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As filed with the Securities and Exchange Commission on February 9, 1996
Registration No. 33 - 65335
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________
Amendment No. 2 to
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
__________________________
VECTOR AEROMOTIVE CORPORATION
(Exact name of registrant as specified in charter)
NEVADA 33-0254334
(State or other jurisdiction of (I.R.S. Employer
Incorporation or organization) Identification Number)
7601 CENTURION PARKWAY
JACKSONVILLE, FLORIDA 32256
TELEPHONE: (904) 645-0505
(Address and telephone number of registrant's principal executive offices)
D. PETER ROSE
7601 CENTURION PARKWAY
JACKSONVILLE, FLORIDA 32256
TELEPHONE: (904) 645-0505
(Name, address and telephone number of agent for service)
Copy to:
T. MALCOLM GRAHAM, ESQ.
KIRSCHNER, MAIN, PETRIE, GRAHAM, TANNER & DEMONT
POST OFFICE BOX 1559
ONE INDEPENDENT DRIVE, SUITE 2000
JACKSONVILLE, FLORIDA 32201-1559
TELEPHONE: (904) 354-4141
Approximate date of commencement of proposed sale to public:
From time to time after the Registration Statement becomes effective.
___________________________
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
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If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [x]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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PROSPECTUS
7,450,000 SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO WARRANTS
350,000 SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO AGREEMENT
15,290,000 SHARES OF COMMON STOCK
CURRENTLY OUTSTANDING
500,000 SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO OPTIONS
WARRANTS TO
PURCHASE 500,000 SHARES
OF COMMON STOCK
VECTOR AEROMOTIVE CORPORATION
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
This Prospectus relates to 6,250,000 shares of common stock, par value
$.01 per share (the "Common Stock"), of Vector Aeromotive Corporation ("Vector"
or the "Company") issuable upon exercise of the Company's common stock purchase
warrants (the "1991 Warrants") expiring August 12, 1996 (5,750,000, of which
were issued August 12, 1991 and 500,000 of which are issuable pursuant to the
Underwriters' Warrants (as defined below) and 400,000 shares of Common Stock
issuable upon exercise of the Company's outstanding common stock purchase
warrants issued November 14, 1990, and (as extended) expiring August 12, 1996
(the "1990 Warrants"). The 1991 Warrants and the 1990 Warrants are sometimes
referred to herein as the "Public Warrants" and the shares of Common Stock
issuable upon exercise of the Public Warrants are sometimes collectively
referred to herein as the "Public Warrant Shares". The Public Warrants are
exercisable for one share of Common Stock at an exercise price of $1.50 per
share. Subject to appropriate registration or qualification of the Public
Warrant Shares in their state of residency, holders of the Public Warrants may
exercise their warrants upon presentation to the Company's Warrant Agent (as
identified below) of a duly executed subscription form on the reverse side of
the Warrant Certificate, accompanied by payment of the purchase price in cash,
or by cashier's, certified or personal check, made payable to the order of the
Warrant Agent. The Public Warrant Shares are being offered for sale pursuant
to this Prospectus, from time to time by the Company pursuant to the exercise
of the Public Warrants. See "Use of Proceeds."
In addition to the Public Warrant Shares, this Prospectus relates to
the resale of (collectively, the "Securityholders' Securities"): (i) 350,000
shares of Common Stock issuable pursuant to an agreement dated October 1, 1995,
290,000 shares of Common Stock currently outstanding and 500,000 shares of
Common Stock issuable upon exercise of options (the "Options") granted pursuant
to agreements dated October 1, 1995, (ii) 300,000 shares of Common Stock
issuable upon exercise of a warrant issued January 10, 1992, and (as extended)
expiring April 9, 1996 (the "Consultant's
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Warrant") in connection with consulting services rendered to the
Company, (iii) 500,000 shares of Common Stock issuable upon exercise of warrants
issued August 12, 1991 and expiring August 12, 1996 (the "Underwriters'
Warrants"), (iv) 15,000,000 shares of common stock held by the Company's two
largest shareholders, and (v) 500,000 1991 Warrants (the "Underwriters' 1991
Warrants"), granted to certain underwriters in connection with the offering of
the 1991 Warrants.
The Securityholders' Securities are being offered for resale pursuant
to this Prospectus, from time to time, by or for the account of the
securityholders named herein (the "Selling Securityholders"). See "Selling
Securityholders." The Company will not receive any of the proceeds of the
offering of the Securityholders' Securities, except for the receipt of the
exercise price of the Options and the Consultant's Warrant, the Underwriters'
Warrants, and the Underwriters' 1991 Warrants (collectively, the "Warrants").
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.
TRANSFER AND WARRANT AGENT:
AMERICAN SECURITIES TRANSFER, INC.
930 E. QUAIL STREET, SUITE 101
LAKEWOOD, COLORADO 80215-5513
February 13, 1996
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The Selling Securityholders either directly, through agents designated
or to be designated from time to time by them, or through underwriters or
dealers, may sell the Securityholders' Securities from time to time on terms to
be determined by the Selling Securityholders at the time of sale. To the
extent required by applicable laws, the specific amount of the Securityholders'
Securities sold, the names of the Selling Securityholders, the respective
purchase price and public offering price, the names of such agents,
underwriters or dealers, and any applicable commission or discount with respect
to a particular offer will have to be set forth as appropriate in a Prospectus
Supplement or an amendment to the Registration Statement of which this
Prospectus is a part. The Selling Securityholders may also seek, to the extent
permitted by applicable laws, to sell the Securityholders' Securities in
transactions under Rule 144 of the Securities Act of 1933, as amended (the
"Securities Act").
All expenses of the offering, other than commissions or discounts of
broker-dealers, will be borne by the Company. It is estimated that such
expenses to be borne by the Company, including accounting and legal fees, will
approximate $103,599.
The Selling Securityholders and any broker-dealers, agents,
underwriters or dealers that participate with the Selling Securityholders in
the distribution of the Securityholders' Securities may be deemed to be
"underwriters" within the meaning of the Securities Act, and any commissions
received by them and any profit on the resale of the Securityholders'
Securities purchased by them may be deemed to be underwriting commissions or
discounts under the Securities Act.
PRIOR TO THE EXERCISE OF THE PUBLIC WARRANTS EACH INVESTOR SHOULD
CONTACT THE COMPANY OR THE WARRANT AGENT IN ORDER TO DETERMINE WHETHER THE
UNDERLYING SHARES OF COMMON STOCK HAVE BEEN QUALIFIED OR REGISTERED IN THE
STATE IN WHICH THE INVESTOR RESIDES. INVESTORS MAY CONTACT THE COMPANY AT
(904) 645-0505 OR MAY CONTACT THE WARRANT AGENT AT 930 E. QUAIL STREET, SUITE
101, LAKEWOOD, COLORADO 80215-5513.
The Common Stock, the 1990 Warrants and the 1991 Warrants are
currently traded on the NASDAQ SmallCap Market under the symbol VCAR, VCARW and
VCARL, respectively. The closing bid price of the Common Stock, the 1990
Warrants and the 1991 Warrants are on the NASDAQ SmallCap Market on February 7,
1996 was $.62 per share, $.16 per warrant and $.18 per warrant, respectively.
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AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). The reports, proxy
statements and other information filed by the Company with the Commission can
be inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
Commission's Regional Offices at Seven World Trade Center, Suite 1300, New
York, New York 10048, and Suite 1400, Northwestern Atrium Center, 500 West
Madison Street, Chicago, Illinois 60661. Copies of such material also can be
obtained from the Public Reference Section of the Commission, at 450 Fifth
Street, N.W., Washington, D.C. 20549, at prescribed rates.
