As filed with the Securities and Exchange Commission on November 8, 1999
Registration No. 333-_____
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
WILLIAMS CONTROLS, INC.
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(Exact name of Registrant as specified in its charter)
Delaware 84-1099587
--------------------------------- ----------------------------
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
14100 SW 72nd Avenue
Portland, Oregon 97224
(503) 684-8600
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(Address, including zip code,
and telephone number, including
area code, of Registrant's
principal executive offices)
Thomas W. Itin
President, Chairman and Chief Executive Officer
Williams Controls, Inc.
14100 SW 72nd Avenue
Portland, Oregon 97224
(503) 684-8600
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(Name, address, including zip code, and
telephone number, including
area code, of agent for service)
With copies to:
Gerald Raskin, Esq.
John W. Kellogg, Esq.
Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
1400 Glenarm Place, Third Floor
Denver, Colorado 80202
(303) 571-1400
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Approximate date of commencement of proposed sale to public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please 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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<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
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CALCULATION OF REGISTRATION FEE
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Title of each class of securities to be Amount to be Proposed maximum Proposed Amount of
registered registered offering price maximum registration
per share aggregate fee
offering price
- --------------------------------------------- ----------------- ------------------ ---------------- ----------------
Common Stock (2) 1,331,149 $ 2.25 $ 2,995,086 $ 833
- --------------------------------------------- ----------------- ------------------ ---------------- ----------------
Common Stock underlying Placement Agent's 87,084(1) $ 3.30 287,378 80
warrants
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Common Stock underlying other warrants 465,902 (1) $ 3.125 1,455,943 405
- --------------------------------------------- ----------------- ------------------ ---------------- ----------------
TOTAL 1,884,135 $ 4,738,407 $ 1,318
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(1) Plus indeterminable number of shares of Common Stock as may be issuable by
reason of the anti-dilution provision for warrants.
(2) Fee has been calculated in accordance with Rule 457(c).
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.
<PAGE>
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED NOVEMBER 8, 1999
PROSPECTUS
[WILLIAMS CONTROLS, INC. LOGO]
1,884,135 Shares
Common Stock
--------------------
This Prospectus relates to the proposed sale of 1,884,135 shares of our common
stock by certain selling shareholders, of which 552,986 shares are underlying
warrants. These selling shareholders acquired their shares as part of a private
placement of the Company's securities. We will not receive any of the proceeds
from the sale of these securities.
The selling shareholders may sell all or any portion of their shares of common
stock in one or more transactions on the NASDAQ National Market or in private
negotiated transactions. We have agreed to pay registration expenses. The
selling shareholders will pay all selling expenses, including any brokerage
commissions.
Our common stock is traded on the NASDAQ National Market under the symbol
"WMCO". On November 4, 1999, the last reported sale price of our common stock on
the NASDAQ National Market was $2.34 per share.
We may amend or supplement this prospectus from time to time by filing
amendments or supplements as required. You should read this entire prospectus
and any amendments or supplements carefully before you make your investment
decision.
--------------------
See "Risk factors" on page 7 for certain risks you should
consider before you purchase any shares.
--------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
accuracy or adequacy of this prospectus. Any representation to the contrary is a
criminal offense.
--------------------
The date of this prospectus is November 8, 1999.
<PAGE>
Table of Contents
Page
Where you can find more information........................................-3-
Forward looking statements.................................................-3-
Williams Controls, Inc.....................................................-4-
Recent developments........................................................-6-
Risk factors...............................................................-7-
Use of proceeds............................................................-13-
Selling shareholders.......................................................-14-
Plan of distribution.......................................................-15-
Legal matters..............................................................-16-
Experts....................................................................-16-
You should rely only on the information contained or incorporated by reference
in this prospectus and in any accompanying prospectus supplement. No one has
been authorized to provide you with different information.
The shares of common stock are not being offered in any jurisdiction where the
offer is not permitted.
You should not assume that the information in this prospectus or any prospectus
supplement is accurate as of any date other than the date on the front of those
documents.
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document that we file at the
SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Our SEC filings are also available to you free of
charge at the SEC's web site at http://www.sec.gov.
We incorporate by reference the documents listed below and any future
filings we will make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 until this offering has been completed:
* Our Annual Report on Form 10-K for the year ended September 30, 1998.
* Our Quarterly Report for the fiscal quarter ended December 31, 1998.
* Our Quarterly Report for the fiscal quarter ended March 31, 1999.
* Our Quarterly Report for the fiscal quarter ended June 30, 1999.
* Our Current Report on Form 8-K filed on December 14, 1998.
* Our Current Report on Form 8-K filed on August 13, 1999.
* Our Current Report on Form 8-K/A filed on October 12, 1999.
* Our Proxy Statement for the 1999 Annual Meeting of Stockholders held
on February 26, 1999.
* The description of our Common Stock contained in a Registration
Statement on Form 8-A, Commission File No. 0-18083, as filed with the
Commission on November 1, 1989.
You may request free copies of these filings by writing or telephoning us
at our principal offices, which are located at the following address:
Williams Controls, Inc.
14100 SW 72nd Avenue
Portland, Oregon 97224
Attention: Chief Financial Officer
(503) 684-8600
FORWARD LOOKING STATEMENTS
All statements contained in this Prospectus, as well as statements made in
press releases and oral statements that may be made by us or by officers,
directors or employees acting on our behalf, that are not statements of
historical fact constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995. Such forward-looking
statements involve known or unknown risks, uncertainties and other factors that
could cause our actual results to be materially different from historical
results or from any future results expressed or implied by such forward-looking
statements. The "Risk Factors" section of this Prospectus, commencing on page 7,
summarizes certain of the material risks and uncertainties that could cause our
actual results to differ materially. In addition to statements that explicitly
describe such risks and uncertainties, readers are urged to consider statements
that include the terms "believes," "belief," "plans," "anticipates," "expects,"
"estimates, "may," "will" or similar terms to be uncertain and forward-looking.
All cautionary statements made herein should be read as being applicable to all
forward-looking statements wherever they appear. In this connection, investors
should consider the risks described herein and should not place undue reliance
on any forward-looking statements.
3
<PAGE>
WILLIAMS CONTROLS, INC.
We are a Delaware corporation formed in 1988. The principal company in
our vehicle component segment, our primary business segment, was founded by
Norman C. Williams in 1939 and acquired by the Company in 1988. Our
operating subsidiaries are divided into three business units (one of which is
reported as a discontinued operation).
