<PAGE>
As filed with the Securities and Exchange Commission on July 5, 1996
Registration No. 333-_____
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------------------
FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
----------------------------------
FRONTIER AIRLINES, INC.
(Exact name of Registrant as specified in its charter)
Colorado 12015 East 46th Avenue 84-1256945
(State or other Denver, Colorado 80239 (I.R.S. Employer
jurisdiction of (303) 371-7400 Identification Number)
incorporation or (Address, including zip
organization) code, and telephone number,
including area code, of
Registrant's principal
executive office)
Copy to:
Arthur T. Voss Douglas R. Wright, Esq.
Frontier Airlines, Inc. Parcel, Mauro, Hultin, & Spaanstra, P.C.
12015 East 46th Avenue 1801 California Street, Suite 3600
Denver, Colorado 80239 Denver, Colorado 80202
(303) 371-7400 (303) 292-6400
(Name, address, including
zip code, and telephone
number, including area code,
of agent for service of process)
Approximate date of commencement of proposed sale to the public: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to 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. [ ]
CALCULATION OF REGISTRATION FEE
[Table continued on following page]
================================================================================
<TABLE>
<CAPTION>
Proposed Proposed
maximum maximum
Amount to offering aggregate Amount of
Titles of securities be price per offering registration
to be registered registered share price fee
- ----------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, no par value 678,733 $ 9.00/(1)/ $6,108,597 $2,106.43
Shares
- ----------------------------------------------------------------------------------
Common Stock, no 110,000 $ 5.525/(2)/ $ 607,750 $ 209.57
par value, issuable Shares
upon exercise of a
warrant to purchase
common stock
- ----------------------------------------------------------------------------------
Common Stock, no 110,000 $ 5.00/(3)/ $ 550,000 $ 189.65
par value, issuable Shares
upon exercise of
warrants to purchase
common stock
- ----------------------------------------------------------------------------------
Common Stock, no 200,000 $ 5.00/(4)/ $1,000,000 $ 344.83
par value, issuable Shares
upon exercise of
Warrants to
purchase
common stock
- ----------------------------------------------------------------------------------
Common Stock, no 140,000 $ 7.19 $1,006,600 $ 347.10
par value, issuable Shares
upon exercise of
Warrants to purchase
common stock
==================================================================================
Total Fee Paid Herewith $3,197.58
==================================================================================
</TABLE>
(1) Based upon the closing bid price of the Common Stock on the Nasdaq SmallCap
Market on June 27, 1996.
(2) Based upon the exercise price of the Warrant to purchase Common Stock of
$5.525 per share.
(3) Based upon the exercise price of the Warrant to purchase Common Stock of
$5.00 per share.
(4) Based upon the exercise price of the Warrant to purchase Common Stock of
$5.00 per share.
(5) Based upon the exercise price of the Warrant to purchase Common Stock of
$7.19 per share.
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>
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.
SUBJECT TO COMPLETION, DATED JULY 5, 1996
PROSPECTUS
FRONTIER AIRLINES, INC.
-------------------
1,238,733 SHARES OF COMMON STOCK
------------------
This Prospectus covers 1,238,733 shares (the "Shares") of the Common
Stock, no par value, ("Common Stock"), of Frontier Airlines, Inc. (the
"Company"), of which 560,000 Shares are issuable upon the exercise of certain
warrants (the "Warrants") held by certain persons. Holders of the Shares are
referred to herein as the "Selling Shareholders". Exclusive of any proceeds the
Company may receive upon the exercise of the Warrants, the Company will not
receive any of the proceeds from the sale of the Shares by the Selling
Shareholders. See "Selling Shareholders".
The Shares are being offered by the Selling Shareholders through
brokers' and dealers' transactions, not involving any underwriter. Brokers or
dealers through whom the Shares are sold may receive compensation in the form of
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom they act as agent. See "Plan of Distribution".
The Common Stock is traded in the over-the-counter market and is
quoted on the Nasdaq SmallCap Market under the symbol "FRNT." On July ___,
1996, the closing bid price of the Common Stock on the Nasdaq SmallCap Market
was $________.
--------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------------------------
FOR A DISCUSSION OF CERTAIN MATTERS THAT SHOULD BE CONSIDERED BY PROSPECTIVE
PURCHASERS OF THE SECURITIES, SEE "PRINCIPAL RISK FACTORS" AT PAGE 5 HEREOF.
--------------------------------
The date of this Prospectus is July ___, 1996.
