<PAGE>
As filed with the Securities and Exchange Commission on April 28, 2000.
Registration No. 333-5011
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
POST-EFFECTIVE AMENDMENT NO. 2 ON FORM S-3
TO THE
Registration Statement on Form SB-2
UNDER THE SECURITIES ACT OF 1933
_______________
PACIFIC AEROSPACE & ELECTRONICS, INC.
(Successor Issuer to PCT Holdings, Inc.)
(Exact name of registrant as specified in its charter)
Washington 91-1744587
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification Number)
430 Olds Station Road, Third Floor
Wenatchee, WA 98801
(509) 667-9600 (telephone)
(509) 667-9696 (facsimile)
(Address, including zip code, and telephone and facsimile numbers,
including area code, of registrant's principal executive offices)
_________________
Donald A. Wright
430 Olds Station Road, Third Floor
Wenatchee, WA 98801
(509) 667-9600 (telephone)
(509) 667-9696 (facsimile)
(Name, address, including zip code, and
telephone and facsimile numbers, including area code, of agent for service)
Copy to:
L. John Stevenson, Jr.
Stoel Rives LLP
One Union Square, 36th Floor
600 University Street
Seattle, WA 98101-3197
(206) 624-0900 (telephone)
(206) 386-7500 (facsimile)
Approximate date of commencement of proposed sale to the public:
From time to time after this Post-Effective Amendment No. 2 becomes effective.
If the only securities being registered on this Form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box. [_]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with a dividend or
interest reinvestment plan, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [_]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration 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. [_]
________________
THIS POST-EFFECTIVE AMENDMENT NO. 2 SHALL BECOME EFFECTIVE UPON ORDER OF THE
COMMISSION PURSUANT TO SECTION 8(C) OF THE SECURITIES ACT OF 1933, AS AMENDED.
<PAGE>
Prospectus
[LOGO OF PACIFIC AEROSPACE & ELECTRONICS, INC.]
2,655,000 Shares of Common Stock and
180,000 Warrants to Purchase Common Stock
This prospectus covers the issuance by Pacific Aerospace & Electronics, Inc. of
up to 2,655,000 shares of its common stock and 180,000 of its publicly-traded
warrants to purchase common stock. Those securities will be issued by the
Company from time to time as follows:
(a) 2,295,000 shares of common stock upon the exercise of the Company's
currently outstanding public warrants;
(b) 180,000 shares of common stock and 180,000 public warrants upon the
exercise of underwriters' warrants held by Paulson Investment Company,
Inc., Chester L.F. Paulson and M. Lorraine Maxfield; and
(c) 180,000 shares of common stock upon the exercise of the public
warrants described in section (b) above.
This prospectus also covers the resale, from time to time, by the selling
securityholders named in section (b) above, of the 180,000 shares of common
stock and the 180,000 public warrants issuable upon exercise of the
underwriters' warrants. The public warrants and the underwriters' warrants were
issued in connection with the Company's July 1996 public offering.
Each public warrant entitles the holder to purchase from the Company one share
of common stock at an exercise price of $4.6875 per share until July 15, 2001,
unless sooner redeemed. The Company may redeem the outstanding public warrants,
in whole or in part, at a price of $.25 per warrant, if the closing bid price of
the common stock has been at least $9.375 per share for the 20 consecutive
trading days prior to the redemption notice. As of the date of this prospectus,
none of the public warrants has been exercised or redeemed.
Each of the underwriters' warrants entitles the holder to purchase from the
Company a unit consisting of one share of common stock and one public warrant,
at an exercise price of $3.75 per unit. The underwriters' warrants are
exercisable until July 15, 2001.
The common stock and the public warrants trade on the NASDAQ National Market
System under the symbols PCTH and PCTHW. On April 26, 2000, the closing price
of the common stock was $1.5938 per share and the closing price of the warrants
was $0.6250 per warrant.
Pacific Aerospace develops, manufactures and markets high-performance
electronics and metal components and assemblies for the aerospace, defense,
electronics and transportation industries in the Unites States and Europe. The
Company's executive offices are at 430 Olds Station Road, Third Floor,
Wenatchee, Washington 98801, and its telephone number is (509) 667-9600.
Potential investors should consider the Risk Factors starting on page 3 before
purchasing the shares or the warrants.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved the shares or the warrants, or
determined if this prospectus is accurate or complete. Any representation
to the contrary is a criminal offense.
_______________________, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
Risk Factors.................................................. 3
The Offering.................................................. 11
Use of Proceeds............................................... 11
Market for Common Stock and Public Warrants................... 11
Information Incorporated by Reference......................... 13
Available Information......................................... 13
Selling Securityholders....................................... 14
Description of Warrants....................................... 15
Plan of Distribution.......................................... 16
Experts....................................................... 17
Legal Matters................................................. 17
</TABLE>
______________________
Prospective investors may rely only on information contained in this prospectus.
Neither Pacific Aerospace & Electronics, Inc. (also referred to in this
prospectus as "we," "Pacific Aerospace" or the "Company") nor the selling
securityholders have authorized any person to provide prospective investors with
any information other than that contained in this prospectus. This prospectus
is not an offering in any jurisdiction where such offering is not permitted.
The information contained in this prospectus is correct only as of the date of
the prospectus, regardless of the time of the delivery of this prospectus or any
sale of the shares.
______________________
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RISK FACTORS
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An investment in our common stock or our public warrants involves certain risks.
You should carefully consider all of the information set forth in this
prospectus. In particular, you should evaluate the following risk factors
before making an investment in our common stock or our public warrants. If any
of the following circumstances actually occur, our business, financial condition
and results of operations could be materially and adversely affected. If that
occurs, the trading price of our common stock or our public warrants could
decline, and you could lose all or part of your investment.
Some of these risk factors contain "forward-looking statements." These forward-
looking statements are not guarantees of our future performance. They are
subject to risks and uncertainties related to business operations, some of which
are beyond our control. Any of these risks or uncertainties may cause actual
results or future circumstances to differ materially from the forward-looking
statements set forth in this section.
- --------------------------------------------------------------------------------
We need to manage our rapid growth to be successful.
We have experienced rapid growth from both operations and acquisitions. This
growth has placed and will continue to place significant demands on our
managerial, administrative, financial and operational resources. For example,
both our total number of employees and the number of our operating sites nearly
doubled as a result of acquiring our European Aerospace Group, which was formed
when we acquired Aeromet International PLC in July 1998. Our operating
divisions have had different accounting systems, which we have integrated or are
in the process of integrating. As we grow and our business operations become
more complex, we will need to be increasingly diligent in our business decisions
to comply with regulatory and accounting requirements. To manage our growth
effectively, we must continue to improve our operational, accounting, financial
and other management processes and systems. We must also continue to attract
and retain highly skilled management and technical personnel.
