As filed with the Securities and Exchange Commission
on July 23, 1997
Registration No. 333-____
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
SABRATEK CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 36-3700639
-------- ----------
(State or other juris- (I.R.S. Employer
diction of incorporation Identification No.)
or organization)
5601 West Howard Street, Niles, Illinois 60714
(847) 647-2760
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
K. SHAN PADDA
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SABRATEK CORPORATION
5601 West Howard Street, Niles, Illinois 60714
(847) 647-2760
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies to:
SCOTT HODES, ESQ.
DAVID S. GUIN, ESQ.
ROSS & HARDIES
150 North Michigan Avenue, Chicago, Illinois 60601
(312) 558-1000
Approximate date of commencement of proposed sale to the public: From
time to time after this Registration Statement becomes effective.
<PAGE>
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 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(b) under the Securities Act, check the following box and list the securities
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. [ ]
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
===================================================================================================================================
Title of Each Proposed
Class of Maximum Proposed Maximum
Securities to be Amount to be Offering Price Aggregate Offering Amount of
Registered Registered Per Share Price Registration Fee
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 239,548(1) $26.875(2) $6,378,852.50 $1,950.86
$.01 par value
per share
- ------------------------------------------------------------------------------------------------------------------------------------
Common Stock 464,272(3) $5.50(4) $2,553,496 $773.79
$.01 par value
per share
- ------------------------------------------------------------------------------------------------------------------------------------
Totals 703,820 N/A N/A $2,724.65
====================================================================================================================================
</TABLE>
(1) To be offered and sold by Selling Stockholders.
(2) Estimated solely for the purpose of computing the amount of the
registration fee in accordance with Rule 457(c) under the Securities
Act of 1933, as amended (the "Securities Act"), based on the average of
the high and low sale price for the Common Stock, $.01 par value per
share (the "Common Stock") as reported by the National Association of
Securities Dealers Automated Quotation National Market System
("NASDAQ-NMS") on July 18, 1997.
(3) To be offered and sold by Selling Stockholders upon exercise of
outstanding Warrants. Pursuant to Rule 416 under the Securities Act,
this registration statement also relates to an indeterminate number of
additional shares of Common Stock which may be issuable upon exercise
of the Warrants to prevent dilution resulting from stock splits, stock
dividends and similar transactions.
(4) This price is determined by assuming the offering price equals the
weighted average exercise price of the warrants relating to the shares
of Common Stock offered hereby.
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 THE 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 (THE "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 23, 1997
PROSPECTUS
SABRATEK CORPORATION
- --------------------------------------------------------------------------------
703,820 Shares
Common Stock
($.01 par value)
This prospectus (the "Prospectus") relates to the offer and sale of up
to 703,820 shares of common stock, $.01 par value (the "Common Stock"), of
Sabratek Corporation (the "Company" or "Sabratek") by selling stockholders (the
"Selling Stockholders"). Of such 703,820 shares of Common Stock, (i) an
aggregate of 107,955 shares are currently held by certain Selling Stockholders
who acquired such shares by exercising warrants within one year prior to the
date of this Prospectus; (ii) an aggregate of 464,272 shares are issuable upon
exercise of outstanding warrants held by certain Selling Stockholders ("Warrant
Shares"); and (iii) 131,593 shares are held by the stockholders of Rocap, Inc.
("Rocap Shares"). All of the shares of Common Stock being offered hereby are
hereinafter sometimes collectively referred to as the "Common Shares."
The Company will bear all expenses in connection with the registration
of the Common Shares herein which expenses are estimated to be $30,000. The
Selling Stockholders will pay any brokerage compensation in connection with its
sale of the Common Shares. The Company will not receive any of the proceeds from
the sale of the Common Shares by the Selling Stockholders but will receive
proceeds of up to $2,558,763 upon exercise of the Warrants, assuming all the
Warrants are exercised. See "Use of Proceeds."
The Company's Common Stock is traded in the over-the-counter market and
is quoted on the National Association of Securities Dealers Automated Quotation
- - National Market System ("NASDAQ-NMS"), under the symbol "SBTK." On July 18,
1997 the reported last sale price of the Common Stock, as reported on NASDAQ-
NMS, was $26.625 per share.
On or around September 23, 1994, the Company issued warrants (the
"Private Placement Warrants") to purchase an aggregate of 1,369,147 shares of
Series A Preferred Stock of the Company at a per share exercise price of $1.50.
In conjunction with the Company's initial public offering in June, 1996, the
Private Placement Warrants were converted into warrants to purchase an aggregate
of 451,348 shares of Common Stock at a per share exercise price of $4.55. Of the
703,820 shares of Common Stock being offered hereby, 132,681 shares have been
previously issued upon the exercise of such warrants and 318,667 are issuable
upon the exercise of such warrants in the future.
In addition to the foregoing, between June, 1992 and September, 1996,
the Company issued warrants (the "Service Warrants") which are currently
exercisable to purchase 145,605 shares of its Common Stock at exercise
<PAGE>
prices of between $3.17 and $13.00. Of the 703,820 shares of Common Stock being
offered hereby, 11,792 shares have been previously issued upon the exercise of
such warrants and 145,605 are issuable upon the exercise of such warrants in the
future.
On September 6, 1996, the Company issued a warrant (the "Omnicare
Warrant") to purchase 50,000 shares of Common Stock at a per share exercise
price of $13.00 to Omnicare, Inc. ("Omnicare"), a customer of the Company. Of
the 703,820 shares of Common Stock being offered hereby 50,000 are issuable upon
the exercise of such warrant in the future.
On February 25, 1997, the Company issued 131,593 shares of Common Stock
(the "Rocap Shares") valued at $3,043,088 to Rocap, Inc. ("Rocap") as partial
consideration for the acquisition of substantially all of the assets of Rocap.
On July 16, 1997, Rocap made a distribution and each of Rocap's stockholders
received their proportionate share of such consideration with Rocap retaining
3,649 shares to satisfy any contingent obligations. Of the 703,820 shares of
Common Stock being offered hereby, 131,593 shares were issued to Rocap and its
stockholders for the purpose described above.
The Selling Stockholders may sell the Common Shares from time to time
in transactions in the open market, in negotiated transactions, or by a
combination of these methods, at fixed prices that may be changed, at market
prices at the time of sale, at prices related to market prices or at negotiated
prices. The Selling Stockholders may effect these transactions by selling the
Common Shares to or through broker-dealers, who may receive compensation in the
form of discounts or commissions from the Selling Stockholders or from the
purchasers of the Common Shares for whom the broker-dealers may act as agent or
to whom they may sell as principal, or both.
See "Plan of Distribution."
Prospective investors should consider and review the information under
the caption "RISK FACTORS" commencing on page 4 prior to an investment in the
shares offered hereby.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is July 23, 1997
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<PAGE>
TABLE OF CONTENTS
Page
Available Information.................................. 1
Incorporation of Certain Documents by Reference........ 1
Prospectus Summary..................................... 2
Risk Factors........................................... 4
Use of Proceeds........................................ 10
Selling Stockholders................................... 10
Plan of Distribution................................... 15
Legal Matters.......................................... 15
Experts................................................ 15
NO ONE HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATION
NOT CONTAINED OR INCORPORATED BY REFERENCE IN THIS PROSPECTUS IN CONNECTION WITH
THIS OFFERING. ANY INFORMATION OR REPRESENTATION NOT CONTAINED OR INCORPORATED
BY REFERENCE HEREIN MUST NOT BE RELIED ON AS HAVING BEEN AUTHORIZED BY THE
COMPANY, ANY SELLING STOCKHOLDER OR ANY OTHER PERSON. THIS PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY THE
SECURITIES OFFERED HEREBY IN ANY STATE TO ANY PERSON TO WHOM IT IS UNLAWFUL TO
MAKE SUCH OFFER OR SOLICITATION. EXCEPT WHERE OTHERWISE INDICATED, THIS
PROSPECTUS SPEAKS AS OF ITS DATE AND NEITHER THE DELIVERY OF THIS PROSPECTUS NOR
ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION
THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY SINCE THE DATE
HEREOF.
- iii -
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission. Such reports, proxy statements and other
information filed by the Company can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the following Regional Offices of the Commission:
New York Regional Office, Seven World Trade Center, Suite 1300, New York, New
York 10048; and Chicago Regional Office, Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Company's Securities are listed on the NASDAQ-NMS and reports and
other information concerning the Company can be inspected at the NASDAQ-NMS.
