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As filed with the Securities and Exchange Commission on January 5,1998
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933
AMERICAN EDUCATIONAL PRODUCTS, INC.
(Exact name of Registrant as specified on its Charter)
Colorado 84-1012129
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(State or other jurisdiction IRS Employer
of incorporation or organization) Identification Number
6550 Gunpark Drive, Suite 200
Boulder, Colorado 80301
(303) 527-3230
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(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
Clifford C. Thygesen
American Educational Products, Inc.
6550 Gunpark Drive, Suite 200
Boulder, Colorado 80301
(303) 527-3230
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(Name, address, including zip code, and telephone number of
agent for service of process)
Copies to:
Clifford L. Neuman, Esq.
David H. Drennen, Esq.
Neuman & Drennen, LLC
1507 Pine Street
Boulder, Colorado 80302
(303) 449-2100
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO PUBLIC:
As soon as practicable after the effective date of the 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 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [ X ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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<TABLE>
CALCULATION OF REGISTRATION FEE
<CAPTION>
Title of Proposed
Each Class Maximum Proposed Amount
of Securities Amount Offering Maximum of
to be to be Price Aggregate Registration
Registered Registered Per Share(1)(2) Price(1) Fee
---------------- ---------- --------------- --------- -------------
<S> <C> <C> <C> <C>
Common Stock,
$.05 par value(3) 78,000 $4.50(4) $351,000 $106.36
Common Stock,
$.05 par value(5) 61,401 $6.88(6) $422,439 $128.01
TOTAL: $773,439 $234.38
</TABLE>
(1) Pursuant to Rule 416, the Registration Statement also relates to an
indeterminate number of additional shares of Common Stock issuable upon
exercise of outstanding Common Stock Purchase Warrants (the "Warrants")
pursuant to anti-dilution provisions contained therein, which shares of
Common Stock are registered hereunder.
(2) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(3) Reflects 78,000 shares of Common Stock issuable upon exercise of
outstanding Warrants.
(4) Based upon the $4.50 per share exercise price of the Warrants.
(5) Reflects shares of Common Stock offered for sale by the Selling
Securityholders.
(6) Based upon the average of the bid and ask prices of the Common Stock being
offered by the Selling Securityholders in accordance with Rule 457(c).
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.
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AMERICAN EDUCATIONAL PRODUCTS, INC.
Item No. and Heading
In Form S-3
Registration Statement Location In Prospectus
---------------------- ----------------------
1. Forepart of the Registration Forepart of Registration
Statement and outside front Statement and outside front
cover of Prospectus cover page Prospectus
2. Inside front and outside back Inside front and back cover
cover pages of Prospectus pages of Prospectus
3. Summary Information, Risk Risk Factors
Factors and Ratio of Earnings
to Fixed Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Determination of Offering
Price Price
6. Dilution Dilution
7. Plan of Distribution Plan of Distribution
8. Description of Securities to Description of Securities
be Registered
9. Interest of Named Experts Legal Matters
and Counsel
10. Material Changes Recent Developments
11. Incorporation of Certain Incorporation of Certain
Information by Reference Documents by Reference
12. Disclosure of Commission Indemnification
Position on Indemnification
for Securities Act
Liabilities
<PAGE>
<PAGE>
PROSPECTUS
AMERICAN EDUCATIONAL PRODUCTS, INC.
-------------------------------------------------
139,401 Shares
$.05 par value Common Stock
This Prospectus relates to the offering of securities of American
Educational Products, Inc., a Colorado corporation (the "Company" or "AEP").
The first offering relates to the reoffer of 61,401 shares of the Common
Stock, $.05 par value ("Common Stock") of the Company owned by certain
stockholders (the "Selling Securityholders" and the "Selling Securityholders'
Offering," respectively). The Selling Securityholders may offer all 61,401
shares of the Company's Common Stock covered by this Prospectus in transactions
in the over-the-counter market at prices obtainable at the time of sale, or in
privately-negotiated transactions at prices determined by negotiation. Selling
Securityholders may effect such transactions by selling the shares to or
through securities broker-dealers, and such broker-dealers may receive
compensation in the form of discounts, concessions or commissions from the
Selling Securityholders, and/or the purchasers of the shares for whom such
broker-dealers may act as agent or to whom they sell as principals, or both
(which compensation as to a particular broker/dealer may be in excess of
customary commissions). See "SELLING SECURITYHOLDERS" and "PLAN OF
DISTRIBUTION." The Selling Securityholders and the broker-dealers through whom
sales of the shares are made may be deemed to be "Underwriters" within the
meaning of the Securities Act of 1933, as amended (the "Securities Act"). If
any broker-dealers are used by the Selling Securityholders, any commissions
paid to broker-dealers, and if broker-dealers purchase any securities as
principals, any profits received by such broker-dealers on the resales of the
securities may be deemed to be underwriting discounts or commissions under the
Securities Act. In addition, any profits realized by the Selling
Securityholders may be deemed to be underwriting compensation.
This Prospectus also relates to the offer by the Company of up to 78,000
shares of Common Stock issuable pursuant to the exercise of outstanding Common
Stock Purchase Warrants (the "Warrants" and the "Warrant Stock Offering,"
respectively). Each Warrant is exercisable to purchase one share of Common
Stock at an exercise price of $4.50 per share (the "Exercise Price") for the
period of time commencing on October 1, 1997 and expiring on September 30, 1999
(the "Exercise Period"). The Company does not have the right to compel the
exercise of the Warrants, and the Warrantholders have not committed to exercise
any of the Warrants. Accordingly, there can be no assurance of the number, if
any, of shares which will be purchased by the Warrantholders pursuant to the
exercise of the Warrants and sold under this Prospectus.
Assuming the Warrantholders exercise all Warrants to purchase 78,000
shares of Common Stock, the Company will receive gross proceeds of $351,000.
The Company will not receive any of the proceeds from the resale of shares of
Common Stock by the Selling Securityholders. Pursuant to an agreement between
the Company and the Selling Securityholders, the Company has agreed to pay all
of the expenses incurred in connection with the preparation and filing of the
Registration Statement of which this Prospectus forms a part, estimated to be
$10,000. The Selling Securityholders will, however, pay the other costs
related to the sale of their shares, including discounts, commissions and
transfer fees. See "PLAN OF DISTRIBUTION." The Company has agreed to
indemnify the Selling Securityholders against certain liabilities, including
liability under the Securities Act.
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The Company's Common Stock is traded on the Nasdaq SmallCap Market
("Nasdaq") under the symbol AMEP. On December 1, 1997, the closing price was
$6.88 per share as reported by Nasdaq. There can be no assurance that a market
for the Common Stock will continue in the future. The Company has no
arrangements with broker-dealers concerning the maintenance of a trading market
for the Common Stock.
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FOR DISCUSSION OF CERTAIN MATTERS THAT SHOULD BE CONSIDERED IN EVALUATING
AN INVESTMENT IN THE COMPANY, SEE "RISK FACTORS" COMMENCING AT PAGE 10 HEREOF.
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THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSIONS, NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
<TABLE>
<CAPTION>
Price to Underwriting Proceeds to
Warrantholders(1) Discount(2) Company(3)
----------------- -------------- -----------
<S> <C> <C> <C>
Per Share: $4.50 * $4.50
Total $351,000 * $351,000
</TABLE>
The Date of This Prospectus is January ____, 1998.
(1) Reflects the exercise by the Warrantholders of all outstanding Warrants to
purchase an aggregate of 78,000 shares of Common Stock at an Exercise
Price of $4.50 per share. The Company does not have the right to compel
the exercise of the Warrants, and the Warrantholders have not committed to
exercise any of the Warrants. Accordingly, there can be no assurance of
the number, if any, of shares which will be purchased by the
Warrantholders pursuant to their exercise of the Warrants. The Company
intends to maintain a current Prospectus until the Warrants expire on
September 30, 1999, or until they are all exercised, if earlier. The
expiration date of the Warrants may be extended by a majority vote of the
Company's Board of Directors upon thirty (30) days' written notice to all
Warrantholders. (See "DESCRIPTION OF SECURITIES-Warrants.")
(2) The Warrantholders may reoffer their shares in transactions in the over-
the-counter market at prices obtainable at the time of sale or in
privately negotiated transactions at prices determined by negotiation.
The Warrantholders may effect transactions by selling to or through
securities broker-dealers and such broker-dealers may receive compensation
in the form of discounts, concessions, or commissions from the
Warrantholders. While it is impracticable to determine the precise amount
that the Warrantholders will incur, it is anticipated that any such
discounts, selling concessions or commissions will be consistent with
those customarily charged by broker-dealers who are members of the
National Association of Security Dealers, Inc. ("NASD").
