<PAGE>
As filed with the Securities and Exchange Commission on September 27, 1996
Registration No. 333-___________________________
Securities and Exchange Commission
Washington, D.C. 20549
Form S-3
Registration Statement Under
The Securities Act of 1933
LUNN INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
Delaware 11-1581582
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization) Identification No.)
1 Garvies Point Road, Glen Cove, New York 11542-2828
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 671-9000
Lawrence Schwartz
Lunn Industries, Inc.
1 Garvies Point Road
Glen Cove, New York 11542
(Name, address, including Zip Code and telephone number
including area code of agent for service)
With a Copy to:
Lawrence A. Muenz, Esq.
Muenz & Meritz, P.C.
Three Hughes Place
Dix Hills, New York 11746
Approximate date of proposed sale to the public: As soon as practicable after
this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment, 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]
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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
Title of each Proposed Proposed
class of maximum maximum Amount of
securities to Amount to be offering price aggregate registration
be registered registered per unit offering price fee
_______________________________________________________________________________
Common Stock 6,017,666 $1.0625 (1) $6,393,770 $2,205
Directors' Warrants 50,000 $1.50 (2) $ 75,000 $ 26
Directors' Warrants 30,000 $4.37 (2) $ 131,100 $ 45
Selling Agents'
Warrants 884,163 $.40 (2) $ 353,665 $ 122
Lenders Warrants 112,500 $.50 (2) $ 56,250 $ 19
Lenders Warrants 500,000 $.84 (2) $ 420,000 $ 145
Miscellaneous
Warrants 20,000 $.50 (2) $ 10,000 $ 3
Convertible Note 1,145,000 $.40 (2) $ 458,000 $ 158
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Total Registration Fee $2,723
____________________________________________
(1) Estimated solely for purposes of calculating the registration fee in
accordance with Rule 457(c) of the regulations promulgated under
Securities Act of 1933 and based upon the average of the high and low
sale prices of Common Stock as reported by the Nasdaq SmallCap Market on
September 25, 1996.
(2) Price calculated in accordance with Rule 457(g) of the regulations
promulgated under Securities Act of 1933
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN OR CONTAINED IN THIS PROSPECTUS IN CONNECTION
WITH THE OFFERING MADE BY THIS PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER
TO SELL, OR A SOLICITATION OF AN OFFER TO BUY THE SECURITIES OFFERED HEREBY,
IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE AN OFFER OR
SOLICITATION. EXCEPT WHERE OTHERWISE INDICATED, THIS PROSPECTUS SHALL NOT,
UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
8,759,329 shares
Common Stock
LUNN INDUSTRIES, INC.
Date: September 27, 1996
___________________________________________
Page
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Available Information ................................... 3
Documents Incorporated by Reference...................... 3
The Company.............................................. 5
Prospectus Summary....................................... 5
Use of Proceeds.......................................... 10
Capitalization........................................... 10
Risk Factors............................................. 6
Selling Shareholders..................................... 12
Manner of Distribution................................... 13
Description of Securities................................ 14
Experts.................................................. 17
Legal Matters............................................ 17
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INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
LUNN INDUSTRIES, INC.
6,017,666 SHARES OF COMMON STOCK
OFFERED BY THE SELLING SHAREHOLDERS
1,596,663 SHARES OF COMMON STOCK
ISSUABLE UPON THE EXERCISE OF CERTAIN OUTSTANDING WARRANTS
1,145,000 SHARES OF COMMON STOCK
ISSUABLE UNDER THE TERMS OF A CONVERTIBLE NOTE
This Prospectus ("Prospectus") relates to 6,017,666 shares (such shares referred
to herein as the "Shareholder Securities") of Common Stock, par value $.01 per
share ("Common Stock" or "Shares") of Lunn Industries, Inc., a Delaware
corporation (the "Company") offered by the Shareholders of the Company named
under "Selling Shareholders" (the "Selling Shareholders"). The Shares may be
offered by the Selling Shareholders from time to time in transactions in the
over-the-counter market, in negotiated transactions or a combination of such
methods of sale at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices. This
Prospectus also relates to the sale by the Company of 1,596,663 shares of Common
Stock issuable upon the exercise of certain outstanding warrants issued by the
Company and to the sale by the Company of 1,145,000 shares of Common Stock
issuable under the terms of a convertible note. [See "Description of
Securities."] On September 25, 1996, the mean price per share of the Common
Stock on the supplemental market system, for small cap issues as reported by the
National Association of Securities Dealers' Automated Quotation System
("NASDAQ") was $1.0625. The Selling Shareholders may effect such transactions
by selling the Shares to or through broker-dealers, and such broker-dealers may
receive compensation in the form of discounts, concessions or commissions from
the Selling Shareholders and/or the purchasers of the Shares for whom such
broker-dealers may act as agents or to whom they sell as principals, or both.
[See "Selling Shareholders" and "Manner of Distribution"]
None of the proceeds from the sale of the Shares by the Selling Shareholders
will be received by the Company. The Company has agreed to bear all expenses
(other than selling discounts, concessions or commissions) in connection with
the registration and sale of the Shares being offered by the Selling
Shareholders against certain liabilities, including certain liabilities under
the Securities Act of 1933, as amended (the "Securities Act").
For a discussion of the material risks that may be involved in investing in the
Shares, see "Risk Factors."
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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 27, 1996
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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 Annual, Quarterly and Current Reports (on Forms 10-KSB, 10-QSB
and 8-K, respectively), proxy statements utilized in the solicitation of votes
of shareholders as well as other information. Information filed by the Company
under the Exchange Act can be inspected and copied at the public reference
facilities maintained by the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's Regional office at 75 Park Place,
14th Floor, New York, New York 10007. Copies of such material can be obtained
from the Public Reference section of the Commission, Washington, D.C. at
prescribed rates.
The Prospectus constitutes a part of a Registration Statement on Form S-3
(together with any amendments thereto, the "Registration Statement") filed with
the Commission under the Securities Act relating to the Shares offered hereby.
This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto, certain portions
of which have been omitted in accordance with the rules and regulations of the
Commission. Statements contained in this Prospectus as to the contents of any
contract or any other document are not necessarily complete, and in each
instance reference is made to such copy of such contract or other document filed
as an exhibit and schedules thereto. For further information regarding the
Company and the Common Stock offered hereby, reference is hereby made to such
Registration Statement and such exhibits and schedules, which may be inspected
without charge at the office of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and copies of which may be obtained from the Commission
upon payment of the fees prescribed by the Commission.
DOCUMENTS INCORPORATED BY REFERENCE
In accordance with the requirements of the Exchange Act, the Company
periodically files certain reports and other information with the Commission.
The following documents filed with the Commission are hereby incorporated in
this Prospectus by reference:
1. The Company's Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1995;
2. The Company's Quarterly Report on Form 10-QSB/A Amendment 1 for the
fiscal quarter ended March 31, 1996;
3. The Company's Definitive Proxy Statement dated August 28, 1995 in
connection with the solicitation of proxies for the annual meeting
of the Company's shareholders held on September 29, 1995;
5. The Company's Report on Form 10-C dated April 3, 1996.
6. The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended June 30, 1996;
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All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 of 15(d) of the Exchange Act after the date hereof and prior to the
termination of the offering of the Shares shall be deemed to be incorporated by
reference herein and to be a part hereof from the date of filing of 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 purposes of this Prospectus to the extent that a statement contained in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such 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 provide, without charge, to each person to whom a
Prospectus is delivered, on the written or oral request of any such person, a
copy of any or all of the documents incorporated by reference herein, other than
exhibits to such documents, unless such exhibits are specifically incorporated
by reference in such documents. Such requests should be addressed to Lunn
Industries, Inc.,1 Garvies Point Road, Glen Cove, New York 11542, Attention:
Lawrence Schwartz, Vice President, (516) 671-9000.
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<PAGE>
THE COMPANY
The Company is a corporation organized under the laws of the State of
Delaware in 1948. The Company has two primary operating divisions, Lunn
Composites and Alcore, Inc. ("Alcore"), a wholly owned subsidiary. Lunn
Composites manufactures a variety of complex composite structures made from
fiber glass, graphite, Kevlar and other fabric materials impregnated with
polyester, epoxy and other resins, as well as a wide variety of metal bonded
assemblies utilizing aluminum honeycomb, foam and other core and skin materials.
