<PAGE>
As filed with the Securities and Exchange Commission on May 12, 1997
File No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
TOPRO, INC.
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(Name of Registrant as specified in its charter)
COLORADO 84-1042227
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(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
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(Address, including zip code, and (Name, address, including
telephone number, including area zip code and telephone
code, of Registrant's principal number, including area
executive offices) code, of agent for service)
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It is requested that copies of all correspondence be sent to: Donna A. Key,
Esq., Key & Mehringer, P.C., 555 Seventeenth Street, Suite 3405, Denver,
Colorado 80202, telephone number (303) 295-2300, facsimile number (303)
296-1645.
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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/
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
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.
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<TABLE>
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CALCULATION OF REGISTRATION FEE
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Title of each class Amount to Proposed maximum Proposed maximum Amount of
of securities to be be registered offering price aggregate offering registration
registered(1) per share(2) price(2) fee(2)
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<S> <C> <C> <C> <C>
Common Stock, $.0001
par value (3) 263,334 Shares $1.41 $371,301 $112.51
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Common Stock issuable
upon exercise of
Warrants 70,000 Shares $1.41 $ 98,700 $ 29.91
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Total 333,334 Shares $1.41 $470,001 $142.42
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</TABLE>
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(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 ($1.41) reported by Nasdaq on May 8,
1997 (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.
<PAGE>
TOPRO, INC.
CROSS REFERENCE SHEET
FORM S-3 SECTIONS IN PROSPECTUS
ITEM NO. CAPTION OR REGISTRATION STATEMENT
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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
<PAGE>
SUBJECT TO COMPLETION - PRELIMINARY PROSPECTUS DATED MAY 12, 1997
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.
263,334 OUTSTANDING SHARES OF COMMON STOCK OFFERED BY SELLING SHAREHOLDERS
70,000 SHARES OF COMMON STOCK TO BE ISSUED TO AND
OFFERED BY SELLING SHAREHOLDERS
An aggregate of 333,334 shares (the "Shares") of $.0001 par value
Common Stock (the "Common Stock") 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. Up to 70,000 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 of outstanding warrants (the "Warrants") held by Selling
Shareholders. These Shares may be resold in the public market by the Selling
Shareholders. The Company will receive the exercise 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 the Selling Shareholders will accrue to the
benefit of the Selling Shareholders. 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."
The Common Stock is traded in the over-the-counter market and
quoted on the National Association of Securities Dealers Automated Quotation
System ("Nasdaq") Small-Cap Market under the symbol "TPRO". On May 8, 1997, the
average of the bid and asked prices of the Common Stock as reported by Nasdaq
was $1.41 .
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGES FIVE THROUGH NINE 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 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.
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.
THE DATE OF THIS PROSPECTUS IS _________, 1997.
<PAGE>
<TABLE>
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Price Per Total Number Aggregate Offering Proceeds to Selling
Share of Shares Price Shareholder
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<S> <C> <C> <C> <C>
Shares Outstanding
Offered by Selling
Shareholders $1.41(1) 263,334 $ 371,301 $ 371,301
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Shares to be Outstanding
Offered by Selling
Shareholders (2) $1.41(1) 70,000 $ 98,700 $ 470,001
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</TABLE>
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(1) The Price per Share represents the average of the bid and asked price as
reported by Nasdaq on May 8, 1997. 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 will be offered by the Selling Shareholders after exercise of
outstanding Warrants. SEE "Description of Securities."