The Company has filed with the Commission a Registration Statement on
Form S-3 (together with any amendments thereto, the "Registration Statement")
under the Securities Act, with respect to the securities offered hereby. As
permitted by the rules and regulations of the Commission, this Prospectus does
not contain all of the information set forth in the Registration Statement and
exhibits thereto. Statements contained in this Prospectus or in any document
incorporated by reference in this Prospectus as to the contents of any contract
or other document referred to herein or therein are not necessarily complete,
and in each instance where such contract or document has been filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by such reference. 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 herein or 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,
except as so modified or superseded, shall not be deemed to constitute a part
of this Prospectus.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company incorporates herein by reference the following documents
filed with the Commission under the Exchange Act:
(a) Annual Report on Form 10-K for the fiscal year ended September
30, 1994;
(b) Quarterly Report on Form 10-Q for the fiscal quarter ended
December 31, 1994;
(c) Amendment to Quarterly Report on Form 10-Q for the fiscal
quarter ended December 31, 1994;
(d) Current Report on Form 8-K dated January 6, 1995;
(e) Current Report on Form 8-K dated January 31, 1995;
(f) Form 10-C filed February 3, 1995;
(g) Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1995;
(h) Amendment to Quarterly Report on Form 10-Q for the fiscal
quarter ended March 31, 1995;
(i) Quarterly Report on Form 10-Q for the period ended June 30,
1995;
(j) Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1995;
(k) Current Report on Form 8-K dated December 15, 1995;
(l) Current Report on Form 8-K dated January 31, 1996;
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(m) Form 10-C dated February 2, 1996;
(n) The description of the Company's Common Stock contained in the
Company's Registration Statement No. 0-17303 filed pursuant to
Section 12 of the Exchange Act and any amendment or report
filed for the purpose of updating that description; and
(o) The description of the 1991 Warrants contained in the
Company's Registration Statement No. 33-39281 filed pursuant
to the Securities Act of 1933 and any amendment or report
filed for the purpose of updating that description shall be
deemed to be incorporated by reference in this Prospectus and
to be a part hereof from the date of filing of such documents
or reports.
(p) All documents and reports subsequently filed by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the
date of this Prospectus and prior to termination of the offering of the
securities offered hereby shall be deemed to be incorporated by reference in
this Prospectus and to be a part hereof from the date of filing of such
documents or reports.
The Company's financial statements as of September 30, 1994 and 1993
and for each of the three years in the period ended September 30, 1994, have
been audited by BDO Seidman, independent accountants, and their reports thereon
are incorporated into this Prospectus by reference to the Company's Annual
Report on Form 10-K for the year ended September 30, 1994.
The Company will provide without charge to each person to whom a copy
of this Prospectus has been delivered, on the written or oral request of such
person, a copy of any or all of the documents incorporated herein by reference,
other than exhibits to such documents unless they are specifically incorporated
by reference into such documents. Requests for such copies should be directed
to: Investor Relations, Vector Aeromotive Corporation, 7601 Centurion Parkway,
Jacksonville, Florida 32256, telephone: (904) 645-0505.
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PROSPECTUS SUMMARY
The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information included elsewhere in this
Prospectus. Investors should carefully consider the information set forth under
the heading "RISK FACTORS."
THE COMPANY
Vector Aeromotive Corporation (the "Company") designs, manufactures and
markets exotic sports cars. Since purchasing the assets of its predecessor,
Vector Car, in 1987, the Company completed the design and engineering of its
first production car, the Vector W8; successfully completed substantially all
state and federal government testing on the Vector W8; and produced a total of
22 Vector W8's. The Company ceased production of the Vector W8 in early 1993.
During 1994 and 1995 the Company sold no automobiles.
During fiscal years 1992 and 1993, the Company developed design concept
specifications for the Vector M12 (formerly known as the Avtech), the successor
to the W8 and the only American-built 12 cylinder exotic sports car. Production
of the Vector M12 was commenced in October 1995, and sales to customers are
anticipated to commence in February 1996. The Vector M12 features updated
styling and a manufacturer's suggested retail price slightly below $190,000.
THE OFFERING
<TABLE>
<S> <C>
Common Stock offered by the Selling Securityholders... 23,590,000 shares
1991 Warrants offered by the Selling Securityholders.. 500,000 Warrants
Common Stock to be offered by the Company............. None
Common Stock to be outstanding after the offering..... 169,732,699 shares(1)
Use of proceeds....................................... The Company will receive none of the
proceeds from the sale of the Selling
Securityholders' Securities by the Selling
Securityholders. Any proceeds from the
exercise of the Options (as defined
herein) and the Warrants (as defined
herein) will be utilized by the Company
for general corporate purposes.
NASDAQ Symbol oF Common Stock......................... "VCAR"
NASDAQ Symbol of 1991 Warrants........................ "VCARL"
</TABLE>
__________________
(1) Consists of 53,043,199 shares outstanding on January 25, 1996, the
23,590,000 shares offered hereby and 93,099,500 shares acquirable under other
options and warrants exercisable on January 25, 1996. See "DESCRIPTION OF
SECURITIES."
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RISK FACTORS
An investment in Common Stock involves certain risks that a prospective
investor should carefully consider. See "RISK FACTORS."
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RISK FACTORS
Purchase of the securities offered hereby should be considered only by
persons able to sustain a loss of their entire investment. In analyzing this
offering, prospective investors should read this entire Prospectus and
carefully consider, among others, the following risk factors:
Need for Additional Capital; Liquidity. The business in which the
Company is engaged is capital intensive. The Company may require additional
cash resources in order to continue manufacture of the Vector M12 (formerly
known as the Vector Avtech) and continue research and development on additional
models or for a variety of other reasons. The Company has no commitment from
others to provide additional capital, and there can be no assurance that such
funding will be available when needed, or if available, that its terms will be
favorable or acceptable to the Company. Should the Company be unable to obtain
additional capital, when and if needed, it could be forced to either curtail
operations or cease business activities altogether.
In its Quarterly Report to the Commission on Form 10-Q for the fiscal
quarter ended June 30, 1995, the Company reported that it believed that it
might require up to $1 million of additional funds to sustain operations until
early 1996 when it anticipated that car sales would create positive cash flows.
In November 1995, the Company's largest shareholder, V'Power Corporation
("V'Power") informed the Company it was acquiring 2,325,582 shares of Common
Stock for $1 million in cash through the partial exercise of an option held by
it. Subsequently, V'Power informed the Company that it no longer intended to
exercise this option but instead in accordance with a letter of intent dated
November 21, 1995, on November 28, 1995, advanced $1 million to the Company as
a 90-day loan bearing 12% interest pending the outcome of discussions between
the Company and V'Power concerning the terms of a possible additional
investment by V'Power in the Company. Pursuant to a Share Purchase Agreement
between V'Power and the Company dated December 29, 1995, on January 24, 1996,
V'Power acquired from the Company for $5 million in cash 10 million newly,
issued shares of Common Stock and a one-year option for an additional 50 million
shares with an exercise price of $.45 per share. On each of December 28, 1995
and January 23, 1996, the closing bid price for Common Stock on the Nasdaq
SmallCap Market was $.68.
There can be no assurance that funds in addition to the $5 million
provided by V'Power in November 1995 and January 1996 will not be required to
sustain the Company's operations.
Operating Losses of Company. In the year ended September 30, 1994,
the Company had a net loss of $4,471,032 and its only revenues were generated
from repairing and servicing models no longer in production. The Company's
deficit accumulated totaled $25,326,140 at September 30, 1994, and had
increased to $30,919,352 at September 30, 1995. In the nine months ended
September 30, 1995, the Company had a net loss of $4,828,476. The Company
anticipates continued net losses in each calendar quarter at least through the
second quarter of 1996. As a development stage firm, the success of the
Company will be affected by expenses, operational difficulties and other
factors frequently encountered in the development of a business enterprise in a
competitive environment, many of which may be beyond the Company's control.
