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As filed with the Securities and Exchange Commission on June 1, 2000
Registration No. 333-_____
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------------------
GREAT LAKES AVIATION, LTD.
(Exact Name of Registrant as Specified in Its Charter)
IOWA 42-1135319
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
1022 AIRPORT PARKWAY
CHEYENNE, WYOMING 82001
(307) 432-7000
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
--------------------------
DOUGLAS G. VOSS, CHIEF EXECUTIVE OFFICER
1022 AIRPORT PARKWAY
CHEYENNE, WYOMING 82001
(307) 432-7000
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
COPIES TO:
THOMAS F. STEICHEN, ESQ.
BRIGGS AND MORGAN, PROFESSIONAL ASSOCIATION
2400 IDS CENTER
MINNEAPOLIS, MINNESOTA 55402
(612) 334-8400
---------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED
SALE TO THE 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 investment reinvestment plans, please check the
following box. / /
If any of the securities being registered on this form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. /X/
If this form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of
the earlier effective registration statement for the same offering. / /
If this form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. / /
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CALCULATION OF REGISTRATION FEE
--------------------------------------------- -------------------- -------------------- --------------------- ---------------------
PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT TO BE AGGREGATE PRICE AGGREGATE OFFERING AMOUNT OF
TITLE OF SHARES TO BE REGISTERED REGISTERED(1)(2) PER SHARE(3) PRICE(3) REGISTRATION FEE
--------------------------------------------- -------------------- -------------------- --------------------- ---------------------
<S> <C> <C> <C> <C>
Common Stock ($.01 par value per share).... 6,700,000 $1.9375 $25,151,172 $6,640
--------------------------------------------- -------------------- -------------------- --------------------- ---------------------
</TABLE>
(1) Includes 5,700,000 shares issued or issuable to the selling
shareholders pursuant to securities purchase agreements and 1,000,000
shares issuable pursuant to a warrant to one of the selling
shareholders.
(2) In accordance with Rule 416 under the Securities Act of 1933, common
stock offered hereby shall also be deemed to cover an indeterminate
number of securities to be offered or issued to prevent dilution
resulting from stock splits, stock dividends or similar transactions.
(3) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457(c) and based upon the average of the high and low
sale prices for such stock on May 30, 2000, as reported by the Nasdaq
SmallCap Market.
-----------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION ACTING PURSUANT TO SAID SECTION 8(a)
MAY DETERMINE.
================================================================================
<PAGE>
PROSPECTUS SUBJECT TO COMPLETION, DATED JUNE 1, 2000
--------------------------------------------------------------------------------
6,700,000 SHARES
GREAT LAKES AVIATION, LTD.
COMMON STOCK
--------------------------------------------------------------------------------
The shareholders of Great Lakes listed on page 8 below are offering and
selling 6,700,000 shares of common stock under this prospectus. We will not
receive any part of the proceeds from this offering.
Our common stock is quoted on the Nasdaq SmallCap Market and trades
under the ticker symbol "GLUX." On May 30, 2000, the closing price of one share
of our stock on the Nasdaq SmallCap Market was $1.9375.
--------------------------------------
Neither the SEC nor any state securities commission has approved or
disapproved of these securities or determined if this prospectus is truthful or
complete. Any representation to the contrary is a criminal offense.
--------------------------------------
THE SHARES INVOLVE CERTAIN RISKS. SEE "RISK FACTORS" BEGINNING ON PAGE 3.
THE DATE OF THIS PROSPECTUS IS _______________, 2000
<PAGE>
PROSPECTUS SUMMARY
BECAUSE THIS IS A SUMMARY, IT DOES NOT CONTAIN ALL OF THE
INFORMATION THAT MAY BE IMPORTANT TO YOU. YOU SHOULD READ THE ENTIRE
PROSPECTUS AND SHOULD CAREFULLY CONSIDER, AMONG OTHER THINGS, THE INFORMATION
SET FORTH UNDER "RISK FACTORS" BEFORE YOU DECIDE TO PURCHASE OUR STOCK.
GREAT LAKES
We are a regional airline operating under the marketing identity
United Express. We became a United Express carrier under a code sharing
agreement with United Airlines, Inc. in April 1992 and we are one of the
principal United Express regional carriers. The code sharing agreement with
United expired in December 1997 but we believe that our relationship with
United is satisfactory, as evidenced by United's selection of us, during
1998, as the United Express carrier for additional routes serving the Denver
airport. Since December 31, 1997, we have been operating as if the principal
day-to-day operational provisions of the previous code sharing agreement are
still effective. Our United Express operation serves 67 destinations in 14
states located in the upper midwest, with hubs located at Chicago O'Hare,
Denver and Minneapolis/St. Paul. In addition to the United Express
designation, we own 54 landing and takeoff slots and have 10 exemptions
allocated to us at Chicago O'Hare airport. We have entered into negotiations
with United to renew the code sharing agreement. As part of the negotiations,
United has restructured its operating relationships with certain of its
United Express carriers, pursuant to which we have provided service to Denver
from 24 additional cities since April 23, 1998. As of December 31, 1999, we
operated a fleet of 40 Beechcraft 1900D 19-passenger aircraft and eight
Embraer Brasilia 30-passenger aircraft. We also have four Beechcraft Model
1900C aircraft which we are using exclusively for freight operations.
