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As filed with the Securities and Exchange Commission on October 17, 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.)
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<S> <C>
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 telephone (Name, address, including zip code
number, including area code, of and telephone number, including area
Registrant's principal executive offices) code, of agent for service)
</TABLE>
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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
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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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CALCULATION OF REGISTRATION FEE
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Title of each class of Amount to Proposed maximum Proposed maximum Amount of
securities to be registered(1) be registered(2) offering price per share(3) aggregate offering price(3) registration fee(3)
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<S> <C> <C> <C> <C>
Common Stock, $.0001 par 213,263 Shares $5.3125 $ 1,132,960 $ 343
value (4)
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Common Stock issuable upon 1,333,340 Shares $5.3125 $ 7,083,369 $2,146
Preferred Stock Conversion
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Common Stock issuable upon 868,333 Shares $5.3125 $ 4,613,019 $1,398
exercise of Warrants & Options
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Total 2,414,936 Shares $5.3125 $12,829,348 $3,887
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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) Pursuant to Rule 416, there also are being registered such additional
shares of Common Stock as may become issuable as a result of the
anti-dilution provisions of outstanding securities.
(3) Proposed maximum offering price and registration fee is based on the
closing sale price ($5.3125) reported by Nasdaq on October 13, 1997 (a date
within five business days prior to the initial filing hereof) pursuant to
Rule 457(c).
(4) Represents shares outstanding in the hands of Selling Securityholders.
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TOPRO, INC.
CROSS REFERENCE SHEET
FORM S-3 SECTIONS IN PROSPECTUS
ITEM NO. CAPTION OR REGISTRATION STATEMENT
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 OCTOBER 17, 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.
213,263 OUTSTANDING SHARES OF COMMON STOCK OFFERED BY SELLING SHAREHOLDERS
2,201,673 SHARES OF COMMON STOCK TO BE ISSUED TO AND OFFERED BY
SELLING SHAREHOLDERS
An aggregate of 2,414,936 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 2,201,673 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 or options or upon the
conversion of Series A Convertible Preferred Stock held by Selling
Shareholders. These Shares may be resold in the public market by the Selling
Shareholders. The Company will receive the exercise or 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 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 October 13, 1997,
the closing sale price of the Common Stock as reported by Nasdaq was $5.31.
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 REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
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PRICE PER TOTAL NUMBER AGGREGATE PROCEEDS TO SELLING
SHARE OF SHARES OFFERING PRICE SHAREHOLDER
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<S> <C> <C> <C> <C>
Shares Outstanding Offered by
Selling Shareholders $5.31 213,263 $ 1,132,427 $ 1,132,427
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Shares to be Outstanding
Offered by Selling Shareholders (2) $5.31 2,201,673 $11,690,884 $11,690,884
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(1) The Price per Share represents the closing sale price as reported by Nasdaq
on October 13, 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 options or warrants or conversion of the Series A Convertible
Preferred Stock. SEE "Description of Securities."
THE DATE OF THIS PROSPECTUS IS _______, 1997.
<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, 1997 filed with the Commission on
October 10, 1997; (2) 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; (3) Current Report on
Form 8-K dated October 16, 1997 filed with the Commission on October 16,
1997; (4) 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 of the initial
filing of this registration statement and prior to effectiveness of this
registration
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statement; and (5) 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. These
statement often can be identified by the use of terms such as "may," "will,"
"expect," "anticipate," "estimate," or "continue," or the negative thereof.
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 and events 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. Any forward-looking statements represent
management's best judgment as to what may occur in the future. However,
forward-looking statements are subject to risks, uncertainties and important
factors beyond the control of the Company that could cause actual results and
events to differ materially form historical results of operations and events
and those presently anticipated or projected. 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 statement.
These factors include those discussed in this Prospectus under the heading
"Risk Factors" and in the "Management's Discussion and Analysis" sections of
the Company's Annual Report on Form 10-KSB for the fiscal year ended June 30,
1997, and in its other Securities and Exchange Commission filings
incorporated herein by reference. Such factors include adverse economic
conditions, entry of new and stronger competitors, inadequate capital,
unexpected costs, failure to integrate operations of recently acquired
subsidiaries and failure to capitalize upon access of new clientele.
Additional risks and uncertainties which may affect forward-looking
statements about the Company's Plant Y2K One-TM- business and prospects
include
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the possibility that a competitor will develop a more comprehensive or less
expensive Y2K solution, delays in market awareness of Topro and its product
and service solutions, possible delays in Topro product roll out, which could
have an immediate and material adverse effect by placing Topro behind its
competitors for a time sensitive product and inability to engage qualified
staff as needed. 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., d/b/a TAVA Technologies, 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.
