
================================================================================================================================
</TABLE>
(1) Pursuant to Rule 416(a), also registered hereunder is an indeterminate
number of shares of Common Stock issuable as a result of the
antidilution provisions of the warrant and debenture agreements.
(2) Pursuant to Rule 457(c), the registration fee is calculated based on
the average of the high and low sale prices for the Common Stock, as
reported by the Nasdaq Stock Market's National Market on April 19,
1996, or $7.06 per share.
<PAGE>
(3) Filing fee of $2,447 was previously paid with the Form S-3 filing on
April 24, 1996.
(4) Pursuant to Rule 457(c), the registration fee is calculated based on
the average of the high and low sale price for the Common Stock, as
reported by the Nasdaq Stock Market's National Market on July 5, 1996
or $8.19 per share.
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>
SUBJECT TO COMPLETION JULY 9,1996.
******************************************************************************
* *
* 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 BUY NOR *
* SHALL THERE BE ANY SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH *
* OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR *
* QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE. *
* *
******************************************************************************
PROSPECTUS
INDUSTRIAL HOLDINGS, INC.
1,695,153 Shares
The 1,695,153 shares (the "Shares") of common stock, par value $.01 per
share (the "Common Stock"), of Industrial Holdings, Inc. (the "Company") offered
hereby, are shares of Common Stock which are currently outstanding or that may
be acquired upon conversion of certain notes or exercise of certain warrants.
This Prospectus relates only to the resale of the Shares. See "The Offering,"
"Selling Shareholders," "Plan of Distribution" and "Description of Securities."
The Company will not receive any proceeds from the resale of the shares of
Common Stock offered hereby, but may receive up to $2,148,000 on the exercise of
warrants exercisable to acquire Shares.
The Shares are quoted on the Nasdaq Stock Market's National Market
("Nasdaq/NMS") under the symbol "IHII." On July 5, 1996, the last reported
closing sale price of the Common Stock was $8.00 per share.
The Shares may be offered and sold from time to time by the selling
shareholders named herein through underwriters, dealers or agents or directly to
one or more purchasers in fixed-price offerings or negotiated transactions and
either at market prices prevailing at the time of sale or at prices related to
such market prices. The terms of the offering and sale of the Shares with
respect to which this Prospectus is being delivered, including any public
offering price, any discounts, commissions or concessions allowed, reallowed or
paid to underwriters, dealers or agents, the purchase price of the Shares, the
proceeds to the selling shareholders and any other material terms shall be as
set forth in the applicable Prospectus Supplement. See "Plan of Distribution"
for information regarding possible indemnification arrangements for
underwriters, dealers and agents.
SEE "RISK FACTORS" ON PAGES FIVE AND SIX FOR A DISCUSSION OF CERTAIN
FACTORS THAT SHOULD BE CONSIDERED BY INVESTORS.
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 , 1996.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith, files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. and at the Commission's regional offices at the
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511 and 7 World Trade Center, Suite 1300, New York, 10048. Copies of such
material may also be obtained from the Public Reference Section of the
Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549,
at prescribed rates. Such materials may also be inspected a the offices of
Nasdaq/NMS, 1735 K Street, N.W. Washington, D.C., 20006-1506, on which the
Common Stock is listed.
The Company has filed with the Commission a Registration Statement on
Form S-3 (including any amendments thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (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 and
schedules thereto. For further information with respect to the Company and the
Common Stock, reference is made to the Registration Statement and the exhibits
and schedules thereto. Statements made in this Prospectus regarding the contents
of any contract or document filed as an exhibit to the Registration Statement
are not necessarily complete and, in each instance, reference is hereby made to
the copy of such contract or document so filed. Each such statement is qualified
in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are hereby incorporated by reference in this
Prospectus:
(1) the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1995;
(2) the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1996;
(3) the Company's Proxy Statement dated May 26, 1996 regarding its
Annual Stockholder's Meeting held on June 28, 1996;
(4) the Company's Current Report on Form 8-K dated December 7,
1995 as amended and;
(5) all documents filed by the Company pursuant to Sections 13(a),
13(c) and 15(d) of the Exchange Act after the date of this
Prospectus and before the termination of the offering covered
hereby will be deemed to be incorporated by reference in this
Prospectus and to be a part hereof from the date of filing
such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference in this
Prospectus shall be deemed to be modified or superseded for
purposes of this Prospectus to the extent that a statement
contained in this Prospectus or in any other subsequently
filed document that also is or is deemed to be incorporated by
reference modifies or replaces such statement.
2
The Company will provide, without charge and on oral or written
request, to each person to whom this Prospectus is delivered, a copy of any or
all of the documents incorporated by reference in this Prospectus other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference into the information that this Prospectus incorporates. In
addition, a copy of the Company's most recent annual report to shareholders will
be promptly furnished, without charge and on oral or written request, to such
persons. All such requests should be directed to Industrial Holdings, Inc., 7135
Ardmore, Houston, Texas 77054, Attention: Robert E. Cone, telephone number (713)
747-1025.
THE COMPANY
Industrial Holdings, Inc. (including its subsidiaries, the "Company")
was incorporated in August 1989. The Company's principal executive offices are
located at 7135 Ardmore, Houston, Texas 77054, and its telephone number is (713)
747-1025.
The Company's business is organized into two divisions: the Fastener
Manufacturing and Sales Division, which includes Landreth Engineering Company
("LEC") and Milford Rivet ("Milford"), acquired December 1995, and the Energy
Products and Services Division which includes the Valve and Supplies Sales Group
which includes Pipeline Valve Specialty, Inc. ("PVS") and Industrial Municipal
Supply Company, Inc. ("IMSCO"); the New Machine Sales and Services Group which
includes Regal Machine Tools ("Regal") and Rex Machinery Movers ("RMM"); the
Export Crating Group which includes U.S. Crating ("USC"); and the Used Machine
Sales Group which includes Rex/Paul's Machine Sales ("RPMS").
