<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON SEPTEMBER , 1998
REGISTRATION NO. 333-60421
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
SI TECHNOLOGIES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE 3596 95-3381440
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) CLASSIFICATION CODE NUMBER) IDENTIFICATION NO.)
</TABLE>
4611 SOUTH 134TH PLACE
TUKWILA, WASHINGTON 98168
(206) 244-6100
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
------------------------
PAUL CAVANAUGH, CHIEF FINANCIAL OFFICER
4611 SOUTH 134TH PLACE
TUKWILA, WASHINGTON 98168
(206) 244-6100
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
------------------------
COPIES TO:
BENJAMIN F. STEPHENS
WILLIAM W. BARKER
GRAHAM & JAMES LLP/RIDDELL WILLIAMS P.S.
1001 FOURTH AVENUE PLAZA, SUITE 4500
SEATTLE, WASHINGTON 98154
TEL: (206) 624-3600
FAX: (206) 389-1708
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after this Registration Statement becomes effective.
If any of the securities being registered on this form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act,
check the following box: [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If this form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box: [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<S> <C> <C> <C> <C>
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PROPOSED MAXIMUM
TITLE OF EACH CLASS OF SECURITIES AMOUNT TO BE PROPOSED MAXIMUM AGGREGATE OFFERING AMOUNT OF
TO BE REGISTERED REGISTERED OFFERING PRICE(1) PRICE REGISTRATION FEE
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Common stock, $.01 par value(2)... 1,087,632 $6.625 $7,205,562 $2,125*
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</TABLE>
* Previously filed.
(1) Estimated pursuant to Rule 457(c) under the Securities Act solely for the
purpose of calculating the registration fee, based upon the last reported
sale of the common stock $6.625 as quoted on Nasdaq on July 28, 1998.
(2) Consists of 839,664 shares of outstanding common stock issued in the April
1998 Financing and registered for resale hereby; 168,000 shares of common
stock issuable upon exercise of warrants issued in the April 1998 Financing
and registered for resale hereby; and 79,968 shares of common stock
registered for resale issuable upon exercise of warrants issued to the
placement agent in connection with the April 1998 Financing.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
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<PAGE> 2
PROSPECTUS
1,087,632 SHARES
SI TECHNOLOGIES
COMMON STOCK
------------------------
All of the 1,087,632 shares of common stock of SI Technologies, Inc.
("Company") offered hereby are being offered for resale by selling stockholders
without the participation of an underwriter ("Selling Stockholders") pursuant to
contractual registration rights. See "Recent Events -- April 1998 Financing."
The Company will not receive any proceeds from the sale of the common stock by
Selling Stockholders. The common stock is quoted on the Nasdaq Small Cap Market
under the symbol "SISI." On September 9, 1998 the last reported sale price for
the common stock was $5.00.
The common stock being registered hereby may be sold in transactions on the
Nasdaq Stock Market at market prices then prevailing, in negotiated
transactions, or otherwise. See "Plan of Distribution."
------------------------
THE COMMON STOCK OFFERED HEREBY INVOLVES MATERIAL RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
------------------------
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 SEPTEMBER 10, 1998.
<PAGE> 3
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 U.S.
Securities and Exchange Commission ("Commission"). Reports, proxy statements and
other information filed with the Commission 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 Commission's regional
offices located at 500 West Madison Street, Room 1400, Chicago, Illinois 60661
and at 7 World Trade Center, Suite 1300, New York, NY 10048. Copies of such
material can be obtained from the Public Reference Section of the Commission at
450 Fifth Street, Washington, D.C. 20549, at prescribed rates, or from the
Commission's web site at www.sec.gov.
The Company has filed a registration statement on Form S-3, together with
all exhibits and amendments thereto ("Registration Statement"), of which this
Prospectus ("Prospectus") is a part, under the Securities Act of 1933
("Securities Act") with the Commission with respect to the common stock offered
hereby. This Prospectus does not contain all of the information set forth in the
Registration Statement, certain portions of which are omitted in accordance with
the rules and regulations of the Commission. Statements made in this Prospectus
concerning documents, while complete in material respects, are nonetheless
summaries. Reference is made to each exhibit for a full description of each such
document, and in each case summary descriptions are qualified by reference to
complete exhibits filed with the Commission. For further information with
respect to the Company and its common stock, reference is made to the
Registration Statement, exhibits and schedules thereto, which may be inspected
without charge at the public reference facilities maintained by the Commission
at 450 Fifth Street N.W., Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission (File No.