We have reported net losses for recent periods, and we may continue to incur net
losses.
We reported a net loss of $12,869,000 for our fiscal year ended May 31, 1999,
and we reported a net loss of $5,195,000 for the nine months ended February 29,
2000. We can offer no assurance that profitable operations will be achieved in
the near future or that any profitable operations will be sustained. Our
ability to achieve a profitable level of operations in the future will depend on
many factors, including our ability to reduce the level of our debt, to
assimilate our recent and potential future acquisitions and to finance
production, our ability to develop new products, the degree of market acceptance
of existing and new products, and the level of competition in those markets in
which we operate.
We have significant debt that could have disadvantages for us.
We incurred substantial debt and payment obligations to finance the Aeromet
acquisition and ongoing operations. This debt could have important consequences,
such as:
. making us unable to obtain additional financing in the future,
. diverting a significant portion of our cash flow to principal and
interest payments and away from operations, acquisitions and capital
expenditures,
. increasing our interest expense, and decreasing our net income,
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. putting us at a competitive disadvantage in relation to competitors
with less debt, or
. limiting our flexibility in adjusting to downturns in our business or
market conditions.
If we do not perform well in the future, we might not be able to pay our debt.
Our future financial and operating performance will determine our ability to pay
our debt. Many factors affect our performance. Because some of these factors
are beyond our control, we might not have sufficient cash flow to make our debt
payments when scheduled, or at all. If we do not maintain sufficient cash flow
to make our debt payments, we could be forced to:
. reduce or delay capital expenditures,
. dispose of material assets or operations, potentially at a loss,
. restructure or refinance our debt at potentially higher rates of
interest, or
. seek additional equity capital, which would probably dilute the value
of the shares held by our existing shareholders.
We may not be able to do any of these things, or we may not be able to do them
on satisfactory terms. In addition, if we could not repay our secured debt,
secured lenders could proceed against any collateral securing that debt.
Our debt limits our flexibility.
We must comply with a number of significant covenants imposed by the agreements
that govern our debt. Those covenants restrict a number of our activities,
including our ability to:
. dispose of or create liens on assets,
. incur additional indebtedness,
. prepay or amend certain debt,
. pay dividends or repurchase stock,
. enter into sale and leaseback transactions,
. make investments, loans or advances,
. engage in acquisitions, mergers or consolidations,
. make capital expenditures,
. change the business we conduct, or
. engage in certain transactions with related parties.
If we breach any of these covenants, the lenders may be able to declare all
amounts we owe to be immediately due and payable. As a result, our lenders
might terminate their commitments to extend further credit to us. In addition,
if there is a change of control of our company, we may be required to repay our
debt. Any of these events could harm our business and financial performance.
We may need to raise additional cash.
We believe that our existing cash and credit facilities will be sufficient to
meet our obligations as they become due during fiscal 2000. However, we may
need to obtain additional cash after fiscal 2000. Our actual cash needs,
however, will depend on many unpredictable factors, including:
. cash generated from or used by operations,
. interest due on our variable rate debt,
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. early repayment of debt, redemption of preferred stock, or other
unexpected cash expenditures,
. capital expenditures required to remain competitive, and
. cash required for acquired companies, future acquisitions, and
financing transaction costs.
As a result of these factors, we cannot predict accurately the amount or timing
of our future cash needs. If we cannot obtain additional cash if and when
needed, we may be unable to fund all our obligations as they become due or at
all. Should we need to dispose of assets to generate cash, we can offer no
assurance that the carrying values will be realizable upon liquidation outside
of the ordinary course of business. Our ability to obtain additional cash if
and when needed could have a material adverse effect on our financial position
and results of operations.
We need to manage the risks posed by our acquisitions and our acquisition
strategy.
Pacific Aerospace has pursued an aggressive growth strategy. We expect to
continue to evaluate and pursue potential strategic acquisitions. The success of
this strategy depends on our ability to manage the risks associated with
acquisitions. These risks include:
. our ability to assess the value, strengths and weaknesses of
acquisition candidates accurately,
. our effectiveness in implementing necessary changes at newly acquired
subsidiaries,
. possible diversion of management attention from our operations, and
. possible increased borrowings, disruption of product development
cycles and dilution of earnings per share.
We incurred substantial losses because of our acquisition of Electronic
Specialty Corporation and our investment in Orca Technologies, Inc. The size of
our European Aerospace Group has caused and will continue to cause it to have a
significant impact on our future financial results. If we do not manage these
or other acquisition risks, our acquisition strategy may not succeed.
Maintaining our European Aerospace Group subjects us to additional risks because
we have foreign operations.
These risks include:
. our ability to manage operations in the United Kingdom effectively
from our Wenatchee, Washington headquarters,
. unfavorable changes in foreign government policies, regulations,
tariffs, taxes and other trade barriers,
. exchange controls and limitations on dividends or other payments, and
. devaluations and fluctuations in currency exchange rates.
Our foreign operations also subject us to foreign currency risks.
Because of our European Aerospace Group, we may decide to engage in hedging
transactions to protect against losses if the exchange rate between the U.S.
dollar and the British pound sterling changes. However, hedging transactions
may not completely offset such losses. Our European Aerospace Group has a few
contracts that are in European currencies other than British pounds sterling, or
in U.S. dollars. We believe that the conversion of European currencies to the
Euro will not have a material adverse effect on the European Aerospace Group's
business or financial condition.
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We depend on some significant customers who may be able to influence our
business.
Our top ten customers in terms of revenues during fiscal 1999 together accounted
for approximately 47% of our revenues for that year, and no other customer
accounted for more than 2% of our revenues. Only the top four customers
individually accounted for 5% or more of our revenues, with The Boeing Company
at approximately 13%, PACCAR, Inc. at approximately 8%, Rolls-Royce plc at
approximately 7%, and British Aerospace plc at approximately 5%. Because of the
relatively small number of customers for most of our products, our largest
customers can influence product pricing and other terms of trade. If we were to
lose any of our largest customers, or if they reduced or canceled orders, our
business and financial performance could be harmed.
We operate in industries that are subject to cyclical downturns.
We operate in historically cyclical industries. The aerospace, defense and
transportation industries are sensitive to general economic conditions, and past
recessions have adversely affected these industries. In past years, a number of
factors have adversely affected the aerospace industry, including increased fuel
and labor costs, and intense price competition. Recently, the commercial
aircraft industry has experienced a downturn in the rate of its growth due to
changing economic conditions and as a result of the ongoing financial crisis in
Asia, which has caused reduction in production rates for some commercial airline
programs. Additional cancellations or delays in aircraft orders from Asian
customers of Boeing or Airbus could reduce demand for our products and could
have a material adverse effect on our business and financial performance. These
cyclical factors and general economic conditions may lead to a downturn in
demand for our core products.
