<PAGE>
As filed with the Securities and Exchange Commission on March 24, 2000.
Registration No. 333-______
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
SECURITIES ACT OF 1933
AMERICAN EDUCATIONAL PRODUCTS, INC.
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(Exact name of Registrant as specified on its Charter)
Colorado 84-1012129
- -------------------- --------------------
(State or other jurisdiction of IRS Employer
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
----------------------------------------
(Name, address, including zip code, and telephone number of
agent for service of process)
Copies to:
David H. Drennen, Esq.
Neuman & Drennen, LLC
5445 DTC Parkway, PH4
Englewood, CO 80111
303-221-4700
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. [ ]
<PAGE>
<PAGE>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Title of Each Proposed Proposed
Class of Maximum Maximum
Securities Amount Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price (1) Fee
- ------------- ---------- --------- --------- ------------
<S> <C> <C> <C> <C>
Common Stock,
$.05 par value
(2) 75,000 $8.00 (3) $ 600,000 $158.40
Common Stock,
$.05 par value
(4) 71,250 $10.00 (5) $ 712,500 $188.10
------- ---------- -------
Total 146,250 $1,312,500 $346.50
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee
pursuant to Rule 457.
(2) Shares of common stock issuable upon exercise of warrants.
(3) Based upon the $8.00 per share exercise price of the warrants.
(4) Shares of common stock issuable upon conversion of convertible notes.
(5) Based on $10.00 per share conversion price of the notes.
The Registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall
file a further amendment which specifically states that this registration
statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
<PAGE>
<PAGE>
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
Statement and outside front and outside front cover page
cover of Prospectus of Prospectus
2. Inside front and outside back Inside front and outside back
cover pages of Prospectus pages of Prospectus
3. Summary Information, Risk Factors Risk Factors
and Ratio of Earnings to Fixed
Charges
4. Use of Proceeds Use of Proceeds
5. Determination of Offering Price Determination of Offering Price
6. Dilution Not Applicable
7. Plan of Distribution Plan of Distribution
8. Description of Securities to be Description of Securities
Registered
9. Interest of Named Experts and Legal Matters
Counsel
10. Material Changes Not Applicable
11. Incorporation of Certain Incorporation of Certain Documents
Information by Reference by Reference
12. Disclosure of Commission Position Indemnification
on Indemnification for Securities
Act Liabilities
<PAGE>
<PAGE>
Prospectus
AMERICAN EDUCATIONAL PRODUCTS, INC.
146,250 Shares
$.05 par value Common Stock
* We are registering 146,250 shares of common stock. 75,000 of those
shares are issuable upon the exercise of outstanding warrants; and
71,250 of those shares are issuable upon conversion of outstanding
convertible notes.
------------------------------
Investing in our securities involves risks. Please read the risk factors
beginning on page 4 before making a decision to invest in our securities.
------------------------------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if
this prospectus is truthful or complete. It is illegal for any person to tell
you otherwise.
------------------------------
Nasdaq SmallCap Market Trading Symbols
Common Stock - AMEP
Warrants - AMEPW
------------------------------
The date of this prospectus is March 24, 2000.
<PAGE>
<PAGE>
American Educational Products, Inc.
We manufacture, develop, market, and distribute educational products to
parents, teachers, principals, public and private schools, and school
districts throughout the United States and in some selected international
locations. Generally, our products can be classified as supplemental
instructional aids, that is, products that present educational content in a
format different than traditional textbooks. Specifically, we produce
manipulative products that students can physically touch, examine, and
manipulate to gain additional understanding. Our operations are primarily
conducted through our five subsidiaries: Scott Resources, Inc.; Hubbard
Scientific, Inc.; SL Distribution, Inc., which is doing business as "Summit
Learning"; National Teaching Aids, Inc.; and AEP California, dba To-Sew. Our
executive offices are located at 6550 Gunpark Drive, Suite 200, Boulder,
Colorado 80301. Our telephone number at that address is (303) 527-3230.
Scott Resources 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 in Fort Collins, Colorado.
Hubbard Scientific manufactures, develops, and markets both proprietary
and non-proprietary supplemental educational and instructional materials in
the field of science. National Teaching, a subsidiary of Hubbard develops,
manufactures, and markets science products for the K-12 market. Hubbard
Scientific and National Teaching maintain their principal manufacturing
facility in Chippewa Falls, Wisconsin.
Summit Learning distributes supplemental educational products through the
direct mailing of catalogs. Summit Learning's operations are conducted at its
facilities in Fort Collins, Colorado.