<PAGE>
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 filed with the Commission on
September 30, 1996, as amended by Form 10-KSB/A No. 1 filed on January 23,
1997 and Form 10-KSB/A No. 2 filed on February 7, 1997; (2) Quarterly Report
on Form 10-QSB for the quarter ended September 30, 1996 filed with the
Commission on November 18, 1996, as amended by Form 10-QSB/A No. 1 filed with
the Commission on January 22, 1997; (3) Current Report on Form 8-K dated
November 27, 1996 filed with the Commission on December 13, 1996; (4) Current
Report on Form 8-K dated December 18, 1996 and filed with the Commission on
December 18, 1996; (5) pro forma financial information and financial
statements of Advanced Control Technology, Inc., included in the Company's
Current Report on Form 8-K dated February 21, 1996 filed with the Commission
on March 7, 1996; (6) pro forma financial information and
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<PAGE>
financial statements of Visioneering Holding Corporation included in the
Current Report on Form 8-K dated May 30, 1996, filed with the Commission on
June 14, 1996, as amended by Form 8-K/A No. 1 filed on August 13, 1996 and
Form 8-K/A No. 2 filed on January 21, 1997; (7) Current Report on Form 8-K
dated December 31, 1996 filed with the Commission on January 15, 1997, as
amended by Form 8-K/A No. 1 filed on February 7, 1997, Form 8-K/A No. 2 filed
on February 13, 1997, Form 8-K/A No. 3 filed on February 28, 1997, Form 8-K/A
No. 4 filed on March 5, 1997, which includes audited year end and unaudited
interim financial statements of All-Control Systems, Inc., and pro forma
financial information reflecting the Company's acquisition of this entity;
(8) Quarterly Report on Form 10-QSB for the quarter ended December 31, 1996
filed with the Commission on February 19, 1997; (9) Current Report on Form
8-K dated March 13, 1997 filed with the Commission on March 13, 1997; (10)
Current Report on Form 8-K dated April 18, 1997 filed with the Commission on
April 18, 1997; (11) Current Report on Form 8-K dated April 29, 1997 filed
with the Commission on May 1, 1997 and (12) 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 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.
FORWARD-LOOKING STATEMENTS
Statements made in this Prospectus, including statements contained in
information incorporated by reference, that are not historical or current
facts are "forward-looking statements" made pursuant to the safe harbor
provisions of Section 27A of the Act and Section 21E of the 1934 Act. The
Company intends that such forward-looking statements be subject to the safe
harbors for such statements. Forward-looking statements are subject to
certain risks and uncertainties that could cause actual results to differ
materially from historical results of operations and events and those
presently anticipated or projected. The Company wishes to caution readers
not to place undue reliance on any such forward-looking statements, which
speak only as of the date made. Actual events may differ materially from
those projected in any forward looking statement. There are a number of
important factors beyond the control of the Company that could cause actual
events to differ materially from those anticipated by any forward looking
information. These factors include those discussed in this Prospectus under
the heading "Risk Factors" and in the "Management's
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<PAGE>
Discussion and Analysis" sections of the Company's Securities and Exchange
Commission Filings incorporated herein by reference as well as factors described
in the Company's Current Reports on Form 8-K and other documents incorporated
herein by reference. The Company disclaims any obligation subsequently to
revise any forward-looking statements to reflect events or circumstances after
the date of such statements or to reflect the occurrence of anticipated or
unanticipated events.
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 six wholly-owned subsidiaries:
Topro Systems Integration, Inc. ("TSI"), Management Design & Consulting
Services, Inc. ("MDCS"), headquartered in Atlanta, Georgia; Advanced Control
Technology, Inc. ("ACT"), headquartered in Albany, Oregon; Visioneering
Holding Corp. and its subsidiary Vision Engineering Corporation ("VHC"),
headquartered in Cypress, California; and All-Control Systems, Inc. ("ACS")
headquartered in West Chester, Pennsylvania. The Company's executive offices
and the offices of TSI 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 333,334 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, 263,334 of the Shares registered for public sale
are outstanding, and 70,000 of the Shares have not yet been issued, but may
be purchased from the Company by Selling Shareholders at a price of $2.46 per
share upon exercise of Warrants and resold by the Selling Shareholders
pursuant to this Prospectus. SEE "Description of Securities." The Company
will receive the cash proceeds from the exercise of warrants.
