As filed with the Securities and Exchange Commission on July 16,1996.
REGISTRATION NO. 333-4160
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Amendment No. 2 to
FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
INDUSTRIAL HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
TEXAS 5080 76-0289495
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization Classification Code Number) Identification Number)
</TABLE>
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 $8.25(4)
warrants and debenture 920,153 and $8.19(4) $7,549,853 $2,605(3)
- -------------------------------------------------------------------------------------------------------------
Total 1,925,153 $---------- $14,645,153 $5,052
=============================================================================================================
</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.
(3) Filing fees of $2,447 and $1,950 were previously paid with the Form S-3
filings on April 24, 1996 and July 9, 1996.
(4) Pursuant to Rule 457(c), the registration fee for 690,153 shares and
230,000 shares respectively 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 and July 12, 1996 or $8.19 and
$8.25 per share.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS RESPECTIVE 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>
PROSPECTUS
INDUSTRIAL HOLDINGS, INC.
1,925,153 Shares
The 1,925,153 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 $2,855,250 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 12, 1996, the last reported
closing sale price of the Common Stock was $8.13 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.
<PAGE>
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 1,925,153 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 1,925,153 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 1,925,153 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 1,925,153 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 1,925,153 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 1,925,153 shares offered hereby, 230,000 shares are issuable from
time to time on the exercise of a warrant ("Texas Capital Warrant") to purchase
57,500 units granted to Texas Capital Securities, Inc. in connection with the
Company's initial public offering at an exercise price of $12.30 per unit
through January 1997 (each unit consisting of two share of Common Stock and two
redeemable stock purchase warrants, each exercisable to acquire one share of
Common Stock).
Of the 1,925,153 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,
Texas Capital Warrant 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 $2,855,250 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 $2,855,250. 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:
SHARES OWNED
SHARES OWNED AFTER THE
NAME OF SELLING SHAREHOLDER PRIOR TO OFFERING OFFERING(11)
- --------------------------- ----------------- -----------
Renaissance Capital Partners II, Ltd.(1). 625,153 0
St. James Capital Partners, L.P(2)....... 215,000 0
St. James Capital Corp.(3) (8)........... 80,000 0
Blake Liedtke(3)......................... 14,883 0
1959 Trust for Robert Tilly Arnold(3).... 14,883 0
The Hugh Roy Cullen Estate Trust for
Isaac Arnold, Jr.(3)................... 7,441 0
The Lillie C. Cullen Estate Trust for
Isaac Arnold, Jr.(3)................... 7,442 0
Dennis LaValle(3)........................ 37,209 0
Thomas M. Vertin(3)...................... 74,420 0
HUB, Inc.(3)............................. 74,420 0
Isaac Arnold, Jr.(4)..................... 15,000 0
Barbara C. Bailey(4)..................... 6,500 0
John A. Beck(4).......................... 1,000 0
Earl D. Bellamy(4)....................... 1,000 0
Douglas B. Bowman(4)..................... 3,000 0
Chifam, Ltd.(4).......................... 2,000 0
Robert D. Duncan(4)...................... 10,000 0
Roy J. Farr(4)........................... 3,500 0
Robin Fisher and M.R. Burns(4)........... 1,000 0
R. Vincent Ford(4)....................... 400 0
Michael J. Gaido(4)...................... 10,000 0
Robert Garrison(4)....................... 10,000 0
Guadalupe Funding Company (4) (5)........ 129,302 0
Ken Hanson IRA Rollover(4)............... 5,000 0
James Michael Haggar(4).................. 2,000 0
William H. Hintze(4)..................... 1,000 0
Roger H. Jenswold(4)..................... 2,500 0
Roger H. Jenswold & Co., Inc.