Recent Issuances of Securities by the Company. Pursuant to two
separate agreements dated October 2, 1995 (the "1995 Consulting Agreements")
between the Company and a consultant (the "1995 Consultant"), the 1995
Consultant agreed to perform corporate and investor relations services for the
Company for one year in exchange for (i) $30,000 in cash, (ii) 640,000 shares
of Common Stock and (iii) the following options (the "Options"). The
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Options under the first 1995 Consulting Agreement consist of (i) options
expiring October 1, 1996 to purchase up to 50,000 shares of Common Stock at a
purchase price of $.50 per share, (ii) options expiring October 1, 1996 to
purchase up to an additional 50,000 shares at a purchase price of $.62 per
share, (iii) options expiring October 1, 1996 to purchase up to an additional
50,000 shares at a purchase price of $.75 per share, (iv) options expiring
October 1, 1997 to purchase up to an additional 50,000 shares at a purchase
price of $.85 per share, and (v) options expiring October 1, 1997 to purchase up
to an additional 50,000 shares at a purchase price of $1.75 per share. The
Options under the second 1995 Consulting Agreement consist of (i) options
expiring April 1, 1997 to purchase up to 50,000 shares of Common Stock at a
purchase price of $.50 per share, (ii) options expiring April 1, 1997 to
purchase up to an additional 50,000 shares at a purchase price of $.62 per
share, (iii) options expiring April 1, 1997 to purchase up to an additional
50,000 shares at a purchase price of $.75 per share, (iv) options expiring April
1, 1998 to purchase up to an additional 50,000 shares at a purchase price of
$.85 per share, and (v) options expiring April 1, 1998 to purchase up to an
additional 50,000 shares at a purchase price of $1.75 per share.
In Jauary 1996, the Company issued to V'Power for $5 million in cash
10 million newly-issued shares of Common Stock and a one-year option for an
additional 50 million shares with an exercise price of $.45 per share.
In November 1990, the Company issued the 1990 Warrants, which are
traded on NASDAQ under the symbol "VCARW." Under their original terms, the 1990
Warrants were exercisable for one share of Common Stock each for an exercise
price of $4.68 and were to expire on November 14, 1995. In October 1995, the
Company modified the terms of the 1990 Warrants. As modified, the 1990
Warrants are exercisable for one share of Common Stock for an exercise price of
$1.50 and expire August 12, 1996.
In January 1996, the Company extended the expiration date of the
Consultant's Warrants from January 9, 1996 to April 9, 1996.
Non-Compliance with NASDAQ Maintenance Requirements. The Company's
Common Stock is listed on the National Association of Securities Dealers
Automated Quotation System ("NASDAQ"). Under the rules for continued listing
in the NASDAQ system, a company must maintain at least $2,000,000 in total
assets, $1,000,000 in capital and surplus, two marketmakers and a minimum bid
price of $1.00 per share (unless it has capital and surplus of $2,000,000). A
deficiency in the maintenance standards for market value of public float,
marketmakers and bid price will be determined if the issue fails the individual
stated requirement for ten consecutive trading days. If a failure of the ten
day test occurs, the Company will be promptly notified and will be given 90
calendar days in which to comply with the entry level requirements of the
specified area, which are more stringent than the maintenance requirements.
Failure of the Company to meet the maintenance requirements of NASDAQ could
result in the Company's securities being delisted from NASDAQ, with the result
that the Company's securities would trade on the OTC Bulletin Board or in the
"pink sheets" maintained by the National Quotation Bureau, Inc., which are
generally considered to be less efficient markets. The bid price of Common
Stock is currently and has in the past been significantly below $1.00 per share
for prolonged periods, and the Company was in November 1995 notified by NASDAQ
that its listing would be terminated on February 20, 1996, unless it complied
with NASDAQ's minimum standards before that time. Additionally, the Company's
capital and surplus at September 30, 1995 was $1,172,703, well below the Nasdaq
minimum. The issuance of equity securities to V'Power in January 1996 for $5
million brought the Company into compliance with NASDAQ standards. Because of
the anticipated continued operating losses of the Company at least through the
second quarter of 1996, however, there can be no assurance that the Company
will be able to continue compliance with Nasdaq standards and to maintain the
listing of Common Stock on the Nasdaq SmallCap Market.
Future Dilution; Shares Eligible for Future Sale. On January 25, 1996
there were 53,043,199 shares of Common Stock outstanding. In addition, an
aggregate of 67,068,000 shares were issuable under presently exercisable
warrants, options and agreements, consisting of 6,650,000 shares issuable
pursuant to the Public Warrants; 300,000 shares issuable to a consultant;
500,000 shares issuable under the Underwriters' Warrants; 850,000 shares
issuable under the 1995 Consulting Agreements; 500,000 shares issuable under
the Underwriters' 1991 Warrants; 889,500
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shares issuable pursuant to presently exercisable stock options and warrants
held by present and former officers, directors and consultants at an exercise
price of $.21875; 50,000,000 shares pursuant to an option held by V'Power with
an exercise price of $.43 per share; 6,000,000 shares pursuant to an option
held by V'Power with an exercise price of $.75 per share; 50,000,000 pursuant
to an option held by V'Power with an exercise price of $.45; and 1,000,000
shares pursuant to a warrant with a $1.00 exercise price held by the Company's
former Chairman. In addition, the Company has issued options to purchase
834,000 shares of the Company's Common Stock at an exercise price of $.38 per
share to certain officers, directors, employees and consultants of the Company
which become exercisable in February 1996. Future exercises of options and
warrants could depress the market price of the shares. See "DILUTION" and
"DESCRIPTION OF SECURITIES".
Dealers; Backlog. The Company has entered into agreements with seven
dealers, each of which has agreed to maintain a minimum inventory of two Vector
M12's. Accordingly, the Company presently has orders from its dealers for the
first 14 Vector M12's to be produced. Because of applicable state laws,
however, these orders are not firm and may be cancelled at the dealers' option.
Additional dealers orders will depend in large part upon market acceptance of
the automobile.
Limited Production History. The Company's ability to produce
automobiles is relatively untested, and the Company has experienced production
delays in the past which have been caused by a variety of factors. Prior to
early 1993, the Company produced a total of 22 Vector W8 automobiles. The
production of this model was not profitable, and production of Vector W8's
ceased in early 1993. Design work on the Vector M12 model began in February
1995. The Company's emphasis shifted to production and manufacturing
activities with respect to the M12 in the summer of 1995. To date, only two
production vehicles have been produced. Because of the lack of production
history, there can be no assurance the Company will be capable of meeting
production requirements in the future or that the Company will not incur
material warranty expenses should the Vector M12 experience significant
operating difficulties on an after-sale basis.
Lack of Success with Vector W8. The Company ceased production of the
Vector W8 in early 1993 and sold a total of 18 Vector W8's. Although
production and marketing of Vector M12's differs substantially from that of the
Vector W8 (for instance, the Company produced only one Vector W8 per month
compared to an anticipated rate of 12 Vector M12's per month, and the suggested
base price of a Vector M12 is $184,000 compared to approximately $400,000 for
the Vector W8 during most of its production period), there can be no assurance
that the Vector M12 will be more successful than the Vector W8.
Change of Control. Prior to July 1993, the largest stockholder of the Company
was Mr. Gerald A. Wiegert, who was also the Company's Chairman, President and
Chief Executive Officer. In a series of transactions from July 1992 through
January 1996, Setdco Engineering Corporation ("Setdco") and V'Power acquired 9%
and 70%, respectively, of the Company's outstanding shares of Common Stock.
V'Power also has the right to acquire an additional 106,000,000 shares of
Common Stock pursuant to presently exerciseable options. Exercise of these
options would give V'Power ownership of approximately 90% of the Company's
outstanding voting shares. V'Power is controlled by Mr. Hutomo Mandala Putra,
who is the controlling stockholder of V'Power, Automobili Lamborghini, S.p.A.
("Lamborghini"), the manufacturer of the Italian exotic sports car and
Automobili Lamborghini U.S.A. ("Lamborghini U.S.A."), the American importer and
distributor of Lamborghini products. In January 1996, the Company issued to
V'Power for $5 million 10 million newly-issued shares of Common Stock and a
one-year option for an additional 50 million shares with a exercise price of
$.45 per share.
In March 1993, Mr. Wiegert was removed from his positions with the
Company. All of the Company's current executive officers have held management
positions with the Company for less than two years.
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Conflicts of Interest; Certain Relationships and Related Transactions.