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<PAGE>
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
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, and a net loss of $84,000 for the six months ended
December 31, 1996. Management believes that the 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, VHC and ACS 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 December 31, 1996, the Company's working capital was
$316,000. In March and April 1997 the Company received $1,167,000 in proceeds
from exercise of certain warrants, and in April 1997 received an additional
$1,500,000 in proceeds from the sale of Preferred Stock. Management believes
that cash on hand and operating revenues will be sufficient to fund working
capital requirements through fiscal 1997 and beyond. However, 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 its expanded market presence and product offerings, or to fund
increased cash requirements arising from future acquisitions, if any, and
expanded operations. 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
Consolidated Financial Statements and Notes thereto and "Management's
Discussion and Analysis of Financial Condition and Results of Operations."
RISKS ASSOCIATED WITH ACQUISITIONS. Over the past 24 months the Company
has acquired four independent control systems integrators ("CSIs"). Most
recently, in fiscal 1997, the Company
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acquired 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
these acquisitions, there can be no assurance that its 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, could have a
material adverse effect on the Company's results of operations. The Company
believes that it will face fewer risks in connection with the acquisition of
ACS than it faced in connection with the acquisitions of ACT and VHC, since
ACS has a positive net worth and had profitable operations in fiscal 1996.
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 Chief Executive Officer, John Jenkins, its
Chief Operating Officer, Kevin Fallon and upper level management of its
recently acquired subsidiaries. The Company has employment contracts with
Messrs. Jenkins and Fallon expiring in January 1999 and February 1999,
respectively, 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, VHC and ACS, 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's annual debt service requirement is
$1,271,000, of which $720,000 is required for principal payments on term
loans and $551,000 is required for interest payments. These amounts include
ACS' $300,000 annual principal payments and $128,000 interest payments.
Repayment of principal on the $4,700,000 principal amount of 9% Convertible
Debentures will commence on March 1, 1999. 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 its assets 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 its 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
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Debentures were issued contain numerous financial, operating and general
covenants and require the Company and its subsidiaries to meet certain
financial ratios and tests. Through October 1, 1997, the minimum financial
standards under the Debentures are as follows: debt to equity ratio no
greater than seven to one; current ratio no less than .75 to one; tangible
net worth no less than ($3,000,000); and EBITDA from continuing operations
divided by interest expense shall be a minimum of three. Following October
1, 1997, the minimum financial standards increase to the following: debt to
equity ratio not greater than 3.6 to one; minimum tangible net worth of
$1,000,000; and net earnings times interest expense of no less than two to
one. 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, VHC and ACS 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.
In addition to the Debentures, the Company and its subsidiaries have other
outstanding debt, primarily a working capital line of credit, for which
assets of the subsidiaries are pledged as collateral. Foreclosure on the
assets pledged to secure repayment of debt 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. As of the date of this Prospectus, the Company has
reserved 5,745,913 shares for issuance upon exercise of outstanding options
and warrants, and has registered most of those shares, together with a
significant number of privately issued shares, for public sale by the
holders. Many of the outstanding privately issued Shares were acquired from
the Company at prices ranging from $.67 to $1.00 per Share. Shares are
issuable upon conversion of debt and exercise of warrants and options at
prices as low as $.67 and $1.00 per Share, respectively. Any sale into the
public market of Shares purchased privately at prices below the current
market price could be expected to have a depressive effect on the market
price of the Company's Common Stock. SEE "Description of Securities."
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. In
addition, certain security holders, 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 security holder following notice that the debt will be
converted to Common Stock. The exercise of any of these registration rights
may in the future depress the market price of the Company's Common Stock.
INDUSTRY AND ECONOMIC CONDITIONS. A sizable portion of the Company's
business is comprised of projects representing capital expenditures, rather
than expense items, to its customers. Management believes that its customer
base is susceptible to general depressive economic factors which cause such
capital projects to be delayed and scaled back and payments to be postponed
and
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<PAGE>
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 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 on its
Common Stock, and it does not contemplate paying dividends in the foreseeable
future on its Common Stock in order to use all of its earnings, if any, to
finance expansion of its operations. Moreover, the Company is required to
pay a cumulative annual dividend of $.90 per share of Series A Convertible
Preferred Stock, before any dividend may be declared or paid to holders of
Common Stock. 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 100,000 Shares of Preferred
Stock issued and outstanding designated as "Series A Convertible Preferred
Stock." The Series A Convertible Preferred Stock has a 6% cumulative annual
dividend and has the right to vote in all matters submitted to a vote of
shareholders. SEE "Description of Securities - Preferred Stock."
