<PAGE> 1
As filed with the Securities and Exchange Commission on February 12, 1996.
Registration No. 33-___
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
CRITICARE SYSTEMS, INC.
(Exact Name of Registrant as Specified in Its Charter)
Delaware 3693
(State or Other (Primary Standard 39-150563
Jurisdiction of Industrial (I.R.S. Employer
Incorporation or Classification Identification No.)
Organization) Code Number)
20925 Crossroads Circle
Waukesha, Wisconsin 53186
(414) 798-8282
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
Gerhard J. Von der Ruhr, Chairman of the Board,
President and Treasurer
20925 Crossroads Circle
Waukesha, Wisconsin 53186
(414) 798-8282
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent for Service)
Copies to:
Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, WI 53202
Attn: Robert E. Bellin, Esq.
Approximate date of commencement of proposed sale to the public: As soon as
practicable after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. / /
If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 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. / /
<PAGE> 2
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. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
================================================================================
Proposed Proposed
Maximum Maximum
Amount Aggregate Aggregate Amount of
Title of Shares to be Price Offering Registration
to be Registered Registered Per Share (1) Price (1) Fee
________________________________________________________________________________
<S> <C> <C> <C> <C>
Common Stock,
$.04 Par Value 150,000 $3.6875 $553,125 $191
================================================================================
</TABLE>
(1) Calculated in accordance with Rule 457(c) based on the average of the high
and low sales prices of the Common Stock as reported on the Nasdaq National
Market on February 6, 1996 solely for the purpose of calculating the amount of
the registration fee.
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> 3
SUBJECT TO COMPLETION
PRELIMINARY PROSPECTUS DATED FEBRUARY 12, 1996
150,000 Shares
CRITICARE SYSTEMS, INC.
COMMON STOCK
The shares offered hereby (the "Shares") consist of 150,000 shares of
common stock, $.04 par value per share (the "Common Stock") of Criticare
Systems, Inc., a Wisconsin corporation ("Criticare Systems" or the "Company")
which are issuable by the Company to the selling shareholder listed herein
under "Selling Shareholder" (the "Selling Shareholder") upon exercise of the
Warrant (defined below) issued to the Selling Shareholder by the Company. The
Warrant was issued by the Company to the Selling Shareholder on September 21,
1995 (the "Warrant") pursuant to the terms of a certain Consulting Agreement by
and between the Selling Shareholder and the Company as of such date (the
"Consulting Agreement"). The Warrant was issued to the Selling Shareholder in
consideration of its services provided and to be provided to the Company
pursuant to the Consulting Agreement. The Warrant is exercisable for up to
150,000 shares of the Company's Common Stock pursuant to certain vesting
criteria. The exercise price for all Shares of the Company's Common Stock
acquired pursuant to exercise of the Warrant is $2 per share. For a further
description of the terms of the Warrant see "Plan of Distribution." This
Prospectus covers the sale of the Shares from time to time by the Selling
Shareholder. The issuance of the Shares of Common Stock upon exercise of the
Warrant is not covered by this Prospectus, but rather only the resale of such
Shares.
The Shares may be offered from time to time by the Selling Shareholder.
All expenses of the registration incurred in connection herewith are being
borne by the Company, but any brokers' or underwriters' fees or commissions
will be borne by the Selling Shareholder. The Company will not receive any
proceeds from the sale of the Shares by the Selling Shareholder.
The Selling Shareholder has not advised the Company of any specific plans
for the distribution of the Shares covered by this Prospectus, but it is
anticipated that the Shares will be sold from time to time primarily in
transactions (which may include block transactions) on the Nasdaq National
Market at the market price then prevailing, although sales may also be made in
negotiated transactions or otherwise. The Selling Shareholder and the brokers
and dealers through whom sale of the Shares may be made may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended
(the "Securities Act"), and their commissions or discounts and other
compensation may be regarded as underwriters' compensation. See "Plan of
Distribution."
The Common Stock is currently listed on the Nasdaq National Market under
the symbol "CXIM." On February 8, 1996, the last reported sale price of the
Common Stock on the Nasdaq National Market was $3-13/16 per share.
