MARKED COPY
REGISTRATION NO. 33- 56610
- ---------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 3
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
AirSensors, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 91-1039211
---------------------------- ---------------------------
(State of other jurisdiction (I.R.S. employer
of incorporation or organization) identification number)
16804 GRIDLEY PLACE, CERRITOS, CALIFORNIA 90703 (310) 860-6666
(Address and telephone number of Registrant's principal executive offices)
DALE L. RASMUSSEN
AIRSENSORS, INC.
708 INDUSTRY DRIVE
SEATTLE, WASHINGTON 98188
(206) 575-1594
(Name, address and telephone number of agent for service)
-----------------------
COPIES TO:
WILLIAM G. PUSCH
DAVIS WRIGHT TREMAINE
2600 CENTURY SQUARE
1501 FOURTH AVENUE
SEATTLE, WASHINGTON, 98101
-----------------------
Approximate date of commencement of proposed sale to public: As soon as
practicable after this Post-Effective Amendment to the Registration Statement
becomes effective.
-----------------------
If the only securities being registered on this form are to be offered
pursuant to dividend or interest reinvestment plans, 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 ]
-----------------------
- ---------------------------------------------------------------------------
PURSUANT TO RULE 429(A), THE PROSPECTUS CONTAINED IN THIS REGISTRATION
STATEMENT IS A COMBINED PROSPECTUS RELATING TO THE PROSPECTUS INCLUDED IN THE
REGISTRANT'S REGISTRATION STATEMENT ON FORM S-2, REGISTRATION NO. 33-56610.
Exhibit Index at Page 13 Page 1 of
under sequential numbering system 16 pages
<PAGE>
PROSPECTUS MARKED COPY
862,500 Shares
AIRSENSORS, INC.
Common Stock
------------------
All shares of Common Stock offered hereby are being issued by AirSensors, Inc.
(the "Company") upon exercise by the holders of the Company's outstanding
Common Stock Purchase Warrants ("Warrants"). Two Warrants entitle the holder
thereof to purchase, at any time during the period ending March 7,
1997 , at 5:00 p.m. (California time), one share of Common Stock at a price
of $7.50.
The Common Stock is quoted on the Nasdaq National Market under the symbol
ARSN. On January 29, 1996 , the last reported sale price for the Common
Stock was $8.25 per share.
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK.
SEE RISK FACTORS.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
Price to Underwriting Proceeds to
Public Discount Company (1)
---------------- ---------------- -----------------
Per Share....... $7.50 -0- $7.50
Total........... $6,468,750 -0- $6,468,750
(1)Before deducting expenses payable by the Company estimated at $10,000.
The date of this Prospectus is January __, 1996
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended, and in accordance therewith files
reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and
other information can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
Washington D.C., as well as at the following regional offices: Room 1400, 75
Park Place, New York, New York, and Northwestern Atrium Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois. Copies of such material can be
obtained from the Public Reference Section of the Commission at Judiciary
Plaza, 450 Fifth Street N.W., Washington D.C. 20549, at prescribed rates.
The Company has filed with the Commission a registration statement on
Form S-3 (together with all amendments and exhibits thereto, referred to
herein as the "Registration Statement") under the Securities Act of 1933, as
amended, (the "Securities Act"). This Prospectus does not contain all of the
information set forth in the Registration Statement, certain parts of which
are omitted in accordance with the regulations of the Commission. For further
information, reference is hereby made to the Registration Statement.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission are incorporated by
reference in this Prospectus: (a) the Company's Annual Report on Form 10-K
and Form 10-K/A for the year ended April 30, 1995; (b) the Company's
Current Report on Form 8-K dated October 31, 1995; (c) the Company's
Quarterly Report on Form 10-Q for the periods ended July 31, 1995
and October 31, 1995; and (d) the Company's Proxy Statement for the
1995 Annual Meeting of Stockholders. All documents filed by the
Company pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the date of this Prospectus
and prior to the termination of the offering shall be deemed to be
incorporated by reference in this Prospectus, and to be a part hereof from the
date of filing of such documents.