The Company has filed with the Commission a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act, with respect
to the shares of Common Stock offered hereby. This Prospectus does not contain
all of the information set forth in the Registration Statement and the exhibits
and schedules thereto. For further information with respect to the Company and
the shares of Common Stock offered hereby, reference is hereby made to the
Registration Statement, exhibits and schedules.
The Company's principal executive offices are located at 5601 West
Howard Street, Niles, Illinois.
The following trademarks and service marks appear in this Prospectus:
SABRATEK(R) and its logo, AutoRamp(R), HOMMERUN(R), Seamless Delivery
System(TM), PumpMaster(TM), MediVIEW(R) and TCS Total Compliance System(TM).
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed with the Commission are
incorporated herein by reference: (i) the Company's Annual Report on Form 10-K
filed by the Company pursuant to the Exchange Act for the year ended December
31, 1996, (ii) all other reports filed by the Company pursuant to Section 13(a)
or 15(d) of the Exchange Act since December 31, 1996, including but not limited
to, (a) the Quarterly Report on Form 10-Q for the quarter ended March 31, 1997,
(b) the Current Report on Form 8-K filed by the Company with the Commission on
March 11, 1997 and (c) the description of the Company's Common Stock, $.01 par
value, as contained in its registration statement on Form 8-A, declared
effective by the Commission on June 21, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act, subsequent to the date hereof and prior to the
filing of a post-effective amendment to the Registration Statement which
indicates that all shares of Common Stock offered hereby have been sold or which
deregisters all shares of Common Stock then remaining unsold, 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 herein or 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 such statement is modified or superseded by a statement contained
herein or in a subsequently filed document which also is or is deemed to be
incorporated by reference herein. 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 this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the information that has been
incorporated by reference in this Prospectus (not including exhibits to such
information unless such exhibits are specifically incorporated by reference into
such information). Such requests should be directed to Scott Skooglund, Vice
President - Finance, at the Company's principal executive offices at 5601 West
Howard Street, Niles, Illinois 60714, telephone (847) 647-2760.
<PAGE>
PROSPECTUS SUMMARY
------------------
The following summary is qualified in its entirety by reference to the more
detailed information and consolidated financial statements appearing elsewhere
and incorporated by reference in this Prospectus.
The Company
The Company develops, produces and markets technologically-advanced,
user-friendly and cost-effective therapeutic and diagnostic medical systems
designed specifically to meet the unique needs of the alternate-site health care
market. The Company's multi-therapy infusion and other systems incorporate
advanced communications technology which is designed to reduce provider
operating costs while maintaining the integrity and quality of care. The
Company's proprietary health care information system provides remote programming
as well as real-time diagnostic and therapeutic data capture capabilities,
allowing caregivers to monitor patient compliance more effectively and allowing
providers to develop outcome analyses and optimal clinical protocols. The
Company has designed its integrated hardware and software system to permit
providers of infusion therapy to achieve cost-effective movement of patients
along the continuum of alternate-site health care settings. The Company intends
to expand its product line beyond infusion therapy to become a leading developer
and marketer of a variety of interactive therapeutic and diagnostic medical
systems for the delivery of high-quality, cost-effective health care in
alternate sites. The Company believes that its current and future products and
related software will facilitate the ability of alternate-site providers to
create a "virtual" hospital room, thereby affording the delivery of a wide range
of care previously provided primarily in an acute-care setting. Substantially
all of the Company's revenues have historically been derived from the sale of
its multi-therapy infusion pumps and related disposable supplies. Since August,
1996, the Company has commercially introduced several additional products which
it believes will contribute to future revenues.
The Company's strategy focuses primarily on the alternate-site health
care market, which it believes will continue to experience significant growth as
managed care payors continue to move patients to the lowest-cost care setting.
Such growth may be attributed to increasing cost-containment pressures, along
with advances in medical technology, that have transitioned the delivery of
health care away from the traditional acute-care setting to more cost-effective
sites. The alternate-site market includes, among other things, the provision of
infusion services rendered in various settings, including the patient's
residence, sub-acute care facilities, nursing homes, outpatient clinics,
dialysis centers and hospice facilities. According to POV, Incorporated, an
industry tracking and consulting firm, the infusion therapy segment of this
market is expected to grow in revenue from $3.2 billion in 1992 to $7.9 billion
in 1997, representing an average annual compounded growth rate of approximately
20%.
The Company believes that for alternate-site health care providers, the
management of costly resources such as nursing staff and infusion equipment
inventories is critical to their operating viability. The Company's strategic
response to the need to achieve cost-effective movement of patients along the
continuum of alternate-site care has been to develop the Seamless Delivery
System which integrates stationary and ambulatory multi-therapy infusion pumps,
disposable supplies, a proprietary interactive software system and a proprietary
infusion pump testing device. Sabratek's Seamless Delivery System maximizes the
similarities in operating features and range of therapeutic applications of the
Company's stationary and ambulatory infusion devices, thereby reducing the
costly time requirements of training and infusion administration as well as
minimizing equipment inventories. The Company's interactive software system
augments the utilization of Sabratek's infusion pumps and allows providers to
program therapies and monitor compliance on a real-time basis from a remote
location. The Company's portable, automatic infusion pump testing device enables
providers to perform on-site diagnostic tests on Sabratek's infusion pumps and
thereby reduces costs by eliminating the traditional reliance on third-party
testing services and in-house biomedical engineering capabilities. The Company
believes that competing infusion therapy products do not meet the diverse needs
of payors, alternate-site health care providers and their patients within the
managed care environment to the same extent as the Company's Seamless Delivery
System.
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<PAGE>
In 1992, the Company commercially launched its multi-therapy stationary
infusion device (the "3030 Stationary Pump"), and in 1995 introduced its
multi-therapy ambulatory infusion device (the "6060 Ambulatory Pump"). In
addition, the Company markets a comprehensive line of related disposable tubing
sets. Both the 3030 Stationary Pump and the 6060 Ambulatory Pump have received
510(k) clearance from the Food and Drug Administration. In 1996, the Company
began marketing its proprietary medical software system ("MediVIEW") and its
proprietary infusion pump testing device (the "PumpMaster"). The Company
currently markets its products domestically to national, regional and local
alternate-site and acute-care providers through a sales force composed of 19
direct sales professionals, six clinical support staff and two full-time sales
consultants] combined with a network of specialized alternate-site medical
products distributors. The Company also markets its products internationally
through distributors in Europe, Asia, Africa, South America and the Middle East.
The Company's goal is to continue to develop and market interactive
therapeutic and diagnostic medical systems designed to improve the delivery of
high-quality, cost-effective health care at alternate sites. The Company intends
to achieve its goal by continuing to: (i) develop advanced medical products and
related software systems that maximize the cost-effective provision of
alternate-site health care, (ii) develop an integrated system of therapeutic and
diagnostic information-based medical products supported by the Company's
proprietary health care information system platform, and (iii) create a
proprietary outcomes database through the Company's products and software system
platform.
The Offering
Securities Offered.........
This Prospectus relates to the offer and sale of up to 703,820 shares
of Common Stock, $.01 par value, of the Company by the Selling
Stockholders. Of such 703,820 shares of Common Stock, (i) an aggregate of
107,955 shares are currently held by certain Selling Stockholders who
acquired such shares by exercising warrants within one year prior to the
date of this Prospectus; (ii) an aggregate of 464,272 shares are issuable
upon exercise of the Warrant Shares; and (iii) 131,593 shares are held by
the stockholders of Rocap, Inc. ("Rocap Shares").
Securities Outstanding.....
As of July 1, 1997, the Company had 10,000,378 shares of Common Stock
outstanding. Assuming that the Private Placement Warrants, the Service
Warrants and the Omnicare Warrant are all exercised for the maximum number
of shares of Common Stock issuable upon exercise of such warrants and no
other shares of Common Stock are issued subsequent to July 1, 1997, the
Company would have 10,594,714 shares of Common Stock outstanding. See
"Selling Stockholders."
Use of Proceeds.........
The Company will not receive any proceeds from the sale of the Common
Shares offered herein by the Selling Stockholders. If all of the Private
Placement warrants, Service Warrants and the Omnicare Warrant are
exercised, the Company will receive estimated gross proceeds of $2,558,763.
The Company intends to utilize any proceeds received from the exercise of
the Private Placement Warrants, Service Warrants and the Omnicare Warrant
for general corporate purposes. There can be no assurance that any of the
outstanding warrants will be exercised. See "Use of Proceeds."
Risk Factors.......
See "Risk Factors" for a discussion of certain risk factors that
should be considered by prospective investors in connection with an
investment in the shares of Common Stock offered hereby.