<PAGE>
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained or
incorporated by reference in this Prospectus in connection with the offer
contained in this Prospectus and, if given or made, such information or
representations must not be relied upon as having been authorized by the
Company. Neither the delivery of this Prospectus nor any sale hereunder shall,
under any circumstances, create any implication that there has been no change in
the affairs of the Company since the date hereof. This Prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy any security
other than the securities covered by this Prospectus, nor does it constitute an
offer or solicitation by anyone in any jurisdiction in which such offer or
solicitation is not authorized, or in which the person making such offer or
solicitation is not qualified to do so, or to any person to whom it is unlawful
to make such offer or solicitation.
AVAILABLE INFORMATION
The Company is subject to the reporting requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and accordingly files
reports, proxy statements, and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements, and
other information filed with the Commission are available for inspection and
copying at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549, and at
certain of the Commission's regional offices located at Northwestern Atrium
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and Seven
World Trade Center, New York, New York 10048, upon payment of the charges
prescribed therefor by the Commission.
The Company has filed with the Commission a registration statement on
Form S-3 (herein, together with all amendments and exhibits, referred to as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement. Copies of the Registration Statement are
available from the Commission as set forth above.
The Common Stock of the Company is currently traded in the over-the-
counter market and is quoted on the Nasdaq SmallCap Market. Reports, proxy
statements and other information filed by the Company therewith can be inspected
at the National Association of Securities Dealers, Inc., 1735 K Street N.W.,
Washington, D.C. 20006.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company (File No. 0-4877) with
the Commission pursuant to the Exchange Act are incorporated herein by
reference:
1. Annual Report on Form 10-KSB for the fiscal year ended March 31,
1996.
-2-
<PAGE>
2. A description of the Company's Common Stock contained in the
Registration Statement on Form 8-A as declared effective by the Securities and
Exchange Commission on May 19, 1994.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus and
prior to the termination of the offering of the Common Stock shall be deemed to
be incorporated by reference into this Prospectus and to be a part hereof from
the date of filing of such documents.
Any statement contained in a document 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 a statement 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.
The Company will provide without charge to each person, including any
beneficial owner, to whom a Prospectus is delivered, upon written or oral
request of such person, a copy of any or all of the documents which are
incorporated by reference herein, other than exhibits to such documents which
are not specifically incorporated by reference herein. Requests should be
directed to Frontier Airlines, Inc., 12015 East 46th Avenue, Denver, CO 80239,
Attention: Arthur T. Voss (telephone 303-371-7400).
-3-
<PAGE>
THE COMPANY
Frontier Airlines, Inc. (the "Company") is a low-fare, full-service airline
based in Denver, Colorado. Principally serving markets abandoned by Continental
Airlines during that carrier's downsizing of its Denver hub in 1993 and 1994,
the Company currently operates routes linking its Denver hub to 15 cities in 12
states covering the western two-thirds of the United States. The Company's
current route system extends from Denver to Los Angeles, San Diego and San
Francisco, California; Chicago, Illinois; Seattle/Tacoma, Washington; Las Vegas,
Nevada; Phoenix, Arizona; St. Louis, Missouri; Minneapolis/St. Paul, Minnesota;
Salt Lake City, Utah; Omaha, Nebraska; Albuquerque, New Mexico; El Paso, Texas;
and Bismarck and Fargo, North Dakota. At present, the Company utilizes four
gates at the new Denver International Airport ("DIA") for approximately 54 daily
flight departures and arrivals.
Organized in February 1994, the Company commenced flight operations in July
1994 with two leased Boeing 737-200 jet aircraft. It has since expanded its
fleet to nine leased jets, including five Boeing 737-200s, two Boeing 737-300s
added to the fleet in November 1995, and two additional Boeing 737-200s added in
June 1996. The Company has agreed to lease a third Boeing 737-300 scheduled for
delivery in April 1997. Pending future aircraft availability, the Company plans
to lease additional jets in the 737 series for possible deliveries in the second
half of 1996 and in 1997, which would permit the Company to further expand its
lines of service.
The Company's business strategy is to further develop its Denver hub by
introducing low-fare service in additional high-volume markets formerly served
by Continental Airlines. Management believes that potential markets for its
planned route expansions can support a higher volume of flight capacity than now
provided by the incumbent carriers and that passengers would welcome the
restoration of additional capacity, particularly at the low fares and quality
service offered by the Company.
The Company's senior management team includes executives with substantial
service in the airline industry, including persons who occupied similar
positions at a former airline called Frontier Airlines that served regional
routes to Denver from 1950 to 1986. From time to time, the former Frontier
Airlines served all of the Company's current and intended markets with jet
equipment from its Denver hub.