Effective September 1, 1999, we acquired the business known as To-Sew and
relocated its operations to our existing facilities in Fort Collins, Colorado.
To-Sew manufactures and distributes supplemental educational products.
<PAGE>
<PAGE>
Risk Factors
You should consider carefully the following risk factors in addition to the
other information contained in this prospectus:
Unspecified Use of Proceeds. We will have broad discretion to allocate any
proceeds we receive from the exercise of warrants. We cannot guarantee that
the monies received will improve our operations.
The monies that we may receive from the exercise of the warrants have
been allocated generally to provide working capital for operations. As such,
we will use funds as they are received for such purposes and in such
proportions as we deem advisable. While we will apply the proceeds in a
manner consistent with our fiduciary duty and in a manner consistent with our
best interests, we cannot assure you that the monies received will result in
any present or future improvement in our results of operations.
Intense Competition. We are in an extremely competitive industry that is
dominated by several companies, which have significantly greater financial,
technical and marketing resources, than we have.
Intense competition and extensive research and development efforts
characterize the industry in which we compete. New product developments, and
enhancements of existing products, are expected to continue and we cannot
assure you that discoveries by others will not render our products non-
competitive. Sales of technology related products such as computers and other
electronic products are growing at a faster rate than sales of manipulatives
and videos. We do not manufacture technology related products and have no
such products currently under development.
There are many companies, both public and private, that develop products
for the same applications as we pursue. The products manufactured by these
competitors range from textbooks to manipulatives and models. Many of these
entities publish catalogs in addition to listing their products in dealer
catalogs. Some of these companies have substantially greater financial,
research and development, manufacturing and marketing experience and resources
than we have and represent substantial long-term competition for us. These
companies may succeed in developing products that are more effective or less
costly than any products that we may currently own or be developing in the
future.
Additionally, during the last three years, there has been increasing
competition from foreign manufacturers of educational products. These
products are often priced less than our products. While we can provide our
customers with better delivery schedules and more comprehensive teacher
manuals, foreign competition may still have an adverse effect on us.
<PAGE>
Risk Caused by Changing School Procurement Policies. Change in school
procurement policies may adversely impact our sales.
Over the past ten years, many school districts have de-centralized their
purchasing of educational products. Increasingly, purchasing decisions are
being made at the school, or classroom level, rather than at the school
district level. This change has caused educational product manufacturers to
market through catalogs and other direct sales channels, rather than through
distributors and sales representatives. Additionally, we believe that
products may begin to be marketed over the internet. Although we our not
aware of a significant amount of internet marketing of educational products,
if we are not able to respond to these new marketing techniques, our sales
will suffer.
Risk of Inability to Integrate Acquired Businesses. We may not be able to
integrate acquired businesses in a manner that is beneficial to us, or that
results in additional profits.
We believe that our ultimate success and profitability turns, in part, on
our ability to expand our product base and strengthen our market position via
acquisition. As a result, we actively seek acquisition opportunities that
complement our existing business. By expanding our product base, we believe
that we will be better able to more fully address the diverse and growing
requirements of the education industry. To this end, we believe that the
acquisitions of Summit Learning, National Teaching, and To Sew will allow us
to provide a more complete and useful product offering within the educational
industry. However, we cannot assure you that the integration of any future
acquired business into our operations will be completed in a manner that is
efficient, effective and timely enough to achieve the anticipated benefits of
the acquisitions, or that the acquisitions will result in additional profits.
Integrating the companies will require the timely, efficient and effective
combination of management, sales and marketing and development and
manufacturing teams that prior to the acquisitions operated in different
geographic locations, under varying management philosophies. Integration of
the companies may also require the combination of differing product lines,
product development plans, and marketing approaches. Additionally, the time-
consuming task of integrating the companies may distract our attention from
our day-to-day business operations.
Risk of Inability to Manage Growth. Our failure to manage growth properly
could have a material adverse effect upon our business, financial condition,
and results of operations.
The educational products industry is a very fragmented industry. Thus,
the ability to timely deliver a variety of educational products and to provide
meaningful customer support for a diverse product offering is indispensable.
For this reason, we have adopted a long term growth strategy to develop our
product lines and strengthen our market position via acquisition. However,
our ability to manage our growth, if any, will require us to continue to
improve and expand our management, operational and financial systems and
controls. Any measurable growth in business will result in additional demands
on customer support, sales, marketing, administrative and technical resources
and will place significant strain on our management, administrative,
operation, financial and technical resources and increase demand upon our
systems and controls. We cannot assure you that we will be able to
successfully address these additional demands, or that our operating and
financial control systems will be adequate to support our future operations
and anticipated growth.
