S-3/A

As filed with the Securities and Exchange Commission on January 29, 2004

Registration No. 333-109528         

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 AMENDMENT NO. 1
TO
FORM S-3REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

ARGAN, INC.
(Exact Name of Registrant as Specified in Its Charter)
(formerly Puroflow Incorporated)

Delaware
(State or Other Jurisdiction of Incorporation or Organization)

13-1947195
(I.R.S. Employer Identification No.)

One Church Street, Suite 302
Rockville, MD  20850
(301) 315-0027
(Address, including zip code, and telephone number, including area code, of registrant's principal executive offices)

RAINER H. BOSSELMANN
Chairman of the Board and
Chief Executive Officer
Argan, Inc.
One Church Street, Suite 302
Rockville, MD  20850
(301) 315-0027
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies 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
as determined by market conditions and other factors.

     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, as amended, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box: T

     If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act of 1933, as amended, please 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 of 1933, as amended, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering: o ______________________

     If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box: o

CALCULATION OF REGISTRATION FEE

			Proposed Maximum		Proposed Maximum
	Amount to be		Offering Price Per		Aggregate Offering		Amount of
Title of Securities to be Registered	Registered (1)		Share (2)		Price (2)		Registration Fee (3)
Common Stock, $0.15 par value		1,533,974		$8.00		$12,271,792		$993

(1)  Represents 1,533,974 shares of Argan common stock that may be sold by the selling stockholders plus, pursuant to Rule 416(a) under the Securities Act of 1933, as amended, any additional securities that may be offered or issued to prevent dilution resulting from stock splits, stock dividends, recapitalizations or similar transactions.  Of these shares of common stock, 1,303,974 shares were issued to the selling stockholders in the private placement described under the section of the prospectus contained herein entitled "The Private Placement" and 230,000 shares are issuable upon exercise of warrants issued to certain of the selling stockholders in connection with the Private Placement.

(2)  Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(c) under the Securities Act of 1933, as amended, based on the last reported sales price of the Registrant's common stock on the Boston Stock Exchange on October 2, 2003.

(3)  Previously paid.

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 that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until this Registration Statement shall become effective on such date as the Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

Subject to completion, dated January 28, 2004

The information in this prospectus is not complete and may need to be changed.  We may not sell these securities 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.

PROSPECTUS

ARGAN, INC.

1,533,974 Shares of Common Stock

_______________________

This prospectus may be used only in connection with the resale, from time to time, of 1,533,974 shares of our common stock, par value $0.15, by the selling stockholders identified in this prospectus.  Of these shares of common stock, 1,303,974 shares were issued to the selling stockholders in the private placement described under the section of this prospectus entitled "The Private Placement" and 230,000 shares are issuable upon exercise of warrants issued to certain of the selling stockholders in connection with the private placement.  Certain information about the time and manner in which the selling stockholders may sell shares of our common stock under this prospectus is provided under the sections entitled "Selling Stockholders" and "Plan of Distribution" in this prospectus.

Our common stock is listed on the Boston Stock Exchange under the symbol "AGX." On January __, 2004, the last reported sales price of our common stock was $__ per share.

Investing in our common stock involves risks.  Beginning on page 4, we have listed several "Risk Factors" which you should consider.  You should read the entire prospectus carefully before you make your investment decision.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities, or determined if this prospectus is truthful or complete.  Any representation to the contrary is a criminal offense.

The date of this prospectus is January __, 2004

TABLE OF CONTENTS

PROSPECTUS SUMMARY	1
RISK FACTORS	3
FORWARD LOOKING STATEMENTS	10
BUSINESS	11
WHERE YOU CAN FIND MORE INFORMATION	13
USE OF PROCEEDS	15
SELLING STOCKHOLDERS	15
PLAN OF DISTRIBUTION	18
LEGAL MATTERS	20
EXPERTS	20

You should rely only on the information contained, or incorporated by reference, in this prospectus or the registration statement.  We have not authorized anyone to provide you with information different from that contained in this prospectus.  The selling stockholders are offering to sell, and seeking offers to buy, the shares of our common stock only in jurisdictions where such offers and sales are permitted.

PROSPECTUS SUMMARY

Because this is a summary, it may not contain all the information that may be important to you.  You should read the entire prospectus carefully, including the risks of investing discussed under "Risk Factors," beginning on page 4, and the financial statements included in our other filings with the Securities and Exchange Commission, before making an investment decision.

Overview

                    We provide telecommunications infrastructure services including project management, construction and maintenance to the Federal Government, telecommunications and broadband service providers as well as electric utilities.  We conduct our operations through our wholly owned subsidiary, Southern Maryland Cable (SMC).

                    We were organized as a Delaware corporation in May 1961.  On June 13, 1983, we changed our name from Ultra Dynamics Corporation to Puroflow Incorporated.  On October 23, 2003, we changed our name from Puroflow Incorporated to Argan, Inc.  Our principal executive offices are located at One Church Street, Suite 302, Rockville, MD 20850.  Our phone number at that address is (301) 315-0027.  We maintain a website on the Internet at www.arganinc.net, which is presently under construction.  Information contained on our website does not constitute part of this prospectus.

Unless the context otherwise requires, references in this prospectus to "Argan," the "Company," "we," "us" or "our" refer to Argan, Inc., a Delaware corporation, and its subsidiaries.  Each trademark, trade name or service mark of any other company appearing in this prospectus belongs to its holder.

The Private Placement

On December 31, 2002, we executed a non-binding term sheet with a group consisting of Rainer H. Bosselmann, H. Haywood Miller III and Arthur F. Trudel, setting forth terms for a private placement of our common stock.  Pursuant to the term sheet, this group and/or its affiliates agreed to invest not less than $2 million in the private placement.  Mr. Bosselmann was appointed to our Board of Directors as Vice Chairman and Mr. Miller and Mr. Trudel were appointed as corporate officers of the Company, each at a nominal annual salary of $1.00, upon execution of the term sheet.  In addition, we granted to this group warrants to purchase an aggregate of 180,000 shares of our common stock at an exercise price of $7.75 per share upon execution of the term sheet.  These warrants could only be exercised in the event that the private placement was consummated.

1

On April 29, 2003, we completed the private placement.  In the private placement, we sold 1,303,974 shares of our common stock to a group of accredited investors (including Messrs. Bosselmann, Miller and Trudel) at a price of $7.75 per share.  We raised a total of $10,106,000 in the private placement (before giving effect to offering expenses of approximately $472,000).

Pursuant to the terms of the private placement, Mr. Bosselmann received the right to designate four members of our Board of Directors (including himself) upon consummation of the private placement.  Following the closing of the private placement, four of our existing directors (Warren Lichtenstein, Glen Kassan, Joshua Schechter and Robert Smith) 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).  Also upon the consummation of the private placement, each of Messrs. Bosselmann, Miller and Trudel became senior officers of the Company.

Certain affiliates of MSR Advisors, Inc., a Delaware corporation, purchased 325,584 shares of our common stock in the private placement.  In addition, MSR Advisors, Inc. received warrants to purchase 50,000 shares of our common stock at an exercise price of $7.75 in connection with the private placement.  Daniel A. Levinson, a member of our Board of Directors, is President of MSR Advisors, Inc.

In connection with the private placement, we entered into a registration rights agreement pursuant to which the purchasers in the private placement received certain registration rights with respect to the shares of common stock purchased in the private placement.  We are required to file the registration statement of which this prospectus is a part under the registration rights agreement to register the resale of the shares of our common stock purchased in the private placement.  We have also agreed to include in this registration statement the shares of our common stock that are issuable upon exercise of the warrants received by Messrs. Bosselmann, Miller and Trudel and MSR Advisors, Inc. in connection with the private placement.

Other Recent Events

We are currently pursuing a strategic plan involving the diversification of our business through business acquisitions and/or other investments.  We believe that this diversification strategy will provide the potential for growth and profit.

On July 17, 2003, we acquired Southern Maryland Cable, Inc..  We acquired Southern Maryland Cable by merger of Southern Maryland Cable with and into our wholly-owned subsidiary.  Southern Maryland Cable's operations are now conducted by this wholly-owned subsidiary, which has been renamed "Southern Maryland Cable."  We used approximately $3.6 million of proceeds from the private placement in our acquisition of Southern Maryland Cable.  We intend to use the remaining proceeds from the private placement for acquisitions in growth oriented industries and for working capital.

On August 4, 2003, our common stock began trading on the Boston Stock Exchange under the symbol "AGX."  Prior to our listing on the Boston Stock Exchange, our common stock was traded on the Bulletin Board System and reported by the National Quotation Service under the symbol "PFLW.OB."

Prior to October 31, 2003, we were also engaged in the manufacture and sale of filtration products (which we referred to as our "Puroflow business").  On October 23, 2003, we transferred all of the operating assets and liabilities relating to our Puroflow business to a new wholly-owned subsidiary of the Company.  After the transfer, we changed our name from "Puroflow Incorporated" to "Argan, Inc." and the new wholly-owned subsidiary changed its name to "Puroflow Incorporated."

On October 31, 2003, we completed the sale of Puroflow Incorporated (our new wholly-owned subsidiary) and, as such, our Puroflow business, to Western Filter Corporation (WFC) for approximately $3.5 million in cash, of which $300,000 is being held in escrow for one year to protect WFC from losses resulting from a breach of our representations and warranties made in connection with that sale.

2

The Offering

The following is a brief summary of the offering.  You should read the entire prospectus carefully, including the "Risk Factors" section and our financial statements included in our other filings with the Securities and Exchange Commission.

Securities Offered	1,533,974 shares of common stock, par value $0.15 per share.
Use of Proceeds	We will not receive any of the proceeds of the resale of the shares of common stock by the selling stockholders.  We will, however, receive proceeds of up to $1,782,500 upon exercise of the warrants held by Messrs. Bosselmann, Miller and Trudel and MSR Advisors, Inc.  We plan to use proceeds received upon exercise of the warrants for acquisitions in growth oriented industries and for general working capital.
Trading	Our common stock is listed on the Boston Stock Exchange under the symbol "AGX" and is traded on the Bulletin Board System and reported by the National Quotation Service under the symbol "AGAX.OB."
Risk Factors	See "Risk Factors" and the other information in this prospectus for a discussion of the factors you should carefully consider before deciding to invest in the shares of common stock offered by the selling stockholders pursuant to this prospectus.

RISK FACTORS

You should carefully consider the following risk factors before making an investment decision.  If any of the following risks actually occur, our business, financial condition, or results of operations could be materially and adversely affected.  In such case, the trading price of our common stock could decline, and you may lose all or part of your investment.  You should also refer to the other information set forth and incorporated by reference in this Prospectus, including our consolidated financial statements and the related notes.

Our new officers and directors have limited experience in managing our business and, as a result, may be unsuccessful in do so.

Rainer H. Bosselmann recently became Chairman and Chief Executive Officer, H. Haywood Miller III recently became Executive Vice President and Arthur F. Trudel recently became Senior Vice President and Chief Financial Officer of the Company.  Upon consummation of the private placement, four of our existing directors (Warren Lichtenstein, Glen Kassan, Joshua Schechter and Robert Smith) 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 caused by the resignation of Travis Bradford, and in October, 2003, W.G. Champion Mitchell was elected to our Board of Directors at our 2003 Annual Meeting replacing Michael H. Figoff who did not stand for re-election.  Although Messrs. Bosselmann, Miller, 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 plan to use the remaining proceeds from the private placement principally to finance future business acquisitions and/or investments.  We recently completed our acquisition of Southern Maryland Cable.  As of the date hereof, we have not identified any other specific acquisitions and/or investments that are probable of consummation. 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.