Changes, if any, 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 2,414,936 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, 213,263 of the Shares registered for public sale
are outstanding, and 2,201,673 of the Shares have not yet been issued, but
may be purchased from the Company by Selling Shareholders upon exercise of
warrants or options or upon conversion of Series A Convertible Preferred
Stock and resold by the Selling Shareholders pursuant to this Prospectus. SEE
"Description of Securities." The Company will receive the cash proceeds from
the exercise, if any, of warrants and options.
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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
or options 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 has incurred net
losses for the past five years and reported net losses of $2,735,000 and
$1,855,000 for the fiscal years ended June 30, 1997 and 1996, respectively.
The Company has experienced negative cash flow from operations and has
experienced severe cash flow issues during the past fiscal year. During the
past two fiscal years, the Company has assumed bank debt and additional
overhead expenses of companies it acquired, issued over $4,000,000 in
convertible debt obligations to provide working capital, and began to
allocate resources to its Plant Y2K initiative, which is not expected to
generate significant revenues prior to the third quarter of fiscal 1998. The
Company also has significant working capital issues related to payment and
claims issues on contracts in progress. At June 30, 1997, the Company's
working capital was $168,000. SEE Consolidated Financial Statements and
Notes thereto and "Management's Discussion and Analysis of Financial
Condition and Results of Operations." From July 1 through August 31, 1997
the Company received cash proceeds of $4,616,000 from the exercise of options
and warrants, which significantly improved its working capital position.
However, the Company likely will seek additional debt or equity financing to
consolidate bank debt, complete development and establish volume sales of its
Year 2000 product offerings, and to fund increased cash requirements arising
from recent acquisitions 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.
RISKS ASSOCIATED WITH ACQUISITIONS. Over the past 24 months the Company
has acquired four independent control systems integrators ("CSIs"). 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
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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.
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 its Vice-President and Chief
Financial Officer, Douglas H. Kelsall. The Company has employment contracts
with Messrs. Jenkins, Fallon and Kelsall expiring in January 1999, February
1999, and July, 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 relatively 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. At June 30,
1997, the Company had debt obligations totaling $7,573,000. Subsequent to
June 30, 1997, $2,685,048 of 9% Convertible Debentures was converted to
Common Stock, leaving a principal balance of $2,015,000 for that debt.
Repayment of the principal balance of 9% Convertible Debentures remaining
unconverted will commence on March 1, 1999. With regard to the other debt
obligations, $2,151,000 is scheduled to mature prior to June 30, 1998. This
significant indebtedness 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 and
bank debt 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 Debentures were
issued contain numerous financial, operating and general covenants and
require the Company and its subsidiaries to meet certain financial ratios and
tests. Until January 1, 1998, the minimum financial standards under the
Debentures are as follows: debt to equity ratio, as defined in the Debenture
Loan Agreement, no greater than three to one; current ratio no less than one
to one; tangible net worth not less than negative $1,500,000. EBITDA to
interest expense shall be no less than .25 to one through September 30, 1997
and .75 to one thereafter until January 1, 1998. Thereafter, the minimum
financial standards revert to the following: debt to equity ratio not greater
than 3.6 to one; minimum
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tangible net worth of $1,000,000; and EBITDA times interest expense of not
less than 1.5 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 credit facilities for which assets of the subsidiaries are
pledged as collateral. If the Company is not successful in refinancing these
credit facilities, its overall liquidity would be negatively impacted and
default could result in acceleration of other obligations, including the
Debentures. Foreclosure on the assets pledged to secure repayment of the
Debentures and other 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. SEE Consolidated Financial Statements and Notes
thereto and "Management's Discussion and Analysis of Financial Condition and
Results of Operations."
MARKET OVERHANG. As of October 15, 1997, the Company has reserved
3,805,808 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
pursuant to this Prospectus, and two registration statements filed
previously. The outstanding privately issued Shares were acquired from the
Company, and shares are issuable upon conversion of Preferred Stock and
exercise of warrants and options, at prices substantially below the current
market price. Any sale into the public market of Shares purchased privately
could be expected to have a depressive effect on the market price of the
Company's Common Stock. SEE "Description of Securities."
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 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 on its 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."
