Unassociated Document
As
Filed with the Securities and Exchange Commission on February 20,
2007.
REGISTRATION
NO. 333-________
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
______________________________________
FORM
S-3
REGISTRATION
STATEMENT
UNDER
THE
SECURITIES ACT OF 1933
|
ARGAN,
INC.
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|
(Exact
Name of Registrant as Specified in Its Charter)
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|
Delaware
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|
(State
or Other Jurisdiction of Incorporation or
Organization)
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|
13-1947195
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|
(I.R.S.
Employer Identification Number)
|
| |
|
One
Church Street, Suite 401
Rockville,
MD 20850
(301)
315-0027
|
|
(Address,
Including Zip Code, and Telephone Number, Including Area
Code,
of
Registrant’s Principal Executive Offices)
|
|
Rainer
Bosselmann
President
and Chief Executive Officer
Argan,
Inc.
One
Church Street, Suite 401
Rockville,
MD 20850
(301)
315-0027
|
|
(Name,
Address, Including Zip Code, and Telephone Number, Including Area
Code, of
Agent for Service)
|
Copies
of
All Communications to:
Richard
A. Krantz, Esq.
Robinson
& Cole LLP
Financial
Centre
695
East Main Street
Stamford,
Connecticut 06904
(203)
462-7500
Approximate
Date of Commencement of Proposed Sale to the Public: From time to time after
the
effective date of this registration statement.
If
the
only securities being registered on this form are being offered pursuant
to
dividend or interest reinvestment plans, please check the following box.
o
If
any of
the securities being registered on this form are to be offered on a delayed
or
continuous basis pursuant to Rule 415 under the Securities Act of 1933, other
than securities offered in connection with dividend or interest reinvestment
plans, check the following box. x
If
this
form is filed to register additional securities for an offering pursuant
to Rule
462(b) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. o
If
this
form is a post-effective amendment filed pursuant to Rule 462(c) under the
Securities Act, check the following box and list the Securities Act registration
statement number of the earlier effective registration statement for the
same
offering. o
If
this
form is a registration statement pursuant to General Instruction I.D. or
a
post-effective amendment thereto that shall become effective upon filing
with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. o
If
this
form is a post-effective amendment to a registration statement filed pursuant
to
General Instruction I.D. filed to register additional securities or additional
classes of securities pursuant to Rule 413(b) under the Securities Act, check
the following box. o
CALCULATION
OF REGISTRATION FEE
|
Title
of Each Class of Securities
to
Be Registered
|
|
Amount
To
Be
Registered
|
|
Proposed
Maximum
Offering
Price
Per Share
|
|
Proposed
Maximum
Aggregate
Offering
Price
|
|
Amount
of
Registration
Fee
|
|
|
Common
Stock
|
|
|
2,653,335(1)
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|
$
|
6.20(2)
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$
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16,450,677(2)
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$
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505.00
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(1)
Pursuant
to Rule 416 of the Securities Act of 1933, as amended, this registration
statement shall also cover any additional shares of common stock by reason
of
any stock dividend, stock split, recapitalization or similar transaction or
to
cover such additional shares as may hereinafter be offered or issued to prevent
dilution resulting from stock splits, stock dividends, recapitalizations or
certain other capital adjustments, effected without the registrant’s receipt of
consideration, which results in an increase in the number of outstanding shares
of the registrant’s common stock.
(2)
Estimated
solely for the purpose of calculating the registration fee pursuant to Rule
457(c) under the Securities Act of 1933, as amended, based upon the closing
price of the registrant’s common stock as reported on the National Association
of Securities Dealers, Inc., Electronic Bulletin Board System on February 14,
2007.
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 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.
THE
INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THESE
SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN
OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
SUBJECT
TO COMPLETION, DATED FEBRUARY 20, 2007
PROSPECTUS
[ARGAN,
INC.
LOGO]
2,653,335
Shares of Common Stock
On
December 8, 2006, the selling shareholders listed on pages 19 and 20 acquired
2,653,335 shares of our common stock directly from us in a private placement
that was exempt from the registration requirements of the federal securities
laws. Under this prospectus, the selling shareholders and any pledgees, donees,
transferees or other successors-in-interest may offer and resell up to 2,653,335
shares of our common stock for their own accounts. We will not receive any
of
the proceeds from the sale of these shares by the selling
shareholders.
The
selling shareholders may sell their shares from time to time at fixed prices,
at
prevailing market prices at the time of sale, at prices related to the
prevailing market price, at varying prices determined at the time of sale,
or at
negotiated prices. We have agreed to bear all of the expenses in connection
with
the registration and sale of the shares, except for underwriting discounts
and
selling commissions.
Our
common stock is listed on the Boston Stock Exchange under the symbol AGX and
traded on the National Association of Securities Dealers, Inc., Electronic
Bulletin Board System under the symbol AGAX.
Our
principal executive offices are located at One Church Street, Suite 401,
Rockville, MD 20850, and our telephone number is (301) 315-0027.
Investing
in our common stock involves risks. See “Risk Factors” beginning on page 4.
Neither
the Securities and Exchange Commission nor any state securities commission
has
approved or disapproved of these securities or passed upon the adequacy or
accuracy of this prospectus. Any representation to the contrary is a criminal
offense.
The
date
of this prospectus is [____________].
TABLE
OF CONTENTS
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Page
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FORWARD-LOOKING
STATEMENTS
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ii
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ABOUT
THIS PROSPECTUS
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ii
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SUMMARY
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1
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RISK
FACTORS
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4
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USE
OF PROCEEDS
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18
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SELLING
SHAREHOLDERS
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18
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PLAN
OF DISTRIBUTION
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20
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LEGAL
MATTERS
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23
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EXPERTS
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23
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WHERE
YOU CAN FIND MORE INFORMATION
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23
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INCORPORATION
BY REFERENCE
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24
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FORWARD-LOOKING STATEMENTS
This
prospectus and the documents incorporated by reference into this prospectus
contain forward-looking statements that are based on current expectations,
estimates and projections about our industry, management’s beliefs, and
assumptions made by management. Words such as “anticipates,” “expects,”
“intends,” “plans,” “believes,” “seeks,” “estimates,” and variations of such
words and similar expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future performance and are
subject to certain risks, uncertainties and assumptions that are difficult
to
predict; therefore, actual results may differ materially from those expressed
or
forecasted in any forward-looking statements. The risks and uncertainties
include those noted in “Risk Factors” above and in the documents incorporated by
reference. We undertake no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events or
otherwise.
ABOUT
THIS PROSPECTUS
This
prospectus is part of a registration statement that we filed with the Securities
and Exchange Commission utilizing a continuous offering process. Under this
continuous offering process, the selling shareholders may, from time to time,
sell the securities described in this prospectus in one or more offerings.
This
prospectus provides you with a general description of the securities that may
be
offered by the selling shareholders. Each time a selling shareholder sells
securities, the selling shareholder is required to provide you with this
prospectus and, in certain cases, a prospectus supplement containing more
specific information about the selling shareholder and the terms of the
securities being offered. The prospectus supplement may also add, update or
change information contained in this prospectus. If there is any inconsistency
between the information in this prospectus and any prospectus supplement, you
should rely on the information in that prospectus supplement. You should
carefully read both this prospectus and any prospectus supplement, including
documents incorporated by reference herein, together with the additional
information described in the section entitled “Where You Can Find More
Information.”
We
have
not authorized any dealer, salesman or other person to give any information
or
to make any representation other than those contained or incorporated by
reference in this prospectus and the accompanying supplement to this prospectus.
You must not rely upon any information or representation not contained or
incorporated by reference in this prospectus or the accompanying prospectus
supplement. This prospectus and the accompanying supplement to this prospectus
do not constitute an offer to sell or the solicitation of an offer to buy any
securities other than the registered securities to which they relate, nor do
this prospectus and the accompanying supplement to this prospectus constitute
an
offer to sell or the solicitation of an offer to buy securities in any
jurisdiction to any person to whom it is unlawful to make such offer or
solicitation in such jurisdiction. You should not assume that the information
contained in this prospectus and the accompanying prospectus supplement is
accurate on any date subsequent to the date set forth on the front of the
document or that any information we have incorporated by reference is correct
on
any date subsequent to the date of the document incorporated by reference,
even
though this prospectus and any accompanying prospectus supplement is delivered
or securities sold on a later date.
SUMMARY
This
summary highlights information contained elsewhere in this prospectus and in
the
documents incorporated by reference herein and does not contain all of the
information you should consider in making your investment decision. You should
read this summary together with the more detailed information, including our
business information, financial statements and the related notes, incorporated
by reference in this prospectus, as well as the information set forth in any
prospectus supplement. You should carefully consider, among other things, the
matters discussed in the section entitled “Risk Factors.”
Argan,
Inc.
We
provide a broad range of engineering,
procurement and construction services to the power industry, telecommunications
infrastructure services, as well as engage in the manufacture and distribution
of nutritional supplements. We conduct our operations through our wholly owned
subsidiaries, Gemma Power Systems, LLC and it affiliates (Gemma), Southern
Maryland Cable, Inc. (SMC) and Vitarich Laboratories, Inc. (Vitarich) that
we
acquired in, December 2006, July 2003 and August 2004, respectively.
We
were
organized as a Delaware corporation in May 1961. On October 23, 2003, our
shareholders approved a plan providing for our internal restructuring whereby
we
became a holding company, and our operating assets and liabilities relating
to
our Puroflow Incorporated business were transferred to a newly-formed, wholly
owned subsidiary. The subsidiary then changed its name to “Puroflow
Incorporated” and we changed our name from Puroflow Incorporated to “Argan,
Inc.” On October 31, 2003, we sold our subsidiary, Puroflow, to Western Filter
Corporation.