Risks Associated with Our Ability to Make Unspecified Acquisitions.
Additional acquisitions, if consummated, could adversely affect our
operations.
In furtherance of our goal to implement and maintain a strategic plan of
expansion of our product base through acquisitions we have sought, and may
continue to seek, potential acquisitions of products, technologies and
businesses in the education industry that could complement or expand our
current product offering and business. In the event we identify additional
appropriate acquisition candidates, we cannot assure you that we will be able
to successfully negotiate, finance or integrate the acquired products,
technologies or businesses. Furthermore, such an acquisition could cause a
diversion of our time and resources. We cannot assure you that a given
acquisition, when consummated, would not materially adversely affect our
business and results of operations.
Dependence upon Key Personnel. Our success will depend on our ability to
attract and retain key personnel. If we are unable to attract and retain key
personnel, we will be unable to succeed in our business plan.
Our future success is dependent on the continued service of our key
technical, marketing, sales, and management personnel and on our ability to
continue to attract, motivate, and retain highly qualified employees. Except
for a one year agreement with our President, Mr. Thygesen, we currently do not
have in place any employment agreements with our key employees. As a result,
our key employees may voluntarily terminate their employment at any time.
Competition for such employees is intense and the process of locating
technical and management personnel with the combination of skills and
attributes required to execute our strategy is often lengthy. Accordingly,
the loss of the services of key personnel could have a material adverse effect
upon our operations and our development efforts.
Inability to Adequately Protect Our Products. We may be unable to prevent the
unauthorized use of our products or unauthorized disclosure of our proprietary
information. Any unauthorized use or disclosure could have a material adverse
effect on our business and operations.
We rely on copyrights and trademarks for protection of our products.
Where registrations of trademarks have not been issued, we claim common law
trademark rights to those names. Notwithstanding the foregoing, we cannot
assure you that we will obtain additional registrations for any of our
trademarks. We may be subject to opposition, cancellation or infringement
proceedings based upon the use of those trademarks. If we lose the use of any
one or more of our trademarks, it could have a material adverse effect upon
our ability to profitably market our products.
We also rely on trade secret protection for our unpatented proprietary
technology. However, trade secrets are difficult to protect. We cannot
assure you that others will not independently develop substantially equivalent
manipulatives and models or otherwise gain access to our trade secrets, that
such trade secrets will not be disclosed or that we can effectively protect
our rights to unpatented trade secrets. Despite our precautions, unauthorized
parties may attempt to design, copy or obtain and use our products and other
information we consider proprietary. We cannot assure you that the
precautions we have taken will provide meaningful protection for our products
or other proprietary information in the event of unauthorized use or
disclosure of this information.
Potential Adverse Effects from Decreases in Educational Funding. A material
reduction in funding for public education would adversely effect our
profitability.
The principal markets for our products are elementary, middle and
secondary school systems. Most, if not all, of these potential customers rely
upon federal, state, and local funding in order to support their activities.
The ability of these institutions to purchase our products is dependent upon
continued support and funding for public education. A reduction or withdrawal
of such support could result in a diminished demand for our products, which,
in turn, would adversely effect our operations and profitability.
Risks Related to Limited Liquidity in Trading Markets of our Securities. The
trading market for our securities is limited and sporadic.
Prior to this offering, our common stock and warrants have been thinly
traded on the Nasdaq SmallCap Market under the symbols AMEP and AMEPW,
respectively. While there currently exists a limited and sporadic public
trading market for our securities, the prices are subject to high degrees of
volatility and we cannot assure you that the market will improve in the
future. Factors discussed in this prospectus may have a significant impact on
the market prices of our common stock and warrants.
Potential Adverse Effects of Future Sales. The market price of our securities
could be adversely affected by sales of restricted securities.
Actual sales or the prospect of future sales of shares of our common
stock under Rule 144 may have a depressive effect upon the price of, and
market for, our common stock. As of December 31, 1999, 1,082,070 shares of
our common stock were issued and outstanding. 479,285 of those shares are
"restricted securities" and under some circumstances may, in the future, be
under 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 other conditions, a person who has beneficially owned
restricted shares of common stock for at least one year is entitled to sell,
within any three-month period, a number of shares that:
1. Does not exceed the greater of one percent of the total number of
outstanding shares of the same class; or
2. If the common stock is quoted on Nasdaq or a stock exchange, the
average weekly trading volume during the four calendar weeks immediately
preceding the sale.
