<PAGE> 1
As filed with the Securities and Exchange Commission on November 29, 1996
File No.333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
___________________________
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
TOPRO, INC.
___________________________
(Name of Registrant as specified in its charter)
COLORADO 84-1042227
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
John Jenkins, President
Topro, Inc.
2525 W. Evans Avenue 2525 W. Evans Avenue
Denver, Colorado 80219 Denver, Colorado 80219
(303) 935-1221 (303) 935-1221
(Address, including zip code, and telephone (Name, address, including zip code
number, including area code, of and telephonenumber, including area
Registrant's principal executive offices) code, of agent for service)
---------------------
It is requested that copies of all correspondence be sent to: Donna A. Key,
Esq., Brenman Key & Bromberg, P.C., 1775 Sherman Street, Suite 1001, Denver,
Colorado 80203, telephone number (303) 894-0234, facsimile number (303)
839-1633.
---------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC: AS SOON AS
PRACTICABLE AFTER THIS REGISTRATION STATEMENT BECOMES EFFECTIVE.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment 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, check the following box: X
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, as amended,
or until the registration statement becomes effective on such date as the
Securities and Exchange Commission acting pursuant to said Section 8(a) may
determine.
================================================================================
<PAGE> 2
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
CALCULATION OF REGISTRATION FEE
==============================================================================================================================
Proposed maximum
Title of each class of Amount to Proposed maximum offering aggregate Amount of
securities to be registered(1) be registered price per unit(2) offering price(2) registration fee(2)
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par value(3) 4,508,606 Shares $2.50 $11,271,515 $ 3,416
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock included in Units 298,507 Shares $2.50 $ 746,268 $ 227
issuable upon conversion of
Convertible Notes (4)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon 3,376,288 Shares $2.50 $ 8,440,720 $ 2,558
exercise of Warrants (4)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon 3,133,333 Shares $2.50 $ 7,833,333 $ 2,374
conversion of Debentures (4)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon 315,000 Shares $2.50 $ 787,500 $ 239
conversion of Notes (4)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon 747,477 Shares $2.50 $ 1,868,693 $ 567
exercise of Options (4)
- ------------------------------------------------------------------------------------------------------------------------------
Common Stock issuable upon 660,000 Shares $4.25 $ 2,805,000 $ 850
exercise of publicly held 60,000 Shares $5.10 $ 306,000 $ 93
Warrants (4)
- ------------------------------------------------------------------------------------------------------------------------------
Total 13,099,211 Shares $34,069,350 $10,324
==============================================================================================================================
</TABLE>
(1) For a description of the various securities referred to herein and the
transactions in which they were issued, See "Description of Securities
- Securities Registered Hereby"
(2) Proposed maximum offering price and registration fee is based on the
average of the high and low prices ($2.50) reported by Nasdaq on
November 22, 1996 (a date within five business days prior to the
initial filing hereof) pursuant to Rule 457(c).
(3) Represents shares outstanding in the hands of Selling Securityholders.
(4) Pursuant to Rule 416, there are also being registered such additional
shares of Common Stock as may become issuable as a result of the
anti-dilution provisions of outstanding Notes, Warrants, Debentures
and Options.
<PAGE> 3
TOPRO, INC.
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
FORM S-3 SECTIONS IN PROSPECTUS
ITEM NO. CAPTION OR REGISTRATION STATEMENT
----------- ------- -------------------------
<S> <C> <C>
PART I INFORMATION REQUIRED IN PROSPECTUS
1 Forepart of the Registration Statement and Outside
Front Cover Page of Prospectus . . . . . . . . . Outside Front Cover Page
2 Inside Front and Outside Back Cover Pages of
Prospectus . . . . . . . . . . . . . . . . . . . Inside Front Cover Pages;
Table of Contents
3 Summary Information, Risk Factors and Ratio of
Earnings to Fixed Charges . . . . . . . . . . . . Risk Factors; Prospectus Summary
4 Use of Proceeds . . . . . . . . . . . . . . . . . Prospectus Summary; Use of Proceeds
5 Determination of Offering Price . . . . . . . . . Plan of Distribution
6 Dilution . . . . . . . . . . . . . . . . . . . . Not Applicable
7 Selling Security Holders . . . . . . . . . . . . Selling Shareholders
8 Plan of Distribution . . . . . . . . . . . . . . Plan of Distribution
9 Description of Securities to be Registered . . . Description of Securities
10 Interest of Named Experts and Counsel . . . . . . Not Applicable
11 Material Changes . . . . . . . . . . . . . . . . Prospectus Summary - The Company and Recent
Developments
12 Incorporation of Certain Information by Reference
Documents Incorporated by Reference
13 Disclosure of Commission Position on
Indemnification for Securities Act Liabilities . Plan of Distribution - Indemnification
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
14 Other Expenses of Issuance and Distribution . . Other Expenses of Issuance and Distribution
15 Indemnification of Directors and Officers . . . . Indemnification of Directors and Officers
16 Exhibits . . . . . . . . . . . . . . . . . . . . Exhibits
17 Undertakings . . . . . . . . . . . . . . . . . . Undertakings
</TABLE>
<PAGE> 4
SUBJECT TO COMPLETION - PRELIMINARY PROSPECTUS DATED NOVEMBER 29, 1996
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
TOPRO, INC.
4,508,606 OUTSTANDING SHARES OF COMMON STOCK OFFERED BY SELLING SHAREHOLDERS
7,870,605 SHARES OF COMMON STOCK TO BE ISSUED TO AND OFFERED
BY SELLING SHAREHOLDERS
720,000 SHARES OF COMMON STOCK OFFERED BY THE COMPANY
An aggregate of 12,379,211 shares of $.0001 par value Common Stock (the
"Common Stock" or "Shares"), of Topro, Inc. ("Topro" or the "Company") may be
offered by certain shareholders (the "Selling Shareholders") from time to time
in the public market. All proceeds received from the sale of the Shares
offered by the Selling Shareholders will accrue to the benefit of the Selling
Shareholders and not to the Company. Of the 4,508,606 outstanding Shares
offered by Selling Shareholders, 1,835,571 are subject to certain "lock-up"
restrictions. Up to 7,870,605 of the Shares which may be offered by the
Selling Shareholders are not outstanding on the date of this Prospectus, but
may be issued by the Company after the date of this Prospectus upon exercise or
conversion of outstanding options, warrants and convertible securities held by
Selling Shareholders. These Shares may be resold in the public market by the
Selling Shareholders. The Company will receive the exercise price and
conversion price paid for issuance of those Shares; however, any difference
between that price and the price at which the Shares are sold in the market by
Selling Shareholders will accrue to the benefit of Selling Shareholders.
In addition to the Shares offered by Selling Shareholders, the Company is
offering 720,000 Shares issuable upon exercise of outstanding Redeemable Common
Stock Purchase Warrants (the "Public Warrants") and Underwriter's Unit Warrants
issued in a public offering in 1992.
The Common Stock and Public Warrants are traded in the over-the-counter
market and quoted on the National Association of Securities Dealers Automated
Quotation Service ("Nasdaq") under the symbols "TPRO" and "TPROW,"
respectively. On November 22, 1996, the average of the bid and ask prices of
the Common Stock and of the Public Warrants, as reported by NASDAQ, was $2.50
and $.8125, respectively.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE
OF RISK. SEE "RISK FACTORS" FOR DISCUSSION OF CERTAIN MATERIAL RISKS IN
CONNECTION WITH THE COMPANY WHICH PROSPECTIVE INVESTORS SHOULD CONSIDER PRIOR
TO PURCHASING THE SECURITIES OFFERED HEREBY.
The Shares will be offered by the Selling Shareholders through dealers or
brokers in the over-the-counter market. The Shares may also be sold in
privately negotiated transactions. Sales through dealers or brokers are
expected to be made with customary commissions being paid by the Selling
Shareholders. Payments to persons assisting the Selling Shareholders with
respect to privately negotiated transactions will be negotiated on a
transaction-by-transaction basis. The Selling Shareholders have advised the
Company that prior to the date of this Prospectus they have made no agreements
or arrangements with any underwriters, brokers or dealers regarding the sale of
the
<PAGE> 5
Shares. See "Plan of Distribution." Any commissions and/or discounts on the
sale of Shares offered by the Selling Shareholders will be paid by the Selling
Shareholders, and all other expenses related to the filing of the registration
statement to which this offering relates are being paid by the Company.
The outstanding Shares offered by the Selling Shareholders, which will be
offered from time to time in the public market, constitute approximately 66% of
the Shares outstanding as of November 20, 1996. In addition, if all of the
outstanding options, warrants and convertible securities are exercised and
converted by the Selling Shareholders, the total Shares offered by the Selling
Shareholders will constitute approximately 80% of the Shares outstanding
immediately after their issuance. Sales of any of these previously restricted
Shares into the public market could impact the market adversely so long as this
Offering continues. See "Risk Factors."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REFERENCE TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Price Per Total Number Aggregate Offering Proceeds to Selling
Share of Shares Price Shareholder or Company
------------------------- ------------------ ----------------------
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares Outstanding Offered
by Selling Shareholders(1) $2.50(1) 4,508,606(1) $11,271,515(1) $11,271,515(1)
- -------------------------------------------------------------------------------------------------------------------
Shares to be Outstanding
Offered by Selling
Shareholders (2) $2.50(1) 7,870,605 $19,676,512(1) $19,676,512(1)
- -------------------------------------------------------------------------------------------------------------------
Shares Offered by the $4.25(3) 660,000 $ 2,805,000(3) $ 2,805,000(3)(5)
Company $5.10(4) 60,000 $ 306,000 $ 306,000(5)
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
_______________
(1) These Shares will be offered from time to time by the Selling
Shareholders at market prices. Underwriting discounts or commissions may
be paid by the Selling Shareholders. See "Plan of Distribution."
(2) These Shares may be offered by the Selling Shareholders after exercise or
conversion of outstanding options, warrants and convertible securities.
See "Description of Securities."
(3) The Shares are offered by the Company upon exercise of 600,000 Public
Warrants outstanding on the date of this Prospectus and 60,000 Public
Warrants issuable after the date of this Prospectus upon exercise of
outstanding Underwriter's Unit Warrants. See "Description of
Securities."
(4) Represents Shares issuable upon exercise of outstanding Underwriter's
Unit Warrants. See "Description of Securities."
(5) Proceeds to the Company do not reflect deduction of offering expenses
estimated to total $50,000. The Company is paying all of the offering
expenses (other than underwriting discounts and commissions) on behalf of
Selling Shareholders. No underwriting discounts or commissions will be
paid by the Company. If all of the outstanding warrants, options and
convertible securities are exercised and converted, of which there can be
no assurance, the maximum proceeds to the Company would total $13,104,752
in cash and $5,215,000 in reduction of debt. See "Use of Proceeds."
The date of this Prospectus is December _____, 1996.
<PAGE> 6
AVAILABLE INFORMATION; DOCUMENTS INCORPORATED BY REFERENCE
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended ("the 1934 Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). The Company's Common
Stock and Redeemable Common Stock Purchase Warrants are quoted on Nasdaq and,
therefore, copies of such documents and other information are provided to the
National Association of Securities Dealers, Inc. Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at its principal office at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: in Chicago, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and in New York, 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such materials can be
obtained at prescribed rates by written request addressed to the Commission,
Public Reference Section, 450 Fifth Street, N.W., Washington, D.C. 20549. In
addition, copies of such documents and other information are provided to Nasdaq
and can be inspected at the Nasdaq offices maintained at the National
Association of Securities Dealers, Inc., 1735 "K" Street, Washington, D.C.
20549. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding the Company and the
address of such Web site is (http://www.sec.gov).
The Company provides annual reports, including audited financial
statements, to its shareholders on request and as required under the 1934 Act.
The Company has filed with the Commission in Washington, D.C. a
Registration Statement on Form S-3 under the Securities Act of 1933, as
amended, with respect to the Common Stock 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 the exhibits
thereto. For further information with respect to the Company and the Common
Stock offered hereby, reference is made to the Registration Statement,
including the exhibits filed or incorporated as a part thereof, copies of which
can be inspected at, or obtained at prescribed rates from, the Public Reference
Section of the Commission at the address set forth above.