Alcore manufactures aluminum honeycomb products with a variety of strengths,
densities, thicknesses, span lengths, core orientations and contoured shapes for
commercial aircraft, aerospace, transportation and construction applications.
Markets for the Company's products include the aircraft, defense,
transportation, electronics and various industrial industries. The principal
executive offices of the Company are located at 1 Garvies Point Road, Glen Cove,
New York 11542. The Company's main telephone number is: (516) 671-9000.
PROSPECTUS SUMMARY
The information in this summary is qualified in its entirety by reference
to the information appearing elsewhere in this Prospectus and in the documents
incorporated herein by reference.
THE OFFERING
Common Stock offered by the Selling The Selling Shareholders who are
Shareholders . . .identified under "Selling Shareholders"
are registering 6,017,666 shares of
Common Stock. These shares of Common
Stock were issued by the Company in
various transactions.
Common Stock Issuable upon Exercise The Company is registering 1,596,663
of Warrants currently exercisable . . . shares of Common Stock issuable upon
the exercise of outstanding Warrants
issued by the Company at various times.
See "Description of Securities."
Common Stock Issuable under theThe Company is registering 1,145,000
terms of a Convertible Noteshares of Common Stock issuable under
the terms of a Convertible Note dated
January 17, 1995. See "Description of
Securities".
Securities Outstanding . . .As of September 18, 1996, 11,396,859
shares of Common Stock, warrants to
purchase 1,596,663 shares of Common
Stock, stock options to purchase
641,006 shares of Common Stock, and
1,145,000 shares of Common Stock that
may be issued under a convertible note.
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<PAGE>
RISK FACTORS
The securities offered hereby are speculative and involve a high degree
of risk, including, but not necessarily limited to the risk factors described
below. Each prospective investor should carefully consider the following risk
factors inherent in and affecting the business of the Company before making an
investment decision.
Financing Arrangements
During December 1995 the Company entered into a new two year $3.5 Million
credit facility with Gibraltar Corporation to replace the Company's present line
of credit with Fleet Bank. The new facility consists of a $2.75 Million
revolving line of credit and a $750 Thousand term loan. The revolving line of
credit bears interest at a rate of prime plus 2%, is subject to borrowing base
calculations set forth in the credit facility agreement and is collateralized by
substantially of the Company's inventory and accounts receivable assets. The
term loan bears interest at a rate of prime plus 2%, is amortized over
thirty-six months commencing February 1, 1996, and is collateralized by
substantially all of the Company's fixed assets. The amortization schedule
requires six monthly payments of $30 Thousand, six monthly payments of $25
Thousand, twelve monthly payments of $23 Thousand, eleven monthly payments of
$12 Thousand and a final monthly payment of the balance due.
The availability of credit as of December 31, 1995 based on borrowing base
calculations was $835 Thousand. The Company is in full compliance with all
credit facility covenants.
Simultaneous with the Company obtaining the new credit facility in
December 1995, the Company entered into an agreement with Fleet Bank to repay
the $3.189 Million loan balance by making a one-time payment of $1.961 Million,
issuing of a warrant valid for ten years to purchase 500,000 shares of the
Company's common stock at 75% of the current market price at the time of
exercise, or $1.00 per share, whichever is less, and a payment of $300 Thousand
in March 1996.
Approximately $154 Thousand of the $200 Thousand balance of the bridge
loan was repaid in March 1996, with approximately $46,000 converted to equity.
The Company believes it has sufficient capital resources to operate
successfully over the next twelve months. The Company's operating plan for 1996
calls for approximately $700 Thousand in capital improvements and enhancements
to equipment and facilities located in New York and Maryland to support
increased production, provide environmental process control and continue to meet
environmental compliance requirements. The Company believes that operating cash
flow adjusted for depreciation will be sufficient to support its capital needs.
However, should circumstances arise effecting cash flow or require additional
capital expenditures beyond those anticipated by the Company, there can be no
assurance that such funds will be available. [See "Forward Looking Statements -
Cautionary Factors"]
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Dependence on Principal Customers Industry Concentration
Military business in 1995 represented approximately 29% of the Company's
consolidated sales compared to approximately 45% in 1994. With the purchase of
the assets of the metal bonded business and consolidation of the fiber
reinforced composite businesses into the Glen Cove facility subsequent to
December 31, 1994, military sales represent a declining share of the Company's
total sales. Aerospace and aircraft business represented approximately 55% of
1995 consolidated sales, with industrial, transportation and construction
representing the remaining 16%. Aerospace and aircraft are projected to
represent increasing percentages of the Company's sales in future years due to
the addition of the metal bonded business. Industrial, transportation and
construction are also expected to represent increasing percentages of the
Company's sales due primarily to diversification of honeycomb sales into these
markets.
The backlog as of December 31, 1995 was $13.6 Million compared to $8.3
Million as of the end of 1994, subsequently increased to $18.4 Million as of
August 31, 1996. Approximately $5.3 Million of backlog as of August 31, 1996
is anticipated to be released for shipment within the remaining portion of
fiscal 1996, as compared to $4.9 Million that was released for shipment during
the same period in 1995.
In 1995 the Company had one (1) identified customer who represented
greater than 10% of sales. The customer is :
U.S. Government $1,783,949 (12.1%)
In 1994 the Company had two (2) identified customers who represented
greater than 10% of sales. They were:
Raytheon $2,054,000 (13.5%)
U.S. Government $1,793,000 (11.8%)
The Company believes the loss of any of its principal customers could have
a materially adverse effect on the Company's business. Each of the Company's
prime contracts with an agency of the U. S. Government is terminable by that
agency without cause after having paid normal cancellation and termination
claims as authorized in the terminated contract. In the event of termination by
a U. S. Government agency of a prime contract for which the Company is a
subcontractor, the prime contractor can, in turn, terminate the subcontract with
the Company again subject to payment of termination claims. [See "Forward
Looking Statements - Cautionary Factors"]
Competition
The market for the Company's products is highly competitive. The Company
competes with a number of companies engaged in supplying honeycomb and composite
materials, a few of which possess substantially greater financial, marketing,
personnel and other resources than the Company. The Company competes on the
basis of price, quality, timely delivery and the ability to manufacture
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<PAGE>
products to very exacting specifications. There can be no assurance that the
Company will be able to compete successfully in the future. [See "Forward
Looking Statements - Cautionary Factors"]
Personnel and Marketing Capabilities
The Company's growth prospects will be largely dependent upon the Company'
s ability to achieve greater penetration of the commercial markets for its
composites and honeycomb products. Achieving market penetration will require
significant efforts and resources by the Company to create awareness of and
demand for the Company's services and products. The Company has limited
marketing capabilities and resources. To date, substantially all of the
Company's marketing activities have been conducted by sales representatives and
members of management. Accordingly, the Company's ability to build its client
base will be limited by the resources devoted to marketing its products and
services and will be dependent on the efforts of marketing and executive
personnel. [See "Forward Looking Statements - Cautionary Factors"]
Expansion Risks
There can be no assurance that the Company will be able to expand its
operations successfully. Expansion of the Company's operations will be
dependent on, among other things, its ability to obtain new contracts for
composite and honeycomb materials (through competitive bidding or otherwise),
retain skilled management and other personnel, secure adequate sources of supply
on commercially reasonable terms, successfully manage growth and the
availability of adequate financing. The Company may also seek to expand its
operations through acquisitions. As of the date of this Prospectus, the Company
has no agreements, understandings or commitments and is not engaged in any
significant negotiations relating to any potential acquisitions. There can be
no assurance that the Company will effect any acquisition or that if the Company
is able to effect any acquisitions that it will be able to successfully
integrate into its operations any newly acquired business. [See "Forward
Looking Statements - Cautionary Factors"]
No Dividends.
The Company has paid no cash dividends on its Common Stock and does not
anticipate paying any cash dividends in the foreseeable future. Under the terms
of a forbearance agreement between the Company and its bank, the company is
prohibited from making any dividend, distribution, redemption or other transfer
to holders of its Common Stock until the Company's indebtedness to its bank has
been satisfied.
