<PAGE> 1
As filed with the Securities and Exchange Commission on January 9, 2001.
Registration No. ___________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
ADVANCED NEUROMODULATION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1646002
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
6501 WINDCREST DRIVE, SUITE 100
PLANO, TEXAS 75024
(972) 309-8000
(Address, including zip code, and telephone number,
including area code, of registrant's principal
executive offices)
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F. Robert Merrill III
Executive Vice President - Finance,
Chief Financial Officer and Treasurer
6501 Windcrest Drive, Suite 100
Plano, Texas 75024
(972) 309-8000
(Name, address, and telephone number,
including area code, of agent for service)
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Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of this Registration Statement.
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 of 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 of 1933, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act of 1933, 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: [ ]
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
AMOUNT PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF SHARES TO BE AGGREGATE PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) FEE
------------------------- ---------------------- ----------------------- ---------------------- ----------------------
<S> <C> <C> <C> <C>
Common Stock,
$.05 par value 1,223,825(2) $21.125(3) $25,853,303(3) $6,463.33
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) This registration statement is being used to register 1,223,825 shares of
common stock owned by selling shareholders, plus an indeterminate number of
shares of common stock which may be issued pursuant to provisions of the
ESOX Asset Purchase Agreement described herein.
(3) Calculated pursuant to Rule 457(c) of the Securities Act of 1933, as
amended, based upon the average of the high and low prices per share of
Advanced Neuromodulation Systems, Inc. on January 2, 2001, as reported by
the Nasdaq National Market.
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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 THAT 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.
================================================================================
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 THAT 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.
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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 THAT 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> 2
ADVANCED NEUROMODULATION SYSTEMS, INC.
1,223,825 SHARES
COMMON STOCK
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On January 2, 2001, we issued 119,100 shares of our common stock
pursuant to an Asset Purchase Agreement, dated as of January 2, 2001, among us,
SPAC Acquisition Corp., a Delaware corporation and our wholly-owned subsidiary,
Implantable Devices, Inc., a Minnesota corporation ("IDI"), Implantable Devices
Limited Partnership, a Minnesota limited partnership ("IDP"), ESOX Technology
Corporation, a Minnesota corporation ("ESOX"), and Henry Buchwald, John
Hoeschler, Thomas Rohde and Bruce Wigness, the shareholders of IDI and ESOX. We
issued the shares to ESOX Technology Holdings, LLC, a Minnesota limited
liability company ("ESOX LLC"), as successor in interest to ESOX, and to IDP.
ESOX LLC and IDP then distributed the shares to their shareholders, as listed
below under the caption "Selling Shareholders." These selling shareholders can
use this prospectus to sell to other purchasers some or all of the shares of our
common stock they received pursuant to the asset purchase agreement. ESOX LLC's
and IDP's consolidated unaudited revenues for their last fiscal year did not
exceed $100,000.
Subsequently, but also on January 2, 2001, we issued 1,104,725 shares
of our common stock pursuant to an Agreement and Plan of Merger, dated as of
November 30, 2000, among us, ANS Acquisition Corp., a New Jersey corporation and
our wholly-owned subsidiary, Hi-tronics Designs, Inc., a New Jersey corporation,
and certain major shareholders of Hi-tronics Designs, Inc. We issued the shares
to all of the shareholders of Hi-tronics Designs, Inc., as listed below under
the caption "Selling Shareholders." These selling shareholders can use this
prospectus to sell to other purchasers some or all of the shares of our common
stock they received pursuant to the merger agreement. HDI is a contract
developer and original equipment manufacturer of electro-mechanical devices,
and supplies components to us and to other customers. Hi-tronics' unaudited
revenues for its fiscal year ended November 30, 2000 were approximately $10.6
million, including approximately $1.5 million of revenues associated with sales
to us. Hi-tronic's unaudited earnings before taxes for the fiscal year were
approximately $300,000.