3

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 may 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.

4

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.

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 is 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 will be materially and adversely affected.

5

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 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.

6

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 customers, General Dynamics, Southern Maryland Electric Cooperative (SMECO) and Verizon Communications, Inc., currently account for most of our business.  General Dynamics accounted for approximately 52% of consolidated net sales during the nine months ended October 31, 2003.  SMECO accounted for approximately 23% of consolidated net sales during the nine months ended October 31, 2003.  Verizon accounted for approximately 20% of consolidated net sales during the nine months ended October 31, 2003.  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 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 insure 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).

We may be exposed to product liability claims in the event of product failure.

Our business may expose us to claims for injury, resulting from the failure of products that we sell or services that we provide.  We have product liability and other insurance, covering in such amounts and against such risk as our management believes advisable, in light of our business and the terms and cost of such insurance.  There is no assurance that we will maintain the same level of insurance coverage in the future.

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 to 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 do not carry key-person life insurance on any of our employees.

7

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" and is traded on the Bulletin Board System and reported by the National Quotation Service under the symbol "AGAX.OB."  Prior to our listing on the Boston Stock Exchange, our common stock was traded on the Bulletin Board System and reported by the National Quotation Service under the symbol "PFLW.OB."  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 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 of projects 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 termination of existing agreements;
   

• 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 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.

8

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.

Availability of significant amounts of our common stock for sale could adversely affect its market price.

If our stockholders sell substantial amounts of our common stock in the public market following this offering, including shares issued upon exercise of the warrants held by Messrs. Bosselmann, Miller and Trudel and MSR Advisors, Inc., the market price of our common stock could fall.  As of January 5, 2004, there were 1,798,280 shares of our common stock outstanding.  Of those, 1,533,974 shares of our common stock (including 230,000 shares of common stock that are issuable upon exercise of the warrants) are being registered for resale under this prospectus.  A sale of all or a significant portion of these shares could have an adverse impact on our stock price.

We have experienced losses in the past and may experience additional losses in the future.

As of October 31, 2003, we had an accumulated deficit of approximately $2.2 million resulting primarily from past losses.  We may experience additional losses in the future.

We do not expect to pay dividends for the foreseeable future.

We have not paid cash dividends on its 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.

Certain officers, directors and stockholders have substantial control over the Company. 

As of January 5, 2004, Rainer H. Bosselmann, Chairman and Chief Executive Officer, beneficially owned approximately 16% of our voting shares (giving effect to 60,000 shares of common stock that may be purchased upon exercise of warrants held by Mr. Bosselmann); H. Haywood Miller III, Executive Vice President, beneficially owned approximately 3.9% of our voting shares (giving effect to 60,000 shares of common stock that may be purchased upon exercise of warrants held by Mr. Miller); Arthur F. Trudel, Senior Vice President and Chief Financial Officer, beneficially owned approximately 3.8% of our voting shares (giving effect to 60,000 shares of common stock that may be purchased upon exercise of warrants held by Mr. Trudel); Peter L. Winslow, a member of our Board of Directors, beneficially owned approximately 2.4% of our voting shares; and MSR Advisors, Inc. and certain of its affiliates beneficially owned approximately 20.3% of our voting shares (giving effect to 50,000 shares of common stock that may be purchased upon exercise of warrants held by MSR Advisors, Inc.).  Daniel A. Levinson, a director of the Company, is the President of MSR Advisors, Inc.  In addition, the Company believes, based upon beneficial ownership reports filed with the Commission, that as of January 5, 2004, Wheatley Partners III, LLC and certain affiliates beneficially owned approximately 14.4% of our voting shares and Steel Partners II, L.P. and certain affiliates beneficially owned approximately 9.8% of our voting shares.  As a result of such ownership, Messrs. Bosselmann, Miller, Trudel, Winslow and Levinson and MSR Advisors, Inc., individually or collectively, and Wheatley Partners III, LLC and Steel Partners II, L.P., 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.

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.

9

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.

We have approximately $1.1 million of unhedged variable rate debt. Any general increase in interest rate levels will increase our cost of doing business.

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.

FORWARD LOOKING STATEMENTS

Statements made in this prospectus, other than statements of historical fact, are forward-looking statements that involve risks and uncertainties.  These statements relate to future events or our future financial performance, including statements relating to products, customers, suppliers, business prospects and effects of acquisitions.  In some cases, forward-looking statements can be identified by terminology such as "may," "will," "should," "expect," "anticipate," "intend," "plan," "believe," "estimate," "potential," or "continue," the negative of these terms or other comparable terminology.  These statements involve a number of risks and uncertainties, including incomplete or preliminary information; the effects of future acquisitions and/or investments; competitive factors; business and economic conditions generally; changes in government regulations and policies; our dependence upon third-party suppliers; continued acceptance of our products in the marketplace; technological changes; and other risks and uncertainties including those set forth above under "Risk Factors" that could cause actual events or results to differ materially from any forward-looking statement.  The information contained in this prospectus should be read in conjunction with the "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 5 of our Form 10-KSB for the fiscal year ended January 31, 2003, filed with the Commission on March 20, 2003; the "Management's Discussion and Analysis of Financial Condition and Results of Operations" beginning on page 14 of our Form 10-QSB for the fiscal quarter ended October 31, 2003, filed with the Commission on December 15, 2003; and our financial statements included in our other filings with the Commission.

You are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this prospectus and are based on information currently and reasonably known.  We undertake no obligation to release any revisions to or update these forward-looking statements to reflect events or circumstances which occur after the date of this prospectus or to reflect the occurrence or effect of anticipated or unanticipated events.

10

BUSINESS

General

We conduct our operations through our wholly owned subsidiary, Southern Maryland Cable, Inc. (SMC).  Through SMC, we provide telecommunications infrastructure services including project management, construction and maintenance to the Federal Government, telecommunications and broadband service providers as well as electric utilities. 

We were organized as a Delaware corporation in May 1961.  On June 13, 1983, we changed our name from Ultra Dynamics Corporation to Puroflow Incorporated.  On October 23, 2003, our shareholders approved a plan providing for the internal restructuring of the Company whereby we became a holding company, and our operating assets and liabilities relating to our Puroflow business were transferred to a wholly owned subsidiary.  Accordingly, on October 23, 2003, we transferred substantially all of our Puroflow operating assets and liabilities to a newly formed, wholly owned subsidiary of the Company.  The subsidiary then changed its name to "Puroflow Incorporated" and we changed our name from Puroflow Incorporated to "Argan, Inc."  At the time of the transfer, we also held another wholly owned operating subsidiary (SMC) which we acquired in July, 2003.

On October 31, 2003, we completed the sale of Puroflow Incorporated (our new wholly-owned subsidiary) to Western Filter Corporation (WFC) for approximately $3.5 million in cash, of which $300,000 is being held in escrow for one year to protect WFC from losses resulting from our breach of the representations and warranties made by us pursuant to that sale.

Our principal executive offices are located at One Church Street, Suite 302, Rockville, MD 20850.  Our phone number at that address is (301) 315-0027.  We maintain a website on the Internet at www.arganinc.net, which is presently under construction.  Information contained on our website does not constitute part of this prospectus.

Unless the context otherwise requires, references in this prospectus to "Argan," the "Company," "we," "us" or "our" refer to Argan, Inc., a Delaware corporation, and its subsidiaries.  Each trademark, trade name or service mark of any other company appearing in this prospectus belongs to its holder.

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.  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 the Company.

We are a holding company with no operations other than our investment in our wholly owned operating subsidiary (SMC).  At November 1, 2003, there were no restrictions with respect to dividends or other payments from SMC to Argan.

Telecom Infrastructure Services

After the sale of Puroflow Incorporated in October 2003, we have only one subsidiary, Southern Maryland Cable, Inc. (SMC).  SMC is a provider of telecommunications infrastructure services including project management, construction and maintenance for the Federal Government, telecommunications and broadband service providers as well as electric utilities.  Our strategy is to become a geographically and customer diversified telecom infrastructure services company, by providing a full range of telecom 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.

11

We continue to participate in the expansion of the telecommunications industry by working with various 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.

We further intend to seek acquisitions to evolve into a geographically diverse telecom and utility infrastructure services entity with a reputation for high quality and on-time performance.

Competition

We operate in a fragmented and competitive industry. 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 contractors. We believe that we compete favorably with the other companies in the telecom and utility infrastructure services industry. 

Materials

Generally, our customers supply most or all of the materials required for a particular contract and we provide the personnel, tools and equipment to perform the installation services. However, with respect to a portion of our contracts, we may supply part or all of the materials required. In these instances, we are not dependent upon any one source for the materials that we customarily utilize to complete the job. We are not presently experiencing, nor do we anticipate experiencing, any difficulties in procuring an adequate supply of materials.

Customers

During 2003, we provided services to telecommunications and utility customers as well as to the Federal Government, through a contract with General Dynamics.  Certain of the Company's more significant customer relationships were with General Dynamics, Southern Maryland Electric Cooperative (SMECO) and Verizon Communications, Inc.  General Dynamics accounted for approximately 52% of consolidated net sales during the nine months ended October 31, 2003.  The Federal Government, through our contract with General Dynamics, has been a major customer for two years.  SMECO accounted for approximately 23% of consolidated net sales during the nine months ended October 31, 2003.  SMECO has been a major customer for several years.  Verizon accounted for approximately 20% of consolidated net sales during the nine months ended October 31, 2003.  Verizon has been a major customer for several years, but has indicated its intention to decrease its volume of business with us.  An increase in SMECO's level of business has substantially offset the Verizon decrease.  Combined, General Dynamics, SMECO and Verizon accounted for approximately 95% of consolidated net sales during the nine months ended October 31, 2003.

Backlog

At October 31, 2003, we had a backlog of estimated commitments of $6 million to perform services in the next twelve months.  Of our backlog, all is expected to be constructed within the next twelve months.

12

Regulation

Our operations are subject to various federal, state and local laws and regulations including: licensing for contractors; building codes; permitting and inspection requirements applicable to construction projects; regulations relating to worker safety and environmental protection; and special bidding, procurement and clearance requirements on government projects.  We believe that we have all the licenses required to conduct our operations and that we are in substantial compliance with applicable regulatory requirements.  Our failure to comply with applicable regulations could result in substantial fines or revocation of our operating licenses.  Many state and local regulations governing construction require permits and licenses to be held by individuals who have passed an examination or met other requirements.

Safety and Risk Management

We are committed to ensuring that our employees perform their work in a safe environment.  We regularly communicate with our employees to promote safety and to instill safe work habits.  Our safety director, an SMC employee, reviews accidents and claims, examines trends and implements changes in procedures or communications to address any safety issues.

Risk Management, Insurance and Performance Bonds

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.

Employees

As of October 31, 2003, we had approximately 100 employees, all of whom were full-time. None of these employees are represented by labor organizations and we are not aware of any employees seeking organization.  We believe that our employee relations are good.

Facilities

Our corporate headquarters is located in an office facility in Rockville, Maryland.  SMC's headquarters is located in Tracy's Landing, Maryland in a leased facility that includes approximately four acres of land, a 2,400 square foot maintenance facility and a 3,000 square foot office facility. 

SMC's principal operations are conducted at local construction offices, equipment yards and storage facilities.  These facilities are temporary in nature with most of SMC's services performed on customer premises or job sites.  Because equally suitable temporary facilities are available in all areas where SMC does business, these facilities are not material to SMC's operations.

Legal Proceedings

We are not a party to any legal proceedings.