The following documents filed by the Company with the Commission are
incorporated into this Prospectus by reference: (1) Annual Report on Form
10-KSB for the fiscal year ended June 30, 1996; (2) Quarterly Report on Form
10- QSB for the quarter ended September 30, 1996; and (3) all other documents
filed by the Company pursuant to Sections 13(a), 13(c), 14 or 15(d) of the 1934
Act after the date hereof and prior to the termination of the offering of the
Shares, which documents shall be deemed to be incorporated by reference herein
and to be a part hereof from the date of filing such documents. Any statement
contained herein or in any documents 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 statements contained herein, or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein, modifies or supersedes
-2-
<PAGE> 7
such statement. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
Any person receiving a copy of this Prospectus may obtain without charge,
upon written or oral request, a copy of any and all of the documents
incorporated by reference herein (not including exhibits to those documents,
unless such exhibits are specifically incorporated by reference into the
information that the Prospectus incorporates). Requests for such documents
should be directed to Shareholder Relations, Topro, Inc., 2525 W. Evans Ave.,
Denver, CO 80219, telephone (303)935-1221.
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information appearing elsewhere in this Prospectus and the documents
incorporated by reference herein.
The Company and Recent Developments
Topro Inc. is an industrial technology company providing control system
integration products and services through four wholly-owned subsidiaries:
Management Design & Consulting Services, Inc. ("MDCS"), headquartered in
Atlanta, Georgia; Advanced Control Technology, Inc. ("ACT"), headquartered in
Albany, Oregon; and Visioneering Holding Corp. and its subsidiary Vision
Engineering Corporation ("VHC"), headquartered in Cypress, California. The
Company's executive offices are located at 2525 West Evans Avenue, Denver,
Colorado 80219, telephone (303) 935-1221.
Any changes in the Company's affairs which have occurred since the end of
the latest fiscal year for which audited financial statements were included in
the Company's latest Annual Report incorporated herein by reference are
described in subsequent reports on Form 10-Q or Form 8-K which are also
incorporated herein by reference.
The Offering
Pursuant to this Prospectus, the Selling Shareholders may from time to
time offer all or any portion of an aggregate of 12,379,211 Shares of Common
Stock in the over-the-counter market through underwriters, dealers or brokers
or in independently negotiated transactions. See "Selling Shareholders" and
"Plan of Distribution." The Company will not receive any proceeds from the
sale of Shares offered by the Selling Shareholders. As of the date of this
Prospectus, 4,508,606 of the Shares registered for public sale are outstanding,
and 7,870,605 of the Shares have not yet been issued, but may be purchased from
the Company by the Selling Shareholders and resold by them pursuant to this
Prospectus. These Shares of Common Stock underlie outstanding warrants,
options and convertible promissory notes and debentures exercisable or
convertible at varying prices. See "Description of Securities." The Company
will receive the cash proceeds from exercise of outstanding warrants and
options and will benefit through reduction of indebtedness by conversion
-3-
<PAGE> 8
of outstanding notes and debentures; however, the prices at which the Company
is obligated to issue these Shares is, as of the date of this Prospectus, below
the market price.
Of the 4,508,606 Shares outstanding in the hands of Selling Shareholders
on the date of this Prospectus, 1,835,571 are subject to a "lock-up" agreement.
The agreement provides that none of the Shares will be sold prior to February
21, 1997 and no more than 25% of the Shares will be sold thereafter until
February 21, 1998, without the prior consent of the Renaissance Capital Growth
& Income Fund III, Ltd. (holder of $3.5 million of Company debentures) and
Bathgate McColley Capital Group, LLC, a broker-dealer affiliated with the
Company's financial consultants.
On the date of this Prospectus, the Company has issued a call for
redemption of __________ of the outstanding warrants which will be redeemed
consideration if not exercised during the period expiring 30 days after the
date of this Prospectus.
Also pursuant to this Prospectus, the Company is offering 720,000 Shares
of Common Stock underlying outstanding Public Warrants and Underwriter's Unit
Warrants.
Risk Factors
The securities offered are speculative and involve a high degree of risk.
Factors which may affect the Company's business and the securities offered
hereby include uncertain financial condition, lack of profitability, possible
need for additional capital, substantial debt and the likely adverse effect of
this Offering on the market price of the Company's Common Stock. See "Risk
Factors."
Use of Proceeds
Any net proceeds to the Company from the exercise of outstanding options
or warrants will be used for working capital. See "Use of Proceeds."
RISK FACTORS
In addition to the other information contained in this Prospectus,
prospective investors should carefully consider the following factors in
evaluating the Company and its business before purchasing the Common Stock
offered hereby.
FINANCIAL CONDITION; WORKING CAPITAL NEEDS. The Company reported net
losses of $1,855,000 and $2,184,000 for the fiscal years ended June 30, 1996
and 1995, respectively. Management believes that the Company's disposition of
the assets and operations of Sharp Electric in late fiscal 1995 and completion
of almost all outstanding Sharp Electric projects in fiscal 1996 will curtail
substantially the Company's future operating losses, and that the acquisition
of MDCS, ACT and VHC will lead to increased revenues and gross profit; however,
there can be no assurance that the Company will achieve profitability during
fiscal 1997. Moreover, the acquisition of ACT and VHC in fiscal 1996 has
increased substantially Topro's need for capital in the short term. At
-4-
<PAGE> 9
September 30, 1996, the Company had a working capital (deficiency) of
approximately $1,348,000. To provide working capital, subsequent to September
30, 1996, the Company issued an additional $1.2 million in 9% Convertible
Debentures, due in 2001, and raised additional funds through sale of equity and
short-term promissory notes. The Company may seek additional capital to fund
increased cash requirements arising from the acquisitions and expanded
operations. See Consolidated Financial Statements and Notes thereto and
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
NO ASSURANCE OF OFFERING PROCEEDS; ADDITIONAL FINANCING MAY BE
REQUIRED. On the date of this Prospectus, the Company called for redemption
certain outstanding Warrants in order to induce the holders to exercise them
prior to the January _, 1997 redemption date. Although those Warrants are
exercisable at prices ranging from $.67 to $1.25, substantially below the
market price of the Common Stock at the date of the call, there can be no
assurance that holders will exercise those Warrants prior to the redemption
date, with the result that the Company may never receive any proceeds. If all
of the Warrants called are exercised prior to the redemption date, the Company
would receive gross proceeds of approximately $1.9 million, which management
believes would, together with operating revenues, be sufficient to fund
increased working capital requirements through fiscal 1997. To the extent
Warrant exercise proceeds and operating revenues are not adequate, the Company
may seek additional debt or equity financing to accelerate funding of costs of
integrating the acquired operations and capitalizing on the opportunities
arising from the Company's expanded market presence and product offerings. Any
issuance of equity securities would result in dilution to the interests of the
Company's shareholders and any issuance of debt securities would subject the
Company to risks that interest rates may increase or cash flow may be
insufficient to repay such indebtedness. See "Management's Discussion and
Analysis of Financial Condition and Results of Operations."
RISKS ASSOCIATED WITH ACQUISITIONS. Over the past 18 months the
Company has acquired three independent control systems integrators ("CSIs") and
has entered into a letter of intent to acquire another leading CSI, All
Control Systems, Inc. ("ACS"), headquartered in West Chester, Pennsylvania.
Although all activities are coordinated through, and certain administrative
functions are centered in, the Company's Denver, Colorado headquarters,
operations of these firms were and continue to be conducted in other regions of
the U.S. Although the Company believes it has an adequate infrastructure to
support the completed and proposed acquisitions, there can be no assurance that
the Company's current management, personnel and other corporate infrastructure
will be adequate to manage the Company's growth and operations which are
geographically dispersed. Integrating the operations of acquired companies may
take management time and attention away from the Company's day-to-day
operations. Any inability to integrate an acquired business into its
operations, particularly in instances in which the Company has made a
significant capital investment, would have a material adverse effect on the
Company's results of operations.
DEPENDENCE ON MANAGEMENT. The Company's prospects for success
currently are greatly dependent upon the efforts and active participation of
its management team, including its current President, John Jenkins, and upper
level management of the acquired companies. The Company
-5-
<PAGE> 10
has an employment contract with Mr. Jenkins for an initial term expiring in
January 1997, which will be renewed automatically for a one year term if not
terminated by either party prior to December 2, 1996, and is the beneficiary
of a $600,000 key employee insurance policy on Mr. Jenkins, the proceeds of
which would be available to permit the Company to engage other qualified
personnel. Due to the recent acquisition of MDCS, ACT and VHC, the Company
also is dependent upon management of those subsidiaries to provide continuity
and assist in the integration of those new operations into Topro's
infrastructure. The Company has entered into employment or consulting
agreements with those persons it believes constitute key management of its
operating subsidiaries, and many members of its key management are significant
shareholders of the Company; however, the loss of the services of any key
member of management could be expected to have an adverse effect on the Company
over the near term.
SIGNIFICANT DEBT; ASSET ENCUMBRANCES; RESTRICTIVE COVENANTS. As of
the date of this Prospectus, the Company has issued an aggregate $4.7 million
principal amount of 9% Convertible Debentures. This debt could have important
consequences to the holders of Common Stock by restricting the Company's
ability to obtain additional financing for working capital, acquisitions or
other purposes in the future and by creating the risk that violation of a
covenant or other term of the loan agreement could cause the outstanding
balance of the loan to become due, putting all of the assets of the Company at
risk. The Company's ability to make scheduled payments of principal or
interest on, or to refinance, the Debentures will depend on future operating
performance and cash flow, which are subject to prevailing economic conditions
and financial, competitive and other factors beyond the Company's control. The
terms of the Debentures impose substantial conditions on the Company's ability
to redeem or prepay the Debentures. The loan agreements pursuant to which
these Debentures were issued contain numerous financial, operating and general
covenants and require the Company and its subsidiaries to meet certain
financial ratios and tests. A failure to comply with the loan agreement
covenants could result in an event of default which could permit acceleration
of the debt. The obligations of the Company under the loan agreements are
secured by a pledge of all of the capital stock of ACT and VHC (as well as the
Shares of ACS if and when acquired) and by a first priority security interest
in substantially all of the assets of Topro and its subsidiaries. If the
Company becomes insolvent or is liquidated, or if payment under the loan
agreement is accelerated, the investor would be entitled to exercise remedies
available to secured creditors under applicable law and pursuant to the loan
agreement. Accordingly, the Debenture holders will have a prior claim on the
assets of the Company and its subsidiaries. Foreclosure on the Company's
assets pledged to secure repayment of the Debentures could reduce the Company's
assets to a level at which assets were not sufficient to make any distribution
to shareholders in the event of liquidation.
MARKET OVERHANG. All of the Shares registered for sale on behalf of
the Selling Shareholders are "restricted securities" as that term is defined in
Rule 144 under the Securities Act of 1933. The Company has filed the
Registration Statement of which this Prospectus is a part to register these
restricted Shares for sale into the public market by the Selling Shareholders.
Any outstanding Shares not sold by Selling Shareholders pursuant to this
Prospectus will remain as restricted securities in the hands of the holder.
-6-
<PAGE> 11
The 4,508,606 outstanding Shares registered hereby for public sale by
the Selling Shareholders represent approximately 66% of the 6,868,689 Shares of
Topro Common Stock outstanding as of November 20, 1996. Of the Shares
registered for sale, 1,835,571 are subject to certain "lock-up" restrictions,
leaving 2,673,035 Shares, or approximately 39% of the total outstanding, freely
saleable on the date of this Prospectus. The Shares issuable upon exercise and
conversion of outstanding securities will represent 80% of the Shares
outstanding after this Offering, assuming exercise and conversion of all
outstanding securities. Many of the outstanding Shares offered by Selling
Shareholders were acquired from the Company at prices ranging from $.67 to
$1.00 per Share. Shares are issuable to the Selling Shareholders upon
conversion of debt and exercise of warrants and options at prices as low as
$.67 and $1.00 per Share, respectively. The sale into the public market of a
significant number of Shares purchased at prices below the current market price
can be expected to have a depressive effect on the market price of the
Company's Common Stock; however, approximately 2,000,000 of the Shares
registered hereby are subject to certain restrictions under lock-up agreements.