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<PAGE>
RISK FACTORS
------------
Information contained and incorporated by reference in this Prospectus
contains "forward-looking statements" which can be identified by the use of
forward-looking terminology such as "believes," "expects," "may," "will,"
"should," or "anticipates" or the negative thereof or other variations thereon
or comparable terminology, or by discussions of strategy. No assurance can be
given that the future results covered by the forward-looking statements will be
achieved. The risk factors set forth below constitute cautionary statements
identifying important factors with respect to such forward-looking statements,
including certain risks and uncertainties, that could cause actual results to
vary materially from the future results indicated in such forward- looking
statements. Other factors could also cause actual results to vary materially
from the future results indicated in such forward-looking statements.
An investment in the Common Shares offered hereby involves a high
degree of risk. Prospective investors should carefully consider the following
risk factors in addition to the other information set forth and incorporated by
reference in this Prospectus before making any decision to invest in the Common
Shares.
History of Losses
The Company was formed in 1989, introduced its first product in 1992,
and has incurred operating and net losses of approximately $3.6 million, $6.0
million, and $858,000 for the years 1994, 1995 and 1996, respectively, and as of
December 31, 1996, had an accumulated deficit of $14.3 million. For the first
quarter of 1997, the Company reported income of $1,067,000. The Company's losses
resulted primarily from expenditures relating to research and development,
product engineering, obtaining FDA clearance for its products, development of
its initial sales and marketing organization, and establishment of manufacturing
capability. Although the Company has experienced revenue growth in recent
periods and has operated at a profit for the last three calendar quarters, such
recent growth and profitability may not be sustainable and may not be indicative
of future results. The Company's ability to increase sales and generate profits
will depend on numerous factors, and there can be no assurance that the
Company's revenues will continue to grow or that the Company will remain
profitable.
Dependence on Principal Product Line and New Product Development
The Company currently derives substantially all of its revenues from
the sale of its multi-therapy infusion pumps and related disposable supplies and
expects that revenues from these products will continue to account for a
significant portion of the Company's revenues in the future. Although the
commercial introduction of MediVIEW and PumpMaster along with the recent
acquisition of Rocap reduce the Company's reliance on its principal product
line, future declines in the demand for the Company's infusion pumps and related
disposable supplies, whether due to increased competition, technological
changes, or other factors, could have a material adverse effect on the Company's
business, financial condition and results of operations. The Company's execution
of its business strategy and its future financial performance will depend in
large part on the Company's ability to meet the increasingly sophisticated needs
of its customers through the timely development and successful introduction or
acquisition of new infusion therapy products, enhanced versions of existing
products, and new complementary products. The success of new or enhanced
products is subject to certain risks inherent in the development of products and
materials based upon new technologies. These risks include the possibilities
that (i) certain of the products developed may require and fail to receive
regulatory clearance or approval, (ii) the products may be difficult to
manufacture on a commercial scale or may be uneconomical to manufacture or
market, (iii) the proprietary rights of third parties may preclude the Company
from marketing such products, (iv) the Company's competitors may market
superior, more cost effective or equivalent products and may do so on a more
timely basis, (v) errors and malfunctions may be found in products after their
commercial introduction and may not be corrected in a timely manner, and (vi)
customers may not accept or use the products. The Company has historically
expended a significant amount on product development and believes that
significant continuing product development efforts will be required to sustain
- 4 -
<PAGE>
the Company's growth. There can be no assurance that the market will continue to
accept the Company's existing products, or that product enhancements or new
products will be developed in a timely and cost-effective manner, meet the needs
and requirements of alternate-site health care providers or achieve market
acceptance. In addition, the Company may be unable to acquire additional
products and technologies.
Highly Competitive Markets; Technological Risk
The medical products industry in general and the infusion therapy
products industry in particular are characterized by intense competition. Large
competitors, such as Abbott Laboratories, Advanced Medical, Inc., Baxter
International Inc. and SIMS Deltec, Inc., a subsidiary of Smiths Industries, PLC
("SIMS Deltec"), among others, have significant market shares and installed
bases of products in the infusion pump and related disposable supplies industry.
Many of the Company's competitors have substantially greater capital resources,
research and development staffs, regulatory experience, sales and marketing
capabilities, manufacturing facilities and broader product offerings than the
Company. The Company expects that these competitors will continue to compete
aggressively with tactics such as offering volume discounts based on "bundled"
purchases of a broader range of medical equipment and supplies, a tactic that
the Company can currently only pursue on a more limited basis. There can be no
assurance that such competition will not adversely affect the Company's results
of operations or its ability to maintain or increase sales and market share. As
a consequence of the foregoing, the Company may not be able to successfully
execute its business strategies.
The market for infusion therapy products is affected by continuing
improvements and enhancements in technology. There can be no assurance that the
Company's competitors or potential competitors will not succeed in developing or
marketing products that provide more desirable characteristics, or are more
effective or less expensive than those developed or marketed by the Company. In
addition, technological advances in drug delivery systems, the development of
therapies that can be administered by methods other than infusion therapy, and
the development of new medical treatments that cure certain complex diseases or
reduce the need for infusion therapy could adversely impact the Company's
business.
Uncertain Protection of Intellectual Property
There can be no assurance that the common law, statutory and
contractual rights on which the Company relies to protect its intellectual
property and confidential and proprietary information will provide it with
meaningful protection. Third parties may independently develop products,
techniques or information which are substantially equivalent to the products,
techniques and information which the Company considers proprietary. In addition,
proprietary information regarding the Company could be disclosed in a manner
against which the Company has no meaningful remedy.
Disputes regarding the Company's intellectual property could force the
Company into expensive and protracted litigation or costly agreements with third
parties. An adverse determination in a judicial or administrative proceeding or
failure to reach an agreement with a third party regarding intellectual property
rights could prevent the Company from manufacturing and selling certain of its
products, which could have a material adverse effect on the Company's business,
financial condition and results of operations.
Pending Litigation
On February 5, 1997, SIMS Deltec filed a complaint in the United States
District Court for the District of Minnesota alleging that Sabratek's
manufacture, use and/or sale of the MediVIEW software in conjunction with its
infusion pumps infringes on a patent entitled "Systems and Methods of
Communicating with Ambulatory Medical Devices Such as Drug Delivery Devices"
previously issued to SIMS Deltec. Subsequently, SIMS Deltec filed other
pleadings that raised additional claims against Sabratek and three of its
employees including trade secret misappropriation, unfair competition and
interference with SIMS Deltec's customers. SIMS Deltec seeks injunctive relief,
unspecified monetary damages and costs. In addition, SIMS Deltec filed for a
preliminary injunction against
- 5 -
<PAGE>
Sabratek seeking to prevent on a preliminary basis Sabratek's manufacture and
sale of the MediVIEW system. The Company and the individual defendants intend to
vigorously defend against the allegations made by SIMS Deltec. Protracted
litigation or an adverse outcome in this matter could have a material adverse
impact on the Company's business, financial condition and results of operations.
In addition, Sabratek has filed a complaint against SIMS Deltec in the
United States District Court for the Northern District of Illinois alleging that
SIMS Deltec employees have made misstatements about Sabratek's products.
Sabratek has stated claims under the Federal Lanham Act to stop SIMS Deltec's
improper disparagement and has requested preliminary and permanent injunctive
relief, monetary damages and costs.
Limited Sales and Marketing Experience
The Company has only begun to significantly expand its sales, marketing
and distribution force within the past year. The Company's sales and marketing
staff will require additional personnel in the future. There can be no assurance
that the Company will be able to continue to successfully expand its sales and
marketing staff, that such an expanded sales and marketing staff will be
cost-effective, or that the Company's increased direct sales and marketing
efforts will be successful. The Company also sells its products through domestic
and international distributors of medical products. There can be no assurance
that the Company or its distributors will be successful in marketing or selling
the Company's products.
Limited Assembly/Manufacturing Experience
Most of the Company's products are currently assembled/ manufactured by
the Company at its facilities. To be successful, the Company must
assemble/manufacture its products in compliance with regulatory requirements, in
sufficient quantities and on a timely basis, while maintaining product quality
and acceptable assembly/manufacturing costs. There can be no assurance that the
Company will be able to continue to assemble/manufacture products in large
commercial quantities on a timely basis and at an acceptable cost. If the
Company becomes unable to assemble/manufacture its products at its facility in a
timely and efficient manner, the Company's ability to supply product to its
distributors and direct customers may be adversely affected until such time as
the Company is able to establish alternative assembly/manufacture arrangements.