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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 133,334 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, at the rate of ten votes per share, on 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 and will not receive any cash proceeds if its
outstanding Convertible Preferred Stock is converted to Common Stock. The
Company will receive cash proceeds from the exercise, if any, of outstanding
warrants and options. If all the options and warrants are exercised by the
Selling Shareholders, after deduction of expenses of the offering estimated
to total $25,000 the Company would receive approximately $1,856,800 in net
proceeds, which 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
October 15, 1997 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>
Shares Beneficially Owned Shares Beneficially
Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering
-------------------------- --------------------------------- ----------------------
Shares Underlying
Name Number Percent Shares Convertible Securities(2) Number(3) Percent(3)
- ----------------------------------- ------ ------- ------ ------------------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
Phillip Bettendorf 28,000 * 4,000 12,000 12,000 *
Creative Business Strategies, Inc. 10,000 * -0- 10,000 -0- *
R. Larry Ethridge 5,000 * -0- 5,000 -0- *
Martin Fallon, Jr. 342,211(4) 2.05% 63,158 -0- 261,043(4) 1.57%
Martin Fallon, Sr. & Helen Fallon 199,474(4) 1.20% 42,105 -0- 157,369(4) *
</TABLE>
-8-
<PAGE>
<TABLE>
Shares Beneficially Owned Shares Beneficially
Prior to Offering(1) Number of Shares Offered Hereby Owned After Offering
-------------------------- --------------------------------- ----------------------
Shares Underlying
Name Number Percent Shares Convertible Securities(2) Number(3) Percent(3)
- ----------------------------------- ------ ------- ------ ------------------------- --------- ----------
<S> <C> <C> <C> <C> <C> <C>
E. Gregory Fisher 30,000 * -0- 10,000 20,000 *
H. Robert Gill 45,000 * -0- 15,000 30,000 *
Kaljit Hairon 3,500 * 500 1,500 1,500 *
James Haney 42,000 * 6,000 18,000 18,000 *
H. Robert Hodge 45,000 * -0- 15,000 30,000 *
J. Scott Liolios 35,500 * -0- 35,500 -0- *
Don Mounchou 28,000 * 4,000 12,000 12,000 *
Steve Patino 2,000 * -0- 2,000 -0- *
Pro Futures Bridge
Capital Fund, Inc. 1,756,673 9.57% -0- 1,756,673 -0- *
Mark Qualey 2,000 * -0- 2,000 -0- *
Renaissance Capital Group, Inc. 1,368,301 7.60% -0- 25,000 1,343,301 7.46%
Tom Reski 28,000 * 4,000 12,000 12,000 *
Randy J. Sasaki 35,500 * -0- 35,500 -0- *
Elliott S. & Lois C. Schlissel 8,000 * 8,000 -0- -0- *
David Sidhu 3,500 * 500 1,500 1,500 *
Jagir Singh Sidhu 3,500 * 500 1,500 1,500 *
Surjit Sidhu 3,500 * 500 1,500 1,500 *
Michael C. Taylor Family
Revocable Living Trust 532,000 3.11% 76,000 228,000 228,000 1.33%
John R. Teed, Jr. 14,000 * 2,000 6,000 6,000 *
Barry Wagoner 14,000 * 2,000 6,000 6,000 *
</TABLE>
- -------------------------
* Less than one percent.
(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 underlying the Convertible Securities and offered for
sale by the Selling Shareholders is subject to adjustment in accordance
with anti-dilution provisions of the Convertible Securities.
(3) Assumes that the Convertible Securities are converted/exercised and all
Shares registered are sold by the Selling Shareholders.
(4) 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 sell no more than 22% of the shares issued
in the ACT merger prior to February 7, 1998, and no more than 25% of those
shares prior to February 7, 1999. 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%.
-9-
<PAGE>
RELATIONSHIPS AND TRANSACTIONS WITH CERTAIN SELLING SHAREHOLDERS
Martin Fallon, Sr., Helen Fallon and Martin Fallon, Jr. were officers,
directors and/or shareholders of ACS at the time ACS was acquired by the
Company. In connection with the acquisition each of these persons 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 includes an escrow
arrangement relating to a potential deferred tax liability 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 to
purchase certain of ACS' software products relating to the color printing
industry. Both agreements are between ACS and Fallon Technology, Inc.
("Fallon Tech"), a Pennsylvania corporation owned by members of the Fallon
family, including Kevin Fallon, COO of the Company. 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 the color printing
technology.
E. Gregory Fisher is a Vice-President of the Company.
Shares registered on behalf of Messrs. Liolios, Qualey, Patino and
Sasaki are those underlying options granted to Pacific Consulting Group, Inc.
pursuant to a consulting agreement. Pacific Consulting Group, Inc. has been
engaged by the Company as a consultant since February 1, 1996.
H. Robert Gill currently serves as a director of the Company. Messrs.
Ethridge and Hodge are former directors of the Company. Mr. Ethridge also
served as the Company's President until January 1995 and its Chairman until
August 1997.
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.
-10-
<PAGE>
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; or (2) the purchase of the securities in a private transaction.
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. 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 and Options if and when they 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 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.
-11-
<PAGE>
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 outstanding warrants or options
or conversion of outstanding Series A Convertible Preferred Stock. The
Company anticipates that Shares issued upon exercise/conversion of these
securities 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 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.