0-12370) and are incorporated herein by reference into this Prospectus:
(a) Annual Report on Form 10-KSB for the fiscal year ended July 31, 1997;
(b) Quarterly Report on Form 10-QSB, for the period ended April 30, 1998;
(c) Quarterly Report on Form 10-QSB for the period ended January 31, 1998;
(d) Quarterly Report on Form 10-QSB for the period ended October 31, 1997;
(e) Forms 8-Ks filed on each of February 27, 1998, May 21, 1998 and July
29, 1998.
All documents subsequently filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act prior to the termination of the offering
to which this Prospectus relates shall be deemed to be incorporated by reference
into this Prospectus and to be part of this Prospectus from the date of filing
thereof.
The Company will provide without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, a copy of any
information that has been incorporated by reference in this Prospectus (not
including exhibits to information that is incorporated by reference unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates), upon request to Paul Cavanaugh, Chief Financial
Officer, SI Technologies, Inc., 4611 South 134th Place, Tukwila, Washington
98168, (206) 244-6100.
2
<PAGE> 4
FORWARD-LOOKING STATEMENTS
This Prospectus and the documents incorporated by reference herein contain
projections and forward-looking statements within the meaning of Section 27A of
the Securities Act and Section 21E of the Exchange Act, which statements involve
substantial risks and uncertainties. The words "anticipate," "believe,"
"estimate," "expect" and similar terms are intended to identify these
projections and forward-looking statements. Actual results could differ
materially from the results expressed in or implied by these projections and
forward-looking statements as the result of certain factors, including those
factors discussed in "Risk Factors," contained herein, and in "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
"Business" in the periodic reports incorporated herein by reference.
3
<PAGE> 5
THE COMPANY
The Company, together with its subsidiaries, is an industry leader in the
design, manufacturing and marketing of equipment and engineered systems that
enhance the processing, handling, movement and transportation of goods and
materials. Its products and applied technology solutions include dynamic and
stationary weighing systems, load handling and moving systems, measurement
devices, instrumentation and operations information systems. These products are
intended to enhance the operational control, safety, efficiency and
profitability of the Company's customers. Key markets served by the Company
include aerospace, agriculture, automotive, aviation, construction, forestry,
freight transportation, maritime, mining, and waste management. The Company
markets its equipment and systems throughout the world. In recent years, the
Company has been capitalizing on its technology and existing customer
relationships through product and market expansion in the industrial weighing
and material handling equipment industry. Driving the business expansion of the
Company are both an aggressive internal product development program and the
acquisition of businesses with complementary technology and products.
The Company was incorporated in California on May 29, 1979 as IDEA
(Invention, Design, Engineering Associates, Inc.), and was reincorporated in
Delaware on April 20, 1983. In February 1996, the Company changed its name to SI
Technologies, Inc. The principal executive offices and headquarters of the
Company are located at 4611 South 134th Place, Tukwila, Washington, and its
telephone number is (206) 244-6100. The Company's web site for weighing systems
is located at .com. The Company's web site for its AeroGo subsidiary is located
at . Information located on the Company's web sites is not a part of this
prospectus.
RECENT EVENTS
APRIL 1998 FINANCING
In April 1998 the Company raised $4.2 million (approximately $3.8 million
net of expenses) through the sale of "Units" in a private financing to three
accredited investors in reliance upon Section 4(2) and Rule 506 under the
Securities Act (the "April 1998 Financing"). 168 Units were sold in the April
1998 Financing, each Unit consisting of 4,998 shares of common stock and
two-year Warrants to purchase 1,000 shares of common stock at $8.00 per share.
The common stock registered for resale in this offering is being registered
pursuant to the registration rights agreements entered into between the Company
and the Selling Stockholders in connection with the April 1998 Financing. The
proceeds of the April 1998 Financing were used for the repayment of
indebtedness. In connection with the financing, the Company issued to the Boston
Group, as placement agent, a Warrant to purchase 79,968 shares of common stock
at $5.50 per share, exercisable for five years.