A person who presently is not and who has not been one of our affiliates
for at least three months immediately preceding a sale and who has
beneficially owned the shares of common stock for at least one year is
entitled to sell these shares under Rule 144 without regard to any of the
volume limitations described above. We may grant options to purchase an
additional 16,485 shares of common stock under our incentive stock option
plan. We have registered for sale all shares issuable upon exercise of the
options granted under our incentive stock option plan. As a result, when the
options are exercised, the shares issued will be free-trading, except for
limitations imposed upon directors, officers and affiliates who exercise
options granted under the plan. We cannot predict what effect, if any, that
sales of shares of common stock, or the availability of these 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 our common stock and
could impair our ability to raise capital in the future through the sale of
equity securities.
Potential Adverse Effects of Preferred Stock. We may authorize the issuance
of our preferred stock without shareholder approval.
Our articles of incorporation, as amended, authorize the issuance of up
to 50,000,000 shares of preferred stock. We can fix and determine the
relative rights and preferences of preferred shares and may issue these
shares, without further stockholder approval. As a result, we could authorize
the issuance of a series of preferred stock that would:
1. Grant to holders preferred rights to our assets upon liquidation;
2. Grant to holders the right to receive dividend coupons before
dividends would be declared to common stockholders; and
3. Grant to holders the right to the redemption of those shares,
together with a premium, prior to the redemption of common stock.
Common stockholders have no redemption rights. In addition, we could issue
large blocks of voting stocks to fend against unwanted tender offers or
hostile takeovers without further shareholder approval.
Possible Dilution and other Adverse Effects from Future Sales of Additional
Shares. The exercise of outstanding options and warrants and/or our ability
to issue additional securities without shareholder approval could have
substantial dilutive and other adverse effects on existing stockholders and
investors in this offering.
We have the authority to issue additional shares of common stock and to
issue options and warrants to purchase shares of our 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 you as an investor in this offering.
In addition, we could issue large blocks of voting stock to fend off unwanted
tender offers or hostile takeovers without further shareholder approval. We
have outstanding options exercisable to purchase up to 183,300 shares of
common stock at a weighted average exercise price of $6.49 per share, and
outstanding warrants exercisable to purchase up to 992,000 shares of common
stock at a weighted average exercise price of $10.00 per share. Holders of
the options or warrants can be expected to exercise them at a time when we
would, in all likelihood, be able to obtain any needed capital on terms which
are more favorable to us than the exercise terms provided by such options or
warrants. Exercise of these warrants and options could have a further
dilutive effect on existing stockholders and you as an investor in this
Offering.
Additional Information
We file annual, quarterly and special reports, proxy statements, and
other information with the Securities and Exchange Commission. You may read
and copy any document we file at the Commission's Public Reference Rooms in
Washington, D.C., New York, New York, and Chicago, Illinois. Please call the
Commission at 1-800-SEC-0330 for further information on the Public Reference
Rooms. You can also obtain copies of our Commission filings by going to the
Commission's website at http://www.sec.gov.
The Commission allows us to "incorporate by reference" the information we
file with them, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and later information
that we file with the Commission will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the Commission under Sections 13(a), 13(c), 14, or
15(d) of the Securities Exchange Act of 1934. This prospectus is part of a
registration statement we filed with the Commission.
(a) Annual report on Form 10-KSB for the fiscal year ended December 31,
1999.
(b) Proxy Statement for the annual meeting of shareholders held on July
21, 1999.
You may request a copy of these filings 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, you can obtain these filings electronically at the Commission's
worldwide website at http://www.sec.gov/edgarhp/htm.
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement to this prospectus. We have not
authorized anyone else to provide you with different information. We are not
making an offer of these securities in any state where the offer is not
permitted. You should not assume that the information in this prospectus or
any supplement to this prospectus is accurate as of any date other than the
date on the front of those documents.
Forward-Looking Statements
This prospectus contains "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995 that are prospective.
These statements are subject to risks, uncertainties, and other factors, which
could cause actual results to differ materially from the information contained
in the forward-looking statements. We cannot control many of those risks and
uncertainties, which include competitive pressures, changing economic
conditions, and other factors.