Although the Company's Common Stock is traded in the over-the-counter market
and listed on Nasdaq, the market for the Common Stock is not well established
and trading of the Common Stock is subject to significant fluctuation. Any
sale into the public market of Shares purchased at prices below the current
market price could have an adverse effect on the market price of the Company's
Common Stock. See "Description of Securities - Securities Registered Hereby."
Holders of certain of the Company's outstanding warrants, options and
other rights may require the Company, subject to certain limitations, to
include all or part of their Shares in a registration statement. The Company
has filed the registration statement of which this Prospectus is a part to
fulfill that obligation. In addition, certain securityholders, most notably
the holders of the 9% Convertible Debentures, have been granted "demand"
registration rights, requiring the Company to register Shares, at the Company's
expense, upon demand of the securityholder following notice that the debt will
be converted to Common Stock. The exercise of any of these registration rights
may hinder the Company in making public Offerings of its securities in the
future.
INDUSTRY AND ECONOMIC CONDITIONS. A sizable portion of the Company's
business is comprised of projects representing significant capital
expenditures to its customers. Management believes that its customer base is
susceptible to general depressive economic factors which cause such projects to
be delayed and scaled back and payments to be postponed and disputed. Although
general economic factors may affect all industries, management believes that
the Company's business may be more susceptible than many due to the high cost
of these projects. As a result of the Company's recent acquisitions, the
Company has significantly increased the number of industrial market segments
which it serves and, therefore, has reduced its reliance on any individual
market segment.
NO DIVIDENDS. Topro has not paid dividends since inception, and it
does not contemplate paying dividends in the foreseeable future since it will
use all of its earnings, if any, to finance
-7-
<PAGE> 12
expansion of its operations. See "Market for the Company's Common Equity and
Related Shareholder Matters - Dividends."
AUTHORIZATION AND ISSUANCE OF PREFERRED STOCK. Topro is authorized to
issue up to 10,000,000 Shares of preferred stock. The Board of Directors has
the power to establish the dividend rates, liquidation preferences, voting
rights, redemption and conversion terms and privileges with respect to any
series of preferred stock. The issuance of any Shares of preferred stock
having rights superior to those of Topro's Common Stock may result in a
decrease in the value or market price of the Common Stock, provided a market
exists, and further could be used by the Board as a device to prevent a change
in control of Topro. Holders of preferred stock may have the right to receive
dividends, certain preferences in liquidation and conversion rights. As of the
date of this Prospectus, there are no Shares of Preferred Stock issued or
outstanding, and the Board of Directors has no current plan to issue any Shares
of Preferred Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from sales of Shares by the
Selling Shareholders. The Company will benefit if outstanding notes and
debentures are converted (which will not provide cash proceeds, but will
increase available capital by reducing interest expense and enhance the
Company's financial position by reducing debt), and will receive cash proceeds
from the exercise, if any, of outstanding warrants and options.
As of the date of this Prospectus, based on recent market prices for
the Company's Common Stock, management believes that it is likely that debt
instruments will be converted and that options and warrants will be exercised
at prices up to $1.25. If debt convertible at prices below $1.25 is converted,
and options and warrants exercisable at prices up to $1.25 are exercised,
proceeds of the Offering to the Company would total an aggregate of $200,000 in
reduction of debt and $1,931,740 in cash. After deduction of expenses of this
Offering payable by the Company, estimated to total $50,000, net cash proceeds
are estimated to total $1,881,740.
Any net cash proceeds received by the Company will be used for working capital.
-8-
<PAGE> 13
SELLING SHAREHOLDERS
The following table sets forth information known to the Company regarding
the beneficial ownership of Shares of the Company's Common Stock as of
November 20, 1996, and as adjusted to reflect the sale of the shares offered
hereby, by each Selling Shareholder. The information set forth below is based
upon information concerning beneficial ownership provided to the Company by
each Selling Shareholder. Except as otherwise indicated below, each of the
persons named in the table has sole voting and investment power with respect to
the shares set forth opposite such person's name.
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Shares Beneficially Shares Beneficially
Owned Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering(1)
----------------------- ------------------------------- -----------------------
Shares Underlying Notes,
Warrants, Debentures
Name Number Percent Shares(2) and Options(3) Number(4) Percent
- ---- ------ ------- -------- ------------------------ --------- -------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Steven M. Bathgate(5) 568,524 7.9 217,800 316,724 34,000 *
- -----------------------------------------------------------------------------------------------------------------------------
Margaret M. Bathgate(6) 184,500 2.66 100,000 50,000 34,500 *
- -----------------------------------------------------------------------------------------------------------------------------
Kenneth S. Bernstein(7) 52,350 * 26,925 25,425 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Fred Birner 30,000 * 15,000 15,000 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Peter J. Bloomquist and 10,000 * 5,000 5,000 -0- *
Kathy Bloomquist
- -----------------------------------------------------------------------------------------------------------------------------
Fredric W. Duboc 30,000 * 15,000 15,000 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Douglas H. Kelsall(8) 36,000 * 19,600 12,400 4,000 *
- -----------------------------------------------------------------------------------------------------------------------------
Joseph A. Lavigne 41,250 * 26,000 15,250 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Thomas E. McChesney 69,500 * 22,000 47,500 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Eugene C. McColley(9) 414,274 5.8 116,000 268,274 30,000 *
- -----------------------------------------------------------------------------------------------------------------------------
Virginia Stevens McDonald 315,000 4.45 105,000 205,000 5,000 *
- -----------------------------------------------------------------------------------------------------------------------------
Paul Mendell 20,000 * 10,000 10,000 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Robert M. Nieder 112,500 1.6 60,000 52,500 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Edmond O'Donnell 65,000 * 46,000 19,000 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Harry J. Schmidt 50,850 * 27,725 18,125 5,000 *
- -----------------------------------------------------------------------------------------------------------------------------
Cohig & Associates, Inc. 57,407 * -0- 57,407 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Kiawah Capital Partners 227,547 3.23 50,000 177,547 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
-9-
<PAGE> 14
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Shares Beneficially Shares Beneficially
Owned Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering(1)
----------------------- ------------------------------- -----------------------
Shares Underlying Notes,
Warrants, Debentures
Name Number Percent Shares(2) and Options(3) Number(4) Percent
- ---- ------ ------- --------- ----------------------- --------- -------
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Jeffrey A. Minalga**** 37,589 * 18,657 18,657 275 *
- -----------------------------------------------------------------------------------------------------------------------------
Marvin W. Smith*** 89,850 1.29 14,925 74,925 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Richard L. Meador 30,350 * 14,925 14,925 500 *
- -----------------------------------------------------------------------------------------------------------------------------
Michael P. Casiglio 5,970 * 2,985 2,985 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Joseph R. Troke**** 75,710 1.0 37,313 37,313 1,084 *
- -----------------------------------------------------------------------------------------------------------------------------
Thomas M. Savage**** 69,700 * 29,850 39,850 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
David E. Wiley*** 14,926 * 7,462 7,462 2 *
- -----------------------------------------------------------------------------------------------------------------------------
Thomas A. Hughes**** 2,984 * 1,492 1,492 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
David R. Rollins*** 4,022 * 2,000 2,000 22 *
- -----------------------------------------------------------------------------------------------------------------------------
David R. Gill*** 14,926 * 7,463 7,463 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Mark R. Shamley*** 4480 * 2,239 2,239 2 *
- -----------------------------------------------------------------------------------------------------------------------------
Kenneth B. Marsh 15,000 * 15,000 -0- -0- *
- -----------------------------------------------------------------------------------------------------------------------------
John D. Higgins(10) 323,143 4.5 17,530 268,913 36,700 *
- -----------------------------------------------------------------------------------------------------------------------------
John P. Jenkins (26)** 579,642 7.97 178,571 401,071 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
E. Gregory Fisher** 220,000 3.19 200,000 20,000 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
David W. Brown 78,204 1.1 39,102 39,102 -0- *
- -----------------------------------------------------------------------------------------------------------------------------
S. R. Hinkle Inc. Pension Plan 10,000 * 10,000 -0- -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Susan S. Duboc 25,000 * 25,000 -0- -0- *
- -----------------------------------------------------------------------------------------------------------------------------
Lawrence Bathgate(11) 35,000 * 25,000 -0- 10,000 *
- -----------------------------------------------------------------------------------------------------------------------------
Summit Fund Limited 359,286 5.1 198,143 161,143 -0- *
Partnership
- -----------------------------------------------------------------------------------------------------------------------------
Pamela M. Kelsall(12) 5,000 * 5,000 -0- -0- *
- -----------------------------------------------------------------------------------------------------------------------------
James Edgar McDonald(13) 243,750 3.47 97,000 141,750 5,000 *
- -----------------------------------------------------------------------------------------------------------------------------
</TABLE>
-10-
<PAGE> 15
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------
Shares Beneficially Shares Beneficially
Owned Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering(1)
-------------------------- ------------------------------- -----------------------
Shares Underlying Notes,
Warrants, Debentures
Name Number Percent Shares(2) and Options(3) Number(4) Percent
- ---- ------ ------- -------- --------------------- --------- -------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Victor L. Kashner 25,000 * 25,000 -0- -0- *
- ------------------------------------------------------------------------------------------------------------------------------
William B. Miller, Jr. 10,000 * 5,000 -0- 5,000 *
- ------------------------------------------------------------------------------------------------------------------------------
Wayne T. Clasen 45,000 * 35,000 -0- 10,000 *
- ------------------------------------------------------------------------------------------------------------------------------
Sherry A. Clasen and 46,000 * 35,000 -0- 11,000
Gene P. Clasen
- ------------------------------------------------------------------------------------------------------------------------------
Anchor Sales Co. Profit 22,000 * 20,000 -0- 2,000 *
Sharing Plan
- ------------------------------------------------------------------------------------------------------------------------------
John Pfeiffer 60,000 * 10,000 50,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Perkins Coie 65,000 * 65,000 -0- -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Richard M. Brown (14)(25)*** 401,431 5.84 390,931 10,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Clifford L. Morrison 211,965 3.0 201,465 10,500 -0- *
(15)(25)***
- ------------------------------------------------------------------------------------------------------------------------------
Donald H. Gurney (16)(25)*** 30,536 * 23,536 7,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Jon E. Walker (17)(25)** 492,216 7.1 474,716 17,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Imogene Walker (18)(25)**** 492,216 7.1 474,716 17,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
David Reece (25)*** 80,318 1.16 66,818 13,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Jon E. Walker, Jr. (25)*** 65,318 * 54,818 10,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Alexander Hutton, Inc. (25) 78,000 1.1 78,000 -0- -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Caribou Bridge Fund LLC 177,500 2.58 100,000 77,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Thomas Sharp (19)*** 22,500 * 12,000 10,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Robert & Debora Richards*** 30,000 * 16,000 14,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
United Investment Bankers 22,500 * 12,000 10,500 -0- *
Inc.