4
<PAGE> 6
RISK FACTORS
Investment in the Company's common stock offered hereby involves material
risks. Investors should consider the following risks in addition to other
information in this Prospectus.
Risks Associated With Fluctuations in Quarterly Results; Uncertainty of
Future Results. The Company's quarterly operating results have fluctuated in the
past and are expected to fluctuate significantly in the future as a result of a
variety of factors. Product and price competition, research and development
requirements, volume and timing of projects and orders, announcements or
introductions of new products or technologies by the Company or its competitors,
foreign currency exchange rates, investments in marketing and distribution,
price increases by suppliers, and national and global economic conditions may be
expected to cause significant variations in the Company's quarterly operating
results, including possible declines in profit margins. Revenues in any quarter
from the sale of the Company's weighing and information systems are dependent on
orders booked and shipped in that quarter. Net sales for any future quarter are
not predictable with any degree of accuracy. It is likely that in some future
quarter the Company's operating results will be below the expectations of
analysts. In such event, the price of the common stock would likely be
materially adversely affected.
A substantial portion of the revenues generated by the Company are derived
from a small number of large, custom orders for material handling systems and
related process weighing systems. A delay, rescheduling or cancellation of one
or more purchase orders for these products may have a material impact on the
Company's financial condition and results of operation. A delay in a shipment
near the end of a particular quarter due to, for example, an unanticipated
shipment rescheduling, a cancellation or deferral by a customer, competitive or
economic factors, unexpected manufacturing or other difficulties, delays in
deliveries of parts by suppliers, or the failure to receive an anticipated
order, may cause sales in a particular period to fall significantly below
expectations and may have a material adverse effect on the Company's financial
condition and results of operations for that period.
Risks Associated With Acquisitions; Integration of Operations. A major
portion of the Company's growth in recent years has resulted from acquisitions.
The Company's acquisition strategy involves risks inherent in assessing the
value, strengths, weaknesses, contingent or other liabilities, and potential
profitability of acquisition candidates, and in integrating the operations of
acquired companies with the Company's operations. Operational risks associated
with acquisitions include the possibility that an acquisition will not provide
the benefits anticipated by Company management. Financial risks involve
incurring additional indebtedness in order to effect the acquisition and the
risk that the Company will be unable to service such indebtedness. In addition,
the issuance of stock in connection with acquisitions involves dilution to
existing stockholders. There can be no assurance that the Company will be
successful in identifying attractive acquisition candidates, that the Company
will have access to the capital required to finance potential acquisitions, will
complete acquisitions on favorable terms, or that any business acquired will be
integrated successfully with the Company's operations, or be profitable.
Risks Associated with Leverage and Liquidity. At July 15, 1998 the Company
had total indebtedness of approximately $18.5 million and debt as a percentage
of capitalization of 62%. The degree to which the Company will be leveraged in
the future could have important consequences including: (i) impairment of the
Company's ability to obtain financing for working capital, capital expenditures,
financing acquisitions, and general corporate purposes; (ii) possible inability
to generate sufficient cash flow to pay principal and interest on its
indebtedness; and (iii) increased vulnerability of the Company to economic
downturns and in ability to withstand competitive pressures. There can be no
assurance that the Company's business will continue to generate cash flow at
levels sufficient to service its debt.
Limited Intellectual Property Protection. The Company's success depends in
part on its ability to protect its technology and trade secrets. To develop and
maintain its competitive position, the Company relies upon continuing
technological innovations, trade secrets and know-how. The Company also relies
on a combination of patent, copyright and trademark laws, and confidentiality
agreements to protect its proprietary rights. The Company has limited patent
protection, however. There can be no assurance that any patent applications
relating to its technology will be granted, or that any patents that are granted
will afford protection against
5
<PAGE> 7
competitors, or will not be successfully challenged or circumvented by
competitors. There can be no assurance that the trade secret protection and
other measures taken by the Company will prevent or deter misappropriation of
its technology or that competitors will not be able to independently develop
technologies having similar functions or performance characteristics. In
addition, the laws of some foreign countries do not protect proprietary rights
to the same extent as do the laws of the United States. Therefore, there can be
no assurance that the Company will have an adequate legal remedy to prevent or
seek redress for future unauthorized misappropriations of the Company's
technology.