WHERE YOU CAN FIND MORE INFORMATION

This prospectus is part of a Registration Statement on Form S-3 that we filed with the Securities and Exchange Commission.  The registration statement contains more information than this prospectus regarding the Company and our common stock, including certain exhibits and schedules.  You may read and copy this information at the Public Reference Room of the Securities and Exchange Commission located at 450 Fifth Street, N.W., Suite 1024, Washington, D.C. 20549.  You may also obtain copies of this information at prescribed rates by mail from the Public Reference Section of the Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549.  You may obtain information on the operation of the Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-0330.  The Securities and Exchange Commission also maintains a website on the Internet that contains reports, proxy statements and other information about issuers, like us, who file electronically with the Securities and Exchange Commission.  The address of that site is http://www.sec.gov.

13

The Securities and Exchange Commission allows us to "incorporate by reference" into this prospectus information we file with the Securities and Exchange Commission in other documents.  This means that we can disclose important information to you by referring to other documents that contain that information.  The information may include documents filed after the date of this prospectus which update and supersede the information you read in this prospectus.  We incorporate by reference the documents listed below, except to the extent information in those documents is different from the information contained in this prospectus.  We also incorporate by reference all future documents filed with the Securities and Exchange Commission under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until we terminate the offering of shares of our common stock offered by this prospectus.

Documents Filed by Argan, Inc.
with the Securities and Exchange
Commission (File No. 001-31756)	Period
Annual Report on Form 10-KSB	Fiscal year ended January 31, 2003
Quarterly Report on Form 10-QSB	Quarterly period ended April 30, 2003
Quarterly Report on Form 10-QSB	Quarterly period ended July 31, 2003
Quarterly Report on Form 10-QSB	Quarterly period ended October 31, 2003
Current Report on Form 8-K	Filed on January 27, 2004
Current Report on Form 8-K/A	Filed on January 27, 2004
Current Report on Form 8-K	Filed on November 14, 2003
Current Report on Form 8-K	Filed on October 30, 2003
Current Report on Form 8-K/A	Filed on September 24, 2003
Current Report on Form 8-K	Filed on July 29, 2003
Current Report on Form 8-K/A	Filed on June 12, 2003
Current Report on Form 8-K/A	Filed on June 5, 2003
Current Report on Form 8-K	Filed on May 23, 2003
Proxy Statement on Schedule 14A relating to our 2003 Annual Meeting	Filed on September 18, 2003
The description of our common stock as set forth in our Registration Statement on Form 8-A and any amendment or report filed for the purpose of updating such description	Filed on August 1, 2003

You may request a copy of these filings at no cost, by writing or calling us at the following address or telephone number:

Argan, Inc.
One Church Street
Suite 302
Rockville, MD  20850
(301) 315-0027

Exhibits to the filings will not be sent, however, unless those exhibits have specifically been incorporated by reference in this document.

14

USE OF PROCEEDS

We will not receive any proceeds from the sale of the shares of our common stock offered by the selling stockholders pursuant to this prospectus. The selling stockholders will receive all of the proceeds from those sales.  See "Selling Stockholders."   We will, however, receive proceeds of up to $1,782,500 upon exercise of the warrants held by Messrs. Bosselmann, Miller and Trudel and MSR Advisors, Inc.  We plan to use proceeds received upon exercise of the warrants for acquisitions in growth oriented industries and for general working capital.

SELLING STOCKHOLDERS

In connection with the private placement, we issued shares of our common stock to the selling stockholders identified in the table below, and we agreed to register a number of their shares for resale.  We have also agreed to register for resale the shares of our common stock that may be received upon exercise of the warrants held by Messrs. Bosselmann, Miller and Trudel and MSR Advisors, Inc.  We have also agreed to use commercially reasonable efforts to keep the registration statement of which this prospectus is a part effective for a period ending on the first to occur of:

(i) the date when all of the shares registered under this registration statement have been sold;

(ii) the date when all of the shares registered under this registration statement may be freely resold without restriction under Rule 144; and

(iii) two years after the effective time of this registration statement.

Our registration of the shares of our common stock does not necessarily mean that the selling stockholders will sell all or any of the shares or that Messrs. Bosselmann, Miller or Trudel or MSR Advisors, Inc. will exercise all or any of the warrants or sell all or any of the shares that they receive upon exercise of the warrants.

The following table sets forth certain information regarding the beneficial ownership of our common stock, as of January 5, 2004, by each of the selling stockholders.  The information in the table below is provided to the best of the Company's knowledge based upon information provided by the selling stockholders, review of the Company's share transfer ledger, and Commission filings and other publicly available information.  Except as otherwise disclosed below, none of the selling stockholders has, or within the past three years has had, any position, office or other material relationship with us.  Because the selling stockholders may sell all or some portion of the shares of common stock beneficially owned by them, we cannot estimate the number of shares of common stock that will be beneficially owned by the selling stockholders after this offering.  In addition, the selling stockholders may have sold, transferred or otherwise disposed of, or may sell, transfer or otherwise dispose of, at any time or from time to time since the date on which they provided the information regarding the shares of common stock beneficially owned by them, all or a portion of the shares of common stock beneficially owned by them in transactions exempt from the registration requirements of the Securities Act of 1933.

Beneficial ownership is determined in accordance with Rule 13d-3(d) promulgated by the SEC under the Securities Exchange Act of 1934.  Unless otherwise noted, each person or group identified possesses sole voting and investment power with respect to shares, subject to community property laws where applicable.

15

	Number of Shares			Shares Being			Percentage of Class
Selling Stockholder	Beneficially Owned			Offered			Following Offering
MSR Advisors, Inc.		375,584	(1)		50,000	(2)		*
MSR I SBIC Partners, LLC		375,584	(1)		0			*
MSR I SBIC, L.P.		375,584	(1)		322,584			*
Tri-Lev LLC		375,584	(1)		3,000			*
Wheatley Partners III, L.P.		258,065	(3)		180,542			*
Wheatley Associates III, L.P.		258,065	(3)		38,135			*
Wheatley Foreign Partners III, L.P.		258,065	(3)		39,388			*
Rainer H. Bosselmann		298,710	(4)		298,710			*
H. Haywood Miller III		73,300	(5)		70,000	(5)		*
Arthur F. Trudel		70,000	(6)		70,000			*
Peter L. Winslow		43,640	(7)		33,480	(7)		*
James W. Quinn		17,903	(8)		12,903	(8)		*
Kristopher D. Brown		1,000			1,000			*
John S. Zuckerman		1,000			1,000			*
Brookeith Investment Partners, LLC		3,200	(9)		3,200			*
Matthew I. Rebold & Nancy B. Rebold		10,000			10,000			*
Dean V. Shahinian		1,000			1,000			*
Alan J. Stearn		2,000			2,000			*
Michael Rubin & Sherry Rubin		2,000			2,000			*
Mark S. Pollack		1,000			1,000			*
Henry Foster		1,000			1,000			*
Timothy Healy		1,000			1,000			*
Douglas Schiffman		3,000			3,000			*
Richard Lewisohn, III		5,000			5,000			*
Kerri Cagnassola		1,000			1,000			*
Mark H. Bates		1,000			1,000			*
Marshall & Johanna Kiev		2,000			2,000			*
S.A. Spencer		1,000			1,000			*
Howard Kaye		12,903			12,903			*
Prairie Fire Capital LLC		19,355	(10)		19,355			*
Michael R. Stone		19,355			19,355			*
William Laverack, Jr.		19,355			19,355			*
FM Multi Strategy Investment Fund L.P.		6,400	(11)		6,400			*
Greenleaf Capital, L.P.		129,032	(12)		129,032			*
Allen & Company Incorporated**		64,516	(13)		64,516			*
John Simon		12,903			12,903			*
Bruce Allen		12,903			12,903			*
Andrew J. Hirsch Trust Dated 9/15/1980 David Hirsch Trustee		1,000			1,000			*
Jeffrey A. Hirsch Trust Dated 9/15/1980 David Hirsch Trustee		1,000			1,000			*

16

Jamie E. Hirsch Trust Dated 9/15/1980 David Hirsch Trustee	1,000		1,000	*
David & Hope Hirsch	1,000		1,000	*
Charles R. Goldstein & Adrienne C. Goldstein	3,300		3,300	*
William A. Adams	1,000		1,000	*
Shoulda Partners, L.P.	6,000	(14)	6,000	*
Scott Korman	1,000		1,000	*
David M. Schneider	1,000		1,000	*
Sally M. Herman	3,000		3,000	*
Fred B. Tarter & Lois G. Tarter	6,451		6,451	*
Aspen Ventures LLC	6,451	(15)	6,451	*
Jess and Corp Profit Sharing Plan & Trust	2,000		2,000	*
Bruce Edward Roberts	1,935		1,935	*
Laurance R. Clark	3,500		3,500	*
Silverado Insurance, Ltd.	12,900	(16)	12,900	*
Robert V. Perini	2,000		2,000	*
R & R Opportunity Fund, L.P.	6,450	(17)	6,450	*
Kenneth Olson IRA	1,000		1,000	*
John P. Rosenthal	3,000		3,000	*
Peter Wilson Getsinger	1,935		1,935	*
Manket Berns Feldman Group	1,000	(18)	1,000	*
Michael Goldstein	5,000		5,000	*
John McMahon	1,000		1,000	*
One & Co.	6,452	(19)	6,452	*
Louisa Correa	1,936		1,936	*

*	Less than 1% of the outstanding common stock.
**	This selling stockholder is a broker-dealer.  This selling stockholder (a) purchased the securities in the ordinary course of business, (b) at the time of the purchase of the securities to be resold, the selling stockholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities, and (c) at the time of the purchase, the broker-dealer did not purchase from the Company with a view to, or in connection with, the resale or other distribution of the securities.
***	This selling stockholder is an affiliate of a broker-dealer.  This selling stockholder (a) purchased the securities in the ordinary course of business, and (b) at the time of the purchase of the securities to be resold, the selling stockholder had no agreements or understandings, directly or indirectly, with any person to distribute the securities.
(1)	Includes 325,584 shares owned and 50,000 shares issuable upon exercise of warrants owned, in the aggregate, by MSR Advisors, Inc., a Delaware corporation ("MSRA"), MSR I SBIC Partners, LLC, a Delaware limited liability company ("MSRI Partners"), MSR I SBIC, L.P., a Delaware limited partnership ("MSRI"), and Tri-Lev LLC, a Connecticut limited liability company ("Tri-Lev"). Of such 375,584 shares, MSRA has sole voting and dispositive power with respect to 50,000 shares and shared voting and dispositive power with respect to 325,584 shares; MSRI Partners has sole voting and dispositive power with respect to 0 shares and shared voting and dispositive power with respect to 375,584 shares; MSRI has sole voting and dispositive power with respect to 322,584 shares and shared voting and dispositive power with respect to 53,000 shares; and Tri-Lev has sole voting and dispositive power with respect to 3,000 shares and shared voting and dispositive power with respect to 372,584 shares. Daniel A. Levinson, a director of the Company, is the President of MSRA and the Managing Member of MSRI Partners. MSRA is the Manager of Tri-Lev. MSRI Partners is the General Partner of MSRI.  MSRA, MSRI Partners, MSRI, and Tri-Lev have identified Mr. Levinson as a natural person with control over MSRA, MSRI Partners, MSRI, and Tri-Lev. The business address of Mr. Levinson, MSRA, MSRI Partners, MSRI, and Tri-Lev is 8 Wright Street, Westport, Connecticut 06880. Each of Mr. Levinson, MSRA, MSRI Partners, MSRI, and Tri-Lev (each an "MSRA Person") disclaims beneficial ownership of all shares and warrants of the Company beneficially owned by the other MSRA Persons, except to the extent such person has sole voting and dispositive power with respect to such securities.
(2)	Includes 50,000 shares issuable upon exercise of warrants owned by MSR Advisors, Inc.
(3)	Includes 258,065 shares beneficially owned (in the aggregate) by Wheatley Partners III, LLC, Wheatley Partners III, L.P., Wheatley Associates III, L.P. and Wheatley Foreign Partners III, L.P. Wheatley Partners III, LLC is the General Partner of Wheatley Partners III, L.P., Wheatley Associates III, L.P. and Wheatley Foreign Partners III, L.P. Of such 258,065 shares, Wheatley Partners III, LLC has sole voting and dispositive power with respect to 0 shares and shared voting and dispositive power with respect to 258,065 shares; Wheatley Partners III, L.P. has sole voting and dispositive power with respect to 180,542 shares and shared voting and dispositive power with respect to 77,523 shares; Wheatley Associates III, L.P. has sole voting and dispositive power with respect to 38,135 shares and shared voting and dispositive power with respect to 219,930 shares; and Wheatley Foreign Partners III, L.P. has sole voting and dispositive power with respect to 39,388 shares and shared voting and dispositive power with respect to 218,677 shares. Wheatley Partners III, LLC, Wheatley Partners III, L.P., Wheatley Associates III, L.P. and Wheatley Foreign Partners III, L.P. have identified Barry Rubenstein as a natural person with control over Wheatley Partners III, LLC, Wheatley Partners III, L.P., Wheatley Associates III, L.P. and Wheatley Foreign Partners III, L.P.  The business address of Wheatley Partners is 80 Cuttermill Road, Suite 311, Great Neck, NY 11021.