- ------------------------------------------------------------------------------------------------------------------------------
Wayne Hammersly (20) 22,500 * 12,000 10,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Timothy Evans 22,500 * 12,000 10,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Harold Golz 41,250 * 6,000 35,250 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-11-
<PAGE> 16
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Shares Beneficially Shares Beneficially
Owned Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering(1)
----------------------- ------------------------------- ---------------------
Shares Underlying Notes,
Warrants, Debentures
Name Number Percent Shares(2) and Options(3) Number(4) Percent
- ---- ------ ------- --------- ------------------------ --------- -------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
John D. Phillips 21,000 * 11,200 9,800 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Grant Street Joint Ventures 22,500 * 12,000 10,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Eugene A. & Marilyn K. 10,000 * 8,000 2,000 -0- *
Raymond
- ------------------------------------------------------------------------------------------------------------------------------
Stanley A. Kaplan 25,000 * 20,000 5,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Douglas F. Taylor*** 15,000 * 12,000 3,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Norman Lewis Jette*** 5,000 * 4,000 1,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
David J. & Marilyn D. 4,000 * 3,200 800 -0- *
Wilson***
- ------------------------------------------------------------------------------------------------------------------------------
Patrice & Richard A. 25,065 * 20,000 5,000 65 *
Wright***
- ------------------------------------------------------------------------------------------------------------------------------
Stephen Kent Pearce*** 10,000 * 8,000 2,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
James & Rosalene 5,000 * 4,000 1,000 -0- *
Weatherby***
- ------------------------------------------------------------------------------------------------------------------------------
Jesse Chan 20,000 * 16,000 4,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Charles W. Botsford 15,000 * 12,000 3,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
U.S.Trust Co. custodian for 15,000 * 12,000 3,000 -0- *
Portland Partners
- ------------------------------------------------------------------------------------------------------------------------------
James M. Fleming 15,000 * 12,000 3,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Richard Friedman 37,500 * 30,000 7,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Jeffrey Markowitz 37,500 * 30,000 7,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Lester W. Erb Living Trust 67,142 * 36,571 30,571 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Macy Family Trust 10,000 * 8,000 2,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Merwyn E. Gilderoy*** 10,000 * 8,000 2,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Raymon D. & Lisa D. 15,000 * 12,000 3,000 -0- *
Burrows***
- ------------------------------------------------------------------------------------------------------------------------------
Douglas Joseph Fleming 15,000 * 12,000 3,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Andrew & Sarah Nicoletta 15,000 * 12,000 3,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-12-
<PAGE> 17
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Shares Beneficially Shares Beneficially
Owned Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering(1)
----------------------- ------------------------------- ---------------------
Shares Underlying Notes,
Warrants, Debentures
Name Number Percent Shares(2 and Options(3) Number(4) Percent
- ---- ------ ------- -------- ----------------------- --------- -------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Randy J. & Rori Sasaki(21) 109,000 1.56 7,200 101,800 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
E. Bowman McLean (22) 12,000 * 9,600 2,400 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
D & B Partners, LTD 15,000 * 12,000 3,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Rexford E. Spencer*** 17,500 * 14,000 3,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
David A. Fry*** 10,000 * 8,000 2,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Jessie L. & Debbie 7,500 * 6,000 1,500 -0- *
Beasley***
- ------------------------------------------------------------------------------------------------------------------------------
David Westcott 5,500 * 4,400 1,100 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
H. Dennison Parker 5,000 * 4,000 1,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Nora Sherwood Parker 5,000 * 4,000 1,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
PAMB Investments 5,000 * 4,000 1,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Alan A. & Carla F. Jochim 5,500 * 4,400 1,100 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
J. Scott Liolios (23) 107,000 1.53 5,600 101,400 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Vicki Barone 5,000 * -0- 5,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Mark Holifer 7,000 * -0- 7,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
William J. Macy (24) 67,142 * 36,571 30,571 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Michael C. Taylor Family 680,000 9.58 152,000 228,000 300,000 1.99
Trust (27)(28)***
- ------------------------------------------------------------------------------------------------------------------------------
James Haney (27)*** 30,000 * 12,000 18,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Phillip Bettendorf (27)*** 20,000 * 8,000 12,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Tom Reski (27) 20,000 * 8,000 12,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
John R. Teed, Jr. (27) 10,000 * 4,000 6,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Barry Wagoner (27)*** 10,000 * 4,000 6,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Don Mouchou (27)*** 20,000 * 8,000 12,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
David Sidhu (27) 2,500 * 1,000 1,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Jagor Singh Sidhu (27) 2,500 * 1,000 1,500 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
-13-
<PAGE> 18
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Shares Beneficially Shares Beneficially
Owned Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering(1)
-------------------------- ------------------------------- -----------------------
Shares Underlying Notes,
Warrants, Debentures
Name Number Percent Shares(2) and Options(3) Number(4) Percent
- ---- ------ ------- ------ --------------------- --------- -------
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Kaljit Hairon(27) 1,750 * 1,000 750 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Surjit Sidhu(27) 1,750 * 1,000 750 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Royce Investments Group, Inc. 120,147 1.7 -0- 120,147 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Renaissance Capital Growth 2,708,333 28.2 -0- 2,708,333 -0- *
Income Fund III, Inc.
- ------------------------------------------------------------------------------------------------------------------------------
Renaissance U.S. Growth & 800,000 10.4 -0- 800,000 -0- *
Income Trust, PLC
- ------------------------------------------------------------------------------------------------------------------------------
Pacific Consulting Group, 200,000 2.8 -0- 200,000 -0- *
Inc.
- ------------------------------------------------------------------------------------------------------------------------------
The Women's Bank 14,286 * -0- 14,286 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
J. Neal Ethridge**** 205,000 2.8 -0- 205,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
H. Robert Gill** 15,000 * -0- 15,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
H. R. Hodge** 15,000 * -0- 15,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Gary Cansler 66,667 * -0- 66,667 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
Elliot S. & Lois C. 164,350 2.3 -0- 164,350 -0- *
Schlissel
- ------------------------------------------------------------------------------------------------------------------------------
Jesse Greenfield 530,258 7.4 11,930 246,525 271,803 1.84
Rockies Fund, Inc. 110,000 1.57 5,000 105,000 -0- *
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Less than one percent.
** Denotes a director and/or officer-employee of the Company or a
subsidiary.
*** Denotes an employee (other than officers) of the Company or a
subsidiary.
**** Denotes a person previously employed by, or a director of, the Company
or a subsidiary during the past three years.
(1) Beneficial ownership is calculated in accordance with Rule 13d-3(d) of
the Securities Exchange Act of 1934, as amended. Under Rule 13d-3(d),
shares not outstanding that are subject to options, warrants, rights
or conversion privileges exercisable within 60 days are deemed
outstanding for the purpose of calculating the number and percentage
owned by such person of the class, but not deemed outstanding for the
purpose of calculating the percentage owned of the class by any other
person.
(2) The number of Shares offered hereby consists of outstanding Shares
held and offered for the account of the Selling Shareholders.
-14-
<PAGE> 19
(3) The number of Shares underlying notes, warrants, debentures and
options are those Shares registered for sale upon conversion and
exercise of notes, warrants, debentures and options held by Selling
Shareholders.
(4) Assumes that all notes, options, debentures and warrants are
converted, exercised and all Shares are sold by the Selling
Shareholders.
(5) Includes 142,800 Shares and warrants to purchase 87,450 Shares held of
record by Mr. Bathgate's two Keough accounts, 50,000 Shares and
warrants to purchase 50,000 Shares held in a joint account with Mr.
Bathgate's wife, one-half of 9,000 Shares held of record by Bathgate
Family Partnership of which Mr. Bathgate is a partner, and one-half
of the 141,667 Shares and warrants to purchase 85,880 Shares held of
record by Kiawah Capital Partners, a general partnership of which Mr.
Bathgate is a general partner. Mr. Bathgate, in a Schedule 13D filing
with the Securities and Exchange Commission, has disclaimed beneficial
ownership of 50% of the Company's securities held of record by Kiawah
Capital Partners. Does not include Shares held of record by spouse.
(6) Includes 50,000 Shares and warrants to purchase 50,000 Shares held in
a joint account with Ms. Bathgate's husband, Steven M. Bathgate, and
one-half of 9,000 Shares held of record by Bathgate Family Partnership
of which Ms. Bathgate is a partner. Does not include Shares held of
record by spouse.
(7) Includes 14,925 Shares and warrants to purchase 14,925 Shares held of
record in Mr. Bernstein's IRA account.
(8) Includes 10,000 Shares and warrants to purchase 10,000 Shares held of
record in Mr. Kelsall's IRA account, and one-half of the 12,000 Shares
and warrants to purchase 3,000 Shares held of record by D & B
Partners, LTD, a general partnership of which Mr. Kelsall is a general
partner. Does not include Shares held of record by spouse.
(9) Includes 22,000 Shares and warrants to purchase 15,000 Shares held of
record by Mr. McColley's IRA account and one-half of the 141,667
Shares and warrants to purchase 85,880 Shares held of record by Kiawah
Capital Partners, a general partnership, of which Mr. McColley is a
general partner. Mr. McColley, in a Schedule 13D filing with the
Securities and Exchange Commission, has disclaimed beneficial
ownership of 50% of the Company's securities held of record by Kiawah
Capital Partners.
(10) Includes 111,940 Shares and warrants to purchase 111,940 Shares held
of record by a joint account in the name of Mr. Higgins and his wife,
Lynn Higgins.
(11) Includes 25,000 Shares held of record by Mr. Bathgate's IRA account.
(12) Consists of 5,000 Shares held of record by Ms. Kelsall's IRA account.
Does not include Shares held of record by spouse.
(13) Includes 50,000 Shares and warrants to purchase 50,000 Shares held of
record by the James Edgar McDonald Trust and includes 5,000 Shares
held in the name of Virginia Stevens McDonald, of which Mr. McDonald
may be considered a beneficial owner.
(14) Includes 12,000 Shares and warrants to purchase 10,500 Shares held of
record in a joint account with Mr. Brown's wife, Sallie Brown.
(15) Includes 12,000 Shares and warrants to purchase 10,500 Shares held of
record in a joint account with Mr. Morrison's wife, Susan Morrison.
-15-
<PAGE> 20
(16) Includes 8,000 Shares and warrants to purchase 7,000 Shares held of
record in a joint account with Mr. Gurney's wife, Georgia Gurney.
(17) Includes 20,000 Shares and warrants to purchase 17,500 Shares held of
record in a joint account with Mr. Walker's wife, Imogene Walker.
Does not include Shares held of record by spouse.
(18) Includes 20,000 Shares and warrants to purchase 17,500 Shares held of
record in a joint account with Ms. Walker's husband, Jon E. Walker.
Does not include Shares held of record by spouse.
(19) Consists of 12,000 Shares and warrants to purchase 10,500 Shares held
of record by Mr. Sharp's IRA account.
(20) Consists of 12,000 Shares and warrants to purchase 10,500 Shares held
of record by Mr. Hammersly's IRA account.
(21) Includes one-half of the options to purchase 200,000 Shares held of
record by Pacific Consulting Company, a general partnership of which
Mr. Sasaki is a general partner.
(22) Includes one-half of the 12,000 Shares and warrants to purchase 3,000
Shares held of record by D & B Partners, LTD, a general partnership
of which Mr. Bowman is a general partner.
(23) Includes one-half of the warrants to purchase 200,000 Shares held of
record by Pacific Consulting Company, a general partnership of which
Mr. Liolios is a general partner.
(24) Includes 8,000 Shares and warrants to purchase 2,000 Shares held of
record by the Macy Family Trust over which Mr. Macy has beneficial
control as trustee.
(25) Includes Shares acquired in the ACT merger which are subject to a
lock-up agreement with Renaissance and Bathgate McColley Capital Group
LLC whereby the holders have agreed that without prior consent they
will not sell such shares until February 21, 1997, and that until
February 21, 1998 they will not sell more than 25% of such shares.
In the event other shareholders subject to this lock-up agreement sell
less than 25% of such shares during such period, other shareholders
may sell more than 25% so long as the aggregate number of shares sold
by the group does not exceed 25% .
(26) These Shares are subject to a lock-up agreement with Renaissance and
Bathgate McColley Capital Group LLC whereby the holders have agreed
that without prior consent they will not sell any of their shares
until February 21, 1997, and that until February 21, 1998 they will
not sell more than 25% of their Shares. In the event other
shareholders subject to this lock-up agreement sell less than 25% of
their Shares during such period, other shareholders may sell more than
25% so long as the aggregate number of Shares sold by the group does
not exceed 25% .
(27) Includes options which are not exercisable until April 8, 1997.