Although the Company believes that it currently owns or has adequate rights
to utilize all material technologies relating to its existing products, third
parties have in the past made patent infringement claims against the Company. In
certain cases, the Company has resolved these claims by obtaining a license to
the technology. There can be no assurance as to the outcome of any pending or
future claims, litigation or proceedings involving Company's proprietary rights.
Risks Associated With Competition. Competition in the weighing and material
handling equipment and system industry is intense. There are approximately 5,000
manufacturers and a greater number of distributors and service companies in
competition with the Company. Many of the Company's competitors have
substantially greater technical, financial and marketing resources, larger
customer bases, and greater name recognition than the Company. The Company
expects that its competitors will continue to improve the performance and lower
the price of their current products and to introduce new products or new
technologies. Failure of the Company to improve its products and introduce new
products and new technologies that are superior to competitors' products at
competitive prices could cause a significant decline in sales. Increased
competition could result in price reductions, reduced margins or loss of market
share, any of which could have a material adverse effect on the Company's
business, financial condition and results of operations.
Risks Associated With International Sales. Approximately 40% of the
Company's sales in fiscal 1997 were made to customers located outside of the
United States. The Company anticipates that international sales will continue to
account for a significant percentage of its sales for the foreseeable future.
The Company's international sales may be denominated in foreign or United States
currencies. The Company does not currently engage in foreign currency hedging
transactions as currency fluctuations have not had a material effect on the
Company's financial results. However, if a material amount of future sales are
denominated in foreign currency, a decrease in the value of foreign currency
relative to the United States dollar could result in losses from such
transactions. In such event, the Company might seek to limit its exposure to
foreign currency transactions by hedging strategies. There can be no assurance
that any such strategy would be successful in avoiding exchange rate related
losses. With respect to the Company's international sales that are United States
dollar denominated, such a decrease could make the Company's systems less price
competitive, or could cause distributors or customers to renegotiate prices for
subsequent purchases. Either occurrence could have a material adverse effect
upon the Company's business, financial condition and results of operations.
Additional risks inherent in the Company's international business activities
include changes in regulatory requirements, tariffs and other trade barriers,
political and economic instability, difficulties in staffing and managing
foreign operations, difficulties in managing distributors, customs requirements,
potentially adverse tax consequences, the burden of complying with a wide
variety of complex foreign laws and treaties, difficulties in obtaining
necessary equipment authorizations and the possibility of difficulty in accounts
receivable collections. Foreign laws which may differ significantly from U.S.
laws may govern distribution and sales agreements entered into with foreign
customers. Therefore, the Company may be limited in its ability to enforce its
rights under such agreements and to collect damages, if awarded. These factors
may have a material adverse effect on the Company's business, financial
condition and results of operations.
6
<PAGE> 8
Risks of Operation in Foreign Countries. The Company currently operates
facilities in The Netherlands through its subsidiary, Revere Transducers Europe,
B.V. The Company's international operations are subject to the general risks of
remote management as well as other risks associated with the conduct of business
in foreign countries, including economic, legal and regulatory uncertainties;
currency fluctuations, which the Company generally does not attempt to hedge;
restrictions on repatriation of earnings; export-import regulations; customs
matters; foreign collection problems; military, political and transportation
risks; and foreign laws and governmental regulation.
Risks Associated With Management of Growth. The Company expects to continue
to expand product lines, invest in marketing and distribution and pursue
strategic acquisitions. The Company must successfully manage the integration of
acquired entities, control of overhead expenses and inventories and development,
introduction, marketing and sales of new products and product enhancements,
management and training of its employees, and monitoring of third-party
contractors and suppliers. The Company may need to significantly expand its
internal management and information systems and implement necessary procedures
and controls. There can be no assurance that the Company will be able to achieve
its planned expansion goals or manage its growth effectively. The failure to
develop and implement these systems, procedures and controls in a timely manner
could have a material adverse effect on the Company's financial condition or
results of operations.