The Company's principal office is located at 12015 East 46th Avenue,
Denver, Colorado 80239, and its telephone number is (303) 371-7400.
-4-
<PAGE>
PRINCIPAL RISK FACTORS
Risks Related to the Airline Industry Generally
Effect of General Economic Conditions; Seasonality. The airline
industry is significantly affected by general economic conditions. Because a
substantial portion of business and personal airline travel is discretionary,
the industry tends to experience severe adverse financial results during general
economic downturns. Economic and competitive conditions since deregulation of
the airline industry in 1978 have contributed to a number of bankruptcies and
liquidations among airlines. A worsening of current economic conditions, or an
extended period of recession nationally or regionally, could have a materially
adverse effect on the Company's operations. The Company's business also is
seasonal, which can affect the Company's results of operations from quarter to
quarter.
Low Margin and High Fixed Cost Business. The airline industry is
characterized by low gross profit margins, with fixed costs that are high in
relation to revenues. Accordingly, a shortfall from expected revenue levels can
have a material adverse effect on profitability, including the Company's.
Increases in Fuel Costs. Fuel is a major component of operating
expense for all airlines. Both the cost and availability of fuel are subject to
many economic and political factors and events occurring throughout the world.
During the period commencing with inauguration of the Company's flight
operations in July 1994 and ending March 31, 1995, fuel accounted for 14.5% of
the Company's total operating expenses. Fuel accounted for 14.4% of the
Company's total operating expenses for the year ended March 31, 1996. Fuel
costs per gallon for the year ended March 31, 1996 were approximately 4.52 cents
higher than the average cost per gallon for the prior fiscal year. Fuel costs
increased slightly during the second calendar quarter of 1996. The Company has
no agreement with any fuel suppliers assuring the availability and price
stability of fuel. In August 1993, the United States increased taxes on domestic
fuel, including aviation fuel, by 4.3 cents per gallon. Airlines were exempt
from this tax increase until October 1, 1995, at which time airlines became
subject to the tax increase. The airline industry has proposed a continuation of
this exemption, but it appears unlikely that Congress will approve the
extension. The Company anticipates the increased taxes will substantially
increase fuel costs in the next fiscal year. Based on approximately 30 million
gallons of fuel consumed annually and assuming its current nine aircraft fleet,
the fuel tax increases the Company's annual costs by approximately $1,290,000.
The future cost and availability of fuel to the Company cannot be predicted, and
substantial sustained price increases or the unavailability of adequate fuel
supplies could have a material adverse effect on the Company's operations and
profitability. Because newer aircraft are more fuel efficient than the Company's
Boeing 737-200 aircraft, a significant increase in the price of jet fuel would
therefore result in a higher increase in the Company's total costs than those of
competitors using more fuel-efficient aircraft. In addition, larger airlines may
have a competitive advantage because they pay lower prices for higher quantities
of fuel. The Company intends generally to follow industry trends by raising
fares in response to significant fuel price increases. However, the Company's
ability to pass on increased fuel costs through fare increases may be limited by
economic and competitive conditions, particularly given the Company's low fare
strategy.
-5-
<PAGE>
Federal Regulation. The Company has obtained the necessary authority
to conduct flight operations, including a Certificate of Public Convenience and
Necessity from the Department of Transportation ("DOT") and an operating
certificate from the FAA; however, the continuation of such authority is subject
to continued compliance with applicable statutes, rules and regulations
pertaining to the airline industry, including any new rules and regulations that
may be adopted in the future. Management believes that small and start-up
airlines are often subject to strict scrutiny by FAA officials, making them
susceptible to regulatory demands that can negatively impact their operations.
No assurance can be given that the Company will continue to comply with all
present and future rules and regulations. In addition, the Company can give no
assurance about the costs of compliance with such regulations and the effect of
such compliance costs on the profitability of the Company. In May 1996 a
relatively new domestic airline, as is the Company, sustained an accident in
which one of its aircraft was destroyed and all persons on board were fatally
injured. In June that airline agreed at the FAA's request to cease all of its
flight operations for an indefinite period of time. Should the Company
experience a similar accident, it would have a material adverse effect on the
Company's business.
Risks Related to the Company
Net Losses; Substantial Third-Party Credit; Limited Operating History.