(3) Consists of proceeds to the Company from the exercise by the
Warrantholders of all Warrants which are exercisable to purchase 78,000
shares of the Company's Common Stock at an Exercise Price of $4.50 per
share. Does not reflect deduction of expenses of the Offering for
printing, legal, accounting, transfer agent and miscellaneous expenses of
the Offering, the total of which is estimated at $10,000, which the
Company has agreed to pay. See "USE OF PROCEEDS."
No dealer, salesman or other person has been authorized to give any
information or to make any representation other than those contained in this
Prospectus, and, if given or made, such information or representation must not
be relied upon as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to buy any of the
securities offered hereby in any jurisdiction to any person to whom it is
unlawful to make such offer in such jurisdiction, or in any jurisdiction in
which the person making such offer or solicitation is not qualified to do so.
<PAGE>
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance with
the Exchange Act files periodic reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). Reports, proxy
statements and other information concerning the Company can be inspected and
copied (at prescribed rates) at the Commission's Public Reference Section, Room
1024, 450 Fifth Street, N.W. Judiciary Plaza, Washington, D.C. 20549, as well
as at the following Regional Offices: Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661-2511; and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material also may
be obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Judiciary Plaza, Washington, D.C. 20549,
and are publicly available through the Commission's website at
http:\\www.sec.gov.
The Company has filed a Registration Statement on Form S-3 with the
Commission, Washington, D.C., in accordance with the provisions of the Act.
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain portions of which have been omitted as
permitted by the rules and regulations of the Commission. For further
information pertaining to the shares of Common Stock offered hereby and the
Company, reference is made to the Registration Statement, including the
exhibits and financial statements incorporated therein by reference. Reference
also should be made to the Annual Report to Shareholders and Annual Report on
Form 10-KSB for the year ended December 31, 1996, the Company's definitive
Proxy Statement, and the Company's Quarterly Reports on Form 10-QSB for the
quarters ended March 31, 1997, June 30, 1997 and September 30, 1997,
incorporated by reference into this Prospectus. Statements herein contained
concerning the provisions of any document are not necessarily complete and, in
each instance, reference is made to the copy of such document filed as an
Exhibit to the Registration Statement. Each such statement is qualified in its
entirety by such reference. The Registration Statement may be obtained from the
Commission upon payment of the fees prescribed therefor and may be examined at
the principal office of the Commission in Washington, D.C.
<PAGE>
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents which have been filed with the SEC pursuant to the
Exchange Act are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-KSB for the fiscal year
ended December 31, 1996, SEC File No. 0-16310.
(b) The Company's definitive Proxy Statement for the Annual Meeting of
Shareholders held on June 2, 1997, SEC File No. 0-16310.
(c) The Company's Quarterly Report on Form 10-QSB for the quarter ended
March 31, 1997 as filed with the Commission on May 15, 1997, SEC File
No. 0-16310.
(d) The Company's Quarterly Report on Form 10-QSB for the quarter ended
June 30, 1997 as filed with the Commission on August 18, 1997, SEC
File No. 0-16310.
(e) The Company's Quarterly Report on Form 10-QSB for the quarter ended
September 30, 1997 as filed with the Commission on November 17, 1997,
SEC File No. 0-16310.
All documents filed by the Company with the Commission pursuant to Section
13a, 13c, 14 or 15d of the Exchange Act after the date of this Prospectus and
prior to the termination of the offering covered by this Prospectus will be
deemed incorporated by reference into this Prospectus and to be a part hereof
from the date of filing of such documents.
Any statement contained in the above-referenced documents shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained in this Prospectus modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
A copy of the documents incorporated by reference, other than exhibits to
such documents (unless such exhibits are specifically incorporated by reference
to this Prospectus), may be obtained at no charge by a written or oral request
to Clifford C. Thygesen, President, American Educational Products, Inc., 6550
Gunpark Drive, Suite 200, Boulder, Colorado 80301 (303) 527-3230. In addition,
such materials filed electronically by the Company with the Commission are
available at the Commission's worldwide website at
http://www.sec.gov/edgarhp/htm.
<PAGE>
<PAGE>
FORWARD-LOOKING STATEMENTS
Certain statements contained in this Prospectus are "forward-looking
statements" within the meaning of the Private Securities Litigation Reform Act
of 1995 and are thus prospective. Such statements are subject to risks,
uncertainties and other factors which could cause actual results to differ
materially from future results expressed or implied by such forward-looking
statements. Such risks and uncertainties include, but are not limited to,
competitive pressures, changing economic conditions and other factors, some of
which will be outside of the control of the Company.
CAPITAL STOCK INFORMATION
All information with regard to the Common Stock of the Company contained
in this Prospectus, including share and per share information, gives effect to
a one-for-five (1-for-5) reverse stock split effected by the Company on April
22, 1997.
<PAGE>
<PAGE>
THE COMPANY
The Company is engaged in the manufacture, development, marketing and
distribution of both proprietary and non-proprietary supplemental educational
materials and instructional programs through its two (2) wholly-owned
subsidiaries: Scott Resources, Inc. ("Scott Resources"); and Hubbard
Scientific, Inc. ("Hubbard Scientific"). The executive offices of the Company
are located at 6550 Gunpark Drive, Suite 200, Boulder, Colorado 80301. Its
telephone number at that address is (303) 527-3230.
Scott Resources, a wholly-owned subsidiary, manufactures, develops and
markets both proprietary and non-proprietary supplemental educational materials
and instructional programs in the fields of science and mathematics at its
principal manufacturing facility located at 401 Hickory Street, Fort Collins,
Colorado 80524. Its telephone number at that address is (970) 484-7445.
Hubbard Scientific, another wholly-owned subsidiary, manufactures,
develops and markets both proprietary and non-proprietary supplemental
educational and instructional materials in the field of science. Hubbard
Scientific maintains its principal manufacturing facility at 1120 Halbleib
Road, Chippewa Falls, Wisconsin 54729.
<PAGE>
<PAGE>
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD REVIEW CAREFULLY THE FOLLOWING INVESTMENT
CONSIDERATIONS IN EVALUATING THE COMPANY AND ITS BUSINESS:
LIMITED LIQUIDITY AND CAPITAL RESOURCES. At September 30, 1997, the
Company had limited working capital of $1,518,000 based upon current assets of
$4,598,000 and current liabilities of $3,080,000. Of current liabilities,
$2,296,000 represented the principal balance under a revolving line of credit
pursuant to a loan agreement. Although the loan agreement has a scheduled
maturity date of April 30, 2000, it also contains a demand provision under
which the lender has the right to demand repayment of the entire balance at any
time. Even though the Company does not expect to repay the entire debt within
the next twelve months, it is required to classify the entire loan as a current
liability. If the lender did demand repayment in full during the next twelve
months, it would have significant adverse impact on the Company. Furthermore,
the Company experienced deficits during each of the three years ended
December 31, 1996. Those deficits significantly decreased the Company's
liquidity and capital resources. The Company's liquidity shortfall has
adversely affected operations during 1997. Actions were taken to mitigate the
impact of the liquidity shortfall and those actions were effective during the
first nine months of 1997. Nevertheless, there are no guarantees that the
Company can continue to improve its liquidity.
LACK OF OPERATING PROFITS. For the year ended December 31, 1996, the
Company reported a net loss of $1,095,000. The Company also reported net
losses for each of the two preceding years. For the first nine months of 1997,
the Company reported net income of $605,000, an improvement over the net loss
of $(643,000) reported for the first nine months of 1996. The Company
attributes the improved results to an increased market demand for its products,
to a reorganization that significantly reduced operating costs, and to the sale
of an unprofitable division. There are no guarantees that the Company can
continue its profitable performance.
LIMITED FUNDS AVAILABLE FOR OPERATIONS. The Company's Common Stock is
currently trading in a range between $6.00 and $7.00 and per share. It is
unlikely that any of the Warrants will be exercised unless the share price
increases substantially. Accordingly, it is not likely that proceeds of any
warrant exercise will ameliorate the Company's working capital shortage in the
foreseeable future.
EXERCISE PRICE OF WARRANTS. The Exercise Price of the Warrants was
determined by agreement between the Company and the holders of the Warrants and
bears no direct relationship to the Company's assets, book value, net worth or
operations.
NO ASSURANCE OF WARRANT EXERCISE. The Warrantholders are under no
obligation to exercise the warrants, and can be expected to do so only if it is
economically reasonable for them to do so. Typically, warrants are not
exercised unless exercise is forced, either by the Company calling them for
redemption, or because they are scheduled to expire; and then they will be
exercised only if the exercise price is less than the market price of the
Common Stock. Accordingly, there is no assurance that the Warrants will be
exercised during the Exercise Period.
UNSPECIFIED USE OF PROCEEDS. The monies received by the Company upon
exercise of the Warrants have been allocated generally by the Company to
provide working capital for operations. As such, the Company will utilize funds
as they are received for such purposes and in such proportions as management
deems advisable. While management will apply the proceeds of the Offering in a
manner consistent with their fiduciary duty and in a manner consistent with the
best interests of the Company, there can be no assurance that the monies
received will result in any present or future improvement in the Company's
results of operations.
