As filed with the Securities and Exchange Commission on September 30, 1998
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
AVIATION GENERAL, INCORPORATED
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
Delaware 3721 73-1547635
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer
incorporation or organization) Classification Code Number) Identification Number)
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7200 Northwest 63rd Street
Bethany, Oklahoma 73008
(405) 495-8080
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
Wirt D. Walker, III
Chairman and Chief Executive Officer
Aviation General, Incorporated
7200 Northwest 63rd Street
Bethany, Oklahoma 73008
(405) 495-8080
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
Copies to:
John F. Kearney
Dyer Ellis & Joseph PC
600 New Hampshire Ave., NW
Washington, D.C. 20037
(202) 944-3000
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the Registration Statement becomes effective.
If any securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to rule
434, please check the following box. / /
CALCULATION OF REGISTRATION FEE
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Proposed Maximum Proposed Maximum
Title of Each Class of Amount To Be Offering Price Aggregate
Securities To Be Registered Registered Per Share (1) (2) Offering Price (2) Registration Fee
<S> <C> <C> <C> <C>
Common Stock (3).............. 5,061,286 $1.9375 $9,806,242 $2,893
============================== ====================== ====================== ====================== ==================
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(1) These figures are estimates made solely for the purpose of calculating the
registration fee pursuant to Rule 457(c).
(2) Proposed maximum offering price is based on the last sale price of the
Common Stock on the Nasdaq SmallCap Market on September 28, 1998.
(3) Registered for resale by certain Selling Stockholders.
The Registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a)
may determine.
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SUBJECT TO COMPLETION, DATED SEPTEMBER 30, 1998
PROSPECTUS
September 30, 1998
5,061,286 Shares
Aviation General, Incorporated
Common Stock
All of the 5,061,286 shares of Common Stock of Aviation General,
Incorporated (the "Company") offered hereby (the "Shares") are being offered by
the holders thereof (the "Selling Stockholders"). See "Selling Stockholders."
The Company will receive none of the proceeds from the sale of the Shares.
The Shares may be offered from time to time by the Selling
Stockholders, or by their pledgees, donees, transferees or other successors in
interest, in transactions (which may include block transactions) on the Nasdaq
SmallCap Market, the over-the-counter market, in private sales or negotiated
transactions, through the writing of options on Shares, or a combination of such
methods of sale, at fixed prices that may be changed, at market prices
prevailing at the time of sale, at prices related to such prevailing market
prices, or at negotiated prices. The Selling Stockholders may effect such
transactions by selling Shares to or through broker-dealers, and such
broker-dealers may receive compensation in the form of discounts, concessions,
or commissions from the Selling Stockholders and the purchasers of Shares for
whom such broker-dealers may act as agent or to whom they sell as principal, or
both (which compensation as to a particular broker-dealer may be in excess of
customary commissions).
The Common Stock is listed on the Nasdaq SmallCap Market. On September
28, 1998, the closing sale price of the Common Stock was $2.25 per share.
See "Risk Factors" beginning on page 5 for certain
information that should be considered by
prospective investors.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is September 30, 1998.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports and other information with the Securities and
Exchange Commission (the "Commission") and with the National Association of
Securities Dealers, Inc. (the "NASD"). Reports and other information filed by
the Company with the Commission can be inspected and copied at the Commission's
public reference facilities, 450 Fifth Street, N.W., Room 1024, Washington, D.C.
20549, as well as at the Commission's regional offices located at 7 World Trade
Center, New York, New York 10007 and Northwest Atrium Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Copies of such material may be
obtained from the Public Reference Section of the Commission at prescribed
rates. The Commission maintains an Internet web site that contains reports,
proxy and information statements, and other information regarding issuers that
file electronically with the Commission which is located at
(http://www.sec.gov). In addition, reports and other information concerning the
Company also may be inspected at the offices of the NASD, 1735 K Street, N.W.,
Washington, D.C.
20006.
The Company has filed with the Commission a Registration Statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the shares of Common Stock offered hereby. As permitted by the rules
and regulations of the Commission, this Prospectus omits certain information set
forth in the Registration Statement. The omitted information may be inspected
without charge at the offices of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of such information may be obtained upon
payment of the fees prescribed by the Commission. For further information
pertaining to the shares of Common Stock offered hereby, refer to the
Registration Statement, including the exhibits filed with it.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by the
Company and Commander Aircraft Company ("Commander"), the Company's predecessor,
are incorporated in this Prospectus by reference:
1. Commander's Annual Report on Form 10-K for the year ended
December 31, 1997.