-12-
<PAGE>
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. 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 October 15, 1997, the Company had issued
and outstanding 16,633,453 Shares of Common Stock and 133,334 Shares of
Preferred Stock.
SERIES A CONVERTIBLE PREFERRED STOCK. As of the date of this
Prospectus, there are 133,334 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 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 is entitled to 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 upon conversion as of the record date
for determining shareholders entitled to vote on such matter (currently, ten
votes per share of Preferred Stock).
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
Company granted certain registration rights which obligate it to include
those shares in the registration statement of which this Prospectus is a
part; however, with respect to this Prospectus Kevin Fallon, the Company's
COO, has waived that right with respect to the 1,326,315 shares he received
in the merger and other members of the Fallon family have waived that right
with respect to 473,685 shares, resulting in only 105,263 of such shares
being registered
-13-
<PAGE>
hereby. The balance of 83,334 shares issued in the ACS acquisition have
previously been registered for sale by the holders, who are not affiliated
with Mr. Fallon.
Effective August 1, 1997 the Company issued options to E. Gregory Fisher
to purchase up to 10,000 Shares of Common Stock at an exercise price of $5.97
per Share, equal to the closing bid price at that date. These options were
issuable automatically under the Company's employment agreement with Mr.
Fisher, which was entered in connection with the Company's acquisition of
MDCS, of which Mr. Fisher was founder and President. The Common Stock
underlying the options is registered for public sale pursuant to this
Prospectus.
Effective April 29, 1997 and June 30, 1997 the Company issued in private
placements 133,334 shares of Series A Convertible Preferred Stock (the
"Preferred Stock") and warrants to purchase 400,000 shares of the Company's
Common Stock. Each share of the Preferred Stock can be converted into ten
(subject to adjustment) shares of Common Stock at the option of the holder,
and automatically upon the occurrence of certain events. The warrants, which
are exercisable at $2.00 per share, expire June 30, 1999. In accordance with
a registration rights agreement, the Common Stock underlying the Preferred
Stock and the warrants is registered for public sale pursuant to this
Prospectus, as are 33,333 shares underlying warrants, exercisable at $1.50
per share until September 29, 1999, which were issued pursuant to that
agreement due to the Company's failure to effect registration on or prior to
September 30, 1997.
Shares held by Elliott S. & Lois C. Schlissel were issued in connection
with the Company's sale of 10% Senior Convertible Notes in 1995. The balance
of shares issued in that offering were previously registered for sale by the
holders.
Shares registered on behalf of Messrs. Ethridge, Gill and Hodge are
issuable upon exercise of options granted to Mr. Ethridge in 1995 and Messrs.
Gill and Hodge in 1992, 1994 and 1995 in recognition of their service as
directors of the Company. As of October 15, 1997, Mr. Gill remains a
director of the Company. Each of these persons holds 5,000 options
exercisable at a price of $.625 until February 22, 2005. In addition,
Messrs. Gill and Hodge each own 5,000 options exercisable at a price of $3.75
until November 23, 2002 and 5,000 options exercisable at a price of $3.50
until February 14, 2004.
The Company also has registered for sale by the holders 100,000 "bonus"
shares and 300,000 shares underlying options, exercisable at $2.50 per share
until October 8, 2006, issued to former shareholders of VHC in connection
with the Company's acquisition of VHC.
Shares registered on behalf of Renaissance Capital Group, Inc. are
issuable upon exercise of a warrant, exercisable to purchase 25,000 shares at
$1.50 per share, issued as consideration for the waiver of certain covenants
in its Debenture Loan Agreement.
Of the 75,000 Options granted to Pacific Consulting Group, Inc., 50,000
are exercisable at $2.75 per share and 25,000 are exercisable at $4.00 per
share, until February 1, 2002
-14-
<PAGE>
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 Series A
Convertible Preferred Stock, notes, options, debentures and warrants.
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, 1997 and the related consolidated statements of operations,
stockholders' equity and cash flows for the year ended June 30, 1997, which
appear in the Company's Form 10-KSB for the fiscal year ended June 30, 1997
have been incorporated by reference herein in reliance upon the report, dated
September 26, 1997, of BDO Seidman LLP, Denver, Colorado, independent
certified public accountants, and upon the authority of said firm as experts
in accounting and auditing.
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 year then ended which appear in
the Company's Form 10-KSB for the fiscal year ended June 30, 1997, 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 combined financial statements of All-Control Systems, Inc. and
affiliate which appear in Amendment No. 1 on Form 8-K/A dated February 7,
1997, Amendment No. 2 on Form 8-K/A dated February 13, 1997, Amendment No. 3
on Form 8-K/A dated February 28, 1997 and Amendment No. 4 on Form 8-K/A filed
on March 5, 1997 to Topro, Inc.'s Current Report on Form 8-K dated January
15, 1997, 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.