The Company had net losses of $7,999,000 and $5,582,000 for the years ended
March 31, 1995 and 1996, respectively. The Company had a working capital deficit
of $47,000 at March 31, 1996. The Company's suppliers currently provide goods,
services and operating equipment on open credit terms. If such terms were
modified to require immediate cash payments, the Company would be materially
adversely affected. The Company has a limited operating history in a highly
competitive industry, and it faces all of the difficulties inherent in a
relatively new entrant in the airline industry.
Need for Additional Financing. The airline industry is capital
intensive. Although management believes that the Company can meet its cash
requirements for the next 12 months and will not require additional financing
for operations during that time, there can be no assurance that the Company will
not require additional financing.
Operating Plan. The Company's success will depend primarily on the
success of the Company's business strategy. In its first 18 months of operation,
the Company was compelled to modify its strategy due to market conditions and
the actions of competitors. The Company's strategy is based on existing market
conditions for airline service to and from Denver and management's perception of
potential profitable routes. The Company's routes could become uneconomical, for
example, if the economies of its market area or other parts of the United States
deteriorate or if competitors take actions that affect the Company's market
share or revenues. Accordingly, there is no assurance that the Company's
business strategy will prove successful. The success of the Company may
ultimately depend on management's ability to react expeditiously and effectively
to exigencies that affect the Company's business.
Costs at Denver International Airport. DIA opened in March 1995, and
Stapleton International Airport ("Stapleton") was closed. Financed through
revenue bonds, DIA depends on
-6-
<PAGE>
landing fees, gate rentals and other income from airlines, the traveling public
and others to pay debt service and support operations. As a new airport, DIA's
cost of operation has not been firmly established. Generally, the Company's cost
of operations at DIA will vary as traffic increases or diminishes at that
airport. Management believes that the Company's operating costs at DIA will
substantially exceed those it would have incurred at Stapleton or that other
airlines incur at hub airports in other cities. The cost to the Company to
operate at DIA may make it difficult for the Company to operate economically at
that airport.
Limited Number of Routes. Because of its small fleet size and limited
number of routes, the Company is at a competitive disadvantage compared to other
airlines such as United 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.
Competition. The airline industry is highly competitive, primarily due
to the effects of the Airline Deregulation Act of 1978 (the "Deregulation Act"),
which has substantially eliminated government authority to regulate domestic
routes and fares and has increased the ability of airlines to compete with
respect to flight frequencies and fares. The Company competes with United
Airlines in ten of the Company's markets, and anticipates that it will compete
principally with United Airlines in its future market entries. United Airlines
is the dominant carrier out of DIA and a formidable competitor of the Company.
The Company also competes with other carriers in its markets. Most if not all of
the Company's current and potential competitors have significantly greater
financial resources, larger route networks and superior market identity than the
Company.
Risks of Third-Party Deposits. As of March 31, 1996 the Company had
deposited $625,000 in connection with its aircraft leases with USAir, Inc. In
addition, as of March 31, 1996, the Company had deposited $6,091,000 with USAir,
Inc. related to aircraft maintenance. These deposits are unsecured, and any
bankruptcy, insolvency or other financial or operational problems encountered by
the lessor could result in a loss of all or a substantial portion of such
deposits and could materially and adversely affect the Company's business and
operations.
Dependence on Executive Officer. The Company is dependent on the
active participation of Samuel D. Addoms, its President and Chief Executive
Officer. The loss of his services could materially and adversely affect the
business of the Company and its future prospects. The Company does not maintain
key person life insurance on any of the Company's officers nor does it have
employment agreements with its executive officers.
Airport and Gate Access. The Company has not initially encountered
barriers to airport or airport gate access. However, any condition that would
deny or limit the Company's access to the airports that the Company intends to
utilize in the future or that diminishes the desire or ability of potential
customers to travel between any of those cities may have a materially adverse
effect on the Company's business. In addition, gates may be limited in some
airports, which could adversely affect the Company's operations.
-7-
<PAGE>
Certain Risks Associated with Aircraft. The Company leases five Boeing
737-200 aircraft, manufactured in 1968 and 1969, and two additional Boeing 737-
200 aircraft, manufactured in 1981. The Company also leases two Boeing 737-300
aircraft manufactured in 1985 and 1986.
A. Maintenance. Under its aircraft lease agreements, the Company is
required to bear all routine and major maintenance expenses. Maintenance
expenses comprise a significant portion of operating expenses. In addition, the
Company is required periodically to take aircraft out of service for heavy
maintenance checks, which can adversely affect revenues. The Company also may be
required to comply with regulations and airworthiness directives issued by the
Federal Aviation Administration ("FAA"), the cost of which may be partially
assumed by the Company's aircraft lessors depending upon the magnitude of the
expense. There can be no assurance that the Company will not incur higher than
anticipated maintenance expenses, particularly with respect to its older Boeing
737-200 aircraft. The Company's leased aircraft are in compliance with all FAA-
issued Airworthiness Directives ("ADs"). However, the Company cannot assure that
other ADs will not become due in the future.