Volatility: Price of Common Stock
The market price of the Company's Common Stock has been, and may in the
future be, highly volatile. Factors such as the Company's operating results,
prospects for the Company's products or services or developments at the
Company's competitors as well as changes in the defense and aircraft industry
could have a significant impact on the market price of the Company's Common
Stock. Further, in recent years, the securities markets have experienced a high
level of price and volume volatility and the market price of securities for many
companies, particularly emerging growth
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<PAGE>
companies, have experienced wide fluctuations which have not been necessarily
related to the operating performance of such companies.
Lack of Patent Protection
The Company relies on proprietary know-how and trade secrets and employs
various methods to protect such know-how and trade secrets, which include
confidentiality agreements with its employees. However, such methods may not
afford complete protection and there can be no assurance that others will not
independently develop such know-how or trade secrets. The patents for the
Company's phosphoric acid anodized core aluminum honeycomb products expired in
1994. The Company does not believe the expiration of such patents will have a
material adverse effect on its business.
Registration Rights and Shares Eligible for Future Sale
No prediction can be made as to the effect that sales of the previously
restricted shares or shares currently exercisable pursuant to outstanding
warrants or options may have on the prevailing market prices of the Company's
Common Stock. Sales of substantial amounts of Common Stock in the public
markets could adversely affect prevailing market prices and could impair the
Company's ability to raise additional capital through its sale of equity
securities.
On March 31, 1994, the Company consummated the sale of 2,400,000
unregistered shares of its Common Stock for $.60 per share. Pursuant to the
terms of such offering, the holders of a majority of such shares and the shares
underlying the Selling Agents' Warrants, commencing July 1, 1994, can demand
that the Company file a registration statement with respect to such shares under
certain conditions.
On March 21, 1996, the Company consummated the sale of 3,500,000
unregistered shares of its Common Stock for $.40 per share. Pursuant to the
terms of such offering, the holders of a majority of such shares and the shares
underlying the Selling Agents' Warrants, following the filing of the Company's
Annual Report (Form 10-KSB) for the Company's fiscal year ended December 31,
1995 and the Company's Quarterly Report (Form 10-QSB) for the Company's fiscal
quarter ended March 31, 1996 with the Securities and Exchange Commission, can
demand that the Company file a registration statement with respect to such
shares under certain conditions.
Forward Looking Statements - Cautionary Factors
Except for the historical information and statements contained in this
Report, the matters and items set forth in this Report are forward looking
statements that involve uncertainties and risks some of which are discussed at
appropriate points in the Report and are also summarized as follows:
1. The U.S. Government is a significant customer of the Company representing
12.1 percent of its revenue. With the continuing pressure to reduce government
spending, in addition to the world-wide political climate creating an
environment of less visible military threats to the United States, the
de-emphasis in military spending is expected to continue. This could
potentially have a material
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adverse effect on future projects upon which the Company's backlog is based, and
upon programs the Company is pursuing.
2. Continued consolidation of major aerospace companies could result in program
cancellations as well as increased demand for price concessions. This together
with increased competition for available business could translate into downward
pressure on gross margins with resulting lower overall profit margins.
3. Vendor prices for production materials such as aluminum foil, resins, liquid
and film adhesives, reinforcing fiber materials and other materials and supplies
could increase as demand for aircraft parts and assemblies increase to match
higher build rates for commercial aircraft. Higher material prices and demand
for lower aircraft part and assembly prices could place increasing pressure on
the Company's operating margins and net income.
USE OF PROCEEDS
If all of the Directors' Warrants, the Selling Agent Warrants, the Lender
Warrants, and the Miscellaneous Warrants, as such terms are defined under
"Description of Securities", were exercised, the Company would receive gross
proceeds of approximately $206,100, $353,395, $456,250 and $10,000,
respectively. Although the present market is above the exercise price for a
substantial portion of the warrants being registered in this Registration
Statement, there can be no assurance that any of these warrants will be
exercised. The Company will use any proceeds received from the exercise of
these warrants for working capital and to repay outstanding indebtedness. The
above applications reflect management's current plans and may be changed to
reflect various factors.
The Company will not receive any of the proceeds from the sale by the
Selling Shareholders of the Common Stock offered hereby.
CAPITALIZATION
The following table sets forth the capitalization of the Company as of
June 30, 1996. This table should be read in conjunction with the Company's
Consolidated Financial Statements and notes thereto incorporated by reference
herein.
Long-term debt (including current portion)....................... $ 4,100,094
Stockholders Equity
Common Stock, $.01 par value, 20,000,000
shares authorized, 11,346,999 shares issued and
outstanding (1).................................................. $ 113,470
Additional paid-in capital....................................... $13,840,328
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Accumulated deficit.............................................. $(3,686,104)
Treasury Stock at cost........................................... $ (337)
Total Stockholders Equity................................... $10,267,357
Total Capitalization.........................................$14,367,451
_____________________
(1) The Company currently has outstanding warrants to purchase an aggregate
of 1,596,663 shares of Common Stock all of which currently is exercisable.
The exercise price of such warrants range from $.40 to $4.37 per share.
(2) The Company currently has outstanding stock options to purchase an
aggregate of 641,006 shares of Common Stock of the Company. Not all
stock options are presently exercisable.
(3) The Company has issued a convertible note that may be converted into
1,145,000 shares of common stock.
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SELLING SHAREHOLDERS
The following table shows the names of the Selling shareholders and the
number of Shares being offered by them:
Number of Shares Owned
Selling ShareholderAnd Being Offered
- ------------------- ----------------------
Penfield Partners, L.P. 300,000
Special Situations Cayman Fund 51,000
Special Situations Fund III, L.P. 186,000
Cook & Cie, S.A. 1,657,000
Grange Nominees Limited 760,000
Coges Corraterie Gestion S.A. 100,000
Steven Simon 50,000
Warren H. Haber 80,000
Hoenig Group, Inc. 50,000
Daniel Abraham 900,000
Allen & Co., Inc. 900,000
The Nunzio P. And Sherolyn K. DeSantis Trust 250,000
Joseph D'Andrea 50,000
Zita M. Sheehan - Trust 50,000
Joseph E. Sheehan III - Trust 50,000
Bernard Grill 100,000
Joseph E. Sheehan & Co., Inc. 110,000
Joseph E. Sheehan 70,000
Mark B. Senders Retirement Plan 33,333
Jonas Aircraft and Arms Pension Plan and Trust 105,833
Lawrence M. Pohly 57,000
Alan Baldwin 52,500
Infoanalysis 20,000
Roger Favale 10,000
Robert Spitalnick 10,000
Diserio, Martin, O'Connor & Castiglioni 15,000
---------
Total 6,017,666
Substantially all of the Shares being offered by the Selling Shareholders
were acquired by them from the Company in private placements pursuant to
individual subscription agreements entered into on March 31, 1994 and March 21,
1996, were acquired by a Selling Shareholder in exchange for a debt obligation
and/or interest from a debt obligation owed by the Company, or were paid to the
Selling Shareholder in lieu of fees for services rendered to the Company. In
the subscription agreements relating to the private placements arranged by J.E.
Sheehan & Company, Inc., the Company granted registration rights to the
purchasers conditioned upon the holders of at least a majority of the Shares
sold in such private placement requesting such registration. In all other
cases, the Company agreed to use its best efforts to include their shares in any
registration statement filed by the Company. The Company also agreed to bear
all expenses (other than
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commissions and discounts of underwriters, dealers or agents) in connection with
the registration and sale of the Shares being offered by the Selling
Shareholders. See "Manner of Distribution."
The Selling Shareholders have requested that the Company use its best
efforts to effectuate a registration of such shares for resale under the
Securities Act. In the light of this request and in accordance with the
subscription agreements, the Company has filed with the Securities and Exchange
Commission this Registration Statement with respect to the resale of the Shares
from time to time in the over-the-counter market and/or in privately negotiated
transactions and has agreed to prepare and file such amendments and supplements
to the Registration Statement as may be necessary to keep the Registration
Statement effective until all of the Shares offered hereby have been sold
pursuant thereto. This Prospectus forms a part of the Registration Statement.