Any statement contained in a document incorporated or deemed incorporated
by reference herein shall be deemed to be modified or superseded for purposes
of this Prospectus to the extent that such statement is modified or replaced
by a statement contained in this Prospectus or in any other subsequently filed
document that also is or is deemed to be incorporated by reference into this
Prospectus. Any such statement so modified or superseded shall not be deemed,
except as so modified or replaced, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered, upon written or oral request of such person, a copy
of any and all of the documents that have been or may be incorporated by
reference in this Prospectus (not including exhibits to the information that
is incorporated by reference unless such exhibits are specifically
incorporated by reference into the documents that this Prospectus
incorporates). Requests for the foregoing materials should be made to the
Secretary, AirSensors, Inc., 708 Industry Drive, Seattle, Washington 98188;
its telephone number is (206) 575-1594.
<PAGE>
THE COMPANY
The Company is one of the leading manufacturers of fuel equipment that
allows internal combustion engines to operate on gaseous alternative fuels,
such as propane and natural gas. The Company's wholly-owned subsidiary, IMPCO
Technologies, Inc. ("IMPCO"), which has been in business since 1958, currently
manufactures a broad line of products that are used in various applications,
such as automotive conversions, forklifts, and small portable to large
stationary engines. These products are designed for internal combustion
engines ranging from 1 to 5,000 horsepower and its products are sold worldwide
to distributors and original equipment manufacturers.
Changing federal and state emission regulations have created a growing
market for engines that use alternative fuels. The Company has developed
products designed to further reduce exhaust emissions to serve that market.
To be competitive, the Company believes it will be necessary to market
products utilizing the latest electronic technology, which is replacing the
vacuum-actuated mechanical devices for many control functions used in today's
internal combustion engines. The Company believes it has a competitive
advantage over its current competitors in the alternative fuel market place
because of its years of experience with gaseous fuels, its patented
mass-sensing technology, its existing market share, its distribution network,
and its internationally recognized products.
AirSensors was primarily engaged in the research and development of
electronic fuel management and injection systems for automotive engines from
its inception in 1978 until its acquisition of IMPCO in 1989. AirSensors
developed a mass-sensing device designed to achieve an optimum air/fuel
mixture that increased engine performance and fuel economy as compared with
carburetor-equipped engines. However, AirSensors realized only limited
revenue from product sales prior to its acquisition of IMPCO and incurred
significant research and development expenses. Since the acquisition of
IMPCO, the Company has concentrated its efforts on providing equipment for
converting internal combustion engines to alternative fuels, such as propane
and natural gas. AirSensors is now primarily a holding company.
AirSensors was incorporated in the State of Washington in 1978 and became
a Delaware corporation in 1985. The address of the Company's executive office
is 16804 Gridley Place, Cerritos, California 90703, and its telephone number
is (310) 860-6666.
RISK FACTORS
Investment in the Common Stock offered hereby is speculative and subject
to significant risks. Prospective investors should review carefully this
entire Prospectus and consider the risks of investment, including the
following:
OPERATING HISTORY - PRIOR LOSSES. Prior to its acquisition of IMPCO,
AirSensors was primarily involved in research and development and accumulated
a deficit of approximately $18 million. It did not realize significant
revenue from product sales. Subsequent to the acquisition of IMPCO, the
Company realized operating income. However, through fiscal year 1992 it
continued to incur net losses due to substantial financing charges resulting
from the leveraged acquisition of IMPCO, and at April 30, 1995 had an
accumulated deficit of $19,172,879. For the fiscal year ending April
30, 1995 , the Company had net income applicable to common stock of
$2,419,596. However, there can be no assurance that the Company will
continue to operate profitably.
DEPENDENCE ON NEW PRODUCTS. The Company believes that its future success
is dependent upon the successful marketing of new fuel management products
using mass-sensing and electronic technology. It believes that the markets
for its products will be characterized by rapidly changing technology, new
product introductions and the entry of new competitors. Accordingly, its
ability to enhance existing products in a timely manner and to develop and
introduce new products that incorporate new technologies, conform to
increasingly stringent emission standards and achieve market acceptance in a
timely manner, will significantly affect its future performance.
DEPENDENCE ON QUALIFIED PERSONNEL. The success of the Company depends,
in part, on the continued availability of other key management and technical
employees. As product development becomes more complex, the necessity to
attract and retain qualified automotive and software engineers will increase.
Although the Company believes it has a positive working relationship with its
employees, there can be no assurance that the Company can attract or retain
such key management and technical employees.