Risks Associated With Environmental Regulations. The Company is subject to
various foreign, federal, state and local laws and regulations relating to the
protection of the environment. These laws may provide for retroactive, strict
liability for damages to natural resources or threats to public health and
safety, rendering a party liable for environmental damage without regard to its
negligence or fault. Sanctions for noncompliance may include revocation of
permits, corrective action orders, administrative or civil penalties in criminal
prosecution. The business of the Company involves environmental management and
issues typically associated with historical manufacturing operations. To date,
the cost of complying with environmental laws and regulations by the Company has
not been material, but the fact that such laws or regulations are changed
frequently makes it difficult to predict the costs or impact of such laws and
regulations in the future. The modification of existing laws or regulations or
the adoption of new laws or regulations affecting the Company's operations could
have a material adverse effect on Company's business, financial condition, and
results of operations.
Risks Associated With Dependence on Key Personnel. The Company's success
depends to a significant extent upon the efforts and abilities of members of its
senior management, including Rick A. Beets, the President and Chief Executive
Officer of the Company. The loss of the services of one or more of the senior
management of the Company could have a material adverse effect on the Company's
business, financial condition and results of operations. The success of the
Company will depend on its ability to hire, train and retain skilled personnel
in all areas of its business. There can be no assurance that the Company will be
able to attract, train and retain sufficient qualified personnel to achieve its
business objectives.
Control by Existing Shareholders. Members of the board of directors and
officers of the Company beneficially own approximately 45% of the outstanding
shares of common stock of the Company. Accordingly, these stockholders will be
able to significantly influence the election of the members of the Company's
board of directors and significantly influence the outcome of corporate actions
requiring shareholder approval, such as mergers and acquisitions. This level of
ownership, together with certain provisions of the Company's certificate of
incorporation, bylaws and Delaware law, may have a significant effect in
delaying, deferring, or preventing a change in control of the Company and may
adversely effect the voting and other rights of other shareholders of common
stock.
Possible Issuance of Preferred Stock. The Company is authorized to issue up
to 2,000,000 shares of Preferred Stock, which may be issued in one or more
series and the terms of which may be determined at the time of issuance by the
Board of Directors without further action by stockholders. The issuance of
Preferred Stock may adversely affect the market price of, and the voting and
other rights of the holders of, the Common Stock.
7
<PAGE> 9
Limited Public Trading Market. Trading of the Company's Common Stock has
been limited, and no assurance can be given that an active public trading market
for the Common Stock will develop, or if developed, be sustained.
Risks Associated With Year 2000. Where necessary, the Company is in the
process of modifying, upgrading, or replacing its computer software applications
and internal information systems to accommodate the year 2000 dating changes
necessary to permit correct recording of year dates for 2000 and later years.
The Company does not expect that the cost of its year 2000 compliance program
will be material to its business, financial condition or results of operations.
The Company believes that it will be able to achieve any necessary compliance by
the end of 1999, and does not currently anticipate any material disruption in
its operations as the result of any failure by the Company to be in compliance.
If, however, any of the Company's significant suppliers or customers do not
successfully and timely achieve year 2000 compliance, the Company's business or
operations could be adversely affected.
8
<PAGE> 10
SELLING STOCKHOLDERS
The 1,087,572 shares of common stock being registered hereby for resale in
this offering are owned by the Selling Stockholders listed below. Except as
described below, none of the Selling Stockholders has had a material
relationship with the Company or any predecessors or affiliates within the past
three years.
<TABLE>
<CAPTION>
AS OF JULY 30, 1998
-----------------------------------------------------------
NUMBER OF BENEFICIAL OWNERSHIP
SHARES AFTER THE OFFERING
BENEFICIAL OWNERSHIP OFFERED (ASSUMING SALE OF ALL
PRIOR TO THE OFFERING HEREBY SHARES OFFERED)
--------------------- --------- ---------------------
NAME AND ADDRESS SHARES PERCENTAGE SHARES PERCENTAGE
---------------- ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C>
The Cuttyhunk Fund Limited(1)(2)...... 479,840 13.8 479,840 0 0
73 Front Street
Hamilton 4M12
BERMUDA
Tonga Partners, L.P.(1)(2)............ 479,840 13.8 479,840 0 0
Cannell Capital Management
750 Battery Street
San Francisco, CA 94111
The Boston Group, L.P.(3)............. 79,968 2.3 79,968 0 0
2049 Century Park East
30th Floor
Los Angeles, CA 90067
Rick A. Beets(4)...................... 328,984 9.5 47,984 281,000 7.6
President, CEO and Director
c/o SI Technologies
4611 South 134th Place
Tukwila, WA 98168
</TABLE>
- ---------------
(1) Includes 80,000 shares issuable upon exercise of warrants to purchase Common
Stock.
