<PAGE> 1
As filed with the Securities and Exchange Commission on May 2, 1996
Registration No. 33-88708
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
GENERAL AUTOMATION, INC.
(Exact name of registrant as specified in its charter)
Delaware 95-2488811
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
17731 Mitchell North
Irvine, California 92714
(714) 250-4800
(Address, including zip code, and telephone number,
including area code, of principal executive offices)
Robert D. Bagby
17731 Mitchell North
Irvine, California 92714
(714) 250-4800
(Name, address, including zip code, and telephone
number, including area code, of agent for service)
Copy to:
Scott E. McConnell, Esq.
Higham, McConnell & Dunning
28202 Cabot Road, Suite 450
Laguna Niguel, California 92677-1250
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, 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/
<PAGE> 2
[COVER PAGE CONTINUED]
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CALCULATION OF REGISTRATION FEE
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<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum Amount
offering aggregate of
Title of securities Amount to be price per offering registration
to be registered registered share price(1) fee
====================================================================================================================================
<S> <C> <C> <C> <C>
Common Stock,
$.10 par value
per share 125,000 $0.5625 $70,313 $100.00(2)
====================================================================================================================================
</TABLE>
(1) The offering price is estimated pursuant to the provisions of Rule 457
solely for the purpose of calculating the registration fee (based on
the closing sale price for the Registrant's Common Stock on the
American Stock Exchange on January 19, 1995).
(2) Previously paid.
<PAGE> 3
P R O S P E C T U S
125,000 Shares
GENERAL AUTOMATION, INC.
Common Stock
This Prospectus relates to 125,000 shares of Common Stock (the
"Shares") of General Automation, Inc. (the "Company"). The Shares may be offered
and sold from time to time by and for the account of one or more of the
shareholders (the "Selling Shareholders") of the Company identified under the
caption "Selling Shareholders." The Company will receive no part of the proceeds
of such sales. The Company will bear all of the expenses incurred in connection
with the offer and sale of the Shares, other than any commissions, discounts or
fees of underwriters, dealers or agents.
The sale of the Shares by the Selling Shareholders may be effected from
time to time in one or more transactions (which may involve block transactions,
purchases by a broker or dealer as principal and resale by such broker or dealer
for its own account pursuant to this Prospectus, ordinary brokerage transactions
and transactions in which brokers solicit purchases) on the American Stock
Exchange, in special offerings, exchange distributions or secondary
distributions pursuant to and in accordance with the rules of such exchange, in
negotiated transactions or otherwise, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, or at negotiated
prices. In effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers selected by the Selling Shareholders may receive commissions or
discounts from the Selling Shareholders in amounts to be negotiated immediately
prior to sale (and which, as to a particular broker, may be in excess of
customary commissions). The Selling Shareholders and such brokers or dealers, or
any other participating brokers or dealers, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act") in connection with such sales.
The Company's Common Stock is traded on the American Stock Exchange. On
May 1, 1996, the closing price of the Company's Common Stock on the American
Stock Exchange was $2.94 per share.
AN INVESTMENT IN THE COMPANY'S COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK
FACTORS" BELOW.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE 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 May 3, 1996
<PAGE> 4
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"). These reports, proxy statements and
other information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices: 7 World Trade
Center, New York, New York 100048, and 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can also be obtained at prescribed rates
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Company's Common Stock is listed on the American
Stock Exchange. Reports, proxy statements and other information concerning the
Company can be inspected at The American Stock Exchange, Inc., 86 Trinity Place,
New York, New York 10006-1818.
The Company has filed a registration statement with the Commission with
respect to the Shares being offered under this Prospectus (the "Registration
Statement"). This Prospectus does not contain all of the information contained
in the Registration Statement, certain portions of which have been omitted
pursuant to the rules and regulations of the Commission.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
hereby incorporated by reference into this Prospectus:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended September 30, 1995, as amended by the amendment thereto
filed May 2, 1996.