The loss of any of our key management or technical personnel could negatively
affect our ability to manage our business.
We believe that our ability to successfully implement our business strategy and
to operate profitably depends significantly on the continued employment of our
senior management team, led by our president, Donald A. Wright, and our
significant technical personnel. We have key man life insurance policies on the
life of Mr. Wright totaling $8 million. Our business and financial results
could be materially adversely affected if Mr. Wright, other members of the
senior management team, or significant technical personnel become unable or
unwilling to continue in their present employment. In addition, our growth and
future success will depend in large part on our ability to retain and attract
additional board members, senior managers and highly skilled technical
personnel. Competition for such individuals is intense, and we may not be
successful in attracting and retaining them, which could interfere with our
ability to manage our business.
We may not be able to convert all of our backlog into revenue.
We sell the majority of our products through individual purchase orders. Many
of our customers would have the right to terminate orders by paying the cost of
work in process plus a related profit factor. Historically, we have experienced
no significant order cancellations. As of May 31, 1999, we had purchase orders
and contractual arrangements evidencing anticipated future deliveries, which we
treat as backlog, through fiscal year 2001 of approximately $100 million. We
expect to deliver approximately $80 million of this backlog in fiscal year 2000.
We may not be able to complete all of that backlog and book it as net sales, if
we experience cancellations of pending contracts or terminations or reductions
of contracts in progress.
We need to adapt to technological change and develop new products.
The market for our products is characterized by evolving technology and industry
standards, changes in customer needs, adaptation of products to customer needs,
and new product introductions. Our competitors from time to
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time may announce new products, enhancements, or technologies that have the
potential to replace or render our existing products obsolete. Our success will
depend on our ability to:
. enhance our current products and develop new products to meet
changing customer needs, and achieve market acceptance of those
products, and
. anticipate or respond to evolving industry standards and other
technological changes on a timely and cost-effective basis.
We have substantial competition in many of the markets that we serve.
Many of our competitors have greater financial resources, broader experience,
better name recognition and more substantial marketing operations than we do,
and they represent substantial long-term competition for us. Components and
products similar to those we make can be made by competitors using a number of
different manufacturing processes. We believe that our manufacturing processes,
proprietary technologies, and experience provide significant advantages to our
customers. However, competitors can use alternative forms of manufacturing to
produce many of the components and products that we make. In addition, we
expect our competitors to continue making new developments, and our competitors
could develop products that customers view as more effective or more economical
than our product lines. We may not be able to compete successfully against
current and future competitors, which could seriously harm our business.
If we cannot obtain raw materials when needed and at a reasonable cost, we could
have difficulty producing cost-effective products and delivering them on time.
Our European Aerospace Group obtains approximately 70% of its titanium from one
supplier and is subject to a lead time of approximately 65 weeks in ordering and
obtaining titanium. While the European Aerospace Group generally has managed
the ordering process to obtain titanium when needed, a labor strike at the
supplier negatively affected the group's ability to obtain timely deliveries of
titanium during fiscal 1999. Although the shortage of titanium did not have a
material adverse effect on our European Aerospace Group's business or on our
overall financial condition, we lost some business due to customers' dual
sourcing contracts, and some customer orders that were expected to be delivered
in fiscal 1999 were delayed into fiscal 2000. The effect of the strike
emphasizes the fact that a failure to obtain titanium or other raw materials
when we need them, or significant cost increases imposed by suppliers of raw
materials such as titanium or aluminum, could damage our business and financial
performance. We generally have readily available sources of all raw materials
and supplies we need to manufacture our products and, where possible, we
maintain alternate sources of supply. However, we do not have fixed price
contracts or arrangements for all of the raw materials and other supplies we
purchase. We have experienced in the past shortages of, or price increases for,
certain raw materials and supplies that we use, and shortages or price increases
may occur in the future. Future shortages or price fluctuations could have a
material adverse effect on our ability to manufacture and sell our products in a
timely and cost-effective manner.
We need to protect our intellectual property and proprietary rights, and
protection may be costly and not always available.
Significant aspects of our business depend on proprietary processes, know-how
and other technology that are not subject to patent protection. We rely on a
combination of trade secret, copyright and trademark laws, confidentiality
procedures, and other intellectual property protection to protect our
proprietary technology. However, our competitors may still develop or utilize
technology that is the same as or similar to our proprietary technology.
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We have 33 U.S. patents, seven U.S. patent applications pending, two PCT
International patent applications pending, one Canadian patent application
pending, and one European patent enforceable in the U.K., most of which pertain
to our U.S. Electronics Group. In addition, our European Aerospace Group has
one patent application pending in several jurisdictions. We can provide no
assurance that any of the patent applications will result in issued patents,
that existing patents or any future patents will give us any competitive
advantages for our products or technology, or that, if challenged, these patents
will be held valid and enforceable. Most of our issued patents expire at
various times over the next 15 years, with 18 patents expiring over the next
five years. Although we believe that the manufacturing processes of much of our
patented technology are sufficiently complex that competing products made with
the same technology are unlikely, our competitors may be able to design
competing products using the same or similar technology after these patents have
expired.
Despite the precautions we have taken, unauthorized parties may attempt to copy
aspects of our products or obtain and use information that we regard as
proprietary. Existing intellectual property laws give only limited protection
with respect to such actions, and policing violations of these laws is
difficult. The laws of certain countries in which our products are or may be
distributed do not protect products and intellectual property rights to the same
extent as do the laws of the United States. We could be required to enter into
costly litigation to enforce our intellectual property rights or to defend
infringement claims by others. Infringement claims could require us to license
the intellectual property rights of third parties, but licenses may not be
available on reasonable terms, or at all.
We could be subject to product liability claims and lawsuits for harm caused by
our products.
We maintain product liability insurance with a maximum coverage of $2 million.
However, this insurance may not be sufficient to cover any claims that may
arise. A successful product liability claim in excess of our insurance coverage
could have a material adverse effect on our business and financial performance.
We must comply with environmental laws, and any failure to do so could subject
us to claims or regulatory action.
Our facilities are subject to regulations concerning solid waste disposal,
hazardous materials generation, storage, use and disposal, air emissions, waste
water discharge, employee health and other environmental matters. Proper waste
disposal and environmental regulation are major considerations for us because a
number of the metals, chemicals and other materials used in and resulting from
our manufacturing processes are classified as hazardous substances and hazardous
wastes. If we do not meet permitting and other requirements of applicable
environmental laws, we could be liable for damages and for the costs of remedial
actions. We could also be subject to fines or other penalties, including
revocation of permits needed to conduct our business. Any permit revocation
could require us to cease or limit production at one or more of our facilities,
which could damage our business and financial performance. We have an ongoing
program of monitoring and addressing environmental matters, and from time to
time in the ordinary course of business we are required to address minor issues
of noncompliance at our operating sites. From time to time, we identify certain
operations or processes that lack required permits or otherwise are not in full
compliance with applicable environmental laws. Although we believe these items
have not been material to date, our policy is to take steps promptly to remedy
any noncompliance.