2. Commander's Quarterly Reports on Form 10-Q for the quarters
ended March 31, and June 30, 1998.
3. The description of the Company's Common Stock contained in the
Proxy Statement/ Prospectus included in the Company's
Registration Statement on Form S-4 under the Securities Act
(File No. 333-56731), filed with the Commission on June 12,
1998.
4. The Company's Form 8-K filed with the Commission on August 13, 1998.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14, or 15(d) of the Exchange Act after the date of this Prospectus and prior to
the termination of the offering of the Shares shall be deemed to be incorporated
by reference in this Prospectus and to be a part hereof from the date of filing
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be deemed to be modified or superseded
for
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purposes of this Prospectus to the extent that a statement contained herein or
in any other subsequently filed document that also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus.
The Company will furnish without charge to each person to whom this
Prospectus is delivered, on the written or oral request of any such person, a
copy of any and all of the documents described above, other than exhibits to
such documents, unless such exhibits are specifically incorporated by reference
therein. Requests should be directed to: Aviation General, Incorporated, 7200
Northwest 63rd Street, Hanger 8 Wiley Post Airport, Bethany, Oklahoma 73008,
telephone (405) 495-8080.
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THE COMPANY
Aviation General, Incorporated (the "Company") manufactures, markets,
and provides support services for its line of single engine, high performance
aircraft through Commander Aircraft Company, a wholly owned subsidiary. These
aircraft include the Commander 114B, the turbo-charged Commander 114TC, and the
Commander 114AT all-purpose trainer. The Company also provides consulting and
brokerage services for single engine, twin engine, turboprop, and jet aircraft,
and aircraft refurbishment services including new paint, interiors, and avionics
through Commander Aircraft Company and another wholly owned subsidiary.
RISK FACTORS
The Shares offered hereby involves a high degree of risk. Prospective
investors should carefully consider the following risk factors inherent in and
affecting the business of the Company and the Shares prior to making an
investment in the Company.
History of Operating Losses and Accumulated Deficits; Uncertainty
Regarding Achievement of Profitability. The Company has incurred net losses in
each of its reported fiscal years since inception. The Company reported net
losses of $2.1 million for the year ended December 31, 1997 and $0.7 million for
the six months ended June 30, 1998. The Company's accumulated deficit through
June 30, 1998 was $31.3 million. There is no assurance the Company will ever
achieve profitable operations.
Dependence on Single Product Line; Limited Market. Although the Company
intends to expand its aviation services division, its success continues to be
dependent upon its ability to sell its single engine, high performance aircraft,
for which a limited market exists. Should there be a downturn in demand for
Commander aircraft in particular or for aircraft of the same class in general,
the Company would be adversely affected.
Dependence on Growth of Aviation Services Division. The Company is in
the process of expanding its aviation services division. This division is in an
early stage of development, however, and the Company is unable to predict
whether it will continue to grow and become profitable.
Competition. The general aviation aircraft industry is highly
competitive. The Company competes with established companies, most of which have
significantly greater financial, technical and marketing resources than the
Company. Sales of Commander aircraft also must compete with sales of used
aircraft and sales of new aircraft in other categories. There can be no
assurance that the Company will be able to achieve or maintain adequate market
share or sales.
Dependence on Suppliers. The manufacture of aircraft requires
dependence upon suppliers for delivery of engines, parts and sub-assemblies. The
Company purchases these components from approximately 140 independent suppliers.
The Company's production activities were substantially affected during the
start-up phase of production by difficulties in obtaining essential components
on a timely basis. In certain cases, the Company has sole or limited source for
supply. The Company acquires components from suppliers on the basis of purchase
order and has no long-term or fixed price contracts with any supplier. The
Company's ability to manufacture aircraft on an efficient and timely basis could
be adversely affected by the ability or willingness of its key suppliers to
supply components on a timely basis.
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Regulation. The Company is subject to regulation by the FAA under the
provisions of the Federal Aviation Act of 1958, as amended. The FAA prescribes
standards and licensing requirements for aircraft and aircraft components. The
costs of compliance with these requirements are significant. The Company is
subject to inspections by the FAA and may be subjected to fines and other
penalties (including orders to cease production) for noncompliance with FAA
regulations. The sale of the Company's product internationally is subject to
regulation by comparable agencies in foreign countries.
Insurance; No Product Liability Insurance. The Company carries most
types of insurance customary for a manufacturer of general aviation aircraft,
including coverage for general liability, property damage, aircraft loss or
damage, and worker's compensation, but does not carry product liability
insurance. There is no assurance that the amount of insurance carried by the
Company would be sufficient to protect it fully in the event of a serious
accident or liability claim, or that such insurance will continue to be
available on commercially reasonable terms.