The Fastener Manufacturing and Sales Division manufactures industrial
metal fasteners, including special cold-formed fasteners and threaded fastener
products for sale primarily to manufacturers in the furniture, home appliance
and automotive industries. The Valve and Supplies Sales Group remanufactures
pipeline valves and distributes pipe, valves, fittings and other products
primarily to the petrochemical, chemical and petroleum refining industries and
to the pipeline transportation and product storage industries. The New Machine
Sales and Services Group sells new machine tools and conducts a machine moving
operation. The Export Crating Group provides international export crating
services. The Used Machine Sales Groups sells used machine tools.
THE OFFERING
Of the 1,695,153 shares offered hereby, 400,000 shares are issuable
from time to time on the exercise of Common Stock purchase warrants (the "St.
James Warrants") to purchase an aggregate of 400,000 shares of Common Stock that
were sold in connection with the Company's private placement of a 12%
Convertible Promissory Note (the "Promissory Note") in the amount of $1,000,000
to St. James Capital Partners, L.P. ("St. James"), a portion of the proceeds of
which was used to fund the acquisition of Milford. Each of the St. James
Warrants is exercisable at any time through December 8, 2000, at an exercise
price of $3.27 per share. Subsequently, St. James distributed the St. James
Warrants to its various partners.
3
Of the 1,695,153 shares offered hereby, 215,000 shares (the "Conversion
Shares") are currently outstanding shares of Common Stock which were issued in
May 1996 on the conversion of $804,100 of the Promissory Note at a conversion
price of $3.74 per share. The Conversion Shares may be resold in the market from
time to time. The Company is not offering the Conversion Shares and will not
receive any cash proceeds from the resale of the Conversion Shares.
Of the 1,695,153 shares offered hereby, 575,153 are issuable from time
to time on the conversion of a convertible debenture (the "Debenture") in the
principal amount of $1,875,000 due October 1, 1999 and payable to Renaissance
Capital Partners II, Ltd. ("Renaissance"). The Debenture is convertible at any
time after December 31, 1996 into Common Stock at a conversion price of $3.26
per share. The Debenture in the original principal amount of $2,500,000 was
entered into in October 1992 to finance the purchase of the Company's
subsidiary, LEC.
Of the 1,695,153 shares offered hereby, 50,000 are issuable from time
to time on the exercise of Common Stock purchase warrants (the "Renaissance
Warrants") that were issued in connection with the March 1996 prepayment of
$600,000 of the Debenture and in exchange for agreement by Renaissance not to
convert the balance of the Debenture until after December 31, 1996. The
Renaissance Warrants are exercisable at any time through March 31, 1999 at an
exercise price of $4.00 per share.
Of the 1,695,153 shares offered hereby, 90,000 shares are issuable from
time to time on the exercise of Common Stock purchase warrants (the "IPO
Warrants") that were issued in connection with the Company's initial public
offering. Each of the IPO Warrants is exercisable at any time through January
23, 1997 at exercise prices of $4.00 to $7.50 per share.
Of the 1,695,153 shares offered hereby, 65,000 shares are issuable from
time to time on the exercise of Common Stock purchase warrants (the"Consulting
Warrants") that were issued December 1995 and January 1996 in connection with
compensation for consulting services performed. Each Consulting Warrant is
exercisable at any time through December 1998 at $3.80 to $5.00 per share.
The remaining 300,000 shares (the "Resale Shares") offered hereby are
currently outstanding shares of Common Stock issued in connection with the
Company's private placement to certain accredited investors in March 1996, the
proceeds from which were used to retire $600,000 of the Debenture and to provide
funds for the relocation of LEC and its division, Milford, to new facilities in
Houston, Texas and Waterbury, Connecticut. The Resale Shares may be resold in
the market from time to time. The Company is not offering the Resale Shares and
will not receive any cash proceeds from the resale of the Resale Shares.
This offering relates solely to resales of the Shares acquired on the
exercise of the St. James Warrants, Renaissance Warrants, Consulting Warrants
and IPO Warrants ("the Warrants") or conversion of the Debenture and does not
involve an offering by the Company of the Warrants or Debenture. This prospectus
also relates to the resale of any additional shares as may become issuable on
the exercise of the Warrants, and the conversion of the Debenture pursuant to
the antidilution provisions thereof. The Company will not receive any cash
proceeds from the resale of the Shares issuable on exercise of the Warrants or
conversion of the Debenture. The Company will receive approximately $2,148,000
on the exercise of the Warrants.
4
RISK FACTORS
THE SHARES OFFERED HEREBY INVOLVE MATERIAL RISKS. IN ADDITION TO THE
OTHER INFORMATION CONTAINED IN THIS PROSPECTUS, PROSPECTIVE INVESTORS SHOULD
CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS BEFORE MAKING AN INVESTMENT IN THE
SHARES OF COMMON STOCK:
LIMITED CAPITAL; NEED FOR ADDITIONAL FINANCING. The Company's ability
to effect its business plan depends on its ability to raise funds to consummate
acquisitions and provide necessary working capital. The Company's future growth
through acquisitions will require substantial capital expenditures. While the
Company evaluates business opportunities on a regular basis, there can be no
assurance that the Company will be successful in identifying any additional
acquisitions or will have sufficient financial resources with which to make
additional acquisitions. In the event that the Company is unable to obtain cash
in order to effect additional acquisitions, the Company may issue additional
shares. As the Company effects acquisitions and expands its operations, there
can be no assurance that the Company will be able to obtain and retain the
management personnel required to operate such expanded operations. In addition,
normal growth and integration of acquired companies will require significant
working capital. At March 31, 1996, the Company had working capital of
$2,117,316, long-term debt of $5,104,299 and shareholders' equity of $8,778,599
and availability of $1,162,419 under its credit facilities with Comerica Bank -
Texas. The Company anticipates that its operating cash needs for fiscal 1996 can
be met with cash generated from operations, borrowings under its credit
facilities with Comerica Bank-Texas and private placements of equity and debt
securities. At this time, the Company has no agreements with respect to the
acquisition of any company. However, any future acquisition of companies in
connection with the Company's acquisition strategy will require additional
financing, which likely would include a combination of debt and equity
financing.