Environmental laws could become more stringent over time, imposing greater
compliance costs and increasing risks and penalties associated with any
violations. As a generator of hazardous materials, we are subject to financial
exposure with regard to our properties even if we fully comply with these laws.
In addition, certain of our facilities are located in industrial areas and have
lengthy operating histories. As a consequence, it is possible that historical
or neighboring activities have affected properties we currently own, and that,
as a result,
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additional environmental issues may arise in the future, the precise nature of
which we cannot now predict. Any present or future noncompliance with
environmental laws or future discovery of contamination could have a material
adverse effect on our results of operations or financial condition.
We are subject to costs and risks from our U.S. government contracts and federal
laws.
Certain of our products are manufactured and sold under United States government
contracts or subcontracts. As with all companies that provide products or
services to the United States government, we are directly and indirectly subject
to various federal rules, regulations and orders applicable to government
contractors. Some of these regulations relate specifically to the seller-
purchaser relationship with the government, such as the bidding and pricing
rules. Under regulations of this type, we must observe certain pricing
restrictions, produce and maintain detailed accounting data, and meet various
other requirements. We are also subject to many regulations affecting the
conduct of our business generally. For example, in the United States we must
adhere to federal acquisition requirements and standards established by the
Occupational Safety and Health Act relating to labor practices and occupational
safety standards. We are currently updating and implementing written policies
and training programs relating to employee health and safety matters at several
of our facilities. Violation of applicable government rules and regulations
could result in civil liability, in cancellation or suspension of existing
contracts, or in ineligibility for future contracts or subcontracts funded in
whole or in part with federal funds. In addition, some of our customers are in
the defense industry, and loss of governmental certification by these customers
could cause them to reduce or curtail their purchases from us, which could harm
our business.
Our outstanding Series B Convertible Preferred Stock could adversely affect the
interests of common shareholders.
Our outstanding Series B Convertible Preferred Stock is convertible into common
stock at conversion prices that vary with the market price of our common stock.
For that reason, and because each holder of Preferred Stock has the right to
choose both the times at which the holder will convert and the amount that the
holder will convert at any particular time, we cannot predict the conversion
prices at which the Preferred Stock will be converted or the number of shares of
common stock into which the Preferred Stock will be converted. In general, if
the market price of our common stock rises, fewer shares will be issuable upon
conversion, and if the market price of our common stock falls, more shares will
be issuable upon conversion. However, if all of the 46,275 shares of Preferred
Stock outstanding on April 24, 2000 were converted at $1.55, which was the
conversion price on that date, it would be converted into an additional
2,981,477 shares of common stock. The shares of Common Stock issued upon
conversion of the Preferred Stock can be resold by the holders into the public
market pursuant to SEC Rule 144, subject to certain limitations, and, if
requested by the holders, we are obligated to register those shares to the
extent necessary to permit the holders to resell into the public market.
The conversion of Preferred Stock has resulted in dilution to the equity
interests of other holders of our common stock and is expected to result in
further dilution. This could result in a decrease in the relative voting power
of the common stock outstanding prior to the conversion of the Preferred Stock.
Furthermore, to the extent that the holders of the Preferred Stock convert and
then sell their shares of common stock, the market price of the common stock
could decrease because of the additional shares being sold into the market. A
reduced price could allow the holders of the Preferred Stock to convert their
shares into larger amounts of common stock, the sale of which could further
depress the market price of the common stock and encourage short sales by the
holders of the Preferred Stock or others. This could place further downward
pressure on the market price of our common stock. In addition, the greater
number of outstanding shares, the possibility of dilution and decreased market
price, and the overhang resulting from the existence of the Preferred Stock
could inhibit our opportunities to obtain additional public or private financing
when and if needed or on terms acceptable to us. If the Company
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were sold, under certain circumstances, the holders of Preferred Stock would be
entitled to payment of a designated amount from the sale proceeds before any
payment could be made to holders of common stock.
The ability of the holders of Preferred Stock to convert at any time could make
it possible, depending on the applicable conversion price, for a group of the
holders to convert and retain a sufficient number of shares of common stock to
effect a change of control of the Company. If that occurred, in addition to
the changes that would ordinarily be associated with a change in control,
certain changes of control, such as beneficial ownership by a group of more than
35% of the voting power of outstanding stock, could have the effect of requiring
us to offer to repurchase the notes held by each holder of the Company's 11 1/4%
senior subordinated notes at a cash price equal to 101% of the principal amount,
plus accrued interest and possible liquidated damages. We do not currently have
sufficient cash to repurchase the notes, and a failure to offer to repurchase
the notes in the event of such a change of control would constitute a default
under the indenture.
Future issuances or resales of a significant number of shares of our common
stock could negatively affect the market price of our stock.
Sales of a significant number of shares of common stock in the public market or
the prospect of such sales could adversely affect the market price of our common
stock. As of April 24, 2000, we have reserved 2,295,000 common shares for
issuance under our outstanding publicly traded warrants, 2,923,948 common shares
for issuance under options outstanding under our stock incentive plan, 86,637
common shares for issuance under options outstanding under our independent
director stock plan, and 838,609 common shares for issuance under other warrants
and options. We also have an employee stock purchase plan permitting employees
to purchase shares of common stock using payroll deductions, subject to certain
limits. Shares issued upon exercise of our outstanding warrants or options or
pursuant to the employee stock purchase plan would be available for resale in
the public markets, subject in some cases to volume and other limitations.
Any future issuance of a significant number of common shares, or any future
resales by the holders of a significant number of common shares, or the prospect
of such issuances or resales, could negatively affect the market price of our
common stock.
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THE OFFERING
Pacific Aerospace is offering to issue up to 2,655,000 shares of its common
stock and 180,000 of its publicly-traded warrants to purchase common stock.
Those securities will be issued by the Company from time to time as follows:
(a) 2,295,000 shares of common stock upon the exercise of the outstanding
public warrants;
(b) 180,000 shares of common stock and 180,000 public warrants upon the
exercise of underwriters' warrants held by Paulson Investment Company,
Inc., Chester L.F. Paulson and M. Lorraine Maxfield; and
(c) 180,000 shares of common stock upon the exercise of the public
warrants described in section (b) above.
This prospectus also covers the offering and resale, from time to time, by the
selling securityholders named in section (b) above, of the 180,000 shares of
common stock and the 180,000 public warrants issuable upon exercise of the
underwriters' warrants. See "Selling Securityholders." The public warrants and
the underwriters' warrants were issued in connection with the Company's July
1996 public offering. See "Description of Warrants" for a summary of the terms
of the public warrants and the underwriters' warrants.