<PAGE>
NEED FOR ADDITIONAL CAPITAL. The Company will be required over the next
several years to expend substantial amounts to complete development and
testing of its new products and to bring those products to market. Although
the Company expects to fund a major portion of these expenses from operations,
there can be no assurance that cash flow will be adequate for such purposes.
The Company may be required to seek funds for these and other purposes through
additional equity debt or lease financing, collaborative arrangements with
corporate partners or from other sources. There can be no assurance that
additional funds will be available, or if available, on terms acceptable to
the Company. If adequate funds are not available from operations or from
other financing sources, the Company's business will be materially and
adversely affected.
DEPENDENCE ON ALTERNATIVE FUEL MARKET. Although the Company and others
believe that there will be substantial growth in the market for alternative
fueled engines, especially among fleet vehicle owners, there can be no
assurance that such growth will materialize or, if such growth does occur,
that it will result in increased sales of the Company's products. The
Company's products are designed for gaseous alternative fueled vehicles, but
not for alternative fuels such as electricity, reformulated gasoline, methanol
and ethanol. If the major growth in the alternative fuel market is for such
fuels, the Company will be adversely affected. At present, the lack of a
well-developed infrastructure for the supply of alternative fuels is limiting
growth in the alternative fuel engine market. Such an infrastructure is
necessary for wide-spread use of alternate fuels. While some development has
begun in Canada, there has been little similar development in the United
States.
Also, while alternative fueled vehicles have been operating in the
United States for many years, the economic and environmental benefits continue
to be scrutinized by opponents of alternative fuels, including large, multi-
national companies with significant interests in a petroleum based economy.
Although the Company believes the alternative fuel market will overcome this
opposition, there can be no assurance that market acceptance of alternative
fuel vehicles will be as favorable as the Company has projected.
LEGISLATIVE DELAYS. The Company believes that future growth in the
conversion of motor vehicles to alternative fuels will be driven principally
by federal and state anti-pollution legislation, such as the 1990 Amendments
to the Clean Air Act and the Energy Policy Act of 1992. Significant growth of
the Company's products for the United States motor vehicle market is
contingent upon the timing of the implementation of such legislation. There
can be no assurance that changes or delays in this legislation will not occur
and have an unfavorable impact on the Company's business.
NEED TO DEVELOP VEHICLE SPECIFIC SOFTWARE. The Company develops vehicle
specific software to enable it to produce in a timely and economical manner
engine management products for use in converting fleet and other vehicles from
gasoline to gaseous alternative fuels. When vehicle models change, which in
some cases is as often as yearly, the Company must develop new or modified
software for the changed or new vehicle model. Although the Company believes
it will be able to develop such vehicle specific software, there can be no
assurance that the Company will complete such development or, if such
development is completed, it will be in a timely manner which may be required
in order for the Company to be competitive.
COMPETITION. The Company believes that competition in the alternative
fuel engine marketplace is increasing, particularly in the growing market for
propane and natural gas fueled vehicle products. Many of the current
competitors and potential future competitors are large, well-financed
companies, with financial and marketing resources and research and development
staffs and facilities that are substantially larger than those of the Company.
Further, competitors' products may perform the same functions as the products
the Company is attempting to develop by the use of similar or other
technology. Also, competitors may be able to satisfy regulatory requirements
and market their products faster and more effectively than the Company. Any
of these competitive factors could adversely affect the Company.
ENTRY OF ORIGINAL EQUIPMENT MANUFACTURERS INTO MARKET. As the market for
alternative fueled vehicles increases, original equipment manufacturers may
find it advantageous to develop and produce their own fuel management
equipment rather than purchasing such equipment from suppliers such as the
Company. If this occurs, the demand for the Company's products could be
adversely affected.
<PAGE>
NEED TO COMPLY WITH GOVERNMENTAL REGULATIONS. The Company must obtain
product certification from governmental agencies such as the United States
Environmental Protection Agency and the California Air Resources Board to sell
certain of its products in the United States automotive markets. A
substantial portion of the Company's future sales will depend upon sales of
fuel management products that have been certified to meet existing and future
air quality and energy regulations. Although the Company believes its
technology will permit its existing and new products to meet these standards,
there can be no assurance that this will occur.
INCREASED WARRANTY CLAIMS. Vehicle manufacturers are, in response to
consumer demand, providing increasingly longer warranty periods for their
products. Suppliers, such as the Company, will be required to provide
correspondingly longer product warranties. Consequently, the Company could
incur substantially greater warranty claims in the future.