COMPETITION. The industries in which the Company and its subsidiaries
operate are highly competitive. Many of these competitors have greater financial
and other resources than the Company. Competitive factors for the Company's
subsidiaries include price sensitivity and customer service. The industries in
which the Company's subsidiaries operate are highly fragmented and dominated by
privately-owned businesses. Management's marketing strategy is to institute
centralized inventory controls, reduce personnel costs and achieve greater
buying power through expansion. Management believes that these strategies will
allow the Company and its subsidiaries to be more competitive. However, there
can be no assurance that the Company will be able to successfully compete
against presently known or future competitors.
FOREIGN SUPPLIERS. Certain of the Company's subsidiaries purchase
products from United States manufacturing companies operating abroad and from
foreign manufacturers. Accordingly, the Company is subject to the risks of doing
business abroad, including fluctuations in currency exchange rates, changes in
import duties or quotas, transportation costs, labor disputes and strikes. The
occurrence of any one or more of the foregoing events could adversely affect the
Company's product supply.
REGULATION. The Company's business is affected by governmental
regulations relating to its industry segments in general, as well as
environmental and safety regulations that have specific application to the
Company's business. While the Company is not aware of any proposed or pending
legislation, there can be no assurance that future legislation will not have an
adverse effect on the Company's business or competitive position. The Company
believes that it disposes of environmentally sensitive materials in accordance
with present rules and regulations.
5
DEPENDENCE ON KEY PERSONNEL. The success of the Company is dependent
on, among other things, the services of Robert E. Cone, President and Chief
Executive Officer, James H. Brock, Jr., President - Energy Products and Services
Division and Thomas C. Landreth, President - Fastener Manufacturing and Sales
Division. The Company has entered into employment agreements with Messrs. Cone,
Brock and Landreth. The loss of the services of any of these officers, for any
reason, may have a material adverse effect on the prospects of the Company.
VOTING CONTROL. Directors and officers of the Company, including
certain officers of certain of the Company's subsidiaries, own shares or have
options or warrants to purchase shares that, after the exercise of such options
and warrants, would in the aggregate constitute approximately 25% of the
Company's outstanding shares. It is anticipated that such directors, officers
and affiliates will be able to elect a majority of the Company's Board of
Directors and to control the business and affairs of the Company.
LACK OF CONTRACTUAL SUPPLY AGREEMENTS. The Company's subsidiaries
purchase products from various sources of supply. The Company does not maintain
firm contractual agreements with any of its suppliers with respect to the
product purchases. Instead, the Company purchases its products from suppliers on
the most favorable terms that can be negotiated.
DIVIDEND POLICY. For the foreseeable future, it is anticipated that any
earnings that may be generated from the Company's operations will be used to
finance the Company's growth, and cash dividends will not be paid to holders of
Common Stock. Certain of the Company's outstanding debt instruments currently
prohibit the Company from paying dividends.
SHARES ELIGIBLE FOR FUTURE SALE. Of the Company's currently outstanding
3,631,162 shares, 668,646 are "restricted securities" within the meaning of Rule
144 promulgated under the Securities Act and, under certain circumstances, may
be sold without registration pursuant to Rule 144. Holders of certain warrants
have one demand registration right to cause the Company to register the
issuance, or resale, of the underlying shares.
USE OF PROCEEDS
The Company will receive cash proceeds equal to the exercise price of
the Warrants, which will total approximately $2,148,000. The Company presently
intends to add the cash proceeds from the exercise of the Warrants to its
general working capital.
The Company will not receive any proceeds from the sale of the Shares
that may be resold from time to time by the selling shareholders.