USE OF PROCEEDS
The Company intends to use any net proceeds from the exercise of public warrants
or underwriters' warrants for working capital and other general corporate
purposes. Whether and when the public warrants and the underwriters' warrants
are exercised will depend on the price of our common stock and warrants in the
future. If all of the public warrants and the underwriters' warrants are
exercised in full, the proceeds to the Company, prior to the expenses of this
offering, would be approximately $12,276,500. We can provide no assurance that
any or all of the public warrants or the underwriters' warrants will be
exercised. Our board of directors will have broad discretion in determining how
any net proceeds to the Company will be used.
The Company will not receive any of the proceeds from the sale of the common
stock or the public warrants offered by the selling securityholders pursuant to
this prospectus.
MARKET FOR COMMON STOCK AND PUBLIC WARRANTS
Since July 16, 1996, our common stock and our public warrants have been traded
on the Nasdaq National Market System under the symbols "PCTH" for the common
stock and "PCTHW" for the warrants. Each public warrant entitles the holder to
purchase one share of common stock at an exercise price of $4.6875 per share.
See "Description of Warrants."
11
<PAGE>
The Nasdaq National Market System reported the following range of high and low
sales prices for our common stock and our public warrants for each calendar
quarter during the period from January 1, 1998 through April 24, 2000:
<TABLE>
<CAPTION>
Common Stock Warrants
Calendar Period High Low High Low
<S> <C> <C> <C> <C>
1998
First Quarter............................ 7.0313 4.1875 3.1250 1.1250
Second Quarter........................... 6.9375 5.3125 3.0000 2.3750
Third Quarter............................ 7.0000 2.7813 3.0000 1.0000
Fourth Quarter........................... 3.0000 1.4375 1.0625 0.5000
1999
First Quarter............................ 2.9688 1.6875 0.8750 0.3438
Second Quarter........................... 2.1875 1.5000 0.5938 0.3750
Third Quarter............................ 1.7812 1.2500 0.6250 0.2500
Fourth Quarter........................... 1.5000 0.5938 0.6875 0.1875
2000
First Quarter............................ 7.0000 1.1250 2.4375 0.2500
Second Quarter (April 1-April 24, 2000).. 2.7500 1.5000 1.1250 0.5000
</TABLE>
As of April 24, 2000, the closing sales price on the Nasdaq National Market
System for the common stock was $1.5625 per share and for the public warrants
was $0.7500 per warrant. As of April 24, 2000, there were 1,023 holders of
record of 29,443,137 shares of common stock outstanding and 13 holders of record
of 2,295,000 public warrants outstanding, based on the records maintained by our
transfer agent.
12
<PAGE>
INFORMATION INCORPORATED BY REFERENCE
The SEC allows us to "incorporate by reference" certain of our publicly-filed
documents into this prospectus, which means that information included in those
documents is considered part of this prospectus. Information that we file with
the SEC after the date of this prospectus will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c), 14
or 15(d) of the Securities Exchange Act of 1934 until the termination of the
offering.
The following documents filed with the SEC are incorporated by reference in this
prospectus:
1. Our annual report on Form 10-K for the year ended May 31, 1999;
2. Our quarterly report on Form 10-Q for the quarter ended August 31,
1999;
3. Our quarterly report on Form 10-Q for the quarter ended November 30,
1999;
4. Our quarterly report on Form 10-Q for the quarter ended February 29,
2000;
5. Our definitive proxy statement dated September 3, 1999;
6. Our definitive proxy statement dated February 4, 2000; and
7. The description of our common stock set forth in our registration
statement on Form 8-B as filed with the SEC on February 6, 1997.
You may request free copies of these filings by writing or telephoning us at the
following address: Pacific Aerospace & Electronics, Inc., 430 Olds Station Road,
Third Floor, Wenatchee, Washington 98801, Attention: Mr. Tom Barrows, Investor
Relations, (509) 667-9600.
The information relating to Pacific Aerospace contained in this prospectus is
not comprehensive, and you should read it together with the information
contained in the incorporated documents.
AVAILABLE INFORMATION
This prospectus is part of a registration statement that we filed with the SEC.
Certain information in the registration statement has been omitted from this
prospectus in accordance with SEC rules.
We file annual, quarterly and special reports and other information with the
SEC. You may read and copy the registration statement and any other document
that we file at the SEC's public reference rooms located at Room 1024, Judiciary
Plaza, 450 Fifth Street N.W., Washington, D.C. 20549; 7 World Trade Center,
Suite 1300, New York, New York 10048; and Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661. Please call the SEC at 1-800-SEC-
0330 for further information on the public reference rooms. Our SEC filings are
also available to you free of charge at the SEC's web site at
http://www.sec.gov.
Statements contained in this prospectus as to the contents of any contract or
other document referred to are not necessarily complete, and in each instance
you should refer to the copy of the contract or other document filed as an
exhibit to the registration statement.
13
<PAGE>
SELLING SECURITYHOLDERS
The selling securityholders are offering up to 180,000 shares of common stock
and 180,000 public warrants pursuant to this prospectus, which are issuable upon
the exercise of the underwriters' warrants held by the selling securityholders.
Each of the underwriters' warrants entitles the holder to purchase from the
Company a unit consisting of one share of common stock and one public warrant,
at an exercise price of $3.75 per unit. The underwriters' warrants are
exercisable until July 15, 2001. The public warrants and the underwriters'
warrants were issued in connection with the Company's July 1996 public offering.
See "Description of Warrants".
This prospectus and the related registration statement which has been filed by
the Company with the SEC will allow the selling securityholders to resell up to
180,000 shares of common stock and up to 180,000 public warrants to third
parties according to the plan of distribution described in this prospectus. See
"Plan of Distribution." In the underwriters' warrants, the Company agreed to
file this registration statement with the SEC and to keep it updated in order to
permit such resale.
No selling securityholder has had any position, office, or other material
relationship with the Company in the past three years. Paulson Investment
Company, Inc. was one of the underwriters in the Company's July 1996 public
offering, and Chester L. F. Paulson and M. Lorraine Maxfield are officers of
Paulson Investment Company, Inc.
The following table sets forth certain information as of April 24, 2000, to the
best of the Company's knowledge, regarding the ownership of common stock and
public warrants by the selling securityholders and as adjusted to give effect to
the sale of all the common stock and public warrants offered by the selling
securityholders pursuant to this prospectus.