Interruption in Sources of Supply
The Company could face problems in supplying its equipment and
disposable products to distributors and customers if its primary sources of
supply were interrupted and it faced delays in activating its secondary sources
of supply. Any such interruption or delays could have an adverse effect on the
Company. There can be no assurance that the Company will be able to maintain a
sufficient and adequate supply of products in its own inventory or that the
Company will be able to cause its distributors to maintain a sufficient and
adequate supply of products to avoid such a disruption.
Dependence on Third-Party Reimbursement
The Company's products are generally purchased by health care
providers, which then seek reimbursement from various public and private
third-party payers, such as Medicare, Medicaid and indemnity insurers, for
health care services provided to patients. Government and private third-party
payers are increasingly attempting to contain health care costs by limiting both
the extent of coverage and the reimbursement rate for new diagnostic and
therapeutic products and services. The Health Care Financing Administration of
the United States Department of Health and Human Services ("HCFA"), which
administers Medicare, and most private insurance companies do not provide
reimbursement for services that they determine to be experimental in nature or
that are not considered "reasonable and necessary" for diagnosis or treatment.
Many private insurers are influenced by HCFA actions in making their own
coverage decisions on new products or services. There can be no assurance that
third-party reimbursement for the services provided using the Company's products
will continue to be available to its customers
- 6 -
<PAGE>
or that any such reimbursement will be adequate. Disapproval of, or limitations
in, coverage by HCFA or other third-party payers could materially and adversely
affect market acceptance of the Company's products which could, in turn, have a
material adverse effect on the Company's business, financial condition and
results of operations.
No Assurance of Regulatory Clearance; Strict Governmental Regulation
The production and marketing of the Company's current products and the
products the Company intends to introduce in the future are subject to
regulations by numerous governmental authorities, including the Food and Drug
Administration ("FDA") and corresponding state and foreign agencies. In the
United States, the development, manufacture and promotion of medical devices are
regulated by the FDA under the Federal Food, Drug, and Cosmetic Act (the
"FFDCA"). The Company's 3030 Stationary Pump and 6060 Ambulatory Pump, and the
related disposable tubing sets for use with these systems, have been cleared by
the FDA under a premarket notification procedure known as a "510(k) Submission,"
which generally takes less time to complete, and requires less information, than
the FDA's lengthy and expensive premarket approval ("PMA") process.
The Company's Rocap division is registered with the FDA as a drug
manufacturer and repackager and its products are required to be manufactured
according to current good manufacturing practices ("GMP"). Some of the products
manufactured by the Rocap division have been listed with the FDA in accordance
with the Drug Listing Act of 1972. Some of the products manufactured by the
Rocap division contain drugs which are purchased from other manufacturers which
have received FDA approvals. There can be no assurance that the suppliers of
such drugs will be able to maintain such approvals. While Rocap currently
manufactures and distributes its products without any FDA approvals, there can
be no assurance that the FDA will allow the Rocap division to manufacture and
distribute new or altered products without obtaining FDA approvals. If in the
future the FDA concludes that the products manufactured and distributed by the
Company's Rocap division require that the products be relabeled, require Rocap
to obtain 510(k) clearance, require new drug approval, or other regulatory
approval, the FDA could prohibit the Rocap division from manufacturing and/or
distributing these products until the Company made the necessary submissions and
obtained any required approvals. The FDA could also take regulatory action
against the Company for the Rocap division's manufacture and/or distribution of
products. If the FDA were to take any of the foregoing actions with respect to
the Company, it could have a material adverse effect on the Company's
operations.
The Company believes that the original 510(k) clearance for the 6060
Ambulatory Pump permits the Company to market the MediVIEW software with the
6060 Ambulatory Pump in the United States without a new 510(k) Submission.
However, there can be no assurance that the FDA would agree with the Company's
determination. If in the future the FDA concludes that the MediVIEW software
system for use with the 6060 Ambulatory Pump required a new 510(k) Submission,
the FDA could prohibit the Company from marketing the MediVIEW software system
for this use until the Company filed a new 510(k) Submission and obtained
clearance from the FDA. The FDA could also take regulatory action against the
Company for its prior distribution of the MediVIEW software system with the 6060
Ambulatory Pump.
The Company has determined that the PumpMaster does not constitute a
medical device under the statutory definition and, therefore, did not file a
510(k) Submission with respect to this product. There can be no assurance that
the FDA will agree with the Company's determination in this regard. If the FDA
were to determine that the PumpMaster is a medical device that requires a 510(k)
Submission prior to its commercial distribution, the FDA could suspend further
commercial distribution of the PumpMaster and take regulatory action against the
Company for its prior distribution of the product.
The Company's new products and new applications for existing products
may require FDA clearance or approval prior to marketing. The FDA regulatory
requirements and review criteria for software-related medical devices could
adversely effect the Company's introduction of new software products, or devices
that incorporate software, in the future. The product clearance process for
future products can be lengthy, expensive and uncertain. There can be no
assurance that market clearances will be forthcoming in a timely manner, if at
all, or that the FDA
- 7 -
<PAGE>
will not require more extensive clinical evaluations, other information or a PMA
Submission. Moreover, the clearances, if granted, could limit the uses for which
the product could be marketed. Failure to obtain, or delays caused by,
regulatory clearances or approvals could have a material adverse affect on the
Company's business, financial condition and results of operations.
In October 1996, the Company learned of a defect in a software feature
of certain units of the 6060 Ambulatory Pump. The Company initiated a recall of
these units to correct the problem with an upgrade of the software. Pursuant to
FDA regulations, the Company notified the FDA of the recall and has updated the
FDA of the progress of the recall, which is now approximately 95% complete. The
FDA reported this recall in the January 15, 1997, issue of the FDA Enforcement
Report. There can be no assurance that the FDA will not take further enforcement
action against the Company with respect to this matter.
The Company is also subject to strict domestic and foreign regulations
and supervision regarding the development, manufacturing, marketing, labeling,
distribution, and promotion of its products. This includes periodic inspections
of the Company's manufacturing facility by the FDA to determine compliance with
GMP requirements, which are set forth in the FDA's Quality System ("QS")
regulations. There can be no assurance that the Company will be able to attain
or maintain compliance with GMP requirements.
Failure to comply with the regulations outlined above may result in
severe governmental sanctions. Noncompliance with applicable requirements can
result in, among other things, rejection or withdrawal of premarket clearance or
approval for devices, recall or seizure of products, total or partial suspension
of production, fines, injunctions, and civil and criminal penalties. The FDA
also has the authority to request repair, replacement or refund of the cost of
any devices manufactured or sold by the Company. Any of these sanctions may have
a material adverse effect on the Company's business, financial condition or
results of operations.
Product Liability Exposure
Manufacturers of medical devices face the possibility of substantial
liability for damages in the event that the use of their products is alleged to
have resulted in adverse effects to a patient. The Company maintains product
liability insurance with coverage limits of $7.0 million per occurrence with an
annual aggregate policy limit of $7.0 million. The Company's product liability
insurance provides coverage only for products currently manufactured and
distributed. There can be no assurance that liability claims will not exceed the
limits of such coverage or that such insurance will continue to be available on
commercially reasonable terms or at all. Furthermore, the Company does not
maintain insurance that would provide coverage for any costs or losses resulting
from any required recall of its products due to alleged defects, whether
instituted by the Company or a regulatory agency.
Risks Associated with International Operations
During the year ended December 31, 1996, the Company derived
approximately 9% of its revenues from international sales, resulting in exposure
to certain risks. Fluctuations in exchange rates of the U.S. dollar against
foreign currencies may reduce demand for, or the profitability of, the Company's
products sold overseas. In addition, the Company's international sales may be
affected by economic or political instability and domestic and foreign
governmental regulations, including export license requirements, trade
restrictions, changes in tariffs, regulatory approval for marketing products or
similar factors. Finally, the laws of certain foreign countries may not protect
the Company's intellectual property rights to the same extent as do the laws of
the United States.
Quarterly Fluctuations
The Company's quarterly revenues and operating results have varied
significantly in the past and may continue to do so in the future. In
particular, the Company's distributors and other customers may purchase several
months of inventory at one time which may cause fluctuations in quarterly
revenues. Future revenues and operating
- 8 -
<PAGE>
results may also fluctuate significantly from quarter to quarter and will depend
upon, among other factors: (i) demand for the Company's products and new product
introductions by the Company or its competitors or transitions to new products,
(ii) the timing of orders and shipments, (iii) the mix of sales between
products, (iv) competition, including pricing pressures, (v) the timing of
regulatory and third-party reimbursement approvals, (vi) expansion of the
Company's assembly capacity and the Company's ability to assemble or manufacture
its products efficiently, and (vii) the timing of research and development
expenditures. Accordingly, period-to-period comparisons of the Company's
revenues and operating results should not be relied upon as an indication of
future performance, and the results of any quarterly period may not be
indicative of results to be expected for a full year.