Except for the individuals and/or entities listed below, none of the
Selling Shareholders has held any position or office or has any other material
relationship in the past three years with the Company.
Selling Shareholders' Relationships with the Company
J.E. Sheehan & Company, Inc. has, since January 29, 1992, served as the
Company's investment banker, and has loaned the Company funds from time to time.
Cooke & Cie, SA ("Cooke") has loaned the Company money from time to time.
Presently total indebtedness by the Company owed to Cooke amounts to $360,000.
Warren H. Haber is a member of the Board of Directors of the Company.
Bernard Grill is the controlling shareholder of Grill Leasing, Inc., the
Company's landlord in Glen Cove, New York. Additionally, the Company is
indebted to Mr. Grill under a promissory note dated January 16, 1995 with an
initial balance of $608,762.
Mark B. Senders Retirement Plan and Jonas Aircraft and Arms Pension Plan
and Trust were both bridge lenders which converted all or part of the bridge
loan to common stock.
Lawrence M. Pohly and Diserio, Martin, O'Connor & Castiglioni, both
previously served as outside corporate counsel to the Company and exchanged
for common stock the monies owed by the Company to them for professional
services previously rendered.
Alan Baldwin is Chairman of the Board and Chief Executive Officer of the
Company. Mr. Baldwin exchanged for common stock, $21,000 due him from the
Company for moving expenses, and received the balance, $35,000, in cash.
Infoanalysis, Roger Favale and Robert Spitalnick all provided financial
advisory services to the Company and received payment for these services,
amounting to $10,000, $30,000 and $30,000, respectively, in addition to
receiving 20,000, 10,000, and 10,000 shares, respectively, for further payment
of such services.
MANNER OF DISTRIBUTION
The Selling Shareholders may sell the Shares through broker-dealers,
agents, or directly to one or more purchasers. The distribution of the Shares
may be effected from time to time in one or more transactions in the
over-the-counter market or in transactions otherwise than in the
over-the-counter market including privately negotiated transactions. Any of
such transactions may be effected at market prices prevailing at the time of
sale, at prices related to such prevailing market prices or at
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negotiated prices. The Selling Shareholders 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 Shareholders and/or commissions from purchasers of Shares for whom they
may act as agent (which discounts, concessions or commissions may or may not
exceed those customary in the type of transactions involved). J.E. Sheehan &
Company, Inc. may act as broker-dealer on behalf of one or more of the Selling
Shareholders in connection with the offering of certain and/or all of the Shares
by Selling Shareholders. The Selling Shareholders and any broker-dealers or
agents that participate in the distribution of Shares may be deemed to be
underwriters, and any profit on the sale of Shares by them and any discounts,
concessions or commission received by any such broker-dealers or agents may be
deemed to be underwriting discounts and commissions under the Securities Act.
The Selling Shareholders have agreed to indemnify the Company, its officers,
directors and controlling persons for any labilities under the Securities Act
insofar as such liabilities result from any untrue statement or omission in the
Registration Statement in reliance on information provided to the Company in
writing by the Selling Shareholders specifically for use in the Registration
Statement.
In order to comply with certain states' securities laws, if applicable,
the Shares offered hereby will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, the Shares may not be
sold in certain states unless they have been registered or qualified for sale in
such state or an exemption from regulation or qualification is available and is
complied with. Pursuant to the terms of the subscription agreements, the
Company intends to use its best efforts to register or qualify the Shares for
resale or to seek an exemption from registration or qualification in any state
required in order to facilitate as to a particular sale, the resale of the
Shares by the Selling Shareholders.
DESCRIPTION OF SECURITIES
The authorized capital stock of the Company consists of 20,000,000 shares
of Common Stock, $.01 par value per share. On September 18, 1996, there were
issued and outstanding 11,396,859 shares of Common Stock. The general terms
governing the Common Stock being registered are summarized below.
Common Stock
The Shares being offered pursuant to this Prospectus are 6,017,666 shares
of the Company's Common Stock, par value $.01 per share. Holders of shares of
Common Stock are entitled to one vote per share on all matters to be voted on by
shareholders and are not entitled to cumulative voting in the election of
directors, which means that the holders of a majority of the shares voting for
the election of directors can elect all the directors then standing for
election, if they choose to do so. The holders of Common Stock are entitled to
share ratably in such dividends as may be declared on shares of Commons Stock
from time to time by the Board of Directors in its discretion from funds legally
available therefor. The holders of shares of Common Stock are entitled to share
pro rata in distributions to shareholders upon liquidation of the Company.
Holders of shares of Common Stock have no preemptive or other subscription or
conversion rights, and there are no redemption provisions with respect to such
shares.
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Directors' Warrants
In order to compensate its non-employee Directors, the Company has, from
time to time, granted warrants to certain of its non-employee Directors
("Directors' Warrants"). The Directors' Warrants are exercisable for 10 years
after grant. On June 15, 1989 Directors' Warrants for 10,000 shares at $1.50
per share were granted to each of four non-employee Directors. On June 30, 1991
Directors' Warrants covering 10,000 shares were granted to one non-employee
Director at an exercise price of $1.50 per share. On March 17, 1993, warrants
covering 30,000 shares of Common Stock in the aggregate exercisable at $4.37 per
share were granted to three non-employee Directors. There are a total of 80,000
shares of Common Stock covered by Directors' Warrants at prices ranging from
$1.50 per share to $4.37 per share. Upon exercise of the Directors' Warrants,
the difference between the market value of the Common Stock and the Directors'
Warrants exercise price is taxable as ordinary income and that amount is
generally deductible by the Company in that year. The Company is registering
80,000 shares of common stock in this Registration Statement that are issuable
upon the exercise of these Directors' Warrants.
Selling Agents' Warrants
In January, 1992, the Company completed a private placement of 800,000
units. J.E. Sheehan & Company, Inc. acted as the Company's exclusive selling
agent in connection with this placement and was given a warrant dated January
31, 1992 to purchase 80,000 shares of the Company's common stock at $5.00 per
share exercisable through January 31, 1997. The shares to be issued upon
exercise of the warrant are subject to "piggyback" registration rights. These
shares are to be included in any registration statement which the Company may
file. This warrant is assignable. J.E. Sheehan & Company, Inc. transferred its
rights to 40,000 units to three persons who assisted in the January, 1992
private placement. The warrant contains anti-dilution provisions providing for
adjustment in the exercise price and of the number of shares to be received upon
exercise if the Company issues any of its shares of Common Stock for
consideration of less than $5.00 per share. This warrant has been adjusted to
reflect subsequent offerings to a total of 440,363 shares exercisable at $.40
per share.
In connection with a private placement of 2,400,000 shares of Common
Stock of the Company for $.60 per share which was consummated on March 31, 1994,
the Company issued to J.E. Sheehan & Company, as selling agent, warrants to
acquire 192,000 shares of Common stock for $.70 per share, exercisable for a
period of 57 months commencing ninety-one days after the closing of such
offering. The shares to be issued upon exercise of such warrants are subject to
certain demand and piggy-back registration rights and the warrants contain
anti-dilution provisions providing certain adjustments in the exercise price and
the number of shares to be received upon exercise in the event of subsequent
sales of stock by the Company below the initial Warrant exercise price. This
warrant has been adjusted to reflect subsequent offerings to a total of 268,800
shares exercisable at $.40 per share.
In connection with a private placement of 3,500,000 shares of Common
Stock of the Company for $.40 per share which was consummated on March 21, 1996,
the Company issued to J.E. Sheehan & Company, as selling agent, warrants to
acquire 175,000 shares of Common stock for $.40 per share, exercisable for a
period of five years from the date of the closing of such offering.
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The shares to be issued upon exercise of such warrants are subject to certain
demand and piggy-back registration rights and the warrants contain anti-dilution
provisions providing certain adjustments in the exercise price and the number of
shares to be received upon exercise in the event of subsequent sales of stock by
the Company below the initial Warrant exercise price.
The Company is registering 884,163 shares of common stock in this
Registration Statement that are issuable upon the exercise of these Selling
Agents' Warrants.