(2) J. Carlo Cannell dba Cannell Capital Management is the General Partner of
Tonga Partners, L.P. and has sole voting and dispositive powers over the
referenced shares and is the investment advisor to The Cuttyhunk Fund, and
shares voting and investment control with such fund over the shares held by
such fund.
(3) Consists entirely of shares issuable upon exercise of warrants to purchase
Common Stock.
(4) Includes 80,000 shares subject to currently exercisable options. Includes
20,000 shares of record held by Mr. Beets' wife, Mara J. Beets. Mr. Beets
has shared voting and investment power with respect to such shares. Also
includes 40,000 shares held of record by Mr. Beets' children for whom he
acts as custodian. Does not include 20,000 unvested option shares granted in
1994. Includes 8,000 shares issuable upon exercise of warrants.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the common stock
by Selling Stockholders.
PLAN OF DISTRIBUTION
The common stock offered hereby by the Selling Stockholders may be sold
from time to time by the Selling Stockholders, or by pledgees, donees,
transferees or other successors in interest. Such sales may be made on one or
more exchanges or in the over-the-counter market (including The Nasdaq Stock
Market), in privately negotiated transactions, at prices and at terms then
prevailing or at prices related to the then current market price, in negotiated
transactions, or otherwise. In addition, any shares of common stock covered by
this Prospectus that qualify for sale pursuant to Rule 144 might be sold under
Rule 144 rather than pursuant to this Prospectus, assuming that there is an
available exemption. The Common Stock may be sold to or through brokers or
dealers who may act as agent or principal, or in direct transactions between the
Selling Stockholders and purchasers. In addition, the Selling Stockholders may,
from time to time, sell the common stock short
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<PAGE> 11
and, in such instances, this Prospectus may be delivered in connection with such
short sales and the common stock offered hereby used to cover such short sales.
The Selling Stockholders may sell the common stock to or through dealers,
who may receive compensation in the form of discounts, concessions or
commissions from the Selling Stockholders and/or commissions from the purchasers
for whom they may act as agent. Dealers participating in the distribution of the
common stock may be deemed to be underwriters, and any discounts and commissions
received by them and any profit realized by them on resale of the common stock
may be deemed to be underwriting discounts and commissions. Upon the Company
being notified by a Selling Shareholder that any material arrangement has been
entered into with a broker or dealer for the sale of common stock through a
block trade, special offering, exchange distribution or secondary distribution a
purchase by a broker or dealer, a prospectus supplement will be filed, if
required, pursuant to Rule 424(c) under the Securities Act, disclosing (a) the
name of each such broker-dealer, (b) the number of shares of common stock
involved, (c) the price at which such shares of common stock were sold, (d) the
commissions paid or discounts or concessions allowed to such broker-dealer,
where applicable, (e) that such broker-dealer did not conduct any investigation
to verify the information set out or incorporated by reference in this
Prospectus, as supplemented, and (f) other facts material to the transaction.
In connection with distributions of the Common Stock, the Selling
Stockholders may enter into hedging transactions with brokers or dealers and the
brokers or dealers may engage in short sales of the common stock in the course
of hedging the positions they assume with the Selling Stockholders. The Selling
Stockholders also may enter into option or other transactions with brokers or
dealers that involve the delivery of the common stock to the brokers or dealers,
who may then resell or otherwise transfer such common stock. The Selling
Stockholders also may loan or pledge the common stock to a broker or dealer and
the broker or dealer may sell the common stock so loaned or upon default may
sell or otherwise transfer the pledged common stock.
The Company is bearing all costs relating to the registration of the common
stock other than fees and expenses, if any, of counsel or other advisors to the
Selling Stockholders. Any commissions, discounts or other fees payable to
brokers or dealers in connection with any sale of common stock will be borne by
the Selling Stockholders, the purchasers participating in such transaction, or
both.