-15-
<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 2,414,936 Shares
Risk Factors . . . . . . . . . . . 5 of Common Stock
Use of Proceeds. . . . . . . . . . 8
Selling Shareholders . . . . . . . 8
Plan Of Distribution . . . . . . . 10 PROSPECTUS
Description Of Securities. . . . . 13
Legal Matters. . . . . . . . . . . 15
Experts. . . . . . . . . . . . . . 15 October __, 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 $ 3,879
Printing costs (including Edgar formatting) $ 7,000
Legal fees $ 8,000
Accounting fees $ 5,750
Miscellaneous $ 371
-------
Total $25,000
-------
-------
All amounts listed above, except for the SEC filing 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 otherwise, the small business issuer
has been advised that in the opinion of the Securities and
II-2
<PAGE>
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)
2.5 Amendment No. 1 to the ACS Agreement of Merger. (G)
3.3 Restated Articles of Incorporation. (F)
3.4 Amendment to Articles of Incorporation - Designation of Series A
Preferred Stock. (H)
3.5 Bylaws (D)
4.1 Specimen form of the Company's Stock Certificate. (D)
II-3
<PAGE>
4.2 Instruments defining rights of security holders.
(a) Registration Rights Agreement. Filed herewith.
(b) See Exhibit 3.4.
5.1 Opinion of Key & Mehringer, P.C. as to the legality of the
securities registered hereby. Filed herewith.
21.1 List of Subsidiaries. (I)
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 BDO Seidman, LLP. Filed herewith.
24.1 Power of Attorney. Filed herewith. SEE Signature Page.
- --------------------
(A) Incorporated by reference from the Company's Form 8-K 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 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 from the Company's Registration Statement on
Form SB-2, File No. 33-98788.
(G) Incorporated by reference from the Company's Form 8-K dated December
31, 1996, as amended.
(H) Incorporated by reference from the Company's Form 10-QSB for the
quarter ended March 31, 1997.
II-4
<PAGE>
(I) Incorporated by reference from the Company's Registration Statement on
Form S-3, File No. 333-170891, effective March 6, 1997.
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.
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.
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<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 October 16, 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 Douglas H. Kelsall, 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/ John Jenkins President, Chief Executive October 16, 1997
- --------------------------- Officer, and Director
John Jenkins
/s/ Douglas H. Kelsall Principal Financial and October 16, 1997
- --------------------------- Accounting Officer
Douglas H. Kelsall
/s/ H. Robert Gill Director October 16, 1997
- ---------------------------
H. Robert Gill
/s/ Robert C. Pearson Director October 16, 1997
- ---------------------------
Robert C. Pearson
/s/ Robert L. Costello Director October 16, 1997
- ---------------------------
Robert L. Costello
II-6
<PAGE>
Exhibit 4.2(a)
Instruments Defining the Rights of Security Holders
REGISTRATION RIGHTS AGREEMENT
This Agreement is made by and between Topro, Inc. (the "Company") and the
undersigned holder of securities of the Company (the "Shareholder"), who has
acquired Series A Convertible Preferred Stock (the "Preferred Stock"), which
is convertible into shares of the Company's $.0001 par value Common Stock (the
"Common Stock"), and Common Stock Purchase Warrants (the "Warrants")
exercisable to purchase 400,000 shares of Common Stock and who may, in certain
events acquire certain additional Common Stock Purchase Warrants described in
Section 2(b), below (the "Additional Warrants") (the Common Stock underlying
the Preferred Stock, the Warrants and the Additional Warrants collectively
referred to herein as "the Shares") in a non-public transaction (the "Private
Offering") and in accordance with the provisions of a Subscription Agreement
and Investment Letter dated June 25, 1997, to be effective as of the closing
date of the Private Offering (the "Closing Date").
WHEREAS, the Shareholder has purchased securities from the Company in a
private sale pursuant to exemptions from the registration requirements of the
Securities Act of 1933 (the "Act");
WHEREAS, the Preferred Stock, the Warrants, the Additional Warrants and
the Shares are "restricted securities" as that term is defined in Rule 144 of
the General Rules and Regulations promulgated under the Act; and
WHEREAS, the Shareholder's purchase of the securities was made with the
understanding that the Shareholder would receive the registration rights set
forth herein;
NOW, THEREFORE, in consideration for the purchase of the securities by
the Shareholder and the mutual promises and covenants set forth herein, the
Shareholder and the Company hereby mutually agree as follows:
So long as the Shareholder owns any of the Preferred Stock, Warrants,
Additional Warrants or Shares issued upon conversion or exercise thereof, the
Shareholder shall, subject to the terms and conditions set forth herein, have
the right to require that the Company register the Warrants and the Shares
under the Act as follows:
1. REGISTRATION RIGHT. The Company shall file a registration statement
(the "Registration Statement") with the Securities and Exchange Commission
(the "SEC") registering the shares of Common Stock underlying the Preferred
Stock and the Common Stock issuable upon exercise of the Warrants as soon as
possible, but not later than July 30, 1997, and shall use its best efforts to
1
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cause the Registration Statement to become effective as soon as possible
thereafter. The Company shall be required to file no more than one
registration statement pursuant to this paragraph.