17

(4)	Includes 214,860 shares owned by Mr. Bosselmann, 23,850 shares owned by Mr. Bosselmann's wife (of which Mr. Bosselmann disclaims beneficial ownership), and 60,000 shares issuable upon exercise of warrants owned by Mr. Bosselmann.  Mr. Bosselmann is Chairman of the Board and Chief Executive Officer of the Company.
(5)	Shares beneficially owned includes 13,000 shares owned by Mr. Miller, 300 shares held in custodial accounts for Mr. Miller's minor children, and 60,000 shares issuable upon exercise of warrants owned by Mr. Miller.  Shares being offered include 10,000 shares owned by Mr. Miller and 60,000 shares issuable upon exercise of warrants owned by Mr. Miller.  Mr. Miller is Executive Vice President of the Company.
(6)	Includes 10,000 shares owned by Mr. Trudel and 60,000 shares issuable upon exercise of warrants owned by Mr. Trudel.  Mr. Trudel is Senior Vice President and Chief Financial Officer of the Company.
(7)	Shares being offered includes 3,200 shares held by Mr. Winslow as Trustee for Condit & EC Winslow 41 u/d Trust; 1,900 shares held by Mr. Winslow as Trustee for Sears B. Condit Trust u/w; 25,800 shares held by Mr. Winslow as Trustee for Sears B. Condit Trust u/l; and 2,580 shares held by Mr. Winslow as Trustee for Andrew N. Winslow Trust u/w.  Shares beneficially owned includes, in addition to the shares being offered, 1,290 shares held by Mr. Winslow; 3,870 shares held by Mr. Winslow as Trustee for Louise Condit Trust u/d FBO Elinor Winslow; and options to purchase 5,000 shares of common stock held by Mr. Winslow, all of which are fully vested.  Mr. Winslow is a director of the Company.
(8)	Shares being offered includes 12,903 shares beneficially owned by Mr. Quinn.  Shares beneficially owned includes, in addition to the shares being offered, options to purchase 5,000 shares of common stock held by Mr. Quinn, all of which are fully vested.  Mr. Quinn is a director of the Company.
(9)	The selling stockholder has identified David Heidecorn as a natural person with control over Brookeith Investment Partners, LLC.
(10)	The selling stockholder has identified Peter M. Castleman as a natural person with control over Prairie Fire Capital LLC.
(11)	The selling stockholder has identified Seymour Zises as a natural person with control over FM Multi Strategy Investment Fund L.P..
(12)	The selling stockholder has identified Michael R. Stone as a natural person with control over Greenleaf Capital, L.P..
(13)	The selling stockholder has identified James W. Quinn as a natural person with control over Allen & Company Incorporated.  Mr. Quinn is a director of the Company.
(14)	The selling stockholder has identified Michael Feinsod as a natural person with control over Shoulda Partners, L.P..
(15)	The selling stockholder has identified Fred B. Tarter as a natural person with control over Aspen Ventures LLC.
(16)	The selling stockholder has identified Steven L. Trenk as a natural person with control over Silverado Insurance, Ltd..
(17)	The selling stockholder has identified John Borer as a natural person with control over R & R Opportunity Fund, L.P..
(18)	The selling stockholder has identified Steven M. Manket as a natural person with control over Manket Berns Feldman Group.
(19)	The selling stockholder has identified Thomas N. Dabney as a natural person with control over One & Co..

As explained below under "Plan of Distribution," we have agreed to bear all expenses of the Registration Statement of which this prospectus is a part.

PLAN OF DISTRIBUTION

The shares of common stock may be sold from time to time by the selling stockholders in one or more transactions at fixed prices, at market prices at the time of sale, at varying prices determined at the time of sale or at negotiated prices.  As used in this prospectus, "selling stockholders" includes donees, pledgees, transferees and other successors in interest selling shares received from a selling stockholder after the date of this prospectus as a gift, pledge, partnership distribution or other non-sale transfer.  Upon our being notified by a selling stockholder that a donee, pledgee, transferee or other successor in interest intends to sell shares, a supplement to this prospectus, if required, will be filed.  The selling stockholders may offer their shares of common stock in one or more of the following transactions:

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• on any national securities exchange or quotation service on which the common stock may be listed or quoted at the time of sale, including the Boston Stock Exchange;
   
• in the over-the-counter market;
   
• in negotiated transactions other than on such exchanges;
   
• by pledge to secure debts and other obligations;
   
• in connection with the writing of non-traded and exchange-traded call options, in hedge transactions, in covering previously established short positions and in settlement of other transactions in standardized or over-the-counter options; or
   
• in a combination of any of the above transactions.

If required, we will distribute a supplement to this prospectus to describe material changes in the terms of the offering.

The shares of common stock described in this prospectus may be sold from time to time directly by the selling stockholders.  Alternatively, the selling stockholders may from time to time offer shares of common stock to or through underwriters, broker/dealers or agents.  The selling stockholders and any underwriters, broker/dealers or agents that participate in the distribution of the shares of common stock may be deemed to be "underwriters" within the meaning of the Securities Act of 1933.  Any profits on the resale of shares of common stock and any compensation received by any underwriter, broker/dealer or agent may be deemed to be underwriting discounts and commissions under the Securities Act of 1933.  We have agreed to indemnify the selling stockholders against certain liabilities, including liabilities arising under the Securities Act of 1933.  The selling stockholders may agree to indemnify any agent, dealer or broker-dealer that participates in the sale of shares of common stock described in this prospectus against certain liabilities, including liabilities arising under the Securities Act of 1933.

We entered into a registration rights agreement for the benefit of the selling stockholders to register the shares of common stock purchased in the private placement under applicable federal and state securities laws and under specific circumstances and at specific times.  The registration rights agreement provides for cross-indemnification of the selling stockholders and us and their and our respective directors, officers and controlling persons against specific liabilities in connection with the offer and sale of the common stock, including liabilities under the Securities Act of 1933.

Any shares covered by this prospectus that qualify for sale pursuant to Rule 144 under the Securities Act of 1933 may be sold under Rule 144 rather than pursuant to this prospectus.  The selling stockholders may chose not to sell all or any of the shares they hold.  The selling stockholders may transfer, devise or gift such shares by other means not described in this prospectus.

To comply with the securities laws of certain jurisdictions, the common stock must be offered or sold only through registered or licensed brokers or dealers. In addition, in certain jurisdictions, the shares of common stock may not be offered or sold unless they have been registered or qualified for sale or an exemption is available and complied with.

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Under the Securities Exchange Act of 1934, any person engaged in a distribution of the common stock may not simultaneously engage in market-making activities with respect to the common stock for five business days prior to the start of the distribution.  In addition, each selling stockholder and any other person participating in a distribution will be subject to the Securities Exchange Act of 1934, which may limit the timing of purchases and sales of common stock by the selling stockholders or any such other person.  These factors may affect the marketability of the common stock and the ability of brokers or dealers to engage in market-making activities.

All expenses of this registration will be paid by us.  These expenses include the SEC's filing fees, fees under state securities or "blue sky" laws, legal fees and printing costs.

LEGAL MATTERS

Robinson & Cole LLP, Stamford, Connecticut, has opined on the validity of the shares of common stock being offered pursuant to this prospectus.

EXPERTS

The financial statements of Argan, Inc., incorporated in this Prospectus by reference to the Annual Report on Form 10-KSB of Argan, Inc. for the year ended January 31, 2003, have been so incorporated in reliance on the report of Rose, Snyder & Jacobs, independent accountants, given on the authority of said firm as experts in auditing and accounting.

The balance sheets of Southern Maryland Cable, Inc. as of December 31, 2002 and 2001, and the related statements of operations, stockholders' equity and cash flows for the years then ended, incorporated in this Prospectus by reference to the Current Report of Argan, Inc. on Form 8-K/A filed with the Commission on September 24, 2003, have been so incorporated in reliance on the report of Sturn Wagner Lombardo & Company, LLC, independent accountants, given on the authority of said firm as experts in auditing and accounting.

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PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 14.  Other Expenses of Issuance and Distribution

The following table sets forth the costs and expenses, other than underwriting discounts and commissions, if any, payable by the Company in connection with the issuance and distribution of the shares of common stock being registered.  All amounts are estimates except the SEC registration fee.

SEC Registration Fee	$	993.00
Printing		5,000.00
Accounting Fees and Expenses		20,000.00
Legal Fees and Expenses		20,000.00
Miscellaneous		4,007.00
Total	$	50,000.00

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.

The Company's Bylaws provides that the Company shall indemnify its officers and directors and may indemnify its employees and other agents to the fullest extent permitted by Delaware law.  The Company's 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.  The Company has entered into indemnification agreements with its directors containing provisions which provide for the indemnification of such directors to the fullest extent permitted by Delaware law.

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Item 16. Exhibits

Exhibit No.	Description
5.1	Opinion of Robinson & Cole LLP
10.1	Form of Subscription Agreement, by and among the Company and the investors listed on the signature pages thereto
10.2	Registration Rights Agreement, by and among the Company and the and the investors listed on the signature pages thereto
16	Letter of Rose, Snyder & Jacobs, former independent accountants, dated May 20, 2003 (incorporated by reference to Exhibit 16.1 to Form 8-K/A filed on June 12, 2003)
23.1	Consent of Rose, Snyder & Jacobs, Independent Accountants
23.2	Consent of Sturn Wagner Lombardo & Company, LLC, Independent Accountants
23.3	Consent of Robinson & Cole LLP (contained in opinion filed as Exhibit 5.1)
24.1	Power of Attorney (1)

Previously filed.

Item 17. Undertakings

(a)  The undersigned registrant hereby undertakes:

(1)  To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

                                (i)  To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)  To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement;

(iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the registration statement is on Form S-3 or Form S-8, and the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement.