Our code sharing relationship with United entitles us to use
United's "UA" flight designator code to identify our code sharing flights and
fares in computer reservation systems, United's "Apollo" reservations system
(including United's automated check-in, ticketing and boarding pass, and
advance seat reservation and baggage tracing systems), to use the United
Express logo and aircraft exterior paint schemes and uniforms similar to
those of United and to otherwise advertise and market our association with
United. United Express passengers participate in United's "Mileage Plus"
frequent flyer program and are eligible to receive a minimum of 500 United
frequent flyer miles for each trip on a United Express flight. Our
relationship with United also provides for coordinated schedules and through
fares.
THIS OFFERING
We issued or will issue the securities covered by this prospectus to
the selling shareholders in connection with a number of private placement
transactions between us and the selling shareholders. The selling
shareholders may offer their shares through public or private transactions,
on or off the Nasdaq SmallCap Market, at prevailing market prices or
privately negotiated prices. No period of time has been fixed within which
the shares may be offered or sold.
GENERAL
We were incorporated in Iowa in 1979. Our principal offices are
located at 1022 Airport Parkway, Cheyenne, Wyoming 82001. Our telephone
number is (307) 432-7000. In this prospectus, the terms "Company," "Great
Lakes,"we," "us" and "our" refer to Great Lakes Aviation, Ltd. and our
wholly-owned subsidiary RDU, Inc., unless the context otherwise requires.
RDU, Inc. currently has no activity and we are not utilizing it.
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RISK FACTORS
The prospectus contains or incorporates both historical and
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933, and Section 21E of the Securities Exchange Act of
1934. Words such as "anticipates", "believes", "expects", "intends",
"future", and similar expressions identify forward-looking statements. Any
such "forward-looking" statements in this prospectus reflect our current
views with respect to future events and financial performance, and are
subject to a variety of factors that could cause the actual results or
performance to differ materially from historical results or from the
anticipated results or performance expressed or implied by such
forward-looking statements. Because of such factors, we cannot assure you
that the actual results or developments that we anticipate will be realized
or, even if substantially realized, that they will have the anticipated
results. The risks and uncertainties that may affect our business include,
but are not limited to, those set forth below. You should not place undue
reliance on such forward-looking statements, which speak only as of the date
hereof. You should also be aware that, except as the law may otherwise
require, we undertake no obligation to publicly revise any such
forward-looking statements to reflect events or circumstances that may arise
after the date of this prospectus.
You should consider carefully the following risks before you decide
to buy our common stock. The risks and uncertainties described below are not
the only ones we face. Additional risks and uncertainties not presently known
to us may also adversely impact our business. If any of the following risks
actually occur, they could adversely affect our business, financial condition
or operating results, which could adversely affect the trading price of our
common stock.
OUR RELATIONSHIP WITH UNITED IS CRITICAL TO OUR FUTURE SUCCESS. We
generated approximately 94.5% of our revenues for the year ended December 31,
1999 from United through our code sharing relationship. The United Express
agreements expired on December 31, 1997. A failure to renew the United
Express agreements, any termination or materially adverse modification of the
agreements, or any substantial decrease in the number of routes served by us
under the agreements would have a materially adverse effect on our business.
As a result of the United Express agreements, our business is sensitive to
events and risks affecting United. If adverse events affect United's
business, our business will also be adversely affected. The expired United
Express agreements required us to comply with specific operating performance
standards and, with certain limited exceptions, restricted our ability to
merge with another company or dispose of our assets or aircraft without first
offering United a right of first refusal to acquire us or such assets or
aircraft. The expired United Express agreements also prohibited us from
entering into similar arrangements with other carriers in Chicago, Denver,
Minneapolis-St. Paul, Detroit, Des Moines or Omaha without United's prior
approval. The expired United Express agreements required us to obtain
United's prior consent to operate as a United Express carrier in any market,
except for certain pre-approved markets connecting with Minneapolis-St. Paul
or Detroit.
In addition, we participate in United's "Mileage Plus" frequent
flyer program, which makes us more competitive by enabling passengers to use
their Great Lakes frequent flyer miles on United flights. We also have a code
sharing agreement with United and participate in United's "Apollo"
reservation system, which gives us exposure to a larger number of customers.
Any inability to continue in these programs or enter into comparable programs
offered by other airlines could have a material adverse effect on our
operations.
GENERAL ECONOMIC CONDITIONS AFFECT THE AIRLINE INDUSTRY. The air
travel business historically fluctuates in response to general economic
conditions. The airline industry is sensitive to changes in economic
conditions that affect business and leisure travel and is highly susceptible
to unforeseen events that result in declines in air travel, including:
- political instability;
- regional hostilities;
- recession;
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- fuel price escalation;
- inflation;
- adverse weather conditions;
- labor instability; and
- regulatory oversight.