COMPETITION. The Company faces competition from businesses with greater
resources and larger current market shares. The development of new products can
give a competitor significant market advantage. There can be no assurance that
the Company will be able to acquire and develop new products or increase its
portfolio of products to the extent necessary to keep it competitive. Due to
the Company's lack of operating profits, the Company has been required to
reduce its spending on product development which could have a material adverse
impact upon the Company's future operations.
PRODUCT PROTECTION. The Company relies on copyrights, trademarks and
trade secrets for protection of its products. Although believed to be adequate
by the Company, this protection is limited, and it is possible for competitors
of the Company to imitate some of the Company's manipulatives and models, none
of which are patented. There can be no assurance that such limitations, if
significant in number and degree, would not have a material adverse effect on
the operations of the Company.
EDUCATIONAL FUNDING. The sale or distribution of the Company's products
is highly dependent upon public funding for elementary, middle and secondary
school systems. As a result, the continued viability of those markets for the
Company's products is dependent upon continued support and funding for public
education.
LIMITED LIQUIDITY IN TRADING MARKET OF SHARES. Prior to the Offering, the
Company's Common Stock has been thinly traded on the NASDAQ SmallCap Market.
Continuation of low volume trading may adversely affect the liquidity of large
holdings and may contribute to high volatility of the price of the Company's
Common Stock.
NASDAQ SYSTEM MAINTENANCE REQUIREMENTS; POSSIBLE DELISTING OF SECURITIES
FROM NASDAQ SYSTEM; RISKS OF LOW-PRICED STOCKS. The Securities and Exchange
Commission (the "Commission") has approved rules imposing more stringent
criteria for the listing of securities on NASDAQ, including standards for
maintenance of such listing. If the Company is unable to satisfy NASDAQ's
maintenance criteria in the future, its securities could be de-listed, and
trading, if any, would thereafter be conducted in the over-the-counter market
in the so-called "pink sheets" or the "Electronic Bulletin Board" of the
National Association of Securities Dealers, Inc. ("NASD"). As a consequence of
such de-listing, an investor could find it more difficult to dispose of, or to
obtain accurate quotations as to the price of, the Company's securities.
The Securities Enforcement and Penny Stock Reform Act of 1990 requires
additional disclosure relating to the market for penny stocks, in connection
with trades in any stock defined as a penny stock. The Commission recently
adopted regulations that generally define a penny stock to be any equity
security that has a market price of less than Five Dollars ($5.00) per share,
subject to certain exceptions. Such exceptions include any equity security
listed on NASDAQ and any equity security issued by an issuer that has (i) net
tangible assets of at least Two Million Dollars ($2,000,000), if such issuer
has been in continuous operation for three (3) years, (ii) net tangible assets
of at least Five Million Dollars ($5,000,000), if such issuer has been in
continuous operation for less than three (3) years, or (iii) an average annual
revenue of at least Six Million Dollars ($6,000,000), if such issuer has been
in continuous operation for less than three (3) years. Unless an exception is
available, the regulations require the delivery, prior to any transaction
involving a penny stock, of a disclosure schedule explaining the penny stock
market and the risks associated therewith.
If the Company's securities are not quoted on NASDAQ, or the Company does
not have Two Million Dollars ($2,000,000) in net tangible assets, trading in
the Company's securities would be covered by Rules 15g-1 through 15g-6
promulgated under the Exchange Act for non-NASDAQ and non-exchange listed
securities. Under such rules, broker-dealers who recommend such securities to
persons other than established customers and accredited investors must make a
special written suitability determination that the penny stock is a suitable
investment for the purchaser and receive a purchaser's written agreement to the
transaction. Securities are exempt from these rules if the market price of the
Common Stock is at least Five Dollars ($5.00) per share.
Although the Company's Common Stock will, as of the date of this
Prospectus, be outside the definitional scope of a penny stock, as it will be
listed on NASDAQ, in the event the Common Stock was subsequently to become
characterized as a penny stock, the market liquidity for the Company's
securities could be severely affected. In such an event, the regulations on
penny stocks could limit the ability of broker-dealers to sell the Company's
securities and adversely affect the ability of purchasers of the Company's
securities to sell their securities in the secondary market.
DIVIDEND. No dividend has been paid on the Company's Common Stock since
1990, nor, by reason of its present financial status, its contemplated
financial requirements and restrictive covenants in its revolving loan
agreement, does the Company contemplate or anticipate paying any dividends upon
its Common Stock in the foreseeable future. (See "DESCRIPTION OF SECURITIES.")
SHARES ELIGIBLE FOR FUTURE SALE. As of September 30, 1997, 917,872 shares
of the Company's $.05 par value Common Stock, were issued and outstanding,
78,000 of which are "restricted securities" and under certain circumstances
may, in the future, be sold pursuant to a registration under the Securities Act
or in compliance with Rule 144 adopted under the Securities Act. In general,
under Rule 144, subject to the satisfaction of certain other conditions, a
person, including an affiliate of the Company, who has beneficially owned
restricted shares of Common Stock for at least one (1) year is entitled to
sell, within any three-month (3-month) period, a number of shares that does not
exceed the greater of one percent (1%) of the total number of outstanding
shares of the same class, or if the Common Stock is quoted on NASDAQ or a stock
exchange, the average weekly trading volume during the four (4) calendar weeks
immediately preceding the sale. A person who presently is not and who has not
been an affiliate of the Company for at least three (3) months immediately
preceding a sale and who has beneficially owned the shares of Common Stock for
at least two (2) years is entitled to sell such shares under Rule 144 without
regard to any of the volume limitations described above. The Company also may
grant options to purchase an additional 64,700 shares of Common Stock pursuant
to the 1997 Stock Incentive Plan (the "Plan"). The Company plans to register
for sale under the Act all shares issuable upon exercise of the options granted
pursuant to the Plan, such that when the options are exercised and the shares
issued, they will be free-trading, except for certain limitations imposed upon
directors, officers and affiliates who exercise options granted under such
Plan. No prediction can be made as to the effect, if any, that sales of shares
of Common Stock or the availability of such shares for sale will have on the
market prices prevailing from time-to-time. Nevertheless, the possibility that
substantial amounts of Common Stock may be sold in the public market may
adversely effect prevailing prices for the Common Stock and could impair the
Company's ability to raise capital in the future through the sale of equity
securities. Actual sales or the prospect of future sales of shares of Common
Stock under Rule 144 may have a depressive effect upon the price of the Common
Stock and the market therefor.
FUTURE SALES OF PREFERRED STOCK. The Company's Articles of Incorporation,
as amended, authorize the issuance of up to 50,000,000 shares of preferred
stock. The Board of Directors has been granted the authority to fix and
determine the relative rights and preferences of preferred shares, as well as
the authority to issue such shares, without further stockholder approval. As a
result, the Board of Directors could authorize the issuance of a series of
preferred stock which would grant to holders preferred rights to the assets of
the Company upon liquidation, the right to receive dividend coupons before
dividends would be declared to common stockholders, and the right to the
redemption of such shares, together with a premium, prior to the redemption of
Common Stock. Common stockholders have no redemption rights. In addition, the
Board could issue large blocks of voting stocks to fend against unwanted tender
offers or hostile takeovers without further shareholder approval. (See
"DESCRIPTION OF SECURITIES.")
FUTURE SALES OF ADDITIONAL SHARES. The Company's Board of Directors has
the authority to issue additional shares of Common Stock and to issue options
and warrants to purchase shares of the Company's Common Stock without
shareholder approval. Future issuance of Common Stock could be at values
substantially below the Exercise Price of the Warrants, and therefore could
represent further substantial dilution to investors in this Offering. In
addition, the Board could issue large blocks of voting stock to fend off
unwanted tender offers or hostile takeovers without further shareholder
approval. The Company has outstanding options exercisable to purchase up to
163,700 shares of Common Stock at a weighted average exercise price of $4.40
per share; warrants exercisable to purchase up to 78,000 shares of Common Stock
at weighted average exercise price of $4.50 per share, and Public Warrants (as
hereinafter defined) exercisable to purchase 916,298 shares of Common Stock at
an exercise price of $10.000 per share. Exercise of the warrants and options
could have a further dilutive effect on existing stockholders and investors in
this Offering. (See "DESCRIPTION OF SECURITIES.")
DILUTION. As of September 30, 1997, the Company had sold or issued the
outstanding 917,872 shares of Common Stock at an average cost per share of
approximately $7.11, which is $2.61 per share greater than the Warrant Exercise
Price. At September 30, 1997, the Company had a net tangible book value of
$4,544,000 or $4.95 per share of Common Stock outstanding, based on 917,872
shares issued and outstanding. Depending upon the Company's net tangible book
value on the date of exercise, investors in this Offering exercising Warrants
may sustain an immediate substantial dilution of their Exercise Price per share
of $4.50.