USE OF PROCEEDS
The Company will not receive any proceeds from sales of Shares by the
Selling Shareholders. The Company will receive cash proceeds from the
exercise, if any, of outstanding Warrants. As of the date of this
Prospectus, based on recent market prices for the Company's Common Stock,
management believes that it is unlikely that the Warrants will be exercised
since the exercise price is $2.46 per share. However, if all of the Warrants
were exercised at the exercise price of $2.46 per share, then proceeds of the
Offering to the Company would total an aggregate of $172,200 in cash. After
deduction of expenses of this Offering payable by the Company, estimated to
total $14,500 net cash proceeds are estimated to total $157,700. Any net
proceeds to the Company from the exercise of outstanding warrants will be
used for working capital.
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 May 8,
1997 and as adjusted to reflect the sale of the shares offered hereby, by each
Selling Shareholder. The information set forth below
-8-
<PAGE>
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>
Shares Beneficially Owned Shares Beneficially
Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering
------------------------- -------------------------------- --------------------
Shares Underlying
Name Number Percent Shares(2) Warrants(3) Number(4) Percent
- ---- ------ ------- --------- ----------- --------- -------
<S> <C> <C> <C> <C> <C> <C>
Kevin Fallon ** 1,572,907(5) 180,000 -0- 1,392,907
William Shane 16,667 * 16,667 -0- -0- -0-
Lawrence Miller 66,667 * 66,667 -0- -0- -0-
Fidelity National Financial, Inc. 275,000 -0- 25,000
Bruce Wolitarsky 11,000 * -0- 1,000
The Pinnacle Fund, L.P. 120,000 * -0- 10,000
Donald B. Crosbie IRA 22,000 * -0- 2,000
Morrie Galter 16,500 * -0- 1,500 *
Douglas R. Urquhart 22,000 * -0- 2,000 *
Ell and Co. f/b/o AT&T Corporation 149,622 * -0- 13,602 *
Topworks and Co. f/b/o Montgomery
County 38,467 * -0- 3,497 *
Pitt and Co. f/b/o Tracor, Inc. 8,987 * -0- 817 *
Selkeld & Co. f/b/o Sisters of
St. Joseph of Corondelet 5,907 * -0- 537 *
Mac & Co. f/b/o Local 25 SEIU
Employers Pension Fund 2,915 * -0- 265 *
Siglar & Co. f/b/o Marion Bradley
Glass Via Part Trust 7,266 * -0- 661 *
Siglar & Co. f/b/o Marion Bradley
Glass Trust 7,265 * -0- 660 *
Bost & Co. f/b/o Fairfax County
Public Schools 46,706 * -0- 4,246 *
Iowa State University Foundation 7,865 * -0- 715 *
FK Investments, LP 38,500 * -0- 3,500 *
</TABLE>
- ----------------------
* Less than one percent.
** Denotes an officer-employee of the Company.
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<PAGE>
(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.
(3) The number of Shares underlying the Warrants are those Shares registered
for sale upon exercise of the Warrants held by Selling Shareholders.
(4) Assumes that the Warrants are exercised and all Shares are sold by the
Selling Shareholders.
(5) Includes Shares 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 1,400,000 shares until February 7,
1998, and that until February 7, 1999 they will not sell more than 25%
(350,000) of those 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%. Also includes options
currently exercisable to purchase 66,667 shares of Common Stock at a per
share price of $2.25.
RELATIONSHIPS AND TRANSACTIONS WITH CERTAIN SELLING SHAREHOLDERS
Kevin Fallon was an officer, director and shareholder of ACS at the time
ACS was acquired by the Company. In connection with the acquisition Mr. Fallon
in his individual capacity or as an officer, director or shareholder of ACS,
entered into agreements (the "Merger Agreements") related to the Agreement of
Merger dated December 31, 1996.