Economic conditions in the airline industry have contributed to a
number of bankruptcies and liquidations among airlines. If there is a
worsening of current economic conditions, or an extended period of recession
nationally or regionally, our business, financial condition and operating
results could be materially adversely affected.
THE COST OF FUEL IS IMPORTANT TO OUR SUCCESS. Fuel is a major
component of operating expense for all airlines. Our cost of fuel varies
directly with market conditions, we have no guaranteed long-term sources of
supply nor have we hedged the cost of our fuel needs at this time. Recently,
the industry, including us, has experienced increased fuel prices. Fuel
prices have increased dramatically, rising to 87.3 cents per gallon at
January 31, 2000, compared to 58.3 cents per gallon at October 31, 1999. We
intend generally to follow industry trends by raising fares in response to
significant fuel price increases. However, our ability to pass on increased
fuel costs through fare increases may be limited by economic and competitive
conditions. Accordingly, a reduction in the availability or an increase in
the price of fuel could have a materially adverse effect on our cash flow
from operations and profitability.
WE ARE CONTROLLED BY OUR PRINCIPAL SHAREHOLDER. Mr. Douglas G. Voss,
our Chief Executive Officer and President beneficially owns or controls
approximately 59% of the outstanding shares of our common stock. On October
22, 1996, Mr. Voss transferred approximately one-half of the shares of our
common stock then owned by him to his ex-spouse, Ms. Gayle R. Brandt,
pursuant to a marital dissolution stipulation and property settlement. Ms.
Brandt has granted Mr. Voss an Irrevocably Proxy to vote such securities
until June 28, 2010. If Ms. Brandt transfers any of the subject shares, the
transferee must give Mr. Voss an irrevocable proxy to vote all such shares on
all matters to which shareholders are entitled to vote for the term of the
agreement. In addition, the terms of the expired United Express agreements
required that Mr. Voss control at least 51% of our outstanding voting stock.
Accordingly, Mr. Voss will continue to be in a position to control our
management and affairs.
THE AIRLINE INDUSTRY IS SEASONAL AND CYCLICAL. Our operations
primarily depend on passenger travel demand, and, as such are subject to
seasonal variations. We have historically experienced lower passenger load
factors during the months of January through April and in November and
December. The airline industry is also a highly cyclical business with
substantial volatility. Airlines frequently experience short-term cash
requirements. This is caused by seasonal fluctuations in traffic, which often
put a drain on cash during off-peak periods, and various other factors,
including price competition from other airlines, national and international
events, fuel prices and general economic conditions, including inflation.
Because a substantial portion of airline travel is discretionary, our
operating and financial results may be negatively impacted by any downturn in
national or regional economic conditions in the United States. Airlines
require substantial liquidity to continue operating under most conditions.
The airline industry also has low gross profit margins and revenues that vary
to a substantially greater degree than do the related costs. Therefore, a
significant shortfall form expected revenue levels could have a material
adverse effect on our operations. Working capital deficits are not uncommon
in the airline industry since airlines typically have product inventories and
ticket sales not yet flown are reflected as current liabilities.
THE AIRLINE INDUSTRY HAS LOW GROSS PROFIT MARGINS AND HIGH FIXED
COSTS. The airline industry is characterized by low gross profit margins and
high fixed costs. The expenses of each flight do not vary
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significantly with the number of passengers carried and, therefore, a
relatively small change in the number of passengers, or in average fare or
traffic mix, could have a disproportionate effect on an airline's operating
and financial results. Accordingly, a minor shortfall from expected revenue
levels could have a material adverse effect on our results of operations.
WE HAVE A LIMITED NUMBER OF ROUTES. Because of our relatively small
fleet size and limited number of routes, we are at a competitive disadvantage
compared to other airlines that can spread their operating costs across more
equipment and routes and retain connecting traffic (and revenue) within their
much more extensive route networks.
WE USE A LIMITED NUMBER OF DIFFERENT AIRCRAFT TYPES. Our existing
fleet of 52 aircraft comprises 40 Beechcraft Model 1900D 19-passenger
aircraft, eight Embraer Brasilia 30-passenger aircraft and four Beechcraft
Model 1900C aircraft being used exclusively for freight operations. This
dependence on two aircraft types for substantially all of our flights could
have a material adverse effect on us in the event of a government directive
prohibiting or restricting the use of one of these aircraft type or in the
case of adverse public perception of one of these aircraft types.
WE HAVE A LIMITED NUMBER OF AIRCRAFT. We have a fleet of 52
aircraft, 20 of which are leased and 32 of which are owned. The limited
number of aircraft we operate involves financial risks not present for larger
carriers that are able to spread their operating costs over more equipment
and routes. Finally, in the event aircraft are removed from service for
unscheduled maintenance, repairs or other reasons, any resulting interruption
in service could materially and adversely affect our service, reputation and
profitability.