The offering of shares of our common stock under this prospectus is
being made by the selling shareholders only. It is not part of an original
issuance by us of shares of our common stock. Accordingly, all of the net
proceeds from the sale of shares of our common stock offered under this
prospectus will go to the selling shareholders who offer and decide to sell
their shares.
Although we will not receive any of the proceeds from the selling
shareholders' sale of their shares, we have agreed to and will pay for the costs
of registering the shares covered by this prospectus, other than commissions,
fees and discounts of underwriters, brokers, dealers and agents, if any.
The selling shareholders may offer their shares of our common stock in
transactions on the Nasdaq Stock Market's National Market (we refer to it as the
"Nasdaq"), in negotiated transactions, through a combination of these methods or
in any other legal way. The selling shareholders may offer their shares of our
common stock at prevailing market prices, at prices related to market prices, at
fixed prices that may change or at privately negotiated prices. See below under
the caption "Plan of Distribution."
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Our common stock is quoted on the Nasdaq and trades under the symbol
"ANSI." On January 8, 2001, the closing price of one share of our common stock,
as reported on the Nasdaq, was $24.00.
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THIS INVESTMENT IN SHARES OF OUR COMMON STOCK INVOLVES A HIGH DEGREE OF
RISK. YOU SHOULD CAREFULLY CONSIDER THE RISKS WE DESCRIBE UNDER THE CAPTION
"RISK FACTORS" BEGINNING ON PAGE 5.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
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The shares of common stock being offered under this prospectus are not
being offered in any jurisdiction where the offer is not permitted.
<PAGE> 3
The information contained in this prospectus is accurate only as of the
date of this prospectus, regardless of the time of delivery of this prospectus
or of any sale of shares of our common stock offered under this prospectus.
No dealer, salesman or any other person has been authorized to give any
information or to make any representations in connection with this offering
other than those contained in this prospectus and, if given or made, such other
information and representations must not be relied upon as having been
authorized by us or the selling shareholders. Neither the delivery of this
prospectus nor any sale made under this prospectus shall, under any
circumstances, create any implication that there has been no change in our
business affairs since the date of this prospectus or that the information
contained in this prospectus is correct as of any time subsequent to its date.
This prospectus does not constitute an offer to sell, or a solicitation of any
offer to buy, any securities other than the registered securities to which it
relates. This prospectus does not constitute an offer to sell, or a solicitation
of any offer to buy, such securities in any circumstances in which such offer or
solicitation is unlawful.
This prospectus is dated January __, 2001.
2
<PAGE> 4
WHERE YOU CAN FIND MORE INFORMATION
We are subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"). Accordingly,
we file reports, proxy statements, information statements and other information
with the Securities and Exchange Commission (the "Commission"). You may read and
copy the various reports, proxy statements, information statements, and other
information that we file with the Commission pursuant to the requirements of the
Exchange Act at Judiciary Plaza, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549-1004 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 60606. Copies of these materials may be
obtained from the Public Reference Room of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. Also, the Commission
maintains a Web site that contains our various Commission filings and other
information about us. The Commission's Web site address is http://www.sec.gov.
We are a publicly held corporation, and our common stock is traded on
the Nasdaq under the symbol "ANSI." You also may review copies of our various
reports, proxy statements, information statements and other information at the
offices of the Nasdaq National Market, 1735 K Street, N.W., Washington, D.C.
20549.
We intend to furnish our shareholders with annual reports containing
audited consolidated financial statements and other periodic reports as we may
determine or as may be required by law.
This prospectus constitutes a part of a registration statement on Form
S-3 that we have filed with the Commission under the Securities Act of 1933, as
amended, (the "Securities Act"). This prospectus does not contain all
information included in the registration statement. Certain parts of the
registration statement have been omitted in accordance with the rules and
regulations of the Commission. For further information, please refer to the
registration statement, which can be inspected on the Commission's Web site or
at the public reference rooms at the offices of the Commission.