<TABLE>
<CAPTION>
Ownership Before Securities Being Ownership After the
the Offering Offered Offering
-------------------- -------------------- -----------------------
Common Common Common
Selling Securityholder Stock Warrants Stock Warrants Stock Warrants
- ---------------------- ----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Paulson Investment Company, Inc./(1)/
811 S.W. Naito Parkway, Suite 200 180,409 158,563 155,700 155,700 24,709 2,863
Portland, OR 97204
Chester L. F. Paulson/(2)/
811 S.W. Naito Parkway, Suite 200 16,200 16,200 16,200 16,200 -0- -0-
Portland, OR 97204
M. Lorraine Maxfield/(3)/
811 S.W. Naito Parkway, Suite 200 8,100 8,100 8,100 8,100 -0- -0-
Portland, OR 97204
---------------------
Total 180,000 180,000
</TABLE>
___________________
/(1)/ Includes the 155,700 shares of common stock and the 155,700 public
warrants issuable upon exercise of the underwriters' warrant held by
Paulson Investment Company, Inc.
/(2)/ Represents the 16,200 shares of common stock and the 16,200 public
warrants issuable upon exercise of the underwriters' warrant held by
Chester L. F. Paulson.
/(3)/ Represents the 8,100 shares of common stock and the 8,100 public warrants
issuable upon the exercise of the underwriters' warrant held by M.
Lorraine Maxfield.
14
<PAGE>
DESCRIPTION OF WARRANTS
Public Warrants. Each public warrant entitles the holder to purchase from the
Company one share of common stock at the warrant exercise price of $4.6875 per
share. The public warrants were issued in July 1996 in registered form under a
warrant agreement between the Company and Interwest Transfer Co., Inc., as
warrant agent. The public warrants trade on the NASDAQ National Market System
under the symbol PCTHW. As of April 24, 2000, there were 2,295,000 public
warrants outstanding, and the Company is obligated to issue an additional
180,000 public warrants upon the exercise in full of the underwriters' warrants
held by the selling securityholders.
Exercise. The public warrants are, subject to certain conditions, exercisable at
any time until July 15, 2001, unless earlier redeemed. A public warrant may be
exercised upon surrender of the warrant certificate on or before the expiration
date of the warrant at the offices of the warrant agent, with the form of
"Election To Purchase" on the reverse side of the warrant certificate completed
and executed as indicated, accompanied by payment of the exercise price (by
certified or bank check payable to the order of the Company or wire transfer of
good funds) for the number of shares with respect to which the warrant is being
exercised. The Company will not be required to honor the exercise of public
warrants if, in the opinion of the Company's board of directors upon advice of
counsel, the sale of securities upon exercise would be unlawful. The shares of
common stock underlying the public warrants, when issued upon exercise of a
warrant, will be fully paid and nonassessable, and the Company will pay any
transfer tax incurred as a result of the issuance of common stock to the holder
upon its exercise. None of the public warrants has been exercised as of the date
of this prospectus.
Redemption. The public warrants are redeemable by the Company, at $.25 per
warrant, upon at least 30 days prior written notice to the registered holders,
if the closing bid price (as defined in the warrant agreement) per share of
common stock for the 20 consecutive trading days immediately preceding the date
notice of redemption is given equals or exceeds $9.375 (which is 200% of the
warrant exercise price). If the Company gives notice of its intention to redeem,
a holder would be forced either to exercise his or her warrant before the date
specified in the redemption notice or accept the redemption price. None of the
public warrants has been redeemed as of the date of this prospectus.
Registration. For a holder to exercise the public warrants, there must be a
current registration statement in effect with the SEC and qualification in
effect under applicable state securities laws (or applicable exemptions from
state qualification requirements) with respect to the issuance of shares
underlying the warrants. The Company has agreed to use all commercially
reasonable efforts to keep a current registration statement effective in
anticipation of and prior to the exercise of the warrants and to take such other
actions under the laws of various states as may be required to cause the sale of
common stock issuable upon exercise of the public warrants to be lawful. This
prospectus and the registration statement of which it is a part have been filed
by the Company with the SEC in connection with the foregoing obligation of the
Company. If a current registration statement is not in effect at the time a
public warrant is exercised, the Company may at its option redeem the warrant by
paying to the holder cash equal to the difference between the market price of
the common stock on the exercise date and the exercise price of the warrant.
Underwriters' Warrants. The Company authorized the issuance of the underwriters'
warrants in connection with the Company's July 1996 public offering, and 360,000
shares of common stock are reserved for issuance upon exercise of the
underwriters' warrants that remain outstanding (including the common stock
underlying the public warrants issuable upon exercise of the underwriters'
warrants). The underwriters' warrants entitle the holders to purchase from the
Company an aggregate of 180,000 units, each comprised of one share of common
stock and one public warrant, at an exercise price of $3.75 per unit. The
underwriters' warrants are currently exercisable and will remain exercisable
until July 15, 2001. The public warrants and the shares of common stock
15
<PAGE>
issuable upon exercise of the underwriters' warrants are registered for
issuance by the Company and for resale by the selling securityholders pursuant
to this prospectus.
Additional Provisions. The above summary of certain terms and provisions of the
public warrants and the underwriters' warrants is qualified in its entirety by
reference to the detailed provisions of the applicable agreements and
certificates, each of which has been filed as an exhibit to the registration
statement of which this prospectus is a part. The public warrants and the
underwriters' warrants are subject to provisions that adjust the number of
shares or units that may be purchased by the holders and the exercise price in
the event of a common stock split or certain other events. The Company is not
required to issue fractional shares or units upon the exercise of the public
warrants or the underwriters' warrants. No holder of the public warrants or the
underwriters' warrants will possess any rights as a shareholder under those
warrants until the holder exercises those warrants.
Effect of Outstanding Warrants. During the term of the public warrants and the
underwriters' warrants, the holders have the opportunity to profit from a rise
in the market price of the common stock without assuming the risk of ownership
of the shares of common stock issuable upon the exercise of those warrants. The
holders of those warrants may be expected to exercise their warrants at a time
when the Company would, in all likelihood, be able to obtain needed capital by
an offering of common stock on terms more favorable than those provided for by
those warrants. Further, the terms on which the Company could obtain additional
capital during the term of those warrants may be adversely affected.
PLAN OF DISTRIBUTION
The Company will issue and sell common stock to the holders of public warrants
upon exercise of those warrants by the holders. No underwriters will be
involved, and no commission will be payable by the Company.
The common stock and the public warrants offered by the selling securityholders
may be sold to third parties in transactions (a) on Nasdaq, (b) in privately
negotiated transactions, (c) by writing options on such securities, or (d) by a
combination of such methods, at fixed prices that may be changed, at market
prices prevailing at the time of sale, at prices relating to such prevailing
market prices, or at negotiated prices. In addition, any of the common stock or
public warrants that qualify for sale pursuant to Rule 144 under the Securities
Act may be sold in transactions complying with that rule, rather than pursuant
to this prospectus. However, there is no assurance that the selling
securityholders will sell any or all of the common stock or the public warrants
offered by them.