The Company has agreed to indemnify the Selling Stockholders in specified
circumstances, against certain liabilities, including liabilities arising under
the Securities Act. Each Selling Shareholder has agreed to indemnify the
Company, its directors and its officers who sign the Registration Statement
against certain liabilities, including liabilities arising under the Securities
Act.
Notwithstanding the preceding information, the resale of common stock
registered hereby is subject to lock-up agreements with The Boston Group, L.P.
("The Boston Group"), the dealer manager in the April 1998 Financing, for a
period of one year following the initial closing date of the April 1998
Financing. As a result, absent waiver by the Boston Group, the common stock
registered hereby may not be resold until April 17, 1999.
LEGAL MATTERS
The validity of the securities offered hereby will be passed upon for the
Company by Graham & James LLP/Riddell Williams P.S., Seattle, Washington.
EXPERTS
The consolidated financial statements of SI Technologies, Inc. appearing in
its Annual Report on Form 10-KSB for the year ended July 31, 1997 have been
audited by Grant Thornton LLP, independent auditors, as set forth in their
reports and incorporated herein by reference in reliance upon the authority of
such firm as experts in accounting and auditing.
10
<PAGE> 12
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. EXPENSES OF ISSUANCE AND DISTRIBUTION*.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 2,125
Accounting fees and expenses................................ 5,000
Legal fees and expenses..................................... 10,000
Miscellaneous............................................... 2,875
-------
Total............................................. $20,000
=======
</TABLE>
- ---------------
* Except for the SEC registration fee, amounts shown are estimates.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law authorizes a court to
award or a corporation's Board of Directors to grant indemnity to directors and
officers in terms sufficiently broad to permit such indemnification under
certain circumstances for liabilities (including reimbursement for expenses
incurred) arising under the Securities Act. The Company's Certificate of
Incorporation, as amended, and the Bylaws, as amended, provide for
indemnification of its directors, officers, employees and other agents to the
maximum extent permitted by the Delaware General Corporation law. In addition,
the Company has entered into Indemnification Agreements with its officers and
directors. The Company also currently maintains an officers' and directors'
liability insurance policy that insures, subject to the exclusions and
limitations of the policy, officers and directors of the Company against certain
liabilities that might be incurred by them solely in such capacities.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the registrant
pursuant to the foregoing provisions, the registrant has been informed that in
the opinion of the Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1+ Form of Subscription Agreement entered into by participants
in the Company's April 1998 financing
4.2+ Form of Subscription Agreement Supplement incorporated by
reference into the Company's Subscription Agreement
4.3+ Form of Warrant issued in connection with the Company's
April 1998 financing
4.4+ Form of Placement Agent Warrant issued in connection with
the Company's April 1998 financing
4.5+ Registration Rights Agreement entered into by and between
the Company and participants in the Company's April 1998
financing
5.1 Opinion of Graham & James LLP/Riddell Williams P.S.
23.1 Consent of Grant Thornton LLP, Independent Auditors
23.2 Consent of Graham & James/Riddell Williams P.S. (included in
Exhibit 5.1 hereto)
</TABLE>
- ---------------
+ Previously filed.
II-1
<PAGE> 13
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 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 (i) and
(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 (i) and (ii) is contained in periodic reports filed with or
furnished to the Commission 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) If the Registrant is a foreign private issuer, to file a
post-effective amendment to the registration statement to include any
financial statements required by Rule 3-19 of this chapter at the start of
any delayed offering or throughout a continuous offering. Financial
statements and information otherwise required by Section 10(a)(3) of the
Act need not be furnished, provided, that the Registrant includes in the
prospectus, by means of a post-effective amendment, financial statements
required pursuant to this paragraph (4) and other information necessary to
ensure that all other information in the prospectus is at least as current
as the date of those financial statements. Notwithstanding the foregoing,
with respect to registration statements on Form F-3, a post-effective
amendment need not be filed to include financial statements and information
required by Section 10(a)(3) of the Act or Rule 3-19 of this chapter if
such financial statements and information are contained in periodic reports
filed with or furnished to the Commission 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 Form F-3.
(5) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registration's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 (and, 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 the Registration Statement shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described above, 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
II-2
<PAGE> 14
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.
The undersigned Registrant hereby further undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed as part
of this Registration Statement in reliance upon Rule 430A and contained in
a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus 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.
II-3
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 1 to this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of Tukwila, State of Washington, on September 10, 1998.