<PAGE>
<PAGE>
Use of Proceeds
If all of the 146,250 shares offered hereby are purchased upon exercise
of the warrants and conversion of the notes, we will receive gross proceeds of
$1,312,500, from which we will pay the expenses which will be incurred in
connection with the registration of the shares, which are estimated to be
$12,000. You 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 you sell any of the shares.
We will utilize a portion of the net proceeds, if any, realized from the
exercise of the warrants to reduce our existing borrowings under our working
capital line of credit. We will use any additional proceeds for working
capital and for general corporate purposes, at our discretion. Actual
expenditures, however, may vary substantially depending upon economic
conditions and opportunities we are able to identify. Due to an inability to
precisely forecast events, we are unable to predict the precise period for
which this Offering will provide financing.
Determination of Offering Price
The offering price of the shares offered is $8.00 and $10.00 per share.
The exercise prices per share were determined by us and bears no relationship
to the market price of our common stock, the prevailing market conditions, our
operating results in recent periods, our book value or other recognized
criteria of value.
Plan of Distribution
We have issued 75,000 warrants to two individuals as part of a financial
public relations contract with them. The warrants entitle the holders to
purchase up to 75,000 shares of common stock at an exercise price of $8.00 per
share.
In connection with our acquisition of National Teaching Aids in April
1998 we issued promissory notes having an aggregate principal amount of
$950,000. The notes were payable in four annual installments of $237,500,
plus accrued interest. The payment made on April 30, 1999 reduced the
principal of the note to $712,500. The second payment on the notes is due in
April 2000. The notes are convertible at our option into shares of common
stock if the public trading price of our common stock on NASDAQ exceeds $11.00
per share for twenty or more consecutive trading days.
When we issue conversion stock to the noteholders, the noteholders will
be given the right to require us to redeem those shares at $10.00 per share if
(1) the shares are not eligible for sale in reliance upon Rule 144(k) under
the Securities Act, and (2) either (a) a registration statement under the
Securities Act is not declared effective within sixty days following the
conversion, or (b) the closing bid price of our common stock on the effective
date of the registration statement is less than $10.00 per share.
We are offering the shares of common stock underlying the warrants and
the notes. Those shares may be offered on a delayed or continuous basis under
Rule 415 under the Securities Act. No underwriter or placement agent will be
involved and no commissions or similar compensation will be paid to any
person. You may resell the shares of common stock from time to time in
transactions (which may include block transactions) on the Nasdaq SmallCap
Market, in negotiated transactions, or through other methods of sale, at
market prices prevailing at the time of sale, or at negotiated prices. You
may sell 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 discounts, concessions, or commissions from you
and/or the purchasers of the shares.
You and any broker-dealers that act as a principal in connection with the
sale of the warrants and/or shares of common stock 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 shares of
common stock might be deemed to be underwriting discounts and commissions
under the Securities Act. You may agree to indemnify any agent, dealer, or
broker-dealer that participates in transactions involving sales of the shares
against some forms of liability, including liability arising under the
Securities Act. We will not receive any proceeds from the sales of shares by
you. Transactions involving the shares or even the potential of such sales,
may have an adverse effect on the market price of the warrants and/or our
common stock.
We have agreed to pay all expenses incurred in connection with the
registration of the securities we are offering. You will be responsible to
pay any and all commissions, discounts, and other payments to broker-dealers
incurred in connection with your sale of the common stock.
Indemnification
Our by-laws 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 may be
permitted to directors, officers, or persons controlling us under such
provisions, we have 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.
Description of Securities
We are authorized to issue up to 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 our common stock 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 our common stock
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 we may declare. Upon our liquidation, dissolution
or winding up, 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 those assets which are legally available for distribution
to shareholders. The issued and outstanding shares of common stock are
validly issued, fully paid, and nonassessable.
Legal Matters
The law firm of Neuman & Drennen, LLC will issue an opinion regarding the
legality of the warrants. We will pay the firm of Neuman & Drennen, LLC a
fee, estimated to be $6,000. Clifford L. Neuman, a member of the firm, has
been a member of our board of directors since November 1990, and the Audit
Committee of our board of directors since April 1991, and also owns 15,000
shares of our common stock, warrants to purchase an additional 13,000 shares
of common stock and options exercisable to purchase an additional 10,000
shares of common stock.
Experts
Our consolidated financial statements as of December 31, 1999 and 1998,
and for each of the years in the three-year period ended December 31, 1999,
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>
You should rely only on the information incorporated by reference or
provided in this prospectus. We have not authorized anyone to provide you
with different information. We are not making an offer of these securities in
any state where the offer would not be permitted. You should not assume that
the information contained in this prospectus is accurate as of any date other
than the date on the front of this document or the date of documents
incorporated by reference.