Dependence on Key Personnel
The Company's future performance depends in significant part upon the
continued service of its senior management and other key personnel. Because the
Company has a relatively small number of employees when compared to other
companies in the same industry, its dependence on maintaining its employees is
particularly significant. There can be no assurance that the Company's current
employees will continue to work for the Company. Loss of services of key
employees could have a material adverse effect on the Company's business,
results of operations and financial condition. The Company is also dependent on
its ability to attract and retain additional high quality personnel. The Company
may need to grant additional options to key employees and provide other forms of
incentive compensation to attract and retain key personnel.
Influence of Limited Number of Stockholders
The directors and executive officers of the Company and certain
existing stockholders may be able to influence the Company's affairs and
business, including any determination with respect to a change in control of the
Company, future issuances of Common Stock or other securities by the Company,
declaration of dividends on the Company's Common Stock and the election of
directors. Such influence could have the effect of delaying, deferring or
preventing a change in control of the Company which could deprive the Company's
stockholders of the opportunity to sell their shares of Common Stock at prices
higher than prevailing market prices.
Possible Volatility of Stock Price
The securities markets have, from time to time, experienced extreme
price and volume fluctuations which often have been unrelated to the operating
performance of particular companies. The market prices of the common stock of
many publicly-held medical device companies have been in the past, and are
expected to be, volatile. Announcements of technological or medical innovations
or new commercial products by the Company or its competitors, developments or
disputes concerning patents or proprietary rights, changes in regulatory or
medical reimbursement policies, and economic and other external factors, as well
as period-to-period fluctuations in the financial results of the Company, may
have a significant impact on the market price and marketability of the Common
Stock.
Dilution
As of July 1, 1997, there were 10,000,378 shares of Common Stock
outstanding. In addition, the Company has reserved a total of 4,062,036 shares
of Common Stock for future issuance upon the exercise of employee stock options,
warrants and for purchase under the Company's Employee Stock Purchase Plan.
Issuance of Common Stock pursuant to such employee stock options, warrants and
Employee Stock Purchase Plan could result in significant dilution to the
existing stockholders of the Company.
Impact of Anti-takeover Measures; Possible Issuance of Preferred Stock;
Classified Board
Certain provisions of the Company's Certificate of Incorporation and
Bylaws and the Delaware General Corporation Law may have the effect of making it
more difficult for a third party to acquire, or of discouraging
- 9 -
<PAGE>
a third party from attempting to acquire, control of the Company. Such
provisions could limit the price that certain investors might be willing to pay
in the future for shares of the Company's Common Stock. Pursuant to the
Company's Certificate of Incorporation, the Board of Directors is authorized to
fix the rights, preferences, privileges and restrictions, including voting
rights, of unissued shares of the Company's preferred stock and to issue such
stock without any further vote or action by the Company's stockholders. The
rights of the holders of Common Stock will be subject to and may be adversely
affected by the rights of the holders of any preferred stock that may be created
and issued in the future. In addition, stockholders do not have the right to
cumulative voting for the election of directors. The Company's Bylaws include a
number of provisions which may have the effect of discouraging persons from
pursuing non-negotiated takeover attempts. Specifically, the Company's Bylaws
provide for a staggered board whereby only one-third of the total number of
directors are replaced or re-elected each year. The Bylaws also require the
affirmative vote of two-thirds of the Company's issued and outstanding capital
stock to remove a director.
The Company is subject to Section 203 of the Delaware General
Corporation Law ("Section 203"), which restricts certain transactions and
business combinations between a corporation and an "Interested Stockholder"
owning 15% or more of the corporation's outstanding voting stock for a period of
three years from the date the stockholder becomes an Interested Stockholder.
Subject to certain exceptions, unless the transaction is approved in a
prescribed manner, Section 203 prohibits significant business transactions such
as a merger with, disposition of assets to or receipt of disproportionate
financial benefits by the Interested Stockholder, or any other transactions that
would increase the Interested Stockholder's proportionate ownership of any class
or series of the corporation's stock.
USE OF PROCEEDS
---------------
The Company will not receive any proceeds from the sale of the Common
Shares offered herein by the Selling Stockholders. If all of the Warrants are
exercised, the Company will receive estimated gross proceeds of approximately
$2,558,763. The Company intends to utilize any proceeds received from the
exercise of the Warrants for general corporate purposes. There can be no
assurance that any of the outstanding Warrants will be exercised.
Selling Stockholders
General
This Prospectus covers the offer and sale of the Common Stock by the
Selling Stockholders. Any or all of the Common Stock listed below may be offered
for sale by the Selling Stockholders from time to time.
In or around September 23, 1994, the Company issued warrants (the
"Private Placement Warrants") to purchase an aggregate of 1,369,147 shares of
Series A Preferred Stock ("Series A Preferred Shares") of the Company at a per
share exercise price of $1.50. In conjunction with the Company's initial public
offering in June, 1996, the Private Placement Warrants were converted into
warrants to purchase an aggregate of 451,348 shares of Common Stock at a per
share exercise price of $4.55. Of the 703,820 shares of Common Stock being
offered hereby, 132,681 shares have been previously issued upon the exercise of
such warrants and 318,667 are issuable upon the exercise of such warrants in the
future. Pursuant to the Registration Rights Agreement ("Series A Registration
Rights Agreement") dated September 23, 1994, the Company agreed to file a
registration statement other than on Form 4 of Form 8, registering the sale by
certain Selling Stockholders, shares of Common Stock of the Company issued upon
exercise of Private Placement Warrants. As of July 1, 1997, the Series A
Registration Rights Agreement was amended to allow the Company to register only
shares of Common Stock to which registration rights have attached pursuant
thereto and which have not previously been registered under the Securities Act,
but exclude for registration, shares of Common Stock which satisfy the holding
period requirements set forth in Rule 144(d)(1) promulgated under the Securities
Act. The Registration Statement has been filed by the Company
- 10 -
<PAGE>
to fulfill these obligations to the Selling Stockholders under the Series A
Registration Rights Agreement as amended.
In addition to the foregoing, between June, 1992 and September, 1996,
the Company issued warrants (the "Service Warrants") which are currently
exercisable to purchase 145,605 shares of its Common Stock at exercise prices of
between $3.17 and $13.00. Of the 703,820 shares of Common Stock being offered
hereby, 11,792 shares have been previously issued upon the exercise of such
warrants and 145,605 are issuable upon the exercise of such warrants in the
future. The Company decided to register such shares of Common Stock of the
Company issued upon exercise of Service Warrants which have not satisfied the
holding period requirements set forth in Rule 144(d) promulgated under the
Securities Act.
On September 6, 1996, the Company issued a warrant to purchase 50,000
shares of Common Stock at a per share exercise price of $13.00 to Omnicare, Inc.
("Omnicare"), a customer of the Company. Of the 703,820 shares of Common Stock
being offered hereby 50,000 are issuable upon the exercise of such warrant in
the future. Pursuant to the terms of the Omnicare Warrant, the Company agreed to
register 50,000 shares of Common Stock of the Company, which are issuable upon
exercise of the Omnicare Warrant. In addition, Omnicare has demand registration
rights exercisable on or before September 6, 2001 in the event the shares of
Common Stock issuable upon exercise of the Omnicare Warrant are not sold
pursuant to this Prospectus. The Registration Statement has been filed by the
Company to fulfill these obligations to Omnicare under the Omnicare Warrant.
On February 25, 1997, the Company issued the Rocap Shares to Rocap as
partial consideration for the acquisition of substantially all of the assets of
Rocap. On July 16, 1997, Rocap made a distribution and each of Rocap's
stockholders received their proportionate share of such consideration with Rocap
retaining 3,649 shares to satisfy any contingent obligations. Of the 703,820
shares of Common Stock being offered hereby, 131,593 shares were issued to Rocap
and its stockholders for the purpose described above. Also on February 27, 1997,
the Company entered into a Registration Rights Agreement with Rocap, pursuant to
which the Company agreed to register on Form S-3 in a delayed or continuous
offering, the 131,593 shares of Common Stock of the Company which were issued to
Rocap in connection with the Company's acquisition of substantially all of the
assets of Rocap.