Vehicle Components
Our vehicle component product lines primarily include electronic
throttle control systems, exhaust brakes and pneumatic, hydraulic controls and
plastic injection molded products including automotive taillight systems. These
products are used in trucks, utility and off-highway equipment, transit buses
and underground mining machines. Markets for our electronic throttle control
systems are developing in smaller classes of trucks, diesel-powered pick-up
trucks and automobiles. We believe that gasoline-powered automobiles and pick-up
trucks may convert to the electronic throttle control system, although this
would require engine redesign by the automotive manufacturers which is presently
ongoing. In addition, the passenger vehicles market began the introduction of
adjustable foot pedal systems during 1999. We purchased an adjustable foot pedal
designer and manufacturer in July, 1999. We estimate that we have over a 65%
market share of electronic throttle control systems for Class 7 and 8 trucks.
The majority of these products are sold directly to original equipment
manufacturers such as Freightliner, Navistar, Volvo, Isuzu and Motor Coach
Industries. We also sell these products through a well-established network of
independent distributors. The major competitors in one or more of our product
lines include Morris Controls, Furon, Teleflex, Dura Automotive and KSR, Inc.
Electrical Components and Global Positioning System
Our electrical components product line includes the design and
production of microcircuits, cable assemblies and other electronic products used
in the telecommunication, computer and transportation industries. Major
customers include Allied Signal, Raychem and Eaton Corp. Major competitors
include CTS, AMP and Nethode. The global positioning system product line
includes commuter railroad train tracking and agricultural cyber-farming using
global positioning and geographic information systems. Our major customers
include Chicago Metra, Tri-Rail, the Florida Department of Transportation and
Via Tropical Fruit.
Agricultural Equipment
Our agricultural equipment product lines include rotary cutters, discs,
harrows and sprayers. These products are sold to independent equipment dealers
located primarily in the Southeastern United States. Our major competitors
include Allied Industries (Bushhog), Wood Brothers, Taylor Industries, Inc. and
Alamo Group. This business is reported as a discontinued operation.
Possible Changes in Segment Reporting
For the year ended September 30, 1999, we are required to report our
business segments under new rules administered by the Financial Accounting
Standards Board. We are in the process of determining the effect of this new
standard on our segment reporting. We may be required to adopt different
segments than the three segments we listed above.
These are our operating subsidiaries, all of which are 100% owned, and
a brief description of each operating subsidiary's business (the subsidiaries
which are reported as discontinued operations are not listed).
Vehicle Components
- ------------------
* Williams Controls Industries, Inc. manufactures vehicle components sold
primarily in the transportation industry.
4
<PAGE>
* ProActive Acquisition Corporation conducts research and development
activities related to adjustable foot pedals and manufactures adjustable
pedal systems.
* Premier Plastic Technologies, Inc. manufactures plastic components for the
automotive industry.
* NESC Williams, Inc. installs conversion kits to allow vehicles to use
compressed natural gas and provides natural gas well metering services.
* Williams Automotive, Inc. markets our products to the automotive industry.
* Williams Technologies, Inc. supports all subsidiaries of our company by
providing research and development and developing strategic business
relationships to promote "technology partnering."
* Williams World Trade, Inc. manages foreign sourcing for all of our
subsidiaries, affiliates and third party customers through its wholly owned
subsidiary located in Kuala Lumpur, Malaysia.
Electronic Components and Global Positioning System
- ---------------------------------------------------
* Aptek Williams, Inc. develops and produces sensors, microcircuits, cable
assemblies and other electronic products for the telecommunications and the
transportation industries, and conducts research and development activities
to develop commercial applications of sensor related products for our
subsidiaries.
* GeoFocus, Inc. develops train tracking and cyber-farming systems using
global positioning systems and geographical information systems.
We sell our products to customers in the truck, bus, automotive, off
highway, telecommunication and other diversified industries worldwide. For the
fiscal year ended September 30, 1998, approximately 94% of our sales from
continuing operations were to customers in the vehicle component segment and 63%
of our sales from continuing operations were from sales of electronic throttle
control products. Approximately 15%, 14% and 19% of net sales from continuing
operations in fiscal 1998, 1997 and 1996, respectively, were to customers
outside of the United States, primarily in Canada and Sweden, and, to a lesser
extent, in Europe, South America and Australia.
Our operating facilities engage in engineering, research and
development and quality control activities to improve the performance,
reliability and cost-effectiveness of our product lines. Our engineering staff
works closely with our customers in the design and development of new products
and adapting products for new applications. During fiscal 1998, 1997 and 1996,
we spent $2,778,000, $1,832,000 and 2,077,000, respectively, on these activities
for continuing operations. We intend to increase our research and development
expenditures in fiscal 2000 to design electronic throttle control products
compatible with gasoline powered vehicles, develop commercial applications for
inertia, tilt and position sensor products, and the development of adjustable
foot pedal and electronic throttle control systems for automotive, sport utility
vehicles, light trucks and heavy trucks, and further develop train tacking
products.
We produce our products from raw materials, including brass, aluminum,
steel, plastic, rubber and zinc, which currently are widely available at
reasonable terms. We rely upon, and expect to continue to rely upon CTS
Corporation, Robertshaw and Caterpillar, Inc. as single source suppliers for
critical components and/or products as these suppliers are currently the only
manufacturers of sensors made specifically for our electronic throttle control
system. Although these suppliers have been able to meet our needs on a timely
basis, and appear to be willing to continue being suppliers, there is no
assurance that a disruption in a supplier's business, such as a strike, would
not disrupt the supply of a component.
We warrant our products to the first retail purchaser and subsequent
owners against malfunctions occurring during the warranty period resulting from
defects in material or workmanship, subject to specified limitations. The
warranty on vehicle components is limited to a specified time period, mileage or
hours of use, and varies by product and application. We have established a
warranty reserve based upon our estimate of the future cost of warranty and
related service costs. We regularly monitor our warranty reserve for adequacy in
response to historical experience and other factors.
5
<PAGE>
As of June 30, 1999, we employed approximately 508 employees, including
approximately 139 union employees. The non-union employees are engaged in sales
and marketing, accounting and administration, product research and development,
production and quality control The union employees are engaged in manufacturing
vehicle components in our Portland, Oregon facility. Our management believes
that our relationship with our employees and the union are good. We could
experience change in non-union labor costs as a result of change in local
economies and general wage increases.