B. Stage 3 Noise Regulations. According to FAA rules, each new entrant
airline such as the Company must presently have at least 25 percent of its fleet
in compliance with the FAA's Stage 3 noise level requirements. The balance of
each airline's fleet must be brought into compliance with Stage 3 in phases,
with 50 percent compliance by January 1997, 75 percent compliance by January
1999 and full compliance by January. Six of the Company's seven leased Boeing
737-200 aircraft do not presently meet Stage 3 requirements, although one of
these aircraft will be placed in compliance by January 1, 1997. The two Boeing
737-300 aircraft leased by the Company are Stage 3 compliant. This will permit
the Company to meet the FAA Stage 3 noise level requirements until January 1999,
assuming a fleet of four Stage 3 compliant aircraft and the five non-compliant
aircraft. After January 1, 1999, the Company would either need to have
additional Stage 3 compliant jets in service or to equip its existing Boeing
737-200 aircraft with FAA-certified "hush" kits in order to meet 75 percent
Stage 3 compliance. Such kits for the Boeing 737-200s are currently available
for approximately $1.3 million per aircraft.
Availability of Aircraft. The demand for and lease prices of used
aircraft have increased significantly over the past year. The Company cannot
predict how long suitable aircraft will continue to be available, and additional
aircraft may not be available on satisfactory terms or at the times needed for
the Company's operations.
Lack of Spare Aircraft. The Company currently schedules all nine of
its aircraft in regular passenger service with virtually no spare aircraft
capability in the event one or more aircraft is removed from scheduled service
for unplanned maintenance repairs or other reasons. The Company expects this
will remain the case, even as its fleet grows. Moreover, the Company's insurance
for aircraft loss or damage carries a deductible requiring the Company to pay up
to the first $500,000 of loss or damage unless the aircraft is determined to be
a total loss. The loss of use of one or more of the Company's aircraft for a
significant period of time could have a materially adverse effect on the
Company's operations and operating results.
-8-
<PAGE>
Employee Relations. The Company believes that it operates with lower
personnel costs than many established airlines, principally due to lower base
salaries and greater flexibility in the utilization of personnel. There can be
no assurance that the Company will continue to realize these advantages over
established or other air carriers for any extended period of time. None of the
Company's employees is represented by a labor union. If unionization of the
Company's employees occurs, the Company's costs could materially increase.
Reliance on Others. At certain airports, the Company has entered into
agreements with contractors, including other airlines, to provide facilities and
services required for its operations, including maintenance, aircraft ground
handling, and passenger ticketing and check-in. AMR Ground Services provides
aircraft ground handling services for the Company at its Denver hub and
Continental Airlines provides both routine and nonroutine aircraft maintenance
for the Company at DIA, which agreements are subject to termination on 60 days
notice. In the event such agreements were terminated, the Company believes that
it would be able to arrange for ground handling and maintenance through other
contractors or by using its own employees. However, any such alternate
arrangements could be more expensive than current services.
Limitation of Liability and Indemnification. The Company's Articles of
Incorporation eliminates the personal liability of its directors to the Company
and its shareholders for monetary damages for breach of the directors' fiduciary
duties in certain circumstances. The Company's Bylaws provide that the Company
will indemnify its officers and directors to the fullest extent permitted by
law.
Market Effects of Stock and Warrants. As of the date of this
Prospectus, 678,733 of the Shares are "restricted securities" and, as such, are
generally not available for sale in the public market by the holders of the
Shares. Assuming exercise of the Warrants, a total of 1,238,733 additional
shares of the Company's Common Stock will be available for trading in the public
market. This increase in the number of shares of the Company's Common Stock in
the market, and the possibility of sales of such stock, may have a depressive
effect on the price of the Company's Common Stock in the market. Assuming
exercise of the Warrants, the 1,238,733 additional shares available for trading
in the public market would constitute aproximately 12% of the then outstanding
shares of Common Stock of the Company.
Volatility of Price of Common Stock. The market price for shares of
the Company's Common Stock may be highly volatile depending on news
announcements or changes in general market conditions. In recent years the
stock market has experienced extreme price and volume fluctuations.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale by the Selling
Shareholders of the Shares offered hereby. See "Selling Shareholders."