LIMITED PATENT OR PROPRIETARY PROTECTION. The Company's success depends
in part upon its patented mass-sensing technology and its other proprietary
technology. While the Company holds several patents, much of its other
technology is not protected by patents or copyrights. Also, other existing
technology performs the functions covered by the Company's patented technology
and can be used without violating the Company's patents. Although the
Company's patents and trade secrets afford it protection, the Company believes
that its growth potential and future success are more dependent upon its
technical expertise and marketing skills. There can be no assurance that the
Company's patents and trade secrets will provide meaningful protection against
competitors.
DEPENDENCE ON VENDORS AND OTHER MANUFACTURING RISKS. The Company places
substantial reliance on outside vendors to manufacture components. In the
fiscal year ended April 30, 1995 , 10 suppliers accounted for
approximately 56% of raw material purchases and one supplier accounted
for approximately 28% of such purchases. There can be no assurance
that vendors will be able to satisfy the Company's quality and production
volume requirements. Such problems with vendors could adversely affect the
Company's business. Historically, the Company's products have been primarily
mechanical in nature and its manufacturing operations are essentially
mechanical assembly with light machining. Its newer products increasingly
involve electronics and software applications. The Company has had limited
experience with manufacturing processes that involve electronics and software
systems. See "Business - Manufacturing."
NEED FOR QUALIFIED DISTRIBUTORS . Installation of the Company's
component products is complex and requires distributors with technical
knowledge about electronic engine systems. The Company requires<R\> that
distributors be "certified" before installing
certain component products.
It provides training to certain existing distributors and is attempting to
gain new distributors in order to have a technically qualified network of
distributors to install these component products. If the Company is
unable to establish a network of qualified distributors, the success of its
newer component product lines could be adversely affected.
ABILITY TO MEET OEM SPECIFICATIONS. In 1995 the Company began to
offer complete alternative fuel systems, which include tanks, brackets,
electronics and all other under-hood components required to convert a motor
vehicle to alternative fuels. Customers for such systems require that the
Company meet OEM specifications. This requirement has resulted in increased
development, manufacturing, warranty and administrative costs. If these costs
increase significantly, the Company's profitability might not be as favorable
as it has projected.
PRODUCT LIABILITY. Although the Company carries and plans to continue to
carry product liability insurance, there can be no assurance that such
coverage is adequate or that adequate insurance coverage will continue to be
available or, if available, that it will be available at an acceptable cost.
DILUTION TO NEW INVESTORS. Purchasers of the Common Stock offered hereby
will experience immediate and substantial dilution in the net book value per
share of the Common Stock offered hereby. Based upon the net tangible book
value of the Company at April 30, 1995 , and based on an offering price
of $7.50 per share, the dilution to investors purchasing the Common Stock
offered hereby would be $5.71 or 76%<R\> per share. See "Dilution."
<PAGE>
SHARES ELIGIBLE FOR FUTURE SALE. At
November 30, 1995 , the
Company had approximately 5,649,867 shares of Common Stock outstanding.
Of these shares, approximately 3,476,967 shares were held by persons
who are not "affiliates" of the Company and were transferable without
restriction under the Securities Act of 1933, as amended (the "Securities
Act"). The remaining shares held by "affiliates" of the Company may be sold
if registered under the Securities Act or pursuant to an applicable exemption
from registration, including Rule 144 under the Securities Act. As of
November 30, 1995, 782,669 and 1,332,138 shares of Common Stock were
issuable upon exercise of outstanding options and warrants, respectively. Of
those shares, 1,869,976 are currently exercisable at a weighted average
exercise price of $6.91 per share. In addition, 1,123,489 shares of
Common Stock are issuable at a conversion price of $5.30 per share under the
1993 Series 1 Preferred Stock. Sales of restricted shares and shares issuable
upon the exercise of outstanding warrants and options or conversion of
preferred stock may have a material adverse impact on the market price of the
Company's Common Stock.
CONTROL BY DIRECTORS AND OFFICERS. Currently, the directors and
officers of the Company, as a group, own or have the right to acquire
approximately 48% of the outstanding voting stock. Together, they have
the effective power to elect the Company's Board of Directors and to
approve or disapprove any corporate action submitted to a vote of the
Company's stockholders . In addition, the Board of Directors has the
authority to issue a substantial number of additional shares of Common Stock
and Preferred Stock and to determine the rights, preferences, privileges and
restrictions, including voting rights, of the additional Preferred Stock,
without any vote or action by the stockholders. The voting power of the
directors and officers or the issuance of additional stock under certain
circumstances, combined with the fact that directors serve for staggered
terms, could have the effect of delaying or preventing a change of control of
the Company.