Power
Industry
Services
Through
Gemma, we provide a full range of development, consulting, engineering,
procurement, construction, commissioning, operating and maintenance services
to
the energy market for a wide range of customers including public utilities,
independent power project owners, municipalities, public institutions and
private industry.
We
plan
to participate in the rapidly growing alternative fuel industry, including
biodiesel, ethanol and other power energy systems. We provide engineering,
procurement and construction services to the owners of alternative power energy
systems.
We
intend
to emphasize our expertise in the alternative fuel industry as well as our
proven track record developing facilities and services for traditional power
energy systems. We believe that we are uniquely positioned to assist in the
development and delivery of innovative renewable energy solutions as world
energy needs grow and efforts to combat global warming increase.
Telecom
Infrastructure Services
Through
SMC, we provide telecommunications infrastructure services. We currently provide
inside plant, premise wiring services to the Federal Government and have plans
to expand that work to commercial customers who regularly need upgrades in
their
premise wiring systems to accommodate improvements in security,
telecommunications and network capabilities.
We
continue to participate in the expansion of the telecommunications industry
by
working with various telecommunications providers. We are actively pursuing
contracts with a vide variety of telecommunications providers. We provide
maintenance and upgrade services for their outside plant systems that increase
the capacity of existing infrastructure. We also provide outside plant services
to the power industry by providing maintenance and upgrade services to
utilities.
We
intend
to emphasize our high quality reputation, outstanding customer base and highly
motivated work force in competing for larger and more diverse contracts. We
believe that our high quality and well maintained fleet of vehicles and
construction machinery and equipment is essential to meet customers’ needs for
high quality and on-time service. We are committed to invest in our repair
and
maintenance capabilities to maintain the quality and life of our equipment.
Additionally, we invest annually in new vehicles and equipment.
Nutritional
Products
Through
Vitarich, we are dedicated to providing research, development, manufacture
and
distribution of premium nutritional supplements, whole-food dietary supplements
and personal care products. Several of these products have garnered honors
including the National Nutritional Foods Association’s prestigious People’s
Choice Awards for best products of the year in its respective category. Our
customers include health food store chains, mass merchandisers, network
marketing companies, pharmacies and major retailers.
We
intend
to enhance our position in the fast growing global nutrition industry through
our innovative product development and research. We believe that we will be
able
to expand our distribution channels by providing continuous quality assurance
and by focusing on timely delivery of superior nutraceutical
products.
We
intend
to seek acquisitions in the nutrition industry to evolve into a customer and
product diverse nutraceutical products company with a reputation for high
quality and on-time delivery of products.
Holding
Company Structure
We
intend
to make additional acquisitions and/or investments. We intend to have more
than
one industrial focus and to identify those companies that are in industries
with
significant potential to grow profitably both internally and through
acquisitions. We expect that companies acquired in each of these industrial
groups will be held in separate subsidiaries that will be operated in a manner
that best provides cashflow and value for Argan.
We
are a
holding company with no operations other than our investments in Vitarich,
SMC
and Gemma. At January 31, 2007, there were no restrictions with respect to
payments from Vitarich , SMC and Gemma to Argan.
Our
principal executive offices are located at One Church Street, Suite 401,
Rockville, Maryland 20850. Our phone number at that address is (301) 315-0027.
We maintain a website on the Internet at www.arganinc.com. Information on our
website is not incorporated by reference into this prospectus.
Unless
the context otherwise requires, references in this prospectus to “Argan,”, “we,”
“us” or “our” refer to Argan, Inc., a Delaware corporation, and its
subsidiaries. Our fiscal year for financial reporting ends on January 31.
|
Common
Stock offered
|
2,653,335
shares.
|
| |
|
|
Common
Stock outstanding
|
11,094,012
shares.(1)
|
| |
|
|
Risk
factors
|
Investment
in our securities involves a high degree of risk. You should carefully
consider the risk factors described under the section entitled
“Risk
Factors”, as well as any other information in this prospectus, any
prospectus supplement and any document incorporated herein by reference
before investing in any of our securities. Each of these risk factors
could adversely affect our business, operating
results and financial condition, as well as adversely affect the
value of
an investment in our securities.
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| |
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Use
of proceeds
|
The
proceeds from the sale of the shares of our common stock being
offered by
the selling shareholders pursuant to this prospectus and any prospectus
supplement, if applicable, net of any broker’s fee or commissions, will
belong to the selling shareholders. We will not receive any of
the
proceeds from the sale of these shares. See section entitled “Use of
Proceeds”.
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Plan
of Distribution
|
The
shares may be offered and sold from time to time by selling shareholders,
and any pledgees, donees, transferees or other successors-in-interest
of
the shares, through public or private transactions at fixed prices,
at
prevailing market prices at the time of sale, at prices related
to the
prevailing market price, at varying prices determined at the time
of sale,
or at negotiated prices. See section entitled “Plan of
Distribution”.
|
________________
(1) The
above outstanding share information is based upon shares of our common stock
outstanding as of January 31, 2007. The above outstanding share information
excludes: (i) 228,150 shares of our common stock issuable upon the exercise
of
options outstanding at January 31, 2007; (ii) 230,000 shares of our common
stock
issuable upon the exercise of warrants outstanding at January 31, 2007; and
(iii) an aggregate of 15,850 shares of our common stock available for future
issuance under our 2001 Stock Option Plan.
RISK
FACTORS
Investing
in our common stock involves risks. Before investing in our common stock, you
should carefully consider the following risk factors as well as the other
information included and incorporated by reference in this prospectus. If any of
the following risks actually occur, our business, financial condition, or
results of operations could be materially and adversely affected. In such cases,
the trading price of our common stock could decline, and you may lose all or
part of your investment.
General
Risks
Our
officers and directors have limited experience in managing our business and,
as
a result, may be unsuccessful in doing so.
In
April
2003, Rainer H. Bosselmann became Chairman and Chief Executive Officer, H.
Haywood Miller, III became Executive Vice President and Arthur F. Trudel became
our Senior Vice President and Chief Financial Officer. Upon consummation of
the
private placement in April 2003, four of our directors resigned and were
replaced by Mr. Bosselmann and three new directors designated by Mr. Bosselmann
(DeSoto S. Jordan, James W. Quinn and Daniel A. Levinson). In addition, in
June
2003, Peter L. Winslow was elected by the Board of Directors to fill a vacancy,
and in October, 2003, W.G. Champion Mitchell was elected to our Board of
Directors at our 2003 Annual Meeting. On April 7, 2006, Mr. Miller resigned
his
position with us. Although Messrs. Bosselmann, Trudel, Jordan, Quinn, Levinson,
Winslow and Mitchell have experience as executive officers and directors of
other public companies, they have limited experience in managing our business
and, as a result, may be unsuccessful in doing so.
Purchasers
of our common stock will be unable to evaluate future acquisitions and/or
investments.
We
completed our acquisition of Gemma in December 2006. Prior to our acquisition
of
Gemma, we acquired Vitarich in August 2004 and SMC in July 2003. Accordingly,
purchasers of our common stock may be unable to evaluate the business,
prospects, operating results, management or other material factors relating
to
future acquisitions and/or investments that we make. In addition, there can
be
no assurance that future acquisitions will occur, or if they occur, will be
beneficial to us and our stockholders.
We
may be unsuccessful at integrating companies that we acquire.
We
may
not be able to successfully integrate companies that we acquire with our other
operations without substantial costs, delays or other operational or financial
problems. Integrating acquired companies involves a number of special risks
which could materially and adversely affect our business, financial condition
and results of operations, including:
| · |
failure
of acquired companies to achieve the results we
expect;
|
| · |
diversion
of management's attention from operational
matters;
|
| · |
difficulties
integrating the operations and personnel of acquired
companies;
|
| · |
inability
to retain key personnel of acquired
companies;
|
| · |
risks
associated with unanticipated events or
liabilities;
|
| · |
the
potential disruption of our business;
and
|
| · |
the
difficulty of maintaining uniform standards, controls, procedures
and
policies.
|
If
one of
our acquired companies suffers customer dissatisfaction or performance problems,
the reputation of our entire company could be materially and adversely affected.
In addition, future acquisitions could result in issuances of equity securities
that would reduce our stockholders' ownership interest, the incurrence of debt,
contingent liabilities, deferred stock based compensation or expenses related
to
the valuation of goodwill or other intangible assets and the incurrence of
large, immediate write-offs.
We
may not be able to raise additional capital and, as a result, may not be able
to
successfully execute our business plan.
We
will
need to raise additional capital to finance future business acquisitions and/or
investments. Additional financing may not be available on terms that are
acceptable to us or at all. If we raise additional funds through the issuance
of
equity or convertible debt securities, the percentage ownership of our
stockholders would be reduced. Additionally, these securities might have rights,
preferences and privileges senior to those of our current stockholders. If
adequate funds are not available on terms acceptable to us, our ability to
finance future business acquisitions and/or investments and to otherwise pursue
our business plan would be significantly limited.
We
cannot
readily predict the timing, size and success of our acquisition efforts and
therefore the capital we will need for these efforts. Using cash for
acquisitions limits our financial flexibility and makes us more likely to seek
additional capital through future debt or equity financings. When we seek
additional debt or equity financings, we cannot be certain that additional
debt
or equity will be available to us at all or on terms acceptable to us.
We
may not be able to comply with certain of our debt covenants, which as a result,
may interfere with our ability to successfully execute our business
plan.
We
are
borrowing funds from a lender. We must be in compliance with certain debt
covenants in order to draw on these loans. We are currently in compliance with
our debt covenants, but there can be no assurance that we will continue to
be in
compliance. If we are not in compliance, we will not have adequate liquidity
to
successfully execute our business plan.
We
may be unsuccessful at generating internal growth.