Certain of the Selling Shareholders currently hold warrants to
purchase 560,000 Shares at exercise prices ranging from $5.00 to $7.19 per
share. In the event the Selling Shareholders or their
-9-
<PAGE>
transferees exercise all of the warrants for 560,000 Shares, the proceeds to the
Company would be $3,164,350 and would be used for general corporate purposes.
SELLING SHAREHOLDERS
The 1,238,733 Shares registered for sale hereunder are comprised of
the following: (i) an aggregate of 678,733 Shares issued to certain
institutional purchasers in April 1996; (ii) an aggregate of 220,000 Shares
issuable upon the exercise of warrants issued to 11 Selling Shareholders in
connection with the Company's initial public offering; and (iii) an aggregate of
340,000 Shares issuable upon the exercise of warrants issued to three Selling
Shareholders in connection with the lease by the Company of certain aircraft.
Assuming exercise of the Warrants, the Shares registered hereunder would
represent approximately 12% of the Company's issued and outstanding Common
Stock.
The following list sets forth (i) the names of the Selling
Shareholders; (ii) their affiliation or material relationship with the Company,
if any during the last three years; (iii) the amount of Shares owned by each
prior to this offering; (iv) the amount of Shares being offered hereunder for
each Selling Shareholder's account; and (v) the amount of Shares held by each
and (if 1% or more) the percentage of the class owned by each Selling
Shareholder after completion of this offering.
<TABLE>
<CAPTION>
Shares Owned Shares Shares Owned
Before Offered After This
Name/1/ this Offering/2/ Hereunder/2/ Offering/3/
- --------------------------- ---------------- ------------ ------------
<S> <C> <C> <C>
The Copernicus Fund, L.P. 59,578 59,578 -0-
The Galileo Fund, L.P. 119,155 119,155 -0-
Paribus Corporation 200,000 200,000 -0-
Plymouth Partners, L.P. 300,000 300,000 -0-
Cohig & Associates, Inc. 213,136 152,900 60,236
Eugene McColley 17,300 14,300 3,000
Steven Bathgate 34,100 12,100 22,000
Steven Hinkle 38,964 9,900 29,064
Edward Larkin 17,964 4,400 13,564
Rike Wootten 16,013 1,100 14,913
- -------------------------------------------------------------------------------
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
Shares Owned Shares Shares Owned
Before Offered After This
Name/1/ this Offering/2/ Hereunder/2/ Offering/3/
- --------------------------- ---------------- ------------ ------------
<S> <C> <C> <C>
Fred Birner 15,812 9,240 6,572
Dennis Genty 15,541 6,160 9,381
James Hosch 10,064 5,500 4,564
David C. Olson 6,764 2,200 4,564
David H. Drennen 6,764 2,200 4,564
Polaris Holding Company 140,000 140,000 -0-
General Electric Capital
Corporation 100,000 100,000 -0-
GPA II Limited 100,000 100,000 -0-
- --------------------------------------------------------------------------------
</TABLE>
_________________________
/1/ The names of the Selling Shareholders listed above are the
beneficial owners of the securities and are not necessarily the
holders of record.
/2/ These share amounts include Shares issuable upon exercise of
Warrants.
/3/ Assumes that all of the Shares being offered hereunder will be
sold.
PLAN OF DISTRIBUTION
The Selling Shareholders may, from time to time, offer the Shares
through dealers or brokers, who may receive compensation in the form of
commissions from the Selling Shareholders and/or the purchasers of the Shares
for whom they may act as agents. As of the date hereof, no Selling Shareholder
has advised the Company that it has entered into any agreement or understanding
with any dealer or broker for the offer or sale of the Shares. The Selling
Shareholders may enter into such agreements or understandings in the future.
The Selling Shareholders may also offer some or all of
-11-
<PAGE>
the Shares through market transactions on the National Association of Securities
Dealers Automated Quotation System (Nasdaq) SmallCap Market, on which the
Company's Common Stock is traded. Sales of the Shares through brokers may be
made by any method of trading authorized by the Nasdaq SmallCap Market,
including block trading in negotiated transactions. Without limiting the
foregoing, such brokers may act as dealers by purchasing any or all of the
Shares covered by this Prospectus. Sales of Shares are, in general, expected to
be made at the market price prevailing at the time of each such sale; however,
prices in negotiated transactions may differ considerably. No Selling
Shareholder has advised the Company that it anticipates paying any
consideration, other than usual and customary broker's commissions, in
connection with sales of the Shares. The Selling Shareholders are acting
independently of the Company in making decisions with respect to the timing,
manner and size of each sale.