IF OUR OPERATING COSTS INCREASE AS OUR AIRCRAFT FLEET AGES AND WE
ARE UNABLE TO PASS ALONG SUCH COSTS, OUR EARNINGS WILL DECREASE. As our fleet
of aircraft ages, our maintenance costs will likely increase. There can be no
assurance that costs of maintenance, including costs to comply with aging
aircraft requirements, will not materially increase in the future. Any
material increase in such costs could have a material adverse effect on our
business, financial condition and results of operations. Because many
aircraft components are required to be replaced after specified numbers of
flight hours or take-off and landing cycles and because new aviation
technology may be required to be retrofitted, in general, the cost to
maintain aging aircraft will exceed the cost to maintain newer aircraft. We
believe that the cost to maintain our aircraft in the long-term will be
consistent with industry experience for these aircraft types and ages used by
comparable airlines. Amendments to FAA regulations are under consideration
which would require certain heavy maintenance checks and other additional
maintenance requirements for certain types of aging aircraft. While the
proposed amendments do not currently affect our fleet of aircraft, they may
be amended in the future to include aircraft operated by us. In addition, we
will be required to comply with any other future regulations or Airworthiness
Directives issued with respect to aging aircraft applicable to the aircraft
types that we operate.
THE AIRLINE INDUSTRY AND THE MARKETS WE SERVE ARE HIGHLY
COMPETITIVE. We compete with other airlines on the basis of pricing
scheduling (frequency and flight times), on-time performance, frequent flyer
programs and other services. We compete against both larger carriers with
substantially greater resources than we have available as well as smaller
carriers with low-cost structures. Many of our larger competitors have more
expansive marketing and advertising programs than we do and smaller carriers
may be able to offer prices at discounts lower than we are able to offer. New
carriers in many of our markets, as well as increased competition from or the
introduction of new services by existing carriers, could reduce ticket sales
and our operating results. We may be unable to compete effectively against
carriers with substantially greater resources or low-cost structures.
INCREASING NUMBER OF CONSOLIDATIONS AND ALLIANCES HAS ALSO INCREASED
COMPETITION. The United States airline industry has consolidated in recent
years and may further consolidate in the future. Consolidations have enabled
certain carriers to expand their operations and increase their presence in
certain markets. In addition, many major carriers have formed alliances with
regional carriers and foreign carriers. As a result, many of the regional
carriers with whom we compete with are larger and have substantially greater
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resources than we have. Continuing developments in the industry will affect
our ability to compete in the markets in which we operate.
WE SIGNIFICANTLY DEPEND ON OUR DENVER MARKET. Our growth has focused
and will continue to focus on adding flights to and from our Denver base of
operations, which was expanded in April 1998. Our growth strategy continues
to emphasize the Denver hub. A reduction in our share of the Denver market or
reduced passenger traffic to or from Denver could have a material adverse
effect on our financial condition and results of operations.
WE ARE SUBJECT TO VARIOUS GOVERNMENT REGULATIONS. We are subject to
regulation by the U.S. Department of Transportation, the Federal Aviation
Administration and certain other governmental agencies. The DOT principally
regulates economic issues affecting air service such as air carrier
certification and fitness, insurance, consumer protection and competitive
practices. The FAA primarily regulates flight operations, in particular
matters affecting air safety, such as airworthiness requirements for aircraft
and pilot and flight attendant certification. We believe we are in compliance
with all requirements necessary to maintain in good standing our operating
authority granted by the DOT and our air carrier operating certificate issued
by the FAA. Additional laws and regulations have been proposed from time to
time that could significantly increase the cost of our airline operations by,
for instance, imposing additional requirements or restrictions on operations.
There can be no assurance that we will continue to be able to comply with all
present and future rules and regulations or that the cost of continued
compliance will not have a material adverse effect on our results of
operations.
The FAA also has authority to issue maintenance directives and other
mandatory orders relating to, among other things, inspection of aircraft and
engines, fire retardant and smoke detection devices, increased security
precautions, collision and windshear avoidance systems, noise abatement and
the mandatory removal and replacement of aircraft parts.
OUR OPERATING COSTS COULD INCREASE AS A RESULT OF NEW REGULATIONS
THAT IMPOSE ADDITIONAL REGULATIONS AND REQUIREMENTS ON AIRLINES. Both federal
and state governments from time to time propose laws and regulations that
impose additional requirements and restrictions on airlines. New regulations,
such as recently enacted passenger safety measures, could increase our
operating costs and the operating costs significantly. We cannot predict
which laws and regulations will be adopted or the changes and increased
expense that they could cause. Accordingly, we cannot guarantee that future
legislative and regulatory acts will not have a material impact on our
operating results.
WE MUST FOLLOW SPECIFIC REQUIREMENTS FOR SECURITY AND DRUG TESTING
WHICH DO NOT NECESSARILY PROTECT US FROM SECURITY VIOLATIONS OR THE RISKS
INHERENT IN SUBSTANCE ABUSE VIOLATIONS. We are required to follow our FAA
approved program for air carrier security and drug testing. However, even
when complying with these measures, no guarantee can be given that we can
totally prevent security and controlled substance violations.