EXTENSION OF WARRANT EXPIRATION DATE
The Common Stock Purchase Warrants were to expire on March 9, 1996, at
5:00 p.m. (California time). On November 3, 1995 the Board of Directors
extended the expiration date to March 7, 1997, at 5:00 p.m. (California
time).
USE OF PROCEEDS
The net proceeds to be received by the Company from the sale of the
Common Stock offered hereby are estimated to be $6,458,750, assuming exercise
of all of the presently outstanding Warrants. The net proceeds of this
offering will become part of the Company's general funds and will be used to
repay short-term borrowing and other working capital needs.
<PAGE>
DIVIDEND POLICY
The Company has never paid dividends on its Common Stock. It intends to
retain future earnings to finance the operation and expansion of its business
and does not anticipate paying cash dividends in the foreseeable future.
The holders of the Company's 1993 Series 1 Preferred Stock are entitled
to cumulative cash dividends in preference to the Common Stock in an amount
equivalent to interest at an annual rate per share (based on a deemed value of
$1,000 per share) equal to the bank prime rate of interest, plus 1.5%, up to
an amount not to exceed $105 per share and not less than $80 per share. See
"Description of Capital Stock - Preferred Stock." As of April 30,
1995 , 5,950 shares of the 1993 Series 1 Preferred Stock were
outstanding.
DILUTION
The net tangible book value of common stockholders' equity as of April
30, 1995 was $5,177,004 or $.92 per share. Net tangible book
value per share represents the amount of the Company's total tangible assets
(total assets less intangible assets, total liabilities and the liquidation
preference of preferred stock) divided by the number of shares of Common Stock
outstanding. Net tangible book value dilution represents the difference
between the amount per share paid by purchasers in this offering and the pro
forma net tangible book value per share after the offering.
<PAGE>
Without taking into account any changes in tangible book value after
April 30, 1995 , except to give pro forma effect to the sale by the
Company of the Common Stock in this offering at an offering price of $7.50 per
share, with assumed net proceeds to the Company of $6,458,750, the pro forma
net tangible book value of the common stockholders' equity at April 30,
1995 would have been $11,635,754, or $1.79 per share of Common
Stock. This represents an immediate increase in net tangible book value of
$0.87 per share to existing common stockholders and an immediate
dilution of $5.71 or 76% per share to purchasers in this offering. The
following table also assumes no exercise of any outstanding options or
warrants other than the Warrants.
Public offering price per share.......................$ 7.50
Net tangible book value
per share before this offering......... $.92<R\>
Increase per share attributable
to new investors.......................
.87
-----
Pro forma net tangible book value
per share after this offering........................ 1.79
-------
Net tangible book value dilution per
share to purchaser in this offering................ $ 5.71
PRICE RANGE OF COMMON STOCK
The Company's Common Stock is traded on the NASDAQ National Market under
the symbol "ARSN." The following are the range of high and low sales
prices for each quarterly period within the two most recent fiscal years and
for each subsequent full quarterly period , in each case as reported by
NASDAQ. The prices reflect inter-dealer prices and do not reflect retail
mark-up, mark-down or commissions.
Fiscal year Fiscal year Fiscal year
1994 1995 1996
Quarter -------------- --------------- --------------
Ended High Low High Low High Low
- ----------- ------ ------ ------ ------ ------ ------
July 31, $11.50 $ 4.75 $12.63 $ 9.75 $12.38 $8.50
October 31, 13.50 8.75 13.13 9.75 13.74 8.38
January 31, 15.25 10.25 12.13 8.00
April 30, 15.13 8.25 10.63 8.25
- ---------------------------
(1) For a current price, see the cover page of this Prospectus.
As of November 30, 1995 , there were approximately 1,097
recordholders of the Company's Common Stock.
DESCRIPTION OF CAPITAL STOCK
Capital stock of the Company consists of 25,000,000 shares of Common
Stock and 500,000 shares of Preferred Stock.