TABLE OF CONTENTS AMERICAN EDUCATIONAL
PRODUCTS, INC.
Page
American Educational 146,250 Shares
Products, Inc. 2 $.05 par value Common Stock
Risk Factors 3
Additional Information 8
Forward-looking Statements 8
Use of Proceeds 10
Determination of Offering
Price 10
Plan of Distribution 10
Indemnification 11 PROSPECTUS
Description of Securities 11
Legal Matters 12
Experts 12
__________________, 2000
<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
us, are as follows:
SEC Filing Fee $ 386
Printing Expenses* 600
Accounting Fees and Expenses* 2,000
Legal Fees and Expenses* 6,000
Blue Sky Fees and Expenses* 1,000
Registrar and Transfer Agent Fee* 1,000
Miscellaneous* 1,014
Total* $12,000
- ---------------
* Estimated
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. We currently pay for and maintain an insurance policy in the amount
of $1,000,000 that covers directors' and officers' liability.
Item 16. Exhibits.
a. The following Exhibits are filed as part of this Registration
Statement under Item 601 of Regulation SB:
Exhibit No. Title
- ----------- -----
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 under 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:
a. To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
b. 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;
c. 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 security holders that is incorporated by
reference in the Prospectus and furnish under 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 Exchange Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing the to 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 24th day of March, 2000.
AMERICAN EDUCATIONAL PRODUCTS, INC., a
Colorado corporation
By: /s/ Clifford C. Thygesen
-------------------------------
Clifford C. Thygesen, President
Pursuant to the requirements of the Securities Exchange Act of 1933, this
Pre-Effective Amendment No. 3 to Registration Statement on Form S-3 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, 3/24/00
- ------------------------ Director, Secretary
Robert A. Scott
/s/ Clifford C. Thygesen President, CEO, Director 3/24/00
- ------------------------
Clifford C. Thygesen
/s/ Frank L. Jennings Chief Financial Officer, 3/24/00
- ------------------------ Assistant Secretary
Frank L. Jennings
/s/ John J. Crawford Director 3/24/00
- ------------------------
John J. Crawford
/s/ Stephen G. Calandrella Director 3/24/00
- -------------------------
Stephen G. Calandrella
/s/ Wayne R. Kirschling Director 3/24/00
- --------------------------
Wayne R. Kirschling
/s/ Richard J. Ciurczak Director 3/24/00
- --------------------------
Richard J. Ciurczak
/s/ Clifford L. Neuman Director 3/24/00
- --------------------------
Clifford L. Neuman
<PAGE>
NEUMAN & DRENNEN, LLC
Temple-Bowron House
1507 Pine Street
Boulder, Colorado 80302
Telephone (303) 449-2100
Facsimile (303) 449-1045
March 24, 2000
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 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 146,250 shares of the Company's $.05 par
value common stock (the "Common Stock") for resale by certain Selling
Securityholders. 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 100,000,000 shares
of Common Stock having a par value of $.05 each and $50,000,000 shares of
Preferred Stock having a par value of $.01 each.
3. The 146,250 shares of Common Stock being registered for resale
and offered by the Selling Securityholders are lawfully and validly issued,
fully paid and non-assessable shares of the Company's Common Stock.
Sincerely,
Clifford L. Neuman
CLN:gg
<PAGE>
HEIN + ASSOCIATES LLP
717 17th Street
Denver, Colorado 80202
INDEPENDENT AUDITOR'S CONSENT
We consent to the incorporation by reference in the Registration Statement
and Prospectus of American Educational Products, Inc. of our report dated
February 22, 2000, accompanying the financial statements of American
Educational Products, Inc. also incorporated by reference in such
Registration Statement, and to the use of our name and the statements with
respect to us, as appearing under the heading "Experts" in the Prospectus.
Hein + Associates LLP
Denver, Colorado
March 23, 2000
<PAGE>
NEUMAN & DRENNEN, LLC
Temple-Bowron House
1507 Pine Street
Boulder, Colorado 80302
Telephone: (303) 449-2100
Facsimile: (303) 449-1045
March 24, 2000
American Educational Products, Inc.
6550 Gunpark Drive, Suite 200
Boulder, Colorado 80302
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 by certain Selling
Securityholders described therein of up to 146,250 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,
Clifford L. Neuman
CLN:gg