Shares issuable upon exercise of the Warrants held by certain of the
Selling Shareholders will be issued directly by the Company to the Selling
Shareholders. No brokerage commission or similar fee will be paid in connection
with the issuance of such Shares. The Company will bear all expenses in
connection with the registration of the Shares covered by this Prospectus.
LEGAL MATTERS
Certain legal matters with respect to the legality of the Shares
offered hereby and the organization and existence of the Company have been
passed upon for the Company by Parcel, Mauro, Hultin & Spaanstra, P.C., Denver,
Colorado.
EXPERTS
The financial statements of Frontier Airlines, Inc. included in its
Annual Report on Form 10-KSB as of March 31, 1996 and for each of the years in
the two-year period then ended, have been incorporated by reference in this
Prospectus and in the Registration Statement, in reliance upon the report of
KPMG Peat Marwick LLP, independent certified public accountants, incorporated by
reference herein and upon the authority of said firm as experts in accounting
and auditing.
-12-
<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 the
Company in connection with the sale and distribution of the securities being
registered. All of the amounts shown are estimated except for the Securities
and Exchange Commission registration fee.
<TABLE>
<CAPTION>
-------------------------------------
<S> <C>
SEC registration fee $ 3,197.58
-------------------------------------
Printing and mailing ex-
penses $ 2,000.00
-------------------------------------
Legal fees and
expenses $ 3,000.00
-------------------------------------
Accounting fees and
expenses $ 2,000.00
-------------------------------------
Total $10,197.58
-------------------------------------
</TABLE>
Item 15. Indemnification of Directors and Officers.
The Company's Bylaws require the Company to indemnify, to the fullest
extent authorized by applicable law, any person who is or is threatened to be
made a party to any civil, criminal, administrative, investigative, or other
action or proceeding instituted or threatened by reason of the fact that he is
or was a director or officer of the Company or is or was serving at the request
of the Company as a director or officer or another corporation, partnership,
joint venture, trust or other enterprise.
The Company's Articles of Incorporation provide that, to the fullest
extent permitted by the Colorado Business Corporation Act, directors and
officers of the Company shall not be liable to the Company or any of its
shareholders for damages caused by a breach of a fiduciary duty by such director
or officers.
Section 7-109 of the Colorado Business Corporation Act authorizes the
indemnification of directors and officers against liability incurred by reason
of being a director of officer and against expenses (including attorney's fees),
judgments, fines and amounts paid in settlement and reasonably incurred in
connection with any action seeking to establish such liability, in the case of
third-party claims, if the officer or director acted in good faith and in a
manner he reasonably believed to be in
II-1
<PAGE>
or not opposed to the best interests of the corporation, and in the case of
actions by or in the right of the corporation, if the officer or director acted
in good faith and in a manner he reasonably believed to be in the or not opposed
to the best interests of the corporation and if such officer or director shall
not have been adjudged liable to the corporation, unless a court otherwise
determines. Indemnifica tion is also authorized with respect to any criminal
action or proceeding where the officer or director also had no reasonable cause
to believe his conduct was unlawful.
The above discussion of the Company's Articles of Incorporation,
Bylaws and the Colorado Business Corporation Act is only a summary and is
qualified in its entirety by the full text of each of the foregoing.
Item 16. Exhibits.
EXHIBIT
NUMBER DESCRIPTION
- -------------------
3.1 Articles Incorporation of the Company/(1)/
3.2 Bylaws of the Company/(1)/
4.1 Specimen Common Stock Certificate/(1)/
5.1* Opinion of Parcel, Mauro, Hultin & Spaanstra, P.C. as to the legality of
the Shares
23.1* Consent of KPMG Peat Marwick LLP
23.2 Consent of Parcel, Mauro, Hultin & Spaanstra, P.C. (contained in
Exhibit 5.1)
* Filed herewith
________________________________________________________________
(1) Exhibits 3.1, 3.2 and 4.1 are incorporated by reference from Exhibits 3.1,
3.2 and 4.1, respectively, to the Company's Registration Statement on Form
SB-2, Registration No. 33-77790.
Item 17. Undertakings.
The Company 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; (ii) To
reflect in the prospectus any facts or events which, individually or
II-2
<PAGE>
together, represent a fundamental change in the information in the registration
statement; and (iii) To include any additional or changed material information
on the plan of distribution.