(2)  That, for the purpose of determining any liability under the Securities Act of 1933, each such post effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

(3)  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

(b)  The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offering herein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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(c)  Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the registrant pursuant to the registrant's Certificate of Incorporation and Bylaws, and the General Corporation Law of the State of Delaware, the registrant has been informed that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933, 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 a successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person for liabilities arising under the Securities Act of 1933 in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question of whether such indemnification by it is against policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

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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 Amendment No. 1 to Registration Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto duly authorized, in Rockville, Maryland on January 28, 2004.

ARGAN, INC.
By:	/s/ Rainer H. Bosselmann
	Rainer H. Bosselmann Chairman of the Board and Chief Executive Officer

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Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons in the capacities and on the dates indicated.

Name	Title	Date
* /s/ Rainer H. Bosselmann
Rainer H. Bosselmann	Chairman of the Board and Chief Executive Officer (Principal Executive Officer)	January 28, 2004
* /s/ Arthur F. Trudel
Arthur F. Trudel	Chief Financial Officer (Principal Accounting and Financial Officer)	January 28, 2004
* /s/ DeSoto S. Jordan
DeSoto S. Jordan	Director	January 28, 2004
* /s/ Daniel A. Levinson
Daniel A. Levinson	Director	January 28, 2004
_____________________
T. Kent Pugmire	Director
* /s/ James W. Quinn
James W. Quinn	Director	January 28, 2004
_____________________
Peter L. Winslow	Director

* By: /s/ Rainer H. Bosselmann
             Rainer H. Bosselmann
             Attorney in Fact

             Date: January 28, 2004

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INDEX TO EXHIBITS

Exhibit No.	Description
5.1	Opinion of Robinson & Cole LLP
10.1	Form of Subscription Agreement, by and among the Company and the investors listed on the signature pages thereto
10.2	Registration Rights Agreement, by and among the Company and the and the investors listed on the signature pages thereto
16	Letter of Rose, Snyder & Jacobs, former independent accountants, dated May 20, 2003 (incorporated by reference to Exhibit 16.1 to Form 8-K/A filed on June 12, 2003)
23.1	Consent of Rose, Snyder & Jacobs, Independent Accountants
23.2	Consent of Sturn Wagner Lombardo & Company, LLC, Independent Accountants
23.3	Consent of Robinson & Cole LLP (contained in opinion filed as Exhibit 5.1)
24.1	Power of Attorney (1)

(1)  Previously filed.

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EX-5

                                                             Exhibit 5.1

Letterhead of Robinson & Cole LLP

                                                                                                                                              January __, 2004

Argan, Inc.
One Church Street
Suite 302
Rockville, MD  20850

                    Re:     Registration Statement on Form S-3

Ladies and Gentlemen:

                    This opinion is furnished to Argan, Inc. (the "Company") in connection with the filing of a Registration Statement on Form S-3 (the "Registration Statement") with the Securities and Exchange Commission under the Securities Act of 1933, as amended, for the purpose of registering for resale (i) 1,303,974 shares (the "Outstanding Shares") of the Company's Common Stock, par value $0.15 per share (the "Common Stock") that were issued by the Company on April 29, 2003 in connection with a private placement to certain accredited investors (the "Private Placement"), and (ii) 230,000 shares of Common Stock that are issuable by the Company upon exercise of warrants (the "Warrants") issued by the Company in connection with the Private Placement (the "Warrant Shares" and together with the Outstanding Shares, the "Shares ").

                    We have based our opinion upon our review of such records, documents, instruments and certificates, and our examination of such questions of law, as we have deemed necessary or appropriate for the purpose of rendering our opinion.  In connection with our opinion, we have, with your consent, assumed the authenticity of all records, documents, instruments and certificates submitted to us as originals, the genuineness of all signatures, the legal capacity of natural persons and the authenticity and conformity to the originals of all records, documents, instruments and certificates submitted to us as copies.

                    This opinion is limited to the federal laws of the United States of America and the Delaware General Corporation Law, and we disclaim any opinion as to the laws of any other jurisdiction.  We further disclaim any opinion as to any statute, rule, regulation, ordinance, order or other promulgation of any regional or local governmental body or as to any related judicial or administrative opinion.

                    Based upon the foregoing, and assuming that (i) the Registration Statement becomes and remains effective during the period when the Shares are offered and sold, (ii) in the case of unexercised warrants, the full exercise price as stated in the Warrants will be paid, upon exercise thereof, for each Warrant Share, (iii) in the case of unexercised warrants, appropriate certificates evidencing the Shares will be executed and delivered by the Company, and (iv) all applicable securities laws are complied with, it is our opinion that the Shares covered by the Registration Statement have been, or will be in the case of Warrant Shares not yet issued, validly issued and are, or will be in the case of Warrant Shares not yet issued, fully paid and non-assessable.

                    We hereby consent to the reference to our firm under the caption "Experts" in the Registration Statement and to the filing of this opinion as an exhibit to, and to the use of this opinion in connection with, the Registration Statement.  In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the General Rules and Regulations of the Securities and Exchange Commission.

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                    This opinion is rendered in connection with the Registration Statement.  This opinion may not be relied upon for any other purpose without our prior written consent.  We disclaim any obligation to advise you of any change of law that occurs, or any facts of which we become aware, after the date of this opinion.

                                                                                                                                              Very truly yours,

                                                                                                                                              Robinson & Cole LLP

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EX-10

SUBSCRIPTION AGREEMENT

 

SUBSCRIPTION AGREEMENT

THIS SUBSCRIPTION AGREEMENT (the "Agreement") is made as of this        day of April, 2003, by and among PUROFLOW INCORPORATED, a Delaware corporation (the "Company"), and  _______________________________________________ (the "Investor").

W I T N E S S E T H:

WHEREAS, the Investor desires to subscribe for, purchase and acquire from the Company and the Company desires to sell and issue to the Investor __________ shares (the "Shares") of the Company's Common Stock, par value $0.15 per share (the "Common Stock"), upon the terms and conditions and subject to the provisions hereinafter set forth.

NOW, THEREFORE, for and in consideration of the mutual premises contained herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

1.         Purchase and Sale of the Shares.  Subject to the terms and conditions of this Agreement, the Investor subscribes for and agrees to purchase and acquire from the Company and the Company agrees to sell and issue to the Investor the Shares, in the manner set forth in Section 2 hereof, at a purchase price of $7.75 per Share, yielding an aggregate purchase price of $______________ (the "Purchase Price").  Pursuant to the terms of the offering (the "Offering") described in the Company's Confidential Private Placement Offering Memorandum, dated January 2003 (the "Offering Materials").  The Investor hereby acknowledges receipt of the Offering Materials and all exhibits thereto.

2.         Terms of Purchase and Sale of the Shares.  The closing of the transactions contemplated hereby (the "Closing") shall take place prior to March 31, 2003, at the offices of Winslow, Evans & Crocker, Inc. (the "Placement Agent"), or at such other time and place as the Company and the Placement Agent may agree upon.  The Offering may be extended until not later than April 30, 2003.  Contemporaneously with the delivery of this Agreement, the Investor shall deliver to the Placement Agent the Purchase Price by wire transfer of immediately available funds pursuant to wire transfer instructions given to the Investor by the Company. At the Closing, the Placement Agent shall deliver to the Company the Purchase Price by wire transfer of immediately available funds pursuant to wire transfer instructions given to the Placement Agent by the Company, and the Company shall deliver to the Investor a certificate, registered in the name of the Investor, representing the Shares.

The Investor understands that the Shares will not be registered under the Securities Act of 1933, as amended (the "Act"), or under the securities laws of any U.S. state or foreign country.  The Investor also understands that, in order to assure that the sale of the Shares to the Investor will be exempt from registration under the Act and applicable state securities laws, that the Investor must meet certain financial prerequisites and must have such knowledge and experience in financial and business matters so as to be able to evaluate the risks and merits of an investment in the Shares.

3.         Representations and Warranties of the Company.  In order to induce the Investor to enter into this Agreement, the Company represents and warrants the following:

(a)        Authority.  The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has all requisite right, power and authority to execute, deliver and perform this Agreement.

(b)        Enforceability.  The execution, delivery and performance of this Agreement by the Company have been duly authorized by all requisite corporate action.  This Agreement has been duly executed and delivered by the Company, and, upon its execution by the Investor, shall constitute the legal, valid and binding obligation of the Company, enforceable in accordance with its terms, except to the extent that its enforcement is limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors' rights generally and by general principles of equity.

(c)        No Violations.  The execution, delivery and performance of this Agreement by the Company do not and will not violate or conflict with any provision of the Company's Certificate of Incorporation or Bylaws and do not and will not, with or without the passage of time or the giving of notice, result in the breach of, or constitute a default, cause the acceleration of performance, or require any consent under, or result in the creation of any lien, charge or encumbrance upon any property or assets of the Company pursuant to, any material instrument or agreement to which the Company is a party or by which the Company or its properties are bound excepts such consents as have been obtained as of the date hereof.

(d)        Capitalization.  The authorized capital stock of the Company consists of 12,000,000 shares of Common Stock, of which 494,306 shares were issued and outstanding as of October 31, 2002, and 500,000 shares of preferred stock, $0.10 par value, of which no shares were issued and outstanding as of October 31, 2002.  As of October 31, 2002, the Company had granted options and stock warrants to purchase 19,667 shares of Common Stock.  Upon issuance in accordance with the terms of this Agreement against payment of the Purchase Price therefor, the Shares will be duly and validly authorized and issued, fully paid and nonassessable, and, assuming the accuracy of the representations and warranties of the Investor, will be issued in accordance with a valid exemption from the registration or qualification provisions of the Securities Act of 1933, as amended (the "Securities Act"), and any applicable state securities laws (the "State Acts").

(e)        Exchange Act Filing.  All reports and statements required to be filed by the Company under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the rules and regulations thereunder, due at or prior to the date of this Agreement have been made. Such filings, together with all documents incorporated by reference therein, are referred to as "Exchange Act Documents." Each Exchange Act Document, as amended, conformed in all material respects to the requirements of the Exchange Act and the rules and regulations thereunder, and no Exchange Act Document, as amended, at the time each such document was filed, included any untrue statement of a material fact or omitted to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

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(f)        Company Financial Statements.  The audited financial statements, together with the related notes of the Company at January 31, 2002 and 2001, and for the years then ended, and the unaudited financial statements of the Company at October 31, 2002, and for the nine months then ended, (collectively, the "Company Financial Statements") included in the Company's Annual Report on Form 10-K for the year 2002 and its Quarterly Report on Form 10-Q, respectively, fairly present in all material respects, on the basis stated therein and on the date thereof, the financial position of the Company at the respective dates therein specified and its results of operations and cash flows for the periods then ended (subject to, in the case of unaudited financial statements, normal audit adjustments).  To the knowledge of the Company, such statements and related notes have been prepared in accordance with generally accepted accounting principles applied on a consistent basis except as expressly noted therein.

(g)        No Material Liabilities.  Except for liabilities or obligations disclosed in Exchange Act Documents, since October 31, 2002, the Company has not incurred any material liabilities or obligations, direct or contingent, except in the ordinary course of business or except for liabilities or obligations reflected or reserved against on the Company's balance sheet as October 31, 2002, and there has not been any material adverse change in the condition (financial or otherwise), business, or results of operations of the Company or any change in the capital or increase in the long-term debt of the Company, nor has the Company declared, paid, or made any dividend or distribution of any kind on its capital stock.