Lenders' Warrants
On September 12, 1995 the Company borrowed $300 Thousand from four
individual lenders as bridge financing until the restructuring of the Company's
primary credit facility was completed. These bridge lenders received, in total,
the right to purchase up to 135,000 shares of the Company's Common Stock at $.50
per share for a term of five years. One warrant holder has already exercised
his warrant and has purchased 22,500 shares of the Company's Common Stock.
Warrants to purchase up to 112,500 shares of the Company's Common Stock remain
outstanding. The shares to be issued upon the exercise of such warrants are
subject to certain piggy-back registration rights.
On December 28, 1995, the Company refinanced its credit facility with a
new lender, and paid off, in part, its previous lender, Fleet National Bank of
Connecticut (f/k/a Shawmut Bank) ("Fleet Bank"), by paying a discounted amount
of its outstanding debt obligations and issuing warrants for the benefit of
Fleet to purchase 400,000 shares of the Company's Common Stock at 75 percent of
the fair market price, or $1.00, whichever is less, for a period of ten years.
Additionally, on March 21, 1996, the Company retired the remaining $500,000
obligation to Fleet Bank, by paying a discounted payment of $300,000 and issuing
a warrant to Fleet Bank to purchase an additional 100,000 shares of the
Company's Common Stock at 75 percent of the fair market price, or $1.00,
whichever is less, for a period of ten years.
The Company is registering 612,500 shares of common stock in this
Registration Statement that are issuable upon the exercise of these Lenders'
Warrants.
Miscellaneous Warrants
On August 1, 1995, the Company issued its outside corporate counsel,
Muenz & Meritz, P.C., a warrant to purchase 20,000 shares of the Company's
common stock at $.50 with a five year term, as additional consideration for the
legal services provided to the Company. The shares to be issued upon the
exercise of such warrants are subject to certain piggy-back registration rights.
The Company is registering 20,000 shares of common stock in this Registration
Statement that are issuable upon the exercise of these Miscellaneous Warrants.
Convertible Note
On January 17, 1995, the Company borrowed $360,000 from Cook & Cie, S.A.
for a term of two years with an annual interest rate of 10 percent (the "Note").
This Note may be converted, at the option of the holder, at any time during the
term of this Note at the conversion rate of one share for each $.60 of principal
so converted. However, pursuant to an agreement dated February 21, 1996
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between the Company and J.E. Sheehan & Co.,Inc., the Company's investment
banking firm, the Company agreed to reprice the conversion rate under this Note
to the offering price of the private placement of the Company's common stock
that closed on March 21, 1996, $.40. Therefore, at the present conversion rate,
this Note would be fully converted to 900,000 shares of common stock.
The Note also provides for a semi-annual interest payment in common stock
of the Company to made on the expiration date of this Note by using the lesser
price of $.40 or market. Therefore, the maximum number of shares that may be
issued for this interest payment will amount to 45,000 shares. Additionally,
should the holder not convert this Note into common stock and the Company not
pay the full principal amount due under this Note on the expiration date, then
the Company shall pay the holder default interest of 200,000 shares of the
Company's common stock, in addition to the principal payment. All shares to
issued to the holder of this Note as interest, default interest, or converted
principal, are required to be duly registered under the Securities Act of 1933,
as amended.
The foregoing is a summary of the principal terms of the Directors'
Warrants, the Selling Agents' Warrants, the Lenders' Warrants, the Miscellaneous
Warrants and the Convertible Note and does not purport to be a complete
statement of the terms and conditions of such documents, forms of which are
available from the Company and the Commission as exhibits to the Registration
Statement of which this Prospectus forms a part. [See "Available Information."]
LEGAL MATTERS
In connection with this Registration Statement, the validity of the shares
being registered will be passed upon for the Company by Muenz & Meritz, P.C.,
Dix Hills, New York. Muenz & Meritz, P.C. currently holds a warrant to purchase
20,000 shares of Common Stock of the Company.
EXPERTS
The consolidated balance sheet of the Company as of December 31, 1995 and
the consolidated statement of operations, stockholder's equity and cash flows
for each of the two years for the periods ended December 31, 1995 and 1994,
incorporated by reference in this Prospectus from the Company's Annual Report on
Form 10-KSB for the period ended December 31, 1995, have been incorporated
herein in reliance on the report of Cooper & Lybrand, LLP., given on the
authority of that Firm as experts in accounting and auditing.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
A reasonable estimate of the costs to be incurred in connection with this
Registration Statement and Prospectus, to be borne entirely by the Registrant,
is as follows:
Securities and Exchange Commission Registration Fee . . . . . . . $ 2,723
Accounting Fees and Expenses . . . . . . . . . . . . . . . . . . . $ 5,000
Legal Fees and Expenses . . . . . . . . . . . . . . . . . . . . . $ 5,000
Printing and Publication . . . . . . . . . . . . . . . . . . . . . $ 500
Miscellaneous . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .$13,223
Item 15. Indemnification of Officers and Directors
The Delaware General Corporation law, under which the Company is
organized, permits the certificate of incorporation to provide that a director's
personal monetary liability for damages to the corporation or its shareholders
for violations of a director's fiduciary duty of care can be limited or
eliminated. However, the law does not permit limitation or elimination of a
director's monetary liability if the director's breach of fiduciary duty arises
from a breach of duty of loyalty, a failure to act in good faith, intentional
misconduct, a knowing violation of law, an unlawful payment of dividends, an
unlawful stock purchase or redemption or transactions from which the director
derived an improper personal benefit. A provision in the certificate of
incorporation so limiting or eliminating director liability eliminates liability
only for a director acting as a director, not as an officer, and does not alter
or eliminate a director's duty of care, but merely eliminates monetary liability
occasioned by violations of that duty. Such a provision would not permit
limitation of liability arising under other laws or regulations, such as federal
securities laws, or from acts or omissions which occurred prior to the time the
provision was lawfully placed in the corporation's Certificate of Incorporation.
Moreover, such a provision would not affect the availability of equitable
remedies, such as an action to enjoin or rescind a transaction involving a
breach of the fiduciary duty of care, and would not preclude or limit recovery
of damages in litigation instituted by third parties.
Delaware law authorizes a corporation to indemnify its directors,
officers, employees and agents against all reasonable expenses (including
attorneys' fees) and, except in actions initiated by or in the right of the
corporation, against all judgments, fines and amounts paid in settlement of
actions brought against them provided that such individual (the "indemnitee") is
determined to have acted in good faith and for a purpose which he reasonably
believed to be in, or not opposed to, the best interests of the corporation and,
in the case of a criminal proceeding, had no reason to believe his conduct was
unlawful. The Delaware statute contemplates that the determination of whether
the indemnitee is entitled to indemnification is to be made in the specific case
by a majority of a quorum of the "disinterested" directors, by independent legal
counsel or by the shareholders, unless otherwise determined by a court of
competent jurisdiction.
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Under Delaware law, there is a right of mandatory indemnification to the
extent that an indemnitee is successful on the merits or otherwise in the
defense of any claim, issue or matter associated with an action. Thus, Delaware
law permits partial indemnification in the event that an indemnitee is partially
successful in defending an action brought against him. Delaware law allows for
the advance payment of an indemnitee's expenses prior to the final disposition
of an action, provided that the indemnitee undertakes to repay any such amount
advanced if it is later determined that the indemnitee is not entitled to
indemnification with regard to the action for which the expenses were advanced.
The provisions of Delaware law limiting directors' liability and/or providing
for directors' and officers' indemnification as recited above are incorporated
in the Company's Certificate of Incorporation and Bylaws.
The form of the subscription agreements filed as Exhibits 10.9 and 10.35
to this Registration Statement provide for the indemnification of the Company,
its directors and officers, and any controlling person of the Company (within
the meaning of the Securities Act of 1933) by each Selling Shareholder against
any losses, claims, damages, liabilities and expenses resulting from any untrue
statement of material fact contained in the Registration Statement, Prospectus
or Preliminary Prospectus or any amendment thereof or supplement thereto or any
omission of a material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which they were
made, not misleading, but only to the extent that such untrue statement or
omission is contained in any information or affidavit so furnished by such
Selling Shareholder. The obligation to indemnify is several, not joint and
several, among the Selling Shareholders and the liability of each Selling
Shareholder is in proportion to and limited to the net amount received by each
Selling Shareholder from the sale of the Shares pursuant to this Registration
Statement.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to officers, directors or persons controlling the
Company pursuant to the foregoing provisions, the Company has been informed
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.