6
SELLING SHAREHOLDERS
The selling shareholders listed below (the "Selling Shareholders") may
resell, from time to time, all or a portion of the Shares offered hereby. The
following table sets forth the beneficial ownership of the Company's securities
by each of the Selling Shareholders:
<TABLE>
<CAPTION>
SHARES OWNED PERCENT OF CLASS
SHARES OWNED AFTER THE OWNED AFTER THE
NAME OF SELLING SHAREHOLDER PRIOR TO OFFERING OFFERING(11) OFFERING
- --------------------------- ----------------- ------------ ---------
<S> <C> <C> <C>
Renaissance Capital Partners II, Ltd.(1) ............................... 625,153 625,153 14.8%
St. James Capital Partners, L.P(2) ..................................... 215,000 215,000 6.0%
St. James Capital Corp.(3) (8) ......................................... 80,000 80,000 2.3%
Blake Liedtke(3) ....................................................... 14,883 14,883 *
1959 Trust for Robert Tilly Arnold(3) .................................. 14,883 14,883 *
The Hugh Roy Cullen Estate Trust for
Isaac Arnold, Jr.(3) ................................................. 7,441 7,441 *
The Lillie C. Cullen Estate Trust for
Isaac Arnold, Jr.(3) ................................................. 7,442 7,442 *
Dennis LaValle(3) ...................................................... 37,209 37,209 1.1%
Thomas M. Vertin(3) .................................................... 74,420 74,240 2.1%
HUB, Inc.(3) ........................................................... 74,420 74,420 2.1%
Isaac Arnold, Jr(4) .................................................... 15,000 15,000 *
Barbara C. Bailey(4) ................................................... 6,500 6,500 *
John A. Beck(4) ........................................................ 1,000 1,000 *
Earl D. Bellamy(4) ..................................................... 1,000 1,000 *
Douglas B. Bowman(4) ................................................... 3,000 3,000 *
Chifam, Ltd.(4) ........................................................ 2,000 2,000 *
Robert D. Duncan(4) .................................................... 10,000 10,000 *
Roy J. Farr(4) ......................................................... 3,500 3,500 *
Robin Fisher and M.R. Burns(4) ......................................... 1,000 1,000 *
R. Vincent Ford(4) ..................................................... 400 400 *
Michael J. Gaido(4) .................................................... 10,000 10,000 *
Robert Garrison(4) ..................................................... 10,000 10,000 *
Guadalupe Funding Company (4) (5) ...................................... 129,302 129,302 3.7%
Ken Hanson IRA Rollover(4) ............................................. 5,000 5,000 *
James Michael Haggar(4) ................................................ 2,000 2,000 *
William H. Hintze(4) ................................................... 1,000 1,000 *
Roger H. Jenswold(4) ................................................... 2,500 2,500 *
Roger H. Jenswold & Co., Inc. Profit Sharing
Plan(4) .............................................................. 2,000 2,000 *
Michael M. Kelley(4) ................................................... 3,000 3,000 *
Daniel Luce(4) ......................................................... 1,000 1,000 *
James L. Masten(4) ..................................................... 3,000 3,000 *
Richard B. Mayor(4) .................................................... 5,000 5,000 *
Ray Mitchell, Jr.(4) ................................................... 10,000 10,000 *
7
Scott T. Orth Profit Sharing Plan & Trust(4) .............................. 2,000 2,000 *
Christopher J. Pappas(4) .................................................. 2,000 2,000 *
Mary M. Pappas(4) ......................................................... 1,600 1,600 *
PEKA, Ltd.(4) ............................................................. 10,000 10,000 *
James J. Peters(4) ........................................................ 500 500 *
Richard Peters Furs(4) .................................................... 1,000 1,000 *
Stephen M. Reckling(4) .................................................... 40,000 40,000 1.2%
Thomas R. Reckling(4) ..................................................... 20,000 20,000 *
Mashud Reza(4) ............................................................ 3,500 3,500 *
Steve L. Riggs(4) ......................................................... 13,000 13,000 *
Standard Steel Company(4) ................................................. 5,000 5,000 *
Gary E. Rounding IRA Rollover(4) .......................................... 5,000 5,000 *
Robert J. Santoski(4) ..................................................... 24,000 24,000 *
Haroon R. Shaikh(4) ....................................................... 2,000 2,000 *
David R. Sincox(4) ........................................................ 1,000 1,000 *
Pat Smetek(4) ............................................................. 15,000 15,000 *
Judie M. Smith IRA Rollover(4) ............................................ 2,000 2,000 *
Frank Stovall(4) .......................................................... 5,000 5,000 *
Guy B. Sullaway Jr., IRA Rollover(4) ...................................... 3,000 3,000 *
James Henry Tanner III and Carolyn H. Tanner(4) ........................... 4,000 4,000 *
Charles L. Thompson IRA Rollover(4) ....................................... 1,000 1,000 *
David Wishard and Susan G. Wishard(4) ..................................... 500 500 *
Mathew A. Zaleski(4) ...................................................... 1,000 1,000 *
Financial Public Relations, Ltd.(6) ....................................... 24,000 24,000 *
Donald J. Willy(6) ........................................................ 6,000 6,000 *
The Frost National Bank(7) ................................................ 60,000 60,000 1.7%
McBlue Corporation(9) ..................................................... 50,000 50,000 1.4%
Mike Cunniff(10) .......................................................... 15,000 15,000 *
</TABLE>
- ------------
* Represents less than 1% of the Company's outstanding shares of Common
Stock.
(1) Of these Shares, 575,153 are acquirable on conversion of the Debenture
at a conversion price of $3.24 per share, subject to adjustment, and
50,000 are acquirable on exercise of Renaissance Warrants at an
exercise price of $4.00 per share.
(2) These Shares were acquired upon conversion of the Promissory Note.
After conversion, the Company has a $195,900 Promissory Note plus
accrued interest payable to St. James Capital Partners, L.P.
(3) These Shares are acquirable on exercise of the St. James Warrants at an
exercise price of $3.27 per share, subject to adjustment.
(4) These Shares were issued in connection with a private placement in
March 1996.
8
(5) Of these Shares, 89,302 are acquirable on exercise of St. James
Warrants at an exercise price of $3.27 per share, subject to
adjustment.
(6) These Shares are acquirable on exercise of the IPO warrants at an
exercise price of $4.00 per share.
(7) Of these Shares, 30,000 are acquirable on exercise of IPO Warrants at
an exercise price of $5.00 per share and 30,000 are acquirable on
exercise of IPO Warrants at an exercise price of $7.50 per share.
(8) St. James Capital Corp. is the general partner of St. James Capital
Partners, L.P.
(9) These Shares are acquirable on exercise of Consulting Warrants at an
exercise price of $3.80 per share.
(10) These Shares are acquirable on exercise of Consulting Warrants at an
exercise price of $5.00 per share.
(11) Assumes that the Selling Shareholder does not resell any shares of
Common Stock beneficially owned in this offering.