(h)        No Disputes Against Company.  Except as disclosed in the Exchange Act Documents there is no material pending or, to the knowledge of the Company, threatened (a) action, suit, claim, proceeding, or investigation against the Company, at law or in equity, or before or by any Federal, state, municipal, or other governmental department, commission, board, bureau, agency or instrumentality, domestic or foreign, (b) arbitration proceeding against the Company, (c) governmental inquiry against the Company, or (d) any action or suit by or on behalf of the Company pending or threatened against others.

4.         Representations and Warranties of the Investor.  In order to induce the Company to enter into this Agreement, the Investor represents and warrants the following:

(a)        Authority.  The Investor has all requisite right, power and authority to execute, deliver and perform this Agreement.

(b)        Enforceability.  If necessary, the execution, delivery and performance of this Agreement by the Investor have been duly authorized by all requisite partnership or corporate action, as the case may be.   This Agreement has been duly executed and delivered by the Investor, and, upon its execution by the Company, shall constitute the legal, valid and binding obligation of the Investor, enforceable in accordance with its terms, except to the extent that its enforcement is limited by bankruptcy, insolvency, reorganization or other laws relating to or affecting the enforcement of creditors' rights generally and by general principles of equity.

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(c)        No Violations.  The execution, delivery and performance of this Agreement by the Investor do not and will not, with or without the passage of time or the giving of notice, result in the breach of, or constitute a default, cause the acceleration of performance, or require any consent under, or result in the creation of any lien, charge or encumbrance upon any property or assets of the Investor pursuant to, any material instrument or agreement to which the Investor is a party or by which the Investor or its properties may be bound or affected, and, do not or will not violate or conflict with any provision of the articles of incorporation or bylaws, partnership agreement, operating agreement, trust agreement or similar organizational or governing document of the Investor, as applicable. 

(d)        Knowledge of Investment and its Risks.  The Investor has knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of Investor's investment in the Shares.  The Investor understands that an investment in the Company represents a high degree of risk and there is no assurance that the Company's business or operations will be successful.  The Investor has considered carefully the risks attendant to an investment in the Company, and that, as a consequence of such risks, the Investor could lose Investor's entire investment in the Company.

(e)        Investment Intent.  The Investor hereby represents and warrants that (i) the Shares are being acquired for investment for the Investor's own account, and not as a nominee or agent and not with a view to the resale or distribution of all or any part of the Shares, and the Investor has no present intention of selling, granting any participation in or otherwise distributing any of the Shares within the meaning of the Securities Act and (ii) the Investor does not have any contracts, understandings, agreements or arrangements with any person and/or entity to sell, transfer or grant participations to such person and/or entity, with respect to any of the Shares.

(f)        Accredited Investor.  The Investor is an "Accredited Investor" as that term is defined by Rule 501 of Regulation D promulgated under the Securities Act. 

(g)        Disclosure.  The Investor has reviewed information provided by the Company in connection with the decision to purchase the Shares, consisting of the Company's publicly available filings with the Securities and Exchange Commission and the information contained therein.  The Company has provided the Investor with all the information that the Investor has requested in connection with the decision to purchase the Shares.  The Investor further represents that the Investor has had an opportunity to ask questions and receive answers from the Company regarding the business, properties, prospects and financial condition of the Company. To the Investor's knowledge, the Company has not disclosed any material non-public information to the Investor. All such questions have been answered to the full satisfaction of the Investor.

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(h)        No Registration.  The Investor understands that Investor may be required to bear the economic risk of Investor's investment in the Company for an indefinite period of time.  The Investor further understands that (i) neither the offering nor the sale of the Shares has been registered under the Securities Act or any applicable State Acts in reliance upon exemptions from the registration requirements of such laws, (ii) the Shares must be held by he, she or it indefinitely unless the sale or transfer thereof is subsequently registered under the Securities Act and any applicable State Acts, or an exemption from such registration requirements is available, (iii) except as set forth in the Registration Rights Agreement between the Company and the Investor, the Company is under no obligation to register any of the Shares on the Investor's behalf or to assist the Investor in complying with any exemption from registration, and (iv) the Company will rely upon the representations and warranties made by the Investor in this Subscription Agreement in order to establish such exemptions from the registration requirements of the Securities Act and any applicable State Acts. 

(i)         Transfer Restrictions.  The Investor will not transfer any of the Shares unless such transfer is registered or exempt from registration under the Securities Act and such State Acts, and, if requested by the Company in the case of an exempt transaction, the Investor has furnished an opinion of counsel reasonably satisfactory to the Company that such transfer is so exempt.  The Investor understands and agrees that (i) the certificates evidencing the Shares will bear appropriate legends indicating such transfer restrictions placed upon the Shares, (ii) the Company shall have no obligation to honor transfers of any of the Shares in violation of such transfer restrictions, and (iii) the Company shall be entitled to instruct any transfer agent or agents for the securities of the Company to refuse to honor such transfers.

(j)         Principal Address.  The Investor's principal residence, if an individual, or principal executive office, if an entity, is set forth on the signature page of this Subscription Agreement.

(k)       Money Laundering.  The Investor hereby acknowledges that the Company seeks to comply with all applicable laws concerning money laundering and similar activities.  In furtherance of such efforts, the Investor hereby represents and agrees that, to the best of the Investor's knowledge based upon appropriate diligence and investigation:  (i) none of the cash or property that is paid or contributed to the Company by the Investor shall be derived from, or related to, any activity that is deemed criminal under United States law; (ii) no contribution or payment to the Company by the Investor shall (to the extent that such matters are within the Investor's control) cause the Company to be in violation of the Untied States Bank Secrecy Act, the United States Money Laundering Abatement and Anti-Terrorist Financing Act of 2001; and (iii) the Investor is not engaged in money laundering.  Further, the Investor represents and warrants to the Company all evidence of identity provided in connection with the Investor's acquisition of Common Stock as contemplated herein is genuine and all related information furnished is accurate and the Investor hereby agrees to provide any information deemed necessary by the Company in its sole discretion to comply with the Company's anti-money laundering responsibilities and policies.

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5.         Further Assurances.  The parties will, upon reasonable request, execute and deliver all such further assignments, endorsements and other documents as may be necessary in order to perfect the purchase by the Investor of the Shares.

6.         Investment Company Act.  The Company is not required to be registered as an investment company pursuant to the Investment Company Act of 1940, as amended (the "1940 Act").  Further, the Company agrees that it will take no action which would cause it to be an "investment company" as defined in Section 3(a)(1) of the 1940 Act.

7.         Registration Rights Agreement; Power of Attorney.  The Investor agrees to be bound by the terms of and execute the Registration Rights Agreement among the Company and the purchasers of the Shares.

8.         Entire Agreement; No Oral Modification.  This Agreement contains the entire agreement among the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings with respect thereto and may not be amended or modified except in a writing signed by both of the parties hereto.

9.         Binding Effect; Benefits.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective heirs, successors and assigns; however, nothing in this Agreement, expressed or implied, is intended to confer on any other person other than the parties hereto, or their respective heirs, successors or assigns, any rights, remedies, obligations or liabilities under or by reason of this Agreement.

The undersigned agrees that the Investor may not cancel, terminate or revoke this Agreement or any agreement of the Investor made hereunder (except  as otherwise specifically provided herein).   This Agreement is not transferable or assignable by the undersigned except as may be provided herein; provided, however, that this Agreement shall survive the death or disability of the Investor and shall be binding upon the Investor's heirs, executors, administrators, successors and permitted assigns.

10.       Counterparts.  This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.

11.       Governing Law.  This Agreement shall be governed by, and construed and enforced in accordance with, the laws of the United States of America and the State of New York, both substantive and remedial.  Any judicial proceeding brought against either of the parties to this agreement or any dispute arising out of this Agreement or any matter related hereto may be brought in the courts of the State of New York or in the United States District Court for the Southern District of New York and, by its execution and delivery of this agreement, each party to this Agreement accepts the jurisdiction of such courts.

12.       Prevailing Parties.  In any action or proceeding brought to enforce any provision of this Agreement, or where any provision hereof is validly asserted as a defense, the prevailing party shall be entitled to receive and the nonprevailing party shall pay upon demand reasonable attorneys' fees in addition to any other remedy.

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13.       Headings.  The section headings herein are included for convenience only and are not to be deemed a part of this Agreement.

14.       Notices.  All notices, request, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given to any party when delivered by hand, when delivered by telecopier or telex and confirmed, or when mailed, first-class postage pre-paid, (a) if to you, to you at the address or telecopy number set forth below your signature, or to such other address or telecopy number as you shall have furnished to the Company in writing and (b) if to the Company, to it at One Church Street, Suite 302; Rockville, Maryland 20850 or to such other address or addresses, or telecopy number or numbers, as the Company shall have furnished to you in writing.

15.       Tax Certification.  You certify that (a) the taxpayer identification provided under your signature is correct and (b) you are not subject to backup withholding because (i) you have not been notified that you are subject to backup withholding as a result of failure to report interest and dividends or (ii) the Internal Revenue Service has not notified you that you are subject to withholding.  [Strike out clause (ii) if incorrect.]

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

PUROFLOW INCORPORATED,
a Delaware corporation

By:                                                                  
Name: ____________________________
Its:_______________________________

INVESTOR
____________________________________

By:                                                                 
                                                                        ____________________________________
                            Print Name
____________________________________

____________________________________
 Principal Residence or Executive Office

                                                                         Taxpayer Identification Number
                                                                        ____________________________________

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EX-10

Registration Rights Agreement

Registration Rights Agreement

This Registration Rights Agreement (the "Agreement") is made and entered into as of the __ day of ______, 2003 (the "Effective Date") between Puroflow Incorporated, a Delaware corporation (the "Company"), and the parties set forth on the signature page and Exhibit A hereto (each, a "Purchaser" and collectively, the "Purchasers").

Recitals:

A.        The Purchasers have purchased shares of the Company's Common Stock, par value $0.15 per share (as defined below) pursuant to Subscription Agreements (each, a "Subscription Agreement" and collectively, the "Subscription Agreements") by and between the Company and each Purchaser.

B.         The Company and the Purchasers desire to set forth the registration rights to be granted by the Company to the Purchasers.

Now, Therefore, in consideration of the mutual promises, representations, warranties, covenants, and conditions set forth herein and in the Subscription Agreements, the parties mutually agree as follows:

Agreement:

1.         Certain Definitions: As used in this Agreement, the following terms shall have the following respective meanings:

"Business Day" means any day of the year, other than a Saturday, Sunday, or other day on which the Commission is required or authorized to close.

"Certificate of Incorporation" means the Certificate of Incorporation of the Company as filed with the Secretary of State of the State of Delaware, as the same may be amended from time to time.

"Commission" shall mean the Securities and Exchange Commission or any other federal agency at the time administering the Securities Act.

"Common Stock" shall mean the common stock, par value $0.15 per share, of the Company and any and all shares of capital stock or other equity securities of: (i) the Company which are added to or exchanged or substituted for the Common Stock by reason of the declaration of any stock dividend or stock split, the issuance of any distribution or the reclassification, readjustment, recapitalization or other such modification of the capital structure of the Company; and (ii) any other corporation, now or hereafter organized under the laws of any state or other governmental authority, with which the Company is merged, which results from any consolidation or reorganization to which the Company is a party, or to which is sold all or substantially all of the shares or assets of the Company, if immediately after such merger, consolidation, reorganization or sale, the Company or the stockholders of the Company own equity securities having in the aggregate more than 50% of the total voting power of such other corporation.

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"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission promulgated thereunder.