COMMON STOCK
As of November 30, 1995 there were 5,649,869 shares of
Common Stock outstanding. In addition, there were 1,123,489 shares of Common
Stock issuable upon the conversion of the 1993 Series 1 Preferred Stock,
warrants outstanding to purchase 1,332,138 shares of Common Stock, and
options outstanding to purchase 782,669 shares of
Common Stock.
<PAGE>
Each holder of Common Stock is entitled to one vote per share on all
matters that properly come before the stockholders. Except as required by
law, the holders of Common Stock and 1993 Series 1 Preferred Stock vote
together and not as separate classes. In elections of directors, holders of
shares of Common Stock and Preferred Stock are not entitled to cumulative
voting. The Common Stock is neither redeemable nor convertible, and the
holders of Common Stock have no preemptive rights to purchase any securities
of the Company. Holders of Common Stock are entitled to receive dividends out
of funds legally available therefor when, as and if declared by the Board of
Directors. All shares of Common Stock have equal rights, on a share for share
basis, to receive pro rata the net assets of the Company upon liquidation or
dissolution.
<R\>
PREFERRED STOCK
The Company is authorized to issue the Preferred Stock in series to be
designated by the Board of Directors. Material provisions describing the
terms of any series of Preferred Stock which may be issued in the future, such
as dividend rate, conversion features, voting rights, redemption rights and
liquidation preferences, are determined by the Board of Directors of the
Company at the time of issuance. The right of the Board of Directors to issue
such Preferred Stock may adversely affect the rights of the holders of Common
Stock and also could be used by the Company as a means of resisting a change
of control of the Company.
As of
November 30, 1995 , there were 5,950 shares of Preferred
Stock outstanding, designated as the "1993 Series 1 Preferred Stock".
TRANSFER AGENT
The Transfer Agent for the Company's Common Stock is First Interstate
Bank of Washington, N.A., Seattle, Washington.
REGISTRATION RIGHTS
Certain persons who, as of November 30, 1995 held approximately
305,321 shares of Common Stock or options and warrants to purchase
shares of Common Stock at varying prices, are entitled, subject to certain
conditions, to require the Company to register such shares under the
Securities Act of 1933. In addition, whenever the Company proposes to
register any shares of Common Stock, it must give notice to such persons and
permit them to register at the Company's expense such of their shares as they
request be included (subject in some cases to the right of the managing
underwriter in an underwritten public offering to reduce the number of shares
included). These registration rights terminate or are suspended after the
lapse of certain specified periods. None of these persons are exercising any
of their registration rights in connection with this offering.
SHARES ELIGIBLE FOR FUTURE SALE
As of November 30, 1995
, the Company had
1,332,138 shares of
Common Stock outstanding, assuming no exercise of any outstanding warrants
or options . Of these shares, approximately 3,476,962 shares may be
traded without restriction or further registration under most circumstances,
except for shares held by affiliates of the Company. Shares held by such
affiliates are subject to certain resale limitations imposed by Rule 144 under
the Securities Act of 1933, as amended. The remaining 2,172,907 shares
of Common Stock held by existing stockholders are "restricted" securities
within the meaning of Rule 144 and are eligible for sale in the public market
only in compliance with Rule 144.
In general, under Rule 144 a person who may be deemed to be an
"affiliate" of the Company, as that term is defined in Rule 144, is entitled
to sell, within any three-month period, a number of shares beneficially owned
by such person in such amount that does not exceed the greater of (i) one
percent of the then outstanding shares of Common Stock, or (ii) the average
weekly trading volume in the Common Stock during the four calendar weeks
preceding such sales. Sales under Rule 144 are also subject to certain
requirements as to the manner of sales, notice of sale and the availability of
current public information about the Company. A person who is not an
affiliate and has beneficially owned shares of Common Stock for at lest three
years is entitled to sell them without regard to the volume, manner of sale or
notice requirements.
<PAGE>
As of November 30, 1995, 1,332,138 and 782,669 shares of Common
Stock were issuable upon exercise of outstanding warrants and options,
respectively. Of those shares, 1,869,976 are currently exercisable at
a weighted average exercise price of $6.91 per share. In addition,
1,123,489 shares of Common Stock are issuable at conversion prices of $5.30
under the 1993 Series 1 Preferred Stock.