THERE ARE CERTAIN RISK FACTORS WHICH SHOULD BE CONSIDERED BEFORE
PURCHASING SHARES IN THIS OFFERING. 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
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The date of this Prospectus is February __, 1996.
<PAGE> 4
AVAILABLE INFORMATION
This Prospectus, which constitutes a part of a Registration Statement on
Form S-3 (the "Registration Statement") filed by the Company with the
Securities and Exchange Commission (the "Commission") under the Securities Act,
omits certain of the information set forth in the Registration Statement.
Reference is hereby made to the Registration Statement and to the exhibits
thereto for further information with respect to the Company and the securities
offered hereby. Copies of the Registration Statement and the exhibits thereto
are on file at the offices of the Commission and may be obtained upon payment
of the prescribed fee or may be examined without charge at the public reference
facilities of the Commission described below.
Statements contained herein and concerning the provisions of documents are
necessarily summaries of such documents, and each statement is qualified in its
entirety by reference to the copy of the applicable document filed with the
Commission.
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act") and in accordance
therewith files reports, proxy statements and other information with the
Commission. Such reports, proxy statements and other information can be
inspected and copied at the Public Reference Section of the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and at the following
regional offices of the Commission: Midwest Regional Office, Citicorp Center,
500 West Madison Street, Suite 1400, Chicago, IL 60661, and Northeast Regional
Office, 7 World Trade Center, Suite 1300, New York, NY 10048. Copies of such
material can also be obtained at prescribed rates by writing to the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portion of a document filed by the Company with
the Commission (File No. 0-16061) are incorporated herein by reference:
(a) The Company's Annual Report on Form 10-K for the fiscal year ended
June 30, 1995.
(b) The Company's Quarterly Report on Form 10-Q for the quarter ended
September 30, 1995.
(c) The description of the Company's Common Stock which is contained in
the Company's Registration Statement on Form 8-A filed on July 23, 1987 under
the Exchange Act, including all amendments and reports filed for the purpose of
updating such description.
All reports and other documents filed by the Company with the Commission
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent
to the date of this Prospectus and prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or
which deregisters all securities remaining unsold, shall be deemed to be
incorporated by reference herein and to be a part hereof from the date of the
filing of such reports and documents. Any statement contained in a document,
all or a portion of which is incorporated by reference herein, shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent that
a statement contained or incorporated by reference herein modifies or
supersedes such statement. Any statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.
The Company will provide without charge to each person to whom this
Prospectus is delivered a copy of any or all of such documents which are
incorporated herein by reference (other than exhibits to such documents unless
such exhibits are specifically incorporated by reference into the documents
that this Prospectus incorporates). Written or oral request for copies should
be directed to Richard J. Osowski, Senior Vice President Finance and Assistant
Secretary, Criticare Systems, Inc., 20925 Crossroads Circle, Waukesha,
Wisconsin 53186, (414) 798-8282.
2
<PAGE> 5
THE COMPANY
Criticare designs, manufactures and markets vital signs and gas monitoring
instruments and related noninvasive sensors used to monitor patients in many
healthcare settings. Since a patient's oxygen, anesthetic gas and carbon
dioxide levels can change dramatically within minutes, causing severe side
effects or death, continuous monitoring of these parameters is increasing. The
Company's monitoring equipment improves patient safety by delivering accurate,
comprehensive and instantaneous patient information to the clinician. The
Company's products also allow hospitals to contain costs primarily by
substituting cost-effective reusable pulse oximetry sensors for disposable
sensors, controlling the use of costly anesthetics and increasing personnel
productivity.
To meet the needs of end-users in a wide variety of patient settings, the
Company has developed a broad line of patient monitors which combine one or
more of its patented or other proprietary technologies, for monitoring oxygen
saturation, carbon dioxide and anesthetic agents, with standard monitoring
technologies that provide electrocardiogram ("ECG"), invasive and noninvasive
blood pressures, temperature, heart rate and respiration rate. In addition,
the Company's VitalView telemetry system allows one nurse to monitor up to
eight patients simultaneously from a convenient central location. This allows
hospitals to move out of the intensive care unit ("ICU") those patients that
require continuous monitoring, but do not need all of an ICU's extensive and
costly personnel and equipment resources.
The Company was incorporated under the laws of the State of Delaware in
October 1984.