"Family Member" shall mean (a) with respect to any individual, such individual's spouse, any descendants (whether natural, adopted or in the process of adoption), any trust all of the beneficial interests of which are owned by any of such individuals or by any of such individuals together with any organization described in Section 501 (c)(3) of the Internal Revenue Code of 1986, as amended, the estate of any such individual, and any corporation, association, partnership or limited liability company all of the equity interests of which are owned by those above described individuals, trusts or organizations and (b) with respect to any trust, the owners of the beneficial interests of such trust.

"Form S-3" or "Form S-1" shall mean such form under the Securities Act as in effect on the date hereof or any registration form under the Securities Act subsequently adopted by the Commission, which permits inclusion or incorporation of substantial information by reference to other documents filed by the Company with the Commission.

"Holder" shall mean each Purchaser or any of such Purchaser's respective successors and Permitted Assigns who acquire rights in accordance with this Agreement with respect to the Registrable Securities directly or indirectly from such Purchaser, including from and Permitted Assignee.

"Permitted Assignee" shall mean (a) with respect to a partnership, its partners or former partners in accordance with their partnership interests, (b) with respect to a corporation, its shareholders in accordance with their interest in the corporation, (c) with respect to a limited liability company, its members or former members in accordance with their interest in the limited liability company, (d) with respect to an individual party, any Family Member of such party, (e) an entity that is controlled by, controls, or is under common control with a transferor, or (f) a party to this Agreement.

The terms "register", "registered" and "registration" refers to a registration effected by preparing and filing a registration statement in compliance with the Securities Act, and the declaration or ordering of the effectiveness of such registration statement.

"Registrable Securities" shall mean shares of Common Stock issued to each Purchaser pursuant to the Subscription Agreements, excluding (i) any Registrable Securities that have been publicly sold or may be sold immediately without registration under the Securities Act either pursuant to Rule 144 of the Securities Act or otherwise; (ii) any Registrable Securities sold by a person in a transaction pursuant to a registration statement filed under the Securities Act or (iii) any Registrable Securities that are at the time subject to an effective registration statement under the Securities Act.

"Securities Act" shall mean the Securities Act of 1933, as amended, or any similar federal statute promulgated in replacement thereof, and the rules and regulations of the Commission thereunder, all as the same shall be in effect at the time.

"S-3 Blackout Period" shall mean, with respect to a registration, a period not in excess of 90 calendar days in any calendar year during which the Company, in the good faith judgment of its Board of Directors, determines (because of the existence of, or in anticipation of, any acquisition, financing activity, or other transaction involving the Company, or the unavailability for reasons beyond the Company's control of any required financial statements, disclosure of information which is in its best interest not to publicly disclose, or any other event or condition of similar significance to the Company) that the registration and distribution of the Registrable Securities to be covered by such registration statement, if any, would be seriously detrimental to the Company and its shareholders.

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2.         Term. This Agreement shall continue in full force and effect for a period of two (2) year from the Effective Date.

3.         Registration.

(a)        Registration.  Not later that 180 days after the date hereof (the "Registration Filing Date"), the Company shall use its commercially reasonable best efforts to file a shelf registration statement on Form S-1 or, if the Company is eligible to use such form, Form S-3 (or such successor forms) relating to the resale by the Holders of all of the Registrable Securities; provided, however, that the Company shall not be obligated to effect any such registration, qualification or compliance pursuant to this Section 3(a), or keep such registration effective pursuant to Section 4: (i) in any particular jurisdiction in which the Company would be required to qualify to do business as a foreign corporation or as a dealer in securities under the securities or blue sky laws of such jurisdiction or to execute a general consent to service of process in effecting such registration. qualification or compliance. in each case where it has not already done so: or (ii) during any S-3 Blackout Period.

(b)        Piggyback Registration.  If the Company shall determine to register for sale for cash any of its Common Stock, for its own account or for the account of others (other than the Holders), other than a registration solely to employee benefit plans or securities issued or issuable to employees, consultants (to the extent the securities owned or to be owned by such consultants could be registered on Form S-8) or any of their Family Members (including a registration on Form S-8) the Company shall promptly give to the Holders written notice thereof (and in no event shall such notice be given less than 30 calendar days prior to the filing of such registration statement), and shall include in such registration (and any related qualification under blue sky laws or other compliance) (a "Piggyback Registration"), all of the Registrable Securities specified in a written request or requests, made within 20 calendar days after receipt of such written notice from the Company, by any Holder or Holders.  However, the Company may, without the consent of the Holders, withdraw such registration statement prior to its becoming effective if the Company or such other shareholders have elected to abandon the proposal to register the securities proposed to be registered thereby.

4.         Registration Procedures.  In the case of each registration, qualification or compliance effected by the Company pursuant to Section 3 hereof, the Company will keep each Holder including securities therein reasonably advised in writing as to the initiation of each registration, qualification and compliance and as to the completion thereof. At its expense with respect to any registration statement filed pursuant to Section 3, the Company will use its commercially reasonable best efforts to:         

(a)        prepare and file with the Commission with respect to such Registrable Securities, a registration statement on any form for which the Company then qualifies or which counsel for the Company shall deem appropriate, and which form shall be available for the sale of the Registrable Securities in accordance with the intended method(s) of distribution thereof, and use its commercial efforts to cause such registration statement to become and remain effective at least for a period ending with the first to occur of (i) the sale of all Registrable Securities covered by the registration statement, (ii) the availability under Rule 144 for the Holder to immediately, freely resell without restriction all Registrable Securities covered by the registration statement, and (iii) two years after a registration statement filed pursuant to Section 3(a) is declared effective by the Commission or 90 days after a firm commitment underwritten Piggyback Registration is declared effective by the Commission (in either case, the "Effectiveness Period"); provided that no later than five business days before filing with the Commission a registration statement or prospectus or any amendments or supplements thereto, including documents incorporated by reference after the initial filing of any registration statement, the Company shall (i) furnish to the underwriters, if any, and to one counsel ("Holders Counsel") selected by the Holders of a majority of the Registrable Securities covered by such registration statement copies of all such documents proposed to be filed (excluding any exhibits other than applicable underwriting documents), in substantially the form proposed to be filed, which documents shall be subject to the review of the underwriters and such counsel, and (ii) notify each Holder of Registrable Securities covered by such registration statement of any stop order issued or threatened by the Commission and take all reasonable actions required to prevent the entry of such stop order or to remove it if entered;

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(b)        if a registration statement is subject to review by the Commission, promptly respond to all comments and diligently pursue resolution of any comments to the satisfaction of the Commission;

(c)        prepare and file with the Commission such amendments and supplements to such registration statement and the prospectus used in connection therewith as may be necessary to keep such registration statement effective during the Effectiveness Period (but in any event at least until expiration of the 90-day period referred to in Section 4(3) of the Securities Act and Rule 174, or any successor thereto, thereunder, if applicable), and comply with the provisions of the Securities Act with respect to the disposition of all securities covered by such registration statement during such period in accordance with the intended method(s) of disposition by the sellers thereof set forth in such registration statement;

(d)        furnish, without charge, to each Holder one (1) signed copy of such registration statement (excluding any exhibits thereto other than applicable underwriting documents), each amendment and supplement thereto (including one (1) conformed copy to each Holder and one (1) signed copy to each managing underwriter and in each case including all exhibits thereto), and such number of copies of the prospectus included in such registration statement (including each preliminary prospectus and any other prospectus filed under Rule 424 under the Securities Act) as such Holders may request, in conformity with the requirements of the Securities Act, and such other documents as such Holder may reasonably request in order to facilitate the disposition of the Registrable Securities owned by such Holder, but only during the Effectiveness Period;

(e)        use its commercially reasonable best efforts to register or qualify such Registrable Securities under such other applicable securities or blue sky laws of such jurisdictions as any Holder, and underwriter, if any, of Registrable Securities covered by such registration statement reasonably requests as may be necessary for the marketability of the Registrable Securities (such request to be made by the time the applicable registration statement is deemed effective by the Commission) and do any and all other acts and things which may be reasonably necessary or advisable to enable such Holder and each underwriter, if any, in the case of a Piggyback Registration to consummate the disposition in such jurisdictions of the Registrable Securities owned by such Holder; provided that the Company shall not be required to (i) qualify generally to do business in any jurisdiction where it would not otherwise be required to qualify but for this paragraph (e), or, (ii) subject itself to taxation in any such jurisdiction;

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(f)         immediately notify each Holder of such Registrable Securities at any time when a prospectus relating thereto is required to be delivered under the Securities Act of the happening of any event which comes to the Company's attention if as a result of such event the prospectus included in such registration statement contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein not misleading and the Company shall promptly prepare and furnish to such Holder a supplement or amendment to such prospectus (or prepare and file appropriate reports under the Exchange Act) so that, as thereafter delivered to the purchasers of such Registrable Securities, such prospectus shall not contain an untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading, unless suspension of the use of such prospectus otherwise is authorized herein or in the event of an S-3 Blackout Period, in which case no supplement or amendment need be furnished (or Exchange Act filing made) until the termination of such suspension or S-3 Blackout Period; and

(g)        comply, and continue to comply during the period that such registration statement is effective under the Securities Act, in all material respects with the Securities Act and the Exchange Act and with all applicable rules and regulations of the Commission with respect to the disposition of all securities covered by such registration statement, and make available to its security holders, as soon as reasonably practicable, an earnings statement covering the period of at least twelve (12) months, but not more than eighteen (18) months, beginning with the first full calendar month after the effective date of such registration statement, which earnings statement shall satisfy the provisions of Section 11(a) of the Securities Act.

Each Holder of Registrable Securities agrees that, upon receipt of any notice from the Company of the happening of any event of the kind described in Section 4(f) hereof or of the commencement of an S-3 Blackout Period, such Holder shall discontinue disposition of Registrable Securities pursuant to the registration statement covering such Registrable Securities until such Holder's receipt of the copies of the supplemented or amended prospectus contemplated by Section 4(f) hereof or notice of the end of the S-3 Blackout Period, and, if so directed by the Company, such Holder shall deliver to the Company (at the Company's expense) all copies (including, without limitation, any and all drafts), other than permanent file copies, then in such Holder's possession, of the prospectus covering such Registrable Securities current at the time of receipt of such notice. In the event the Company shall give any such notice, the period mentioned. in Section 4(c) hereof shall be extended by the greater of (i) ten business days or (ii) the number of days during the period from and including the date of the giving of such notice pursuant to Section 4(f) hereof to and including the date when each Holder of Registrable Securities covered by such registration statement shall have received the copies of the supplemented or amended prospectus contemplated by Section 4(f) hereof.

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5.         Registration Expenses. The Company shall pay all expenses in connection with any registration, including, without limitation, all registration, filing, stock exchange and NASD fees, printing expenses, all fees and expenses of complying with securities or blue sky laws, the fees and disbursements of counsel for the Company and of its independent accountants, and the reasonable fees and disbursements of a Holders Counsel; provided that, in any underwritten registration, each party shall pay for its own underwriting discounts and commissions and transfer taxes. Except as provided above in this Section 5 and Section 8, the Company shall not be responsible for the expenses of any attorney or other advisor employed by a Holder of Registrable Securities.

6.         Assignment of Rights.  No Holder may assign its rights under this Agreement to any party without the prior written consent of the Company; provided, however, that a Holder may assign its rights under this Agreement without such restrictions to a Permitted Assignee.

7.         Information by Holder.  The Holder or Holders of Registrable Securities included in any registration shall furnish to the Company such information regarding such Holder or Holders and the distribution proposed by such Holder or Holders as the Company may request in writing.