The Company has agreed to indemnify the Selling Stockholders against
any liabilities, under the Securities Act or otherwise, arising out of or based
upon any untrue or alleged untrue statement of a material fact in the
Registration Statement or this Prospectus or by any omission of a material fact
required to be stated therein except to the extent that such liabilities arise
out of or are based upon any untrue or alleged untrue statement or omission in
any information furnished in writing to the Company by the Selling Stockholders
expressly for use in the Registration Statement. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers or persons controlling the Company pursuant to its certificate of
incorporation and by-laws, the Company has been informed that in the opinion of
the Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is therefore unenforceable.
In connection with the registration of the shares of Common Stock
offered hereby, the Company will supply prospectuses to the Selling Stockholders
and use its best efforts to qualify the Common Shares for sale in states
reasonably designated by the Selling Stockholders.
- 11 -
<PAGE>
Stock Ownership
The table below sets forth (i) the number of shares of Common Stock the
Company believes are owned beneficially by each Selling Stockholder as of July
1, 1997; (ii) the number of shares of Common Stock being offered by each Selling
Stockholder pursuant to this Prospectus; (iii) the number of shares of Common
Stock to be owned beneficially by each Selling Stockholder after completion of
the offering, assuming that all of the Common Shares offered hereby are sold;
and (iv) the percentage of the outstanding shares of Common Stock to be owned
beneficially by each Selling Stockholder after completion of the offering,
assuming that all of the Common Shares offered hereby are sold. Other than the
transactions described herein, the Selling Stockholders have not had any
material relationship with the Company during the past three years.
<TABLE>
<CAPTION>
Number of Percentage of
Shares to be Outstanding Shares
Number of Owned of Common Stock
Shares Beneficially to be Owned
Beneficially Number of After Beneficially After
Owned as of Shares Completion Completion
Selling Stockholders July 1, 1997 Offered of Offering of Offering(1)
-------------------- ------------ --------- ------------- ---------------
<S> <C> <C> <C> <C>
Bisbee, Gerald & Linda 646 646(11) 0 0
Corning, Warren Trust 145751 5,032 4,395(11) 637 *
Dayton, Duncan 36,052 2,198(11) 33,854 *
Dearborn, Jane F. 550 550(11) 0 0
D-W Investments, LP 5,275 5,275(11) 0 0
Edelstein, Edward G. 220 220(11) 0 0
Fansler, Davis D. 8,522 3,349(12) 5,173 *
Fawcett, Anne 5,741 1,539(11) 4,202 *
Fawcett, Donald & Andrienne 1,407 220(11) 1,187 *
Fawcett, Dwight P. 550 550(11) 0 0
Fawcett, Dwight W. 11,664 5,933(11) 5,731 *
Finnegan, Paul J. 14,908 3,297(11) 11,611 *
Gaines, Peter M. 17,477 6,594(11) 10,883 *
Hall, Charles R. 2,163 1,649(11) 514 *
Hill, Jack E. 4,395 4,395(11) 0 0
Hyman, Steven and Rivanna 27,563 2,198(11) 25,365 *
Lautman, William D.(2) 164,678(4) 77,199(13) 87,479 *
Lomicka, William H.(2) 84,434(5) 3,152(13) 81,282 *
Mayer, Frank D. Jr. 7,037 1,099(11) 5,938 *
Mehdi, Mirza 20,773(6) 12,422(14) 8,351 *
MSI, Inc. 658,631 318,667(15) 339,964 3.114%
Peterson, Gary 4,254 3,132(16) 1,122 *
P-J Investments, LP 8,701 4,395(11) 4,306 *
Pavlovic, Vukasin 1,099 1,099(11) 0 0
Pohlad Companies 1,786 1,786(11) 0 0
Reynolds, Timm R. and 2,149 1,099(11) 1,050 *
Robin S.
Rogers, John E. 58,888 21,977(11) 36,911 *
- 12 -
<PAGE>
Smith, Gordon H. and 1,099 1,099(11) 0 0
Eunice H.
Stafford, Jim 5,354 5,354(11) 0 0
Stafford, John 252,167 5,354(11) 246,813 2.261%
Traeger John E. Trust No. 1 19,509 6,594(11) 12,915 *
Spencer, Edson W. Jr.(2) 72,820(7) 7,558(17) 65,262 *
Hodes, Scott 64,079(8) 46(18) 64,033 *
Upland Associates, LP 764 229(19) 535 *
Barker, Lee & Co. 688 153(19) 535 *
Namakagon Associates, LP 688 153(19) 535 *
Gideon Hixon Fund, Inc. 53,803 927(19) 52,876 *
DeYoung, James 5,725 5,725(19) 0 0
Omnicare Inc. 50,000 50,000(20) 0 0
Mandell, Ginger(3) 103,117(9) 58,557(21) 44,560 *
Miller, Peter 12,336 12,336(21) 0 0
Erps, Niel 8,228 8,228(21) 0 0
Parisi, William 3,000 3,000(21) 0 0
Decker, Raymond 2,392 2,392(21) 0 0
Hamer, John 2,266 2,266(21) 0 0
Gasdia Trust 1,202 1,202(21) 0 0
Richard, Steven 2,266 2,266(21) 0 0
Russell, Edward 1,202 1,202(21) 0 0
Rudolph, George 493 493(21) 0 0
Garrigan, Kerry 265 265(21) 0 0
Dorman, Lisa 265 265(21) 0 0
Heinen, Eric 265 265(21) 0 0
Cusack, Michael 1,278 1,278(21) 0 0
Ziegler, Gregory 721 721(21) 0 0
Rice, Jack 557 557(21) 0 0
Feldman, Dr. John 486 486(21) 0 0
Abraham II, Leopold 959 959(21) 0 0
Cohan, Herbert 959 959(21) 0 0
Kaufman, Howard 959 959(21) 0 0
Hans Hamburger Trust 1,919 1,919(21) 0 0
Lubin, Richard 1,919 1,919(21) 0 0
Curtis, Thomas E. 1,919 1,919(21) 0 0
Leven, David 3,365 3,365(21) 0 0
- 13 -
<PAGE>
Wallick, Melvin 3,851 3,851(21) 0 0
Mandell, Leonard 3,851 3,851(21) 0 0
Leaf, Martin 3,851 3,851(21) 0 0
Simboli, Anthony 3,851 3,851(21) 0 0
Atkin, Norman 3,851 3,851(21) 0 0
Rocap, Inc. 103,117(10) 4,560(21) 98,557 *
</TABLE>
(1) Shown only if the percentage is more than 1%.
(2) A director of the Company.
(3) The wife of Elliott Mandell, a vice president of the Company and President
of its Rocap Division.
(4) Includes 21,115 shares subject to options exercisable within 60 days,
77,199 shares issuable upon exercise of the Service Warrants at $4.76 per
share and 5,988 shares held of record by William D. Lautman IRA. Excludes
shares held of record by The Pharmaceutical/Medical Technology Fund L.P.,
an investment partnership whose general partners are the owners of EGS
Partners, L.L.C. EGS Partners, L.L.C. is an affiliate of EGS Securities
Corp. of which Mr. Lautman is a managing director. Mr. Lautman disclaims
beneficial ownership of shares owned by The Pharmaceutical/Medical
Technology Fund, L.P.
(5) Includes 21,824 shares subject to options exercisable within 60 days and
3,152 shares issuable upon exercise of the Service Warrant at $4.76 per
share.
(6) Includes 3,939 shares subject to options exercisable within 60 days and
1,009 shares and 6,303 shares issuable upon exercise of the Service
Warrants at $11.11 and $4.76 per share, respectively.
(7) Includes 20,830 shares subject to options exercisable within 60 days, 2,904
shares and 927 shares issuable upon exercise of the Service Warrants at
$4.76 and $3.17 per share, respectively, 12,088 shares held of record by
PSF HealthCare Fund, L.P. of which Mr. Spencer is the managing partner, and
9,297 shares held of record by Spencer Family Partnership, L.P. Mr. Spencer
disclaims beneficial ownership of shares owned by Mrs. Spencer, Valerie C.
Spencer Trust #3 and Warren H. Corning #145751 Trust.
(8) Includes 24,080 shares subject to options exercisable within 60 days and 46
shares issuable upon exercise of the Service Warrant at $11.11 per share.
(9) Includes 40,000 shares subject to option exercisable within 60 days which
is owned by Elliott R. Mandell and 4,560 shares held of record by Rocap,
Inc. of which Elliott R. Mandell is the President.