Our
ability to generate internal growth will be affected by, among other factors,
our success in:
| · |
expanding
the range of services and products we offer to customers to address
their
evolving needs;
|
| · |
attracting
new customers;
|
| · |
hiring
and retaining employees; and
|
| · |
reducing
operating and overhead expenses.
|
Many
of
the factors affecting our ability to generate internal growth may be beyond
our
control. Our strategies may not be successful and we may not be able to generate
cash flow sufficient to fund our operations and to support internal growth.
Our
inability to achieve internal growth could materially and adversely affect
our
business, financial condition and results of operations.
Our
business growth could outpace the capability of our corporate management
infrastructure. Our operations and ability to execute our business plan could
be
adversely effected as a result.
We
cannot
be certain that our infrastructure will be adequate to support our operations
as
they expand. Future growth also could impose significant additional
responsibilities on members of our senior management, including the need to
recruit and integrate new senior level managers and executives. We cannot be
certain that we can recruit and retain such additional managers and executives.
To the extent that we are unable to manage our growth effectively, or are unable
to attract and retain additional qualified management, we may not be able to
expand our operations or execute our business plan. Our financial condition
and
results of operations could be materially and adversely affected as a result.
Loss
of key personnel could prevent us from successfully executing our business
plan
and otherwise adversely affect our business.
Our
ability to maintain productivity and profitability will be limited by our
ability to employ, train and retain skilled personnel necessary to meet our
requirements. We cannot be certain that we will be able to maintain an adequate
skilled labor force necessary to operate efficiently and to support our growth
strategy or that our labor expenses will not increase as a result of a shortage
in the supply of these skilled personnel. Labor shortages or increased labor
costs could impair our ability or maintain our business or grow our
revenues.
We
depend
on the continued efforts of our executive officers and on senior management
of
the businesses we acquire. We cannot be certain that any individual will
continue in such capacity for any particular period of time. The loss of key
personnel, or the inability to hire and retain qualified employees, could
negatively impact our ability to manage our business.
We
have experienced losses in the past and may experience additional losses in
the
future.
As
of
October 31, 2006, we had an accumulated deficit of approximately $15.4 million
resulting primarily from past losses. We may experience additional losses in
the
future.
Any
general increase in interest rate levels will increase our cost of doing
business. Our results of operations, cash flow and financial condition may
suffer as a result.
As
of
October 31, 2006, we have approximately $1.3 million of unhedged variable rate
debt. Any general increase in interest rate levels will increase our cost of
doing business.
Specific
Risks Relating to our Power Industry Services
Failure
to successfully operate our power industry services will adversely affect our
business.
A
majority of our future revenue stems from our backlog for power industry
services. We only acquired Gemma in December 2006 and therefore, do not have
significant experience in the engineering, procurement and construction of
alternative energy and traditional power plants. Our inability to successfully
develop, manage and provide our power industry services will adversely affect
our business operations and financial condition.
Construction
of energy power plants will be subject to risks of delay and cost overruns.
The
engineering and construction of energy power plants utilizing alternative
sources of energy such as ethanol and bio-diesel, will be subject to the risks
of delay or cost overruns resulting from numerous factors, including the
following:
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• |
shortages
of equipment, materials or skilled labor;
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|
• |
unscheduled
delays in the delivery of ordered materials and equipment;
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• |
engineering
problems, including those relating to the commissioning of newly
designed
equipment;
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• |
cost
increases, such as increases to the price of commodities such as
corn or
soybean or increases in or the availability of land at reasonable
prices
to grow corn and soybean;
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• |
price
decreases for a barrel of oil;
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• |
inability
to develop or non-acceptance of new technologies to produce alternative
fuel sources; and
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|
• |
difficulty
in obtaining necessary permits or approvals.
|
If
prices for alternative fuel sources are unfavorable, construction of alternative
energy power plants may not be economical.
An
increase of prices in corn, soybean or other feed stocks used to make ethanol
or
other alternative fuel sources relative to prices for oil and refined products,
or a decrease in prices for oil and refined products, could adversely affect
the
demand for services relating to alternative energy power plants, and in turn,
our operations.
If
tax credits are repealed, alternative energy power plants may not be economical.
Current
legislation offer tax credits and incentives to those utilizing alternative
sources of energy. In the event new legislation is enacted which decreases
or
cancels such credits or incentives, then in such event, the construction and
use
of alternative energy sources may not be economically viable. A decrease in
the
construction of alternative energy power plants will adversely affect our
business operations.
Weather
can significantly impact our revenues and profitability.
Our
ability to perform work is significantly impacted by weather conditions such
as
precipitation and temperature. Changes in weather conditions can create
significant variability in our quarterly revenues and profitability,
particularly in the first and fourth quarters of the year. Additionally, delays
and other weather impacts may increase a project’s cost and decrease its
profitability.
Adverse
operating conditions to energy plants could negatively impact our business
operations.
The
need
for our services depends on favorable plant operating conditions. Among
operating conditions that impact plant economics are the site location,
infrastructure, weather conditions, equipment, legislation and availability
of
alternative fuel sources at favorable prices. For example, if a plant were
located in an area that requires construction or expansion of rail
transportation, plant economics could be adversely affected.
Our
future success will depend on our ability to attract and retain qualified
management and personnel.
Our
future success is substantially dependent on the continued services and on
the
performance of Joel M. Canino and William F. Griffin, Jr., executive officers
of
Gemma. Messrs. Canino and Griffin have entered into employments agreements
which
have an eighteen month term. There can be no assurance that either Mr. Canino
or
Mr. Griffin will renew his employment agreement upon expiration of its term.
The
loss of the services of either Mr. Canino or Mr. Griffin could materially
adversely affect our business. Our ability to achieve our development will
also
depend on our ability to attract and retain additional qualified and skilled
personnel. Recruiting personnel in the energy power industry is competitive.
We
do not know whether we will be able to attract or retain additional qualified
personnel. Our inability to attract and retain qualified personnel, or the
departure of key employees, could materially and adversely affect our
development and, therefore, our business, prospects, results of operations
and
financial condition.
We
could be subject to claims and liabilities under environmental, health and
safety laws and regulations.
Our
operations are subject to compliance with United
States federal, state and local environmental, health and safety laws and
regulations,
including those relating to discharges to air, water and land, the handling
and
disposal of solid and hazardous waste, and the cleanup of properties affected
by
hazardous substances. Certain environmental laws impose substantial penalties
for non-compliance and others, such as the federal Comprehensive Environmental
Response, Compensation and Liability Act, impose strict, retroactive, joint
and
several liability upon persons responsible for releases of hazardous substances.
We continually evaluate whether we must take additional steps to ensure
compliance with environmental laws, however, there can be no assurance that
these requirements will not change and that compliance will not adversely affect
our operations in the future.
The
enactment of new legislation could hinder the development of plant facilities.
Coal
and
fossil fuel emissions are said to be factors attributable to global warming.
The
enactment of new legislation could require planned and existing coal fired
plants to modify structures to reduce pollutants, thereby affecting the
economics of these plants, as well the services we provide.
We
may not have enough insurance to cover all of the risks we
face.
In
accordance with customary industry practices, we maintain insurance coverage
against some, but not all, potential losses in order to protect against the
risks we face. We may elect not to carry insurance if our management believes
that the cost of available insurance is excessive relative to the risks
presented. In addition, we cannot insure fully against pollution and
environmental risks. The occurrence of an event not fully covered by insurance
could have a material adverse effect on our financial condition and results
of
operations.
We
bear risk of cost overruns in the dollar-value of our contracts. We may
experience reduced profits or, in some cases, losses under these contracts
if
costs increase above our estimates.
We
conduct our business under various types of contractual arrangements. We bear
a
significant portion of the risk for cost overruns. Under fixed price contracts,
contract prices are established in part on cost and scheduling estimates which
are based on a number of assumptions, including assumptions about future
economic conditions, prices and availability of labor, equipment and materials,
and other exigencies. If these estimates prove inaccurate, or circumstances
change such as unanticipated technical problems, changes in local laws or labor
conditions, weather delays, costs of raw materials or our suppliers’ or
subcontractors’ inability to perform, cost overruns may occur and we could
experience reduced profits, or in some cases, a loss for that project. From
time
to time, we may also assume a project’s technical risk, which means that we may
have to satisfy certain technical requirements of a project despite the fact
that at the time of project award, we may not have previously produced the
system or product in question.
If
we guarantee the timely completion or performance standards of a project, we
could incur additional costs to cover our guarantee
obligations.
In
some
instances and in many of our fixed price contracts, we guarantee a customer
that
we will complete a project by a scheduled date. We sometimes provide that the
project, when completed, will also achieve certain performance standards. If
we
subsequently fail to complete the project as scheduled, or if the project
subsequently fails to meet guaranteed performance standards, we may be held
responsible for cost impacts to the client resulting from any delay or the
costs
to cause the project to achieve the performance standards, generally in the
form
of contractually agreed-upon liquidated damages. To the extent that these events
occur, the total costs of the project would exceed our original estimates and
we
could experience reduced profits or, in some cases, a loss for that
project.
We
are vulnerable to the cyclical nature of the markets we
serve.
The
demand for our services and products is dependent upon the existence of projects
with engineering, procurement, construction and management needs. Although
downturns can impact our business, our power markets exemplify businesses that
are cyclical in nature. The power markets have historically been and will
continue to be vulnerable to general downturns and are cyclical in nature.
As a
result, our past results have varied considerably and may continue to vary
depending upon the demand for future projects in these industries.
Our
use of the percentage-of-completion method of accounting could result in a
reduction or reversal of previously recorded revenues or
profits.