The Company's principal executive offices are located at 20925 Crossroads
Circle, Waukesha, Wisconsin 53186, and its telephone number is (414) 798-8282.
3
<PAGE> 6
RISK FACTORS
Prospective investors should carefully consider the risk factors set forth
below as well as the other information contained in this Prospectus.
COMPETITION
The markets for the Company's products are highly competitive. Many of
the Company's competitors have greater engineering, research and development,
manufacturing, financial and marketing resources, as well as a more established
market presence and reputation. The Company has historically experienced
substantial price competition for its products and such price competition is
likely to continue.
DEVELOPMENT OF DIRECT SALES FORCE
In fiscal 1989, the Company began the transition from relying on third
party distributors in the domestic hospital market to developing its own direct
sales force. The Company experienced reduced net sales and a net loss in
fiscal 1989 as relationships with distributors were terminated and direct sales
efforts were initiated. Although net sales and net income have increased since
fiscal 1989, the Company has experienced significant sales force turnover which
has adversely affected domestic hospital sales. While the Company believes
that recent personnel changes have improved the quality of its direct sales
force, additional turnover would have an adverse impact on the Company's
domestic hospital sales.
DEPENDENCE ON PATENTS AND PROPRIETARY TECHNOLOGY
The Company believes one of its principal competitive advantages is
provided by its patented and other proprietary technology including its sensor
technology, infrared specific anesthetic gas monitoring technology, UltraSync
signal processing software and disposable respiratory secretion filter system.
Although none of the Company's United States patents expire before 2004, to the
extent competitors develop equivalent or superior non-infringing technology in
these areas, or to the extent that the Company is unable to enforce its
patents, the Company's ability to market and sell its products could be
materially adversely affected.
DEPENDENCE ON KEY PERSONNEL
The Company relies to a substantial degree on its founder and principal
executive officer, Gerhard J. Von der Ruhr, as well as key divisional sales
officers and technical managers. The loss of any of these individuals could
materially adversely affect the Company.
INTERNATIONAL SALES
Since fiscal 1990, the Company's international sales have grown faster
than its sales to any other market, and accounted for 49.1% of the Company's
total net sales for the 1995 fiscal year. The Company expects that
international sales will continue to constitute a significant portion of its
business. Although the Company sells its products in United States dollars and
is not subject to significant currency risks, an increase in the value of the
United States dollar relative to foreign currencies in the Company's
international markets could make the Company's products less price competitive
in such markets.
GOVERNMENT REGULATION
The Company's products are subject to regulation by the United States Food
and Drug Administration (the "FDA") and comparable foreign governmental
authorities. These regulations can be burdensome and may substantially delay
or prevent the introduction of new products, materially increase the costs of
any such product introductions, interfere with or require cessation of product
manufacturing and marketing or result in product recalls. Additionally,
adoption of new regulations or modifications to applicable regulations could
adversely affect the Company.
4
<PAGE> 7
COST CONTAINMENT PROGRAMS
The cost of a significant portion of medical care in the United States is
funded by government or other insurance programs. Additional limits imposed by
such programs on health care cost reimbursements may further impair the ability
of hospitals and other health care providers to purchase equipment such as the
Company's products and could adversely affect the Company's domestic sales.
PRODUCT LIABILITY EXPOSURE
As a manufacturer of medical diagnostic equipment, the Company could face
product liability claims. Criticare has had no product liability claims to
date and maintains product liability insurance in an aggregate amount of $5
million. There can be no assurance that such coverage will be adequate to
cover any product liability claims which arise in the future or that it will
continue to be available at reasonable prices.
SINGLE SOURCES OF SUPPLY
Certain of Criticare's products incorporate components currently purchased
from single sources. While the Company believes these components are available
from alternate sources on reasonable terms, an interruption in the delivery of
these components could have an adverse effect on the Company.
POSSIBLE VOLATILITY OF STOCK PRICE; FLUCTUATIONS IN QUARTERLY RESULTS
Market prices of securities of medical technology companies, including the
Company's Common Stock, have experienced significant volatility from time to
time. There may be volatility in the market price of the Common Stock due to
factors that may or may not relate to the Company's performance. Various
factors and events, such as announcements by the Company or its competitors
concerning new product developments, governmental approvals, regulations or
actions, developments or disputes relating to patent or proprietary rights and
public concern over product liability may have a significant impact on the
market price of the Common Stock. In addition, Criticare's quarterly results
have historically fluctuated.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Shareholder.