NEED FOR CURRENT PROSPECTUS. The Warrants may not be exercised unless the
Company maintains with the Commission a current and effective Registration
Statement and Prospectus covering the shares of Common Stock issuable upon
their exercise. While the Company has undertaken to do so and plans to do so,
there can be no assurance that a current Registration Statement and Prospectus
will be in effect when any of the Warrants are attempted to be exercised.
MARKET OVERHANG FROM WARRANTS AND OPTIONS. Immediately prior to the
Offering, the Company had outstanding 241,700 warrants and options. To the
extent that such stock options or warrants are exercised, dilution to the
interests of the Company's stockholders may occur. Exercise of these options
or warrants, or even the potential of their exercise or conversion, may have an
adverse effect on the trading price and market for the Company's Common Stock.
The holders of the options or warrants are likely to exercise at times when the
market price for the shares of Common Stock exceeds the exercise price of the
options or warrants. Accordingly, the issuance of shares of Common Stock upon
exercise of the options or warrants may result in dilution of the equity
represented by the then outstanding shares of Common Stock held by other
shareholders. Holders of the options or warrants can be expected to exercise
them at a time when the Company would, in all likelihood, be able to obtain any
needed capital on terms which are more favorable to the Company than the
exercise terms provided by such options or warrants. (See "DESCRIPTION OF
SECURITIES.")
<PAGE>
DILUTION
The net tangible book value of the Company at September 30, 1997 was
$4,544,000, or $4.95 per share, based upon 917,872 shares outstanding. Net
tangible book value per share is determined by dividing the number of
outstanding shares of Common Stock into the net tangible book value of the
Company (total assets less total liabilities and intangible assets).
If any outstanding Warrants are exercised, of which there can be no
assurance, the number of Common Shares outstanding will increase and the
Company's net tangible book value will increase. The exercise of any Warrants
at a time when the exercise price is greater than the Company's net tangible
book value per share will increase the net tangible book value per share of
shares held by the then current shareholders and decrease the net tangible book
value per share of the shares purchased pursuant to the Warrant exercise.
Dilution is the reduction of value of the purchaser's investment measured by
the difference between the Warrant Exercise Price and the net tangible book
value per share after the Offering, if the Warrants are exercised at a time
when the Warrant Exercise Price is greater than the net tangible book value per
outstanding share before the exercise. The dilution per share will decrease
with the exercise of each additional Warrant because the proceeds from each
such exercise will increase the Company's net tangible book value.
<PAGE>
<PAGE>
USE OF PROCEEDS
The 139,401 shares of Common Stock covered by this Prospectus consist of
(i) 61,401 shares of Common Stock which were issued by the Company to the
Selling Securityholders in private transactions and (ii) 78,000 shares of
Common Stock issuable upon exercise of outstanding Warrants at a price of $4.50
per share. (See "PLAN OF DISTRIBUTION.")
The Company will not receive any of the proceeds from the sale of shares
which may be sold by the Selling Securityholders. If all of the 78,000 shares
offered hereby are purchased upon exercise of the Warrants, of which there can
be no assurance, then the Company will receive gross proceeds of up to
$351,000, from which the Company will pay the expenses which will be incurred
in connection with the registration of the shares, which are estimated to be
$10,000. The Warrantholders and Selling Securityholders will not pay any of
the expenses which are expected to be incurred in connection with the
registration of the shares, but will pay all commissions, discounts and other
compensation to any securities broker-dealers through whom they sell any of the
shares.
The Company will utilize the net proceeds, if any, realized from the
exercise of the Warrants for working capital and for general corporate
purposes, at the discretion of management. Pending their use, proceeds will be
placed in short-term, interest-bearing investment grade securities,
certificates of deposit or direct or guaranteed obligations of the United
States of America.
Due to an inability to precisely forecast the number of Warrants which may
be exercised, the Company is unable to predict the precise period for which the
Warrant Stock Offering will provide financing. The Company's working capital
requirements are a function of its future sales growth and potential business
or product acquisition, neither of which can be predicted with any reasonable
degree of certainty. The Company may need to seek funds through loans or other
financing arrangements in the future, and there can be no assurance that the
Company will be able to make such arrangements in the future should the need
arise. (See "RISK FACTORS.")
DETERMINATION OF OFFERING PRICE
The Offering Price of the 78,000 shares offered pursuant to the exercise
of the Warrants is $4.50 per share. The Exercise Price per share was determined
by negotiation between the Company and the Warrantholders and bears no
relationship to the market price of the Company's Common Stock, the prevailing
market conditions, operating results of the Company in recent periods, the book
value of the Company, or other recognized criteria of value. The Warrants were
issued by the Company as part of Units sold by the Company in a private
offering completed in the third quarter of 1996 (the "Private Offering"). The
Private Offering was made to a limited number of accredited investors, and the
terms of the Private Offering were the result of negotiation between the
Company and those investors.
<PAGE>
<PAGE>
PLAN OF DISTRIBUTION
SELLING SECURITYHOLDERS OFFERING
This Prospectus relates to the reoffer of 61,401 shares of Common Stock
currently owned by certain shareholders of the Company. Of the shares of
Common Stock included in the Selling Securityholders' Offering, 43,401 shares
of Common Stock were sold as part of Units in the Private Offering which was
completed by the Company in the third quarter of 1996. The remaining 18,000
shares of Common Stock were issued by the Company to a consultant for services
rendered.
Investors in the Private Offering were granted certain demand and
piggyback registration rights with respect to the Common Stock and Warrants
sold as part of the Units.
The Company has been advised by the Selling Securityholders that they may
hold some of the shares of Common Stock which they own or shares which they may
acquire pursuant to the exercise of the Warrants for investment purposes.
However, the Selling Securityholders have not determined how many shares of
Common Stock they will hold for investment and how many shares they will sell.
The Selling Securityholders may distribute or resell the shares of Common Stock
offered hereby to the public in the over-the-counter market at prices and on
terms prevailing on the date of sale in negotiated transactions or otherwise.
The Selling Securityholders also may pay customary brokerage commissions on
sales.
The shares of Common Stock offered by the Selling Securityholders are
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.
WARRANT STOCK OFFERING
The Warrants entitle the holders to acquire 78,000 shares of Common Stock
at an Exercise Price of $4.50 per share. The Warrants are exercisable until
September 30, 1999. The Company does not have the right to compel the exercise
of any of the Warrants and the Warrantholders have not committed to exercise
any of the Warrants. Accordingly, there can be no assurance of the number, if
any, of shares that will be purchased by the Warrantholders pursuant to the
exercise of the Warrants. The Company intends to maintain a current Prospectus
until the Warrants expire, or until they are all exercised, if earlier. The
expiration date of the Warrants may be extended by a majority of the Company's
Board of Directors upon thirty (30) days' written notice to all the
Warrantholders.
The shares of Common Stock to be issued upon exercise of the Warrants are
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act.
The Company is offering shares of Common Stock underlying the Warrants.
No underwriter or placement agent has been engaged to assist the Company in
this regard and no commissions or similar compensation will be paid to any
person. The Warrantholders may resell the shares offered hereby from time to
time in transactions (which may include block transactions) in the over-the-
counter market, in negotiated transactions, through the writing of options on
the Common Stock or a combination of such methods of sale, at fixed prices that
may be changed, at market prices prevailing at the time of sale, or at
negotiated prices. The Warrantholders may effect such transactions by selling
the Common Stock directly to purchasers or through broker-dealers that may act
as agents or principals. Such broker-dealers may receive compensation in the
form of discount, concessions or commissions from the Warrantholders and/or the
purchasers of the shares of Common Stock for whom such broker-dealers may act
as agents or to whom they sell as principals, or both (which compensation as to
a particular-broker dealer might be in excess of customary commissions).
<PAGE>
<PAGE>
The Selling Securityholders and Warrantholders and any broker-dealers that
act in connection with the sale of the shares of Common Stock as principals may
be deemed to be "Underwriters" within the meaning of Section 2(11) of the
Securities Act and any commissions received by them and any profit on the
resale of the shares of Common Stock as principals might be deemed to be
underwriting discounts and commissions under the Securities Act. The Selling
Securityholders and Warrantholders may agree to indemnify any agent, dealer, or
broker-dealer that participates in transactions involving sales of the shares
of Common Stock against certain liabilities, including liabilities arising
under the Securities Act. The Company will not receive any proceeds from the
resales of shares of Common Stock by the Selling Securityholders and
Warrantholders. Sales of the shares of Common Stock by the Selling
Securityholders and Warrantholders or even the potential of such sales, may
have an adverse effect on the market price of the Common Stock.
