As filed with the Securities and Exchange Commission on January 12, 1999
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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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
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Common Stock (3).............. 105,000 $2.25 $236,250 $100
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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 January 8, 1999.
(3) Pursuant to Rule 429 under the Securities Act, the Prospectus included in
this Registration Statement also covers 5,061,286 shares of Common Stock
that were previously registered on Registration Statement No. 333-64891.
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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PROSPECTUS
January 12, 1999
5,166,286 Shares
Aviation General, Incorporated
Common Stock
The shareholders of Aviation General, Incorporated identified in this
Prospectus are offering and selling 5,166,286 shares of Aviation General common
stock.
The Selling Shareholders may offer their Aviation General stock through
public or private transactions, on or off the United States exchanges, at
prevailing market prices, or at privately negotiated prices.
Aviation General stock is traded on the Nasdaq SmallCap Market under
the symbol "AVGE." On January 11, 1999, the closing price of one share of
Aviation General stock on the Nasdaq Market was $2.625.
See "Risk Factors" beginning on page 4 for certain
information that should be considered by
prospective investors.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved 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 12, 1999.
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TABLE OF CONTENTS
Page
AVAILABLE INFORMATION.........................................................3
THE COMPANY...................................................................4
RISK FACTORS..................................................................4
History of Operating Losses and Accumulated Deficits; Uncertainty
Regarding Achievement of Profitability............................4
Dependence on Single Product Line; Limited Market..........................4
Dependence on Growth of Aviation Services Division.........................4
Competition................................................................4
Dependence on Suppliers....................................................4
Regulation.................................................................5
Insurance; No Product Liability Insurance..................................5
Control by Existing Shareholders...........................................5
Shares Eligible for Future Sale............................................5
No Dividends and None Anticipated..........................................5
Possible Volatility of Stock Price.........................................5
SELLING STOCKHOLDERS..........................................................6
PLAN OF DISTRIBUTION..........................................................6
LEGAL MATTERS.................................................................7
EXPERTS.......................................................................7
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AVAILABLE INFORMATION
Aviation General files annual, quarterly and special reports, proxy
statements and other information with the SEC. Aviation General's SEC filings
are available to the public over the Internet at the SEC's web site at
http://www.sec.gov. You may also read and copy any document Aviation General
files at the SEC's public reference rooms in Washington, D.C., New York, New
York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further
information on the public reference rooms.
The SEC allows Aviation General to "incorporate by reference" the
information it files with them. This Prospectus incorporates important business
and financial information about Aviation General which is not included in or
delivered with this Prospectus. The information incorporated by reference is an
important part of this Prospectus, and information that Aviation General files
later with the SEC will automatically update and supersede this information.
The following documents previously filed with the SEC by Aviation
General and Commander Aircraft Company, Aviation General'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. Aviation General's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1998;
4. The description of Aviation General's Common Stock contained
in the Proxy Statement/Prospectus included in Aviation
General's Registration Statement on Form S-4 under the
Securities Act (File No. 333-56731), filed with the Commission
on June 12, 1998;
5. Aviation General's Form 8-K filed with the Commission on
August 13, 1998; and
6. Any future filings made with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934
until all of the securities covered by this Registration
Statement are sold.
You may obtain a copy of these documents without charge, by writing or
telephoning Aviation General at the following address: 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 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. Aviation General 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 involve a high degree of risk. Prospective
investors should carefully consider the following risk factors inherent in and
affecting the business of Aviation General and the Shares prior to making an
investment in Aviation General.
History of Operating Losses and Accumulated Deficits; Uncertainty
Regarding Achievement of Profitability. Aviation General has incurred net losses
in each of its reported fiscal years since inception. Aviation General reported
net losses of $2.1 million for the year ended December 31, 1997 and $0.8 million
for the nine months ended September 30, 1998. Aviation General's accumulated
deficit through September 30, 1998 was $31.4 million. There is no assurance
Aviation General will ever achieve profitable operations.
Dependence on Single Product Line; Limited Market. Although Aviation
General 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, Aviation General would be adversely affected.
Dependence on Growth of Aviation Services Division. Aviation General is
in the process of expanding its aviation services division. This division is in
an early stage of development, however, and Aviation General is unable to
predict whether it will continue to grow and become profitable.
Competition. The general aviation aircraft industry is highly
competitive. Aviation General competes with established companies, most of which
have significantly greater financial, technical and marketing resources than
Aviation General. 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 Aviation General 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.
Aviation General purchases these components from approximately 140 independent
suppliers. Aviation General'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, Aviation General has sole or
limited source for supply. Aviation General acquires components from suppliers
on the basis of purchase order and has no long-term or fixed price contracts
with any supplier. Aviation General's ability to manufacture aircraft on an
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efficient and timely basis could be adversely affected by the ability or
willingness of its key suppliers to supply components on a timely basis.
Regulation. Aviation General 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.
Aviation General 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 Aviation General's product
internationally is subject to regulation by comparable agencies in foreign
countries.
Insurance; No Product Liability Insurance. Aviation General 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
Aviation General 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
Aviation General'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 Aviation General is also a
shareholder and the Managing Director of the general partner of Aviation
General's controlling shareholder.
Shares Eligible for Future Sale. Sales of substantial amounts of
Aviation General 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 Aviation General 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 Aviation General of
dividends, if any, in the future rests within the discretion of its Board of
Directors and will depend, among other things, upon Aviation General's earnings,
its capital requirements and its financial condition, as well as other relevant
factors. Aviation General has not paid or declared any dividends upon its stock
since its inception and does not contemplate or anticipate making any
distributions with respect to its stock in the foreseeable future.
Possible Volatility of Stock Price. Although Aviation General's stock
has been traded on the Nasdaq SmallCap Market since April 1993, the stock has
generally been traded on a limited basis and in small volumes. The trading price
for the stock may be significantly affected by such factors as the operating
results of Aviation General, 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
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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 Aviation General's stock.
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
KuwAm Corporation...................................... 174,000 105,000 69,000
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PLAN OF DISTRIBUTION
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).
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LEGAL MATTERS
Certain legal matters have been passed upon for Aviation General by
Dyer Ellis & Joseph PC, Washington, D.C.
EXPERTS
The financial statements of Aviation General 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.
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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 Aviation General. All the amounts
shown are estimates.
To Be Paid By
Registrant
SEC Filing fee $ 100
Printing and engraving expenses 1,000
Legal fees and expenses 1,000
Accounting fees and expenses 1,000
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Total $ 3,100
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 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
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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.
(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.
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(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 January 12, 1999.
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/ WIRK D. WALKER, III Chairman of the Board and January 12, 1999
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Wirt D. Walker, III Chief Executive Officer
/s/ STEPHEN R. BUREN Vice President, Chief Financial January 12, 1999
- -----------------------------
Stephen R. Buren Officer and Treasurer
Director January 12, 1999
- ---------------------------------
N. Gene Criss
/s/ MISHAL YOUSEF SAUD AL SABAH Director January 12, 1999
- -------------------------------
Mishal Yousef Saud Al Sabah
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Exhibit 5.1
January 12, 1999
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 5,166,286 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".
/s/ GRANT THORNTON LLP
GRANT THORNTON LLP
Oklahoma City, Oklahoma
January 11, 1999