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<PAGE> 5
DOCUMENTS INCORPORATED BY REFERENCE
The Commission allows us to "incorporate by reference" certain
information and reports that we file with it. Accordingly, this prospectus
incorporates by reference the following documents previously filed by us with
the Commission pursuant to the Securities Act and the Exchange Act, and these
documents are deemed a part of this prospectus:
(i) our Annual Report on Form 10-K, which contains audited financial
statements for the fiscal year ended December 31, 1999;
(ii) our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000;
(iii) our Quarterly Report on Form 10-Q for the quarter ended June 30,
2000;
(iv) our Quarterly Report on Form 10-Q for the quarter ended September
30, 2000;
(v) our Current Reports on Form 8-K, filed on December 1, 2000 and
January 9, 2001; and
(vi) a description of our common stock contained in our registration
statement on Form SB-2, dated September 28, 1995 (Commission File Number
33-62991), including any amendment or reports filed for the purpose of updating
such description.
All of the documents that we file with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
prospectus and before the termination of the offering relating to this
prospectus will be deemed to be incorporated by reference in this prospectus and
to constitute a part of this prospectus from the date that such documents are
filed with the Commission. For purposes of this prospectus, any statement that
is incorporated or deemed to be incorporated by reference in this prospectus
will be deemed to be modified, replaced, or superseded by a statement contained
in this prospectus or contained in any other subsequently filed document that
also is or is deemed to be incorporated by reference in this prospectus. Such
modified or superseded statement will be deemed, except as so modified or
superseded, to constitute a part of this prospectus.
You may request, at no cost, copies of any or all of the documents
incorporated by reference in this prospectus (other than the exhibits to such
documents, unless such exhibits are specifically incorporated by reference into
the information that this prospectus incorporates) by writing or telephoning us
at:
Advanced Neuromodulation Systems, Inc.
6501 Windcrest Drive
Suite 100
Plano, Texas 75024
Attn: Chief Financial Officer
Telephone: (972) 309-8000
4
<PAGE> 6
THE COMPANY
We design, develop, manufacture and market advanced implantable
neuromodulation devices that improve the quality of life for people with
disabling chronic pain or nervous system disorders. Neuromodulation is the
electrical or chemical modulation of the central nervous system to significantly
reduce chronic pain or improve neurological function. We are a market share and
technology leader in the $42 million radio-frequency stimulation segment of the
neuromodulation market. Additionally, we continue to accelerate our investment
in development projects to position us to participate in the other larger and
more rapidly growing segments of the neuromodulation market.
We are a Texas corporation formed in 1979. Our principal executive
offices are located at 6501 Windcrest Drive, Suite 100, Plano, Texas 75024, and
our telephone number is (972) 309-8000.
RISK FACTORS
You should carefully consider the following risk factors and warnings
before making an investment decision. The risks described below are not the only
ones that we face. Additional risks that we do not yet know of or that we
currently think are immaterial may also impair our business operations. If any
of the following risks actually occur, our business, financial condition or
results of operations could be materially adversely affected. In such case, the
trading price of our common stock could decline, and you may lose all or part of
your investment. You should also refer to the other information set forth and
incorporated by reference in this prospectus.
This prospectus and the information incorporated by reference in this
prospectus contain forward-looking statements. These statements refer to future
events or our future financial performance. In some cases, you can identify
forward-looking statements by terminology such as "may," "will," "should,"
"expects," "anticipates," "plans," "believes," "estimates," "predicts,"
"potential" or "continue" or the negative of such terms and other comparable
terminology. These statements are only predictions. Actual events or results may
differ materially. In evaluating these statements, you should specifically
consider various factors, including the risks outlined below. These factors may
cause our actual results to differ materially from those expressed in
forward-looking statements made or incorporated by reference in this prospectus,
or in any other Commission filings or public statements we may make. We
undertake no obligation to publicly update any forward-looking statements,
whether as a result of new information, future events or otherwise.
Product Development and Market Acceptance. Our growth depends in part on our
ability to develop and gain market acceptance of new products, including our
next generation of products. We cannot assure you that we will continue to
develop successful products, that we will not experience delays in product
introduction, or that once such products are introduced, the market will accept
them.