Item 16. Exhibits
Exhibit
3.1 Certificate of Incorporation - incorporated by
reference to the Registrant's Form 10-K for
the year ending December 31, 1992
3.2 By-Laws - incorporated by reference to the
Registrant's Form 10-K for the year ending
December 31, 1991
5.1 Legal opinion of Muenz & Meritz, P.C.
10.1 Lease covering the Newtown, Connecticut Plant -
incorporated by reference to the Registrant's
Form 10-K for the year ending December 31, 1992
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10.2 Lease covering the Danbury, Connecticut Plant -
incorporated by reference to the Registrant's Form
10-K for the year ending December 31, 1992
10.3 Lease covering the Jessup, Maryland Plant -
incorporated by reference to the Registrant's
Form 10-K for the year ending December 31, 1992
10.4 Stock Purchase Agreement for the sale of
Norfield Corporation to Edwin F. Phelps, Jr.
dated March 10, 1994 - incorporated by
reference to the Registrant's Report on Form
8-K dated March 10, 1994
10.5 Technology Royalty Agreement between the
Company and Norfield Corporation dated
March 10, 1994 - incorporated by reference to
the Registrant's Report on Form 8-K dated
March 10, 1994
10.6 Employment Resignation Agreement between
the Company and Edwin F. Phelps, Jr. dated
March 10, 1994 - incorporated by reference to
the Registrant's Report on Form 8-K dated
March 10, 1994
10.7 Forbearance Agreement between the Company
and Shawmut Bank Connecticut, N.A. dated
March 11, 1994 - incorporated by reference to
the Registrant's Report on Form 8-K dated
March 10, 1994
10.8 Commitment letter between the Company and
J.E. Sheehan & Company, Inc. dated March 16,
1994 - incorporated by reference to the
Registrant's Report on Form 8-K dated March 10, 1994
10.9 Form of Subscription Agreement pertaining to
the issuance of 2,400,000 shares at $.60 per
share dated March 31, 1994, incorporated by
reference to the Registrant's report on Form
10-Q/A Amendment 1, for the period ended
March 31, 1994.
10.10 Grant of Warrant for the purchase of 192,000
shares of the common stock of the Registrant
at $.70 per share to J.E. Sheehan & Company,
Inc. Dated March 31, 1994, incorporated by
reference to the Registrant's report on Form
10-Q/A Amendment 1, for the period ended
March 31, 1994.
10.11 Asset Purchase Agreement between Lunn
Industries, Inc., Limco Manufacturing Corp-
oration and Alcore, Inc. dated December
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<PAGE>
12, 1994., incorporated by reference and
previously filed as Exhibit 10.1 to the
Registrant's report on Form 10-QSB for the
period ended March 31, 1995.
10.12 Promissory Note dated January 16, 1995
Payable to the order of Limco Manufacturing
Corporation in the amount of $608,762,
incorporated by reference and previously filed
as Exhibit 10.2 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.13 Promissory Note dated January 17, 1995
payable to the order of Limco Manufacturing
Corporation in the amount of $96,238, incorporated
by reference and previously filed as Exhibit 10.3 to
the Registrant's report on Form 10-QSB for the
period ended March 31, 1995.
10.14 Guaranty Agreement dated January 17, 1995
between Alcore, Inc. And Limco Manufacturing
Corporation, incorporated by reference and previously filed
as Exhibit 10.4 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.15 Subordination Agreement dated January 17,
1995 by and among TAT Technologies, Ltd.,
Limco Manufacturing Corporation and Lunn
Industries, Inc., incorporated by reference and
previously filed as Exhibit 10.5 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.16 Assignment and Assumption of Obligations
Agreement dated January 17, 1995 between
Limco Manufacturing Corporation and Lunn
Industries, Inc, incorporated by reference and
previously filed as Exhibit 10.6 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.17 Amendment dated January 17, 1995 to the
Asset Purchase Agreement by and among Lunn
Industries, Inc., Limco Manufacturing Corporation
and Alcore, Inc. dated December 12, 1994,
incorporated by reference and previously filed
as Exhibit 10.7 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.18 Loan Agreement dated January 17, 1995 between
Lunn Industries, Inc. and Cook and Cie, S.A.,
incorporated by reference and previously filed
as Exhibit 10.8 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.19 Promissory note dated January 17, 1995 payable to
the order of Cook & Cie, S.A. in the amount of
$360,000, incorporated by reference and previously filed
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<PAGE>
as Exhibit 10.9 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.20 Promissory note dated January 17, 1995 payable to
the order of J.E. Sheehan & Company, Inc. in the
Amount of $100,000, incorporated by reference and
previously filed as Exhibit 10.10 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.21 Letter dated January 10, 1995 subordinating the Commercial
Revolving Loan, Term Loan and Security Agreement dated
May 21, 1993 with Shawmut Bank, Connecticut, N.A. to
the $100,000 promissory note payable to the order of J.E.
Sheehan & Company dated January 17, 1995, incorporated
by reference and previously filed as Exhibit 10.11 to the
Registrant's report on Form 10-QSB for the period ended
March 31, 1995.
10.22 Lease for the Company's headquarters located in Glen Cove,
New York dated January 1, 1995 between Grill Leasing Corp.
and Lunn Industries, Inc., incorporated by reference and
previously filed as Exhibit 10.12 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.23 Moratorium Agreement dated February 24, 1995 between
Grill Leasing Corp. and Lunn Industries, Inc., incorporated
by reference and previously filed as Exhibit 10.13 to the
Registrant's report on Form 10-QSB for the period ended
March 31, 1995.
10.24 Agreement effective July 19, 1995, between the Company
and J.E. Sheehan & Company extending the maturity date
of note held by J.E. Sheehan & Company, incorporated by
reference and previously filed as Exhibit 10.1 to the
Registrant's report on Form 10-QSB for the period ended
September 30, 1995.
10.25 Promissory Note dated December 28, 1995 payable to the
order of Gibraltar Corporation of America, incorporated by
reference and previously filed as Exhibit 10.25 to the
Registrant's report on Form 10-KSB for the fiscal year ended
December 31, 1995.
10.26 Security Agreement dated December 28, 1995 between the
Company and Gibraltar Corporation of America, incorporated by
reference and previously filed as Exhibit 10.26 to the Registrant's
report on Form 10-KSB for the fiscal year ended December 31, 1995.
10.27 Rider to the Financing Agreement dated December 28, 1995
between the Company and Gibraltar Corporation of America,
incorporated by reference and previously filed as Exhibit 10.27
to the Registrant's report on Form 10-KSB for the fiscal year ended
December 31, 1995.
10.28 Financing Agreement dated December 28, 1995 between the
Company and Gibraltar Corporation of America, incorporated by
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reference and previously filed as Exhibit 10.28 to the Registrant's
report on Form 10-KSB for the fiscal year ended December 31, 1995.
10.29 Security Agreement dated December 28, 1995 between the
Company and Gibraltar Corporation of America, incorporated by
reference and previously filed as Exhibit 10.29 to the Registrant's
report on Form 10-KSB for the fiscal year ended December 31, 1995.
10.30 Amended and Restated Commercial Revolving Loan, Term
Loan and Security Agreement dated December 28, 1995, by
and among the Company, Alcore, Inc., and Fleet National
Bank of Connecticut, incorporated by reference and previously
filed as Exhibit 10.30 to the Registrant's report on Form 10-KSB
for the fiscal year ended December 31, 1995.
10.31 Amended and Restated Subordinated Term Note date
December 28, 1995 payable to the order of Fleet
National Bank of Connecticut, incorporated by
reference and previously filed as Exhibit 10.31 to the
Registrant's report on Form 10-KSB for the fiscal year ended
December 31, 1995.
10.32 Warrant dated December 28, 1995 issued to Fleet
National Bank of Connecticut, incorporated by
reference and previously filed as Exhibit 10.32 to the
Registrant's report on Form 10-KSB for the fiscal year ended
December 31, 1995.