The Company has identified and established mutually beneficial relationships
with Lamborghini and Lamborghini U.S.A. To date, these arrangements include
joint development of, and manufacture by Lamborghini of, the engine for the
Vector M12 and the lease of a facility in Jacksonville, Florida, by the Company
from Lamborghini U.S.A. for the Company's executive offices. Potential
conflicts of interest exist between the Company and Lamborghini and Lamborghini
U.S.A. with respect to competition for dealers and customers as well as
marketing and product development.
One of the Company's directors is an executive officer of Lamborghini.
Michael J. Kimberley is President and Chief Executive Officer and serves as a
managing director of Lamborghini. In addition, Sudjaswin E.L., a director of
the Company, is a managing director of Lamborghini.
V'Power has provided funds to the Company in the past through the
purchase of additional shares of Common Stock and options to purchase Common
Stock. In April 1994, for an aggregate of $2,250,000, V'Power acquired
3,000,000 shares of Common Stock and an option to purchase an additional
6,000,000 shares of Common Stock with a $.75 per share exercise price which
expires in April 1996. In January and April 1995, for an aggregate of
$5,500,000, V'Power acquired 18,333,333 shares of Common Stock and an option to
purchase an additional 50,000,000 shares of Common Stock with a $.43 per share
exercise price. This option expires in May 1996. In January 1996, for an
aggregate of $5,000,000, V'Power acquired 10,000,000 newly-issued shares of
Common Stock and an option expiring January 1997 to acquire an additional
50,000,000 shares of Common Stock with a $.45 per share exercise price. The
Company received investment bankers' fairness opinions with respect to the 1995
and the 1996 transactions, and the Company believes that these transactions
with V'Power were fair to and in the best interests of the Company. There can
be no assurance that V'Power will provide additional funds to the Company,
either through purchase of additional equity securities from the Company or
exercise of the existing option, to satisfy the Company's capital needs.
Litigation Related to Mr. Wiegert. There is currently pending
significant litigation concerning the change in control from Mr. Wiegert. In
connection with the removal of Mr. Wiegert as the Company's Chairman, President
and Chief Executive Officer, the Company on March 24, 1993 filed a complaint in
the Superior Court of California, Los Angeles County, against Mr. Wiegert
styled Vector Aeromotive Corporation v. Gerald A. Wiegert, which it later
amended to state ten claims for relief, including breach of fiduciary duty and
breach of the employment agreement between the Company and Mr. Wiegert. Mr.
Wiegert and his wife, Brenda Wiegert, filed a third amended cross complaint
against the Company in this action for breach of the employment agreement and
breach of the lease on an industrial building formerly rented by the Company
from Mr. Wiegert, declaratory relief, conversion of assets, libel and slander,
and has sought unspecified damages from the Company. This action, which was
previously anticipated to be scheduled for trial in late 1995 or early 1996, has
not yet received a trial date pending assignment of a new judge to the matter.
Mr. Wiegert, in his capacity as general partner of Vector Car (the predecessor
of the Company) on June 15, 1994, also filed a separate lawsuit in the same
court styled Vector Car v. Vector Aeromotive Corporation, et. al., claiming
that Vector assumed a debt of $326,000 owed to Mr. Wiegert by Vector Car and
that Vector is obligated on a separate $250,000 note payable to Vector Car.
It is anticipated that this action will be scheduled for trial concurrently
with the Company's action against Mr. Wiegert. While the Company intends to
vigorously defend the claims made by Mr. Wiegert, no assurance can be given
regarding the outcome of either case.
Limited Market; Pricing. The Company has designed the Vector M12 for
a select clientele interested in acquiring a high-performance, exotic sports
car suitable for normal road use. The Vector M12 carries a current U.S.
manufacturers' suggested retail price of $189,000. Although management
believes the Vector M12 is priced in the low end of the range of other exotic
sports cars, the market for such automobiles is limited. If such a market does
not develop, or if production difficulties are encountered, or for a number of
other reasons, the production of Vector automobiles in commercial quantities
may be unprofitable, and the Company may not be able to continue as a going
concern. The establishment of a market for the Company's automobiles in
commercial quantities may be difficult in view of the existing competition for
customers of exotic sports cars from other, well-known manufacturers. There
can be no assurance that the Company's marketing efforts will generate
significant sales of the Vector M12 exotic sports car.
11
<PAGE> 15
Automobile Market Entry; Competition. The development, manufacture
and sale of any automobile is subject to certain market risks, including slow
market acceptance. There can be no assurance the Company will compete
successfully in the exotic sports car market. Competitors in this market
include, among others, Ferrari, Aston Martin and Lamborghini, which have
greater name recognition and longer operating histories than the Company, and
may have greater financial, marketing and technical resources than the Company.
The Company may also be subject to potential competition from other firms
desiring to enter the exotic sports car market, such as Porsche, Maserati or
other sports car manufacturers.
Potential Vector M12 Operating Difficulties; Potential Warranty
Claims. The Vector M12 is sold with a limited 24-month warranty. The Vector
M12, because of its performance characteristics, may experience a greater
number of operating difficulties than a mass-produced automobile. Moreover,
although the Company believes that it has rigorously tested the Vector M12 and
that its testing meets or exceeds that required to satisfy applicable safety
and other requirements, the Company has not had in the past, and will not have
in the future, the resources available to develop a comprehensive testing
program such as that undertaken by major manufacturers. Accordingly, the
relatively limited nature of testing used by the Company (which is typical of
the exotic sports car industry), and the nature of the Vector M12, could expose
the Company to a greater number of warranty claims or could require the Company
to undertake more comprehensive service of Vector M12's than experienced by the
manufactures of mass produced automobiles.
Dependence on Subcontractors. Subcontractors supply major subsystems
to the Company (such as engines or transmissions) which they manufacture to the
Company's proprietary specifications. The Company also utilizes certain
subcontractors to supply components for installation in the Vector M12. While
the use of subcontractors has reduced the Company's investment in capital
assets, it also subjects the Company to risks associated with delivery and
quality control. Inability to obtain timely delivery from the Company's
subcontractors or to locate alternate sources of supply could cause delivery
delays or a loss of customer orders. Moreover, because the Company has only
recently commenced manufacturing, management has a limited basis upon which to
judge the performance of its subcontractors.
Product Updating and Refinements. Because the Company has, and will
in the future have, either one or a small number of models, the Company does
not expect to substantially alter existing models while in the production
process. Accordingly, much like other exotic sports car manufacturers, the
Company will continually seek to implement design and production refinements
which may have a negligible, or no, effect on the appearance of the Company's
models. In the course of implementing design and production refinements, the
Company may update or change engineering, production or performance
specifications. There can be no assurance that the change of such
specifications will not result in differing performance characteristics of the
Company's exotic sports cars or that the Company will not identify improvements
to systems or subsystems after production of a quantity of its automobiles.
Vehicles produced prior to a design or production change will not be updated
unless required by safety or other concerns.
Product Liability. The Company's manufacture of the Vector M12 will
subject the Company to possible exposure for product liability claims should
injury, death or property damage result from the operation of the Vector exotic
sports car. The Company currently maintains product liability insurance
coverage in the amount of $5,000,000, the premium for which is approximately
$110,000 per year. This coverage also covers defense costs, which could be
expected to be substantial in the event of assertion of product liability
claims against the Company. Any product liability action against the Company
seeking amounts in excess of such coverage could expose the Company to damages
or expenses which could be significant and which could have a material adverse
effect on the Company.
Regulation. As an automobile manufacturer, the Company is subject to
compliance with certain environmental and safety standards promulgated by
federal and state regulatory authorities. The Company has completed all of the
major safety tests required by the National Highway Transportation Safety
Administration and
12
<PAGE> 16
the Environmental Protection Agency for the Vector M12. There can be no
assurance additional standards or tests will not be adopted in the future which
would adversely affect the sale of the Company's vehicles. In such event, the
Company could be required to undertake expensive and time consuming
modifications to the Vector M12 exotic sports car in order to comply with such
new standards.