SELLING SHAREHOLDER
The 150,000 shares of the Company's Common Stock described in this
Prospectus are issuable by the Company to the shareholder listed below upon
exercise of the Warrant. Except for the ownership of the Shares and the
Selling Shareholder's services to the Company as a consultant, the Selling
Shareholder has not had any material relationship within the past three years
with the Company. Beginning on September 21, 1995, the Company engaged the
Selling Shareholder as a consultant to provide certain investor relations and
development services to the Company. The Shares are being registered to permit
public secondary trading of the Shares, and the Selling Shareholder may offer
the Shares for resale from time to time. See "Plan of Distribution."
The Shares being offered by the Selling Shareholder hereby are issuable by
the Company to the Selling Shareholder pursuant to the Warrant. The Warrant
was issued by the Company to the Selling Shareholder in consideration of the
Selling Shareholder's services to the Company under the Consulting Agreement by
and among the Company and the Selling Shareholder. Pursuant to terms of the
Warrant, the Selling Shareholder is entitled to exercise all or any part of the
vested portion of the Warrant from time to time during the Warrant's five-year
term to acquire, at an exercise price of $2.00 per share, the vested portion of
the 150,000 shares of the Company's Common Stock issuable under the Warrant.
The Warrant vests in equal increments of 37,500 shares of the Company's Common
Stock based on the following schedule: (a) 37,500 shares vested upon execution
and delivery of the Warrant (i.e., September 30, 1995); (b) 37,500 shares vest
on November 30, 1995 if, on or before said date, the closing price of the
Company's Common Stock, wherever listed, is $4.50 per share or higher (which
criteria was not achieved); (c) 37,500 shares vest on February 29, 1996 if, on
or before said date, the closing price of the Company's Common Stock, wherever
listed, is $7.00 per share or higher; and 37,500 shares vest on May 31, 1996
if, on or before said date, the closing price of the Company's Common Stock,
wherever listed, is $9.00 per share or higher. If any of the above stock
performance criteria for a specific period are not met for such period, but
5
<PAGE> 8
in a subsequent period the stock performance criteria in such subsequent
period are met, then, in addition to the Shares which would vest for such
subsequent period pursuant to the above vesting schedule, any Shares which have
not vested for a prior period or periods shall also vest on such subsequent
period. Any Warrant shares which have not vested as of September 21, 1996 shall
not be exercisable and the Warrant shall terminate as to such unvested shares
after September 21, 1996.
As required by the Warrant, in recognition of the fact that Selling
Shareholder may wish to be legally permitted to sell any Shares acquired upon
exercise of the Warrant when it deems appropriate, the Company has filed with
the Commission under the Act, a Registration Statement on Form S-3, of which
this Prospectus forms a part, with respect to the resale of the Shares by the
Selling Shareholder from time to time on the Nasdaq National Market or in
privately-negotiated transactions.
<TABLE>
<CAPTION>
Number of Shares Number of Shares Number of Shares
Name of Beneficially Owned Being Offered Beneficially Owned
Selling Shareholder Prior to Offering Hereby After Offering
- -------------------- ------------------ ---------------- ------------------
<S> <C> <C> <C>
C.C.R.I. 150,000* 150,000* 0
Corporation
</TABLE>
__________________
*Represents the aggregate number of shares of the Company's
Common Stock which the Selling Shareholder may acquire upon
exercise of the Warrant after certain vesting criteria are
achieved. As of February 12, 1996, the Warrant was vested
and exercisable as to 37,500 shares.
PLAN OF DISTRIBUTION
The Shares being offered by the Selling Shareholder will be sold in one or
more transactions (which may involve block transactions) on the Nasdaq National
Market or in privately-negotiated transactions. The sale price to the public
may be the market price prevailing at the time of sale, a price related to such
prevailing market price or such other price as the Selling Shareholder
determines from time to time. The Selling Shareholder shall have the sole and
absolute discretion not to accept any purchase offer or make any sale of Shares
if it deems the purchase price to be unsatisfactory at any particular time.