2. ADDITIONAL WARRANTS ISSUABLE DUE TO COMPANY'S FAILURE TO FILE
REGISTRATION STATEMENT AND DELAY IN EFFECTIVENESS.
(a) If the registration Statement referred to in paragraph 1 above is
not declared effective by the SEC by September 30, 1997, the Company will
issue to the Shareholder 33,333 "Additional Warrants" (described below in
Section 2(b)) and thereafter shall grant to the Shareholder 33,333 Additional
Warrants on the last day of each following month if such registration
Statement is not effective by such date, until a maximum of 599,994 Additional
Warrants have been granted pursuant to this Section 2(a) (i.e., for a maximum
of 18 months).
(b) Each Additional Warrant shall be exercisable to purchase one share
of Common Stock at a price of $1.50 per share for a period of two years from
date of issuance. The Additional Warrants will not be redeemable by the
Company. The Additional Warrants will contain anti-dilution provisions
concerning mergers in which the Company is not the survivor, reclassifications
of securities, and other extraordinary corporate events.
3. COMPANY'S OBLIGATIONS IN REGISTRATION. If and whenever the Company is
required by the provisions of this Agreement to effect the registration of any
of the Shares under the Act, the Company will, as expeditiously as possible:
(a) Prepare and file with the U.S. Securities and Exchange Commission
("SEC") the proposed registration statement with respect to such
Warrants and/or Shares and use its best efforts: (i) to cause such
registration statement to become and remain effective to permit the
Shareholder to dispose of the Warrants and/or Shares in sales pursuant
to the registration statement; and (ii) to keep such registration
statement effective until the Shareholder has completed the
distribution of the securities registered (the "Selling Period") as
provided herein (including the taking of such steps as are necessary
to obtain the removal of any stop order);
(b) Prepare and file with the SEC such amendments and supplements to
such registration statement and the prospectus used in connection
therewith as may be necessary to keep such registration statement
effective throughout the Selling Period and to comply with the
provisions of the Act;
(c) Furnish to the Shareholder such number of copies of the prospectus
and preliminary prospectus in conformity with the requirements of the
Act and such other documents as the Shareholder may reasonably request
in order to facilitate the public sale or other disposition of the
Warrants and/or Shares;
2
<PAGE>
(d) Use its best efforts to register or qualify the Shares covered by
such registration statement under such securities or blue sky laws of
the states in which the Shareholder resides and do any and all other
acts and things which may be necessary or desirable to enable the
Shareholder to consummate the public sale or other disposition of such
Shares in such jurisdictions; and
(e) Promptly notify the Shareholder, at any time when a prospectus
relating to any of such Shares is required to be delivered under the
Act, of the occurrence of any event as a result of which the
prospectus included in such registration statement as then in effect
includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in the light of the circumstances
then existing. In the event the registration statement or prospectus
includes any untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading in light of the circumstances then
existing, the Company shall file with the SEC a prospectus supplement
under Rule 424 or a post-effective amendment, as required, and shall
immediately notify the Shareholder of such filing. The Company agrees
to prepare and furnish to the Shareholder a reasonable number of
copies of any such supplement or amended prospectus as may be
necessary so that, as thereafter delivered to purchasers of the
Warrants and/or Shares, such prospectus shall not include an untrue
statement of a material fact or omit to state a material fact required
to be stated therein or necessary to make the statements therein not
misleading in the light of the circumstances then existing.
4. EXPENSES OF REGISTRATION. All expenses incurred by the Company
which are necessary in complying with this Agreement, including,
without limitation, (a) all registration and filing fees (including
all expenses incident to filing with the National Association of
Securities Dealers, Inc.), (b) all printing expenses, (c) all fees and
disbursements of counsel and accountants for the Company, and (d) all
blue sky fees and expenses, are herein called "Registration Expenses."