9
PLAN OF DISTRIBUTION
The Selling Shareholders may offer the Shares subject to this
Prospectus for resale from time to time in one or more offerings through
underwriters, dealers or agents or directly to one or more purchasers in
fixed-price offerings or in negotiated transactions and at either current market
prices or at prices related to such market price. Resales by the purchasers of
such shares may be made in the same manner.
The Selling Shareholders have represented to the Company that they have
no current arrangements with any broker-dealer and that they will comply with
Rule 10b-6 under the Exchange Act. If underwriters are used in any offering of
the Shares, such underwriters will be named in the applicable Prospectus
Supplement. Only underwriters named in a Prospectus Supplement will be deemed to
be underwriters in connection with the Shares. Firms not so named will have no
direct or indirect participation in the underwriting of the Shares, although
such a firm may participate in the distribution of such shares under
circumstances entitling it to a dealer's commission. Unless otherwise set forth
in the Prospectus Supplement relating to such offering, any underwriting
agreement pertaining to any offering of the Shares will (i) entitle the
underwriters to indemnification by the Company and the Selling Shareholders
against certain civil liabilities under the Securities Act, (ii) provide that
the obligations of the underwriters will be subject to certain conditions
precedent, and (iii) provide that the underwriters will be obligated to purchase
the Shares so offered if any such shares are purchased. If underwriters are used
in any offering of Shares, the names of such underwriters, the anticipated date
of delivery and other material terms of the transaction will be set forth in the
Prospectus Supplement relating to such offering.
The Company has been advised that the distribution of the Shares by the
Selling Shareholders, or by pledgees, transferees or other
successors-in-interest of the Selling Shareholders, may be effected from time to
time in one or more transactions (which may involve block transactions) on the
Nasdaq/NMS (if the Common Stock continues to be listed on the Nasdaq/NMS) or in
the over-the-counter market, in negotiated transactions or in a combination of
such methods of sale, at fixed prices, 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 directly to purchasers or to or through broker-dealers acting as
principals or agents. Such broker-dealers may receive compensation in the form
of underwriting discounts, concessions or commissions from the Selling
Shareholders or the purchasers of the Shares from whom 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 less than or in excess of customary
commissions). In addition, the Shares covered by this Prospectus that
subsequently qualify for sale pursuant to Rule 144 under the Securities Act may
be sold under Rule 144 rather than pursuant to this Prospectus.
The Selling Shareholders and any broker-dealers or agents who
participate in a sale of the Shares may be deemed to be underwriters within the
meaning of such term under the Securities Act, and any commissions received by
them, as well as any proceeds from any sales as principal by them, may be deemed
to be underwriting discounts and commissions under the Securities Act. Such
broker-dealers or agents may, under agreements with the Selling Shareholders, be
entitled to indemnification by the Company and the Selling Shareholders against
certain civil liabilities under the Securities Act. Certain purchasers to whom
the Selling Shareholders may sell shares in negotiated transactions may be
deemed to be underwriters with respect to any resale by them of shares so
acquired.
Underwriters, dealers and agents may engage in transactions with or
perform services for the Company in the ordinary course of business.
10
DESCRIPTION OF SECURITIES
Pursuant to the Company's Articles of Incorporation, as amended, the
authorized capital stock of the Company consists of 7,500,000 shares, par value
$.01 per share, and 7,500,000 shares of preferred stock, par value $.01 per
share (the "Preferred Stock"). The following description of certain of the
Company's securities is a summary, does not purport to be complete or to give
effect to applicable statutory or common law and is subject in all respects to
the applicable provisions of the Company's Articles of Incorporation and
information herein is qualified in its entirety by this reference.
COMMON STOCK
Holders of Common Stock are entitled, among other things, to one vote
per share on each matter submitted to a vote of shareholders and, in the event
of liquidation, to share ratably in the distribution of assets remaining after
payment of liabilities. Holders of Common Stock have no cumulative voting
rights, and, accordingly, the holders of a majority of the outstanding shares
have the ability to elect all of the directors. Holders of Common Stock have no
preemptive or other rights to subscribe for shares. Holders of Common Stock are
entitled to such dividends as may be declared by the Board of Directors out of
funds legally available therefor.
PREFERRED STOCK
None of the authorized shares of Preferred Stock have been issued or
are outstanding. The Board of Directors has the authority to cause the Company
to issue up to the authorized number of shares of Preferred Stock in one or more
series, to designate the number of shares constituting any series, and to fix
the rights, preferences, privileges and restrictions thereof, including dividend
rights, voting rights, redemption and conversion rights and liquidation
preferences of such series, without further action by the shareholders. The
issuance of Preferred Stock with voting and conversion rights may adversely
affect the voting power of the holders of the Common Stock. The Company has no
present plan to issue any shares of Preferred Stock.
WARRANTS
REDEEMABLE WARRANTS. On January 15, 1992, the Company consummated a
private placement of Units (the "Unit Placement"), each Unit consisting of two
shares of Common Stock, one Class A Redeemable Warrant and one Class B
Redeemable Warrant (collectively, the "Redeemable Warrants"). At June 25, 1996
there were 575,000 Class A Redeemable Warrants and 575,000 Class B Redeemable
Warrants outstanding. Each Class A Redeemable Warrant and each Class B
Redeemable Warrant entitle the registered holder thereof to purchase from the
Company one share of Common Stock at an exercise price of $6.00 and $10.00 per
share, respectively, until January 15, 1997. The Company may redeem each of the
Class A Redeemable Warrants and the Class B Redeemable Warrants at $.05 per
Redeemable Warrant if the closing bid price of the Common Stock shall have
equaled or exceeded at least $8.00 and $12.00 per share, respectively, for a
period of 20 consecutive trading days. Notice of any redemption must be mailed
to all holders of Redeemable Warrants at least 30 days but no more than 60 days
before the date on which the Redeemable Warrants have been called for
redemption.