WE ARE AT A RISK OF SUBSTANTIAL LOSSES IN THE EVENT OF AN ACCIDENT
INVOLVING OUR AIRCRAFT. Any accident involving our aircraft could result in
claims for the death or injury of our passengers. Damage to our aircraft from
an accident could involve repair or replacement of such damaged aircraft and
result in its temporary or permanent loss from service. Moreover, any
aircraft accident, even if fully insured, could cause a public perception
that our aircraft are less safe or reliable than other aircraft, which could
have a negative effect on our business. The occurrence of one or more
incidents or accidents involving our aircraft would likely have a substantial
adverse effect on our public perception and future operations.
We are required by the DOT to carry liability insurance on each of
our aircraft. Although we believe that our current insurance coverage is
adequate, the amount of such coverage may be changed in the future or we may
be forced to bear substantial losses from accidents. Substantial claims
resulting from an accident in excess of related insurance coverage could have
a material adverse impact on us.
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WE ARE DEPENDENT ON OUR KEY PERSONNEL. Our management and operations
are dependent upon the efforts of our Chief Executive Officer and President
Douglas G. Voss, and a small number of management and operating personnel.
The loss of the services of key members of management could have an adverse
impact on our business.
WE ARE SUBJECT TO ANTI-TAKEOVER CONSIDERATIONS. As an Iowa
corporation, we are subject to certain anti-takeover provisions of Iowa law.
Certain provisions of the law could have the effect of delaying, deferring or
preventing a change in our control may discourage bids for our common stock,
and may adversely affect the market price of our stock.
WE MUST CONTINUE TO MEET NASDAQ MAINTENANCE REQUIREMENTS TO KEEP OUR
STOCK LISTED ON NASDAQ. Under the criteria for continued listing of
securities on the Nasdaq SmallCap Market, we must maintain $2,000,000 in net
tangible assets, a minimum bid price of $1.00, and a public float of at least
$1,000,000. In the event that we are unable to maintain the standards for
continued listing, our shares could be subject to delisting from the Nasdaq
SmallCap Market. Trading, if any, in our shares would thereafter be conducted
in the over-the-counter market on the OTC Bulletin Board established for
securities that do not meet the Nasdaq SmallCap Market listing requirements
or in what are commonly referred to as the "pink sheets." As a result,
investors may find it more difficult to dispose of or to obtain accurate
quotations as to the price of our common stock.
THE LOW PRICE OF OUR STOCK MAY RESULT IN LIQUIDITY PROBLEMS FOR
SHAREHOLDERS. In the event that we are unable to satisfy the maintenance
requirements for the Nasdaq SmallCap Market, our stock would be deemed a
"penny stock" and trading would be conducted in the "pink sheets" or the OTC
Bulletin Board. In the absence of the shares being quoted in Nasdaq, or
listed on an exchange, trading in the common stock would be covered by Rule
15g-9 promulgated under the Exchange Act. Under such rule, broker-dealers who
recommend such securities to persons other than established customers and
accredited investors must make a special written suitability determination
for the purchaser and receive the purchaser's written agreement to a
transaction prior to sale. The regulations require the delivery, prior to any
transaction involving a penny stock of a disclosure schedule explaining the
penny stock market and the risks associated with it. Consequently, such
classification, if it were to occur, could materially adversely affect the
ability of broker-dealers to sell our shares and the ability of purchasers in
this offering to sell their shares in the secondary market.
SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET BY THE SELLING
SHAREHOLDERS AND EXISTING INVESTORS COULD CAUSE OUR STOCK PRICE TO DECLINE.
We have 8,647,891 shares of common stock outstanding, including 5,700,000
shares held by selling shareholders, and have outstanding options to purchase
an additional 310,000 shares of common stock pursuant to various stock option
plans (of which 90,800 shares are currently vested). A selling shareholder
also has outstanding warrants to acquire an aggregate of 1,000,000 shares of
our common stock. The 6,700,000 shares in this offering will be freely
tradeable without restriction or further registration under federal
securities laws unless they are purchased by our affiliates as that term is
defined in SEC Rule 144 under the Securities Act. Substantially all of our
other outstanding shares of common stock, other than shares held by officers,
directors or other affiliates, and the shares held by Ms. Brandt which are
subject to a Shareholder Buy-Sell Agreement with Mr. Voss, are freely
tradeable. If the selling shareholders sell substantial amounts of our common
stock in the public market in this offering, the market price of our common
stock could decline. Sales in the public market also might make it more
difficult for us to sell our securities in the future at an appropriate time
and price.
OUR STOCK PRICE HAS BEEN VOLATILE IN THE PAST AND MAY BE VOLATILE IN
THE FUTURE. Our common stock is traded on the Nasdaq SmallCap Market. The
market price of our common stock has historically been somewhat volatile. We
believe the market price of our common stock could fluctuate substantially,
based on a variety of factors, including:
- quarterly fluctuations in results of operations,
- announcements by us of material events, and
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- changes in accounting treatments or principles.