One of the Merger Agreements is an escrow arrangement relating to a
deferred tax liability in the amount of $138,900 that ACS is required to carry
on its financial statements due to the termination of ACS' status as a
subchapter S corporation at the time of acquisition. This escrow arrangement
generally provides that 61,733 shares issued in connection with the acquisition
are to be held to cover the deferred tax liability should the Company be
required to pay the liability. The amount of shares held in escrow will be
reduced as the deferred tax liability is reduced on the Company's books. The
Selling Shareholders can replace the escrowed shares with cash or other
collateral acceptable to the Company, thereby freeing the shares from the escrow
arrangement.
Other Merger Agreements include a sales representation agreement and an
option agreement relating to certain technology. Both agreements are between ACS
and Fallon Technology, Inc. ("Fallon Tech"), a Pennsylvania corporation owned
by Mr. Fallon and members of his family. Under these agreements Fallon Tech is
granted, among other things, the exclusive authority and right to use,
demonstrate, sell, and grant sub-licenses of certain technology, and the right
to purchase an exclusive license with respect to certain technology in the year
2000. During the terms of these agreements, no sales fees, commissions nor
other compensation generated by sales of the technology will be paid nor accrue
to Mr. Fallon nor to members of his family.
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<PAGE>
Mr. Fallon, as a Vice President and the Chief Operating Officer of the
Company, is subject to an employment agreement with the Company which
terminates February 8, 1999 unless extended by mutual agreement between the
parties. In addition, Mr. Fallon and the Company entered into an
Indemnification Agreement with the Company which requires, among other things,
that the Company hold harmless and indemnify Mr. Fallon against: (i) expenses he
may incur with respect to claims made against him as an officer or director of
the Company; and (ii) losses he may incur in connection with certain obligations
of ACS for which Mr. Fallon has acted as guarantor.
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 received from the Company
in connection with: (1) the acquisition of ACS, a private transaction; (2) the
purchase of the shares in a private transaction; or (3) the receipt of the
Warrants as a penalty for failing to meet certain requirements. The Selling
Shareholders 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. However, the Company will receive the exercise
price of the Warrants if and when the Warrants are exercised.
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
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<PAGE>
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.
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.
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."
PRIVATE SALE OF COMMON STOCK BY THE COMPANY
The Company will issue Shares of "restricted" Common Stock to the Selling
Shareholders upon their exercise of the outstanding Warrants which they received
from the Company in private transactions. The Company anticipates that Shares
issued upon exercise of the Warrants 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 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
-12-
<PAGE>
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
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 holder of any shares has
any preemptive right to subscribe for any of the Company's securities.
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 Security holders. Security holders 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.
ISSUED AND OUTSTANDING. As of May 8, 1997, the Company had issued and
outstanding 11,708,473 Shares of Common Stock and 100,000 Shares of Preferred
Stock.
SERIES A CONVERTIBLE PREFERRED STOCK. As of the date of this
Prospectus, there are 100,000 Shares of Preferred Stock issued and
outstanding designated as "Series A Convertible Preferred Stock." Each share
of Series A Convertible Preferred Stock shall be converted into ten shares of
the Company's $.0001 par value Common Stock upon the earliest to occur of the
following
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<PAGE>
events: (1) at the option of the holder, upon notice to the Company, at any
time; or (2) automatically, at any time commencing one year from the date of
issuance of such share, if (a) the closing sale price of the Common Stock as
reported by Nasdaq for 20 for consecutive trading days is $3.00 or more, and
(b) the Common Stock into which the share of Series A Convertible Preferred
Stock is convertible has been registered by the Company for public sale by
the holder; or (3) automatically, on the date which is five years and one
day following the date of issuance of such share. Each share of Series A
Convertible Preferred Stock shall receive an annual dividend of $0.90 per
share, payable quarterly, from funds legally available therefor, as and if
declared by the Board of Directors, such dividend to be cumulative and to be
paid before any dividend is paid on outstanding shares of Common Stock.