Profit Sharing Plan(4)................. 2,000 0
Michael M. Kelley(4)..................... 3,000 0
Daniel Luce(4)........................... 1,000 0
James L. Masten(4)....................... 3,000 0
Richard B. Mayor(4)...................... 5,000 0
Ray Mitchell, Jr.(4)..................... 10,000 0
7
Scott T. Orth Profit Sharing Plan
& Trust(4)............................. 2,000 0
Christopher J. Pappas(4)................. 2,000 0
Mary M. Pappas(4)........................ 1,600 0
PEKA, Ltd.(4)............................ 10,000 0
James J. Peters(4)....................... 500 0
Richard Peters Furs(4)................... 1,000 0
Stephen M. Reckling(4)................... 40,000 0
Thomas R. Reckling(4).................... 20,000 0
Mashud Reza(4)........................... 3,500 0
Steve L. Riggs(4)........................ 13,000 0
Standard Steel Company(4)................ 5,000 0
Gary E. Rounding IRA Rollover(4)......... 5,000 0
Robert J. Santoski(4).................... 24,000 0
Haroon R. Shaikh(4)...................... 2,000 0
David R. Sincox(4)....................... 1,000 0
Pat Smetek(4)............................ 15,000 0
Judie M. Smith IRA Rollover(4)........... 2,000 0
Frank Stovall(4)......................... 5,000 0
Guy B. Sullaway Jr., IRA Rollover(4)..... 3,000 0
James Henry Tanner III and
Carolyn H. Tanner(4)................... 4,000 0
Charles L. Thompson IRA Rollover(4)...... 1,000 0
David Wishard and Susan G. Wishard(4).... 500 0
Mathew A. Zaleski(4)..................... 1,000 0
Financial Public Relations, Ltd.(6)...... 24,000 0
Donald J. Willy(6)....................... 6,000 0
The Frost National Bank(7)............... 60,000 0
McBlue Corporation(9).................... 50,000 0
Mike Cunniff(10)......................... 15,000 0
Texas Capital Securities(12)............. 230,000 0
(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) After the sale of the shares contemplated by this offering and assuming
that the Sellers own no other shares, of which the Company has no
knowledge, the percent of class owned after the offering is 0%.
(12) These Shares are acquirable on exercise of the Texas Capital Warrants to
purchase 57,500 units at an exercise price of $12.30 per unit (each unit
consisting of two shares of Common Stock and two redeemable stock purchase
warrants, each exercisable to acquire one share of Common Stock).
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.
1,925,153 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........... 5,052
Legal Fees and Expenses....................................... 2,000*
Accounting Fees and Expenses.................................. 3,000*
Miscellaneous................................................. 500*
-------
Total................................................... $44,455
=======
- ------------
* 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
II-1
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 Amendment No. 2 to the
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Houston, State of Texas, on July 16, 1996.
INDUSTRIAL HOLDINGS, INC.
/s/ CHRISTINE A. SMITH
Christine A. Smith
Vice President and
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the Registration Statement has been signed by the following persons in
the capacities indicated on July 16, 1996.
SIGNATURE TITLE
--------- -----
* Director, Chairman of the Board of Directors,
Robert E. Cone President and Chief Executive Officer (Principal
Executive Officer)
* Director and Executive Vice President
James H. Brock, Jr.
/s/ CHRISTINE A. SMITH Vice President and Chief Financial Officer (Principal
Christine A. Smith Accounting Officer and Principal Financial Officer)
* Director, Secretary
Barbara S. Shuler
* Director
William J. Argeroplos
* Director
Charles J. Anderson
* Director
James W. Kenney
/s/ JOHN P. MADDEN Director
John P. Madden
*By /s/ CHRISTINE A. SMITH
Christine A. Smith
(Attorney-in-fact)
II-5
INDEX TO EXHIBITS
SEQUENTIALLY
NUMBERED
EXHIBIT 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 15, 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 1,925,153 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 (No. 333-4160)
under the Securities Act of 1933, as amended, of 1,925,153 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 1,410,153 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. 2 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 15, 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 15, 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. 2 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 15, 1996