(b) The Company's report on Form 10-Q for the quarter ended March
31, 1996.
(c) The description of the Company's Common Stock set forth in its
Registration Statement on Form 8-A, filed pursuant to Section
12 of the Exchange Act, including any amendments or reports
filed for the purpose of updating such description.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, after the date of this
Prospectus and prior to the termination of the offering covered by this
Prospectus, shall be deemed to be incorporated by reference into this Prospectus
from the respective dates of filing of such documents, except as to any portion
of any future Annual or Quarterly Report to Shareholders which is not deemed
filed under such provisions. For purposes of this Prospectus, any statement in a
document incorporated by reference herein shall be deemed to be modified or
superseded to the extent that a statement contained in this Prospectus or in any
other subsequently filed document which also is incorporated by reference, or in
a supplement or appendix to this Prospectus, modifies or supersedes a statement
in such document. Any statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
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<PAGE> 5
The Company will provide without charge to each person to whom a copy of this
Prospectus has been delivered, upon the written or oral request of such person,
a copy of any and all of the documents referred to above which have been or may
be incorporated in this Prospectus by reference, other than exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
the document which this Prospectus incorporates. Written or oral requests should
be directed to General Automation, Inc., 17731 Mitchell North, Irvine,
California 92714; Attention: Corporate Secretary; Telephone (714) 250-4800.
THE COMPANY
General Automation, Inc. (the "Company") was incorporated in California
in 1967 and reincorporated in Delaware in 1986. The Company integrates computer
systems and software and provides value-added services for application
solutions. The Company has positioned itself as a service and support company
offering open systems and complimentary software products to a worldwide network
of value-added resellers. The Company's product lines include a broad range of
hardware platforms including Intel and PowerPC based systems, providing a wide
range of systems, complimentary operating environments and value-added customer
services.
As of September 30, 1995, the end of the Company's most recently
completed fiscal year, the Company had an accumulated deficit of $42,501,000.
The Company's principal executive offices are located at 17731 Mitchell
North, Irvine California, and its telephone number is (714) 250-4800.
RISK FACTORS
Prospective purchasers of the Shares offered hereby should
consider, in addition to the information set forth elsewhere in this Prospectus
or incorporated herein by reference, the following risk factors concerning the
Company:
Recent Operating Losses. The Company has incurred losses
before extraordinary items in two of its last three, and three of its last five,
fiscal years. There can be no assurance that the Company will be able to achieve
or sustain profitable operations in the future.
Possible Loss of AMEX Listing. The Company's Common Stock is
listed on the American Stock Exchange (the "Exchange"). The delisting of the
Company's Common Stock on the Exchange could have a material adverse effect on
the market for, and the market price of, the Company's Common Stock, and a
material adverse effect on the ability of the Company to raise capital. In
determining whether a security warrants continued listing on the Exchange, the
Exchange does not rely on any precise mathematical formula. Rather, it considers
many factors, including the degree of investor interest in the issuer of the
security, the issuer's prospects for growth, and whether the security has
suitable characteristics for auction market trading. The Rules of the Exchange
state, however, that the Exchange will normally consider delisting a security if
any one of a number of events shall occur, including the following: (i) the
issuer has stockholders' equity of less than $4,000,000 and has sustained losses
from continuing operations in three of its four most recent fiscal years, or
(ii) the security has traded for a substantial period of time at a low price per
share. The Company has sustained losses before extraordinary items in three of
its last four fiscal years, and the Company's
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<PAGE> 6
stockholders' equity as of September 30, 1995, its most recent fiscal year-end,
was $771,000. Moreover, the Company's Common Stock has traded at less than $1.00
per share during most of the preceding two years. In 1995, the Company received
notice that the Exchange was reviewing the continued listing of the Company's
Common Stock. However, following discussions between the Company's management
and Exchange officials in November 1995, the Exchange informed the Company that
the Exchange would defer any delisting action pending a review of the Company's
performance over the ensuing two or three fiscal quarters. Since those
discussions, the revenues, results of operations and financial condition of the
Company have improved substantially, and the price of the Company's Common Stock
on the Exchange has increased significantly. Accordingly, the Company does not
believe that action will be taken by the Exchange to delist the Company's Common
Stock. The Company's management continues to be in frequent contact with
Exchange officials concerning these issues.