Under
our
accounting procedures, we measure and recognize a large portion of our profits
and revenues under the percentage-of-completion accounting methodology. This
methodology allows us to recognize revenues and profits ratably over the life
of
a contract by comparing the amount of the costs incurred to date against the
total amount of costs expected to be incurred. The effect of revisions to
revenues and estimated costs is recorded when the amounts are known and can
be
reasonably estimated, and these revisions can occur at any time and could be
material. On a historical basis, we believe that we have made reasonably
reliable estimates of the progress towards completion on our long term
contracts. However, given the uncertainties associated with these types of
contracts, it is possible for actual costs to vary from estimates previously
made, which may result in reductions or reversals of previously recorded
revenues and profits.
We
continue to expand our business in areas where bonding is required, but bonding
capacity is limited.
We
continue to expand our business in areas where the underlying contract must
be
bonded. Because of the overall lack of bonding capacity, we can find it
difficult to find sureties who will provide the contract-required
bonding.
We
are dependent upon third parties to complete many of our
contracts.
Much
of
the work performed under our contracts is actually performed by third-party
subcontractors we hire. We also rely on third-party equipment manufacturers
or
suppliers to provide much of the equipment used for projects. If we are unable
to hire qualified subcontractors or find qualified equipment manufacturers
or
suppliers, our ability to successfully complete a project could be impaired.
If
the amount we are required to pay for subcontractors or equipment and supplies
exceeds what we have estimated, especially in a lump sum or a fixed-price type
contract, we may suffer losses on these contracts. If a supplier, manufacturer
or subcontractor fails to provide supplies, equipment or services as required
under a negotiated contract for any reason, we may be required to source these
supplies, equipment or services on a delayed basis or at a higher price than
anticipated which could impair contract profitability.
Specific
Risks Relating to Our Telecommunications Infrastructure
Business
We
are substantially dependent on economic conditions in the telecommunications
infrastructure industry. Adverse economic conditions in the industry could
have
a material adverse effect on our future operating results.
We
are
involved in the telecom and utility infrastructure services industries, which
can be negatively affected by rises in interest rates, downsizings in the
economy and general economic conditions. In addition, our activities may be
hampered by weather conditions and an inability to plan and forecast activity
levels. Adverse economic conditions in the telecommunications infrastructure
and
construction industries may have a material adverse effect on our future
operating results.
The
industry served by our business is subject to rapid technological and structural
changes that could reduce the demand for the services we
provide.
The
utility, telecommunications and computer networking industries are undergoing
rapid change as a result of technological advances that could in certain cases
reduce the demand for our services or otherwise negatively impact our business.
New or developing technologies could displace the wireline systems used for
voice, video and data transmissions, and improvements in existing technology
may
allow telecommunications companies to significantly improve their networks
without physically upgrading them. In addition, consolidation, competition
or
capital constraints in the utility, telecommunications or computer networking
industries may result in reduced spending or the loss of one or more of our
customers. Additionally, our work in the telecommunications infrastructure
services industry could be negatively affected by rises in interest rates,
downsizings in the economy and general economic conditions.
Our
telecommunications infrastructure services business is seasonal and our
operating results may vary significantly from quarter to
quarter.
Our
quarterly results are affected by seasonal fluctuations in our business. Our
quarterly results may also be materially affected by:
| · |
variations
in the margins or products performed during any particular
quarter;
|
| · |
regional
or general economic conditions;
|
| · |
the
budgetary spending patterns of customers, including government
agencies;
|
| · |
the
timing and volume of work under new
agreements;
|
| · |
the
timing of our significant promotional
activities;
|
| · |
costs
that we incur to support growth internally or through acquisitions
or
otherwise;
|
| · |
losses
experienced in our operations not otherwise covered by
insurance;
|
| · |
the
change in mix of our customers, contracts and
business;
|
| · |
the
timing of acquisitions;
|
| · |
the
timing and magnitude of acquisition assimilation costs;
and
|
| · |
increases
in construction and design costs.
|
Accordingly,
our operating results in any particular quarter may not be indicative of the
results that you can expect for any other quarter or for the entire
year.
Our
operations with regard to our telecommunications business are expected to have
seasonally weaker results in the first and fourth quarters of the year, and
may
produce stronger results in the second and third quarters. This seasonality
is
primarily due to the effect of winter weather on outside plant activities,
as
well as reduced daylight hours and customer budgetary constraints. Certain
customers tend to complete budgeted capital expenditures before the end of
the
year, and postpone additional expenditures until the subsequent fiscal period.
We intend to actively pursue larger infrastructure projects with our customers.
The positive impact of major contracts requires that we undertake extensive
up
front preparations with respect to staffing, training and relocation of
equipment. Consequently, we may incur significant period costs in one fiscal
period and realize the benefit of contractual revenues in subsequent
periods.
Our
financial results are dependent on government programs and spending, the
termination of which would have a material adverse effect on our business.
A
significant portion of our business relates to structured cabling work for
military and other government agencies. As such, our business is reliant upon
military and other government programs. Reliance on government programs has
certain inherent risks. Among others, contracts, direct or indirect, with United
States government agencies are subject to unilateral termination at the
convenience of the government, subject only to the reimbursement of certain
costs plus a termination fee.
We
are substantially dependent upon fixed price contracts and are exposed to losses
that may occur on such contracts in the event that we fail to accurately
estimate, when bidding on a contract, the costs that we will be required to
incur to complete the project.
We
currently generate, and expect to continue to generate, a significant portion
of
our revenues under fixed price contracts. We must estimate the costs of
completing a particular project to bid for these fixed price contracts. Although
historically we have been able to estimate costs, the cost of labor and
materials may, from time to time, vary from costs originally estimated. These
variations, along with other risks inherent in performing fixed price contracts,
may cause actual revenue and gross profits for a project to differ from those
we
originally estimated and could result in reduced profitability or losses on
projects. Depending upon the size of a particular project, variations from
the
estimated contract costs can have a significant impact on our operating results
for any fiscal quarter or year.
Many
of our customer contracts may be canceled on short notice and we may be
unsuccessful in replacing contracts as they are completed or expire. As a
result, our business, financial condition and results of operations may be
adversely affected.
Any
of
the following contingencies may have a material adverse effect on our business:
| · |
our
customers cancel a significant number of
contracts;
|
| · |
we
fail to win a significant number of our existing contracts upon re-bid;
or
|
| · |
we
complete the required work under a significant number of non-recurring
projects and cannot replace them with similar projects.
|
Many
of
our customers may cancel their contracts on short notice, typically 30 to 90
days, even if we are not in default under the contract. Certain of our customers
assign work to us on a project-by-project basis under master service agreements.
Under these agreements, the customers often have no obligation to assign work
to
us. Our operations could be materially and adversely affected if the volume
of
work we anticipate receiving from these customers is not assigned to us. Many
of
our contracts, including our master service agreements, are opened to public
bid
at the expiration of their terms. We may not be the successful bidder on
existing contracts that come up for bid.
Loss
of significant customers could adversely affect our business.
Sales
to
our three largest telecom infrastructure services customers, Electronic Data
Systems Corp. (EDS), Verizon Communications (VZ) and Southern Maryland Electric
Cooperative (SMECO) currently account for most of our telecommunications
business. EDS, VZ and SMECO accounted for approximately 13%, 11% and 10% of
consolidated net sales during the nine months ended October 31, 2006. The loss
of any of these customers could have a material adverse effect on our business,
unless the loss is offset by increases in sales to other customers.
We
operate in highly competitive markets. If we fail to compete successfully
against current or future competitors, our business, financial condition and
results of operations will be materially and adversely affected.
We
operate in highly competitive markets. We compete with service providers ranging
from small regional companies which service a single market, to larger firms
servicing multiple regions, as well as large national and multi-national
entities. In addition, there are few barriers to entry in the telecommunications
infrastructure industry. As a result, any organization that has adequate
financial resources and access to technical expertise may become one of our
competitors.
Competition
in the telecommunications infrastructure industry depends on a number of
factors, including price. Certain of our competitors may have lower overhead
cost structures than we do and may, therefore, be able to provide their services
at lower rates than we can provide the same services. In addition, some of
our
competitors are larger and have significantly greater financial resources than
we do. Our competitors may develop the expertise, experience and resources
to
provide services that are superior in both price and quality to our services.
Similarly, we may not be able to maintain or enhance our competitive position
within our industry. We may also face competition from the in-house service
organizations of our existing or prospective customers.
A
significant portion of our business involves providing services, directly or
indirectly as a subcontractor, to the United States government under government
contracts. The United States government may limit the competitive bidding on
any
contract under a small business or minority set-aside, in which bidding in
limited to companies meeting the criteria for a small business or minority
business, respectively. We are currently qualified as a small business concern,
but not a minority business.
We
may
not be able to compete successfully against our competitors in the future.
If we
fail to compete successfully against our current or future competitors, our
business, financial condition, and results of operations would be materially
and
adversely affected.
We
are subject to significant government regulation. This may increase the costs
of
our operations and expose us to substantial civil and criminal penalties in
the
event that we violate applicable law.
We
provide, either directly as a contractor or indirectly as a sub-contractor,
products and services to the United States government under government
contracts. United States government contracts and related customer orders
subject us to various laws and regulations governing United States government
contractors and subcontractors, generally which are more restrictive than for
non-government contractors. These include subjecting us to examinations by
government auditors and investigators, from time to time, to ensure compliance
and to review costs. Violations may result in costs disallowed, and substantial
civil or criminal liabilities (including, in severe cases, denial of future
contracts).
If
we are unable to obtain surety bonds or letters of credit in sufficient amounts
or at acceptable rates, we might be precluded from entering into additional
contracts with certain of our customers. This may adversely affect our business.
Contracts
in the industries we serve may require performance bonds or other means of
financial assurance to secure contractual performance. The market for
performance bonds has tightened significantly. If we are unable to obtain surety
bonds or letters of credit in sufficient amounts or at acceptable rates, we
might be precluded from entering into additional contracts with certain of
our
customers.