The Company has agreed to pay all expenses incurred in connection with the
registration of the shares offered hereby. The Selling Securityholders and
Warrantholders shall be exclusively liable to pay any and all commissions,
discounts and other payments to broker-dealers incurred in connection with
their sale of the shares.
The Selling Securityholders and Warrantholders have undertaken to the
Company to comply with Regulation M under the Exchange Act and in connection
with any distribution of the Company's securities. The Company has agreed to
indemnify the Selling Securityholders and Warrantholders against certain
liabilities that may be incurred in connection with this Offering, including
certain liabilities under the Securities Act.
INDEMNIFICATION
The By-Laws of the Company provide for the indemnification of Officers and
Directors to the maximum extent allowable under Colorado law. Insofar as the
indemnification for liabilities arising under the Securities Act of 1933, as
amended, may be permitted to Directors, Officers or persons controlling the
Company pursuant to such provisions, 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.
<PAGE>
<PAGE>
SELLING SECURITYHOLDERS
The following table sets forth certain information regarding the Common
Stock held by the Selling Securityholders as of December 1, 1997. To the
knowledge of the Company, the Selling Securityholders have had no material
relationship with the Company within the past three years, other than as a
result of the ownership of the securities, except as is expressly noted. The
following information has been furnished to the Company by the person named:
<TABLE>
<CAPTION>
Beneficial Ownership Beneficial Ownership
Prior to Offering Shares After Offering
Name Shares %(1) To Be Sold Shares %(7)
- ---- ---------------------- ---------- -----------------
<S> <C> <C> <C> <C> <C>
Rockies Fund, Inc. 71,000 (2) 7.4% 31,000 40,000 4.4%
Cheryl Wiscott 10,000 (3) 1.1% 5,000 5,000 0.5%
Raymond E. and Tamara D.
McElhaney 6,934 (4) 0.8% 3,467 3,467 0.4%
Bill and Yevonne Conrad 6,934 (5) 0.8% 3,467 3,467 0.4%
Ronald R. and Ethel J.
McGinnis 934 (6) nil 467 467 nil
Focus Tech, Inc. 18,000 2.0% 18,000 -0- -0-
- --------------------
</TABLE>
(1) Shares not outstanding but deemed beneficially owned by virtue of the
individual's right to acquire them as of the date of this Prospectus, or
within sixty (60) days of such date, are treated as outstanding when
determining the percent of the class owned by such individual.
(2) Includes Warrants exercisable to purchase 40,000 shares of Common Stock at
an exercise price of $4.50 per share. The Rockies Fund is a Business
Development Company under the Investment Company Act of 1940, as amended.
Voting and investment power over the subject securities is exercised by
its Board of Directors, whose members are Stephen G. Calandrella, Clifford
C. Thygesen and Charles M. Powell. Mr.Thygesen is also President and a
director of the Company, and Mr. Calandrella is a director of the Company.
(3) Includes Warrants exercisable to purchase 5,000 shares of Common Stock at
an exercise price of $4.50 per share.
(4) Includes Warrants exercisable to purchase 3,467 shares of Common Stock at
an exercise price of $4.50 per share.
(5) Includes Warrants exercisable to purchase 3,467 shares of Common Stock at
an exercise price of $4.50 per share.
(6) Includes Warrants exercisable to purchase 467 shares of Common Stock at an
exercise price of $4.50 per share.
(7) Assumes no outstanding Warrants are exercised. To the extent Warrants are
exercised, the total number of outstanding shares will increase and the
percentage held by a Selling Securityholder will decrease.
<PAGE>
<PAGE>
DESCRIPTION OF SECURITIES
The Company's authorized capital consists of 100,000,000 shares of Common
Stock, $.05 par value per share, and 50,000,000 shares of preferred stock,$.01
par value per share.
The shares of Common Stock covered by this Prospectus will be fully paid
and nonassessable.
COMMON STOCK
Each holder of Common Stock of the Company is entitled to one vote for
each share held of record. Voting rights in the election of directors are not
cumulative, and, therefore, the holders of more than 50% of the Common Stock of
the Company could, if they chose to do so, elect all of the directors.
The shares of Common Stock are not entitled to preemptive rights and are
not subject to redemption or assessment. Subject to the preferences which may
be granted to holders of preferred stock, each share of Common Stock is
entitled to share ratably in distributions to shareholders and to receive
ratably such dividends as may be declared by the Board of Directors out of
funds legally available therefor. Upon liquidation, dissolution or winding up
of the Company, subject to prior liquidation or other preference rights of
holders of preferred stock, if any, the holders of Common Stock are entitled to
receive pro rata the assets of the Company which are legally available for
distribution to shareholders. The issued and outstanding shares of Common Stock
are validly issued, fully paid and nonassessable.
PREFERRED SHARES
The Articles of Incorporation of the Company authorize issuance of a
maximum of 50,000,000 Preferred Shares. The Articles of Incorporation vest the
Board of Directors of the Company with authority to divide the class of
Preferred Shares into series and to fix and determine the relative rights and
preferences of the shares of any such series so established to the full extent
permitted by the laws of the State of Colorado and the Articles of
Incorporation in respect of, among other things, (a) the number of Preferred
Shares to constitute such series, and the distinctive designations thereof; (b)
the rate and preference of dividends, if any, the time of payment of dividends,
whether dividends are cumulative and the date from which any dividend shall
accrue; (c) whether Preferred Shares may be redeemed and, if so, the redemption
price and the terms and conditions of redemption; (d) the liquidation
preferences payable on Preferred Shares in the event of involuntary or
voluntary liquidation; (e) sinking fund or other provisions, if any, for
redemption or purchase of Preferred Shares; (f) the terms and conditions by
which Preferred Shares may be converted, if the Preferred Shares of any series
are issued with the privilege of conversion; and (g) voting rights, if any.
In the event of a proposed merger, tender offer, proxy contest or other
attempt to gain control of the Company not approved by the Board of Directors,
it would be possible for the Board of Directors, subject to any limitations
imposed by applicable law, the Company's Articles of Incorporation, the terms
and conditions of any outstanding class or series of preferred shares and the
applicable rules of any securities exchanges upon which securities of the
Company are at any time listed or of other markets in which securities of the
Company are at any time listed, to authorize the issuance of one or more series
of Preferred Stock with voting rights or other rights and preferences which
would impede the success of the proposed merger, tender offer, proxy contest or
other attempt to gain control of the Company. The issuance of Preferred Stock
may have an adverse effect on the rights (including voting rights) of holders
of Common Stock.
<PAGE>
<PAGE>
PUBLIC WARRANTS
The Company has outstanding 916,298 Warrants which were issued to the
Company's shareholders as a dividend. The Public Warrants entitle the holders
thereof to purchase 916,298 shares of Common Stock at an exercise price of
$10.00 per share. The Public Warrants are exercisable until December 1, 2000.
In the event the Public Warrants are not exercised within the exercise period,
all unexercised Public Warrants will expire and be void and of no further force
or effect. The Public Warrant exercise period may be extended by the Company at
the sole discretion of the Board of the Directors upon thirty (30) days' notice
to the Public Warrantholders. The Public Warrants will expire, become void and
be of no further force or effect upon conclusion of the applicable exercise
period, or any extension thereof.
The Public Warrants are governed by the terms of a Warrant Agreement
between the Company and Corporate Stock Transfer, Inc., as Warrant Agent. The
Public Warrants are redeemable upon thirty (30) days' notice, at the option of
the Company, at a redemption price of $.01 per Public Warrant, if the last sale
price for the Company's Common Stock exceeds 110% of the then current Public
Warrant exercise price for 20 consecutive trading days. The exercise price,
number and kind of common shares to be received upon exercise of the Public
Warrants are subject to adjustment on the occurrence of certain events, such as
stock splits, stock dividends or recapitalization of the Company. In the event
of liquidation, dissolution or winding up of the Company, the holders of the
Public Warrants will not be entitled to participate in the distribution of the
assets of the Company. Additionally, holders of the Public Warrants have no
voting, pre-emptive, liquidation or other rights of shareholders, and no
dividends will be declared on the Public Warrants or the shares underlying the
Public Warrants.
The Public Warrants were issued as a dividend to Common Shareholders of
the Company, and are freely tradeable. The Public Warrants are listed on the
NASDAQ SmallCap Market under the symbol "AMEPW."
PRIVATE WARRANTS
The Company has outstanding additional Warrants exercisable to purchase an
aggregate of 78,000 shares of Common Stock at an Exercise Price of $4.50 per
share. The Warrants were issued to a limited number of accredited investors as
part of Units sold in a Private Offering completed by the Company in third
quarter of 1996. When initially issued, the Warrants were exercisable for a
24-month period commencing the earlier of (i) one year from the date of issue
or (ii) the effective date of a Registration Statement registering for sale
under the Securities Act the shares of Common Stock issuable upon exercise of
such Warrants. The Warrants expire on September 30, 1999. The Company has the
right to extend the expiration date of the Warrants by resolution of the Board
of Directors upon thirty (30) days' written notice to all Warrantholders.