The selling securityholders may sell the common stock or the public warrants to
or through broker-dealers, and such broker-dealers may receive compensation in
the form of discounts, concessions or commissions from the selling
securityholders or the buyers of the common stock or public warrants for whom
such broker-dealers may act as agents or to whom they may sell as principals, or
both (which compensation as to a particular broker-dealer may be in excess of
customary commissions). Any broker-dealer may act as a broker-dealer on behalf
of the selling securityholders in connection with the offering of certain of the
common stock or public warrants by the selling securityholders. The selling
securityholders and any broker-dealers who act in connection with the sale of
the common stock or public warrants under this prospectus may be deemed to be
"underwriters" within the meaning of Section 2(11) of the Securities Act, and
any commissions received by them and profit on any resale of the common stock or
public warrants as principals may be deemed to be underwriting discounts and
commissions under the Securities Act.
The Company will not receive any proceeds from sales of the common stock and
public warrants sold by the selling securityholders, although the Company would
receive the proceeds from the exercise of the underwriters' warrants, and the
public warrants contained in the underwriters' warrants, if and when they are
exercised. The
16
<PAGE>
Company has agreed to pay all expenses (other than any underwriting costs,
selling commission and fees and certain other expenses of the selling
securityholders) in connection with the registration and sale of the common
stock and public warrants sold by the selling securityholders pursuant to this
prospectus. The Company has agreed to indemnify the selling securityholders, and
the selling securityholders have agreed to indemnify the Company, against
certain liabilities under the Securities Act.
EXPERTS
The consolidated financial statements of Pacific Aerospace & Electronics, Inc.
and subsidiaries incorporated by reference in this prospectus and identified
below were audited by the following independent public accountants, as indicated
in their reports:
. KPMG LLP for the fiscal years ended May 31, 1998 and 1999; and
. Moss Adams LLP for the fiscal year ended May 31, 1997.
These financial statements are incorporated by reference in this prospectus and
included in the registration statement in reliance upon the authority of the
above firms as experts in accounting and auditing.
LEGAL MATTERS
The validity of the issuance of the common stock and the public warrants offered
by this prospectus has been passed upon for the Company by Stoel Rives LLP of
Seattle, Washington.
17
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
No person is authorized to give any information or
to make any representation regarding this offering
other than those contained in this prospectus. Any
further information or representation has not been
authorized by Pacific Aerospace. This prospectus
does not constitute an offer to sell or a solicitation of PACIFIC AEROSPACE &
an offer to buy the shares or the warrants: ELECTRONICS, INC.
. in any jurisdiction in which such offer to
sell or solicitation is not unauthorized;
2,655,000 Shares of Common Stock
. in any jurisdiction in which the person and
making such offer or solicitation is not 180,000 Warrants to Purchase
qualified to do so; or Common Stock
. to any person to whom it is unlawful to
make such offer or solicitation.
____________
The delivery of this prospectus and any sale under
this prospectus shall not create any implication that PROSPECTUS
the affairs of Pacific Aerospace are unchanged, or ____________
that the information contained in this prospectus is
correct, at any time after the date of this prospectus.
____________, 2000
</TABLE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
-------------------------------------------
The following table sets forth the expenses incurred in connection with
this Post-Effective Amendment No. 2 covering the issuance and distribution of
the securities registered, other than underwriting discounts and commissions.
All of the amounts shown are estimated.
<TABLE>
<S> <C>
Legal fees and expenses.............. $ 7,500
Accounting fees and expenses......... 7,000
Miscellaneous........................ 500
-------
Total................................ $15,000
</TABLE>
Item 15. Indemnification of Officers and Directors.
------------------------------------------
Article 8 of the Company's Articles of Incorporation authorizes the Company
to indemnify its directors to the fullest extent permitted by the Washington
Business Corporation Act through the adoption of bylaws, approval of agreements,
or by any other manner approved by the Board of Directors.
In accordance with such authorization, Section 10 of the Company's Bylaws
(the "Bylaws") requires indemnification, to the fullest extent permitted by
applicable law, of any person who is or has served as a director or officer of
the Company, as well as any person who, while serving as a director or officer
of the Company, served at the request of the Company as a director, officer,
employee or agent of another entity, against expenses reasonably incurred
because such person was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether formal or
informal, civil, criminal, administrative or investigative.
Notwithstanding these indemnification obligations, Section 10 of the Bylaws
states that no indemnification will be provided (a) to the extent that such
indemnification would be prohibited by the Washington Business Corporation Act
or other applicable law as then in effect, or (b) except with respect to
proceedings seeking to enforce rights to indemnification, to any director or
officer seeking indemnification in connection with a proceeding initiated by
such person unless such proceeding was authorized by the Board of Directors.
Section 10 of the Bylaws also provides that expenses incurred in defending
any proceeding in advance of its final disposition shall be advanced by the
Company to the director or officer upon receipt of an undertaking by or on
behalf of such person to repay such amount if it is ultimately determined that
such person is not entitled to be indemnified by the Company, except where the
Board of Directors adopts a resolution expressly disapproving such advancement.
Section 10 of the Bylaws also authorizes the Board to indemnify and advance
expenses to employees and agents of the Company on the same terms and with the
same scope and effect as the provisions thereof with respect to the
indemnification and advancement of expenses to directors and officers.
II-1
<PAGE>
Item 16. Exhibits.
--------
Exhibit
Number Description
4.1 Articles of Incorporation of Pacific Aerospace & Electronics,
Inc./(1)/
4.2 Amendment to Articles of Incorporation containing Designation of
Rights and Preferences of Series B Convertible Preferred Stock./(2)/
4.3 Bylaws of Pacific Aerospace & Electronics, Inc./(1)/
4.4 Form of specimen certificate for common stock./(1)/
4.5 Form of specimen certificate for public warrants./(1)/
4.6 Warrant Agreement between Interwest Transfer Co., Inc. and PCT
Holdings, Inc. dated July 1, 1996./(3)/
4.7 Purchase Warrant from Pacific Aerospace & Electronics, Inc. to Paulson
Investment Company, Inc., dated September 30, 1997./(2)/
4.8 Purchase Warrant from Pacific Aerospace & Electronics, Inc. to Chester
L. F. Paulson, dated September 30, 1997./(2)/
4.9 Purchase Warrant from Pacific Aerospace & Electronics, Inc. to M.
Lorraine Maxfield, dated September 30, 1997./(2)/
5.1 Opinion of Stoel Rives LLP./(4)/
23.1 Consent of KPMG LLP./(5)/
23.2 Consent of Moss Adams LLP./(5)/
23.3 Consent of Stoel Rives LLP (included in Exhibit 5.1).
24.1 Power of Attorney for officers and certain directors./(4)/
24.2 Power of Attorney for certain directors./(5)/
________________________________________________________________________________
/(1)/ Incorporated by reference to the Company's Current Report on Form 8-K
filed on December 12, 1996.
/(2)/ Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ending May 31, 1998.