SI TECHNOLOGIES, INC.
By: /s/ PAUL CAVANAUGH
-----------------------------------
Paul Cavanaugh
Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Amendment No. 1 to this Registration Statement has been signed by the
following persons in the capacities indicated below.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
RICK A. BEETS* President, Chief Executive September 10, 1998
- ----------------------------------------------------- Officer and Director
Rick A. Beets
/s/ PAUL CAVANAUGH Chief Financial Officer September 10, 1998
- ----------------------------------------------------- (Principal Financial and
Paul Cavanaugh Accounting Officer)
RALPH E. CRUMP* Chairman of the Board, September 10, 1998
- ----------------------------------------------------- Treasurer and Director
Ralph E. Crump
S. SCOTT CRUMP* Director September 10, 1998
- -----------------------------------------------------
S. Scott Crump
HEINZ ZWEIPFENNIG* Director September 10, 1998
- -----------------------------------------------------
Heinz Zweipfennig
EDWARD A. ALKIRE* Secretary and Director September 10, 1998
- -----------------------------------------------------
Edward A. Alkire
D. DEAN SPATZ* Director September 10, 1998
- -----------------------------------------------------
D. Dean Spatz
*By: /s/ PAUL CAVANAUGH
------------------------------------------------
Paul Cavanaugh
Attorney-in-Fact
</TABLE>
II-4
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<C> <S>
4.1+ Form of Subscription Agreement entered into by participants
in the Company's April 1998 financing
4.2+ Form of Subscription Agreement Supplement incorporated by
reference into the Company's Subscription Agreement
4.3+ Form of Warrant issued in connection with the Company's
April 1998 financing
4.4+ Form of Placement Agent Warrant issued in connection with
the Company's April 1998 financing
4.5+ Registration Rights Agreement entered into by and between
the Company and participants in the Company's April 1998
financing
5.1 Opinion of Graham & James LLP/Riddell Williams P.S.
23.1 Consent of Grant Thornton LLP, Independent Auditors
23.2 Consent of Graham & James/Riddell Williams P.S. (included in
Exhibit 5.1 hereto)
</TABLE>
- ---------------
+ Previously filed.
<PAGE> 1
EXHIBIT 5.1
September 10, 1998
SI Technologies, Inc.
4611 S. 134th Place
Seattle, WA 98168
RE: FORM S-3 REGISTRATION STATEMENT
Ladies and Gentlemen:
We have acted as counsel to SI Technologies, Inc. (the "Company") in connection
with the preparation of its Registration Statement on Form S-3, No. 333-60421
(the "Registration Statement") under the Securities Act of 1933, as amended (the
"Act"), which the Company has filed with the Securities and Exchange Commission,
with respect to an aggregate of 1,087,632 shares of Common Stock of the Company
consisting of 839,664 shares of outstanding Common Stock (the "Shares") and
247,968 shares of Common Stock to be issued upon execution of Warrants issued
April 17, 1998 (the "Warrant Shares").
We have examined the Registration Statement and such other documents and records
as we have deemed relevant and necessary for the purpose of this opinion.
Based upon and subject to the foregoing, we are of the opinion that (i) the
Shares are validly issued, fully paid and nonassessable, and (ii) that the
Warrant Shares will, upon due execution by the Company and the registration by
its registrar of the certificates for the Shares and issuance thereof by the
Company and receipt by the Company of the consideration therefor in accordance
with the terms of the Warrants, be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving such consent, we do not admit that we are in
the category of persons whose consent is required under Section 7 of the Act.
Very truly yours,
Benjamin F. Stephens
of
GRAHAM & JAMES LLP/RIDDELL WILLIAMS P.S.
BFS/dp
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
We have issued our reports dated September 29, 1997, accompanying the
consolidated financial statements of SI Technologies, Inc. and Subsidiaries
appearing in the 1997 Annual Report of the Company to its shareholders included
in the Annual Report on Form 10-KSB for the year ended July 31, 1997 which are
incorporated by reference in this Registration Statement. We consent to the
incorporation by reference in the Registration Statement of the aforementioned
reports and to the use of our name as it appears under the caption "Experts."
GRANT THORNTON LLP
Seattle, Washington
September 11, 1998