There currently exists no plan or intention to extend the expiration date of
the Warrants. In the event the Warrants are not exercised within the Exercise
Period, all unexercised Warrants will expire and be void and of no further
force or effect.
The Exercise Price, number and kind of common shares to be received upon
exercise of the Warrants are subject to adjustment on the occurrence of certain
events such as stock splits, stock dividends or recapitalizations of the
Company. The Warrants do not contain anti-dilution provisions that prevent
dilution of the equity interest represented by the underlying Common Stock upon
the occurrence of certain other events. In the event of liquidation,
dissolution or winding up of the Company, the holders of the Warrants will not
be entitled to participate in the distribution of the assets of the Company.
Additionally, holders of the Warrants have no voting, pre-emptive, liquidation
or other rights of shareholders, and no dividends will be declared on the
Warrants or the shares underlying the Warrants.
<PAGE>
<PAGE>
WARRANT SOLICITATION FEES
The Company has no agreement nor any arrangement whereby any fees or other
compensation will be paid to any person or entity upon exercise of any or all
of the Public Warrants or Warrants described herein.
TRANSFER AGENT, WARRANT AGENT AND REGISTRAR
The transfer agent, registrar and warrant agent for the Company's Common
Stock and Public Warrants is Corporate Stock Transfer, Inc., Denver, Colorado.
REPORTS TO SHAREHOLDERS
The Company intends to furnish annual reports to shareholders which will
include audited financial statements reported on by its certified public
accountants. In addition, the Company will issue unaudited quarterly or other
interim reports to shareholders as it deems appropriate.
<PAGE>
<PAGE>
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed on for the
Company by Neuman & Drennen, LLC, Temple-Bowron House, 1507 Pine Street,
Boulder, Colorado 80302, which has served as legal counsel to the Company since
its inception in 1986. For their services in connection with the preparation of
the Registration Statement and related Offering, and the issuance of their
legal opinion, the Company will pay the firm of Neuman & Drennen, LLC a fee,
estimated to be $5,000. Clifford L. Neuman, a member of the firm, has been a
member of the Company's Board of Directors since November 1990, and its Audit
Committee since April, 1991, and is also the beneficial owner of 13,000 shares
of the Company's Common Stock and options exercisable to purchase, in the
aggregate, an additional 12,000 shares of Common Stock.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1996, 1995 and 1994 and for each of the years in the three-year period ended
December 31, 1996, have been incorporated by reference herein and in the
Registration Statement and Prospectus in reliance upon the report of HEIN +
ASSOCIATES, LLP, Independent Certified Public Accountants, incorporated by
reference and upon the authority of said firm as experts in accounting and
auditing.
<PAGE>
<PAGE>
- ------------------------------------------- -----------------------------
No person is authorized to give any information
or to make any representation other than those
contained in this Prospectus, and if made such
information or representation must not be relied
upon as having been given or authorized. This AMERICAN EDUCATIONAL
Prospectus does not constitute an offer to sell PRODUCTS, INC.
or a solicitation of an offer to buy any
securities other than the Securities offered
this Prospectus or an offer to sell or a 139,401 Shares
soliciatation of an offer to buy the Securities
in any jurisdictionto any person to whom it
is unlawful to makesuch offer or solicitation
in such jurisdiction.
The delivery of this Prospectus shall not, under
any circumstances, create any implication that
there has been no change in the affairs of the
Company since the date of this Prospectus.
However, in the event of a material change, this
Prospectus will be amended or supplemented
accordingly.
TABLE OF CONTENTS
Page
--------
---------------------
Available Information 3 PROSPECTUS
Incorporation by Reference 4 ____________________
The Company 5
Risk Factors 6
Dilution 11
Use of Proceeds 13 ________________, 1998
Determination of Offering Price 13
Plan of Distribution 14
Indemnification 14
Description of Securities 15
Legal Matters 16
Experts 16
Financial Statements F-1
- ------------------------------------------- -----------------------------
<PAGE>
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses of the offering, all of which are to be borne by
the Company, are as follows:
<TABLE>
<S> <C>
SEC Filing Fee $ 235.00
NASDAQ Fees 1,740.00
Printing Expenses* 500.00
Accounting Fees and Expenses* 500.00
Legal Fees and Expenses* 5,000.00
Blue Sky Fees and Expenses* 1,500.00
Registrar and Transfer Agent Fee 500.00
Miscellaneous* 25.00
----------
Total* $10,000.00
- -------------------
* Estimated
</TABLE>
Item 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The only statute, charter provision, bylaw, contract, or other arrangement
under which any controlling person, director or officers of the Registrant is
insured or indemnified in any manner against any liability which he may incur
in his capacity as such, is as follows:
a. Sections 7-109-101 through 7-109-110 of the Colorado Corporation Code
provide for the indemnification of a corporation's officers and directors under
certain circumstances.
* * *
b. Article XII of Registrant's Articles of Incorporation provide that
the corporation may indemnify each director, officer, and any employee or agent
of the corporation, his heirs, executors and administrators, against expenses
reasonably incurred or any amounts paid by him in connection with any action,
suit or proceeding to which he may be made a party by reason of his being or
having been a director, officer, employee or agent of the corporation to the
extent permitted by the law as recited above in subparagraph (a).
c. Article XII of Registrant's Articles of Incorporation provides, in
part:
"e. To the maximum extent permitted by law or by public
policy, directors of this Corporation are to have no
personal liability for monetary damages for breach of
fiduciary duty as a director."
d. The Company currently pays for and maintains an insurance policy in
the amount of $1,000,000 that covers directors' and officers' liability.
<PAGE>
<PAGE>
Item 16. EXHIBITS.
a. The following Exhibits are filed as part of this Registration
Statement pursuant to Item 601 of Regulation SB:
Exhibit No. Title
- ----------- -----
4.1 Form of Warrant Certificate
5.1 Opinion of Neuman & Drennen, LLC
24.1 Consent of Hein + Associates LLP
24.2 Consent of Neuman & Drennen, LLC
- --------------------
Item 17. UNDERTAKINGS.
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 that 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 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;
(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.
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. To provide, upon effectiveness, certificates in such denominations
and registered in such names as are required to permit prompt delivery to each
purchaser.
The undersigned registrant hereby undertakes to deliver or to cause to be
delivered with the Prospectus to each person to whom the prospectus is sent or
given the latest annual report to securityholders that is incorporated by
reference in the Prospectus and furnish pursuant to and meeting the
requirements of Rule 14a-3 or 14c-3 under the Securities Exchange Act of 1934;
and where interim financial information required to be presented by Article 3
of Regulation S-X are not set forth in the Prospectus, to deliver or cause to
be delivered to each person to whom the Prospectus is sent or given, the latest
quarterly report that is specifically incorporated by reference in the
Prospectus to provide such interim financial information.
<PAGE>
<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 Registration Statement to be
signed on its behalf by the undersigned thereunto duly authorized. In the City
of Boulder, State of Colorado on the 5th of January, 1998.
AMERICAN EDUCATIONAL PRODUCTS, INC., a
Colorado corporation
By:
---------------------------------------
Clifford C. Thygesen, President
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities with American Educational Products, Inc. and on the dates indicated.
Signature Title Date
- --------- ----- ----
/s/ Robert A. Scott Chairman of the Board, 01/05/98
- ------------------------------ Director, Secretary ------------
Robert A. Scott
/s/ Clifford C. Thygesen President, Director 01/05/98
- ------------------------------ ------------
Clifford C. Thygesen
/s/ Frank L. Jennings Vice President, 01/05/98
- ------------------------------ Chief Financial Officer ------------
Frank L. Jennings
/s/ Steven B. Lapin Director 01/05/98
- ------------------------------ ------------
Steven B. Lapin
/s/ Stephen G. Calandrella Director 01/05/98
- ------------------------------ ------------
Stephen G. Calandrella
/s/ Wayne R. Kirschling Director 01/05/98
- ------------------------------ ------------
Wayne R. Kirschling
Exhibit 4.1
-----------
The securities represented by this instrument have not been
registered under the Securities Act of 1933 (the "Securities Act")
or qualified under the securities laws of any state, in reliance
upon exemptions from such registration and qualification.
WARRANT CERTIFICATE
For the Purchase of Common Shares,
$.01 Par Value per Share
of
AMERICAN EDUCATIONAL PRODUCTS, INC.