Technological Innovations; Decreasing Profit Margins. Competition in
the computer hardware market is intense and is characterized by constant
introduction of new, more cost effective products caused by rapid technological
advances. The Company in the past has been able to keep pace with these
technological changes. However, during the last approximately eighteen months,
it has become more apparent that the Company cannot continue to compete
effectively with its own hardware platforms, and has made the decision to focus
its resources on the integration and distribution of hardware products
engineered and manufactured by other companies, with value added features
provided by the Company, such as its R91 Post Relational Database Application
Environment, and full service and support. This change has resulted in a
decrease in the gross profit margins which the Company is able to achieve on its
hardware sales.
Instability of Service Revenues. During fiscal 1993, 1994 and 1995, the
Company's domestic service revenues have been $7,742,000, $7,121,000 and
$7,249,000, respectively. This relative instability in domestic service revenues
is due primarily to two factors. One such factor is the maturation of the
installed base of the Company's hardware products which, if not replaced by
Company hardware, often leads to service contracts being placed with another
service organization. The effect of this factor is heightened by the Company's
decision, as discussed above, to focus its resources on the integration and
distribution of hardware products engineered and manufactured by others, with
value added features provided by the Company, rather than the sale of the
Company's own hardware platforms. The second factor is the very aggressive
pricing policies of the Company's competitors.
Competition. The Company competes with a number of companies, many of
which have substantially greater financial, technological, marketing and other
resources than the Company. Such competitors include Data General Corporation,
Digital Equipment Corporation, Hewlett Packard Company, and International
Business Machines.
Cash Flow Constraints; Potential Need for Additional Financing. The
Company continues to operate under restricted cash resources. The Company has an
agreement with a lender for a revolving line of credit, not to exceed $800,000,
which is collateralized by domestic accounts receivable. The agreement is
renewable at six month intervals and bears interest at a rate of prime plus 6%,
but not less than 14%. In addition, there are other monthly costs for
maintaining the line of credit. Because the amount of credit available is
dependent upon accounts receivable levels, varying levels of domestic activity
could preclude full utilization of this credit facility, which might require
that the Company obtain financing from alternative sources. There can be no
assurance that the Company will be able to obtain financing from other sources
if necessary.
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<PAGE> 7
Dependence Upon Key Personnel. The Company is substantially dependent
upon the continuing services of Mr. Robert Bagby, the Company's President and
Chief Executive Officer, who is 63 years old, Mr. John R. Donnelly, the
Company's Vice President Finance and Chief Financial Officer, who is 61 years
old, and Jane Christie, the Company's Vice President, Customer Services, Sales
and Marketing, who is 44 years old.
Lack of Dividends. The Company has not previously paid dividends to its
shareholders, and does not anticipate doing so in the foreseeable future.
SELLING SHAREHOLDERS
All of the Shares offered by this Prospectus are being offered by the
Selling Shareholders for their own respective accounts. The following table sets
forth certain information as of May 1, 1996 with respect to the Selling
Shareholders and the shares of the Company's Common Stock which they
beneficially own:
<TABLE>
<CAPTION>
Percentage
of Class
Shares Owned Shares Shares Owned Owned
Name of Selling Prior to Covered by After the After
Shareholder Offering Prospectus Offering(1) Offering(1)
- ---------------- ------------ ---------- ------------ -----------
<S> <C> <C> <C> <C>
Robert Kramer 75,000 75,000 -0- 0%
Lawrence Michels(2) 764,833(3) 50,000 714,833(3) 9.0%
</TABLE>
(1) Assuming the sale of all of the Shares to which this Prospectus
relates.