Public Warrant Exercise and Redemption Provisions. Holders of the
Public Warrants will have the right to exercise their warrants only if a
current prospectus relating to the Public Warrant Shares is then in effect and
only if such shares are qualified for sale under applicable state securities
laws of the states in which holders of the Public Warrants reside. There can
be no assurance the Company will be successful in maintaining a current
prospectus covering the Public Warrant Shares. Public Warrants may be deprived
of any value in the event this Prospectus or another prospectus covering the
Public Warrant Shares is not kept effective or if such shares are not qualified
or registered in the states in which holders of the Public Warrants reside.
Additionally, the Public Warrants may be redeemed by the Company, in whole but
not in part, under certain circumstances upon 30 days' prior written notice at
a price of $.01 per warrant for the 1991 Warrants and $.25 per warrant for the
1990 Warrants. While the Public Warrants may be exercised during the 30-day
notice period prior to the date of redemption, the holder may be unable (for
financial or other reasons) to exercise the Public Warrants at the time of
receipt of the notice of redemption.
DILUTION
At September 30, 1995, the Company had a net tangible book value of
$1,172,703, or $.027 per share. Net tangible book value per share represents
the book value of total tangible assets of the Company less the amount of total
liabilities at September 30, 1995, divided by the number of shares of Common
Stock outstanding. After giving effect to (i) the exercise of all options and
warrants exercisable on September 30, 1995 with exercise prices below the $1.50
exercise price of the Public Warrants, (ii) the issuance of 640,000 shares
of Common Stock under the 1995 Consulting Agreements and (iii) the issuance to
V'Power of an additional 60,000,000 shares of Common Stock pursuant to the
Share Purchase Agreement between the Company and V'Power dated December 29,
1995 (the securities in clauses (i), (ii) and (iii) being collectively referred
to herein as the "Dilutive Shares"), the pro forma net tangible book value at
September 30, 1995, would have been $57,334,000, or $.35 per share. After
giving effect to the exercise of the Public Warrants and the Dilutive Shares,
less the estimated expenses of this offering, the proforma net tangible book
value at September 30, 1995 would have been $67,205,000 or $.40 per share.
This represents an immediate increase in pro forma net tangible book value of
$.05 per share to present stockholders and an immediate dilution of $1.10 per
share to new investors purchasing Common Stock pursuant to the Public Warrants
("New Investors").
The following table illustrates the dilution to New Investors:
<TABLE>
<S> <C>
Warrant exercise price per share $1.50
Pro forma net tangible book value per share at September 30, 1995 .35
Increase in net tangible book value per share attributable to Warrant exercise .05
Pro forma net tangible book value per share after Warrant exercise .40
---
Dilution per share to New Investors $1.10
=====
</TABLE>
The following table sets forth the differences between the number of
shares purchased or purchasable under existing options and warrants, the total
consideration paid or payable, and the average price per share originally paid
for the shares of Common Stock held by the Company's officers, directors and
affiliates and to be paid by the New Investors pursuant to exercise of the
Public Warrants at $1.50 per share:
13
<PAGE> 17
<TABLE>
<CAPTION>
Shares Total Consideration
------------------------- ----------------------------- Average Price
Number Percent Amount Percent Per Share
------ ------- ------- -------------- -------------
<S> <C> <C> <C> <C> <C>
Officers, directors 149,103,333 96.0 $66,237,162 87.0 $0.44
and affiliates (1)
New Investors 6,650,000 4.0 9,975,000 13.0 1.50
----------- ----- ----------- ----- -----
Total 155,753,333 100.0 $76,212,162 100.0 $ .49
=========== ===== =========== ===== =====
</TABLE>
________________
(1) Including options and warrants for 106,770,000 shares of Common Stock with
exercise prices ranging between $.21875 and $.75 per share.
THE COMPANY
The Company designs, manufactures and markets exotic sports cars.
Since purchasing the assets of its predecessor, Vector Car, in 1987, the
Company completed design and engineering of its first production car, the
Vector W8; successfully completed substantially all state and federal
government testing on the Vector W8; and produced a total of 22 Vector W8's.
The Company ceased production of the Vector W8 in early 1993. During 1994 and
1995 the Company sold no automobiles.
During fiscal years 1992 and 1993, the Company developed design
concept specifications for the Vector M12 (formerly known as the Avtech), the
successor to the W8. A prototype for the M12 and also for a second proposed
M12 model, a roadster, were completed. The Vector M12 features updated styling
and, at an anticipated manufacturers' suggested retail price slightly below
$190,000, it will be more competitively priced than the Vector W8, which at
certain times was priced in excess of $400,000.
During fiscal year 1994, the Company engaged in research and
development activities relating to design of the Vector M12's chassis, engine
and power train, electronic systems, and tooling. During the 1995 fiscal year,
all development, state and federal government testing and pre-production
activities on the Vector M12 has been completed. Completion of the first Vector
M12 production car occurred in January 1996. The Company currently plans to
produce approximately 100 Vector M12's during 1996.
Effective in April 1995, D. Peter Rose replaced Robert A. Braner as
President of the Company. Mr. Rose joined the Company as General Manager in
February 1995. Prior to that, Mr. Rose was a private consultant in the
automobile industry, and prior to that he served in various executive
capacities with TRW, Inc. with responsibility for, among other things, advance
systems development for TRW's Steering Systems Group. Mr. Rose is a Chartered
Engineer and a member of the Institute of Mechanical Engineers and the Society
of Automotive Engineers.
In December 1995, Mr. Braner, Baduraman Dorpi P. and John van der Wal
resigned from the Board of Directors of the Company.
USE OF PROCEEDS
The Company will receive none of the proceeds from the sale of the
Securityholders' Securities, which are being sold by the Selling
Securityholders. Any proceeds from the exercise of the Options and the
Warrants will be utilized by the Company for general corporate purposes.
14
<PAGE> 18
PRICE RANGE OF WARRANTS AND COMMON STOCK
The Common Stock is traded on the NASDAQ SmallCap under the symbol
VCAR, and the 1991 Warrants are traded on the NASDAQ SmallCap Market under the
symbol VCARL. The following table sets forth for the periods indicated the
high and low closing bid prices for the Common Stock and the 1991 Warrants as
reported on the NASDAQ SmallCap Market. Such prices are interdealer prices,
without retail markup, markdown or commissions, and may not necessarily
represent actual transactions.
<TABLE>
<CAPTION>
Common Stock 1991 Warrants
------------ -------------
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
CALENDAR 1993
First Quarter .31 .12 .06 .03
Second Quarter .40 .19 .03 .03
Third Quarter .40 .37 .06 .03
Fourth Quarter .97 .41 .38 .06
CALENDAR 1994
First Quarter 1.00 .78 .44 .09
Second Quarter .78 .50 .25 .06
Third Quarter .62 .44 .19 .03
Fourth Quarter .72 .44 .22 .09
CALENDAR 1995
First Quarter .56 .44 .25 .06
Second Quarter .50 .34 .28 .09
Third Quarter 1.00 .47 .34 .19
Fourth Quarter 1.25 .53 .53 .09
CALENDAR 1996
First Quarter (through February 7, 1996) .96 .50 .25 .15
</TABLE>
On February 7, 1996, the reported closing bid price for Common Stock
and the 1991 Warrants was $.62 and .18, respectively. On January 24, 1996,
there were approximately 3,556 holders of record of Common Stock (excluding
holders whose securities were held in street or nominee name).
DIVIDENDS
The Company has not paid a dividend on Common Stock, and intends to
retain all earnings for use in its business for the foreseeable future. The
Board of Directors, at its discretion, may elect to pay dividends in the future
based upon, among other factors, the level of the Company's earnings, capital
requirements and financial condition.
DESCRIPTION OF SECURITIES
The Company's authorized capital stock consists of 600,000,000 shares
of Common Stock, $.01 par value per share, and 5,000,000 shares of undesignated
Preferred Stock, $.10 par value per share. There were 53,043,199 shares of
Common Stock and no shares of Preferred Stock outstanding at January 24, 1996.
In addition, the Company had outstanding currently exercisable options
and warrants pursuant to which were
15
<PAGE> 19
issuable an additional 116,689,500 shares of Common Stock at January 24, 1996
and outstanding options that become exercisable in February 1996 for an
additional 834,000 shares. Additional information concerning these options and
warrants is contained in the following table.