(a Colorado corporation)
Warrant No. Warrants
[ W-______ ] [ ]
THIS WARRANT CERTIFIES THAT, for value received, _______________________
___________________________, or registered assigns ("Warrantholder") is the
registered owner of the above indicated number of Warrants entitling the
Warrantholder, commencing upon the Exercise Date, as defined in paragraph 1 of
this Certificate, but before 5:00 o'clock p.m., Mountain Standard Time, on the
Expiration Date as defined in paragraph 1 of this Certificate but not
thereafter, to subscribe for, purchase and receive _______ (___) fully paid
and non-assessable share___ of Common Stock, $.01 par value (the "Common
Stock") of AMERICAN EDUCATIONAL PRODUCTS, INC., a Colorado corporation (the
"Company"), at a purchase price of one dollar ($1.00) per share of Common
Stock ("Exercise Price") upon presentation and surrender of this Warrant and
upon payment of the Exercise Price for such of the shares of Common Stock of
the Company, at any time after the Exercise Date, but only subject to the
conditions set forth herein. The Exercise Price, the number of shares
purchasable upon exercise of each Warrant, and the Expiration Date are subject
to adjustments described herein. The Warrantholders may exercise all or any
number of the Warrants represented hereby. Upon exercise of this Warrant, the
form of election hereinafter provided for must be duly executed and the
instructions for registration of the Common Stock acquired by such exercise
must be completed. If the rights represented hereby shall not be exercised at
or before the Expiration Date, this Warrant shall become and be void without
further force or effect, and all rights represented hereby shall cease and
expire.
1. TERM OF WARRANT. The Warrants evidenced by this Warrant Certificate
may be exercised in whole or in part at any time for a period of 24 months
commencing upon the earlier of (i) the effective date of a Registration
Statement registering for sale under the Securities Act of 1933, as amended
("the Act") the shares of Common Stock issuable upon exercise of this Warrant
(the "Warrant Stock") or (ii) October 1, 1997 (the "Exercise Date"), and
ending at 5:00 o'clock p.m. Mountain Time on the second anniversary date of
the Exercise Date ("Expiration Date"); provided, however, that the Company may
extend the Exercise Period of this Warrant by giving notice of such extension.
2. NOTICE OF EXTENDED EXPIRATION DATE. The Company may extend the
Expiration Date for the exercise of this Warrant at any time by giving thirty
(30) days' written notice thereof to the Warrantholder. If this Warrant is
not exercised on or before the extended Expiration Date, it shall become
wholly void.
3. ADJUSTMENTS OF EXERCISE PRICE AND SHARES. In the event the Common
Stock issuable upon exercise of this Warrant shall be changed into the same or
different number of shares of any class or classes of stock, whether by
capital reorganization, reclassification or otherwise, or in the event the
Company shall at any time issue Common Stock by way of dividend or other
distribution on any stock of the Company, or subdivide or combine the
outstanding shares of Common Stock, then in each such event the Holder of this
Warrant shall have the right thereafter to exercise such Warrant and receive
the kind and amount of shares of stock and other securities and property
receivable upon such reorganization, reclassification or other change by
holders of the number of shares of Common Stock into which such Warrant might
have been exercised immediately prior to such reorganization, reclassification
or change. In the case of any such reorganization, reclassification or
change, the Exercise Price shall also be appropriately adjusted so as to
maintain the aggregate Exercise Price. Further, in case of any consolidation
or merger of the Company with or into another corporation in which
consolidation or merger the Company is not the continuing corporation, or in
case of any sale or conveyance to another corporation of the property of the
Company as an entirety, or substantially as an entirety, the Company shall
cause effective provision to be made so that the Warrantholder shall have the
right thereafter, by exercising this Warrant, to purchase the kind and amount
of shares of stock and other securities and property receivable upon such
consolidation, merger, sale or conveyance by holders of the number of shares
of Common Stock into which such Warrant might have been exercised immediately
prior to such consolidation, merger, sale or conveyance, which provision shall
provide for adjustments which shall be as nearly equivalent as may be
practicable to the adjustments provided for in this Warrant. The foregoing
provisions shall similarly apply to successive reclassifications, capital
reorganizations and changes of shares of Common Stock and to successive
consolidations, mergers, sales or conveyances. Notwithstanding the foregoing,
no adjustment of the Exercise Price shall be made as a result of or in
connection with (1) the issuance of Common Stock of the Company pursuant to
options, warrants and share purchase agreements now in effect or hereafter
outstanding or created, (2) the establishment of option plans of the Company,
the modification, renewal or extension of any plan now in effect or hereafter
created, or the issuance of Common Stock upon exercise of any options pursuant
to such plans, (3) the issuance of Common Stock in connection with an
acquisition, consolidation or merger of any type in which the Company is the
continuing corporation, or (4) the issuance of Common Stock in consideration
of such cash, property or service as may be approved by the Board of Directors
of the Company and permitted by applicable law.
4. ADJUSTMENT TO PURCHASE PRICE. The Company may, in its sole
discretion, lower the purchase price at any time, or from time-to-time. When
any adjustment is made in the purchase price, the Company shall cause a copy
of such statement to be mailed to the Warrantholder, as of a date within ten
(10) days after the date when the purchase price has been adjusted.
5. MANNER OF EXERCISE. The Warrantholder of the Warrants evidenced by
this Warrant Certificate may exercise all or any whole number of such Warrants
during the Exercise Period in the manner stated herein. This Warrant
Certificate, together with the purchase form provided herein duly executed by
the Warrantholder or by the Warrantholder's duly authorized attorney, plus
payment of the exercise price in the manner set forth in paragraph 6 below,
shall be surrendered to the Company. If upon exercise of any Warrants
evidenced by this Warrant Certificate the number of Warrants exercised shall
be less than the total number of Warrants so evidenced, there shall be issued
to the Warrantholder a new Warrant Certificate evidencing the number of
Warrants not so exercised.
6. MANNER OF PAYMENT. The exercise price of each Warrant shall be
paid, to the extent permitted by applicable statutes and regulations, either
(i) in cash at the time the Warrant is exercised, (ii) by delivery to the
Company of other Common Stock of the Company valued at its then established
fair market value, (iii) by delivery to the Company of either options or
warrants of the Company, including, without limitation, this Warrant, valued
at the difference between their exercise price and the then established fair
market value of the Company's Common Stock, (iv) according to a deferred
payment or other arrangement (which may include, without limiting the
generality of the foregoing, the use of other Common Stock of the Company)
with the holder hereof, or (v) any other form of legal consideration that may
be acceptable to the Board of Directors, in their discretion. For the
purposes of this paragraph 6, the fair market value of the Company's Common
Stock shall be (i) the closing sale price for the Common Stock on the primary
exchange upon which the shares are listed and traded on the date the Warrant
is exercised, or (ii) if the shares are not traded on any national exchange,
the closing sale price for the Common Stock on the NASDAQ National Market on
the date the Warrant is exercised, or (iii) if the shares or neither traded on
a national exchange nor listed on the NASDAQ National Market, then the average
of the bid and ask prices for the Common Stock in the Over-The-Counter Market
as quoted on the NASDAQ Small-Cap Market or (iv) if the shares of Common Stock
are neither traded on a national exchange or the NASDAQ National Market nor
quoted on the NASDAQ Small-Cap Market, the average of the bid and ask prices
for the Common Stock as quoted by any recognized securities quotation service
such as the National Quotation Bureau, Inc. or the OTC Electronic Bulletin
Board on the date the Warrant is exercised. In the case of any deferred
payment arrangement, any interest shall be payable at least annually and shall
be charged at the minimum rate of interest necessary to avoid the treatment as
interest, under any applicable provisions of the Internal Revenue Code, of any
amounts other than amounts stated to be interest under the deferred payment
arrangement.
7. RESERVATION OF COMMON STOCK. The Company agrees that the number of
shares of Common Stock sufficient to provide for the exercise of the Warrant
upon the basis herein set forth will at all times during the term of this
Warrant be reserved for the exercise thereof.
8. ISSUANCE OF COMMON STOCK UPON EXERCISE. The Company, at its
expense, shall cause to be issued, within ten (10) days after exercise of this
Warrant, a certificate or certificates in the name requested by the
Warrantholder of the number of shares of Common Stock to which the
Warrantholder is entitled upon such exercise. All shares of Common Stock or
other securities delivered upon the exercise of the Warrants shall be validly
issued, fully paid and non-assessable.
9. NO RIGHT AS STOCKHOLDER. The Warrantholder is not, by virtue of
ownership of the Warrant, entitled to any rights whatsoever of a stockholder
of the Company.
10. ASSIGNMENT. This Warrant is freely assignable by the Warrantholder
hereof.
11. DEMAND REGISTRATION RIGHTS.
(a) Within thirty (30) days following the written demand of the
holder of fifty percent (50%) or more of the outstanding Warrants of the class
of Warrants represented by this certificate, the Company shall use its best
efforts to cause to be prepared and filed with the SEC a Registration
Statement on any applicable form registering for sale under the Act the shares
of Warrant Stock issuable upon exercise of this Warrant.