Specific
Risks Relating To Our Nutritional Supplement
Business
If
our business or our products are the subject of adverse publicity, our business
could suffer.
Our
business depends, in part, upon the public’s perception of our integrity and the
safety and quality of our products. Any adverse publicity, whether or not
accurate, could negatively affect the public’s perception of us and could result
in a significant decline in our operations. Our business and products could
be
subject to adverse publicity regarding, among other things:
| · |
the
nutritional supplements industry;
|
| · |
the
safety and quality of our products and ingredients;
and
|
| · |
regulatory
investigations of our products or competitors’
products.
|
Our
inability to respond to changing consumers’ demands and preferences could
adversely affect our business.
The
nutritional industry is subject to rapidly changing consumer demands and
preferences. There can be no assurance that customers will continue to favor
the
products provided and manufactured by us. In addition, products that gain wide
acceptance with consumers may result in a greater number of competitors entering
the market which could result in downward price pressure which could adversely
impact our financial condition. We believe that our growth will be materially
dependent upon our ability to develop new techniques and processes necessary
to
meet the needs of our customers and potential customers. Our inability to
anticipate and respond to these rapidly changing demands could have an adverse
effect on our business operations.
There
can be no assurance we will be able to obtain our necessary raw materials in
a
timely manner.
Although
we believe that there are adequate sources of supply for all of our principal
raw materials we require, there can be no assurance that our sources of supply
for our principal raw materials will be adequate in all circumstances. In the
event that such sources are not adequate, we will have to find alternate
sources. As a result we may experience delays in locating and establishing
relationships with alternate sources which could result in product shortages
and
backorders for our products, with a resulting loss of revenue to
us.
There
are limited conclusive clinical studies available on human consumption of our
products.
Although
many of the ingredients in our products are vitamins, minerals, herbs and other
substances for which there is a long history of human consumption, some of
our
products contain innovative ingredients or combinations of ingredients. Although
we believe all of our products to be safe when used as directed, there may
be
little long-term experience with human consumption of certain of these product
ingredients or combinations thereof. Therefore, no assurance can be given that
our products, even when used as directed, will have the effects intended.
Although we test the formulation and production of our products, we have not
sponsored or conducted clinical studies on the effects of human
consumption.
In
the event we are exposed to product liability claims, we may be liable for
damages and expenses, which could adversely affect our financial
condition.
We
could
face financial liability due to product liability claims if the use of our
products results in significant loss or injury. To date, we have not been the
subject of any product liability claims. However, we can make no assurances
that
we will not be exposed to future product liability claims. Such claims may
include that our products contain contaminants, that we provide consumers with
inadequate instructions regarding product use, or that we provide inadequate
warnings concerning side effects or interactions of our products with other
substances. We believe that we maintain adequate product liability insurance
coverage. However, a product liability claim could exceed the amount of our
insurance coverage or a product claim could be excluded under the terms of
our
existing insurance policy, which could adversely affect our financial
condition.
The
nutritional industry is intensely competitive and the strengthening of any
of
our competitors could harm our business.
The
market for nutritional products is highly competitive. Our direct competition
consists primarily of publicly and privately owned companies, which tend to
be
highly fragmented in terms of both geographical market coverage and product
categories. These companies compete with us on different levels in the
development, manufacture and marketing of nutritional supplements. Many of
these
companies have broader product lines and larger sales volume, are significantly
larger than us, have greater name recognition, financial personnel, distribution
and other resources than we do and may be better able to withstand volatile
market conditions. There can be no assurance that our customers and potential
customers will regard our products as sufficiently distinguishable from
competitive products. Our inability to compete successfully would have a
material adverse effect on our business.
Our
violation of government regulations or our inability to obtain necessary
government approvals for our products could harm our
business.
The
formulation, manufacturing, packaging, labeling, advertising, distribution
and
sale of our products are subject to regulation by one or more federal agencies,
including the Food and Drug Administration (FDA), the Federal Trade Commission
(FTC), the Consumer Product Safety Commission, the U.S. Department of
Agriculture, the Environmental Protection Agency, and also by various agencies
of the states, localities and foreign countries in which our products are sold.
In particular, the FDA, pursuant to the Federal Food, Drug, and Cosmetic Act
(FDCA), regulates the formulation, manufacturing, packaging, labeling,
distribution and sale of dietary supplements, including vitamins, minerals
and
herbs, and of over-the-counter (OTC) drugs, while the FTC has jurisdiction
to
regulate advertising of these products, and the Postal Service regulates
advertising claims with respect to such products sold by mail order. The FDCA
has been amended several times with respect to dietary supplements, most
recently by the Nutrition Labeling and Education Act of 1990 and the Dietary
Supplement Health and Education Act of 1994. Our inability to comply with these
federal regulations may result in, among other things, injunctions, product
withdrawals, recalls, product seizures, fines and criminal
prosecutions.
In
addition, our products are also subject to regulations under various state
and
local laws that include provisions governing, among other things, the
formulation, manufacturing, packaging, labeling, advertising and distribution
of
dietary supplements and OTC drugs.
In
the
future, we may become subject to additional laws or regulations administered
by
the FDA or by other federal, state, local or foreign regulatory authorities,
to
the repeal of laws or regulations that we consider favorable, or to more
stringent interpretations of current laws or regulations. We can neither predict
the nature of such future laws, regulations, repeals or interpretations, nor
can
we predict what effect additional governmental regulation, when and if it
occurs, would have on our business. These regulations could, however, require
reformation of certain products to meet new standards, recalls or discontinuance
of certain products not able to be reformulated, additional record-keeping
requirements, increased documentation of the properties of certain products,
additional or different labeling, additional scientific substantiation or other
new requirements. Any of these developments could have a material adverse effect
on our business.
Our
inability to adequately protect our products from replication by competitors
could have a material adverse effect on our business.
We
own
proprietary formulas for certain of our nutritional products. We regard our
proprietary formulas as valuable assets and believe they have significant value
in the marketing of our products. Because we do not have patents or trademarks
on our products, there can be no assurance that another company will not
replicate one or more of our products.
Loss
of significant customers could adversely affect our
business.
Sales
to
our four largest nutritional supplement customers, TriVita Corporation (TVC),
Rob Reiss Companies (RRC), CyberWize.com, Inc. (C) and Orange Peel Enterprises
(OPE) currently account for most of our nutritional supplement business. TVC,
RRC, C and OPE accounted for approximately 17%, 13%, 7% and 4% of consolidated
net sales, respectively, during the nine months ended October 31, 2006. The
loss
of any of these customers could have a material adverse effect on our business,
unless the loss is offset by increases to other customers.
Risks
Relating to our Securities
Our
Board of Directors may issue preferred stock with rights that are superior
to
our common stock.
Our
Certificate of Incorporation, as amended, permits our Board of Directors to
issue shares of preferred stock and to designate the terms of the preferred
stock. The issuance of shares of preferred stock by the Board of Directors
could
adversely affect the rights of holders of common stock by, among other matters,
establishing dividend rights, liquidation rights and voting rights that are
superior to the rights of the holders of the common stock.
Our
common stock is thinly traded. As a result, our stock price may be volatile
and
you may have difficulty disposing of your investment at prevailing market
prices.
Since
August 4, 2003, our common stock has been listed on the Boston Stock Exchange
under the symbol "AGX." Our common stock is traded on the National Association
of Securities Dealers, Inc., Electronic Bulletin Board System under the symbol
AGAX. Our common stock is thinly and sporadically traded and no assurances
can
be given that a larger market will ever develop, or if developed, that it will
be maintained.
Our
acquisition strategy may result in dilution to our
stockholders.
Our
business strategy calls for strategic acquisition of other businesses. In
connection with our acquisition of Gemma and Vitarich, among other
consideration, we issued approximately 3,666,667 and 1,785,000, respectively,
shares of our common stock. In addition, we issued 2,853,335 shares of our
common stock in our December 2006 private placement. We used the proceeds from
the December 2006 private placement to fund the cash portion of the acquisition
cost of Gemma. We anticipate that future acquisitions will require cash and
issuances of our capital stock, including our common stock. To the extent we
are
required to pay cash for any acquisition, we anticipate that we would be
required to obtain additional equity and/or debt financing. Equity financing
would result in dilution for our then current stockholders. Stock issuances
and
financing, if obtained, may not be on terms favorable to us and could result
in
substantial dilution to our stockholders at the time(s) of these stock issuances
and financings.
Availability
of significant amounts of our common stock for sale could adversely affect
its
market price.
As
of
January 31, 2007, there were 11,094,012 shares of our common stock outstanding.
By this prospectus, we are registering for resale 2,653,335 shares of our common
stock acquired in our December 2006 private placement. We also intend to
register for resale on a Form S-3, 3,666,667 shares of our common stock issued
in connection with the acquisition of Gemma. In June 2006, we registered
1,751,192 shares of our common stock on Form S-3 for resale by the selling
shareholders named therein relating to shares issued in connection with our
private placement in May 2006 and our acquisition of Vitarich. In February
2005,
we registered 954,032 shares of our common stock on Form S-3 for resale by
the
selling shareholders named therein consisting of shares issued in connection
with (i) the private sale of our common stock and (ii) our acquisition of
Vitarich. In March 2004, we registered 1,533,974 shares of our common stock
(including 230,000 shares of our common stock that are issuable upon exercise
of
warrants that were issued in connection with the private placement) on Form
S-3
for resale by the selling stockholders named therein consisting of shares issued
in connection with the private sale of our common stock in April 2003. If our
stockholders sell substantial amounts of our common stock in the public market,
including shares registered under any registration statement on Form S-3, the
market price of our common stock could fall.
We
do not expect to pay dividends for the foreseeable future.