RECENT DEVELOPMENTS
During the fourth fiscal quarter ended September 30, 1999, we may
record an additional loss related to the sale or disposal of the agricultural
equipment business unit. Also, during the fourth fiscal quarter ended September
30, 1999, we expect to report a significant operating loss at Premier Plastic
Technologies, Inc., our plastic injection molding facility. In addition, as a
result of the acquisition in July, 1999, of the ProActive Pedals division of
Active Tools Manufacturing Co., Inc., we will record an expense of $1.75 million
for acquired in-process research and development in the fourth fiscal quarter
ended September 30, 1999. Because of these factors, we expect to report a net
loss for the fourth fiscal quarter ended September 30, 1999.
During the third quarter ended June 30, 1999, we recognized a
$5,278,000 loss from the impairment of assets related to Kenco, our former
automotive accessories business unit, consisting of $4,655,000 for the
impairment of non-voting preferred stock and notes and accounts receivable and
$623,000 for the impairment of property.
In conjunction with the purchase of the ProActive Pedals division of
Active Tools Manufacturing Co., Inc., we issued 1,331,149 shares of our common
stock through a private placement, with net proceeds of approximately
$3,386,000. In addition, we borrowed $2.5 million from our bank under a new term
loan facility. The principal amount under this new term loan facility is payable
in three equal monthly installments of $139,000 (plus interest) beginning in
November, 1999, with the remaining balance of $2,083,000 due in February, 2000.
Interest on this new term loan facility is computed at the prime rate plus 1.25%
(9.5% at September 30, 1999).
6
<PAGE>
RISK FACTORS
You should carefully consider all of the information contained in this
prospectus before deciding whether to invest in our Common Stock and, in
particular, the following factors:
We focus our corporate and financial resources in a limited number of core areas
- --------------------------------------------------------------------------------
From fiscal 1994 through fiscal 1996, we pursued an acquisition
strategy to integrate vertically through the acquisition of a sensor
manufacturing company and horizontally through the acquisition of companies in
similar industries that could benefit from our sensor and control experience.
During this period, we acquired several companies with products that could
benefit from sensor and control applications. In fiscal 1997, we changed our
diversification acquisition strategy to focus our corporate and financial
resources on opportunities emerging in our vehicle components business unit
and global positioning system train tracking markets. We cannot give assurances
that we will be able to capitalize on opportunities emerging in vehicle
components or global positioning system train tracking markets and/or the
development of commercial applications of sensor related products. In addition,
if we are successful in one or more endeavors, we cannot be certain that those
endeavors will be profitable. On March 16, 1998, we completed the sale of our
subsidiary comprising the automotive accessories business unit. On December
14, 1998, we announced our intention to sell the agricultural equipment business
unit, and we retained an investment banking firm to advise us on the sale and
solicit potential purchasers for the business unit. On June 30, 1998, we
restructured our investment in Ajay Sports, Inc. to provide for a repayment of
all loans and an increase in the dividend rate on our preferred stock investment
on June 30, 2001.
We have significant investments in non-operative business units
- --------------------------------------------------------------------------------
We have invested approximately $5.9 million in Ajay Sports, Inc., a
company that markets and distributes golf clubs and accessories, casual living
furniture and is a franchisor of golf retail stores. This investment is
comprised of preferred stock of $5 million, a note receivable of $1.6 million
and a negative common stock investment of $700,000. This investment could
increase to $8 million according to terms of an Intercreditor Agreement. In
June, 1998, we restructured the investment in Ajay Sports to provide for
repayment of all such amounts on June 30, 2001. At that time, the notes payable
become due and the dividend rate on the preferred stock increases substantially,
which in effect would require Ajay Sports to redeem the preferred stock. There
is no assurance that Ajay Sports will be able to pay the amounts to us when due.
We would then have to rely on the guarantee the chairman of our company has
supplied us relating to our investment in Ajay Sports.
We had a book value investment in our agricultural equipment business
unit of $7 million as of July 31, 1999. We have solicited offers from
prospective purchasers since approximately March, 1999 and have had limited
success. We do not know if a binding offer to purchase the agricultural
equipment business unit will be received, and if a binding offer is received,
what the amount of the offer would be. As a result, it may be necessary to
record an additional expense for a loss on the sale or disposal of the
agricultural equipment business unit at September 30, 1999, the amount of which
is not known at this time.
Our electronic throttle control systems products may not be accepted into new
markets and the introduction of electronic throttle controls in gasoline engines
will require modification or redesign of engine components, which may not occur,
and we compete against companies much larger and with greater financial
resources than us
- --------------------------------------------------------------------------------
7
<PAGE>
During fiscal 1999, we began the introduction of our electronic
throttle control systems product into the passenger vehicle market which
consists of cars, small trucks and sport utility vehicles. Although our
electronic throttle control systems product has been successful in the domestic
heavy duty truck market, there is no assurance that it will be fully accepted in
these new markets. Introduction of electronic throttle control in gasoline
engines will require modification or redesign of engine components that will be
dependent upon the timing of development by the automotive manufacturers and
their original equipment manufacturers. However, based on initial acceptance, we
expect that a substantial number of passenger vehicles will convert to
electronic throttle controls over the next five years. Our primary competitors
in the United States are Teleflex, Dura Automotive and KSR, Inc. Each of these
companies is substantially larger and has greater financial resources than us.
Furthermore, we have no control over the timing of the introduction of the
electronic throttle control into the automotive, small truck and sport utility
vehicle markets.
We purchased substantially all of the assets and assumed certain
liabilities of ProActive Pedals in July, 1999. ProActive owns patents and
designs for adjustable foot pedal systems and currently produces the adjustable
foot pedal for the Dodge Viper. We currently compete against Teleflex in the
adjustable foot pedal market, and we expect both Dura Automotive and KSR, Inc.
to enter the market with their adjustable foot pedal designs. Thus, we will be
competing against much larger competitors in these markets with financial
resources much greater than ours and with existing long-term supplier
relationships with the automotive industry.
Our products are closely scrutinized for compliance with national safety
standards and regulations and non-compliance may subject us to a product recall
- --------------------------------------------------------------------------------
Because many of our products are integral to the safety of vehicles
using them while operating on highways, our products must comply with regulatory
standards and close scrutiny from federal government agencies. Our vehicle
component products must comply with the National Traffic and Motor Vehicle
Safety Act of 1966, as amended, and regulations promulgated thereunder. The
National Highway Traffic Safety Administration administers these standards and
regulations and conducts investigations. If, after an investigation, it finds
that we are not in compliance with any of its standards or regulations, among
other things, it may require us to recall the non-complying products and repair
or replace them. We believe we are currently in compliance with their standards
and regulations, but any problems with our electronic throttle control system,
which has been critical to our success, could adversely affect our earnings.