LEGAL MATTERS
The validity of the issuance of the Common Stock offered hereby will be
passed upon for the Company by Davis Wright Tremaine, 2600 Century Square,
1501 Fourth Avenue, Seattle, Washington 98101.
EXPERTS
The consolidated financial statements (including the schedule )
appearing in AirSensors, Inc. Annual Report (Form 10-K) for the year ended
April 30, 1995 , have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and
incorporated herein by reference. Such consolidated financial statements are
incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
<PAGE>
- --------------------------------------- --------------------------------------
NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY REPRESEN-
TATION IN CONNECTION WITH THE OFFERING
BEING MADE HEREBY NOT CONTAINED IN THIS
PROSPECTUS, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT
BE RELIED UPON AS HAVING BEEN AUTHORIZED.
THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL AIRSENSORS, INC. OR SOLI- AIRSENSORS, INC.
CITATION OF AN OFFER TO BUY ANY OF THE
SECURITIES OFFERED HEREBY IN ANY JURIS-
DICTION IN WHICH IT IS UNLAWFUL TO MAKE
SUCH OFFER OR SOLICITATION IN SUCH JUR-
ISDICTION. NEITHER THE DELIVERY OF THIS 862,500 SHARES
PROSPECTUS NOR ANY SALE MADE HEREUNDER
SHALL UNDER ANY CIRCUMSTANCES CREATE AN
IMPLICATION THAT INFORMATION CONTAINED
HEREIN IS CORRECT AS OF ANY TIME SUBSE-
QUENT TO THE DATE HEREOF. COMMON STOCK
----------------
TABLE OF CONTENTS
PAGE
----
Available information 2
Incorporation of Certain Documents
by Reference 2
The Company 3 --------------
Risk Factors 3
Extension of Warrant PROSPECTUS
Expiration Date 6
Use of Proceeds 6 --------------
Dividend Policy 6
Dilution 6
Price Range of Common Stock 7
Description of Capital Stock 7
Legal Matters 9
Experts 9
- --------------------------------------- --------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following table sets for the estimated costs and expenses payable by
the Registrant in connection with the sale of the Common Stock being
registered hereby.
Blue Sky fees and expenses..................$1,000
Legal fees and expenses......................4,500
Auditors' fees and expenses..................3,500
Miscellaneous expenses.......................1,000
Total................................. $10,000
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law provides that a
corporation may indemnify directors and officers as well as other employees
and individuals against expenses (including attorneys' fees), judgments, fines
and amounts paid in settlement in connection with specified actions, suits or
proceedings, whether civil, criminal, administrative or investigative (other
than action by or in the right of the corporation -- a "derivative action"),
if they acted in good faith and in a manner they reasonably believed to be in
or not opposed to the best interests of the corporation and, with respect to
any criminal action or proceedings, had no reasonable cause to believe their
conduct was unlawful. A similar standard is applicable in the case of
derivative actions, except that indemnification only extends to expenses
(including attorneys' fees) actually and reasonably incurred in connection
with the defense or settlement of such action, and the statute requires court
approval before there can be any indemnification where the person seeking
indemnification has been found liable to the corporation. The statute
provides that it is not exclusive of other indemnification that may be granted
by a corporation's charter, by-laws, disinterested director vote, stockholder
vote, agreement or otherwise.
Article IX of the Registrant's By-Laws requires indemnification to the
full extent permitted under Delaware law as from time to time in effect.
Subject to any restrictions imposed by Delaware law, the Registrant's By-Laws
provide a right to indemnification for all expense, liability and loss
(including attorneys' fees, judgments, fines, ERISA excise taxes or penalties
and amounts paid in settlement) actually and reasonably incurred by any person
in connection with any actual or threatened proceeding (including, to the
extent permitted by law, any derivative action) by reason of the fact that
such person is or was serving as a director or officer of the Registrant or
that, being or having been such a director or officer or an employee of the
Registrant, such person is or was serving at the request of the Registrant as
a director, officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise, including an employee benefit plan.
The Registrant's By-Laws also provide that the Registrant may, by action of
its Board of Directors, provide indemnification to its employees or agents
with the same scope and effect as the foregoing indemnification of directors
and officers.
Section 102(b)(7) of the Delaware General Corporation Law permits a
corporation to provide in its certificate of incorporation that a director of
the corporation shall not be personally liable to the corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except for liability for (I) any breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) acts or omissions not in good faith
or which involve intentional misconduct or a knowing violation of law, (iii)
payments of unlawful dividends or unlawful repurchases or redemptions, or (iv)
any transaction from which the director derived an improper personal benefit.