/(3)/ Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the year ended May 31, 1996.
/(4)/ Previously filed with this Registration Statement.
/(5)/ Filed with this Amendment.
Item 17. Undertakings.
------------
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this registration
statement (or the most recent post-effective amendment
thereof) that, individually or in the aggregate, represent a
fundamental change in the information set forth in this
registration statement; and
II-2
<PAGE>
(iii) To include any material information with respect
to the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do
not apply if the information required to be included in a post-
effective amendment by those paragraphs is contained in periodic
reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement;
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each 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; and
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered that remain
unsold at the termination of the offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each
filing of the registrant's annual report pursuant to Section 13(a) or
Section 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the registrant pursuant to the provisions
described under "Plan of Distribution" and Item 15, 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 Securities Act of 1933 and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses
incurred or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has
been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act of 1933
and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
PACIFIC AEROSPACE & ELECTRONICS, INC. certifies that it has reasonable grounds
to believe that it meets all of the requirements for filing on Form S-3 and has
duly caused this Amendment No. 2 on Form S-3 to this Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in
Wenatchee, Washington, on April 28, 2000.
PACIFIC AEROSPACE & ELECTRONICS, INC.
By: /s/ Donald A. Wright
-------------------------------------
Donald A. Wright, President
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 2 on Form S-3 to this Registration Statement has been signed
by the following persons in the capacities indicated on April 28, 2000.
Signature Title
/s/ Donald A. Wright President, Chief Executive Officer and Director
- -------------------------------
Donald A. Wright (Principal Executive Officer)
/s/ Nick A. Gerde* Chief Financial Officer, Vice President
- -------------------------------
Nick A. Gerde Finance and Treasurer
(Principal Financial and Accounting Officer)
/s/ Allen W. Dahl, M.D.* Director
- -------------------------------
Allen W. Dahl, M.D.
/s/ Werner Hafelfinger* Director
- -------------------------------
Werner Hafelfinger
/s/ Dale L. Rasmussen* Director
- -------------------------------
Dale L. Rasmussen
/s/ William A. Wheeler* Director
- -------------------------------
William A. Wheeler
/s/ Robert M. Stemmler* Director
- -------------------------------
Robert M. Stemmler
*By /s/ Donald A. Wright
- -------------------------------
Donald A. Wright
(Attorney in Fact)
II-4
<PAGE>
Exhibit Index
-------------
Exhibit
Number Description
4.l Articles of Incorporation of Pacific Aerospace & Electronics,
Inc./(1)/
4.2 Amendment to Articles of Incorporation containing Designation of
Rights and Preferences of Series B Convertible Preferred Stock./(2)/
4.3 Bylaws of Pacific Aerospace & Electronics, Inc./(1)/
4.4 Form of specimen certificate for common stock./(1)/
4.5 Form of specimen certificate for public warrants./(1)/
4.6 Warrant Agreement between Interwest Transfer Co., Inc. and PCT
Holdings, Inc. dated July 1, 1996./(3)/
4.7 Purchase Warrant from Pacific Aerospace & Electronics, Inc. to Paulson
Investment Company, Inc., dated September 30, 1997./(2)/
4.8 Purchase Warrant from Pacific Aerospace & Electronics, Inc. to Chester
L. F. Paulson, dated September 30, 1997./(2)/
4.9 Purchase Warrant from Pacific Aerospace & Electronics, Inc. to M.
Lorraine Maxfield, dated September 30, 1997./(2)/
5.1 Opinion of Stoel Rives LLP./(4)/
23.1 Consent of KPMG LLP./(5)/
23.2 Consent of Moss Adams LLP./(5)/
23.3 Consent of Stoel Rives LLP (included in Exhibit 5.1).
24.1 Power of Attorney for officers and certain directors./(4)/
24.2 Power of Attorney for certain directors./(5)/
________________________________________________________________________________
/(1)/ Incorporated by reference to the Company's Current Report on Form 8-K
filed on December 12, 1996.
/(2)/ Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ending May 31, 1998.
/(3)/ Incorporated by reference to the Company's Annual Report on Form 10-KSB
for the year ended May 31, 1996.
/(4)/ Previously filed with this Registration Statement.
/(5)/ Filed with this Amendment.
II-5
<PAGE>
Exhibit 23.1
Consent of Independent Auditors
The Board of Directors
Pacific Aerospace & Electronics, Inc.:
We consent to the reference to our firm under the heading "Experts" and to the
incorporation by reference into the Post Effective Amendment No. 2 on Form S-3
to the Registration Statement on Form SB-2 filed by Pacific Aerospace &
Electronics, Inc. of our report dated July 16, 1999, except as to note 24 which
is as of August 19, 1999, relating to the consolidated balance sheets of Pacific
Aerospace & Electronics, Inc. and subsidiaries as of May 31, 1998 and 1999 and
the related consolidated statements of operations, stockholders' equity, and
cash flows for each of the years in the two-year period ended May 31, 1999,
which report appears in the May 31, 1999 annual report on Form 10-K of Pacific
Aerospace & Electronics, Inc.
/s/ KPMG LLP
Seattle, Washington
April 28, 2000
<PAGE>
Exhibit 23.2
INDEPENDENT AUDITORS' CONSENT
-----------------------------
We hereby consent to the incorporation by reference in this Post-Effective
Amendment No. 2 on Form S-3 to the Registration Statement of Pacific Aerospace &
Electronics, Inc. on Form SB-2 (Reg. No. 333-5011) of our report dated July 2,
1997, appearing in the Annual Report on Form 10-K of Pacific Aerospace &
Electronics, Inc. for the year ended May 31, 1999. We also consent to the
reference to us under the heading "Experts" in the Prospectus, which is part of
this Registration Statement.
/s/ Moss Adams LLP
Seattle, Washington
April 28, 2000
<PAGE>
Exhibit 24.2
POWER OF ATTORNEY FOR REGISTRATION STATEMENT
--------------------------------------------
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints DONALD A. WRIGHT, with full power to act, his
true and lawful attorney-in-fact and agent, with full power of substitution and
resubstitution, for him and in his name, place and stead, in any and all
capacities, to sign any and all amendments (including post-effective amendments)
to the Registration Statement having SEC file number 333-5011, and to file the
same, with all exhibits thereto and other documents in connection therewith,
with the Securities and Exchange Commission, granting unto said attorney-in-fact
and agent, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises, as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent, or his substitutes, may
lawfully do or cause to be done by virtue hereof. Pursuant to the requirements
of the Securities Act of 1933, as amended, this Power of Attorney has been
signed by the following persons in the capacities indicated on April 28, 2000:
Signature Title
--------- -----
/s/ Werner Hafelfinger Director
- -----------------------------------
Werner Hafelfinger
/s/ Robert M. Stemmler Director
- -----------------------------------
Robert M. Stemmler