The demand for our products is heavily dependent upon the performance of the
manufacturing industry which fluctuates according to general economic trends
- --------------------------------------------------------------------------------
The market for heavy trucks is cyclical. During periods of economic
expansion, when industrial production is increasing, demand for diesel engines
ordinarily increases. In opposition, during recessionary times, the diesel
engine industry is adversely affected by declines in demand. Recently, we have
experienced an increase in electronic throttle control systems sales, which we
believe is, in part, a result of the current economic expansion. Due in part to
the maturity of the heavy-diesel engine industry, there can be no assurance that
such an increase in sales related to economic expansion or other factors will be
sustained. These industries could experience downturns which would affect our
sales and our primary manufacturing facility.
The majority of our continuing operation sales are concentrated in the vehicle
component segment to a few significant customers, the loss of which could
adversely affect our earnings
- --------------------------------------------------------------------------------
We sell our products to customers in diversified industries worldwide;
however, for the fiscal year ended September 30, 1998, approximately 94% of our
sales from continuing operations were to customers in the vehicle component
segment and 63% of our sales from continuing operations were from sales of our
electronic throttle control products. For the fiscal years ended September 30,
1998, 1997 and 1996, Freightliner accounted for 21%, 16% and 17%, respectively,
of net sales for continuing operations. Navistar accounted for 16%, 16% and 13%
of net sales from continuing operations for the fiscal years ended September 30,
1998, 1997 and 1996, respectively. Volvo accounted for 9%, 8% and 10% of net
sales from continuing operations for the fiscal years ended September 30, 1998,
1997 and 1996, respectively. We cannot be certain that we will be able to retain
these customers. The loss of one or more of our significant customers, the
material decline in sales to one or more of these customers, or the economic
downturn in one or more of our market areas could adversely affect our earnings.
8
<PAGE>
A significant amount of our continuing operation sales are to foreign customers
which could be affected by foreign economic conditions beyond our control
- --------------------------------------------------------------------------------
Approximately 15%, 14% and 19% of net sales for continuing operations
in fiscal 1998, 1997 and 1996, respectively, were to customers outside of the
United States, primarily in Canada and Sweden, and to a lesser extent, in
Europe, South America and Australia. The loss of one or more of our significant
customers, a material decline in sales to one or more of these customers, or an
economic downturn in one or more of the company's market areas could have a
material adverse effect on our earnings. On January 1, 1999, the eleven member
states of the European Union, converted to a common currency, the euro. We are
unaware at this time of any potential material adverse effect associated with
the conversion because we only accept payments in U.S. dollars and have no
immediate plans to expand in Europe.
The price of raw materials for our products may fluctuate and affect
profitability
- --------------------------------------------------------------------------------
We produce our products from raw materials, including brass, aluminum,
steel, plastic, rubber and zinc, which currently are widely available at
reasonable terms. Although we recently experienced stable prices, prices for
aluminum, zinc, rubber, steel, and mechanical components such as gearboxes,
hydraulics, and contact position sensors could fluctuate and affect
profitability.
We are reliant upon single source suppliers for critical components and products
whose supply may be disrupted and affect profitability
- --------------------------------------------------------------------------------
We rely upon, and expect to continue to rely upon CTS Corporation,
Robertshaw and Caterpillar, Inc. as single source suppliers for critical
components and products. We manufacture a foot pedal using a contact position
sensor manufactured by Caterpillar, Inc. used exclusively on Caterpillar
engines. Caterpillar supplies this sensor and requires that its sensor be used
on all Caterpillar engines; therefore, we do not consider the Caterpillar sensor
supply to be at risk. Although these suppliers have been able to meet our needs
on a timely basis, and appear to be willing to continue being suppliers, we can
provide no assurance that a disruption in a supplier's business, such as a
strike, would not disrupt the supply of a component.
We may be liable for injuries resulting from the failure of braking or
acceleration systems using our products
- --------------------------------------------------------------------------------
Several of our products are integral parts of braking and acceleration
systems for heavy equipment, buses, and long-haul trucks. The failure of any
part of these systems may result in personal injury to the operator or other
persons in the area. These persons may attempt to hold us liable for any or all
resulting injuries. While we are not aware of any material claims against us for
product liability, we cannot assure you that future claims will not be brought.
Our warranty reserve may not be sufficient to cover future warranty claims
against us
- --------------------------------------------------------------------------------
We provide a standard limited warranty on certain of our products to
the first retail purchaser and subsequent owners against malfunctions occurring
during the warranty period resulting from defects in material or workmanship,
subject to specified limitations. The warranty on vehicle components is limited
to a specified time period, mileage or hours of use, and varies by product and
application. We have established a warranty reserve based upon our estimate of
the future cost of warranty and related service costs. We regularly monitor our
warranty reserve for adequacy in response to historical experience and other
factors. We believe the warranty reserve is reasonable, based on our experience
with products and claims; however, we cannot assure you that the amount of this
reserve will be sufficient to cover future warranty claims against us.
9
<PAGE>
Because several of our officers and directors own a significant amount of our
common stock, they are in a position to influence our direction, policies and
any matter requiring shareholder approval
- --------------------------------------------------------------------------------
As of August 31, 1999, Thomas W. Itin, who is our Chairman, President,
Chief Executive Officer and Treasurer, beneficially owns approximately 28.3% of
our common stock. He also owns approximately 7.1% of Enercorp, Inc., an entity
that beneficially owns approximately an additional 10.1% of our common stock. As
of August 31, 1999, H. Samuel Greenawalt, who is a director, beneficially owns
1.2% of our common stock and approximately 2.1% of Enercorp, Inc. Collectively,
all of our executive officers and directors (twelve persons) as of August 31,
1999 beneficially own approximately 40.2% of our common stock. As a result, our
management, and Mr. Itin in particular, are in a position to significantly
influence our direction and policies, the election of the Board of Directors and
the outcome of any other matters requiring shareholder approval.
While our Portland manufacturing facility has levels of contaminants that exceed
Federal standards, it is not considered a reportable event at this time, but
could be reportable in the future causing us remediation costs
- --------------------------------------------------------------------------------
We are subject to a variety of federal, state and local governmental
regulations relating to hazardous substances used to manufacture our products.