The market price of our common stock may be affected by our ability
to meet or exceed analysts' or "street" expectations. Any failure to meet or
exceed such expectations could have an adverse effect on the market price of
our common stock. These fluctuations and general economic, political and
market conditions, such as recessions or international currency fluctuations
and demand for our products, may affect the market price of our common stock
either negatively or positively.
WE HAVE NOT PAID DIVIDENDS IN THE PAST. We have never declared or
paid cash dividends on our common stock. We currently intend to retain any
future earnings to fund operations and to continue development of our
business and do not expect to pay any cash dividends on our common stock in
the foreseeable future.
SELLING SHAREHOLDERS
The following table presents information regarding the selling
shareholders. The shares listed below represent the shares which each selling
shareholder owned on April 30, 2000 and the shares which each selling
shareholder may own upon the exercise of warrants.
The securities "beneficially owned" by a person are determined in
accordance with the SEC's definition of "beneficial ownership" and,
accordingly, may include securities owned by or for, among others, the
spouse, children or other relatives of such person, as well as other
securities over which the person has or shares voting or investment power or
securities which the person has the right to acquire within 60 days of April
30, 2000. The same shares may be beneficially owned by more than one person.
In the following table, percentage of beneficial ownership is based
on 8,647,891 outstanding shares of common stock. Shares issuable pursuant to
the exercise of warrants or options are deemed outstanding for computing the
percentage of the person holding such securities but are not deemed
outstanding for computing the percentage of any other person. Our
registration of the shares does not necessarily mean that the selling
shareholders will sell all or any of the shares covered by this prospectus.
<TABLE>
<CAPTION>
SHARES SHARES BENEFICIALLY PERCENTAGE OF SHARES
SHARES BENEFICIALLY INCLUDED OWNED IF ALL SHARES OWNED IF ALL SHARES
SELLING SHAREHOLDER OWNED BEFORE IN THE ARE SOLD IN THE ARE SOLD IN THE
THE OFFERING OFFERING OFFERING OFFERING
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<S> <C> <C> <C> <C>
Douglas G. Voss 5,400,000(1)(2) 5,200,000 200,000 1.8%
Gayle R. Brandt 2,350,000(1)(2) 2,350,000 0 0
Raytheon Aircraft 1,000,000(3) 1,000,000 0 0
Credit Corporation
10511 East Central
Wichita, KS 67206
Tennenbaum & Co., LLC 816,200(4) 816,200 0 0
1999 Avenue of the Stars
32nd Floor
Los Angeles, CA 90067
Michael E. Tennenbaum 816,200(5) 816,200 0 0
1999 Avenue of the Stars
32nd Floor
Los Angeles, CA 90067
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<CAPTION>
<S> <C> <C> <C> <C>
Iowa Great Lakes Flyers, Inc. 500,000(6) 500,000 0 0
1965 - 330th Street
Spencer, IA 51301
--------------------
</TABLE>
* Indicates an amount less than 1%.
(1) Ms. Brandt has granted to Mr. Voss an irrevocable proxy to vote all of her
shares of common stock until June 28, 2010. Mr. Voss and Ms. Brandt have
also entered into a Shareholder Buy-Sell Agreement with respect to such
shares. The term of the agreement is until June 28, 2010 or until such time
as Ms. Brandt does not own any such shares or we are dissolved or
liquidated. Pursuant to the agreement, Ms. Brandt could not sell any of the
subject shares until June 28, 1999, at which time she was able to sell
470,000 shares and an additional 235,000 shares in each year thereafter. If
Ms. Brandt transfers any of the subject shares, the transferee must give
Mr. Voss an irrevocable proxy to vote all such shares on all matters to
which shareholders are entitled to vote for the term of the agreement. Mr.
Voss, however, has been granted a right of first refusal to purchase for
the market price any of the subject shares which Ms. Brandt desires to so
sell. The agreement also provides Mr. Voss the option to purchase any of
the subject shares at any time during the term for the market price of
shares of common stock. This agreement provides that in any transaction in
which Mr. Voss sells greater than 5% of his shares of common stock, Mr.
Voss has the right to compel Ms. Brandt to include the subject shares held
by her in such transaction on the same terms as the shares of common stock
of Mr. Voss. In turn, Ms. Brandt has the right to have any of the subject
shares owned by her included by Mr. Voss in any transaction on a pro rata
basis. The agreement also provides Mr. Voss with the right to purchase the
shares at the market price upon the death of Ms. Brandt or upon an
involuntary disposition of the subject shares held by Ms. Brandt. Pursuant
to the agreement, Mr. Voss will vote all shares of common stock
beneficially owned by him (including the shares which are the subject of
the agreement) for the election of Ms. Brandt to the board of directors.
(2) Mr. Voss is the beneficial owner of 5,400,000 shares of common stock. This
includes 20,000 shares of common stock subject to currently exercisable
options. Ms. Brandt is the record owner of 2,350,000 shares of common
stock. The shares of common stock owned by Ms. Brandt and the 500,000
shares of common stock owned by Iowa Great Lakes Flyers, Inc. are included
in the 5,275,000 shares of common stock reported by Mr. Voss.