8.         Indemnification.

(a)        In the event of the offer and sale of Registrable Securities held by Holders under the Securities Act, the Company shall, and hereby does, indemnify and hold harmless, to the fullest extent permitted by law, each Holder, its directors, officers, partners, consultants, each other person who participates as an underwriter in the offering or sale of such securities, and each other person, if any, who controls or is under common control with such Holder or any such underwriter within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, and expenses to which the Holder or any such director, officer, partner, consultant or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages, liabilities or expenses (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement of any material fact contained in any registration statement under which such shares were registered under the Securities Act, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, or any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein in light of the circumstances in which they were made not misleading, and the Company shall reimburse the Holder, and each such director, officer, partner, underwriter and controlling person for any legal or any other expenses reasonably incurred by them in connection with investigating, defending or settling any such loss, claim, damage, liability, action or proceeding; provided that the Company shall not be liable in any such case (i) to the extent that any such loss, claim, damage, liability (or action or proceeding in respect thereof) or expense arises out of or is based upon an untrue statement or omission from such registration statement, any such preliminary prospectus, final prospectus, summary prospectus, amendment or supplement in reliance upon and in conformity with written information furnished to the Company through an instrument duly executed by or on behalf of such Holder specifically stating that it is for use in the preparation thereof or (ii) if the person asserting any such loss, claim, damage, liability (or action or proceeding in respect thereof) who purchased the Registrable Securities that are the subject thereof did not receive a copy of an amended preliminary prospectus or the final prospectus (or the final prospectus as amended or supplemented) at or prior to the written confirmation of the sale of such Registrable Securities to such person because of the failure of such Holder or underwriter to so provide such amended preliminary or final prospectus and the untrue statement or alleged untrue statement or omission or alleged omission of a material fact made in such preliminary prospectus was corrected in the amended preliminary or final prospectus (or the final prospectus as amended or supplemented). Such indemnity shall remain in full force and effect regardless of any investigation made by or on behalf of the Holders, or any such director, officer, partner, underwriter or controlling person and shall survive the transfer of such shares by the Holder.

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(b)        As a condition to including any Registrable Securities to be offered by a Holder in any registration statement filed pursuant to this Agreement, each such Holder agrees to be bound by the terms of this Section 8 and to indemnify and hold harmless, to the fullest extent permitted by law, the Company, its directors and officers, its consultants, underwriters and each other person, if any, who controls the Company within the meaning of Section 15 of the Securities Act, against any losses, claims, damages or liabilities, joint or several, to which the Company or any such director, officer, consultant or underwriter or controlling person may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions or proceedings, whether commenced or threatened, in respect thereof) arise out of or are based upon any untrue statement or alleged untrue statement in or omission or alleged omission from such registration statement, any preliminary prospectus, final prospectus or summary prospectus contained therein, or any amendment or supplement thereto, if such statement or alleged statement or omission or alleged omission was made in reliance upon and in conformity with written information about such Holder as a Holder of the Company furnished to the Company by such Holder, and such Holder shall reimburse the Company, and each such director, officer, and controlling person for any legal or other expenses reasonably incurred by them in connection with investigating, defending, or settling any such loss, claim, damage, liability, action, or proceeding; provided, however, that such indemnity agreement found in this Section 8(b) shall in no event exceed the gross proceeds from the offering received by such Holder. Such indemnity shall remain in full force and effect, regardless of any investigation made by or on behalf of the Company or any such director, officer or controlling person and shall survive the transfer by any Holder of such shares.

(c)        Promptly after receipt by an indemnified party of notice of the commencement of any action or proceeding involving a claim referred to in Section 8(a) or (b) hereof (including any governmental action), such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party, give written notice to the indemnifying party of the commencement of such action; provided that the failure of any indemnified party to give notice as provided herein shall not relieve the -indemnifying party of its obligations under Section 8(a) or (b) hereof, except to the extent that the indemnifying party is actually prejudiced by such failure to give notice. In case any such action is brought against an indemnified party, unless in the reasonable judgment of counsel to such indemnified party a conflict of interest between such indemnified and indemnifying parties may exist or the indemnified party may have defenses not available to the indemnifying party in respect of such claim, the indemnifying party shall be entitled to participate in and to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, the indemnifying party shall not be liable to such indemnified party for any legal or other expenses subsequently incurred by the latter in connection with the defense thereof, unless in such indemnified party's reasonable judgment a conflict of interest between such indemnified and indemnifying parties arises in respect of such claim after the assumption of the defenses thereof or the indemnifying party fails to defend such claim in a diligent manner, other than reasonable costs of investigation. Neither an indemnified nor an indemnifying party shall be liable for any settlement of any action or proceeding effected without its consent. No indemnifying party shall, without the consent of the indemnified party, consent to entry of any judgment or enter into any settlement, which does not include as an unconditional term thereof the giving by the claimant or plaintiff to such indemnified party of a release from all liability in respect of such claim or litigation. Notwithstanding anything to the contrary set forth herein, and without limiting any of the rights set forth above, in any event any party shall have the right to retain, at its own expense, counsel with respect to the defense of a claim.

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(d)        In the event that an indemnifying party does or is not permitted to assume the defense of an action pursuant to Section 8(c) or in the case of the expense reimbursement obligation set forth in Section 8(a) and (b), the indemnification required by Section 8(a) and (b) hereof shall be made by periodic payments of the amount thereof during the course of the investigation or defense, as, and when bills received or expenses, losses, damages, or liabilities are incurred.

(e)        If the indemnification provided for in this Section 8 is held by a court of competent jurisdiction to be unavailable to an indemnified party with respect to any loss, liability, claim, damage or expense referred to herein, the indemnifying party, in lieu of indemnifying such indemnified party hereunder, shall (i) contribute to the amount paid or payable by such indemnified party as a result of such loss, liability, claim, damage or expense as is appropriate to reflect the proportionate relative fault of the indemnifying party on the one hand and the indemnified party on the other (determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission relates to information supplied by the indemnifying party or the indemnified party and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such untrue statement or omission), or (ii) if the allocation provided by clause (i) above is not permitted by applicable law or provides a lesser sum to the indemnified party than the amount hereinafter calculated, not only the proportionate relative fault of the indemnifying party and the indemnified party, but also the relative benefits received by the indemnifying party on the one hand and the indemnified party on the other, as well as any other relevant equitable considerations. No indemnified party guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any indemnifying party who was not guilty of such fraudulent misrepresentation.

(f)         Other Indemnification.  Indemnification similar to that specified in the preceding subsections of this Section 8 (with appropriate modifications) shall be given by the Company and each Holder of Registrable Securities with respect to any required registration or other qualification of securities under any federal or state law or regulation or governmental authority other than the Securities Act.

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9.         Miscellaneous

(a)        Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York and the United States of America, both substantive and remedial. Any judicial proceeding brought against either of the parties to this agreement or any dispute arising out of this Agreement or any matter related hereto may be brought in the courts of the State of New York or in the United States District Court for the Southern District of New York and, by its execution and delivery of this agreement, each party to this Agreement accepts the jurisdiction of such courts. The foregoing consent to jurisdiction shall not be deemed to confer rights on any person other than the parties to this Agreement.

(b)        Successors and Assigns. Except as otherwise provided herein, the provisions hereof shall inure to the benefit of, and be binding upon, the successors, Permitted Assigns, executors and administrators of the parties hereto. In the event the Company merges with, or is otherwise acquired by, a direct or indirect subsidiary of a publicly traded company, the Company shall condition the merger or acquisition on the assumption by such parent company of the Company's obligations under this Agreement.

(c)        Entire Agreement. This Agreement constitutes the full and entire understanding and agreement between the parties with regard to the subjects hereof.

(d)        Notices, etc.  All notices or other communications which are required or permitted under this Agreement shall be in writing and sufficient if delivered by hand, by facsimile transmission, by registered or certified mail, postage pre-paid, or by courier or overnight carrier, to the persons at the addresses set forth below (or at such other address as may be provided hereunder), and shall be deemed to have been delivered as of the date so delivered:

If to the Company:	Puroflow Incorporated Attention:  Rainer Bosselmann One Church Street; Suite 302 Rockville, Maryland  20850
If to the Purchasers:	To each Purchaser at the address set forth on Exhibit A

or at such other address as any party shall have furnished to the other parties in writing.

(e)        Delays or Omissions. No delay or omission to exercise any right, power or remedy accruing to any Holder of any Registrable Securities, upon any breach or default of the Company under this Agreement, shall impair any such right, power or remedy of such Holder nor shall it be construed to be a waiver of any such breach or default, or an acquiescence therein, or of or in any similar breach or default thereunder occurring; nor shall any waiver of any single breach or default be deemed a waiver of any other breach or default theretofore or thereafter occurring. Any waiver, permit, consent or approval of any kind or character on the part of any Holder of any breach or default under this Agreement, or any waiver on the part of any Holder of any provisions or conditions of this Agreement, must be in writing and shall be effective only to the extent specifically set forth in such writing. All remedies, either under this Agreement, or by law or otherwise afforded to any holder, shall be cumulative and not alternative.

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(f)         Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be enforceable against the parties actually executing such counterparts, and all of which together shall constitute one instrument.

(g)        Severability. In the case any provision of this Agreement shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

(h)        Amendments. The provisions of this Agreement may be amended at any time and from time to time, and particular provisions of this Agreement may be waived, with and only with an agreement or consent in writing signed by the Company and by the Holders.

This Registration Rights Agreement is hereby executed as of the date first above written.

COMPANY:

PUROFLOW INCORPORATED

By:                                          
Name:                                     
Its:                                           

PURCHASERS:
The Purchasers listed on Exhibit A attached
Hereto

BY: WINSLOW, EVANS & CROCKER INC.,

Agent and Attorney-in-fact

By:                                          
Name:                                     
Its:                                           

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Exhibit A

Purchaser Information

Name Address Number of Shares

12

EX-23

Exhibit 23.1

Consent of Independent Auditors

The Board Of Directors
Argan, Inc.

We consent to the incorporation by reference in the registration statement on Form S-3 (SEC File No. 333-109528) of Argan, Inc. (formerly Puroflow Incorporated) of: our report dated February 26, 2003, relating to the consolidated balance sheets of Argan, Inc. and subsidiaries at January 31, 2003 and 2002, and the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended, appearing in the Annual Report on Form 10-KSB of Argan, Inc. for the fiscal year ended January 31, 2003, as filed with the Commission on March 20, 2003; and our report dated February 26, 2003 (except as to Note 13, for which the date is January 21, 2004) relating to the consolidated balance sheets of Argan, Inc. and subsidiaries at January 31, 2003 and 2002, and the related consolidated statements of operations, stockholders' equity and cash flows for the years then ended, appearing in the Current Report on Form 8-K of Argan, Inc., dated January 27, 2004.  We also consent to the reference to us under the heading "Experts" in such registration statement. 

/s/ Rose, Snyder & Jacobs
 Rose, Snyder & Jacobs

Encino, California
January 28, 2004

EX-23

Exhibit 23.2

We consent to the incorporation by reference in the registration statement on Form S-3 of Argan, Inc. (formerly Puroflow Incorporated) of our report dated June 27, 2003 (except with respect to the matters discussed in Note 13, as to which the date is September 11, 2003), relating to the balance sheets of Southern Maryland Cable, Inc. as of December 31, 2002 and 2001, and the related statements of operations, stockholders' equity and cash flows for the years then ended, which report appears in the Form 8-K/A filed by Argan, Inc. with the Commission on September 24, 2003.  We also consent to the reference to us under the heading "Experts" in such Registration Statement. 

/s/ Sturn Wagner Lombardo & Company, LLC
      Sturn Wagner Lombardo & Company, LLC

Annapolis, Maryland
January 23, 2004