Shares of Series A Convertible Preferred Stock have the right to vote in the
election of directors and on all other matters which may be submitted to a
vote of shareholders of the Company, and are entitled to the number of votes
per share equal to the number of shares of Common Stock which would be
issuable as of the record date for determining shareholders entitled to vote
on such matter.
SECURITIES REGISTERED HEREBY.
Effective February 7, 1997 the Company issued 1,883,334 Shares to the
shareholders of ACS in exchange for all of the outstanding shares of ACS.
The 83,334 shares issued to Lawrence Miller and William Shane, the two
shareholders of ACS who were not members of management of that Company, are
registered for public sale pursuant to this Prospectus. On March 7, 1997 the
Company sold 180,000 Shares to Kevin Fallon for $270,000, or $1.50 per Share,
under an exemption afforded by Section 4(2) under the Act. Those Shares are
registered for public sale pursuant to this Prospectus.
Effective February 1, 1997 the Company issued warrants (the "Warrants")
to purchase up to 70,000 Shares of Common Stock at an exercise price of $2.46
per Share. These Warrants were issuable automatically as a penalty for the
Company's failure to have effective a registration statement by February 1,
1997 which included shares of the Company's Common Stock sold to a limited
number of accredited, institutional investors in a private placement on
November 27, 1996. Those shares were issued pursuant to exemptions from
registration set forth in Section 4(2) and Rule 506 of Regulation D under the
Act and included certain "piggy-back" registration rights which imposed the
penalty. The Warrants are exercisable until January 31, 1999. The Common
Stock underlying the Warrants are registered for public sale pursuant to this
Prospectus.
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.
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<PAGE>
LEGAL MATTERS
The legality of the issuance of the Shares of Common Stock being offered by
the Selling Shareholders hereunder will be passed upon on behalf of the Company
by Key & Mehringer, P.C., 555 17th Street, Suite 3405, Denver, Colorado 80202.
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.
The consolidated balance sheets of Advanced Control Technology, Inc. and
Subsidiary as of March 31, 1995 and 1994 and the related consolidated
statements of operations, stockholders' equity and cash flows for the years
then ended which appear in the Company's Current Report on Form 8-K dated
February 21, 1996, as amended, have been incorporated by reference herein in
reliance upon the report, dated June 1, 1995, of Moss Adams LLP, Eugene,
Oregon, independent auditors, and upon the authority of said firm as experts
in accounting and auditing.
The consolidated balance sheets of Vision Engineering Corp. and Vision
Fabrication, Inc. as of December 31, 1995 and the related combined
statements of operations, stockholders' equity (deficit) and cash flows for
the year then ended which appear in the Company's Current Report on Form 8-K
dated May 30, 1996, as amended, have been incorporated by reference herein in
reliance upon the report, dated July 30, 1996, of Hein + Associates LLP,
Orange, California, independent auditors, and upon the authority of said firm
as experts in accounting and auditing.
The statement of operations, stockholders' equity (deficit) and cash
flows of Vision Engineering Corp. for the year ended December 31, 1994 which
appear in the Company's Current Report on Form 8-K dated May 30, 1996, as
amended, have been incorporated by reference herein in reliance upon the
report, dated September 22, 1995, of McGladrey & Pullen, LLP, Anaheim,
California, independent auditors, and upon the authority of said firm as
experts in accounting and auditing.
The combined financial statements of All-Control Systems, Inc. and
affiliate which appear in the Company's Current Report on Form 8-K dated
December 31, 1996, as amended, have been audited by BDO Seidman, LLP,
independent certified public accountants, to the extent and for the periods
set forth in their report included therein and are incorporated herein by
reference in reliance upon such report given upon the authority of said firm
as experts in accounting and auditing.
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<PAGE>
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.
TOPRO, INC.