(b) In connection with the preparation and filing of the
Registration Statement, the Company agrees to (i) use its best efforts to
cause such Registration Statement to be declared effective; (ii) prepare and
file with the SEC such amendments and supplements to such Registration
Statement as may be necessary to keep such Registration Statement effective
for a period of not less than 180 days; (iii) furnish to the Subscriber such
number of copies of a prospectus, including a preliminary prospectus, in
conformity with the requirements of the Securities Act of 1933, as amended
(the "Act"), and such other documents as Subscriber may reasonably request in
order to facilitate the disposition of the shares of Common Stock; and (iv)
use its best efforts to register and qualify the shares of Common Stock
covered by such Registration Statement under such other securities or Blue Sky
laws of such jurisdictions as shall be identified by Subscriber for the
distribution of the securities covered by the Registration Statement.
(c) All expenses incurred in connection with the registration,
offering, and distribution of the Warrant Stock, including without limitation,
all fees and disbursements of legal counsel, accounting fees, printing, filing
and Blue Sky fees, shall be paid by the Company.
(d) To the extent permitted by law, Subscriber will indemnify and
hold harmless the Company, and its directors, officers, employees, agents and
representatives, as well as its controlling persons (within the meaning of the
Act) against any losses, claims, damages, liabilities, or expenses, including
without limitation, attorney's fees and disbursements, which arise out of or
are based upon any violation by Subscriber of the Act or under the Securities
Exchange Act of 1934, or any rule or regulation promulgated thereunder
applicable to Subscriber, or arise out of or are based upon any untrue
statement or omission of Subscriber in the Subscription Agreement between the
Company and Subscriber, or arise out of or are based upon any untrue statement
or alleged untrue statement of any material fact contained in the Registration
Statement, or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, but only to the extent that such
untrue statement or alleged untrue statement or omission, or alleged omission
was made in such Registration Statement in reliance upon and in conformity
with information furnished by Subscriber in writing, expressly for use in
connection with such Registration Statement.
(e) To the extent permitted by law, the Company will indemnify and
hold harmless Subscriber, including its officers, directors, employees,
agents, and representatives, against any losses, claims, damages, liabilities,
or expenses, including without limitation attorney's fees and disbursements,
to which Subscriber may become subject under the Act to the extent that such
losses, claims, damages or liabilities arise out of or are based upon any
violation by the Company of the Act or under the Securities Exchange Act of
1934, or any rule or regulation promulgated thereunder applicable to the
Company, or arise out of or are based upon any untrue or alleged untrue
statement of any material fact contained in the Registration Statement, or
arise out of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, or arise out of any violation by the
Company of any rule or regulation promulgated under the Act applicable to the
Company and relating to action or inaction required of the Company in
connection with such Registration Statement; provided, however, that the
indemnify agreement contained in this paragraph shall not apply to any loss,
damage or liability to the extent that same arises out of or is based upon an
untrue statement or omission made in connection with such Registration
Statement in reliance upon and in conformity with information furnished in
writing expressly for use in connection with such Registration Statement by
Subscriber.
(f) Subscriber undertakes to comply with all applicable laws
governing the distribution of securities in connection with Subscriber's sale
of common stock of the Company acquired pursuant to the exercise of this
Warrant, including, without limitation, Rule 10(b)-6 under the Securities
Exchange Act of 1934, and to notify the Company of any changes in Subscriber's
plan of distribution, including the determination of the public offering price
and any dealer concession or discount so that the Company can sticker or amend
the Registration Statement as the Company deems appropriate in its sole
discretion.
Dated:
Attest: AMERICAN EDUCATIONAL PRODUCTS, INC.
By: ________________________ By:________________________________
Secretary President
<PAGE>
<PAGE>
AMERICAN EDUCATIONAL PRODUCTS, INC.
ELECTION OF PURCHASE
Transfer Fee: $7.00 per certificate issued.
The undersigned hereby irrevocably elects to exercise _______ Warrants
represented by this Warrant Certificate, and to purchase the common shares
issuable upon the exercise of such Warrants, and requests that the
certificates for such shares shall be issued in the name of:
___________________________________________________________________________
___________________________________________________________________________
Address
___________________________________________________________________________
Social Security or other identifying number
___________________________________________________________________________
and be delivered to
___________________________________________________________________________
Name
at
___________________________________________________________________________
Address
and, if said number of Warrants shall not be all the Warrants evidenced by
this Warrant certificate, that a new Warrant certificate for the balance of
such Warrants be registered in the name of, AND delivered to, the undersigned
at the address stated below.
Dated: _______________, 19___
Name of Warrantholder: ____________________________________________________
Address: __________________________________________________________________
___________________________________________________________________________
Signature: ________________________________________________________________
ASSIGNMENT
For value received _______________________________________________________
hereby sell, assign, and transfer unto ______________________________________
_____________________________________________________________________________
Warrants represented by this Warrant certificate, together with all right,
title, and interest therein, and do hereby irrevocably constitute and appoint
_____________________________________________________________________________
_____________________________________________________________________________
attorney, to transfer this Warrant certificate on the books of the Company,
with full power of substitution.
Dated: _____________, 19___ X _________________________________________
X _________________________________________
SIGNATURE GUARANTEED: NOTICE: The signature to this assignment must
correspond with the name as written upon the
face of the certificate, in every particular,
without alteration or enlargement, or any change
whatever.
IMPORTANT: SIGNATURE MUST BE GUARANTEED BY A COMMERCIAL BANK OR MEMBER
FIRM OF ONE OF THE FOLLOWING STOCK EXCHANGES: NEW YORK STOCK EXCHANGE,
PACIFIC COAST STOCK EXCHANGE, AMERICAN STOCK EXCHANGE, MIDWEST STOCK
EXCHANGE.
<PAGE>
EXHIBIT 5.1
-----------
December 23, 1997
American Educational Product, Inc.
6550 Gunpark Drive, Suite 200
Boulder, Colorado 80301
Re: S.E.C. REGISTRATION STATEMENT ON FORM S-3
-----------------------------------------
Ladies and Gentlemen:
We have acted as counsel to American Educational Products, Inc. (the
"Company") in connection with a Registration Statement to be filed with the
United Stated Securities and Exchange Commission, Washington, D.C., pursuant
to the Securities Act of 1933, as amended, covering the registration of an
aggregate of 139,401 shares of the Company's $0.05 par value common stock
(the "Common Stock") pursuant to the reoffer by certain Selling Security
holders and the exercise of certain Warrants. In connection with such
representation of the Company, we have examined such corporate records, and
have made such inquiry of government officials and Company officials and
have made such examination of the law as we deemed appropriate in connection
with delivering this opinion.
Based upon the foregoing, we are of the opinion as follows:
1. The Company has been duly incorporated and organized under the
laws of the State of Colorado and is validly existing as a corporation in
good standing under the laws of that state.
2. The Company's authorized capital consists of one hundred million
(100,000,000) shares of Common Stock having a par value of $0.05 each and
fifty million (50,000,000) shares of Preferred Stock having a par value of
$.01 each.
3. The 78,000 shares of Common Stock being registered for sale and
offered by the Company will, upon the valid exercise of the Warrant and
payment of the Warrant exercise price, be lawfully and validly issued, fully
paid and non-assessable shares of the Company's Common Stock.
4. The 61,401 shares of Common Stock being registered for resale by
the Selling Security holders, are lawfully and validly issued, fully paid
and non-assessable shares of the Company's Common Stock.
Sincerely,
/s/ Clifford L. Neuman
CLN:sf
<PAGE>
EXHIBIT 24.1
------------
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference of our report dated February 6,
1997 accompanying the financial statements of American Educational Products,
Inc. and Subsidiaries in the Form S-3 Registration Statement of American
Educational Products, Inc. and to the use of our name and the statements
with respect to us, as appearing under the heading "Experts" in the
Registration Statement.
HEIN + ASSOCIATES LLP
Denver, Colorado
December 16, 1997
<PAGE>
EXHIBIT 24.2
------------
December 23, 1997
American Educational Products, Inc.
6550 Gunpark Drive, Suite 200
Boulder, Colorado 80301
Re: S.E.C. REGISTRATION STATEMENT ON FORM S-3
-----------------------------------------
Ladies and Gentlemen:
We hereby consent to the inclusion of our opinion regarding the
legality of the securities being registered by the Registration Statement to
be filed with the United Stated Securities and Exchange Commission,
Washington, D.C., pursuant to the Securities Act of 1933, as amended, by
American Educational Products, Inc., a Colorado corporation, (the "Company")
in connection with the offering described therein of up to 139,401 shares of
its Common Stock, $.05 par value, as proposed and more fully described in
such Registration Statement.
We further consent to the reference in such Registration Statement to
our having given such opinions.
Sincerely,
/s/ Clifford L. Neuman
CLN:sf