(10) Includes 40,000 shares subject to option exercisable within 60 days which
is owned by Elliott R. Mandell and 58,557 shares held of record by Ginger
Mandell, the wife of Elliott R. Mandell.
(11) Represents the number of shares which were issued upon the exercise of the
Private Placement Warrant.
- 14 -
<PAGE>
(12) Includes 1,538 shares which were issued upon the exercise of the Private
Placement Warrant and 1,811 shares issuable upon the exercise of the
Service Warrant at $4.76 per share.
(13) Represents the number of shares issuable upon the exercise of the Service
Warrant at $4.76 per share.
(14) Includes 5,110 shares which were issued upon the exercise of the Private
Placement Warrant and 1,009 shares and 6,303 shares issuable upon the
exercise of the Service Warrant at $11.11 and $4.76 per share,
respectively.
(15) Represents the number of shares issuable upon the exercise of the Private
Placement Warrant at $4.55 per share.
(16) Includes 878 shares which were issued upon the exercise of the Service
Warrant and 1,328 shares and 926 shares issuable upon the exercise of the
Service Warrant at $4.76 and $3.17 per share, respectively.
(17) Includes 3,727 shares which were issued upon the exercise of the Service
Warrant and 2,904 shares and 927 shares issuable upon the exercise of the
Service Warrant at $4.76 and $3.17 per share, respectively.
(18) Represents the number of shares issuable upon the exercise of the Service
Warrant at $11.11 per share.
(19) Represent the number of shares which were issued upon the exercise of the
Service Warrant.
(20) Represents the number of shares issuable upon the exercise of the Omnicare
Warrant at $13.00 per share.
(21) Represents the proportionate ownership of the Rocap Shares.
PLAN OF DISTRIBUTION
--------------------
The Common Shares may be sold pursuant to this Prospectus by the
Selling Stockholders. These sales may occur in privately negotiated transactions
or in the over-the-counter market through brokers and dealers as agents or to
brokers and dealers as principals, who may receive compensation in the form of
discounts or commissions from the Selling Stockholders or from the purchasers of
the Common Stock for whom the broker-dealers may act as agent or to whom they
may sell as principal, or both. The Company has been advised by the Selling
Stockholders that they have not made any arrangements relating to the
distribution of the shares of Common Stock covered by this Prospectus. In
effecting sales, broker-dealers engaged by the Selling Stockholders may arrange
for other broker-dealers to participate. Broker-dealers will receive commissions
or discounts from the Selling Stockholders in amounts to be negotiated
immediately prior to the sale.
The Selling Stockholders and any broker-dealers who execute sales for
the Selling Stockholders may be deemed to be "underwriters" within the meaning
of the Securities Act by virtue of the number of shares of Common Stock to be
sold or resold by such persons or entities or the manner of sale thereof, or
both. If the Selling Stockholders, broker-dealers or other holders were
determined to be underwriters, any discounts or commissions received by them or
by brokers or dealers acting on their behalf and any profits received by them on
the resale of their shares of Common Stock might be deemed underwriting
compensation under the Securities Act.
The Selling Stockholders have represented to the Company that any
purchase or sale of the Common Stock by them will be in compliance with
applicable rules and regulations of the Commission.
- 15 -
<PAGE>
LEGAL MATTERS
-------------
The legality of the shares of Common Stock offered hereby has been
passed on for the Company by Ross & Hardies, Chicago, Illinois. A member of this
firm owns 64,079 shares of the Company's Common Stock.
EXPERTS
-------
The financial statements of Sabratek Corporation as of December 31,
1996 and 1995 and for each of the years in the three-year period ended December
31, 1996, have been incorporated by reference herein 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. The financial statements of Rocap, Inc. as of December
31, 1996 and for the year ended December 31, 1996, have been incorporated by
reference herein in reliance upon the report of Parent, Naffah & Company,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.
- 16 -
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
- -----------------------------------------------------
The following table sets forth an itemized estimate of fees and
expenses payable by the Registrant in connection with the offering of the
securities described in this registration statement.
SEC registration fee................................. $ 2,724
Legal fees and expenses.............................. $15,000
Accounting fees and expenses......................... $ 5,000
Miscellaneous ................................. $ 4,776
Printing expenses ................................. $ 2,500
Total ....................... $30,000
=======
Item 15. Indemnification of Directors and Officers
- --------------------------------------------------
The Company's Amended and Restated Certificate of Incorporation
provides for indemnification to the full extent permitted by the laws of the
State of Delaware against and with respect to threatened, pending or completed
actions, suits or proceedings arising from or alleged to arise from, a party's
actions or omissions as a director, officer, employee or agent of the Company or
of any other corporation, partnership, joint venture, trust or other enterprise
which has served in such capacity at the request of the Company if such acts or
omissions occurred or were or are alleged to have occurred, while said party was
a director or officer of the Company; provided, however, the Company shall not
indemnify any director or officer in an action against the Company unless the
Company shall have consented to such action. Generally, under Delaware law,
indemnification will only be available where an officer or director can
establish that he/she acted in good faith and in a manner which was reasonably
believed to be in or not opposed to the best interests of the Company.
Section 145 of the Delaware Law provides that a corporation may
indemnify a director, officer, employee or agent made a party to an action by
reason of the fact that such person was a director, officer, employee or agent
of the corporation or was serving at the request of the corporation against
expenses actually incurred by such person in connection with such action if such
person acted in good faith and in a manner such person reasonably believed to be
in, or not opposed to, the best interest of the corporation with respect to any
criminal action, and had no reasonable cause to believe his conduct was
unlawful. Delaware Law does not permit a corporation to eliminate a director's
duty of care, and the provisions of the Company's Amended and Restated
Certificate of Incorporation have no effect on the availability of equitable
remedies such as injunction or rescission, based upon a director's breach of the
duty of care. Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers or persons controlling
the Company pursuant to the foregoing provisions and agreements, the Company has
been informed that in the opinion of the Staff of the Securities and Exchange
Commission such indemnification is against policy as expressed in the Securities
Act and is therefore unenforceable.
The Company maintains a director's and officer's liability insurance
policy which indemnifies directors and officers for certain losses arising from
a claim by reason of a wrongful act, as defined, under certain circumstances
where the Company does not provide indemnification.
II-1
<PAGE>
Item 16. Exhibits, Financial Statement Schedules and Reports
- ------------------------------------------------------------
(a)(1) and (2). The Company's audited financial statements are incorporated
herein by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996.
(a)(3) and (c). The Company filed a Current Report on Form 8-K with the
Commission on March 11, 1997.
Exhibits (numbered in accordance with Item 601 of Regulation S-K).
<TABLE>
<CAPTION>
Page Incorporation
Exhibit Number (if by Reference
Number Description of Documents applicable) (if applicable)
------ ------------------------ ----------- ---------------
<S> <C> <C> <C> <C>
3.1 Articles of Incorporation +
3.2 ByLaws +
5.1 Opinion of Ross & Hardies regarding legality of shares of E-1
Common Stock
10.1 Agreement with Americorp Financial, Inc. re: Leasing +
Services, dated March 22, 1995
10.1.1 Amendment, dated September 16, 1996, to Agreement with +++
Americorp Financial, Inc.