For information concerning the possible issuance of 10,000,000 shares
of Common Stock at a purchase price of $.45 per share and an option for an
additional 50 million shares with an exercise price of $.45 per share, see
"RISK FACTORS - Need for Additional Capital; Liquidity."
<TABLE>
<CAPTION>
Number of
Description Shares Issuable(1) Exercise Price Expiration Date
- ----------- ------------------ -------------- ---------------
<S> <C> <C> <C>
Option held by V'Power 6,000,000 $0.75 April 1996
Option held by V'Power 50,000,000 0.43 May 1996
Option held by V'Power 50,000,000 0.45 January 1997
Warrants held by present and
former directors and employees 667,500 0.21875 November 1998
Non-qualified and incentive stock Various dates
options held by present and former between April 1996
officers and directors 1,056,000 0.21875 - .38 and August 2005
1990 Warrants 400,000 1.50 August 1996
1991 Warrants 6,250,000 1.50 August 1996
Underwriters' Warrants 1,000,000(2) 2.70(3) August 1996
Consultant's Warrant 300,000 1.25 April 1996
Former Chairman's Warrant 1,000,000 1.00 August 1996
Options held by 1995 Consultant 500,000 .50 - 1.75 October 1996 -
April 1998
Shares issuable to 1995
Consultant in April 1996 under
the 1995 Consulting Agreements 350,000 Services Not applicable
TOTAL 117,523,500
- ---------------
</TABLE>
(1) All options and warrants are currently exercisable, except for
incentive and non-qualified options for 834,000 shares, which become
exercisable in February 1996.
(2) The warrant is for 500,000 units each consisting of one share of
Common Stock and one 1991 Warrant at an exercise price of $1.20 per unit.
16
<PAGE> 20
The existence of a large number of shares of Common Stock issuable
under currently exercisable warrants and options, some of which are exercisable
at prices substantially below the current trading price of Common Stock, may
have a negative effect on the future trading prices for Common Stock.
PUBLIC WARRANTS
The 1990 Warrants were issued in an underwritten public offering of
units consisting of one share of Common Stock and one 1990 Warrant. The
offering price for these units was $3.25 per unit, and this offering was
completed in November 1990. The 1991 Warrants were issued in an underwritten
public offering of units consisting of one share of Common Stock and one 1991
Warrant. The offering price for those units was $1.00 per unit, and the
offering was completed in August 1991.
The Public Warrants were issued pursuant to Warrant Agreements between
the Company and American Securities Transfer, Inc. (the "Warrant Agent"). The
Public Warrants will expire, become void and be of no further force or effect
on August 12, 1996, unless extended. The exercise period of the 1990 Warrants
may be extended until November 14, 1996, at the sole discretion of the Company
at any time during the exercise period.
The exercise price of the Public Warrants may be reduced at the
discretion of the Company. Reduction of the exercise price may be expected to
have an adverse impact on the price of Common Stock. Moreover, Public Warrant
holders exercising their Public Warrants prior to any such reduction could be
expected to incur losses in the market value of any Common Stock they acquired
through earlier exercise.
In the event the Company is unable to qualify the sale of the Common
Stock underlying Public Warrants in any state, proceeds from exercising Public
Warrant holders residing in such a state will be returned without deduction or
payment of interest. The Company will utilize its best efforts to qualify the
Public Warrant Shares in various states in which Public Warrant holders reside.
Nonetheless, there can be no assurance such qualification will be obtained for
any state.
TRANSFER AGENT AND REGISTRAR, WARRANT AGENT
The transfer agent and registrar for the Common Stock, and the Warrant
Agent for the Public Warrants, is American Securities Transfer, Inc., Lakewood,
Colorado.
PLAN OF DISTRIBUTION
PUBLIC WARRANT SHARES
The Company is offering 6,650,000 shares of Common Stock, par value
$.01 per share, to the holders of the Company's Public Warrants. The holder of
each Public Warrant is entitled to purchase one Common Share at an exercise
price of $1.50 per share. Public Warrants may be exercised by submitting to
the Company's Warrant Agent a duly executed subscription form on the reverse
side of the Warrant Certificate, accompanied by payment of the purchase price
in cash, or by cashier's, certified or personal check, made payable to the
order of the Warrant Agent. The offering pursuant to the Public Warrants will
commence upon the date of this Prospectus and will continue until expiration of
the Public Warrants.
The exercise price of the Public Warrants was arbitrarily determined
by the Company and the underwriter of the offerings in which the Public
Warrants were initially sold. While there is a market for the Company's Common
Stock and Public Warrants, there can be no assurance that such market will
continue in the future.
No underwriter has been engaged in connection with the solicitation of
exercise of the Public Warrants.
The Company will attempt to qualify the Public Warrants for sale in
various states in which Public Warrant holders reside. Certain state "Blue
Sky" securities laws may prohibit or otherwise prevent the exercise of the
Public Warrants by the holder thereof. There can be no assurance the Company
will be successful in obtaining state qualifications. Public Warrant holders
residing in states in which warrant exercise is not permitted may be able to
17
<PAGE> 21
sell their Public Warrants in the market prior to the date on which their
Public Warrants will expire.
WARRANT SOLICITATION
The Company may agree to pay to broker dealers that are members of the
NASD, a solicitation fee up to 10% of the exercise price of Public Warrants.
In order to qualify to receive the solicitation fee, the broker-dealer must be
designated by the Public Warrant holder (on a form that will be supplied by the
Company) as having solicited the exercise of the Public Warrant. The
compensation payable to the broker-dealer in connection with the exercise of
the Public Warrant must have been disclosed to the Public Warrant holder. The
Company may pay the solicitation fee to qualifying broker-dealers through the
expiration date of the Public Warrants. No solicitation fee will be paid with
respect to the exercise of Public Warrants directly by Public Warrant holders
without the assistance or participation of broker-dealers and no solicitation
fee will be paid in any state which precludes payment of such fees.
No broker-dealers which are members of the NASD will be entitled to
receive a solicitation fee if (i) the exercise of the Public Warrants is made
at a time when the market price of the Company's Common Stock is lower than the
exercise price of the Public Warrants, or (ii) the Public Warrants to be
exercised are held in a discretionary account. Proceeds from exercise of
Public Warrants will not be placed into escrow and will be distributed directly
to the Company by the Warrant Agent.
In connection with the exercise of any Public Warrant, a broker-dealer
will not be entitled to receive the 10% Warrant Solicitation fee unless it
represents to the Company that (1) it did not, during the ten business days
immediately preceding the date of exercise of such warrant, bid for or purchase
the Common Stock of the Company or any security of the Company immediately
convertible into or exchangeable for such Common Stock (including the Public
Warrants), and it did not, during the ten business days immediately preceding
the date of the exercise of such warrant, otherwise engage in the activity that
would be prohibited by Rules 10b-2, 10b-6 and 10b-7 to a person engaged in a
distribution of the Company's securities. Accordingly, broker-dealers will be
prohibited from making a market in the Company's securities during the period
in which they are engaged in the distribution. Should such marketmakers be the
sole marketmakers in the Company's securities, the liquidity and price of the
Company's securities may be materially adversely affected.
SECURITYHOLDERS' SECURITIES
The Securityholders' Securities may be sold from time to time to
purchasers directly by any of the Selling Securityholders, or, alternatively,
any of the Selling Securityholders may from time to time offer the
Securityholders' Securities through dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Securityholders and/or the purchasers of the Securityholders'
Securities for whom they may act as agent. Any discounts, commissions or
concessions received by any such dealers or agents and any profits on the sale
of Securityholders' Securities by them may be deemed to be underwriting
discounts and commissions under the Securities Act. At any time a particular
offer of Securityholders' Securities is made, if required by applicable law or
regulations, a Prospectus Supplement will be distributed which will set forth
the aggregate amount of Securityholders' Securities being offered and the terms
of the offering, including the name or names of any dealers or agents, any
discounts, commissions and other items constituting compensation from the
Selling Securityholders and any discounts, commissions or concessions allowed
or re-allowed or paid to dealers. Guidelines adopted by the National
Association of Securities Dealers, Inc. ("NASD") set forth the maximum
commission that any NASD member firm can receive in connection with a
distribution of any of the Securityholders' Securities without further
clearance from the NASD. If required by applicable law or regulations, a
Prospectus Supplement and/or a post-effective amendment to the Registration
Statement of which this Prospectus is a part will be filed with the Commission
to reflect the disclosure of additional information with respect to the
distribution of the Securityholders' Securities, including, if applicable, the
factors used to determine the price of the Securityholders'
18
<PAGE> 22
Securities then being offered.