(3) Consists of a warrant for the purchase of an aggregate of 1,000,000 shares
of common stock.
(4) Beneficial ownership of all 816,200 shares of common stock is shared with
Michael E. Tennenbaum.
(5) Beneficial ownership of all 816,200 shares of common stock is shared with
Tennenbaum & Co. LLC.
(6) Beneficial ownership of all 500,000 shares of common stock is shared with
Douglas G. Voss.
SELLING SHAREHOLDERS' REGISTRATION RIGHTS
We have registered the shares of common stock being offered by the
selling shareholders pursuant to registration rights which were previously
granted to them. We also agreed to use our best efforts to keep the
registration statement effective for two years, until the selling
shareholders no longer hold or have the right to acquire shares, or until all
of their shares may be sold pursuant to SEC rules without volume
restrictions, whichever comes first. We also agreed to bear all expenses,
other than selling commissions and fees, in connection with the registration
and sale of the shares being offered by the selling shareholders.
Our registration of the shares does not necessarily mean that the
selling shareholders will sell all or any of the shares covered by this
prospectus.
9
<PAGE>
USE OF PROCEEDS
The shares offered by this prospectus will be sold by the selling
shareholders. We will not receive any of the proceeds from the sale of the
shares by the selling shareholders.
PLAN OF DISTRIBUTION
The selling shareholders, and any of their pledgees, assignees and
successors-in-interest, may from time to time sell any or all of their shares
on any stock exchange on which the shares are traded or in private
transactions. These sales may be at fixed or negotiated prices. The selling
shareholders may use any one or more of the following methods when selling
shares:
- ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
- block trades in which the broker-dealer will attempt to sell
the shares as agent but may purchase and resell a portion of
the block as principal to facilitate the transaction;
- purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
- an exchange distribution in accordance with the rules of the
applicable exchange;
- privately negotiated transactions;
- short sales;
- broker-dealers may agree with the selling shareholders to sell
a specified number of such shares at a stipulated price per
share;
- a combination of any such methods of sale; and
- any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares under SEC Rule 144, if
available, rather than under this prospectus.
The selling shareholders may engage in short sales, short sales
against the box, puts and calls and other transactions in our securities or
derivatives of our securities, and may sell or deliver shares in connection
with these trades. The selling shareholders may pledge their shares to their
brokers under the margin provisions of customer agreements. If a selling
shareholder defaults on a margin loan, the broker may, from time to time,
offer and sell the pledged shares.
Broker-dealers engaged by the selling shareholders may arrange for
other brokers-dealers to participate in sales. Broker-dealers may receive
commissions or discounts from the selling shareholders (or, if any
broker-dealer acts as agent for the purchaser of shares, from the purchaser)
in amounts to be negotiated. The selling shareholders do not expect these
commissions and discounts to exceed what is customary in the types of
transactions involved.
The selling shareholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of Section 2(a)(11) of the Securities Act. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
10
<PAGE>
We are required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to
the selling shareholders. We have agreed to indemnify the selling
shareholders against certain losses, claims, damages and liabilities,
including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the shares offered hereby was passed upon on our
behalf by Briggs and Morgan, Professional Association, Minneapolis, Minnesota.
EXPERTS
The consolidated financial statements incorporated in this
prospectus by reference from our Annual Report on Form 10-K for each of the
years in the three-year period ended December 31, 1999 have been audited by
KPMG LLP, independent auditors, as stated in their reports, which are
incorporated herein by reference, and have been so incorporated in reliance
upon the report of such firm given upon their authority as experts in
accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any documents we file
at the SEC's public reference rooms in Washington, D.C., New York, New York,
and Chicago, Illinois. Please call the SEC at 1-800-732-0330 for further
information on the public reference rooms. Our SEC filings are also available
to the public from the SEC's Web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you
by referring you to documents we file with the SEC. The information
incorporated by reference is considered to be part of this prospectus.
Information that we later file with the SEC will automatically update and
supersede this information. We incorporate by reference the documents listed
below and any future filings made with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934, until the registration
statement covering the shares is no longer effective:
- Annual Report on Form 10-K for the year ended December 31,
1999;
- Quarterly Report on Form 10-Q for the quarter ended March 31,
2000;
- Description of our common stock contained in our Registration
Statement on Form 8-A (No. 0-23224) filed on January 18, 1994;
and
- Definitive Schedule 14A Proxy Statement filed on April 25,
2000.
This prospectus is part of a registration statement we filed with
the SEC. You may request a copy of the registration statement or any of the
above filings, at no cost, by writing or telephoning our Chief Executive
Officer at the following address:
Great Lakes Aviation, Ltd.