5
<PAGE> 7
Government Regulation. Our business is subject to extensive government
regulation, principally by the Food and Drug Administration (the "FDA"). The
regulatory process, especially as it relates to product approvals, can be
lengthy, expensive and uncertain and may involve the satisfactory completion of
clinical trials and market tests prior to the introduction of new products.
Failure to obtain government approval of our products on a timely and
cost-efficient basis, including the approval of the IPG stimulation systems for
spinal cord stimulation, could have a material adverse effect on our business,
financial condition and results of operations.
Component Supply. We depend on various suppliers for certain components used to
manufacture our products, and our business depends in part on the adequacy,
acceptability and timeliness of component supply. In addition, we rely on a
single supplier for the computer chip used in the receiver of our stimulation
systems. The supplier of this computer chip has indicated its desire to cease
manufacturing and supplying the computer chip in the future, but to date has not
determined when this will occur. The supplier has agreed to notify us when a
date has been determined and allow us to place a final one-time purchase order
for the computer chip. In the interim, we are maintaining a higher than normal
inventory of the computer chip and are developing a new receiver design that
does not use a custom computer chip. A sudden disruption in supply from the
computer chip supplier or another single-source supplier could adversely affect
our ability to deliver finished products on time.
Competition and Technological Change. The medical device market is highly
competitive. We compete with many larger companies that have access to greater
capital, research and development, marketing, distribution and other resources
than we do. In addition, our market is characterized by extensive research
efforts and rapid product development and technological change, which could
render our products obsolete or noncompetitive. The market for electrical
stimulation systems and implantable intrathecal drug pumps is dominated by one
large supplier, Medtronic, Inc.
Intellectual Property Rights. We rely in part on patents, trade secrets and
proprietary technology to remain competitive. It may be necessary to defend
these rights or to defend against claims that we are infringing on the rights of
others. Intellectual property litigation and controversies are disruptive and
expensive.
Cost Pressures on Medical Technology. The overall escalating cost of medical
products and healthcare results in significant cost pressure. Third-party
payers, such as insurance companies and HMO's, are under intense pressure to
challenge the prices charged for medical products and services. We rely heavily
on Medicare and Medicaid reimbursement. Any amendments to existing reimbursement
rules and regulations that restrict or terminate the reimbursement eligibility
(or the extent or amount of coverage) of medical procedures using our products
or the eligibility (or the extent or amount of coverage) of our products could
adversely impact our business, financial condition and results of operations.
Potential Product Liability. The testing, manufacturing, marketing and sale of
medical devices entail substantial risks of liability claims or product recalls.
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<PAGE> 8
Reliance on Major Customers. During 1999, we had two major customers that
accounted for ten percent or more of our net revenue. Sun Medical, Inc. and
Primesource Surgical, Inc., each a specialty distributor of our products,
accounted for $3.0 million and $2.3 million, respectively, or 14.6% and 11.2%,
respectively, of our net revenue from product sales for the year ended December
31, 1999. While we believe our relations with these customers are good, the loss
of one or both of them could have a material adverse effect on our business,
financial condition and results of operations.
Year 2000 Compliance. Although our Year 2000 readiness efforts were successful
and we have not experienced any Year 2000 issues to date, we cannot assure you
that Year 2000 issues will not occur at a later date that would have a material
adverse impact on our results of operations, financial condition and cash flows.
7
<PAGE> 9
SELLING SHAREHOLDERS
The shares of our common stock to be sold pursuant to the offering were
acquired by the selling shareholders in connection with our acquisitions of
Hi-tronics Designs, Inc. and the assets of ESOX Technology Holdings, LLC and
Implantable Devices Limited Partnership. The table below sets forth information
with respect to the beneficial ownership of the common stock by the selling
shareholders immediately prior to this offering and as adjusted to reflect the
sale of shares of common stock pursuant to the offering. All information with
respect to the beneficial ownership has been furnished by the selling
shareholders.