Subject to the preceding paragraph, the Securityholders' Securities
may be sold from time to time in one or more transactions at a fixed offering
price, which may be changed at varying prices determined at the time of sale,
or at negotiated prices. Such prices will be determined by the Selling
Securityholders or by agreement between the Selling Securityholders and/or
dealers. The Common Stock at the 1991 Warrants are listed on the NASDAQ Small
Cap Market and may also be sold in transactions on the NASDAQ Small Cap Market.
In addition, the Securityholders' Securities may be sold, to the extent
permitted, from time to time in transactions effected in accordance with the
provisions of Rule 144 under the Securities Act.
Under applicable rules and regulations under the Exchange Act, any
person engaged in a distribution of the Securityholders' Securities may not bid
for or purchase the Securityholders' Securities until after such person has
completed his or her participation in such distribution, including the period
of nine business days prior to the commencement of such distribution. In
addition to and without limiting the foregoing, the Selling Securityholders and
any other person participating in such distribution will be subject to other
applicable provisions of the Exchange Act and the rules and regulations
thereunder, including without limitation rules 10b-2, 10b-6, and 10b-7, which
provisions may affect the timing of purchases and sales of any of the
Securityholders' Securities by the Selling Securityholders and any such other
person. All of the foregoing may affect the marketability of the
Securityholders' Securities and the ability of any person or entity to engage
in market making activities with respect to the Securityholders' Securities.
Pursuant to prior agreements entered into with the Selling
Securityholders, the Company will pay substantially all of the expenses
incident to the registration, offering and sale of the Securityholders'
Securities to the public, other than commissions and discounts of dealers or
agents.
SELLING SECURITYHOLDERS
The following table lists the names of the Selling Securityholders
whose shares of Common Stock are covered by this Prospectus, and for each, the
number of shares beneficially owned at the commencement of this offering, the
number of shares being offered for sale and the number of shares to be
beneficially owned after the offering. The columns "Number of Shares Owned at
Commencement of Offering" and "Number of Shares Being Offered" include the
Shares issuable upon exercise of the Options and the Warrants and under the
1995 Consulting Agreements.
<TABLE>
<CAPTION>
Number of Number Number of
Shares Owned of Shares Shares
at Commencement Being After
Selling Securityholder of Offering Offered Offering
- ---------------------- ----------- ------- --------
<S> <C> <C> <C>
V'Power Corporation 143,333,333 10,000,000 133,333,333
Setdco Engineering Corporation 5,000,000 5,000,000 0
Corporate Relations Group, Inc. 1,140,000 1,140,000 0
Chatfield Dean & Co., Inc. 172,000 172,000 0
Thomas E. McChesney 22,500 22,500 0
William A. Berg 22,500 22,500 0
Paulson Investment Company, Inc. 182,500 182,500 0
Sanford D. Greenberg 280,500 280,500 0
Kenneth S. Bernstein 67,500 67,500 0
Kenneth L. Greenberg 30,000 30,000 0
Chester L.F. Paulson 22,500 22,500 0
---------- ---------- ----------
TOTAL 150,273,333 16,940,000 133,333,333
</TABLE>
19
<PAGE> 23
The following table lists the names of the Selling Securityholders
whose Underwriters' 1991 Warrants are covered by this Prospectus, and for each,
the number of Underwriters' 1991 Warrants beneficially owned at the
commencement of this offering, the number of 1991 Warrants being offered for
sale and the number of Underwriters' 1991 Warrants to be beneficially owned
after the offering.
<TABLE>
<CAPTION>
Number of 1991 Number of Number of
Warrants Owned 1991 Warrants 1991 Warrants
at Commencement Being After
Selling 1991 Warrantholder of Offering Offered Offering
- -------------------------- ----------- ------- --------
<S> <C> <C> <C>
Thomas E. McChesney 22,500 22,500 0
William A. Berg 22,500 22,500 0
Paulson Investment Company, Inc. 182,500 182,500 0
Chatfield Dean & Co., Inc. 85,000 85,000 0
Sanford D. Greenberg 127,500 127,500 0
Kenneth S. Bernstein 37,500 37,500 0
Chester L.F. Paulson 22,500 22,500 0
------- ------ -
TOTAL 500,000 500,000 0
</TABLE>
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for
the Company by Kirschner, Main, Petrie, Graham, Tanner & Demont, Jacksonville,
Florida.
EXPERTS
The consolidated balance sheets as of September 30, 1994 and 1993 and
the statements of operations, changes in stockholders' equity and cash flows of
Vector Aeromotive Corporation for each of the three years in the period ended
September 30, 1994, incorporated by reference in this Prospectus, have been
included herein in reliance on the report of BDO Seidman, independent
accountants, given on the authority of that firm as experts in accounting and
auditing.
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<PAGE> 24
NO DEALER, SALESPERSON OR OTHER INDIVIDUAL
HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO
MAKE ANY REPRESENTATIONS NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFERING COVERED
BY THIS PROSPECTUS. IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR
THE UNDERWRITERS. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR SOLICITATION OF AN
OFFER TO BUY, THE COMMON STOCK IN ANY JURISDICTION
WHERE, OR TO ANY PERSON TO WHOM, IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. NEITHER THE
DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS NOT BEEN ANY CHANGE
IN THE FACTS SET FORTH IN THIS PROSPECTUS OR IN
THE AFFAIRS OF THE COMPANY SINCE THE DATE HEREOF.
___________________
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Item Page
---- ----
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . 4
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE . . . . . . . . . . . 4
PROSPECTUS SUMMARY . . . . . . . . . . . . . . 6
RISK FACTORS . . . . . . . . . . . . . . . . . 8
DILUTION . . . . . . . . . . . . . . . . . . . 13
THE COMPANY . . . . . . . . . . . . . . . . . . 14
USE OF PROCEEDS . . . . . . . . . . . . . . . . 14
PRICE RANGE OF WARRANTS AND
COMMON STOCK . . . . . . . . . . . . . . . . 15
DIVIDENDS . . . . . . . . . . . . . . . . . . . 15
DESCRIPTION OF SECURITIES . . . . . . . . . . . 15
PLAN OF DISTRIBUTION . . . . . . . . . . . . . 17
SELLING SECURITYHOLDERS . . . . . . . . . . . . 19
LEGAL MATTERS . . . . . . . . . . . . . . . . . 20
EXPERTS . . . . . . . . . . . . . . . . . . . . 20
</TABLE>
_____________________________________
VECTOR AEROMOTIVE CORPORATION
7,450,000 SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO WARRANTS
350,000 SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO AGREEMENT
15,290,000 SHARES OF COMMON STOCK
CURRENTLY OUTSTANDING
500,000 SHARES OF COMMON STOCK
ISSUABLE PURSUANT TO OPTIONS
WARRANTS TO PURCHASE
500,000 SHARES OF COMMON STOCK
________________________
PROSPECTUS
________________________
February 13, 1996
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<PAGE> 25
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses payable by the
Registrant in connection with this Registration Statement.