(28) Includes warrants to purchase 150,000 Shares held of record by Michael
C. Taylor and warrants to purchase 150,000 Shares held of record by
Mr. Taylor's wife, Kathleen Taylor.
-16-
<PAGE> 21
RELATIONSHIPS AND TRANSACTIONS WITH CERTAIN SELLING SHAREHOLDERS
On October 20, 1993 J. Neal Ethridge, a brother of the Company's
Chairman, loaned a subsidiary of the Company $750,000 in exchange for a
promissory note. Warrants totaling 200,000 Shares exercisable at a price equal
to the bid price of the Company's stock on the date of grant were issued to Mr.
Ethridge. During fiscal 1995, at a time when J. Neal Ethridge was a Director
of the Company, this note was converted to loans from Mr. Ethridge and Gary
Cansler, a non-affiliated party of $570,000 and $190,000, respectively, to Topro
in exchange for promissory notes secured by a pledge of the shares of Direct
Measurement Corporation ("DMC") owned by the Company. On November 8, 1995, the
Company sold its remaining 3,255 DMC shares to three parties, including J. Neal
Ethridge, who was at that time a Director of the Company, and Gary Cansler. The
purchase price of $1,110,000 (approximately $341 per share) was paid with
$350,000 in cash, and cancellation of the aggregate of $760,000 of the Company's
promissory notes held by Mr. Ethridge and Gary Cansler. The stock purchase
agreement provides for a bonus payment to be paid the Company as follows:
should DMC be sold to any third party for consideration of greater than $420 per
share the Company will receive 50% of the difference between the $420 per share
and the actual price. This additional consideration will be paid to the Company
when received by the DMC selling shareholders. The Company realized a gain of
$410,000 from the sale of the DMC stock. The Board of Directors believes that
the terms of this transaction were at least as favorable as terms which could
have been obtained from any non-affiliated party.
Douglas H. Kelsall, President of Caribou Capital Corporation, entered
into a consulting agreement with the Company dated June 15, 1995 for a period
of one year. In addition, D & B Partners LTD, of which Mr. Kelsall is a
general partner, purchased certain accounts receivable from Tech Sales, Inc., a
wholly-owned subsidiary of the Company, on July 21, 1995. This obligation has
been fully repaid.
Pursuant to a Letter of Agreement dated September 1, 1995, the Company
has engaged Pfeiffer Public Relations, Inc. as public relations consultants on
a month to month basis for a fee of $3,000 per month through January 1996 and a
fee of $1,000 per month thereafter. As additional compensation, the Company
issued to John Pfeiffer, president of Pfeiffer Public Relations, Inc., 10,000
Shares and warrants exercisable through October 14, 2000 to purchase 50,000
Shares at a price of $1.00 per Share. Mr. Pfeiffer was also granted certain
registration rights pursuant to which the Shares and the Shares underlying the
warrants are included in the registration statement of which this Prospectus is
a part.
Bathgate McColley & Associates, LLC, a limited liability company
("BMA") owned equally by Steven M. Bathgate and Eugene C. McColley, has acted
as financial consultant to the Company since April 1995 and its affiliate,
Bathgate McColley Capital Group LLC ("BMCG"), has acted as a placement agent in
private offerings of the Company. Under its Financial Consulting Agreement,
BMA provides advice to, and consults with, the Company concerning business and
financial planning, corporate organization and structure, the Company's
relations with its security holders, private and public debt and equity
financing and financial matters in connection with the operation of the
business of the Company for a fee of $4,000 per month. As additional
compensation, in April
-17-
<PAGE> 22
1995 BMA received warrants exercisable for a period of five years to purchase
up to 91,667 Shares at a price of $.67 per Share and was granted the right to
have the Shares underlying those warrants included in certain registration
statements otherwise filed by the Company. The Financial Consulting Agreement
provides that additional compensation, calculated according to the "Lehman
formula," is payable to BMA for assistance provided in connection with
negotiating, structuring and evaluating acquisitions undertaken by the Company.
In accordance with this provision, the Company paid BMA a fee of $17,500 for
services in connection with acquisition of MDCS, a fee of $120,000 for services
in connection with the acquisition of ACT and a fee of $60,000 in connection
with the acquisition of VHC. BMA also acted as broker for the Company's sale
of debentures to Renaissance for which it was paid broker's fees totaling
$164,500 (3.5%). In addition, BMCG acted as the Company's placement agent in
connection with the Company's 1995 and 1996 private placements. In connection
with a renewal of the Financial Consulting Agreement in April 1996, the Company
issued 100,000 options to purchase Shares of Common Stock to BMA which were
subsequently transferred 50,000 to each of Steven M. Bathgate and Eugene C.
McColley. Each option is exercisable to purchase one Share of Common Stock at
$2.56 per Share expiring on March 31, 2001. Various securities held by BMA and
its affiliates, including those described above, are registered for public sale
pursuant to this Prospectus.
In February 1996 the Company entered into a 12 month Financial Public
Relations Agreement with Pacific Consulting Group, Inc. ("PCG"). Under the
contract, PCG receives a fee of $4,000 per month and was issued three-year
options to purchase 50,000 Shares at $1.25 per Share, 50,000 Shares at $2.00
per Share, 50,000 Shares at $2.50 per Share and 50,000 Shares at $3.00 per
Share. The Shares underlying the options issued to PCG are registered for
public sale pursuant to this Prospectus.
The Company has entered into Loan Agreements with Renaissance Capital
Growth & Income Fund III, Inc. and Renaissance U.S. Growth & Income Trust, PLC,
holders of an aggregate of $4.7 million of the Company's 9% Convertible
Debentures, which provide, among other things, for the Company's payment of a
monthly financial advisory fee of $1,500 per month to Renaissance Capital Group,
Inc., which serves as investment adviser to the two funds and grants Renaissance
Capital Group, Inc. the right to designate a nominee to the Company's Board of
Directors. The Loan Agreements also contain other standard agreements and
covenants of the Company.
The Company and certain of the employees, Officers and Directors
identified in the table of Selling Shareholders, above, are parties to
agreements providing for compensation of those persons for services provided to
the Company.
Except as described above and as noted in the Selling Shareholder
table above, none of the Selling Shareholders have had any position, office or
other material relationship with the Company during the past three years.
-18-
<PAGE> 23
PLAN OF DISTRIBUTION
SALE OF SECURITIES BY SELLING SHAREHOLDERS
The Selling Shareholders have advised the Company that prior to the
date of this Prospectus they have not made any agreements or arrangements with
any underwriters, brokers or dealers regarding the resale of the Shares. The
Company has been advised by the Selling Shareholders that the Shares may at any
time or from time to time be offered for sale either directly by the Selling
Shareholders or by their transferees or other successors in interest. Such
sales may be made in the over-the-counter market or in privately negotiated
transactions.
The Selling Shareholders have exercised their right to require the
Company to register the Shares which the Selling Shareholders purchased from
the Company in private transactions. Those private placement purchasers were
granted certain registration rights pursuant to which the Company has agreed to
maintain a current registration statement to permit public sale of the Shares
for a period of at least nine months from the date of this Prospectus or until
the Shares have been sold, whichever first occurs. The Company will pay all of
the expenses incident to the offering and sale of the Shares to the public by
the Selling Shareholders other than commissions and discounts of underwriters,
dealers or agents, if any. Expenses to be paid by the Company include legal
and accounting fees in connection with the preparation of the Registration
Statement of which this Prospectus is a part, legal fees in connection with the
qualification of the sale of the Shares under the laws of certain states,
registration and filing fees, printing expenses, and other expenses. The
Company will not receive any proceeds from the sale of the Shares by the
Selling Shareholders.
The Company anticipates that the Selling Shareholders from time to
time will offer the Shares through: (i) dealers or agents or in ordinary
brokerage transactions; (ii) direct sales to purchasers or sales effected
through an agent; (iii) privately negotiated transactions; or (iv) combinations
of any such methods. The Shares would be sold at market prices prevailing at
the time of sale or at negotiated prices. Dealers and brokers involved in the
offer and sale of the Shares may receive compensation in the form of discounts
and commissions. Such compensation, which may be in excess of ordinary
brokerage commissions, may be paid by the Selling Shareholders and/or the
purchasers of Shares for whom such underwriters, dealers or agents may act.
The Selling Shareholders and any dealers or agents which participate in the
distribution of the Shares may be deemed to be "underwriters" as defined in the
Securities Act of 1933, as amended (the "1933 Act") and any profit on the sale
of the Shares and any discounts, commissions or concessions received by any
dealers or agents might be deemed by the NASD to constitute underwriting
compensation.
If the Company is notified by the Selling Shareholders that any
material arrangement has been entered into with an underwriter for the sale of
Shares, a supplemental prospectus will be filed to disclose such of the
following information as the Company believes appropriate: (i) the name of the
participating underwriter; (ii) the number of Shares involved; (iii) the price
at which such Shares are sold; (iv) the commissions paid or discounts or
concessions allowed to such underwriter; and (v) other facts material to the
transaction.
-19-
<PAGE> 24
Sales of Shares in the over-the-counter market may be by means of one
or more of the following: (i) 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; (ii) purchases by a
dealer as principal and resale by such dealer for its account pursuant to this
Prospectus; and (iii) ordinary brokerage transactions and transactions in which
the broker solicits purchasers. In effecting sales, brokers or dealers engaged
by the Selling Shareholders may arrange for other brokers or dealers to
participate.
In accordance with the registration rights granted by the Company,
certain of the Selling Shareholders are restricted as to the amount and/or
timing of public sales of Shares made pursuant to this Prospectus. Persons who
received any of the 1,657,000 Shares issued in exchange for shares of ACT, and
Topro's President, John Jenkins, who owns 178,571 outstanding Shares and
504,642 Shares underlying warrants and options, have agreed not to sell any
Shares prior to February 21, 1997 and thereafter not to sell more than 25% of
such Shares prior to February 21, 1998, without in each case the prior consent
of both Renaissance Capital Growth & Income Fund III, Inc., holder of $3.5
million of the Company's debentures, and BMCG.
The Company is unable to predict the effect which sales of the Shares
by the Selling Shareholders might have upon the market price of the Company's
Common Stock or the Company's ability to raise further capital. See "Risk
Factors - Market Overhang."
SALE OF COMMON STOCK BY THE COMPANY
Public Sale. The Company is offering Shares underlying the Public
Warrants and Underwriter's Unit Warrants issued in its 1992 public offering.
No underwriter or placement agent has been engaged to assist the Company in
this regard and no commissions or similar compensation will be paid to any
party.
Private Sale. The Company will issue Shares of "restricted" Common
Stock to the Selling Shareholders upon their conversion or exercise of
outstanding notes, warrants, debentures or options which they purchased from
the Company in private transactions. The Company anticipates that Shares
issued upon exercise of notes, warrants, debentures and options will be sold by
the Selling Shareholders as described above.
INDEMNIFICATION
The Company's Articles of Incorporation provide that the Company shall
indemnify any officer, employee, agent or director against liabilities
(including the obligation to pay a judgment, settlement, penalty, fine or
expense), incurred in a proceeding (including any civil, criminal or
investigative proceeding) to which the person was a party by reason of such
status. Such indemnity may be provided if the person's actions resulting in
the liabilities: (i) were taken in good faith; (ii) were reasonably believed
to have been in the Company's best interest with respect to actions taken in
the person's official capacity; (iii) were reasonably believed not to be
opposed to the Company's
-20-
<PAGE> 25
best interest with respect to other actions; and (iv) with respect to any
criminal action, the director had no reasonable grounds to believe the actions
were unlawful. Unless the person is successful upon the merits in such an
action, indemnification may generally be awarded only 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 the director to be indemnified.
A director, employee, agent, or officer who is wholly successful, on
the merits or otherwise, in defense of any proceeding to which he or she was a
party, is entitled to receive indemnification against reasonable expenses,
including attorneys' fees, incurred in connection with the proceeding. In
addition, a corporation may indemnify or advance expenses to an officer,
employee or agent who is not a director to a greater extent than permitted for
indemnification of directors, if consistent with law and if provided for by its
articles of incorporation, bylaws, resolution of its shareholders or directors
or in a contract.