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering After Offering
---------------------------------- ------------------------
Number of Shares to Number of
Name of Beneficial Owner Shares be Sold (1) Shares (1)
------------------------ ---------- -------------- -----------
<S> <C> <C> <C>
Anthony J. Varrichio (2) 481,710 481,710 0
Sherrie Varrichio 20,727 20,727 0
William L. Winstrom (3) 363,545 363,545 0
Leilani Winstrom 987 987 0
Jack Schwartz 78,960 78,960 0
Richard Michelin 30,706 30,706 0
Martin Thompson 20,398 20,398 0
James Caruso (4) 16,724 16,724 0
Randy Robinson 16,450 16,450 0
James Woesner 14,805 14,805 0
SWM Consulting 12,831 12,831 0
Robert Hudson 9,870 9,870 0
Greg Turi 7,402 7,402 0
Jonathon Varrichio 3,290 3,290 0
Gina Varrichio 3,290 3,290 0
Craig Varrichio 3,290 3,290 0
Ann Hudson 3,290 3,290 0
Camile Lipuma 3,290 3,290 0
Lisa Winstrom 3,290 3,290 0
Eric Winstrom 3,290 3,290 0
Amy Redd 1,645 1,645 0
Steven Minnick 1,645 1,645 0
David Palmer 1,645 1,645 0
Robert Winstrom 1,645 1,645 0
ESOX Technology Holdings, LLC 1,197 1,197 0
Implantable Devices Limited 1,203 1,203 0
Partnership
University of Minnesota 11,672 11,672 0
Henry Buchwald 28,955 28,955 0
Bruce Wigness 36,007 36,007 0
John Hoeschler 18,756 18,756 0
Tom Rohde 21,310 21,310 0
</TABLE>
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(1) Assumes all the shares of common stock that may be offered are sold.
Messrs. Anthony J. Varrichio, William L. Winstrom, and James Caruso have
agreed that they will not sell, transfer or otherwise dispose of, or reduce
any risk relative to, any of the common stock they own after January 2,
2001 until such time as financial statements that include at least 30 days
of combined operations of Hi-tronics Designs, Inc. and Advanced
Neuromodulation Systems, Inc. after the merger have been publicly reported.
8
<PAGE> 10
(2) Anthony J. Varrichio became Executive Vice President of Advanced
Neuromodulation Systems, Inc. and General Manager of Hi-tronics Designs,
Inc., a New Jersey corporation and wholly-owned subsidiary of Advanced
Neuromodulation Systems, Inc., effective as of January 2, 2001.
(3) William L. Winstrom became Vice President of Hi-tronics Designs, Inc., a
New Jersey corporation and wholly-owned subsidiary of Advanced
Neuromodulation Systems, Inc., effective as of January 2, 2001.
(4) James Caruso became Vice President - Finance of Hi-tronics Designs, Inc., a
New Jersey corporation and wholly-owned subsidiary of Advanced
Neuromodulation Systems, Inc., effective as of January 2, 2001.
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<PAGE> 11
PLAN OF DISTRIBUTION
The shares of common stock are being registered to permit public
secondary trading of such common stock by the holders thereof from time to time
after the date of this prospectus. The sale of the common stock offered by this
prospectus may be effected from time to time directly, or by one or more
broker-dealers or agents, in one or more transactions (which may involve crosses
or block transactions) on the Nasdaq (or other national securities exchange or
quotation services on which the Common Stock may be listed or quoted at the time
of sale) or otherwise. Such common stock may be sold in one or more negotiated
transactions, or through a combination of such methods of distribution, at
prices related to prevailing market prices, fixed prices, varying prices
determined at the time of sale or at negotiated prices.
In the event one or more broker-dealers or agents agree to sell the
common stock, they may do so by purchasing the common stock as principals or by
selling the common stock as agent for the selling shareholders. Any such
broker-dealers or agents may receive compensation in the form of discounts,
concessions or commissions from the selling shareholders or the purchasers of
the shares of common stock for which such broker-dealer or agent may act as
agent or to whom they may sell as principal, or both (which compensation as to a
particular broker-dealer or agent may be in excess of customary compensation).