We
have
not paid cash dividends on our common stock since our inception and intend
to
retain earnings, if any, to finance the development and expansion of our
business. As a result, we do not anticipate paying dividends on our common
stock
in the foreseeable future. Payment of dividends, if any, will depend on our
future earnings, capital requirements and financial position, plans for
expansion, general economic conditions and other pertinent factors.
Our
officers, directors and a certain key employee have substantial control over
Argan.
As
of
January 31, 2007, our executive officers and directors as a group own
approximately 25% of our voting shares (giving effect to an aggregate of 360,000
shares of common stock that may be purchased upon exercise of warrants and
stock
options held by our executive officers and directors and 790,000 shares
beneficially held in the name of MSR Advisors, Inc. and affiliates for which
one
of our directors is President) and therefore, may have the power to influence
corporate actions such as an amendment to our certificate of incorporation,
the
consummation of any merger, or the sale of all or substantially all of our
assets, and may influence the election of directors and other actions requiring
stockholder approval.
In
addition, as of January 31, 2007, Joel M. Canino and William F. Griffin, Jr.,
executive officers of Gemma, each own approximately 15% of our outstanding
voting shares, excluding common stock equivalents. Therefore, Messrs Canino
and
Griffin, individually, may have the power to influence corporate actions.
Our
executive officers and directors, together with Joel M. Canino and William
F.
Griffin, Jr., currently own approximately 45% of our outstanding voting shares,
excluding common stock equivalents, which will allow our executive officers
and
directors, together with Messrs Canino and Griffin, to approve almost any
corporate action requiring a minimum majority vote without a meeting or prior
notice to our other stockholders.
Provisions
of our certificate of incorporation and Delaware law could deter takeover
attempts.
Provisions
of our certificate of incorporation and Delaware law could delay, prevent,
or
make more difficult a merger, tender offer or proxy contest involving us. Among
other things, under our certificate of incorporation, our board of directors
may
issue up to 500,000 shares of our preferred stock and may determine the price,
rights, preferences, privileges and restrictions, including voting and
conversion rights, of these shares of preferred stock. In addition, Delaware
law
limits transactions between us and persons that acquire significant amounts
of
our stock without approval of our board of directors.
USE
OF PROCEEDS
SELLING
SHAREHOLDERS
The
following table provides information regarding the selling shareholders and
the
number of shares each selling shareholder is offering. We have prepared this
table based on information furnished to us by or on behalf of the selling
shareholders. Under the rules of the SEC, beneficial ownership includes shares
over which the indicated beneficial owner exercises voting or investment power.
Beneficial ownership is determined under Section 13(d) of the Exchange Act
and
generally includes voting or investment power with respect to securities and
including any securities that grant the selling shareholder the right to acquire
common stock within 60 days of January 31, 2007. Unless otherwise indicated
in
the footnotes below, we believe that the selling shareholders have sole voting
and investment power with respect to all shares beneficially owned. The
percentage ownership data is based on 11,094,012 shares of our common stock
issued and outstanding as of January 31, 2007. Since the date on which they
provided us with the information below, the selling shareholders may have sold,
transferred or otherwise disposed of some or all of their shares in transactions
exempt from the registration requirements of the Securities Act of 1933
(Securities Act).
The
shares may be sold by the selling shareholders, by those persons or entities
to
whom they transfer, donate, devise, pledge or distribute their shares or by
other successors in interest. The information regarding shares beneficially
owned after this offering assumes the sale of all shares offered by each of
the
selling shareholders. The selling shareholders may sell less than all of the
shares listed in the table. In addition, the shares listed below may be sold
pursuant to this prospectus or in privately negotiated transactions.
Accordingly, we cannot estimate the number of shares the selling shareholders
will sell under this prospectus.
Except
as
indicated in the footnotes below, the selling shareholders have not held any
position or office or had any other material relationship with us or any of
our
predecessors or affiliates within the past three years.
The
selling shareholders have represented to us that they purchased the shares
for
their own account, for investment only and not with a view toward selling or
distributing them in violation of the Securities Act, except in sales either
registered under the Securities Act, or sales that are exempt from registration.
In recognition of the fact that the selling shareholders, even though purchasing
their shares for investment, may wish to be legally permitted to sell their
shares when they deem appropriate, we agreed with the selling shareholders
to
file a registration statement to register the resale of the shares. We have
also
agreed to prepare and file all amendments and supplements necessary to keep
the
registration statement effective until the earlier of (i) the date on which
the selling shareholders may resell all the shares covered by the registration
statement without registration pursuant to Rule 144(k) under the Securities
Act or any successor rule thereto and (ii) the date on which the selling
shareholders have sold all the shares covered by the registration
statement.
|
Name
and Address
|
Number
of Common Shares Beneficially Owned Before this
Offering
|
Number
of Common Shares Being Offered For Sale in this
Offering
|
Number
of Common Shares Beneficially Owned After this Offering
|
Percentage
Beneficially Owned After this Offering
|
|
MSR
I SBIC, L.P. (1)
C/O
Main Street Resources
120
Post Road West
Westport,
CT 06880
|
879,730
|
92,793
|
786,937
|
7.1%
|
|
MSR
Fund II, L.P. (1)
C/O
Main Street Resources
120
Post Road West
Westport,
CT 06880
|
440,540
|
240,540
|
200,000
|
1.8%
|
|
Allen
& Company LLC(2)
711
Fifth Avenue
New
York, NY 10022
|
80,000
|
80,000
|
0
|
-----
|
|
Allen
SBH Investments,
LLC
(2)
711
Fifth Avenue
New
York, NY 10022
|
386,667
|
266,667
|
120,000
|
1.1%
|
|
James
Quinn (3)
Allen
& Company LLC
711
Fifth Avenue
New
York, NY 10022
|
79,570
|
26,667
|
52,903
|
*
|
|
Perennial
Partners LP
623
Fifth Avenue
26th
Floor
New
York, NY 10022
|
266,667
|
266,667
|
0
|
-----
|
|
Whitney
Green River Management Co., LLC
50
California Street
Suite
3145
San
Francisco, CA 94111
|
266,667
|
266,667
|
0
|
-----
|
|
Westwind
Equity Partners, LLC
917
Tahoe Blvd., Suite 200
Incline
Village, NV 89451
|
266,667
|
266,667
|
0
|
------
|
|
Bruce
Allen
Allen
& Company LLC
711
Fifth Avenue
New
York, NY 10022
|
66,236
|
53,333
|
12,903
|
*
|
|
Name
and Address
|
Number
of Common Shares Beneficially Owned Before this
Offering
|
Number
of Common Shares Being Offered For Sale in this
Offering
|
Number
of Common Shares Beneficially Owned After this Offering
|
Percentage
Beneficially Owned After this
Offering
|
|
John
Simon
Allen
& Company LLC
711
Fifth Avenue
New
York, NY 10022
|
172,903
|
80,000
|
92,903
|
*
|
|
Mark
Levy
344
Araneo Drive
West
Orange, NJ 07052
|
6,667
|
6,667
|
0
|
-----
|
|
Stephen
J. Adler
1
Whippoorwill Close
Chappaqua,
NY 10514
|
6,667
|
6,667
|
0
|
-----
|
|
Argan
Investments LLC
C/O
Richard L. Scott Investments LLC
28
W 44th
Street
Suite
1111
New
York, NY 10036
|
1,100,000
|
1,000,000
|
100,000
|
*
|
_______________
* Less
than 1%
| (1) |
MSR I SBIC, L.P. and MSR Fund II, L.P. are affiliates
of
Daniel Levinson, a director of Argan. |
|
(2)
|
Allen
& Company LLC and Allen SBH Investments, LLC are affiliates of James
Quinn, a director of Argan.
|
| (3) |
James Quinn is a director of
Argan. |
PLAN
OF DISTRIBUTION
Background
On
December 8, 2006, we and certain buyers entered into a certain Stock Purchase
Agreement dated as of December 8, 2006 (the “Buyers
Purchase Agreement”),
pursuant to which we offered for sale, and the buyers identified on Schedule
A
to the
Buyers Purchase Agreement purchased an aggregate of 1,853,335 shares of the
our
common stock at a purchase price of $3.75 per share, yielding an aggregate
purchase price of $6,950,006. Pursuant to the Buyers Purchase Agreement, the
Company has agreed to file a registration statement under the Securities Act
relating to the resale of the purchased shares thereunder as soon as practicable
following the closing.
Also,
on
December 8, 2006, we and Argan Investments LLC (“AI”)
entered into a separate Stock Purchase Agreement dated as of December 8, 2006
pursuant to which, we offered for sale, and AI purchased an aggregate of
1,000,000 shares of our common stock at a purchase price of $3.75 per share,
yielding an aggregate purchase price of $3,750,000. In connection with this
transaction, we and AI entered into a Registration Rights Agreement dated as
of
December 8, 2006, pursuant to which we agreed to file a registration statement
under the Securities Act relating to the resale of the shares acquired by AI
as
soon as practicable following the closing.
General
The
selling shareholders, which as used in this prospectus includes donees,
pledgees, transferees or other successors-in-interest selling the shares of
our
common stock registered hereunder, may, from time to time, sell, transfer or
otherwise dispose of any or all of the shares on any stock exchange, market
or
trading facility on which the shares are traded or in private transactions.
These dispositions may be at fixed prices, at prevailing market prices at the
time of sale, at prices related to the prevailing market price, at varying
prices determined at the time of sale, or at negotiated prices.