10.2 Agreement with Clintec Nutrition Company re: Development +
Agreement, dated September 1, 1995
10.3 Intentionally Omitted
10.4 Intentionally Omitted
10.5 Distributorship Agreement with CO-Medical, Inc., dated +
February 17, 1992
10.6 Distributorship Agreement with Clinical Technology Inc., +
dated August 1, 1992
10.7 Intentionally Omitted
10.8 Intentionally Omitted
10.9 Distributorship Agreement with Advanced Medical, Inc., +
dated September 1, 1991
10.10 Distributorship Agreement with Healthcare Technology, +
dated October 9, 1991
10.11 Intentionally Omitted
10.12 Intentionally Omitted
10.13 Pump Contract with Chartwell Home Therapies, dated +
November 22, 1993
10.14 Sales Agreement with Pharmacy Corporation of America, +
dated March 17, 1995
10.15 Sales & Marketing Agreement with Alpha +
Group, dated November 6, 1995
10.16 Foreign Distributorship Agreement with MED-O-GEN INC., +
dated September 22, 1995
10.17 Foreign Distributorship Agreement with Yoon Duk +
Separation Technology, dated April 17, 1995
II-2
<PAGE>
10.18 Foreign Distributorship Agreement with Upwards Biosystems +
Ltd., dated March 8, 1995
10.19 Foreign Distributorship Agreement with Grupo Grifols, +
S.A., dated September 17, 1993
10.20 Foreign Distributorship Agreement with JMS Company, +
dated March 22, 1996
10.21 Foreign Distributorship Agreement with Brasimpex +
10.22 Foreign Distributorship Agreements with Medicare (s) PTE +
LTD., dated February 10, 1995
10.23 Intentionally Omitted
10.24 Intentionally Omitted
10.25 Master Lease Agreement with Comdisco, Inc., dated August +
9, 1994
10.26 Stock Option Plan +
10.27 Lease for Real Property located at 5601 West Howard, +
Niles, Illinois, dated as of May 31, 1994
10.27.1 Amendment, dated October 30, 1996, to Lease for Real +++
Property located at 5601 West Howard, Niles, Illinois
10.28 Employment Agreement for K. Shan Padda +
10.29 Employment Agreement for Anil Rastogi +
10.30 Asset Purchase Agreement, dated February 25, 1997, by and ++
among Sabratek Corporation; Rocap, Inc. and Elliott
Mandell
10.31 Employment Agreement for Stephen L. Holden ++++
10.32 Employment Agreement for Elliott Mandell ++
10.33 Lease Agreement for property located at 11 Sixth Road, ++++
Woburn, Massachusetts, dated February 1, 1997
10.34 Lease Agreement for property located at 5 Constitution Way, ++++
Woburn, Massachusetts, dated June 26, 1995
10.35 Lease Agreement for property located at 1629 Prime Court, +++++
Suite 100, Orlando, Florida, dated March 11, 1997
23.1 Consent of KPMG Peat Marwick LLP E-3
23.2 Consent of Parent, Naffah & Company
23.3 Consent of Ross & Hardies (included in Exhibit 5.1) E-4
24.1 Powers of Attorney (included on the signature page hereto)
</TABLE>
+ Incorporated by reference to the Company's Registration Statement on Form
S-1, declared effective by the Commission on June 21, 1996 (File No.
333-3866).
++ Incorporated by reference to the Company's Current Report on Form 8-K filed
with the Commission on March 11, 1997.
II-3
<PAGE>
+++ Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1996 filed with the Commission on March
31, 1997.
++++ Incorporated by reference to the Company's Registration Statement on Form
S-1 declared effective by the Commission on April 4, 1997
+++++Incorporated by reference to the Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1997 filed with the Commission on May 15,
1997.
(b) Reports on Form 8-K
The Company's current report on Form 8-K, dated February 25, 1997
(filed March 12, 1997), is incorporated herein by this reference.
Item 17. Undertakings
- ---------------------
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, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in the volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(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 paragraphs (1)(i) and (1)(ii) do not apply if
the registration statement is on Form S-3 or Form S-8, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in the 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 of 1933, each filing of the Registrant's annual report pursuant
to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and
II-4
<PAGE>
where applicable, each filing of an employee benefit plan's annual report
pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in this 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) 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
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the 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 Act and will be governed by the final adjudication of
such issue.
II-5
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements 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 Niles, State of Illinois, on July 23, 1997.
SABRATEK CORPORATION
By: /S/ K. SHAN PADDA
---------------------
K. Shan Padda
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints K. Shan Padda and/or Stephen L. Holden the true and lawful
attorneys-in-fact and agents of the undersigned, with full power of substitution
and resubstitution, for and in the name, place and stead of the undersigned, 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 other documents in connection therewith, with the
Securities and Exchange Commission, and hereby grants to such attorneys-in-fact
and agents full power and authority to do and perform each and every act and
thing requisite and necessary to be done in furtherance of the foregoing, as
fully to al intents and purposes as the undersigned might or could do in person,
hereby ratifying and confirming all that said attorneys-in-fact and agents, or
their substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities indicated on July 23, 1997.
Signature Title
--------- -----
/S/ K. SHAN PADDA Chairman of the Board and Chief Executive Officer
K. Shan Padda
/s/ Stephen L. Holden Senior Vice President, Chief Financial Officer,
Stephen L. Holden Treasurer and Principal Financial Officer
/S/ SCOTT SKOOGLUND Vice President - Finance and Assistant Secretary
Scott Skooglund and Principal Accounting Officer
/S/ FRANCIS V. COOK, M.D. Director
Francis V. Cook, M.D.
/S/ MARK LAMPERT Director
Mark Lampert
/S/ WILLIAM D. LAUTMAN Director
William D. Lautman
/S/ DORON C. LEVITAS Director
Doron C. Levitas
<PAGE>
/S/ WILLIAM H. LOMICKA Director
William H. Lomicka
/S/ MARVIN SAMSON Director
Marvin Samson
/S/ L. PETER SMITH Director
L. Peter Smith
/S/ EDSON W. SPENCER, JR. Director
Edson W. Spencer, Jr.
<PAGE>
SABRATEK CORPORATION
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
5.1 Opinion of Ross & Hardies
23.1 Consent of KPMG Peat Marwick LLP
23.2 Consent of Parent, Naffah & Company
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
EXHIBITS
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------
SABRATEK CORPORATION
(Exact name of registrant as specified in its charter)
EXHIBIT 5.1
[ROSS & HARDIES LETTERHEAD]
July 23, 1997
Sabratek Corporation
5601 West Howard Street
Niles, Illinois 60714
Re: Registration Statement on Form S-3
-------------------------------------------
Ladies and Gentlemen:
You have requested our opinion with respect to the registration by
Sabratek Corporation (the "Company") pursuant to a Registration Statement on
Form S-3 (the "Registration Statement") under the Securities Act of 1933, as
amended (the "Act"), of an aggregate of 464,272 shares of the Company's Common
Stock, $.01 par value per share (the "Common Stock"), issuable upon the exercise
of outstanding warrants (the "Warrants").
In so acting, we have examined originals or copies, certified or
otherwise identified to our satisfaction, of such documents, corporate records,
certificates of public officials and other instruments and have conducted such
other investigations of fact and law as we have deemed relevant and necessary to
form a basis for the opinions hereinafter expressed. In conducting such
examination, we have assumed (i) that all signatures are genuine, (ii) that all
documents and instruments submitted to us as copies conform with the originals,
and (iii) the due execution and delivery of all documents where due execution
and delivery are a prerequisite to the effectiveness thereof. As to any facts
material to this opinion, we have relied upon statements and representations of
officers and other representatives of the Company and certificates of public
officials and have not independently verified such facts.
Based upon the foregoing, it is our opinion that the Common Stock
issuable upon the proper exercise of the Warrants will be validly issued, fully
paid and non-assessable when issued in accordance with the terms of such
Warrants.
We express no opinion as to the laws of any jurisdiction other than the
State of Illinois and the United States of America. Insofar as the foregoing
opinion relates to matters that would be controlled by the substantive laws of
any jurisdiction other than the United States of America or the State of
Illinois, we have assumed that the substantive laws of such jurisdiction conform
in all respects to the internal laws of the State of Illinois.
<PAGE>
Sabratek Corporation
July 23, 1997
Page 2
We hereby consent to the reference to our firm in the Registration
Statement relating to the registration of 703,820 shares of Common Stock,
including the 464,272 shares of Common Stock issuable upon exercise of the
Warrants.
Very truly yours,
ROSS & HARDIES
By: /S/ DAVID S. GUIN
A Partner
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Sabratek Corporation:
We consent to incorporation by reference in the registration statement on Form
S-3 of Sabratek Corporation of our report dated March 4, 1997, relating to the
balance sheets of Sabratek Corporation as of December 31, 1996 and 1995 and the
related statements of operations, stockholders' deficit, and cash flows for each
of the years in the three-year period ended December 31, 1996, which report
appears in the Company's Annual Report for the period ended December 31, 1996,
as filed with the Securities and Exchange Commission on March 31, 1997.
KPMG Peat Marwick LLP
/s/ KPMG PEAT MARWICK LLP
Chicago, Illinois
July 17, 1997
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Sabratek Corporation:
We consent to incorporation by reference in the registration statement on Form
S-3 of Sabratek Corporation of our report dated February 3, 1997, relating to
the balance sheets of Rocap, Inc. as of December 31, 1996 and the related
statements of operations, stockholders' deficit, and cash flows for the year
ended December 31, 1996, which report appears in the Company's Registration
Statement on Form S-1, declared effective by the Securities and Exchange
Commission on April 4, 1996 (File No. 333-23437).
PARENT, NAFFAH & COMPANY
/s/ PARENT, NAFFAH & COMPANY
Chicago, Illinois
July 17, 1997