TABLE OF CONTENTS
Available Information; Documents Incorporated
by Reference. . . . . . . . . . . . . . . . 2
Forward Looking Statements . . . . . . . . . . . 3
Prospectus Summary . . . . . . . . . . . . . . . 4 333,334 Shares
Risk Factors . . . . . . . . . . . . . . . . . . 5 of Common Stock
Use of Proceeds. . . . . . . . . . . . . . . . . 8
Selling Shareholders . . . . . . . . . . . . . . 8
Plan Of Distribution . . . . . . . . . . . . . .11 PROSPECTUS
Description Of Securities. . . . . . . . . . . .13
Legal Matters. . . . . . . . . . . . . . . . . .15
Experts. . . . . . . . . . . . . . . . . . . . .15 ______, 1997
<PAGE>
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.
SEC Filing fee $ 143
Printing costs $ 200
Edgar cost $ 1,000
Legal fees $ 5,000
Accounting fees $ 8,000
Miscellaneous $ 157
Total $ 14,500
--------
--------
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 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.
II-1
<PAGE>
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.
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
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<PAGE>
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 such
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)
2.4 Agreement of Merger dated December 31, 1996 - regarding the
acquisition of ACS. (G)
3.3 Restated Articles of Incorporation. (E)
3.4 Bylaws (D)
4.1 Specimen form of the Company's Stock Certificate. (F)
5.1 Opinion of Key & Mehringer, P.C. as to the legality of the securities
registered hereby. Filed herewith.
21.1 List of Subsidiaries. (E)
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<PAGE>
23.1 Consent of Key & Mehringer, P.C. See Exhibit 5.1.
23.2 Consent of Hein + Associates LLP. Filed herewith.
23.3 Consent of Moss Adams LLP. Filed herewith.
23.4 Consent of McGladrey & Pullen, LLP. Filed herewith.
23.5 Consent of BDO Seidman, LLP. Filed herewith.
24.1 Power of Attorney. Filed herewith.
- ------------
(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 Exhibit 3.3 to Registration Statement
on Form S-1, File No. 33-47159, effective June 17, 1992.
(E) Incorporated by reference from the Company's Form 10-KSB for the
fiscal year ended June 30, 1996.
(F) 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.
(G) Incorporated by reference to Exhibit 2.1 to the Company's Form 8-K
dated December 31, 1996.
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.
II-4
<PAGE>
(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.
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-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements 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 May 12, 1997.
TOPRO, INC., Registrant
By /s/ John Jenkins
------------------------------------
John Jenkins, President and CEO
KNOW ALL MEN BY THESE PRESENTS, that the undersigned officers and/or
directors of Topro, Inc., by virtue of their signatures appearing below, hereby
constitute and appoint John Jenkins and/or H. Robert Gill, or either of them,
with full power of substitution, as attorney-in-fact in their names, places and
steads to execute any and all amendments to this Registration Statement on Form
S-3 in capacities set forth opposite their names on the signature page thereof
and hereby ratify all that said attorneys-in-fact or either of them may do by
virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ R. Larry Ethridge Chairman of the May 12, 1997
- ------------------------- Board of Directors
R. Larry Ethridge
/s/ John Jenkins President, Chief Executive May 12, 1997
- ------------------------- Officer, Principal Financial and
John Jenkins Accounting Officer and Director
Director
- -------------------------
H. Robert Gill
Director
- -------------------------
H. R. Hodge
/s/ Jon E. Walker Director May 12, 1997
- -------------------------
Jon E. Walker
II-6
<PAGE>
Exhibit 5.1
Opinion of Counsel
May 12, 1997
The Board of Directors
Topro, Inc.
2525 W. Evans Avenue
Denver, CO 80219
RE: FORM S-3 REGISTRATION STATEMENT
OPINION OF COUNSEL
Dear Sirs:
As securities counsel for Topro, Inc. (the "Company") a Colorado
corporation, we have examined the originals or copies, certified or otherwise
identified, of the Articles of Incorporation, as restated and amended, and
Bylaws, as amended, of the Company, corporate records of the Company, including
minute books of the Company as furnished to us by the Company, certificates of
public officials and of representatives of the Company, statutes and other
records, instruments and documents pertaining to the Company as a basis for the
opinions hereinafter expressed. In giving such opinions, we have relied upon
certificates of officers of the Company with respect to the accuracy of the
factual matters contained in such certificates.