All underwriting discounts and selling commissions applicable to the
sale of the Warrants and Shares incident to any such registration are
herein called "Selling Expenses." "Selling Expenses" shall also
include the costs of any independent counsel which the Participating
Shareholder(s) may choose to represent the Shareholder(s) in
connection with the review of the registration. The Company will be
responsible for all Registration Expenses in connection with the
registration statement filed pursuant to this Agreement. All Selling
Expenses in connection with registration pursuant to this Agreement
shall be borne proportionately by the Company and by the Shareholder
in proportion to the number of shares included in the registration
statement for their respective accounts.
5. SHAREHOLDER OBLIGATIONS. The Company's contractual obligation to
include the Warrants and/or Shares on behalf of the Shareholder in a
registration statement filed on behalf of the Company shall be subject to the
reasonable cooperation of the Shareholder with counsel to the Company. The
Warrants and/or Shares held by the Shareholder may be excluded from a
registration statement at the election of the Company in the event all
information essential for the
3
<PAGE>
Company and its counsel to prepare the registration statement is not furnished
by the Shareholder, after the Shareholder, upon written request of the Company
or its counsel, has been given a reasonable amount of time (not less than ten
days from the date such request has been sent to the Shareholder) to transmit
the requested information to the Company and/or its counsel.
6. COMPANY'S INDEMNIFICATION. In the event of any registration under the
Act of any of the Warrants and/or Shares pursuant to this Agreement, the
Company (a) will indemnify and hold harmless each Shareholder and each
underwriter, and each other affiliate of a Shareholder or such underwriter
within the meaning of the Act, against any losses, claims, damages or
liabilities, joint or several, to which any Shareholder or such underwriter or
such controlling person may become subject under the Act or otherwise, insofar
as such losses, claims, damages or liabilities (or actions in respect thereof)
arise out of or are based upon: (i) any untrue statement or alleged untrue
statement of any material fact contained, on the effective date thereof, in
any such registration statement, any preliminary prospectus or final
prospectus contained therein, or any amendment thereof or supplement thereto,
or any document incident to registration or qualification of the Warrants
and/or Shares covered thereby under state securities or blue sky laws, or
(ii) the omission or alleged omission to state therein a material fact
required to be stated therein, or (iii) any violation by the Company of the
Act or state securities or blue sky laws applicable to the Company and
relating to any action or inaction required by the Company in connection with
such registration or qualification under such state securities or blue sky
laws, and (b) will reimburse each Shareholder and each such underwriter and
each such affiliate for any legal or any other expenses reasonably incurred by
each such Shareholder, each such underwriter and each such affiliate, in
connection with investigating or defending any such loss, claim, damage,
liability or action; PROVIDED, HOWEVER, that the Company will not be liable in
any such case to any indemnified person to the extent that any such loss,
claim, damage or liability arises out of or is based upon an untrue statement
or alleged untrue statement or omission or alleged omission made in such
registration statement, said preliminary prospectus or said prospectus or said
amendment or supplement, or any document incident to registration or
qualification under state securities or blue sky laws, in reliance upon and in
conformity with any information furnished in writing to the Company or its
counsel by such indemnified person specifically for use in the preparation
thereof or if such loss, claim, damage, liability or action arose out of the
violation of any duty to which the Shareholder may be subject, including the
obligation to deliver a copy of any prospectus, supplement or amendment to a
purchaser of the Warrants and/or Shares and such prospectus, supplement or
amendment was made available to the Shareholder by the Company.
7. SHAREHOLDER'S INDEMNIFICATION. In the event of any registration of
the Warrants and/or Shares under the Act pursuant to this Agreement, the
Shareholder will indemnify and hold harmless the Company and each affiliate
and controlling person, as defined by the Act, of the Company, each officer or
employee of the Company who signs the registration statement, each director of
the Company, any agent of the Company and each underwriter, and any and all
affiliates and controlling persons, as defined by the Act, of such persons
against any and all such losses, claims, damages or liabilities as the
Shareholder and others are indemnified against by the Company and will
reimburse the Company and each of the foregoing persons for any losses,
4
<PAGE>
claims, damages or liabilities (or actions in respect thereof) and for any
legal or any other expenses incurred by each such person, if the statement or
omission in respect of which such loss, claim, damage or liability is asserted
was made in reliance upon and in conformity with information furnished to the
Company in writing by such Shareholder specifically for use in connection with
the preparation of such registration statement or prospectus.