Control by Existing Shareholders. Certain officers, directors and
affiliated persons as a group beneficially own approximately 89.8% of the
outstanding shares of Common Stock. Because of such share ownership, these
shareholders will continue to be able to control the election of all members of
the Company's Board of Directors and generally to determine corporate actions
unless and until the shareholders sell a substantial amount of such shares. The
Chairman and Chief Executive Officer of the Company is also a shareholder and
the Managing Director of the general partner of the Company's controlling
shareholder.
Shares Eligible for Future Sale. Sales of substantial amounts of Common
Stock in the public market, including shares covered by this Prospectus, or the
perception that such sales could occur may adversely affect prevailing market
prices for the Common Stock. Although substantial amounts of the shares covered
by this Prospectus have been eligible for public sale subject to compliance with
certain requirements of Rule 144 under the Securities Act of 1933, the fact that
they now have been registered for resale allows their holders to sell them in
greater quantities than they would have been able to under Rule 144.
No Dividends and None Anticipated. The payment by the Company of
dividends, if any, in the future rests within the discretion of its Board of
Directors and will depend, among other things, upon the Company's earnings, its
capital requirements and its financial condition, as well as other relevant
factors. The Company has not paid or declared any dividends upon its Common
Stock since its inception and does not contemplate or anticipate making any
distributions with respect to its Common Stock in the foreseeable future.
Possible Volatility of Stock Price. Although the Common Stock has been
traded on the Nasdaq SmallCap Market since April 1993, the Common Stock has
generally been traded on a limited basis and in small volumes. The trading price
for the Common Stock may be significantly affected by such factors as the
operating results of the Company, the United States and global economic
conditions, and various other factors generally affecting the general aviation
industry. Furthermore, the stock market has from time to time experienced
extreme price and volume fluctuations that have particularly affected the market
prices of the stocks of small companies traded on the Nasdaq SmallCap market.
These extreme fluctuations, which often have been unrelated to the operating
performance of any particular company or to any group of companies, may
adversely affect the market price of the Common Stock.
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SELLING STOCKHOLDERS
The following table includes the name of each Selling Stockholder, the
number of shares of Common Stock owned by each Selling Stockholder as of the
date of this Prospectus (including the shares to be acquired upon exercise of
the Warrants), the number of shares that may be sold by such Selling
Stockholder, and the number of shares that would be owned by each Selling
Stockholder assuming the sale of all of the shares offered hereby.
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Shares to be
Owned if All
Shares Shares Covered
Shares That May by this Prospectus
Name Owned Be Sold are Sold
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Special Situation
Investment Holdings, Ltd............................ 4,968,868 4,463,368 505,500
Special Situation
Investment Holdings, L.P. II........................ 373,000 235,000 138,000
Wirt D. Walker, III.................................... 334,000 142,590 191,410
Mishal Y. S. Al Sabah.................................. 246,828 200,328 46,500
Fifth Floor Company.................................... 161,500 20,000 141,500
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LEGAL MATTERS
Certain legal matters have been passed upon for the Company by Dyer
Ellis & Joseph PC, Washington, D.C.
EXPERTS
The financial statements of the Company as of December 31, 1996 and
1997 and for each of the three years in the period ended December 31, 1997
incorporated by reference in this Prospectus and the Registration Statement of
which it is part have been audited by Grant Thornton LLP, independent public
accountants, as indicated in their report with respect thereto, and are included
herein in reliance upon the authority of said firm as experts in giving said
reports.
7
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PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth all expenses payable in connection with
the registration of the Common Stock that is the subject of this Registration
Statement, all of which shall be borne by the Company. All the amounts shown are
estimates.
To Be Paid By
Registrant
SEC Filing fee $ 2,893
Printing and engraving expenses 1,000
Legal fees and expenses 5,000
Accounting fees and expenses 1,000
-------------
Total $ 9,893
Item 15. Indemnification of Directors and Officers.