These governmental authorities can impose fines, suspend production, alter our
manufacturing processes or stop our operations if we have not complied with
these regulations. Our failure to control the use, disposal, removal or storage
of, adequately restrict the discharge of, or assist in the cleanup of, hazardous
substances could subject us to significant liabilities, including joint and
several liability under certain environmental statutes. The fines and other
punishments imposed upon us in connection with environmental violations and
expenses related to remediation or compliance with environmental regulations
could have a material adverse effect on our business, financial condition and
results of operations.
We have identified certain contaminants in the soil and groundwater at
and around our Portland, Oregon manufacturing facility which we believe may have
been disposed of on the property by the previous property owner. We have
conducted tests to determine the levels of contaminants and the lateral and
vertical extent of the contamination. Copies of these reports are available for
inspection at our Portland offices. We found concentrations of trichloroethane
in shallow groundwater samples in amounts that are greater than the Federal
drinking water maximum contaminant levels. However, the manufacturing facility
is located in an industrial area and the impacted groundwater is not used nor is
it anticipated to be used for drinking water. We believe that the contamination
is not a reportable condition under the current Oregon statutes, but we cannot
assure you that the Oregon Department of Environmental Quality would take the
same position. In addition, we cannot be certain that the state would not adopt
environmental laws that would make this a reportable event and subject us to
liability. Under Oregon statutes, we and other potentially responsible parties
are required to investigate further and possibly remediate the contamination. We
believe that if remediation is required, we may have to permanently monitor,
treat and/or remove the contamination. We cannot estimate the costs of permanent
monitoring, treatment or clean up at the present time. We believe we are
currently in compliance with environmental regulations.
Significant increases in the interest rates of our significant bank indebtedness
could adversely affect our earnings
- --------------------------------------------------------------------------------
We have significant bank indebtedness that bears interest at rates that
fluctuate with the prime rate. Our net earnings would be adversely affected by
any significant increase in the prime rate. We cannot be certain that the prime
rate will not increase. In addition, our current bank credit facility secures
substantially all of our assets as collateral for the loan and requires us to
maintain a minimum tangible net worth and working capital. In addition, the bank
limits our capital spending in any one year period. These restrictions could
delay our current expansion plans unless the lender agrees to waive or increase
these capital spending limitations.
10
<PAGE>
We are required to maintain a minimum tangible net worth of $18 million
under our current loan agreements. As a result of the ProActive Acquisition,
which consisted primarily of intangible assets, our tangible net worth declined
by approximately $4 million to $19.8 million at August 31, 1999. If we are
required to record an additional loss on the sale or disposal of the
agricultural equipment business unit at September 30, 1999, our tangible net
worth could decline below the minimum $18 million level, which would be a
violation of the bank loan covenants. We would request the bank to amend the
minimum tangible net worth requirement, but there is no assurance that the bank
would agree to such an amendment. If the bank does not grant us an amendment to
the minimum tangible net worth requirement, we believe we can obtain financing
from alternate sources at comparable terms and rates of interest.
Several subsidiaries have a history of operating losses that may continue to
cause us a loss in the future
- --------------------------------------------------------------------------------
Several of our subsidiaries have a history of operating losses.
Although we have taken measures to improve operating results by hiring new
management, adopting business plans and instituting operational changes, we
can provide no assurance that these measures will be effective or that the
subsidiaries will achieve profitability. Our Premier Plastics Technology
subsidiary has been experiencing operating problems resulting from several
factors, including below break-even sale levels, inefficient production from
defective molds supplied by customers, an unprofitable tool-making operation
and from operating problems on the manufacturing floor. To address these issues,
in September, 1999, we replaced the Premier Plastics Technology General Manager
and in August, 1999, retained an experienced plastic injection molding plant
controller. There is no assurance that Premier Plastics Technology's operating
results will improve.
We rely on key personnel
- ------------------------
We are dependent upon the services of Thomas W. Itin and Gerard H.
Herlihy. Mr. Itin is Chairman, President, Chief Executive Officer and Treasurer.
Mr. Herlihy is Chief Administrative and Chief Financial Officer and Secretary.
While we have an employment agreement with Mr. Itin that expires in August 2002,
we do not have an employment agreement with Mr. Herlihy. If either of such
individual's services were to become unavailable us for any reason, our success
could be materially and adversely affected. We do not maintain key man life
insurance.
We do not expect to pay dividends in the foreseeable future
- --------------------------------------------------------------------------------
We have never declared or paid any cash dividends on any class of our
common stock and we do not expect to declare cash dividends on our common stock
in the foreseeable future. Payment of any future dividends will depend upon our
earnings, financial condition and other business and economic factors our Board
of Directors considers relevant.
Our charter and bylaws may delay or frustrate transactions that may be
beneficial to shareholders
- --------------------------------------------------------------------------------
Several provisions of our charter and bylaws may delay or frustrate the
removal of incumbent directors and may prevent or delay a merger, tender offer
or proxy contest that is not approved by the Board of Directors, even if such
events may be beneficial to the interests of shareholders. For example, our
Board of Directors, without shareholder approval, has the authority and power to
issue all authorized and unissued shares of common stock and preferred stock
which have not otherwise been reserved for issuance. Thus, the Board of
Directors could currently issue 21,220,168 shares of common stock on such terms
as the Board of Directors determines. The Board of Directors could currently
also issue 49,920,350 shares of preferred stock and such preferred stock could
have voting or conversion rights which could adversely affect the voting power
of the holders of common stock. Furthermore, our charter provides for three
classes of directors with staggered terms of office. In addition, the Delaware
General Corporation Law contains provisions that may have the effect of making
it more difficult or delaying attempts by other to obtain control of us.
We may be unable to maintain the listing for our common stock on the NASDAQ
National Market System
- --------------------------------------------------------------------------------
Currently, our common stock is traded on the NASDAQ National Market
System. If we fail to maintain this listing for our common stock, and there is
no other exclusion from the definition of "penny stock" under the Exchange Act
available, then any broker engaging in a transaction in our securities would be
required to provide any customer with a risk disclosure document, the
compensation of the broker/dealer in the transaction and monthly account
statements showing the market values of our securities held in the customers
accounts. The bid and offer quotations and compensation information must be
provided prior to effecting the transaction and must be contained on the
customer's confirmation. If brokers become subject to these "penny stock" rules
when engaging in transactions in our securities, they would become less willing
to engage in such transactions, thereby making it more difficult for
shareholders to dispose of their shares of common stock.