In connection with this Offering the Company and the Selling
Shareholders have agreed to indemnify each other against certain civil
liabilities, including liabilities under the Securities Act of 1933, as
amended. Insofar as indemnification for liabilities arising under the Act of
1933 may be permitted to directors, officers and controlling persons of the
issuer pursuant to the foregoing provisions, or otherwise, the small business
issuer 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.
DESCRIPTION OF SECURITIES
AUTHORIZED CAPITAL
As of the date of this Prospectus, the Company is authorized to issue
200,000,000 Shares of $.0001 par value Common Stock and 10,000,000 Shares of
$.0001 par value Preferred Stock are authorized. No Shares of Preferred Stock
are issued or outstanding as of the date of this Prospectus. No holder of any
Shares of Common Stock has any preemptive right to subscribe for any of the
Company's securities. Upon dissolution, liquidation or winding up of the
Company, the assets will be divided pro rata on a share-for-share basis among
holders of all outstanding Shares of Common Stock.
NO CUMULATIVE VOTING. Each holder of Common Stock is entitled to one
vote per Share with respect to all matters that are required by law to be
submitted to Securityholders. Securityholders are not entitled to cumulative
voting in the election of directors. Accordingly, the holders of more than 50%
of the Shares voting for the election of directors can elect 100% of the
directors if they choose to do so; and, in such event, the holders of the
remaining Shares voting for the election of the directors will be unable to
elect any person or persons to the Board of Directors.
-21-
<PAGE> 26
ISSUED AND OUTSTANDING. As of November 20, 1996, the Company had
issued and outstanding 6,868,689 Shares of Common Stock.
SECURITIES REGISTERED HEREBY.
On March 7, 1995 the Company sold $525,000 of 10% Senior Convertible
Notes under exemptions offered by Regulation D and Regulation S under the 1933
Act. Of this amount, $175,000 principal amount of the notes was converted to
units during 1995. The notes are convertible at the rate of $.67 into units
consisting of one Share and one warrant. Commencing March 7, 1997, the notes
are redeemable, in whole only, for an amount equal to 110% of the amount of the
outstanding principal plus accrued and unpaid interest upon 30 days notice,
provided that the average trading price of the Company's Common Stock equals or
exceeds $2.00 per Share for 20 consecutive trading days. Each warrant included
in the units is exercisable to purchase one Share at $1.00 per Share. The
Company may redeem these warrants at a price of $.01 per warrant if the closing
bid price of the Company's Common Stock equals or exceeds $2.50 for 20
consecutive trading days. An additional 31,314 units (consisting of 31,314
Shares and warrants exercisable to purchase 31,314 Shares) were issued as
placement agent's compensation and placement agent's warrants exercisable to
purchase 74,627 units were issued in the note offering. The Shares included in
the units and those issuable upon exercise of the warrants included in the
units underlying the $225,000 of notes issued pursuant to Regulation D and
those issued as placement agent's compensation have been registered for public
sale pursuant to this Prospectus. During 1995 and 1996, the Company issued an
aggregate of 26,049 units as payment of accrued interest on the notes. Of the
52,098 Shares included in the units and underlying the warrants included in the
units issued as interest, 29,770 Shares are registered for public sale pursuant
to this Prospectus.
On April 1, 1995 the Company sold 449,850 units of securities under an
exemption afforded by Regulation D of the 1933 Act. Each unit consisted of one
Share and one warrant exercisable at $1.00 per Share until April 1, 2000. At
any time that the Company has an effective registration statement, such
warrants will be subject to redemption at a price of $.0001 per warrant so long
as the closing bid price of the Company's Common Stock has equalled or exceeded
$2.00 per Share for a period of 30 consecutive trading days. An additional
67,477 units are issuable upon exercise of options granted to the placement
agent for the offering. The Shares included in the units and underlying the
warrants included in the units are registered for public sale pursuant to this
Prospectus.
On June 30, 1995, the Company sold 139,311 units of securities to
employees of the Company under an exemption afforded by Regulation D of the
1933 Act. Each unit consisted of one Share and one warrant exercisable at
$1.00 per Share until April 1, 2000. At any time that the Company has an
effective registration statement, such warrants will be subject to redemption
at a price of $.0001 per warrant so long as the closing bid price of the
Company's Common Stock has equalled or exceeded $2.00 per Share for a period of
30 consecutive trading days. The Shares included in the units and underlying
the warrants included in the units are registered for public sale pursuant to
this Prospectus.
-22-
<PAGE> 27
On November 8, 1995 the Company issued warrants to purchase 14,286
Shares exercisable at $1.75 per Share until November 7, 2000 to The Women's
Bank in consideration for a loan in the amount of $650,000. At any time that
the Company has an effective registration statement, the Warrants will be
subject to redemption at a price of $.0001 per warrant so long as the last sale
price of the Company's Common Stock has equalled or exceeded $2.00 per Share
for a period of 30 consecutive trading days. The Shares issuable upon exercise
of the warrants are registered for public sale pursuant to this Prospectus.
During December 1995 through February 1996, the Company sold $480,000
of 12% Subordinated 180-day Promissory Notes and 240,000 warrants to purchase
Common Stock under exemptions afforded by Regulation D under the 1933 Act. Of
this amount, $465,000 of the notes were converted into subscriptions to
purchase units pursuant to the Company's unit offering conducted in March and
April 1996 and $15,000 of the notes were paid in full. Each warrant is
exercisable to purchase one Share at $1.00 per Share until April 1, 2000. At
any time that the Company has an effective registration statement, the warrants
are subject to redemption at a price of $.0001 per warrant so long as the last
sale price of the Company's Common Stock has equalled or exceeded $2.00 per
Share for a period of 30 consecutive trading days. The Shares underlying the
warrants are registered for public sale pursuant to this Prospectus.
On February 15, 1996 the Company issued options to purchase 200,000
Shares to Pacific Consulting Group, Inc., exercisable 50,000 at $1.25 per
Share, 50,000 at $2.00 per Share, 50,000 at $2.50 per Share and 50,000 at $3.00
per Share until February 15, 1999. The options were issued in consideration
for financial public relations consulting services. The Shares underlying the
options are registered for public sale pursuant to this Prospectus.
In February 1996 the Company issued 1,657,000 Shares to the
shareholders of Advanced Control Technology, Inc. ("ACT") in connection with
the Company's acquisition of ACT. The shareholders of ACT may receive up to
100,000 bonus Shares if certain profit goals are met during the first two
quarters of fiscal 1997. In connection with the merger, 65,000 Shares were
issued to ACT's attorneys in settlement of past fees. The Shares issued to the
shareholders and attorneys of ACT are registered for public sale pursuant to
this Prospectus. Shares issued to ACT shareholders are subject to a "lock-up"
arrangement. See "Selling Shareholders - footnote 25."
During March and April 1996 the Company sold 100,000 units of
securities under an exemption afforded by Regulation D of the 1933 Act. Each
unit consisted of eight Shares and two warrants, each exercisable at $1.00 per
Share until April 1, 2000. At any time that the Company has an effective
registration statement, the warrants will be subject to redemption at a price
of $.0001 per warrant so long as the last sale price of the Company's Common
Stock has equalled or exceeded $2.00 per Share for a period of 30 consecutive
trading days. An additional 15,000 units are issuable upon exercise of
warrants granted to the placement agent for the offering. The Shares included
in the units and underlying the warrants included in the units are registered
for public sale pursuant to this Prospectus.
-23-
<PAGE> 28
On April 25, 1996 the Company issued warrants to purchase 50,000
Shares exercisable at $2.00 per Share commencing on the earlier of (1) April
25, 1997 or (2) the date of this Prospectus and expiring on May 31, 1999 to
certain persons in consideration for the release of a certificate of deposit
pledged by the Company as security for certain Senior Convertible Notes issued
in March 1995. At any time that the Company has an effective registration
statement, the Warrants will be subject to redemption at a price of $.0001 per
warrant so long as the last sale price of the Company's Common Stock has
equalled or exceeded $3.00 per Share for a period of 30 consecutive trading
days. Of the 50,000 Shares issuable upon exercise of the warrants, 28,572 are
registered for public sale pursuant to this Prospectus.
During May 1996 the Company sold $375,000 of 8% 270-day Convertible
Debentures and 214,284 warrants to purchase Common Stock under exemptions
afforded by Regulation D under the Securities Act of 1933, as amended. The
Debentures were convertible at the rate of one Share per $1.75 of principal and
interest and as of November 1, 1996, the entire $375,000 principal amount of
the Debentures was converted into an aggregate of 214,286 Shares of Common
Stock. Each warrant is exercisable to purchase one Share at $4.25 per Share
at any time until June 24, 1997. At any time that the Company has an effective
registration statement, the warrants will be subject to redemption at a price
of $.05 per warrant. The Shares issuable upon conversion of the Debentures
and underlying the warrants are registered for public sale pursuant to this
Prospectus.
On May 30, 1996 the Company issued 200,000 Shares of Common Stock and
options to purchase 900,000 Shares of Common Stock to the shareholders of
Vision Engineering Corporation ("VEC") in connection with the merger of the
Company and VEC. The Shares issued to the shareholders of VEC and 300,000
Shares underlying options (of which 150,000 options are not exercisable until
April 8, 1997) exercisable at $2.25 per Share until October 8, 2006 are
registered for public sale pursuant to this Prospectus.
On June 27, 1996, the Company issued 100,000 options to purchase
Shares of Common Stock to Bathgate McColley & Associates LLC, its investment
banking consultants, which were subsequently transferred 50,000 to each of
Steven M. Bathgate and Eugene C. McColley. Each option is exercisable to
purchase one Share at $2.56 per Share expiring on March 31, 2001. The Shares
underlying the options are registered for public sale pursuant to this
Prospectus.
The Company issued the following 9% Convertible Debentures to
Renaissance Capital Growth & Income Fund III, Inc. and/or Renaissance U.S.
Growth & Income Trust, PLC ("Renaissance"): $1,500,000 on February 21, 1996,
$1,000,000 on March 5, 1996, $1,000,000 on June 23, 1996 and $1,200,000 on
October 30, 1996. The conversion rate is $1.50 per Share on the Debentures.
The outstanding principal amount of the Debentures is redeemable at 120% of par
if the closing bid price for the Company's Common Stock averages at least $5.00
per Share for 20 consecutive trading days and is supported by a minimum of
$.25 in net earnings per Share. In addition, the Company issued to Renaissance
warrants exercisable to purchase 375,000 Shares at $2.00 per Share expiring on
March 31, 1999. The Shares underlying the Debentures and warrants are
registered for public sale pursuant to this Prospectus.
-24-
<PAGE> 29
During October 1996 the Company sold $150,000 of 12% Unsecured
Subordinated Promissory Notes Series 1996-A under exemptions afforded by
Regulation D under the 1933 Act. On the issuance date of each Note, the
Company paid to the lenders a loan origination fee in the amount of 2,500
Shares per $50,000 of the principal sum of the Note. The initial maturity date
of the Notes is November 8, 1996, provided, however, that the maturity date may
be extended at the option of the Company upon payment to the lenders of certain
consideration, as follows: if the Company does not repay the Note on or prior
to November 8, 1996, the Company will pay the lender 2,500 Shares per $50,000
of principal as consideration for an extension of the maturity date to December
9, 1996; and thereafter if the Company does not repay the Note on or prior to
December 9, 1996, the Company will pay the lender 2,500 Shares per $50,000 of
principal as consideration for an extension of the maturity date to January 8,
1997; and thereafter if the Company does not repay the Note on or prior to
January 8, 1997, the Company will pay the lender 2,500 Shares per $50,000 of
principal as consideration for an extension of the maturity date to February 9,
1997. Effective November 8, 1996, the Notes were extended to December 9, 1996.
Upon an event of default, the Notes will be convertible to Shares at the option
of the lender at the rate of one Share per $.50 of principal and accrued
interest. The Shares issued as the loan origination fee and as the extension
fees and the Shares issuable upon conversion of the Notes are registered for
public sale pursuant to this Prospectus.