8. NOTICE REQUIRED IN CASES SUBJECT TO INDEMNIFICATION. Promptly after
receipt by a party entitled to indemnification of notice of the commencement
of any action involving a claim referred to in paragraphs 6 or 7, such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action. In case any such action is brought against an indemnified party,
the indemnifying party will be entitled to participate in and to assume the
defense thereof, with counsel reasonably satisfactory to such indemnified
party and after notice from the indemnifying party to such indemnified party
of its election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party for any legal or other expenses;
PROVIDED, HOWEVER, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded that there may be reasonable defenses available to
it which are different from or additional to those available to the
indemnifying party or if the interests of the indemnified party reasonably may
be deemed to conflict with the interests of the indemnifying party, the
indemnified party shall have the right to select a separate counsel and to
assume such legal defenses and otherwise to participate in the defense of such
action with the expenses and fees of such separate counsel and other expenses
related to such participation to be reimbursed by the indemnifying party as
incurred; PROVIDED, HOWEVER, that the indemnifying party shall be obligated to
pay such expenses and fees of only one such separate counsel of such
indemnified party for matters relating to any one such registration statement,
without regard to the number of defenses that may be available or the
interests of the parties that may conflict.
9. TERMINATION OF REGISTRATION RIGHTS. The rights granted pursuant to
this Agreement shall terminate at such time as all the securities required to
be registered hereunder are eligible for the termination of resale
restrictions afforded by Rule 144(k) of the Act (or its successor provision).
10. ENTIRE AGREEMENT; AMENDMENTS. This Agreement constitutes the entire
understanding of the parties with respect to its subject matter and may not be
modified or amended except by an instrument in writing signed by the party
against whom enforcement is sought.
11. AUTHORIZATIONS; BINDING EFFECT. The persons signing this Agreement
on behalf of the Company and the Shareholder have been duly authorized to so
execute this Agreement and this agreement constitutes the binding obligation
of the parties.
12. NOTICES. Any notice required to be given under the terms of this
Agreement shall, if given to the Company, be sent to Topro, Inc. at 2525 West
Evans, Denver, Colorado 80219, or at such subsequent address of which the
Shareholder may receive written notice, and if to the
5
<PAGE>
Shareholder at his or her address as set forth in the Subscription Documents
furnished by the Shareholder to the Company in connection with the purchase of
the Shares, or at such subsequent address of which the Company may receive
written notice. All notices shall be sent by certified or registered mail,
return receipt requested or by similar postal service, or by regularly
scheduled overnight courier service. Notices shall be deemed received upon
actual receipt if sent by certified or registered mail, or two days after
deposit with such courier service.
13. PARAGRAPH HEADINGS. The paragraph headings used herein are for
convenience only and shall not be deemed to be a substantive part of this
Agreement.
14. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Colorado.
15. SUPERSEDES PRIOR AGREEMENT. This Agreement shall supersede that
certain Registration Rights Agreement, dated as of the closing of the April,
1997 purchase and sale of securities between the parties hereto, which is
Exhibit B to the Subscription Agreement and Investment Letter dated April 28,
1997.
IN WITNESS WHEREOF, the undersigned parties have executed this
Registration Rights Agreement, to be effective as set forth above.
TOPRO, INC. (The Company) PROFUTURES BRIDGE CAPITAL FUND, L.P.
(The Shareholder)
By: /s/ John Jenkins By: BRIDGE CAPITAL PARTNERS,
------------------------------ INC., General Partner
John Jenkins, President
By: /s/ James H. Perry
-----------------------------
James H. Perry, President
6
<PAGE>
Exhibit 5.1
Opinion of Counsel
October 17, 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 October 17, 1997 covering the resale of up to
2,414,936 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
and options held by the Selling Shareholders have been duly
authorized and, upon exercise and payment of the exercise price
stated therein will be validly issued, fully paid and non-assessable;
and
(3) The shares of Common Stock issuable upon conversion of the Series A
Convertible Preferred Stock have been duly authorized and upon
issuance upon conversion of the
<PAGE>
The Board of Directors
Topro, Inc.
October 17, 1997
Page 2
Series A Convertible Preferred Stock will be 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.
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 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
October 16, 1997
<PAGE>
Exhibit 23.3
Consent of Independent Certified Public Accountants
Topro, Inc.
Denver, Colorado
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement, 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), relating to the combined financial statements of All Control
Systems, Inc. appearing in Amendment No. 1 on Form 8-K/A dated
February 7, 1997, Amendment No. 2 on Form 8-K/A dated February 13,
1997, Amendment No. 3 on Form 8-K/A dated February 28, 1997 and
Amendment No. 4 on Form 8-K/A filed on March 5, 1997 to Topro, Inc.'s
Current Report on Form 8-K dated January 15, 1997, and our report
dated September 26, 1997, relating to the consolidated financial
statements of Topro, Inc. and subsidiaries appearing in the Company's
Annual Report on Form 10-KSB for its fiscal year ended June 30, 1997
and to the reference to our Firm under the heading "Experts" in the
Prospectus.
BDO SEIDMAN, LLP
/s/ BDO SEIDMAN, LLP
October 16, 1997