11
<PAGE>
Our success in adjustable foot pedal systems is dependent upon our ability to
protect our patents and operate without infringing upon the patents of others
- --------------------------------------------------------------------------------
The primary assets of ProActive Pedals are patents for adjustable foot
pedal systems. Our ability to successfully compete in the market for adjustable
automobile foot pedals is dependent upon our ability to protect our proprietary
patented technology and operate without infringing upon the rights of others.
There are in existence other patents for adjustable automobile foot pedal
systems issued to other patent holders. We cannot assure you that the holders of
the competing patents would not claim that the ProActive Pedals' patents
infringe on their patents. If we are found to be infringing upon the
intellectual property rights of third parties, the party claiming infringement
could commence litigation against us and may obtain an injunction or other
equitable relief which could effectively block the distribution or sale of
allegedly infringing products. Under those circumstances, we could seek licenses
from such third parties, but there can be no assurance that any such licenses
could be obtained, or if obtained, would be on terms acceptable to us.
We are dependent on the sale of one product
- -------------------------------------------
We rely on the sales of electronic throttle control system products for
approximately 63% of our sales from continuing operations. Any material
reduction of sales due to increased competition, new competitors entering the
market, new technologies, economic downturns or other factors could adversely
affect our operating results. We use a contact position sensor in the electronic
throttle control systems. There are alternative sensor technologies which are
more expensive. If customers switch to an alternative sensor technology that we
could not provide, our sales and operating earnings could be affected materially
and adversely. Our electronic throttle control products are used on highway
vehicles. Any large-scale product failure could materially adversely affect our
reputation, future sales and operating profits.
Fluctuations in local economies and general wages could affect our non-union
labor costs and decrease profitability
- --------------------------------------------------------------------------------
As of June 30, 1999, we employ approximately 508 employees, including
139 union employees. Our non-union employees are engaged in sales and marketing,
accounting and administration, product research and development, production and
quality control. The union employees are engaged in manufacturing vehicle
components in our Portland, Oregon facility and are represented by the
International Union, United Automobile Workers of America and Amalgamated Local
492. We have a collective bargaining agreement with the unions that expires in
September 2002. Our management believes that our relationship with our employees
and the unions are good. We could experience changes in non-union labor costs as
a result of changes in local economies and general wage increases.
Year 2000 software failures may adversely affect our business, financial
condition and results of operations
- --------------------------------------------------------------------------------
We recognize the need to ensure our operations will not be adversely
impacted by Year 2000 software failures. Software failures due to processing
errors potentially arising from calculations using the Year 2000 date are a
known risk. We rely on computer systems and software to operate our business,
including applications used in sales, purchasing, inventory management, finance
and various administrative functions.
We implemented a process which included: inventory of all systems which
may have a Year 2000 liability, assessment of the level of criticality of the
systems to the enterprise and our relationships with our trading partners, as
well as remediation of those systems found to be not Year 2000 compliant. All
hardware, software, services and business relationships with trading partners
which could be affected by Year 2000 issues are being audited for Year 2000
compliance.
12
<PAGE>
As of October 31, 1999, we believe all of our mission critical systems
which may have a material Year 2000 liability are Year 2000 compliant. This
includes installation and implementation of new financial software that is Year
2000 compliant for the purpose of improving operations and service to our
existing and prospective customers. We believe all mission critical
manufacturing and other operational systems and equipment which may have a
material Year 2000 liability are Year 2000 compliant. This has included the
upgrade and replacement of these systems as required for Year 2000 compliance.
Year 2000 remediation and compliance activities are ongoing for
non-mission critical systems.
We acquire a majority of our inventory from approximately 22 vendors.
If these vendors have unresolved Year 2000 issues which affect their ability to
supply merchandise, we could be adversely affected. We have conducted an initial
assessment of vendors whose potential Year 2000 liability could materially
affect operations. Based on this assessment, we believe that our operations are
not materially at risk from a Year 2000 liability posed by our vendors.
USE OF PROCEEDS
All of the Common Stock covered by this prospectus is being sold by the
selling shareholders. We will not receive any of the proceeds from those sales.
It is not likely that any outstanding warrants will be exercised unless
the market price of the Common Stock increases significantly. If the warrants
are exercised at their current prices, which is unlikely at this time, we will
receive net proceeds from such exercise of approximately $1,743,321. The
proceeds from the exercise of the warrants may be used for working capital
purposes.
13
<PAGE>
SELLING SHAREHOLDERS
The table below shows certain information about the shares covered by
this prospectus and other shares of Common Stock beneficially owned by the
selling shareholders on the date of this prospectus. Our registration of these
shares does not necessarily mean that any selling shareholder will sell all or
any of its shares of Common Stock. This table assumes that all shares covered by
this prospectus will be sold by the selling shareholders and that no additional
shares of common stock are bought or sold by any selling shareholder. None of
the selling shareholders is the beneficial owner of one percent or more of the
outstanding shares of common stock (including the shares offered hereby).
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Total Number of Number of Percentage of
Shares Shares Shares to be Shares to be
Underlying Offered by this Held After Held After
Selling Shareholder Shares Warrants Prospectus Offering Offering
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Dolphin Offshore Partners 727,273 254,546 981,819 0 0%
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
EBS Microcap Partners 36,364 12,727 49,091 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Eubel Brady Suttman Asset 36,364 12,727 49,091 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Keith M. Ganzer 5,200 1,820 7,020 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Microcap Partners 46,000 16,100 62,100 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Phronesis Partners 91,500 32,025 123,525 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Craig and Mary Jo Sanford 36,364 12,727 49,091 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Michael N. Taglich 36,764 36,380 73,144 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Robert F. Taglich 41,764 38,130 79,894 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Wechsler & Co., Inc. 240,000 84,000 324,000 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Richard C. Oh 1,500 1,525 3,025 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Vincent Palmieri 1,500 1,525 3,025 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Laura Conroy 2,613 7,623 10,236 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Robert Schroeder 2,370 830 3,200 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Douglas E. Hailey 25,573 40,301 65,874 0 0
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
Total 1,331,149 552,986 1,884,135
- --------------------------- -------------- ------------------ -------------------- --------------- -----------------
</TABLE>
14
<PAGE>
PLAN OF DISTRIBUTION
We are registering the Common Stock covered by this prospectus for the
selling shareholders. These shares may be sold or distributed from time to time
by the selling shareholders, by their donees and transferees or by their other
successors in interest. Such sales may be made in the over-the-counter market or
in negotiated transactions. Sales of shares in the over-the-counter market may
be by means of one or more of the following transactions:
* in a block trade in which a broker or dealer will attempt to
sell the shares as agent but may position and resell a portion
of the block as principal to facilitate the transaction;
* in transactions in which brokers, dealers or underwriters
purchase the shares as principal and resell the shares for
their own accounts pursuant to this prospectus; and
* in ordinary brokers' transactions and transactions in which
the broker solicits purchasers.