The Company also has registered 100,000 Shares issuable at $.67 per
Share upon exercise of warrants, of which 91,667 are held by Kiawah Capital
Partners, an entity owned 50% by Steven M. Bathgate and 50% by Eugene C.
McColley, 150,000 Shares issuable at prices ranging from $.75 to $1.62 per
Share upon exercise of options granted to officer/employees pursuant to
employment agreements, and 15,000 Shares issuable at $.63 per Share, 10,000
Shares issuable at $3.50 per Share and 10,000 Shares issuable at $3.75 per
Share, upon exercise of options granted to non- employee directors.
Also registered hereby are 316,667 Shares underlying warrants issued
to persons who have loaned funds to the Company. These warrants are
exercisable at prices of $1.25 (50,000 warrants), $2.50 (66,667 warrants) and
$3.73 (20,000 warrants). These warrants are not redeemable by the Company.
In addition, the Company has registered the 600,000 Shares issuable at
a price of $4.25 per Share upon exercise of the Public Warrants issued as a
component of units in the Company's 1992 public offering, the 60,000 Shares
issuable upon exercise of Underwriter's Unit Warrants at $5.10 per unit, and
the 60,000 Shares issuable at $4.25 per Share upon exercise of warrants
included in those units. The $4.25 Public Warrants may be redeemed if the
closing bid price for the Common Stock has exceeded $6.375 for at least 20
consecutive trading days and each of the seven trading days immediately
preceding notice of redemption.
The following table summarizes the Shares registered hereby which are
issuable upon exercise or conversion of various notes, warrants, debentures and
options:
-25-
<PAGE> 30
<TABLE>
<CAPTION>
Number of Exercise or
Type of Security Underlying Shares Conversion price
---------------- ----------------- ----------------
<S> <C> <C>
Common Stock included in Units
issuable upon conversion of
Convertible Notes 298,507 Shares $ . 67
- -----------------------------------------------------------------------------------------
Common Stock issuable upon exercise of 174,627 Shares $ .67
Warrants 1,594,281 Shares $ 1.00
220,000 Shares $ 1.25
14,286 Shares $ 1.75
632,143 Shares $ 2.00
116,667 Shares $ 2.50
100,000 Shares $ 2.56
50,000 Shares $ 3.00
200,000 Shares $ 3.73
274,284 Shares $ 4.25
60,000 Shares $ 5.10
- -----------------------------------------------------------------------------------------
Common Stock issuable upon
conversion of Debentures 3,133,333 Shares $ 1.50
- -----------------------------------------------------------------------------------------
Common Stock issuable upon
conversion of Notes* 315,000 Shares* $ .50*
- -----------------------------------------------------------------------------------------
Common Stock issuable upon 25,000 Shares $ .63
exercise of Options 67,477 Shares $ .67
80,000 Shares $ .75
60,000 Shares $ 1.20
10,000 Shares $ 1.625
75,000 Shares $ 1.75
10,000 Shares $ 1.81
300,000 Shares $ 2.25
110,000 Shares $ 3.50
10,000 Shares $ 3.75
- -----------------------------------------------------------------------------------------
Common Stock issuable upon exercise of
publicly held Warrants 660,000 Shares $ 4.25
- -----------------------------------------------------------------------------------------
* These notes are convertible only if the Company defaults.
See "Risk Factors - Market Overhang."
</TABLE>
-26-
<PAGE> 31
TRANSFER AND WARRANT AGENT.
American Securities Transfer, Inc., 938 Quail Street, Lakewood,
Colorado 80215, serves as transfer agent for the Common Stock and as Warrant
agent for the Public Warrants.
The Company serves as agent for its privately issued notes, options,
debentures and warrants.
LEGAL MATTERS
The validity of the issuance of the 720,000 Shares of Common Stock
being offered hereby upon exercise of the Redeemable Common Stock Purchase
Warrants and Underwriter's Warrants has been passed upon for the Company by
Brenman Key & Bromberg, P.C., 1001 Mellon Financial Center, 1775 Sherman
Street, Denver, Colorado 80203.
EXPERTS
The consolidated balance sheet of Topro, Inc. and subsidiaries as of
June 30, 1996 and the related consolidated statements of operations,
stockholders' equity and cash flows for the years ended June 30, 1996 and 1995,
which appear in the Company's Form 10-KSB for the year ended June 30, 1996 have
been incorporated by reference herein in reliance upon the report, dated
October 4, 1996, of Hein + Associates LLP, Denver, Colorado, independent
auditors, and upon the authority of said firm as experts in accounting and
auditing.
-27-
<PAGE> 32
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATIONS NOT CONTAINED IN THIS PROSPECTUS AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATIONS MUST BE NOT RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
SELL OR SOLICITATION OF AN OFFER TO BUY ANY OF THE SECURITIES TO ANY PERSON IN
ANY JURISDICTION WHERE SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL. THE
DELIVERY OF THIS PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT THE INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
TABLE OF CONTENTS
<TABLE>
<S> <C>
Available Information; Documents Incorporated
by Reference. . . . . . . . . . . . . . . . . . . . 2
Prospectus Summary . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . 4
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . 8
Selling Shareholders . . . . . . . . . . . . . . . . . . 9
Plan Of Distribution . . . . . . . . . . . . . . . . . . 19
Description Of Securities . . . . . . . . . . . . . . . . 21
Legal Matters . . . . . . . . . . . . . . . . . . . . . . 27
Experts . . . . . . . . . . . . . . . . . . . . . . . . . 27
</TABLE>
TOPRO, INC.
Shares
-----------------
of Common Stock
PROSPECTUS
December __, 1996
<PAGE> 33
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table shows all expenses of the offering, other than
underwriting discounts and commissions.
<TABLE>
<S> <C>
SEC Filing fee $10,342
Blue sky legal and filing fees 7,500
Printing costs 1,000
Edgar cost 1,000
Legal fees 25,000
Accounting fees 3,000
Postage and Delivery 1,200
Miscellaneous 958
-------
Total $50,000
=======
</TABLE>
All amounts listed above, except for the registration fee, are
estimates. All expenses itemized above will be paid by the Registrant. Sales
agent discounts and commissions to any brokers or dealers will be borne by the
Selling Shareholders for the Shares offered by the Selling Shareholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 7-109-101 through 7-109-110 of the Colorado Business
Corporation Act and Article 5 of the Company's Articles of Incorporation, under
certain circumstances provide for the indemnification of the Company's
officers, directors and controlling persons against liabilities which they may
incur in such capacities. A summarization of the circumstances in which such
indemnification is provided for is contained herein, but that description is
qualified in its entirety by reference to the Company's Articles of
Incorporation and the relevant Section of the Colorado Business Corporation
Act.
The Company's Articles provide that the Company shall indemnify any
officer, employee, agent or director against liabilities (including the
obligation to pay a judgment, settlement, penalty, fine or expense), incurred
in a proceeding (including any civil, criminal or investigative proceeding) to
which the person was a party by reason of such status. Such indemnity may be
provided if the person's actions resulting in the liabilities: (i) were taken
in good faith; (ii) were reasonably believed to have been in the Company's best
interest with respect to actions taken in the person's official capacity; (iii)
were reasonably believed not to be opposed to the Company's best interest with
respect to other actions; and (iv) with respect to any criminal action, the
director had no reasonable grounds to believe the actions were unlawful.
Unless the person is successful upon the merits in such an action,
indemnification may generally be awarded only after a determination of
independent
II-1
<PAGE> 34
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 the director to be indemnified.
A director, employee, agent, or officer who is wholly successful, on
the merits or otherwise, in defense of any proceeding to which he or she was a
party, is entitled to receive indemnification against reasonable expenses,
including attorneys' fees, incurred in connection with the proceeding. In
addition, a corporation may indemnify or advance expenses to an officer,
employee or agent who is not a director to a greater extent than permitted for
indemnification of directors, if consistent with law and if provided for by its
articles of incorporation, bylaws, resolution of its shareholders or directors
or in a contract.
In addition to the foregoing, unless hereafter limited by the
Company's Articles of Incorporation, a court, upon petition by an officer or
director, may order the Company to indemnify such officer or director against
liabilities arising in connection with any proceeding. A court may order the
Company to provide such indemnification, whether or not the applicable standard
of conduct described above was met by the officer or director. To order such
indemnification the court must determine that the petitioner is fairly and
reasonably entitled to such indemnification in light of the circumstances.
With respect to liabilities arising as a result of proceedings on behalf of the
Company, a court may only require that a petitioner be indemnified as to the
reasonable expenses incurred.
Colorado law authorizes the Company to reimburse or pay reasonable
expenses incurred by a director, officer, employee or agent in connection with
a proceeding, in advance of a final disposition of the matter. Such advances
of expenses are permitted if the person furnishes to the Company a written
statement of his belief that he met the applicable standard of conduct required
to permit such indemnification. The person seeking such expense advances must
also provide the Company with a written agreement to repay such advances if it
is determined the applicable standard of conduct was not met. A determination
must also be made that the facts known to the Company would not preclude
indemnification.
The statutory section cited above further specifies that any
provisions for indemnification of or advances for expenses to directors which
may be contained in the Company's Articles of Incorporation, Bylaws,
resolutions of its shareholders or directors, or in a contract (except for
insurance policies) shall be valid only to the extent such provisions are
consistent with the Colorado statutes and any limitations upon indemnification
set forth in the Articles of Incorporation.
The statutory provision cited above also grants the power to the
Company to purchase and maintain insurance policies which protect any director,
officer, employee, fiduciary or agent against any liability asserted against or
incurred by them in such capacity arising out of his status as such. Such
policies may provide for indemnification whether or not the corporation would
otherwise have the power to provide for it. No such policies providing
protection against liabilities imposed under the securities laws have been
obtained by the Company.
II-2
<PAGE> 35
Insofar as indemnification for liabilities arising under the Act of
1933 may be permitted to directors, officers and controlling persons of the
issuer pursuant to the foregoing provisions, or otherwise, the small business
issuer 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 small business issuer of the expenses incurred
or paid by a director, officer or controlling person of the small business
issuer in the successful defense of any action, (suit or proceeding) is
asserted by the director, officer or controlling person in connection with the
securities being registered, the small business issuer 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 its is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
ITEM 16. EXHIBITS. The following is a complete list of exhibits filed
as part of this Registration Statement, which exhibits are filed herewith or
incorporated by reference herein.
Exhibit
Number Description
2.1 Agreement and Plan of Merger dated July 26, 1995
regarding the acquisition of Management Design and
Consulting Services, Inc. (A)
2.2 Agreement and Plan of Merger dated February 21, 1996
- regarding the acquisition of Advanced Control
Technology, Inc. (B)
2.3 Agreement of Merger dated May 17, 1996 - regarding
the acquisition of Visioneering Holding Corporation.
(C)
3.3 Restated Articles of Incorporation. (L)
3.4 By Laws (H)
4.1 Specimen form of the Company's Stock Certificate. (N)
4.2 Loan Agreement - Renaissance Capital Growth & Income
Fund III, Inc. (B)
4.3 Loan Agreement and Convertible Debenture dated
October 30, 1996 - Renaissance Capital Growth &
Income Trust, PLC. (M)
5.1 Opinion of Brenman Key & Bromberg, P.C. as to the
legality of the securities registered hereby. To be
filed by amendment.