<TABLE>
<S> <C>
Registration Fee $ 7,599
Warrant/Transfer Agent Fees 35,000
Accounting Fees 1,000
Legal Fees 35,000
Blue Sky Fees and Expenses 10,000
Printing Expense 10,000
Miscellaneous Expenses 5,000
--------
Total $103,599
========
</TABLE>
___________________
All of the amounts shown above are estimates, except for the fees
payable to the Securities and Exchange Commission.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
(a) Section 78.751 of the Nevada General Corporation Law (the "NGCL")
provides that a corporation may indemnify any person who was or is a party or
is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative, except an action by or in the right of the corporation, by
reason of the fact that he is or was a director, officer, employee, or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership,
joint venture, trust or other enterprise, against expenses, including
attorneys' fees, judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with the action, suit, or proceeding,
if he acted in good faith and in a manner he reasonably believed to be in or
not opposed to the best interests of the corporation, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe his conduct
was unlawful. The termination of any action, suit or proceeding by judgment,
order, settlement, conviction, or upon plea of nolo contendere or its
equivalent, does not, of itself, create a presumption that the person did not
act in good faith and in a manner which he reasonably believed to be in or not
opposed to the best interests of the corporation, and that, with respect to any
criminal action or proceeding, that he had reasonable cause to believe that his
conduct was unlawful.
Section 78.751 of the NGCL also provides that a corporation may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending, or completed action or suit by or in the right of
the corporation to procure a judgment in its favor by reason of the fact that
he is or was a director, officer, employee, or agent of the corporation, or is
or was serving at the request of the corporation as a director, officer,
employee, or agent of another corporation, partnership, joint venture, trust or
other enterprise against expenses, including amounts paid in settlement and
attorneys' fees, actually and reasonably incurred by him in connection with the
defense or settlement of such action or suit, if he acted in good faith and in
a manner which he reasonably believed to be in or not opposed to the best
interests of the corporation and except that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall have
been adjudged by a court of competent jurisdiction, after exhaustion of all
appeals therefrom, to be liable to the corporation or for amounts paid in
settlement to the corporation, unless and only to the extent that the court in
which such action or suit was brought or other court of competent jurisdiction
shall determine upon adjudication that, despite the adjudication of liability
22
<PAGE> 26
that in view of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the court deems proper.
Any such indemnification (unless ordered by a court) shall be made by
the corporation only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or agent is proper in
the circumstances. Such determination shall be made:
(1) by the stockholders;
(2) by the Board of Directors by a majority vote of a quorum
consisting of directors who were not parties to the act, suit
or proceeding;
(3) if a majority vote of a quorum consisting of directors who
were not parties to the act, suit or proceeding so orders, by
independent legal counsel in a written opinion; or
(4) if a quorum consisting of directors who were not parties to
the act, suit or proceeding cannot be obtained, by independent
legal counsel in a written opinion.
(b) Section 78.752 of the NGCL permits a Nevada corporation to
purchase and maintain insurance or make other financial arrangements on behalf
of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise against any liability asserted against such
person and incurred by him in any such capacity, or arising out of his status
as such, whether or not the corporation has the authority to indemnify him
against such liability and expenses. In the absence of fraud, (i) the decision
of the board of directors as to the propriety of the terms and conditions of
any insurance or other financial arrangement made pursuant to Section 78.752
and the choice of person to provide the insurance or other financial
arrangement is conclusive and (ii) the insurance or other financial arrangement
is not void or voidable and does not subject any director to personal liability
for his action, even if a director approving the insurance or other financial
arrangement is a beneficiary of the insurance or other financial arrangement.
(c) Article Ten of the Company's Articles of Incorporation
provides that to the maximum extent permitted by law or by public policy,
directors of the Company are to have no personal liability for monetary damages
for breach of fiduciary duty as a director of the Company. Any mandate for
indemnification, whether by statute or order of court, is to be expressly
subject to the Company's reasonable capability of paying. No person will be
entitled to be reimbursed for expenses incurred in connection with a court
proceeding to obtain court ordered indemnification unless such person first
made reasonable application to the Company and the Company either unreasonably
denied such application or through no fault of the applicant was unable to
consider such application within a reasonable time. The Company may maintain
insurance, at its expense, to protect itself and any director, officer,
employee or agent of the Company or another corporation, partnership, joint
venture, trust or other enterprise against any such expense, liability of loss,
whether or not the Company would have the power to indemnify such person
against such expense, liability or loss. The Company may, to the extent
authorized from time to time by the Board of Directors, grant rights to
indemnification and advancement of expenses to any agent of the Company to the
maximum extent permitted by law or public policy.
(d) The Company has purchased a directors' and officers' insurance
policy which provides coverage for certain liabilities that directors and
officers of the Company may incur in their capacity as such.
(e) Reference is also made to the last Undertaking contained in Item
17 of this Registration Statement.
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<PAGE> 27
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ -----------
<S> <C>
*3.1 Articles of Incorporation of Company (incorporated by reference to
Exhibit 3.1.3 of the Company's Registration Statement on Form S-1
(SEC File No. 33-31981))
*3.2 Form of Certificate of Amendment to Articles of Incorporation of the
Company (incorporated by reference to Exhibit 3.1.2 of the Company's
Registration Statement on Form S-1 (SEC File No. 33-35458)
*3.3 Certificate of Amendment to Articles of Incorporation of the Company
effective April 13, 1995 (incorporated by reference to Exhibit 3.01
of the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1995)
*3.4 By-laws of the Company, as amended and restated (incorporated by
reference to Exhibit 3.2 of the Company's Registration Statement on
Form S-18 (SEC File No. 33-20456-LA))
*4.1 Form of 1991 Warrant (incorporated by reference to Exhibit 4.1.2 of
the Company's Registration Statement of Form S-1 (SEC File No. 33-
39281))
*4.2 Warrant Agreement between American Securities Transfer, Inc. and the
Company (incorporated by reference to Exhibit 4.1.3 of the Company's
Registration Statement of Form S-1 (SEC File No. 33-39281))
*5.1 Opinion of Kirschner, Main, Petrie, Graham, Tanner & Demont
*23.1 Consent of BDO Seidman
*23.2 Consent of Kirschner, Main, Petrie, Graham, Tanner & Demont (included
in Exhibit 5.1)
*24.1 Power of Attorney (set forth on signature pages of this Registration
Statement)
- --------------------
* Previously filed.
</TABLE>
ITEM 17. UNDERTAKINGS.
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:
24
<PAGE> 28
(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, represents a fundamental
change in the information set forth in the registration
statement. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar
value of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Commission pursuant to Rule
424(b) if, in the aggregate, the changes in volume and price
represent no more than a 20% change in the maximum aggregate
offering price set forth in the "Calculation of Registration
Fee" table in the effective 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 (1)(i) and (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
Exchange Act that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post- effective amendment shall be deemed to
be a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
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 15(d) of the Exchange
Act 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.
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 securityholders 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 Exchange Act; and, where
interim financial information required to be presented by Article 3 or
Regulation S-X is not set forth in the prospectus, to deliver, or cause to be
delivered to each person to whom the prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
prospectus to provide such interim financial information.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the
25
<PAGE> 29
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final adjudication of such
issue.
26
<PAGE> 30
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
Amendment No. 2 to the Registration Statement to be signed on its behalf by
the undersigned, thereunto duly authorized in the City of Jacksonville, State
of Florida, on February 9, 1996.
VECTOR AEROMOTIVE CORPORATION
By:/s/ D. Peter Rose
-----------------------------------
D. Peter Rose, President
Pursuant to the requirements of the Securities Act of 1933, this
Amendment No. 2 to the Registration Statement has been signed by the following
persons in the capacities and on the date indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ D. Peter Rose Director; President February 9, 1996
- ----------------------------- (Principal Executive Officer and
D. Peter Rose Principal Financial Officer)
* Director February 9, 1996
- -----------------------------
Richard J. Aprahamian
* Director February 9, 1996
- -----------------------------
Sudjaswin E.L.
</TABLE>
<PAGE> 31
<TABLE>
<S> <C> <C>
* Director February 9, 1996
- -----------------------------
Michael J. Kimberley
* Director February 9, 1996
- -----------------------------
George J. Fencl
/s/ Janna L. Connolly Chief Accountant February 9, 1996
- ----------------------------- (Principal Accounting
Janna L. Connolly Officer)
* By /s/ D. Peter Rose
------------------------
Attorney-in-fact
</TABLE>