The
selling shareholders may use any one or more of the following methods when
disposing of the shares:
|
•
|
ordinary
brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
|
|
|
|
|
•
|
block
trades in which the broker-dealer will attempt to sell the shares
as
agent, but may position and resell a portion of the block as principal
to
facilitate the transaction;
|
|
|
|
|
•
|
purchases
by a broker-dealer as principal and resale by the broker-dealer for
its
account;
|
|
|
|
|
•
|
an
exchange distribution in accordance with the rules of the applicable
exchange;
|
|
|
|
|
•
|
privately
negotiated transactions;
|
|
|
|
|
•
|
short
sales effected after the date the registration statement of which
this
prospectus is a part is declared effective by the SEC;
|
| |
|
|
•
|
through
the writing or settlement of options or other hedging transactions,
whether through an options exchange or otherwise;
|
| |
|
|
•
|
agreement
between broker-dealers and the selling shareholders to sell a specified
number of the shares at a stipulated price per share;
and
|
| |
|
|
•
|
a
combination of any such methods of sale.
|
The
selling shareholders may, from time to time, pledge or grant a security interest
in some or all of the shares owned by them and, if they default in the
performance of their secured obligations, the pledgees or secured parties may
offer and sell the shares, from time to time, under this prospectus, or under
an
amendment to this prospectus under Rule 424(b)(3) or other applicable provision
of the Securities Act amending the list of selling shareholders to include
the
pledgee, transferee or other successors-in-interest as selling shareholders
under this prospectus. The selling shareholders also may transfer the shares
in
other circumstances, in which case the transferees, pledgees or other
successors-in-interest will be the selling beneficial owners for purposes of
this prospectus.
In
connection with the sale of the shares, the selling shareholders may enter
into
hedging transactions with broker-dealers or other financial institutions, which
may in turn engage in short sales of the common stock in the course of hedging
the positions they assume. The selling shareholders may also sell shares short
and deliver shares to close out their short positions, or loan or pledge the
shares to broker-dealers that in turn may sell these securities. The selling
shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions or the creation of one or more
derivative securities that require the delivery to such broker-dealer or other
financial institution of shares offered by this prospectus, which shares such
broker-dealer or other financial institution may resell pursuant to this
prospectus (as supplemented or amended to reflect such transaction).
The
aggregate proceeds to the selling shareholders from the sale of the shares
offered by them will be the purchase price of the shares less discounts or
commissions, if any. Each of the selling shareholders reserves the right to
accept and, together with their agents from time to time, to reject, in whole
or
in part, any proposed purchase of shares to be made directly or through agents.
We will not receive any of the proceeds from this offering.
The
selling shareholders also may resell all or a portion of the shares in open
market transactions in reliance on Rule 144 under the Securities Act, provided
that they meet the criteria and conform to the requirements of that rule.
The
selling shareholders and any underwriters, broker-dealers or agents that
participate in the sale of the shares or interests therein may be deemed
“underwriters” within the meaning of Section 2(11) of the Securities Act.
Any discounts, commissions, concessions or profit the selling shareholders
earn
on any resale of the shares may be underwriting discounts and commissions under
the Securities Act. The selling shareholders who are “underwriters” within the
meaning of Section 2(11) of the Securities Act will be subject to the
prospectus delivery requirements of the Securities Act. We are not aware of
any
underwriting plan or agreement, underwriters’ or dealers’ compensation, or
passive market making or stabilizing transactions involving the purchase or
distribution of the shares registered in this prospectus.
To
the
extent required, the shares to be sold, the names of the selling shareholders,
the respective purchase prices and public offering prices, the names of any
agents, dealers or underwriters, any applicable commissions or any discounts
with respect to a particular offer will be set forth in an accompanying
prospectus supplement or a post-effective amendment to the registration
statement that includes this prospectus, or, if appropriate, a filing pursuant
to the Securities Exchange Act of 1934 (Exchange Act).
In
order
to comply with the securities laws of some states, if applicable, the shares
may
be sold in these jurisdictions only through registered or licensed brokers
or
dealers. In addition, in some states the shares may not be sold unless they
have
been registered or qualified for sale or an exemption from registration or
qualification requirements is available and is complied with.
We
have
advised the selling shareholders that the anti-manipulation rules of Regulation
M under the Exchange Act may apply to sales of shares in the market and to
the
activities of the selling shareholders and their affiliates. In addition, to
the
extent applicable, we will make copies of this prospectus (as it may be
supplemented or amended from time to time) available to the selling shareholders
for the purpose of satisfying the prospectus delivery requirements of the
Securities Act. The selling shareholders may indemnify any broker-dealer that
participates in transactions involving the sale of the shares against certain
liabilities, including liabilities arising under the Securities Act.
We
have
agreed to indemnify the selling shareholders, and the selling shareholders
have
agreed to indemnify for us, to the fullest extent permitted by law, against
liabilities, including liabilities under the Securities Act and state securities
laws, relating to the registration of the shares offered by this prospectus.
We
have
agreed with the selling shareholders to keep the registration statement of
which
this prospectus constitutes a part effective until the earlier of:
|
•
|
such
time as all of the shares covered by this prospectus have been disposed
of
pursuant to and in accordance with the registration statement,
and
|
|
|
|
|
•
|
the
date on which the shares may be sold pursuant to Rule 144(k) of the
Securities Act.
|
We
have
agreed to bear all of the expenses in connection with the registration and
sale
of the shares, except for underwriting discounts and selling commissions.
LEGAL
MATTERS
The
validity of the securities offered hereby has been passed upon for us by
Robinson & Cole LLP, Stamford, Connecticut.
EXPERTS
Our
consolidated financial statements appearing in our Annual Report on Form 10-KSB
for the year ended January 31, 2006, have been audited by Ernst & Young LLP,
independent registered public accounting firm, as set forth in their report
thereon, included therein, and incorporated herein by reference. Such
consolidated financial statements are incorporated herein by reference in
reliance upon such report given on the authority of such firm as experts in
accounting and auditing.
WHERE
YOU CAN FIND MORE INFORMATION
We
have
filed with the Securities and Exchange Commission (SEC) a registration statement
on Form S-3 under the Securities Act with respect to the shares of our common
stock offered hereby. This prospectus, which constitutes a part of the
registration statement, does not contain all of the information set forth in
the
registration statement or the exhibits and schedules filed therewith. We have
omitted certain parts of the registration statement as permitted by the rules
and regulations of the SEC. For further information about us and the common
stock offered hereby, reference is made to the registration statement and the
exhibits and schedules filed therewith. Statements contained in this prospectus
regarding the contents of any contract or any other document that is filed
as an
exhibit to the registration statement are not necessarily complete, and each
such statement is qualified in all respects by reference to the full text of
such contract or other document filed as an exhibit to the registration
statement. A copy of the registration statement and the exhibits and schedules
filed therewith may be inspected without charge at the public reference room
maintained by the SEC, located at 100 F Street, N.E., Washington, D.C. 20549,
and copies of all or any part of the registration statement may be obtained
from
such offices upon the payment of the fees prescribed by the SEC. Please call
the
SEC at 1-800-SEC-0330 for further information about the public reference room.
The SEC also maintains an Internet web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the SEC. The address of the site is http://www.sec.gov.
We
are
subject to the informational requirements of the Securities Exchange Act of
1934
and, therefore, we file annual, quarterly and current reports, proxy statements
and other information with the SEC. Such periodic reports, proxy
statements and other information are available for inspection and copying at
the
public reference room and web site of the SEC referred to above.
You
should rely only on the information provided in this prospectus and the
registration statement. We have not authorized anyone else to provide you with
different information. Our securities are not being offered in any state
where the offer is not permitted. You should assume that the information
in this prospectus is accurate only as of the dates of those documents.
Our business, financial condition, results of operations and prospects may
have
changed since those dates.
INCORPORATION
BY REFERENCE
The
Securities
and Exchange Commission
(SEC)
allows us to “incorporate by reference” information that we file with it, which
means that we can disclose important information to you by referring you to
those documents. The information incorporated by reference is an important
part
of this prospectus. Information in this prospectus supersedes information
incorporated by reference that we filed with the SEC prior to the date of this
prospectus, while information that we file later with the SEC will automatically
update and supersede this information. We incorporate by reference into this
registration statement and prospectus the documents listed below, and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Securities
Exchange Act of 1934:
|
1.
|
Our
Annual Report on Form 10-KSB for the fiscal year ended January 31,
2006;
|
| |
|
|
2.
|
Our
Quarterly Reports on Form 10-QSB for the quarters ended April 30,
2006,
July 31, 2006 and October 31, 2006;
|
| |
|
|
2.
|
Our
Proxy for our shareholders’ meeting on June 23, 2005, filed on May 25,
2005;
|
|
|
|
3.
|
Our
Current Reports on Form 8-K filed March 6, 2006, April 11, 2006,
May 9,
2006 (as amended on May 12, 2006), May 11, 2006, May 23, 2006, December
14, 2006 (as amended on December 21, 2006, January 1, 2007 and January
26,
2007); and
|
|
|
|
|
|
|
4.
|
The
description of our common stock set forth in our registration statement
on
Form 8-A, filed with the SEC on August 1, 2003, including any amendments
or reports filed for the purposes of updating this
description.
|
|
|
|
We
will
furnish without charge to you, on written or oral request, a copy of any or
all
of the documents incorporated by reference, including exhibits to these
documents. You should direct any requests for documents to Argan Inc., One
Church Street, Suite 401, Rockville, MD 20850, telephone: (301)
315-0027.
[ARGAN,
INC.
LOGO]
2,653,335
Shares of Common Stock
______________
PROSPECTUS
[__________]
PART
II
INFORMATION
NOT REQUIRED IN PROSPECTUS
Item
14. Other Expenses of Issuance and Distribution.
The
following table sets forth all expenses payable by us in connection with the
offering of the common stock being registered. All such expenses are being
borne
by us.
|
SEC
Registration Fee
|
|
$
|
1,760.23
|
|
|
Accounting
Fees and Expenses*
|
|
$
|
5,000.00 |
|
|
Legal
Fees and Expenses*
|
|
$
|
|
|
|
Miscellaneous
Expenses*
|
|
$
|
|
|
|
|
|
|
|
|
|
Total*
|
|
$
|
|
|
*
Estimated.