II-3
<PAGE> 36
10.1 $570,000 Variable Rate Secured Promissory Note and
Security Agreement dated June 1, 1995 with J. Neal
Ethridge. (D)
10.2 $190,000 Variable Rate Secured Promissory Note and
Security Agreement dated June 1, 1995 with Gary
Cansler. (D)
10.3 Promissory Note issued by Tech Sales, Inc. in favor
of R. Larry Ethridge, President and a Director of the
registrant, in the amount of $50,000. (I)
10.4 Promissory Note issued by Tech Sales, Inc. in favor
of William B. Heermann, Vice President and a Director
of the registrant, in the amount of $30,000. (I)
10.6 1992 Employee Stock Purchase Plan. (J)
10.7 1992 Incentive Stock Option Plan. (J)
10.8 Agreement dated March 29, 1993 with Direct
Measurement Corporation, whereby the Company invested
$300,000 for an approximate 17% equity interest in
Direct Measurement Corporation. An additional
Agreement signed March 29, 1993, granted the Company
an exclusive three year right to market Direct
Measurement Corporation's products for three years
throughout North America with non exclusive rights
world wide. (J)
10.9 Employment Agreement dated December 27, 1994 between
the Registrant and John Jenkins. (E)
10.10 Non-Qualified Stock Option Agreement dated December
27, 1994 between the Registrant and John Jenkins.
(D)
10.11 Asset Purchase Agreement dated May 5, 1995 -
regarding sale of certain operating assets of the
Registrant's subsidiary Sharp Electric Construction
Company to Piper Electric Co., Incorporated. (F)
10.12 Note, Loan and Security Agreement dated August 24,
1992 With Merrill Lynch Business Financial Services,
Inc. as amended February 19, 1993 and renewed August
23, 1993. (J)
10.13 Renewal, dated April 4, 1995, of Note, Loan and
Security agreement with Merrill Lynch Business
Financial Services. (D)
10.14 Agreement signed October 4, 1994 with Direct
Measurement Corporation. (K)
II-4
<PAGE> 37
10.15 Agreement dated December 6, 1994 with Direct
Measurement Corporation. (D)
10.16 Stock Purchase Agreement dated November 7, 1995 -
regarding DMC shares. (G)
10.17 Employment Agreement dated July 27, 1995 between the
Registrant and E. Gregory Fisher (M)
10.18 Employment Agreement dated February 21, 1996 between
the Registrant and Jon E. Walker. (B)
10.19 Employment and Consulting Agreements, as amended -
Michael Taylor. (M)
10.20 Employment and Consulting Agreements, as amended -
Kathleen Taylor. (M)
10.21 Press Release dated October 16, 1996 with respect to
the All-Control Systems, Inc. Letter of Intent. (M)
21.1 List of Subsidiaries. (L)
23.1 Consent of Brenman Key & Bromberg, P.C. To be filed
by amendment.
23.2 Consent of Hein + Associates LLP. Filed herewith.
24.1 Power of Attorney. See Signature Page.
- ------------------------
(A) Incorporated by reference to the Form 8-K Current
Report dated August 10, 1995.
(B) Incorporated by reference from the Company's Form 8-K
dated February 21, 1996.
(C) Incorporated by reference from the Company's Form 8-K
dated May 30, 1996.
(D) Incorporated by reference from the Company's Form
10-KSB for the fiscal year ended June 30, 1995.
(E) Incorporated by reference to the Form 8-K Current
Report dated January 23, 1995.
II-5
<PAGE> 38
(F) Incorporated by reference to Exhibit 2.1 to the Form
8-K Current report dated May 2, 1995.
(G) Incorporated by reference from the Company's Form 8-K
dated November 8, 1995.
(H) Incorporated by reference from Exhibit 3.3 to
Registration Statement on Form S-1, File No. 33-
47159, effective June 17, 1992.
(I) Incorporated by reference from the Company's Form
10-K for the fiscal year ended June 30, 1992.
(J) Incorporated by reference from the Company's Form
10-K for the fiscal year ended June 30, 1993.
(K) Incorporated by reference from the Company's Form
10-K for the fiscal year ended June 30, 1994.
(L) Incorporated by reference from the Company's Form
10-KSB for the fiscal year ended June 30, 1996.
(M) Incorporated by reference from the Company's Form
10-QSB for the quarter ended September 30, 1996.
(N) Incorporated by reference to Exhibit 3.4 to the
Registrant's Registration Statement on Form S- 1,
File No. 33-47159, effective date June 17, 1992.
ITEM 17. UNDERTAKINGS.
A. The undersigned small business issuer will:
(1) file, during any period in which it offers or sells
securities, a post-effective amendment to this Registration Statement
to include any additional or changed material information on the plan
of distribution.
(2) for the purpose of determining liability under the
Securities Act of 1933, treat each post- effective amendment as a new
registration statement of the securities offered, and the offering of
the securities at that time to be the initial bona fide offering
thereof.
(3) file a post-effective amendment to remove from
registration any of the securities remain unsold at the termination of
the offering.
II-6
<PAGE> 39
B. Insofar as indemnification for liabilities arising under the Act
of 1933 may be permitted to directors, officers and controlling persons of the
issuer pursuant to the foregoing provisions, or otherwise, the small business
issuer 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 small business issuer of the expenses incurred
or paid by a director, officer or controlling person of the small business
issuer in the successful defense of any action, (suit or proceeding) is
asserted by the director, officer or controlling person in connection with the
securities being registered, the small business issuer 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 its is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-7
<PAGE> 40
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 of 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 Denver, State of Colorado, on November 27,
1996.
TOPRO, INC., Registrant
By /s/ John Jenkins
--------------------------------
John Jenkins, President and CEO
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints John Jenkins and R. Larry Ethridge, and
each or any one of them, his true and lawful attorneys-in-fact and agents, each
acting alone, with full powers of substitution and resubstitution, for such
person and in his name, place and stead, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection therewith, with the Securities and Exchange Commission, granting
unto said attorneys-in-fact and agents, each acting alone, full power and
authority to do and perform each and every act and thing requisite or necessary
to be done in and about the premises, as fully to all intents and purposes as
he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, each acting alone, or his or her substitute or
substitutes, may lawfully, 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.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Thomas Tennessen Principal Accounting November 27, 1996
- ----------------------------------- Officer
Thomas Tennessen
/s/ R. Larry Ethridge Chairman of the November 27, 1996
- -------------------------------------------- Board of Directors
R. Larry Ethridge
/s/ John Jenkins President, Chief Executive November 27, 1996
- ------------------------------------- Officer, and Director
John Jenkins
Director
- ------------------------------------------
H. Robert Gill
Director
- -------------------------------------------
H. R. Hodge
/s/ Jon E. Walker Director November 27, 1996
- -------------------------------------------
Jon E. Walker
</TABLE>
II-8
<PAGE> 41
EXHIBIT INDEX
Exhibit
Number Description
- ------- -------------
2.1 Agreement and Plan of Merger dated July 26, 1995
regarding the acquisition of Management Design and
Consulting Services, Inc. (A)
2.2 Agreement and Plan of Merger dated February 21, 1996
- regarding the acquisition of Advanced Control
Technology, Inc. (B)
2.3 Agreement of Merger dated May 17, 1996 - regarding
the acquisition of Visioneering Holding Corporation.
(C)
3.3 Restated Articles of Incorporation. (L)
3.4 By Laws (H)
4.1 Specimen form of the Company's Stock Certificate. (N
4.2 Loan Agreement - Renaissance Capital Growth & Income
Fund III, Inc. (B)
4.3 Loan Agreement and Convertible Debenture dated
October 30, 1996 - Renaissance Capital Growth &
Income Trust, PLC. (M)
5.1 Opinion of Brenman Key & Bromberg, P.C. as to the
legality of the securities registered hereby. To be
filed by amendment.
10.1 $570,000 Variable Rate Secured Promissory Note and
Security Agreement dated June 1, 1995 with J. Neal
Ethridge. (D)
10.2 $190,000 Variable Rate Secured Promissory Note and
Security Agreement dated June 1, 1995 with Gary
Cansler. (D)
10.3 Promissory Note issued by Tech Sales, Inc. in favor
of R. Larry Ethridge, President and a Director of the
registrant, in the amount of $50,000. (I)
10.4 Promissory Note issued by Tech Sales, Inc. in favor
of William B. Heermann, Vice President and a Director
of the registrant, in the amount of $30,000. (I)
10.6 1992 Employee Stock Purchase Plan. (J)
10.7 1992 Incentive Stock Option Plan. (J)
10.8 Agreement dated March 29, 1993 with Direct
Measurement Corporation, whereby the Company invested
$300,000 for an approximate 17% equity interest in
Direct Measurement Corporation. An additional
Agreement signed March 29, 1993, granted the Company
an exclusive three year right to market Direct
Measurement Corporation's products for three years
throughout North America with non exclusive rights
world wide. (J)
10.9 Employment Agreement dated December 27, 1994 between
the Registrant and John Jenkins. (E)
<PAGE> 42
10.10 Non-Qualified Stock Option Agreement dated December
27, 1994 between the Registrant and John Jenkins.
(D)
10.11 Asset Purchase Agreement dated May 5, 1995 -
regarding sale of certain operating assets of the
Registrant's subsidiary Sharp Electric Construction
Company to Piper Electric Co., Incorporated. (F)
10.12 Note, Loan and Security Agreement dated August 24,
1992 With Merrill Lynch Business Financial Services,
Inc. as amended February 19, 1993 and renewed August
23, 1993. (J)
10.13 Renewal, dated April 4, 1995, of Note, Loan and
Security agreement with Merrill Lynch Business
Financial Services. (D)
10.14 Agreement signed October 4, 1994 with Direct
Measurement Corporation. (K)
10.15 Agreement dated December 6, 1994 with Direct
Measurement Corporation. (D)
10.16 Stock Purchase Agreement dated November 7, 1995 -
regarding DMC shares. (G)
10.17 Employment Agreement dated July 27, 1995 between the
Registrant and E. Gregory Fisher (M)
10.18 Employment Agreement dated February 21, 1996 between
the Registrant and Jon E. Walker. (B)
10.19 Employment and Consulting Agreements, as amended -
Michael Taylor. (M)
10.20 Employment and Consulting Agreements, as amended -
Kathleen Taylor. (M)
10.21 Press Release dated October 16, 1996 with respect to
the All-Control Systems, Inc. Letter of Intent. (M)
21.1 List of Subsidiaries. (L)
23.1 Consent of Brenman Key & Bromberg, P.C. To be filed
by amendment.
23.2 Consent of Hein + Associates LLP. Filed herewith.
24.1 Power of Attorney. See Signature Page.
- -----------------
(A) Incorporated by reference to the Form 8-K Current
Report dated August 10, 1995.
(B) Incorporated by reference from the Company's Form 8-K
dated February 21, 1996.
(C) Incorporated by reference from the Company's Form 8-K
dated May 30, 1996.
(D) Incorporated by reference from the Company's Form
10-KSB for the fiscal year ended June 30, 1995.
(E) Incorporated by reference to the Form 8-K Current
Report dated January 23, 1995.
(F) Incorporated by reference to Exhibit 2.1 to the Form
8-K Current report dated May 2, 1995.
(G) Incorporated by reference from the Company's Form 8-K
dated November 8, 1995.
(H) Incorporated by reference from Exhibit 3.3 to
Registration Statement on Form S-1, File No. 33-
47159, effective June 17, 1992.
(I) Incorporated by reference from the Company's Form
10-K for the fiscal year ended June 30, 1992.
(J) Incorporated by reference from the Company's Form
10-K for the fiscal year ended June 30, 1993.
(K) Incorporated by reference from the Company's Form
10-K for the fiscal year ended June 30, 1994.
(L) Incorporated by reference from the Company's Form
10-KSB for the fiscal year ended June 30, 1996.
(M) Incorporated by reference from the Company's Form
10-QSB for the quarter ended September 30, 1996.
(N) Incorporated by reference to Exhibit 3.4 to the
Registrant's Registration Statement on Form S- 1,
File No. 33-47159, effective date June 17, 1992.
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Form S-3 Registration
Statement of Topro, Inc. of our report dated October 4, 1996, accompanying the
consolidated financial statements of Topro, Inc. also incorporated by reference
in such Registration Statement, and to the use of our name and the statements
with respect to us, as appearing under the heading "Experts" in the Prospectus.
/s/ HEIN + ASSOCIATES LLP
- --------------------------------
HEIN + ASSOCIATES LLP
Denver, Colorado
November 26, 1996