(2) Mr. Michels is Chairman of the Board of Directors of the Company.
(3) Includes 535,000 shares subject to currently exercisable stock options.
PLAN OF DISTRIBUTION
The sale of the Shares by the Selling Shareholders may be effected from
time to time in one or more transactions (which may involve block transactions,
purchases by a broker or dealer as principal and resale by such broker or dealer
for its own account pursuant to this Prospectus, ordinary brokerage transactions
and transactions in which brokers solicit purchases) on the American Stock
Exchange, in special offerings, exchange distributions or secondary
distributions pursuant to and in accordance with the rules of such exchange, in
negotiated transactions or otherwise, at market prices prevailing at the time of
sale, at prices related to such prevailing market prices, or at negotiated
prices. In effecting sales, brokers or dealers engaged by the Selling
Shareholders may arrange for other brokers or dealers to participate. Brokers or
dealers selected by the Selling Shareholders may receive commissions or
discounts from the Selling Shareholders in amounts to be negotiated immediately
prior to sale (and which, as to a particular broker, may be in excess of
customary commissions). The Selling Shareholders and such brokers or dealers, or
any other participating brokers or dealers, may be deemed to be "underwriters"
within the meaning of the Securities Act of 1933, as amended (the "Securities
Act") in connection with such sales.
The Company has agreed to maintain the effectiveness of the
Registration Statement covering the Shares offered by this Prospectus until the
earlier of (i) November 17, 1996, or (ii) the sale of all of the Shares offered
hereby. The Company has also agreed to pay the fees and expenses incurred by it
in connection with the preparation and filing of the Registration Statement of
which this Prospectus is a part. However, the Selling Shareholders are
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<PAGE> 8
responsible for any commissions, discounts or fees of underwriters, brokers,
dealers or agents, and any transfer taxes applicable to the Shares sold pursuant
to this Prospectus.
EXPERTS
The financial statements incorporated in this Prospectus by reference
to the Annual Report on Form 10-K for the year ended September 30, 1995, have
been so incorporated in reliance on the report of Price Waterhouse LLP,
independent accountants, given on the authority of said firm as experts in
auditing and accounting.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Higham, McConnell & Dunning, 28202 Cabot Road,
Suite 450, Laguna Niguel, California 92677-1250.
-6-
<PAGE> 9
================================================================================
No dealer, salesman or other person has been authorized to give any
information or make any representations in connection with this offering other
than those contained in this Prospectus (including any Prospectus Supplement)
and, if given or made, such information or representations must not be relied
upon as having been authorized by the Company or by any of the Selling
Shareholders. This Prospectus (including any Prospectus Supplement) does not
constitute an offer to sell or a solicitation of an offer to buy any of these
securities in any state to any person to whom it is unlawful to make such offer
or solicitation in such state. The delivery of this Prospectus at any time does
not imply that the information contained herein is correct as of any time
subsequent to its date.
TABLE OF CONTENTS
Page
Available Information..... 2
Incorporation of Certain
Documents by Reference... 2
The Company............... 3
Risk Factors.............. 3
Selling Shareholders...... 5
Plan of Distribution...... 5
Experts................... 6
Legal Matters............. 6
================================================================================
================================================================================
125,000
Shares of
Common Stock
GENERAL AUTOMATION, INC.
PROSPECTUS
May 3, 1996
================================================================================
<PAGE> 10
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following sets forth the estimated amounts of expenses in
connection with the offering of the shares of Common Stock pursuant to this
Registration Statement, all of which shall be borne by the Company:
<TABLE>
<S> <C>
Securities and Exchange Commission Fee .......... $ 100
Accounting Fees and Expenses .................... $ 7,000
Legal Fees and Expenses ......................... $ 8,000
Miscellaneous Expenses .......................... $ 1,100
------
Total ............................. $16,200
======
</TABLE>
Item 15. Indemnification of Directors and Officers
Section 145 of the Delaware General Corporation Law makes
provision for the indemnification of officers and directors in terms
sufficiently broad to indemnify officers and directors under certain
circumstances from liabilities (including reimbursement for expenses
incurred) arising under the Securities Act of 1933. Indemnification
Agreements entered into by the Company and its officers and directors
provide that the Company shall indemnify its officers and directors to
the fullest extent permitted by law.