(2) That, for the purpose of determining any liability under the
Securities Act each post-effective amendment shall be treated as a new
registration statement relating to the securities offered, and the offering of
such securities at that time shall treated as the initial bona fide offering
thereof.
(3) To file a post-effective amendment to remove from registration
any of the securities that remain unsold at the end of the offering.
(4) That, for purposes of determining any liability under the
Securities Act, each filing of the Company's annual report pursuant to section
13(a) or section 15(d) of the Exchange Act (and, where applicable, each filing
of an employee benefit plan's annual report pursuant to section 15(d) of the
Exchange Act) 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.
(5) That, insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the Company
of expenses incurred or paid by a director, officer or controlling person of the
Company 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 Company 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.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Company hereby 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 and any amendment thereto to be signed on its behalf
of the undersigned, thereunto duly authorized, in the City of Denver, State of
Colorado on July 5, 1996.
FRONTIER AIRLINES, INC.
Date: July 5, 1996 /s/ SAMUEL D. ADDOMS
-----------------------------------------
Samuel D. Addoms
Principal Executive Officer and
Principal Financial Officer
Pursuant to the requirements of the Securities Exchange Act of 1933,
as amended, this Registration Statement and any amendment thereto has been
signed below by the following persons on behalf of the Company in the capacities
and on the dates indicated.
Date: July 5, 1996 /s/ SAMUEL D. ADDOMS
-----------------------------------------
Samuel D. Addoms, Director
Date: July 5, 1996 /s/ PAUL STEPHEN DEMPSEY
-----------------------------------------
Paul Stephen Dempsey, Director
Date: July 5, 1996 /s/ WILLIAM B. MCNAMARA
-----------------------------------------
William B. McNamara, Director
Date: July , 1996
-----------------------------------------
B. LaRae Orullian, Director
Date: July 5, 1996 /s/ ELISSA A. POTUCEK
-----------------------------------------
Elissa A. Potucek, Principal Accounting
Officer
II-4
<PAGE>
EXHIBIT 5.1
Parcel, Mauro, Hultin & Spaanstra, P.C.
Attorneys at Law
1801 California Street
Denver, Colorado 80202-2636
Telephone (303)292-6400
Telecopier (303)295-3040
July 3, 1996
Frontier Airlines, Inc.
12015 East 46th Avenue
Denver, Colorado 80239
Re: Registration Statement on Form S-3
Covering the Registration of 1,238,733
Shares of Common Stock of Frontier Airlines, Inc.
Gentlemen and Ladies:
We have acted as counsel for Frontier Airlines, Inc., a Colorado
corporation (the "Company"), in connection with the registration for sale of
1,238,733 shares of the Company's Common Stock (the "Shares") in accordance with
the registration provisions of the Securities Act of 1933, as amended.
In such capacity we have examined, among other documents, the Registration
Statement on Form S-3 filed by the Company with the Securities and Exchange
Commission on or about July 3, 1996 (as may be further amended from time to
time, the "Registration Statement"), covering the registration of the Shares.
Based upon the foregoing and upon such further examinations as we have
deemed relevant and necessary, we are of the opinion that:
1. The Company is a corporation duly organized and validly existing under
the laws of the State of Colorado.
2. The Shares have been legally and validly authorized under the
Company's Articles of Incorporation, as amended, and constitute (or will
constitute upon due exercise of certain warrants as described in the
Registration Statement) duly and validly issued and outstanding and fully paid
and nonassessable shares of the Company.
<PAGE>
Frontier Airlines, Inc.
July 3, 1996
Page 2
We hereby consent to the use of our name beneath the caption "Legal
Matters" in the Prospectus forming a part of the Registration Statement and to
the filing of a copy of this opinion as Exhibit 5.1 thereto.
Very truly yours,
PARCEL, MAURO, HULTIN & SPAANSTRA, P.C.
By: /s/ Douglas R. Wright
---------------------------------
Douglas R. Wright, Director
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
-----------------------------------------
We consent to the incorporation by reference in the Registration Statement on
Form S-3 of Frontier Airlines, Inc., of our report dated June 14, 1996 relating
to the balance sheet of Frontier Airlines, Inc. as of March 31, 1996, and the
related statements of operations, stockholders' equity and cash flows for the
years ended March 31, 1996 amd 1995, which report appears in the March 31, 1996
annual report on Form 10-KSB of Frontier Airlines, Inc. We also consent to the
reference of our firm under the heading "Experts" in the prospectus.
/s/ KPMG PEAT MARWICK LLP
-------------------------
KPMG Peat Marwick LLP
Denver, Colorado
July 3, 1996