10.33 Engagement letter dated February 21, 1996 between the
Company and J.E. Sheehan & Co., Inc. for the placement of
3.5 million shares of the Company's common stock in a private
placement, incorporated by reference and previously filed
as Exhibit 10.1 to the Registrant's report on Form 10-QSB
for the period ended March 31, 1996.
10.34 Warrant dated March 21, 1996 for right to purchase 175,000
shares of the Company's common stock at $.40 per share,
issued to J.E. Sheehan & Co., Inc. for fee related to the private
placement of the Company's common stock, incorporated by
reference and previously filed as Exhibit 10.2 to the Registrant's
report on Form 10-QSB for the period ended March 31, 1996.
10.35 Form of Subscription Agreement dated March 21, 1996 for
private placement of 3.5 million shares of the Company's
common stock at $.40 per share, incorporated by reference
and previously filed as Exhibit 10.3 to the Registrant's report
on Form 10-QSB for the period ended March 31, 1996.
13.1 Form 10-QSB for the period ended March 31, 1995,
previously filed with the Commission, is herein incorporated
by reference.
13.2 Form 10-QSB for the period ended June 30, 1995,
previously filed with the Commission, is herein incorporated
by reference.
13.3 Form 10-QSB for the period ended September 30, 1995,
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previously filed with the Commission, is herein incorporated
by reference.
13.4 Form 10-QSB for the period ended March 31, 1996,
previously filed with the Commission, is herein incorporated
by reference.
13.5 Form 10-QSB for the period ended June 30, 1996,
previously filed with the Commission, is herein incorporated
by reference.
13.6 1995 Annual Report to Shareholders previously filed
with the Commission, and is herein incorporated by reference.
21 List of Registrant's subsidiaries previously filed with the
Commission in the Annual Report on Form 10-K/A Amendment 1
for the fiscal year ended December 31, 1993, is herein
incorporated by reference
23.1 Consent of Muenz & Meritz, P.C. included in Exhibit 5.1
23.2 Consent of Coopers & Lybrand, LLP.
Item 17. Undertakings
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are made, a
post-effective amendment of 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)(i) 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.
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<PAGE>
(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.
(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.
(c) The undersigned Registrant hereby undertakes to deliver or cause to
be delivered with the prospectus, to each person to whom the Prospectus is sent
or given, the latest annual report to security holders that is incorporated by
reference in the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14A-3 or Rule 14C-3 under the Securities Exchange Act of
1934 and further, hereby undertakes to deliver or cause to be delivered to each
person to whom the Prospectus is sent or given, the latest quarterly report of
the Registrant that is specifically incorporated by reference in the Prospectus
to provide interim financial information required to be represented by Article 3
of Regulation S-X.
(d) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant, or otherwise, the Securities and Exchange Commission
has informed the Registrant that 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, office 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 submit to a
court of appropriate jurisdiction the question of whether such indemnification
by itself is against public policy as expressed in the Act and will be governed
by the final adjudication of such issue.
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<PAGE>
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 the City of Glen Cove, the State of New York on September 27,
1996
LUNN INDUSTRIES, INC.
By: /s/ Alan W. Baldwin September 27, 1996
------------------- ------------------
Alan W. Baldwin Date
Chairman of the Board and,
Chief Executive Officer and Director
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.
By: /s/ Alan W. Baldwin September 27, 1996
------------------- ------------------
Alan W. Baldwin Date
Chairman of the Board and,
Chief Executive Officer and Director
By: /s/ Lawrence Schwartz September 27, 1996
--------------------- ------------------
Lawrence Schwartz Date
Vice President, Secretary
and Chief Financial and
Accounting Officer
By: /s/ Warren H. Haber September 27, 1996
------------------- ------------------
Warren H. Haber Date
Director
By: /s/ John F. Menzel September 27, 1996
------------------ ------------------
John F. Menzel Date
Director
By: /s/ John Simon September 27, 1996
-------------- ------------------
John Simon Date
Director
By: /s/ William R. Lewis September 27, 1996
-------------------- ------------------
William R. Lewis Date
Director
II-9
<PAGE>
Index of Exhibits
Exhibit
3.1 Certificate of Incorporation--incorporated by
reference to the Registrant's Form 10-K for
the year ending December 31, 1992
3.2 By-Laws--incorporated by reference to the
Registrant's Form 10-K for the year ending
December 31, 1991
5.1 Legal opinion of Muenz & Meritz, P.C.
10.1 Lease covering the Newtown, Connecticut Plant--
incorporated by reference to the Registrant's
Form 10-K for the year ending December 31, 1992
10.2 Lease covering the Danbury, Connecticut Plant--
incorporated by reference to the Registrant's Form
10-K for the year ending December 31, 1992
10.3 Lease covering the Jessup, Maryland Plant--
incorporated by reference to the Registrant's
Form 10-K for the year ending December 31,
1992
10.4 Stock Purchase Agreement for the sale of
Norfield Corporation to Edwin F. Phelps, Jr.
dated March 10, 1994--incorporated by
reference to the Registrant's Report on Form
8-K dated March 10, 1994
10.5 Technology Royalty Agreement between the
Company and Norfield Corporation dated
March 10, 1994--incorporated by reference to
the Registrant's Report on Form 8-K dated
March 10, 1994
10.6 Employment Resignation Agreement between
the Company and Edwin F. Phelps, Jr. dated
March 10, 1994--incorporated by reference to
the Registrant's Report on Form 8-K dated
March 10, 1994
10.7 Forbearance Agreement between the Company
and Shawmut Bank Connecticut, N.A. dated
March 11, 1994--incorporated by reference to
the Registrant's Report on Form 8-K dated
March 10, 1994
10.8 Commitment letter between the Company and
J.E. Sheehan & Company, Inc. dated March 16,
1994--incorporated by reference to the
Registrant's Report on Form 8-K dated March
10, 1994
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<PAGE>
10.9 Form of Subscription Agreement pertaining to
the issuance of 2,400,000 shares at $.60 per
share dated March 31, 1994, incorporated by
reference to the Registrant's report on Form
10-Q/A Amendment 1, for the period ended
March 31, 1994.
10.10 Grant of Warrant for the purchase of 192,000
shares of the common stock of the Registrant
at $.70 per share to J.E. Sheehan & Company,
Inc. Dated March 31, 1994, incorporated by
reference to the Registrant's report on Form
10-Q/A Amendment 1, for the period ended
March 31, 1994.
10.11 Asset Purchase Agreement between Lunn
Industries, Inc., Limco Manufacturing Corp-
oration and Alcore, Inc. dated December
12, 1994., incorporated by reference and
previously filed as Exhibit 10.1 to the
Registrant's report on Form 10-QSB for the
period ended March 31, 1995.
10.12 Promissory Note dated January 16, 1995
Payable to the order of Limco Manufacturing
Corporation in the amount of $608,762,
incorporated by reference and previously filed
as Exhibit 10.2 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.13 Promissory Note dated January 17, 1995
payable to the order of Limco Manufacturing
Corporation in the amount of $96,238, incorporated
by reference and previously filed as Exhibit 10.3 to
the Registrant's report on Form 10-QSB for the
period ended March 31, 1995.
10.14 Guaranty Agreement dated January 17, 1995
between Alcore, Inc. And Limco Manufacturing
Corporation, incorporated by reference and previously filed
as Exhibit 10.4 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.15 Subordination Agreement dated January 17,
1995 by and among TAT Technologies, Ltd.,
Limco Manufacturing Corporation and Lunn
Industries, Inc., incorporated by reference and
previously filed as Exhibit 10.5 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.16 Assignment and Assumption of Obligations
Agreement dated January 17, 1995 between
Limco Manufacturing Corporation and Lunn
Industries, Inc, incorporated by reference and
previously filed as Exhibit 10.6 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
II-11
<PAGE>
10.17 Amendment dated January 17, 1995 to the
Asset Purchase Agreement by and among Lunn
Industries, Inc., Limco Manufacturing Corporation
and Alcore, Inc. dated December 12, 1994,
incorporated by reference and previously filed
as Exhibit 10.7 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.18 Loan Agreement dated January 17, 1995 between
Lunn Industries, Inc. and Cook and Cie, S.A.,
incorporated by reference and previously filed
as Exhibit 10.8 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.19 Promissory note dated January 17, 1995 payable to
the order of Cook & Cie, S.A. in the amount of
$360,000, incorporated by reference and previously filed
as Exhibit 10.9 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.20 Promissory note dated January 17, 1995 payable to
the order of J.E. Sheehan & Company, Inc. in the
Amount of $100,000, incorporated by reference and
previously filed as Exhibit 10.10 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.21 Letter dated January 10, 1995 subordinating the Commercial
Revolving Loan, Term Loan and Security Agreement dated
May 21, 1993 with Shawmut Bank, Connecticut, N.A. to
the $100,000 promissory note payable to the order of J.E.