The selling shareholders will be subject to applicable provisions of
the Exchange Act and the rules and regulations thereunder, which provisions may
limit the timing of purchases and sales of the common stock by the selling
shareholders. The foregoing may affect the marketability of the common stock.
In order to comply with certain states' securities laws, if applicable,
the common stock will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states, the common stock may not be sold
unless the common stock has been registered or qualified for sale in such state
or an exemption from registration or qualification is available and is complied
with.
USE OF PROCEEDS
We will not receive any proceeds from the offering.
LEGAL MATTERS
The validity of the common stock offered by this prospectus will be
passed upon for us by Hughes & Luce, L.L.P., Dallas, Texas.
10
<PAGE> 12
EXPERTS
The consolidated financial statements of Advanced Neuromodulation
Systems, Inc. incorporated by reference in Advanced Neuromodulation Systems,
Inc.'s Annual Report on Form 10-K for the year ended December 31, 1999, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report included therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance upon such
report given on the authority of such firm as experts in accounting and
auditing.
INDEMNIFICATION
Our Articles of Incorporation include a provision eliminating or
limiting director liability to Advanced Neuromodulation Systems, Inc. and its
shareholders for monetary damages arising from acts or omissions in the
director's capacity as a director. Consistent with the Texas Business
Corporation Act, our Articles of Incorporation do not eliminate or limit a
director's liability to the extent the director is found liable for (i) a breach
of the director's duty of loyalty to us or our shareholders, (ii) an act or
omission not in good faith that constitutes a breach of duty of the director to
us or an act or omission that involves intentional misconduct or a knowing
violation of the law, (iii) a transaction from which the director received an
improper benefit, whether or not the benefit resulted from an action taken
within the scope of the director's office, (iv) an act or omission for which the
liability of a director is expressly provided by an applicable statute, or (v)
an act related to an unlawful stock repurchase or payment of a dividend. In
addition, we maintain insurance on behalf of our directors and executive
officers, insuring them against any liability asserted against them in their
capacities as directors or officers or arising out of such status.
To the extent that indemnification for liabilities arising under the
Securities Act may be permitted to our directors, officers and controlling
persons under Texas law, our Articles of Incorporation or otherwise, we have
been advised that in the opinion of the 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 us of expenses incurred or paid by a director,
officer, or controlling person 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, we will, unless in the opinion
of our 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 we will be
governed by the final adjudication of such issue.
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<PAGE> 13
PART II
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Registration fee $ 6,463
Accounting fees and expenses 4,000*
Legal fees and expenses 4,000*
Miscellaneous expenses 2,000*
--------
Total: $ 16,463*
</TABLE>
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* Estimated
We will pay all of the above expenses.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Consistent with the Texas Business Corporation Act, our Articles of
Incorporation include a provision eliminating or limiting director liability to
us or our shareholders for monetary damages arising from certain acts or
omissions in the director's capacity as a director. In addition, we maintain
insurance on behalf of our directors and executive officers insuring them
against any liability asserted against them in their capacities as directors or
officers or arising out of such status.
ITEM 16. EXHIBITS.
The Exhibits to this Registration Statement are listed in the Index to
Exhibits on page II-5 of this registration statement, which Index is
incorporated herein by reference.
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act;
(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 the 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 and
II-1
<PAGE> 14
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 volume and
price represent no more than 20 percent 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 (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Form S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed by
the Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act, 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.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the 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 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.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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 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 registrant of expenses
incurred or paid by a director, officer or controlling person of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
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<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act, 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 Plano, State of Texas, on January 9, 2001.
ADVANCED NEUROMODULATION SYSTEMS, INC.