1022 Airport Parkway
Cheyenne, Wyoming 82001
(307) 432-7000
11
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================================================================================
YOU SHOULD RELY ON THE INFORMATION CONTAINED IN THIS DOCUMENT OR THAT TO
WHICH WE HAVE REFERRED YOU. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
INFORMATION THAT IS DIFFERENT. YOU SHOULD NOT ASSUME THAT THE INFORMATION IN
THIS DOCUMENT IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON THE FRONT OF
THIS DOCUMENT. THIS PROSPECTUS IS NOT AN OFFER TO SELL NOR IS IT SEEKING AN
OFFER TO BUY ANY SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT
PERMITTED.
----------------------------
TABLE OF CONTENTS
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<TABLE>
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PAGE
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<S> <C>
Prospectus Summary...................................................... 2
Risk Factors............................................................ 3
Selling Shareholders.................................................... 8
Use of Proceeds......................................................... 10
Plan of Distribution.................................................... 10
Legal Matters........................................................... 11
Experts................................................................. 11
Where You Can Find More Information..................................... 11
</TABLE>
6,700,000 SHARES
GREAT LAKES AVIATION, LTD.
COMMON STOCK
------------------------------
PROSPECTUS
-----------------------------
__________, 2000
================================================================================
<PAGE>
PART II - INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the various expenses payable by us in
connection with the sale and distribution of the shares being registered. All
amounts shown are estimates, except the registration fee.
<TABLE>
<S> <C>
SEC registration fee...................................................$ 6,640
----------
Legal fees and expenses................................................ 5,000
----------
Accounting fees and expenses........................................... 2,000
----------
Miscellaneous (including listing fees, if applicable).................. 1,000
----------
Total.............................................................$ 14,640
==========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 851 of the Iowa Business Corporation Act, permits a
corporation through its Articles of Incorporation to eliminate or limit its
directors' personal liability to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director, with certain
exceptions. The exceptions include a breach of the director's duty of
loyalty, acts or omissions not in good faith or which involve a knowing
violation of law, and transactions from which the director derives an
improper personal benefit or which result in an unlawful distribution to the
stockholders. The limitation of liability provision does not eliminate a
stockholder's right to seek non-monetary, equitable remedies such as
injunction or recission to redress an action taken by directors. However, as
a practical matter, equitable remedies may not be available in all situations
and there may be instances in which no effective remedy is available.
We maintain directors and officers insurance against liability which
may be incurred by directors and officers in such capacities.
Article 4 of our Amended and Restated Articles of Incorporation and
our Bylaws provide that our past or present directors and officers shall be
indemnified by us in accordance with the terms of the Iowa Business
Corporation Act.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
5.1 Opinion of Briggs and Morgan, Professional Association
23.1 Consent of Briggs and Morgan, Professional Association (included in
Exhibit 5.1)
23.2 Consent of KPMG LLP
24.1 Power of Attorney (included on signature page to the Registration
Statement)
ITEM 17. UNDERTAKINGS
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective
amendment thereof) which,
<PAGE>
individually or in the aggregate, represent a
fundamental change in the information set forth
in the registration statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in
the registration statement or any material change to
such information in the registration statement;
provided, however, that the undertakings set forth in paragraphs (i) and (ii)
above do not apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in periodic reports
filed by the registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in the registration statement shall be deemed to be
a new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the registrant pursuant to the provisions summarized
in Item 15 above, or otherwise, the registrant has been advised that in the
opinion of the SEC such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer, or
controlling person of the registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Cheyenne, State of Wyoming, on June
1, 2000.
GREAT LAKES AVIATION, LTD.
By /s/ Douglas G. Voss
-------------------------------------------
Douglas G. Voss
President, Chief Executive Officer
and Director
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below hereby constitutes and appoints Douglas G. Voss and Richard A.
Hanson, jointly and severally, his or her true and lawful attorneys-in-fact,
each with full power of substitution, for him or her in any and all
capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, and to file the same, with all
exhibits thereto and all documents in connection therewith, with the SEC,
hereby ratifying and confirming all that each of said attorneys-in-fact or
any of them, or his or their substitute or substitutes, may lawfully do or
cause to be done or by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons on the dates
and in the capacities indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Douglas G. Voss President and Chief Executive June 1, 2000
------------------------------- Officer and Director (Principal
Douglas G. Voss Executive Officer)
/s/ Richard A. Hanson Vice President-finance (Principal June 1, 2000
------------------------------- Financial Officer and Principal
Richard A. Hanson Accounting Officer)
/s/ Vernon A. Mickelson Director June 1, 2000
-------------------------------
Vernon A. Mickelson
/s/ Gayle R. Brandt Director June 1, 2000
-------------------------------
Gayle R. Brandt
/s/ Ivan L. Simpson Director June 1, 2000
-------------------------------
Ivan L. Simpson
</TABLE>
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
------- ----------------------------------------------------------------------
<S> <C>
5.1 Opinion of Briggs and Morgan, Professional Association
23.1 Consent of Briggs and Morgan, Professional Association (included in
Exhibit 5.1)
23.2 Consent of KPMG LLP
24.1 Power of Attorney (included on signature page to Registration
Statement)
</TABLE>