Sheehan & Company dated January 17, 1995, incorporated
by reference and previously filed as Exhibit 10.11 to the
Registrant's report on Form 10-QSB for the period ended March 31, 1995.
10.22 Lease for the Company's headquarters located in Glen Cove,
New York dated January 1, 1995 between Grill Leasing Corp.
and Lunn Industries, Inc., incorporated by reference and
previously filed as Exhibit 10.12 to the Registrant's report on
Form 10-QSB for the period ended March 31, 1995.
10.23 Moratorium Agreement dated February 24, 1995 between
Grill Leasing Corp. and Lunn Industries, Inc., incorporated
by reference and previously filed as Exhibit 10.13 to the
Registrant's report on Form 10-QSB for the period ended
March 31, 1995.
10.24 Agreement effective July 19, 1995, between the Company
and J.E. Sheehan & Company extending the maturity date
of note held by J.E. Sheehan & Company, incorporated by
reference and previously filed as Exhibit 10.1 to the
Registrant's report on Form 10-QSB for the period ended
September 30, 1995.
10.25 Promissory Note dated December 28, 1995 payable to the
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<PAGE>
order of Gibraltar Corporation of America, incorporated by
reference and previously filed as Exhibit 10.25 to the
Registrant's report on Form 10-KSB for the fiscal year ended
December 31, 1995.
10.26 Security Agreement dated December 28, 1995 between the
Company and Gibraltar Corporation of America, incorporated by
reference and previously filed as Exhibit 10.26 to the Registrant's
report on Form 10-KSB for the fiscal year ended December 31, 1995.
10.27 Rider to the Financing Agreement dated December 28, 1995
between the Company and Gibraltar Corporation of America,
incorporated by reference and previously filed as Exhibit 10.27
to the Registrant's report on Form 10-KSB for the fiscal year ended
December 31, 1995.
10.28 Financing Agreement dated December 28, 1995 between the
Company and Gibraltar Corporation of America, incorporated by
reference and previously filed as Exhibit 10.28 to the Registrant's
report on Form 10-KSB for the fiscal year ended December 31, 1995.
10.29 Security Agreement dated December 28, 1995 between the
Company and Gibraltar Corporation of America, incorporated by
reference and previously filed as Exhibit 10.29 to the Registrant's
report on Form 10-KSB for the fiscal year ended December 31, 1995.
10.30 Amended and Restated Commercial Revolving Loan, Term
Loan and Security Agreement dated December 28, 1995, by
and among the Company, Alcore, Inc., and Fleet National
Bank of Connecticut, incorporated by reference and previously
filed as Exhibit 10.30 to the Registrant's report on Form 10-KSB
for the fiscal year ended December 31, 1995.
10.31 Amended and Restated Subordinated Term Note date
December 28, 1995 payable to the order of Fleet
National Bank of Connecticut, incorporated by
reference and previously filed as Exhibit 10.31 to the
Registrant's report on Form 10-KSB for the fiscal year ended
December 31, 1995.
10.32 Warrant dated December 28, 1995 issued to Fleet
National Bank of Connecticut, incorporated by
reference and previously filed as Exhibit 10.32 to the
Registrant's report on Form 10-KSB for the fiscal year ended
December 31, 1995.
10.33 Engagement letter dated February 21, 1996 between the
Company and J.E. Sheehan & Co., Inc. for the placement of
3.5 million shares of the Company's common stock in a private
placement, incorporated by reference and previously filed
as Exhibit 10.1 to the Registrant's report on Form 10-QSB
for the period ended March 31, 1996.
10.34 Warrant dated March 21, 1996 for right to purchase 175,000
shares of the Company's common stock at $.40 per share,
issued to J.E. Sheehan & Co., Inc. for fee related to the private
placement of the Company's common stock, incorporated by
II-13
<PAGE>
reference and previously filed as Exhibit 10.2 to the Registrant's
report on Form 10-QSB for the period ended March 31, 1996.
10.35 Form of Subscription Agreement dated March 21, 1996 for
private placement of 3.5 million shares of the Company's
common stock at $.40 per share, incorporated by reference
and previously filed as Exhibit 10.3 to the Registrant's report
on Form 10-QSB for the period ended March 31, 1996.
13.1 Form 10-QSB for the period ended March 31, 1995,
previously filed with the Commission, is herein incorporated
by reference.
13.2 Form 10-QSB for the period ended June 30, 1995,
previously filed with the Commission, is herein incorporated
by reference.
13.3 Form 10-QSB for the period ended September 30, 1995,
previously filed with the Commission, is herein incorporated
by reference.
13.4 Form 10-QSB for the period ended March 31, 1996,
previously filed with the Commission, is herein incorporated
by reference.
13.5 Form 10-QSB for the period ended June 30, 1996,
previously filed with the Commission, is herein incorporated
by reference.
13.6 1995 Annual Report to Shareholders previously filed
with the Commission, and is herein incorporated by reference.
21 List of Registrant's subsidiaries previously filed with the
Commission in the Annual Report on Form 10-K/A Amendment
1 for the fiscal year ended December 31, 1993, is herein
incorporated by reference
23.1 Consent of Muenz & Meritz, P.C. included in Exhibit 5.1
23.2 Consent of Coopers & Lybrand, LLP.
II-14
<PAGE>
Exhibit 5.1
[Muenz & Meritz, P.C. letterhead]
September 26, 1996
Lunn Industries, Inc.
1 Garvies Point Road
Glen Cove, New York 11542
Gentlemen:
You have requested our opinion, as counsel for Lunn Industries, Inc., a Delaware
corporation (the "Company"), in connection with the registration statement on
Form S-3 (the "Registration Statement"), under the Securities Act of 1933 (the
"Act"), being filed by the Company with the Securities and Exchange Commission.
The Registration Statement relates to the registration of 8,759,329 shares (the
"Registered Shares") of common stock (the "Offering"), par value $.01 (the
"Common Stock"). A total of 6,017,666 common stock shares are being offered by
the Selling Shareholders. Up to 1,596,663 of the Registered Shares may be
issued by the Company upon the exercise of certain warrants. Up to 1,145,000 of
the Registered Shares may be issued under the terms of a convertible note.
We have examined such records and documents and made such examinations of law as
we have deemed relevant in connection with this opinion. It is our opinion that
when there has been compliance with the Act, the Registered Shares, when
issued, delivered, and paid for, will be fully paid, validly issued and
nonassessable.
No opinion is expressed herein as to any laws other than the laws of the State
of New York, of the United States and the corporate laws of the State of
Delaware.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to our firm under the caption "Legal
Matters" in the Registration Statement. In so doing, we do not admit that we
are in the category of persons whose consent is required under Section 7 of the
Act of the rules and regulations of the Securities and Exchange Commission
promulgated thereunder.
Respectfully yours,
Muenz & Meritz, P.C.
By: s/Lawrence A. Muenz
-------------------
Lawrence A. Muenz
<PAGE>
Exhibit 23.2
[Coopers & Lybrand, LLP. Letterhead]
Consent of Independent Accountants
We consent to the incorporation by reference in the Registration
Statement of Lunn Industries, Inc. and Subsidiary on Form S-3 of our report
dated April 4, 1996, on our audits of the consolidated financial statements of
Lunn Industries, Inc. and Subsidiary as of December 31, 1995, and for the years
ended December 31, 1995 and 1994, which report is included in the Company's
Annual Report on Form 10-KSB. We also consent to our Firm under the caption
"Experts".
/s/ Coopers & Lybrand, LLP.
New York, New York
September 25, 1996