The holders of Redeemable Warrants do not have any voting or any other
rights of shareholders of the Company and are not entitled to receive dividends.
In the event of an adjustment in the number of shares issuable on exercise of
the Redeemable Warrants, the Company will not issue fractional shares, but will,
instead, pay to the holder of the Redeemable Warrants at the time of such
exercise an amount in cash equal to the same fraction of the current market
value of a share of Common Stock.
11
The exercise price and the number and kind of shares or other
securities purchasable on exercise of any Redeemable Warrants and the number of
Redeemable Warrants are subject to adjustment on the occurrence of certain
events, including stock dividends, reclassifications, reorganizations,
consolidations and mergers. No adjustment in the exercise price is required
until cumulative adjustments amount to one percent or more of the exercise
price. If the Company effects any capital reorganization, certain
reclassifications of the Common Stock, any consolidation or merger (other than a
consolidation or merger which does not result in any reclassification or change
in the outstanding shares), or sells all or substantially all its properties and
assets, the Redeemable Warrants become exercisable only for the number of shares
of stock or other securities, assets, or cash to which a holder of the number of
shares of the Company purchasable (at the time of such reorganization,
reclassification, consolidation, merger or sale) on exercise of such Redeemable
Warrants would have been entitled on such reorganization, reclassification,
consolidation, merger, or sale.
The Redeemable Warrants are not exercisable by a holder if (i) the
Shares issuable on exercise of such Redeemable Warrants have not been registered
under the securities or blue sky laws of the state of residence of such holder
or (ii) a current prospectus meeting the requirements of the laws of such state
cannot be lawfully delivered by or on behalf of the Company. Pursuant to the
terms of the respective Redeemable Warrant agreements, the Company has agreed to
use reasonable efforts to register such shares in states in which holders of
Redeemable Warrants are known to reside and to maintain a current prospectus
relating thereto.
SPECIAL PROVISIONS OF THE ARTICLES OF INCORPORATION AND TEXAS LAW
The provisions of the Articles of Incorporation and the Company's
Bylaws, as amended (the "Bylaws"), summarized in the succeeding paragraphs, may
be deemed to have an anti-takeover effect or may delay, defer or prevent a
tender offer or takeover attempt that a shareholder might consider in such
shareholder's best interest, including those attempts that might result in a
premium over the market price for the shares held by a shareholder.
Pursuant to the Articles of Incorporation, the Board of Directors may,
by resolution, establish one or more series of preferred stock, having such
number of shares, designation, relative voting rights, dividend rates,
liquidation or other rights, preferences and limitations as may be fixed by the
Board of Directors without any further shareholder approval. Such rights,
preferences, privileges and limitations as may be established could have the
effect of impeding or discouraging the acquisition of control of the Company.
The Bylaws provide that shareholders' nominations for the Board of
Directors and proposals for other business to be transacted at shareholders'
meetings must be timely received by the Company and must comply with specified
form and content requirements.
LIMITATION OF DIRECTOR LIABILITY. Texas law authorizes a Texas
corporation to eliminate or limit the personal liability of a director to the
Company and its shareholders for monetary damages for breach of certain
fiduciary duties as a director. The Company believes that such a provision is
beneficial in attracting and retaining qualified directors, and accordingly, its
Articles of Incorporation include a provision eliminating a director's liability
for monetary damages for any breach of fiduciary duty as a director, except: (i)
for any breach of the duty of loyalty to the Company or its shareholders; (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law; (iii) for any transaction from which the director
derived an improper personal benefit; or (iv) for certain other
12
actions. Thus, pursuant to Texas law, the Company's directors are not insulated
from liability for breach of their duty of loyalty (requiring that, in making a
business decision, directors act in good faith and in the honest belief that the
action was taken in the best interest of the Company), or for claims arising
under the federal securities laws. The foregoing provisions of the Company's
Articles of Incorporation may reduce the likelihood of derivative litigation
against directors and may discourage or deter shareholders or management from
bringing a lawsuit against directors for breaches of their fiduciary duties,
even though such an action, if successful, might otherwise have benefited the
Company and its shareholders. Further, the Company may, but has no present
intent to, execute indemnity agreements with present and future directors and
officers for the indemnification of and advancement of expenses to such persons
to the full extent permitted by law.
INDEMNIFICATION. To the maximum extent permitted by law, the Articles
of Incorporation and the Bylaws provide for mandatory indemnification of
directors, officers, employees and agents of the Company against all expense,
liability and loss to which they may become subject or which they may incur as a
result of being or having been a director, officer, employee or agent of the
Company. In addition, the Company must advance or reimburse directors and
officers and may advance or reimburse employees and agents for expenses incurred
by them in connection with indemnifiable claims.
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for the Common Stock and Redeemable
Warrants and the Warrant Agent for the Redeemable Warrants is First Interstate
Bank of Texas, N.A., 1000 Louisiana, Suite 700, Houston, Texas 77002.
LEGAL MATTERS
The legality of the securities offered hereby will be passed on for the
Company by Porter & Hedges, L.L.P., Houston, Texas.
13
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS IN CONNECTION WITH THIS OFFERING OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR THE UNDERWRITERS.
NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE. THIS PROSPECTUS DOES
NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES IN WHICH IT RELATES. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION OF AN OFFER TO BUY SUCH SECURITIES IN ANY CIRCUMSTANCES
IN WHICH SUCH OFFER OR SOLICITATION IS UNLAWFUL.