In addition, as permitted by Section 102(b)(7) of the Delaware
General Corporation Law, the Company's Certificate of Incorporation
provides that a director of the Company shall not be liable to the
Company or its shareholders for monetary damages for breach of the
director's fiduciary duty of care. However, as provided by Delaware
law, such limitation of liability will not act to limit liability (i)
for any breach of the director's duty of loyalty to the Company or its
shareholders, (ii) for any acts or omissions not in good faith or which
involve intentional misconduct or a knowing violation of law, (iii)
arising under the provisions of the Delaware General Corporation Law
relating to unlawful distributions, or (iv) for any transaction from
which the director derived an improper benefit.
Item 16. Exhibits
5 Opinion of Higham, McConnell & Dunning
23.1 Consent of Higham, McConnell & Dunning (included in Exhibit 5)
23.2 Consent of Price Waterhouse LLP
24 Power of Attorney (set forth on the signature page of this
Registration Statement)
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:
II-1
<PAGE> 11
(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 this Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represents a
fundamental change in the information set forth in this
Registration Statement;
(iii) to include any material information with
respect to the plan of distribution not previously disclosed
in this Registration Statement or any material change to such
information in the Registration Statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above 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 Company 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 this
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered herein, 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 or persons
controlling the Registrant pursuant to the provisions described under Item 15
above, 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 of
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 of 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.
II-2
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
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
Pre-Effective Amendment No. 3 to Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Irvine,
State of California, on the 1st day of May, 1996.
GENERAL AUTOMATION, INC.
By: /s/ ROBERT D. BAGBY *
---------------------------
Robert D. Bagby, President
and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 3 to Registration Statement has been signed by the
following persons in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ LAWRENCE MICHELS * Chairman of the Board May 1, 1996
- ------------------------
Lawrence Michels and Director
/s/ LEONARD N. MACKENZIE* Vice Chairman May 1, 1996
- ------------------------
Leonard N. Mackenzie and Director
/s/ ROBERT D. BAGBY * President, Chief May 1, 1996
- ------------------------
Robert D. Bagby Executive Officer and
Director
/s/ JOHN R. DONNELLY Chief Financial May 1, 1996
- ------------------------
John R. Donnelly Officer and
Principal Accounting
Officer
/s/ PHILIP T. NODEN * Director May 1, 1996
- ------------------------
Philip T. Noden
/s/ PAUL MORIGI * Director May 1, 1996
- ------------------------
Paul Morigi
/s/ ROBERT M. MCCLURE * Director May 1, 1996
- ------------------------
Robert M. McClure
* By: /s/ JOHN R. DONNELLY
------------------------
John R. Donnelly
Attorney-in-Fact
</TABLE>
S-1
<PAGE> 13
EXHIBIT INDEX
Exhibit No. Description
5 Opinion of Higham, McConnell &
Dunning*
23.1 Consent of Higham, McConnell &
Dunning (included in Exhibit 5)
23.2 Consent of Price Waterhouse LLP
24 Power of Attorney (set forth on the
signature page of this Registration
Statement)
- -----------------------------------
* Previously filed
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
December 19, 1995 appearing on page 27 of General Automation, Inc.'s Annual
Report on Form 10-K/A for the year ended September 30, 1995. We also consent to
the reference to us under the heading "Experts" in such Prospectus.
/s/ Price Waterhouse LLP
PRICE WATERHOUSE LLP
Costa Mesa, California
April 29, 1996