The selling shareholders also may sell these shares in accordance with
Rule 144 under the Securities Act.
We have agreed to pay the fees and expenses of registering the Common
Stock, including the reasonable fees and disbursements of persons retained by
us; however, we will not pay the commissions and discounts of underwriters,
dealers or agents.
Except as set forth above, the selling shareholders have advised us
that they have made no arrangements or agreements with any underwriters, brokers
or dealers regarding the resale of the Common Stock prior to the effective date
of this prospectus. The selling shareholders may pay commissions or allow
discounts to any brokers or dealers participating in the resale of the Common
Stock, which commissions or discounts may be less than or in excess of the
customary rates of such brokers or dealers for similar transactions. The Common
Stock will be sold at market prices prevailing at the time of sale or at
negotiated prices which will be not less than prevailing market prices.
The participating selling shareholders in sales of the Common Stock and
any underwriters, brokers or dealers engaged by them may be deemed underwriters,
and any profits on sales of the Common Stock by them and any discounts,
commissions or concessions received by any selling shareholder or underwriter,
broker or dealer may be deemed to be underwriting discounts or commissions under
the Securities Act.
If the selling shareholder notifies us that a material arrangement has
been entered into with an underwriter, broker or dealer for the sale of the
Common Stock through a secondary distribution or a purchase by an underwriter,
broker or dealer, a supplemented prospectus will be filed, if required,
disclosing such of the following information as we believe is appropriate:
* the name of each such selling shareholder and of the
participating underwriter, broker or dealer;
* the number of Common Stock involved;
* the price at which such Common Stock was sold;
* the commissions paid or discounts or concessions allowed to
such underwriter, broker or dealer; and
* other facts material to the transaction.
We have agreed to indemnify the selling shareholders against certain
liabilities relating to resale of the Common Stock under the Securities Act of
1933. These agreements provide for rights of contribution if indemnification is
not available.
We are unable to predict the effect which sales of the Common Stock
offered hereby might have upon our ability to raise further capital.
15
<PAGE>
In order to comply with certain states' securities laws, if applicable,
the Common Stock will be sold in these states only through registered or
licensed brokers or dealers. In addition, in certain states, the Common Stock
may not be sold unless they have been registered or qualified for sale in such
states or an exemption from registration or qualification is available and
complied with.
LEGAL MATTERS
Friedlob Sanderson Raskin Paulson & Tourtillott, LLC, Denver, Colorado,
will pass on the validity of the Common Stock offered by this prospectus.
EXPERTS
The financial statements and schedule as of September 30, 1997, and for
each of the years in the two year period then ended, included in our 1998 Annual
Report on Form 10-K have been audited by Horwath Gelfond Hochstadt Pangburn &
Co., Denver, Colorado, independent certified public accountants, as indicated in
their report on such financial statements. We have incorporated these financial
statements by reference in this prospectus and in the related registration
statement in reliance upon the authority of such firm as experts in giving such
reports.
The financial statements and schedules incorporated by reference in this
prospectus and elsewhere in the registration statement, to the extent and for
the periods indicated in their reports have been audited by Arthur Andersen LLP,
independent public accountants, and are included herein in reliance upon the
authority of said firm as experts in giving said reports.
16
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following table sets forth the costs and expenses, other than any
underwriting discounts and commissions, payable in connection with the sale of
the Common Stock being registered. All amounts are estimates except the SEC
registration fee.
SEC Registration and filing fee $ 1,318
NASD listing fee 9,000
Printing fees 500
Accounting fees and expenses 5,000
Legal fees and expenses 5,000
Transfer and Warrant Agent fees 4,000
Miscellaneous 182
-------
Total $25,000
=======
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law allows us to
indemnify any person against expenses including attorneys' fees, judgments,
fines and amounts paid in settlement, actually and reasonably incurred in a
proceeding (including any civil, criminal, administrative or investigative
proceeding) to which the person was a party by reason of the fact that he is or
was a director, officer, employee or agent of Williams Controls. Such indemnity
may be provided if the indemnified person acted in a good faith manner which he
reasonably believed to be in or not opposed to the best interests of Williams
Controls and, with respect to any criminal proceeding, had no reasonable cause
to believe that his conduct was unlawful. Unless ordered by a court,
indemnification generally may only be awarded after a determination of
independent members of the Board of Directors or a committee thereof, by
independent legal counsel or by vote of the shareholders that the applicable
standard of conduct was met by person seeking indemnification. To the extent a
director, officer, employee or agent is wholly successful on the merits or
otherwise in defense of any proceeding to which he was a party, he is entitled
to receive indemnification against expenses including attorneys' fees, actually
and reasonably incurred in connection with the proceeding. Delaware law allows
us to advance payments of indemnifiable expenses prior to final disposition of
the proceeding in question. Such advances of expenses are permitted if the
person furnishes us with a written agreement to repay such advances if it is
determined that he is not entitled to be indemnified by Williams Controls.
A similar standard of care applies to derivative actions by or in the
right of Williams Controls, except that indemnification is limited solely to
expenses including attorneys' fees actually and reasonably incurred in
connection with the defense. In such actions, the person to be indemnified must
have acted in good faith, in a manner he believed to have been in our best
interest and must not have been adjudged liable to Williams Controls unless and
only to the extent that the Court of Chancery or the court in which such action
or suit was brought shall determine upon application that, despite the
adjudication of liability, in view of all the circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such expense which the
Court of Chancery or such other court shall deem proper. Indemnification is
otherwise prohibited in derivative suits in which a director is adjudged liable
to Williams Controls, or in connection with any proceeding charging improper
personal benefit to the director in which the director is adjudged liable for
receipt of an improper personal benefit.