--------------------
TABLE OF CONTENTS
PAGE
----
Available Information....................... 2
Incorporation of Certain
Documents by Reference.................... 2
The Company................................. 3
The Offering................................ 3
Risk Factors................................ 4
Use of Proceeds............................. 6
Selling Shareholders........................ 7
Plan of Distribution........................ 9
Description of Securities................... 10
Legal Matters............................... 13
--------------------
Industrial Holdings, Inc.
1,695,153 Shares of
Common Stock
---------------------
P R O S P E C T U S
---------------------
-----------------
July , 1996
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Nasdaq/NMS Listing Fee .......................................... $33,903
Securities and Exchange Commission Registration Fee ............. 4,397
Legal Fees and Expenses ......................................... 2,000*
Accounting Fees and Expenses .................................... 3,000*
Miscellaneous ................................................... 500*
-------
Total .................................................. $43,800
=======
- ------------------
*Estimated for purposes of this filing.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Article 2.02 of the Texas Business Corporation Act (the "TBCA")
provides that a Texas corporation shall have the power to indemnify directors,
officers, employees and agents and to purchase and maintain liability insurance
for those persons. Article 2.02-1 of the TBCA empowers the Company to indemnify
any director or officer for expenses, including attorneys fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred in the defense
of any action, suit or proceeding in which such director or officer is a party
by reason of his position. In no event however, shall a director or officer be
entitled to indemnification in any action, suit, or proceeding in which such
director shall have been found not to have acted in good faith and in the
reasonable belief that his conduct as such director was in the Company's best
interests; and, in the case of an officer of the Company, that such officer did
not act in good faith and in the reasonable belief that his conduct was at least
not opposed to the Company's best interests; and in the case of any criminal
proceeding, such director or officer had no reasonable cause to believe his
conduct was unlawful. Moreover, no director shall be indemnified for any
obligations arising from any action, suit, or proceeding in which (i) such
director is found liable on the basis that personal profit was improperly
received by him, whether or not the action resulted from an action taken in his
official capacity, or (ii) such director is found liable to the Company.
The Company's Bylaws provide that the Company shall indemnify each
director or former director and each officer or former officer of the Company
and each person who is or who may have served at its request as a director or
officer of another corporation in which it owned shares of stock or of which it
is a creditor, or as a partner, venturer, proprietor, trustee, employee, agent
or similar functionary of another partnership, joint venture, sole
proprietorship, trust, employee benefit plan, or other enterprise against
judgments, settlements, penalties and reasonable expenses (including court costs
and attorneys' fees) incurred by him in connection with any claim made against
him or any action, suit, or proceeding in which he is or is threatened to be
made a named defendant or respondent by reason of his being or having been such
director or officer.
The Company shall indemnify such director or officer to the greatest
extent permitted by law for reasonable expenses incurred in connection with any
action, suit, or proceeding in which such director or officer has been wholly
successful in the defense of the proceeding, on the merits or otherwise, except
that if such action, suit, or proceeding was brought by or on behalf of the
Company, indemnification shall be limited to reasonable expenses actually
incurred by such director or officer with respect to such proceeding; provided,
however, that such indemnity shall be conditioned on the prior determination by
a majority of the Board of Directors or a committee thereof who are not named
defendants or respondents in such action, suit, or proceeding, or special legal
counsel appointed thereby, or, solely in the event the Board of Directors is not
able to act and unable to select special legal counsel, by vote of those
<PAGE>
shareholders who are not also directors named as defendant or respondent in such
action, suit, or proceeding, that such director or officer has acted in good
faith and in the reasonable belief as to the best interests of the Company.
If any pending, threatened, or completed proceeding is settled, amounts
paid as indemnification of the settlement shall not exceed costs, fees and
expenses that would have been reasonably incurred if the action, suit or
proceeding had been litigated to a conclusion. The determination by the Board of
Directors, or by independent counsel, and the payment of amounts by the Company
on the basis thereof, shall not prevent a shareholder from challenging such
indemnification by appropriate legal proceedings. Neither shall a determination
by the Board of Directors, a committee thereof, or special legal counsel
appointed thereby, that indemnification is not permissible, prevent a director
or officer from challenging such determination by appropriate legal proceedings.
Reasonable expenses of a director or officer who was, is, or is threatened to be
made a named defendant or respondent in any proceeding shall be paid in advance
before any final disposition following appropriate written request to the
Company.
The Company may purchase and maintain insurance on behalf of any person
who is or was a director, officer, employee, or agent of the Company as a
director, officer, partner, venturer, proprietor, trustee, employee, agent or
similar functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or other
enterprise, against any liability asserted against him in such a capacity or
arising out of his status as such a person, whether or not the Company would
have the power to indemnify him against that liability.
The foregoing rights and indemnification shall be construed in
accordance with the laws of the State of Texas presently in force and as
hereinafter amended. In all events, the Company's Bylaws shall be deemed to
grant the Company's directors and officers the maximum protection consistent
with law and shall be deemed amended from time to time to reflect any changes in
such law. The foregoing shall not be exclusive of any private contractual right
of indemnification, nor shall it limit the same; provided, however, such
contractual agreement shall not be inconsistent with the TBCA presently in force
or hereafter enacted.
The Company's Articles of Incorporation, as amended, contain provisions
eliminating or limiting the liability of a director for an act or omission in
his capacity as director; however, those provisions do not eliminate or limit
the liability of a director for: (i) a breach of a director's duty of loyalty to
the Company or its shareholders; (ii) an act or omission not in good faith or
that involves intentional misconduct or a knowing violation of the law; (iii) a
transaction from which a director received an improper benefit, whether or not
the benefit resulted from an action taken within the scope of the director's
office; (iv) an act or omission from which the liability of a director is
expressly provided for by statute; or (v) an act related to an unlawful stock
repurchase or payment of a dividend.
ITEM 16. EXHIBITS.