The Company's Certificate of Incorporation and By-laws provide for
indemnification of directors, officers, agents, and employees to the fullest
extent permitted by law. Under Delaware law, a corporation may indemnify any
person who was or is a party or is threatened to be made a party to an action
(other than an action by or in the right of the corporation) by reason of his
service as a director or officer of the corporation, or his service, at the
corporation's request, as a director, officer, employee, or agent of another
corporation or other enterprise, against expenses (including attorneys' fees)
that are actually and reasonably incurred by him ("Expenses"), and judgments,
fines and amounts paid in settlement that are actually and reasonably incurred
by him, in connection with the defense or settlement of such action, provided
that he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the corporation's best interests and, with respect to any
criminal action or proceeding, had no reasonable cause to believe that his
conduct was unlawful. Although Delaware law permits a corporation to indemnify
any person referred to above against Expenses in connection with the defense or
settlement of an action by or in the right of the corporation, provided that he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the corporation's best interests, if such person has been judged
liable to the corporation, indemnification is only permitted to the extent that
the Court of Chancery (or the court in which the action was brought) determines
that, despite the adjudication of liability, such person is entitled to
indemnity for such Expenses as the court deems proper. The determination as to
whether a person seeking indemnification has met the required standard of
conduct is to be made (1) by a majority vote of a quorum of disinterested
members of the board of directors, or (2) by independent legal counsel in a
written opinion, if such a quorum does not exist or if the disinterested
directors so direct, or (3) by the stockholders. The General Corporation Law of
the State of Delaware also provides for mandatory indemnification of any
director, officer, employee or agent against Expenses to the extent such person
has been successful in any proceeding covered by the statute. In addition, the
General Corporation Law of the State of Delaware provides the general
authorization of advancement of a director's or officer's litigation expenses in
lieu of requiring the authorization of
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such advancement by the board of directors in specific cases, and that
indemnification and advancement of expenses provided by the statute shall not be
deemed exclusive of any other rights to which those seeking indemnification or
advancement of expenses may be entitled under any by-law, agreement or
otherwise.
Item 16. Exhibits.
(a) The following is a list of exhibits furnished:
5.1 Opinion of counsel as to legality of securities being registered.
23.1 Consent of counsel (contained in opinion of counsel filed as Exhibit
5.1).
23.2 Consent of Grant Thornton LLP.
24.1 Power of Attorney (contained on Page II-4)
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 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.
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(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 offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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 foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer, or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act 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 registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in Bethany, Oklahoma on September 30, 1998.
Aviation General, Incorporated
By:/s/ WIRT D. WALKER, III
Wirt D. Walker, III
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Aviation General,
Incorporated, hereby severally constitute and appoint Michael Joseph and John F.
Kearney, and each of them, our true and lawful attorneys-in-fact and agents,
with full power of substitution and re-substitution, for us and in our stead, in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement and all documents relating thereto,
and to file the same, with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing necessary or advisable to be done in
and about the premises, as fully as he might or could do in person, hereby
ratifying and confirming all that said attorneys-in-fact and agents, or any of
them, or their substitute or substitutes, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
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Signature Title Date
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/s/ WIRT D. WALKER, III Chairman of the Board and September 30, 1998
- --------------------------
Wirt D. Walker, III Chief Executive Officer
/s/ STEPHEN R. BUREN Vice President, Chief Financial September 30, 1998
- -----------------------------
Stephen R. Buren Officer and Treasurer
/s/ N. GENE CRISS Director September 30, 1998
- -----------------
N. Gene Criss
/s/ MISHAL YOUSEF SAUD AL SABAH Director September 30, 1998
- -------------------------------
Mishal Yousef Saud Al Sabah
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II-4
Exhibit 5.1
September 30, 1998
Aviation General, Incorporated
720 N.W. 63rd Street
Hanger 8, Wiley Post Airport
Bethany, Oklahoma 73008
Ladies and Gentlemen:
We have acted as counsel for Aviation General, Incorporated, a Delaware
corporation (the"Company"), in connection with the offer and sale, pursuant to
the Company's registration statement on Form S-3 (the "Registration Statement"),
of up to 5,061,286 shares of its Common Stock, par value $0.50 per share (the
"Shares") by certain stockholders of the Company. Based upon our examination of
such corporate records and other documents and such questions of law as we have
deemed necessary and appropriate, we are of the opinion that the Shares, when
sold as provided for in the Registration Statement, will be validly issued,
fully paid, and non-assessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
Dyer Ellis & Joseph PC
Exhibit 23.2
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our report dated February 6, 1998, accompanying the
financial statements of Commander Aircraft Company included in the Annual Report
of the Company to its shareholders on Form 10-K for the year ended December 31,
1997 which is incorporated by reference in this Registration Statement. We
consent to the incorporation by reference in the Registration Statement on Form
S-3 of the aforementioned report and to the use of our name as it appears under
the caption "Experts".
GRANT THORNTON LLP
Oklahoma City, Oklahoma
September 29, 1998