<PAGE>
Article 11 of the Registrant's Certificate of Incorporation provides that
to the full extent that the Delaware General Corporation Law, as it now exists
or may hereafter be amended, permits the litigation or elimination of the
liability of directors, a director of the Registrant shall not be liable to
the Registrant or its stockholders for monetary damages for breach of duty as
a director. Any amendment or repeal of such Article 11 will not adversely
affect any right or protection of a director of the Registrant for or with
respect to any acts or omissions of such director occurring prior to such
amendment or repeal. The affirmative vote of 80% of the voting stock of the
Registrant is required to amend or repeal, or to adopt any provision
inconsistent with, such Article 11. The Delaware General Corporation Law and
the Registrant's Certificate of Incorporation may have no effect on claims
arising under the federal securities laws.
ITEM 16. EXHIBITS
5 Opinion of Davis Wright Tremaine as to the legality of
securities being registered, including Consent
(filed with Post-Effective Amendment No. 1 on December 12, 1994)
23.1 Consent of Davis Wright Tremaine (included in Exhibit 5)
23.2 Consent of Ernst & Young LLP
24 Powers of Attorney (included on the Signature Page to the
Registration Statement)
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described in Item 14, 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
Securities Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of
whether such indemnification by it as against public policy as expressed in
the Securities 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 this 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 this Registration Statement;
<PAGE>
(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 this
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) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of prospectus filed
as part of this registration statement in reliance upon Rule 430A
and contained in a form of prospectus filed by the registrant
pursuant to rule 424 (b) (1) or (4), or 497 (h) under the
Securitites Act of 1933 shall be deemed to be part of this
registration statement as of the time it was declared effective.
(5) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of
prospectus shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona
fide offering thereof.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
registration statement relating to the securities offered herein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof.
SIGNATURES
Pursuant to the requirements of the Securities Act, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Cerritos, State of California, on January 30, 1996.
AirSensors, Inc.
By /s/ Robert M. Stemmler
------------------------
Robert M. Stemmler
President and Chief Executive Officer
POWER OF ATTORNEY
Each person whose individual signature appears below hereby authorizes
and appoints Thomas M. Costales and Dale L. Rasmussen, and each of
them, with full power of substitution and full power to act without the other,
as his true and lawful attorney-in-fact and agent to act in his name, place
and stead and to execute in the name and on behalf of each person,
individually and in each capacity stated below, and to file, any and all
amendments to this Registration Statement, including any and all post-
effective amendments.
<PAGE>
Pursuant to the requirements of the Securities Act, this registration
statement has been signed by the following persons in the capacities indicated
below on the dates indicated.
Signature Capacity Date
President, Chief Executive
Officer and Director
/s/ Robert M Stemmler [Principal Executive Officer] January 30, 1996
- ----------------------
Robert M. Stemmler
Treasurer and
Chief Financial Officer
/s/ Thomas M. Costales [Principal Financial Officer] January 30, 1996
- ----------------------
Thomas M. Costales
Chairman of the Board
* of Directors and Director January 30, 1996
- ----------------------
Rawley F. Taplett
* Director January 30, 1996
- ----------------------
Edwin J. Schneebeck
Director January 30, 1996
- ----------------------
Peter B. Bensinger
* Director January 30, 1996
- ----------------------
Norman L. Bryan
Director January 30, 1996
- ----------------------
V. Robert Colton
* Director January 30, 1996
- ----------------------
Don Simplot
* Director January 30, 1996
- ----------------------
Douglas W. Toms
/s/ Todd Schock Director of Financial Planning January 30, 1996
- ----------------------
Todd Schock
* By /s/ Dale Rasmussen
------------------
Dale L. Rasmussen
as attorney-in-fact
<PAGE>
Exhibit 23.2
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
Amendment No. 3 to the Registration Statement (Form S-3, No. 33-56610)
and related Prospectus of AirSensors, Inc. for the registration of 862,500
shares of its common stock and to the incorporation by reference therein of
our report dated June 28, 1995, with respect to the consolidated financial
statements and schedule of AirSensors, Inc. included in its Annual Report
(Form 10-K) for the year ended April 30, 1995 filed with the Securities
and Exchange Commission.
ERNST & YOUNG LLP
Los Angeles, California
January 24, 1996