We have also, as such counsel, examined the Registration Statement on Form
S-3, File No. 333-______ (the "Registration Statement") to be filed with the
Commission on or about May 12, 1997 covering the resale of up to 333,334 shares
of Common Stock of the Company by the Selling Shareholders, as more
particularly described in the Registration Statement.
Based upon the foregoing and subject to the other qualifications and
limitations stated in this letter, we are of the opinion that:
(1) The outstanding shares of Common Stock to be sold by the Selling
Shareholders have been duly authorized and are validly issued, fully
paid and non-assessable.
(2) The shares of Common Stock to be issued to holders of the warrants
held by the Selling Shareholders, upon exercise and payment of the
exercise price stated therein will have been duly authorized, validly
issued, fully paid and non-assessable.
This opinion is a legal opinion and not an opinion as to matters of fact.
This opinion is limited to the laws of the State of Colorado and the federal law
of the United States of America, and to the matters stated herein. This opinion
is made as of the date hereof, and after the date hereof, we undertake no, and
disclaim any, obligation to advise you of any change in any matters set forth
herein. This opinion is furnished to you solely in connection with the
transactions referred to herein, and may not be relied on by any other person,
firm or entity without our prior written consent.
<PAGE>
The Board of Directors
Topro, Inc.
May 12, 1997
Page 2
We acknowledge that we are referred to under the caption "Legal Matters"
included in the Registration Statement. We hereby consent to such use of our
name in the Registration Statement and to the filing of this opinion as an
Exhibit thereto. In giving this consent, we do not thereby admit that we come
within the category of persons whose consent is required under Section 7 of the
United States Securities Act of 1933 or the Rules and Regulations of the
Securities and Exchange Commission promulgated thereunder.
Very truly yours,
/s/ Key & Mehringer, P.C.
<PAGE>
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. and our report dated July 30,
1996, accompanying the consolidated financial statements of Visioneering Holding
Corporation, which financial statements are 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 Registration
Statement.
/s/ HEIN + ASSOCIATES LLP
Denver, Colorado
May 8, 1997
<PAGE>
EXHIBIT 23.3
INDEPENDENT AUDITOR'S REPORT
We consent to the incorporation by reference in the Form S-3 Registration
Statement of Topro, Inc. of our report dated June 1, 1995 relating to the
consolidated balance sheets of Advanced Control Technology, Inc. and Subsidiary
as of March 31, 1995 and 1994 and the related consolidated statements of
operations, stockholders' equity, and cash flows for the years then ended which
appear in the Form 8-K Current Report dated February 21, 1996, and to the use of
our name and the statements with respect to us, as appearing under the heading
"Experts" in the Registration Statement.
/s/ MOSS ADAMS LLP
Eugene, Oregon
May 8, 1997
<PAGE>
EXHIBIT 23.4
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Form S-3 Registration
Statement of Topro, Inc. dated May 12, 1997, of our report dated September 22,
1995, which is contained in the Topro, Inc. Form 8-K\A No. 2 dated May 30, 1996
relating to the 1994 financial statements of Vision Engineering Corp., and
to the reference to our Firm under the caption "Experts" in the Registration
Statement.
/S/ MCGLADREY & PULLEN, LLP
Anaheim, California
May 9, 1997
<PAGE>
EXHIBIT 23.5
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Topro, Inc.
Denver, Colorado
We hereby consent to the incorporation by reference in the Form S-3
Registration Statement of Topro, Inc. to be filed on May 12, 1997, of our
report dated December 18, 1996 (except for Note 3, for which the date is
December 31, 1996 and Note 6, for which the date is February 10, 1997) which
is contained in the Topro, Inc. Form 8K/A No. 2 dated December 31, 1996,
relating to the 1995 and 1994 combined financial statements of All Control
Systems, Inc. and affiliate and to the reference to our Firm under the heading
"Experts" in the Prospectus.
/s/ BDO SEIDMAN, LLP
BDO SEIDMAN, LLP
Philadelphia, Pennsylvania
May 12, 1997