17
<PAGE>
Statutory provisions do not exclude other rights under our Certificate
of Incorporation, Bylaws, resolutions of our stockholders or disinterested
directors, or otherwise. These indemnification provisions continue for a person
who has ceased to be a director, officer, employee or agent of Williams Controls
and inure to the benefit of the heirs, executors and administrators of such
persons. Delaware law allows us to purchase and maintain insurance policies
which protect any director, officer, employee or agent against any liability
asserted against or incurred by him in such capacity arising out of his status
as such. Such policies may provide for indemnification whether or not we would
otherwise have the power to provide for it. We have not obtained policies
providing protection against liabilities imposed under the securities laws.
Article VIII of our Bylaws provides that we shall indemnify our
directors, officers, employees and agents to the fullest extent permitted by the
Delaware General Corporation Law. In addition, we has entered into agreements
with our directors indemnifying them to the fullest extent permitted by the
Delaware General Corporation Law.
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers or persons controlling
Williams Controls pursuant to the foregoing provisions, we have been informed
that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
The selling shareholders have agreed to indemnify, to the extent
permitted by law, Williams Controls, our directors, our officers and each person
who controls Williams Controls within the meaning of the Securities Act against
any losses, claims, damages, liabilities and expenses resulting from any untrue
or alleged untrue statement of material fact or any omission or alleged omission
of a material fact required to be stated in a registration statement,
prospectus, private placement memorandum or any amendment thereof or supplement
thereto or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, in each case to the extent, but only to the extent, that any such
loss, liability, claim, damage or expense arises out of or is based upon any
such untrue statement or alleged untrue statement or omission or alleged
omission made therein in reliance upon and in conformity with written
information or affidavits relating to such investors or the placement agent
furnished to us for use therein.
Item 16. Exhibits
Exhibit
Number Description
- ------- -----------
5.1 Opinion by Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
23.1 Consent by Horwath Gelfond Hochstadt Pangburn & Co.
23.2 Consent by Arthur Andersen LLP
23.3 Consent by Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
(see Exhibit 5.1)
24.1 Power of Attorney (included on page 20 of this registration statement)
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:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the registration statement. 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 percent change
in the maximum aggregate offering price set forth in the "Calculation
of Registration Fee" table in the effective registration statement;
18
<PAGE>
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this registration
statement or any material change to such information in the
registration statement;
provided, however, that paragraphs (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
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration, by means of a post-effective
amendment, any of the securities being registered which remain unsold at the
termination of the offering.
(4) 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 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 the initial bona fide offering
thereof.
(5) 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 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 of proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
19
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of West Bloomfield, State of Michigan, on November 5,
1999.
WILLIAMS CONTROLS, INC.
By /s/ Thomas W. Itin
------------------
Thomas W. Itin,
President, Chairman and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Thomas W. Itin, his attorney-in-fact, for
him in any and all capacities, to sign any amendments to this registration
statement, and any related registration statement filed pursuant to Rule 462(b),
and to file the sale, with exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that said attorney-in-fact, or his substitute, may do or cause to
be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated:
Signature Title Date
- --------- ----- ----
/s/ Thomas W. Itin Principal Executive Officer November 5, 1999
- ------------------ and Director
Thomas W. Itin
/s/ Gerard A. Herlihy Chief Financial Officer and November 5, 1999
- --------------------- Chief Administrative Officer
Gerard A. Herlihy
/s/ Kim L. Childs Principal Accounting Officer November 5, 1999
- ----------------- and Controller
Kim L. Childs
/s/ H. Samuel Greenawalt Director November 5, 1999
- ------------------------
H. Samuel Greenawalt
/s/ Timothy S. Itin Director November 5, 1999
- -------------------
Timothy S. Itin
20
<PAGE>
INDEX TO EXHIBITS
Number Title
- ------ -----
5.1 Opinion by Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
23.1 Consent by Horwath Gelfond Hochstadt Pangburn & Co.
23.2 Consent by Arthur Andersen LLP
23.3 Consent by Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
(see Exhibit 5.1)
24.1 Power of Attorney
(included on page 20 of this registration statement)
November 8, 1999
Williams Controls, Inc.
14100 S.W. 72nd Avenue
Portland, Oregon 97224
RE: Registration Statement on Form S-3
Opinion of Counsel
Gentlemen:
As counsel for Williams Controls, Inc., a Delaware corporation (the
"Corporation"), we have examined the Certificate of Incorporation, as amended,
the Bylaws and Minutes of the Corporation and such other corporate records,
documents, certificates and other instruments as, in our judgment, we deemed
relevant for the purposes of this opinion. We have also, as such counsel,
examined the Registration Statement on Form S-3, Securities and Exchange
Commission File No. 333-_____, as amended to date (the "Registration
Statement"), covering the resale by certain Selling Securityholders named in the
Registration Statement (the "Selling Securityholders") of shares of the
Corporation's Common Stock, par value $.01 per share (the "Common Stock")
included in the Registration Statement and shares of Common Stock which may be
issued to the Selling Securityholders upon the exercise of outstanding options
and warrants or the conversion of outstanding convertible preferred stock (the
"Underlying Shares").
Based upon the foregoing, we are of the opinion that (i) the Common Stock
to be sold by the Selling Securityholders constitutes legally issued, fully paid
and nonassessable shares of Common Stock, (ii) the Underlying Shares, upon
exercise or conversion according to the terms of the respective warrant
agreement and payment of the applicable conversion price, will be legally
issued, fully paid and nonassessable shares of Common Stock.
<PAGE>
Williams Controls, Inc.
November 8, 1999
Page 2
We know that we are referred to under the caption "Legal Matters" included
in the Prospectus forming a part of the Registration Statement. We hereby
consent to such use of our name in the Registration Statement and to the filing
of this opinion as Exhibit 5.1 thereto. In giving this consent, we do not
thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933, as amended, or the Rules
and Regulations of the Securities and Exchange Commission promulgated
thereunder.
Very truly yours,
/s/ Friedlob Sanderson Raskin Paulson & Tourtillott, LLC
CONSENT OF INDEPENDENT AUDITORS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of Williams Controls, Inc. and subsidiaries of our report
dated December 18, 1997, which appears in the annual report on Form 10-K for the
year ended September 30, 1998.
/s/ HORWATH GELFOND HOCHSTADT PANGBURN & CO.
Denver, Colorado
November 8, 1999
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement of our reports dated December 11, 1998
included in Williams Controls, Inc.'s Form 10-K for the year ended September 30,
1998, and to all references to our Firm included in this registration statement.
/s/ Arthur Andersen LLP
November 8, 1999
Portland, Oregon