EXHIBIT
NUMBER IDENTIFICATION OF EXHIBIT
------- -------------------------
5.1 -- Opinion of Porter & Hedges, L.L.P.*
24.1 -- Consent of Porter & Hedges, L.L.P. (included in its opinion filed as
Exhibit 5.1 hereto).*
24.2 -- Consent of Price Waterhouse LLP*
24.3 -- Consent of Arthur Andersen LLP*
24.4 -- Consent of Goldberg and Zuffelato, P.C.*
- -----------------
* To be filed herewith.
II-2
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;
(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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than 20 percent change in the maximum
aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective 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;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant pursuant to
Section 13 or Section 15(d) of the Exchange Act 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.
(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.
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 15(d) of the Exchange
Act 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.
II-3
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company 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 the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 9, 1996.
INDUSTRIAL HOLDINGS, INC.
/s/ CHRISTINE A. SMITH
Christine A. Smith
VICE PRESIDENT AND
CHIEF FINANCIAL OFFICER
We, the undersigned directors and officers of the Company do hereby
constitute and appoint Robert E. Cone and Christine A. Smith, and each of them
singly, our true and lawful attorney and agent, to do any and all acts and
things in our name and on our behalf in our capacities as directors and
officers, and to execute any and all instruments for us and in our names in the
capacities indicated below, which said attorney and agent may deem necessary or
advisable to enable said corporation to comply with the Securities Act of 1933,
as amended, and any rules, regulations and requirements of the Securities and
Exchange Commission, in connection with the filing of this Registration
Statement, including specifically, without limitation, power and authority to
sign for us or any of us, in our names in the capacities indicated below, any
and all amendments hereto; and we do hereby ratify and confirm all that said
attorneys and agents or any of them, shall do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this to the
Registration Statement has been signed by the following persons in the
capacities indicated on July 9, 1996.
SIGNATURE TITLE
--------- -----
/s/ ROBERT E. CONE Director, Chairman of the Board of Directors,
Robert E. Cone President and Chief Executive Officer (Principal
Executive Officer)
/s/ JAMES H. BROCK, JR. Director and President - Energy Products and
James H. Brock, Jr. Services Division
/s/ CHRISTINE A. SMITH Vice President and Chief Financial Officer
Christine A. Smith (Principal Accounting Officer and Principal
Financial Officer)
/s/ BARBARA S. SHULER
Barbara S. Shuler Director, Secretary
--------------------- Director
William J. Argeroplos
/s/ CHARLES J. ANDERSON Director
Charles J. Anderson
-------------------
James W. Kenney Director
-------------------
John P. Madden Director
II-5
INDEX TO EXHIBITS
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER IDENTIFICATION OF EXHIBIT PAGE
- ------- ------------------------- ------------
5.1 -- Opinion of Porter & Hedges, L.L.P
24.1 -- Consent of Porter & Hedges, L.L.P. (included in its
opinion filed as Exhibit 5.1 hereto)
24.2 -- Consent of Price Waterhouse LLP*
24.3 -- Consent of Arthur Andersen LLP*
24.4 -- Consent of Goldberg and Zuffelato, P.C.*
- -----------------
* To be filed herewith.
II-6
EXHIBIT 5.1
July 9, 1996
Securities and Exchange Commission
Judiciary Plaza
450 Fifth Street, N.W.
Washington, D.C. 20549
Re: INDUSTRIAL HOLDINGS, INC. - S-3 REGISTRATION STATEMENT NO. 333-4160
COVERING 1,695,153 SHARES (THE "REGISTRATION STATEMENT")
Gentlemen:
We have acted as counsel to Industrial Holdings, Inc., a Texas
corporation (the "Company"), in connection with the registration on Form S-3
under the Securities Act of 1933, as amended, of 1,695,153 shares
of the Company's common stock, par value $.01 per share (the "Common Stock"). In
such capacity we have examined the articles of incorporation, bylaws and
corporate proceedings of the Company, and based upon such examination and having
regard for applicable legal principles, it is our opinion that:
1. The 1,180,153 shares of Common Stock covered by the Registration
Statement issuable on the exercise of warrants and conversion of
convertible notes will, when issued in accordance with the terms of
said warrants and convertible promissory notes, be validly issued,
fully paid and nonassessable shares of outstanding Common Stock; and
2. The 515,000 shares of Common Stock previously issued and covered by
the Registration Statement are validly issued, fully paid and
nonassessable shares of outstanding Common Stock.
We consent to the use of this opinion as an exhibit to the Registration
Statement and in the reference to our firm under the heading "Legal Matters" in
the Prospectus included as part of the Registration Statement.
Very truly yours,
PORTER & HEDGES, L.L.P.
EXHIBIT 24.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No. 1 to Registration Statement on Form S-3
(No. 333-4160) of our report dated February 29, 1996, except as to Note 12,
which is as of March 19, 1996, appearing on page F-2 of Industrial Holdings,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1995.
PRICE WATERHOUSE LLP
Houston, Texas
July 9, 1996
EXHIBIT 24.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this Registration Statement File No. 333-4160 on Form S-3 of our
report dated March 23, 1994 included in Industrial Holdings, Inc.'s Form 10-K
for the year ended December 31, 1995 and to all references to our Firm included
in this Registration Statement.
ARTHUR ANDERSEN LLP
Houston, Texas
July 8, 1996
EXHIBIT 24.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Amendment No. 1 to Registration Statement on Form S-3
(No. 333-4160) of our report dated December 27, 1995, appearing on page 6 of
Industrial Holdings, Inc.'s Report on Form 8-K/A3 dated December 7, 1995.
GOLDBERG and ZUFFELATO, P.C.
West Haven, Connecticut
July 9, 1996