By: /s/ Christopher G. Chavez
---------------------------------------
Christopher G. Chavez
President
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities and on the
dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Christopher G. Chavez Chief Executive Officer, President and January 9, 2001
-------------------------------- Director of Advanced Neuromodulation
Christopher G. Chavez Systems, Inc. (Principal Executive Officer)
/s/ F. Robert Merrill III Executive Vice President - Finance, January 9, 2001
-------------------------------- Treasurer and Secretary of Advanced
F. Robert Merrill III Neuromodulation Systems, Inc. (Principal
Financial and Accounting Officer)
/s/ Hugh M. Morrison Chairman of the Board and Director of January 9, 2001
-------------------------------- Advanced Neuromodulation Systems, Inc.
Hugh M. Morrison
/s/ Robert C. Eberhart Director of Advanced Neuromodulation January 9, 2001
-------------------------------- Systems, Inc.
Robert C. Eberhart
Director of Advanced Neuromodulation January __, 2001
-------------------------------- Systems, Inc.
Joseph E. Laptewicz, Jr.
/s/ A. Ronald Lerner Director of Advanced Neuromodulation January 9, 2001
-------------------------------- Systems, Inc.
A. Ronald Lerner
/s/ Richard D. Nikolaev Director of Advanced Neuromodulation January 9, 2001
-------------------------------- Systems, Inc.
Richard D. Nikolaev
Director of Advanced Neuromodulation January __, 2001
-------------------------------- Systems, Inc.
Michael J. Torma
</TABLE>
II-3
<PAGE> 16
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Christopher G. Chavez and F. Robert Merrill III his or her true and
lawful attorney-in-fact and agent with full power of substitution and
resubstitution, for him or her and in his or her name, place, and stead, in any
and all capacities, to sign any and all amendments (including post-effective
amendments) to this registration statement, any and all supplemental
registration statements (including post-effective amendments), and to file the
same, with all exhibits thereto, and other documents in connection therewith,
with the Commission, and hereby grants to such attorney-in-fact and agent full
power and authority to do and perform each and every act and thing requisite and
necessary to be done, as fully to all intents and purposes as he or she might or
could do in person, hereby ratifying and confirming all that said
attorney-in-fact and agent or his substitute or substitutes may lawfully do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this registration
statement or amendment thereto has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Christopher G. Chavez Chief Executive Officer, President and January 9, 2001
-------------------------------- Director of Advanced Neuromodulation
Christopher G. Chavez Systems, Inc. (Principal Executive Officer)
/s/ F. Robert Merrill III Executive Vice President - Finance, January 9, 2001
-------------------------------- Treasurer and Secretary of Advanced
F. Robert Merrill III Neuromodulation Systems, Inc. (Principal
Financial and Accounting Officer)
/s/ Hugh M. Morrison Chairman of the Board and Director of January 9, 2001
-------------------------------- Advanced Neuromodulation Systems, Inc.
Hugh M. Morrison
/s/ Robert C. Eberhart Director of Advanced Neuromodulation January 9, 2001
-------------------------------- Systems, Inc.
Robert C. Eberhart
Director of Advanced Neuromodulation January __, 2001
-------------------------------- Systems, Inc.
Joseph E. Laptewicz, Jr.
/s/ A. Ronald Lerner Director of Advanced Neuromodulation January 9, 2001
-------------------------------- Systems, Inc.
A. Ronald Lerner
/s/ Richard D. Nikolaev Director of Advanced Neuromodulation January 9, 2001
-------------------------------- Systems, Inc.
Richard D. Nikolaev
Director of Advanced Neuromodulation January __, 2001
-------------------------------- Systems, Inc.
Michael J. Torma
</TABLE>
II-4
<PAGE> 17
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibits
------- -----------------------
<S> <C>
*5.1 Opinion of Hughes & Luce, L.L.P.
*23.1 Consent of Hughes & Luce, L.L.P. (included in Exhibit 5.1)
*23.2 Consent of Ernst & Young LLP
*24.1 Power of Attorney (included in Part II of this registration statement)
</TABLE>
-----------
*Filed Herewith.
II-5