Item
15. Indemnification of Directors and Officers
Section
145 of the Delaware General Corporation Law (the “DGCL”) provides that a
corporation may indemnify its directors and officers, as well as other employees
and individuals, against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement in connection with specified
actions,
suits or proceedings, whether civil, criminal, administrative or investigative
(other than an action by or in the right of the corporation - a “derivative
action”), if they acted in good faith and in a manner they reasonably believed
to be in or not opposed to the best interests of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable cause to believe
their conduct was unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) incurred in connection with the defense or
settlement of such actions, and the statute requires court approval before
there
can be any indemnification in which the person seeking indemnification has
been
found liable to the corporation. The statute provides that it is not exclusive
of other indemnification that may be granted by a corporation's charter, bylaws,
disinterested director vote, stockholder vote, agreement or
otherwise.
Section
102(b)(7) of the DGCL permits a corporation to provide in its certificate of
incorporation that a director of the corporation shall not be personally liable
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, except for liability for (i) any breach of the
director's duty of loyalty to the corporation or its stockholders, (ii) acts
or
omissions not in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) payments of unlawful dividends or unlawful stock
repurchases or redemptions, or (iv) any transaction from which the director
derived an improper personal benefit.
Our
Bylaws provides that we shall indemnify our officers and directors and may
indemnify our employees and other agents to the fullest extent permitted by
Delaware law.
Our
Certificate of Incorporation limits, to the maximum extent permitted by Delaware
law, the personal liability of directors for monetary damages for breach of
their fiduciary duties as a director. We have entered into indemnification
agreements with our directors containing provisions which provide for the
indemnification of such directors to the fullest extent permitted by Delaware
law.
Item
16. Exhibits
The
following exhibits are included or incorporated herein by
reference:
| Exhibit
No. |
Description
|
|
| |
|
|
|
5.1
|
Opinion
of Robinson & Cole LLP
|
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm
|
|
|
23.2
|
Consent
of Robinson & Cole LLP (included in Exhibit 5.1)
|
|
|
24.1
|
Power
of Attorney (included on the signature page hereof)
|
|
Item
17. Undertakings
The
undersigned Registrant hereby undertakes:
1. To
file,
during any period in which offers or sales are being made, a post-effective
amendment to this Registration Statement:
(i) To
include any prospectus required by Section 10(a)(3) of the Securities Act
of 1933, as amended (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 end of the estimated maximum
offering range may be reflected in the form of prospectus filed with the
Securities and Exchange Commission (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 (1)(i), (1)(ii) and (1)(iii) above do not apply if the registration
statement is on Form S-3 and the information required to be included in a
post-effective amendment by those paragraphs is contained in reports filed
with
or furnished to the Commission by the registrant pursuant to section 13 or
section 15(d) of the Securities Exchange Act of 1934 (“Exchange Act”) that are
incorporated by reference in the registration statement, or is contained in
a
form of prospectus filed pursuant to Rule 424(b) that is part of 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.
| |
|
each
prospectus filed by the registrant pursuant to Rule 424(b)(3)shall
be
deemed to be part of the registration statement as of the date the
filed
prospectus was deemed part of and included in the registration statement;
and
|
| |
(b)
|
each
prospectus required to be filed pursuant to Rule 424(b)(2), (b)(5),
or
(b)(7) as part of a registration statement in reliance on Rule 430B
relating to an offering made pursuant to Rule 415(a)(1)(i), (vii),
or (x)
for the purpose of providing the information required by section
10(a) of
the Securities Act shall be deemed to be part of and included in
the
registration statement as of the earlier of the date such form of
prospectus is first used after effectiveness or the date of the first
contract of sale of securities in the offering described in the
prospectus. As provided in Rule 430B, for liability purposes of the
issuer
and any person that is at that date an underwriter, such date shall
be
deemed to be a new effective date of the registration statement relating
to the securities in the registration statement to which that prospectus
relates, and the offering of such securities at that time shall be
deemed
to be the initial bona fide offering thereof; provided,
however,
that no statement made in a registration statement or prospectus
that is
part of the registration statement or made in a document incorporated
or
deemed incorporated by reference into the registration statement
or
prospectus that is part of the registration statement will, as to
a
purchaser with a time of contract of sale prior to such effective
date,
supersede or modify any statement that was made in the registration
statement or prospectus that was part of the registration statement
or
made in any such document immediately prior to such effective date;
or
|
5. That,
for
the purpose of determining liability of the registrant under the Securities
Act
to any purchaser in the initial distribution of the securities, the undersigned
registrant undertakes that in a primary offering of securities of the
undersigned registrant pursuant to this registration statement, regardless
of
the underwriting method used to sell the securities to the purchaser, if the
securities are offered or sold to such purchaser by means of any of the
following communications, the undersigned registrant will be a seller to the
purchaser and will be considered to offer or sell such securities to such
purchaser: (i) Any preliminary prospectus or prospectus of the undersigned
registrant relating to the offering required to be filed pursuant to
Rule 424; (ii) any free writing prospectus relating to the offering
prepared by or on behalf of the undersigned registrant or used or referred
to by
the undersigned registrant; (iii) the portion of any other free writing
prospectus relating to the offering containing material information about the
undersigned registrant or its securities provided by or on behalf of the
undersigned registrant; and (iv) any other communication that is an offer
in the offering made by the undersigned registrant to the
purchaser.
6. The
undersigned registrant hereby undertakes that: (i) for purposes of
determining any liability under the Securities Act, the information omitted
from
the form of prospectus filed as part of the registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the
registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under
the Securities Act shall be deemed to be part of the registration statement
as
of the time it was declared effective; and (ii) for the purpose of
determining any liability under the Securities Act, each post-effective
amendment that contains a form of prospectus 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.
7. The
undersigned registrant hereby undertakes that, for purposes of determining
any
liability under the Securities Act, each filing of the registrant's annual
report pursuant to section 13(a) or section 15(d) of the Exchange Act (and,
where applicable, each filing of an employee benefit plan's annual report
pursuant to section 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.
8.
Insofar
as indemnification for liabilities arising under the Securities Act may be
permitted to directors, officers and controlling persons of the registrant
pursuant to the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the 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 registrant of expenses incurred
or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
SIGNATURES
Pursuant
to the requirements of the Securities Act of 1933, the registrant certifies
that
it has reasonable grounds to believe that it meets all of the requirements
for
filing on Form S-3 and has duly caused this registration statement on Form
S-3
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the
City of Rockville, State of Maryland, on February 15, 2007.
ARGAN,
INC.
By:
/s/
Rainer H. Bosselmann
Rainer
H.
Bosselmann
President
and
Chief
Executive Officer
Each
such
person whose signature appears below hereby appoints Rainer H. Bosselmann and
Arthur F. Trudel, and each of them, each of whom may act without joinder of
the
other, as his or her true and lawful attorney-in-fact and agent, with full
power
and substitution and resubstitution, for him or her and in his or her name,
place and stead, in any and all capacities, to execute in the name and on behalf
of such person any amendment or any post-effective amendment to this
Registration Statement, and any registration statement relating to any offering
made in connection with the offering covered by this Registration Statement
that
is to be effective on filing pursuant to Rule 462(b) under the Securities Act
of
1933, as amended, and to file the same, with exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents full power and authority to
do
and perform each and every act and thing appropriate or necessary to be done,
as
full and for all intents and purposes and he or she might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents
or
their substitute or substitutes may lawfully do or cause to be done by virtue
hereof.
Pursuant
to the requirements of the Securities Act of 1933, this registration statement
has been signed by the following persons in the capacities and on the dates
indicated.
|
SIGNATURE
|
|
TITLE
|
DATE
|
|
|
|
|
|
|
/s/
Rainer H. Bosselmann
|
|
President,
Chief Executive Officer
|
February
15, 2007
|
|
Rainer
H. Bosselmann
|
|
(Principal
Executive Officer) and Chairman of the Board
|
|
|
|
|
|
|
|
/s/
Arthur F. Trudel
|
|
Senior
Vice President and
|
February
15, 2007
|
|
Arthur
F. Trudel
|
|
Chief
Financial Officer
|
|
|
|
|
(Principal
Accounting and Financial Officer)
|
|
|
|
|
|
|
|
/s/
DeSoto
S. Jordan
|
|
Director
|
|
|
DeSoto
S. Jordan
|
|
|
|
| |
|
|
|
|
/s/
Daniel A. Levinson
|
|
Director
|
February
15, 2007
|
|
Daniel
A. Levinson
|
|
|
|
|
|
|
|
|
|
/s/
W.G. Champion Mitchell
|
|
Director
|
February
15, 2007
|
|
W.G.
Champion Mitchell
|
|
|
|
|
|
|
|
|
|
/s/
T. Kent Pugmire
|
|
Director
|
February
15, 2007
|
|
T.
Kent Pugmire
|
|
|
|
|
|
|
|
|
|
/s/
James W. Quinn
|
|
Director
|
February
15, 2007
|
|
James
W. Quinn
|
|
|
|
|
|
|
|
|
|
/s/
Peter L. Winslow
|
|
Director
|
February
15, 2007
|
|
Peter
L. Winslow
|
|
|
|
INDEX
OF
EXHIBITS
| Exhibit
No. |
Description
|
|
| |
|
|
|
5.1
|
Opinion
of Robinson & Cole LLP
|
|
|
23.1
|
Consent
of Independent Registered Public Accounting Firm
|
|
|
23.2
|
Consent
of Robinson & Cole LLP (included in Exhibit 5.1)
|
|
|
24.1
|
Power
of Attorney (included on the signature page hereof)
|
|