The Selling Shareholder may also sell the Shares of Common Stock directly
to market makers acting as principals and/or to broker-dealers acting as agents
for themselves or their customers. Brokers acting as agents for the Selling
Shareholder will receive usual and customary commissions for brokerage
transactions, and market makers and block purchasers purchasing the Shares will
do so for their own account and at their own risk. It is possible that the
Selling Shareholder will attempt to sell Shares of Common Stock in block
transactions to market makers or other purchasers at a price per share which
may be below the then market price. There can be no assurance that all or any
of the Shares offered hereby will be issued to, or sold by, the Selling
Shareholder. The Selling Shareholder and any brokers, dealers or agents, upon
effecting the sale of any of the Shares offered hereby, may be deemed
"underwriters" as that term is defined in the Securities Act.
The Selling Shareholder has agreed that it will not pay more than the
normal brokerage compensation and that it will not enter into arrangements for
special selling efforts without first advising the Company and cooperating in
the disclosure of the same in a revised or supplemental prospectus.
The Selling Shareholder, alternatively, may sell all or any part of the
Shares offered hereby through an underwriter. The Selling Shareholder has not
entered into any agreement with a prospective underwriter and there is no
assurance that any such agreement will be entered into. If the Selling
Shareholder enters into such an agreement or agreements, the relevant details
will be set forth in a supplement or revisions to this Prospectus.
6
<PAGE> 9
EXPERTS
The consolidated financial statements and the related consolidated
financial statement schedule incorporated in this prospectus by reference from
the Company's Annual Report on From 10-K for the year ended June 30, 1995 have
been audited by Deloitte & Touche LLP, independent auditors, as set forth in
their reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon such reports of such firm given upon their
authority as experts in accounting and auditing.
LEGAL MATTERS
The legality of the Shares of Common Stock offered hereby will be passed
upon for the Company by Reinhart, Boerner, Van Deuren, Norris & Rieselbach,
s.c., 1000 North Water Street, Suite 2100, Milwaukee, Wisconsin 53202.
7
<PAGE> 10
No person is authorized to give any information or to make any
representations not contained in this Prospectus in connection with the offer
contained herein, 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 the solicitation of an offer
to buy any security other than the shares of Common Stock offered by this
Prospectus, nor does it constitute an offer to sell or a solicitation of an
offer to buy shares of Common Stock in any jurisdiction where such offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor
any sales made hereunder shall, under any circumstances, create any implication
that there has been no change in the affairs of the Company since the date
hereof.
<TABLE>
<CAPTION>
TABLE OF CONTENTS Page
----
<S> <C>
Available Information ... 2
Incorporation of Certain
Documents by Reference .. 2
The Company ............. 3
Risk Factors. ........... 4
Use of Proceeds ......... 5
Selling Shareholder ..... 5
Plan of Distribution .... 6
Experts ................. 7
Legal Matters ........... 7
</TABLE>
150,000 Shares
CRITICARE SYSTEMS, INC.
COMMON STOCK
PROSPECTUS
February __, 1996
8
<PAGE> 11
II. INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses relating to the registration of the Shares of Common
Stock being offered hereby, other than underwriting discounts and commissions,
will be borne by the Company. Such expenses are estimated to be as follows:
<TABLE>
<CAPTION>
Item Amount
---- ------
<S> <C>
Securities and Exchange Commission
Registration Fee $ 191
Legal Fees and Expenses 2,500
Accounting Fees and Expenses 500
Miscellaneous Expenses 500
------
Total $3,691
======
</TABLE>
Item 15. Indemnification of Directors and Officers
The Company's By-Laws provide that the Company shall, to the fullest
extent permitted by the Delaware Corporation Law and other applicable laws, as
in effect from time to time, indemnify any person who was or is a party or is
threatened to be made a party to any formal or informal threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, including, without limitation, any action brought under federal
or state securities laws, rules or regulations (collectively, "Actions"), other
than in certain limited circumstances, because he is or was a director or
officer of the Company, or because he is or was a director or officer of the
Company and is or was serving at the request of the Company as a director,
officer, employee, consultant or agent of another corporation or other
enterprise or is or was serving at the request of the Company as a fiduciary of
an employee benefit plan or as an employee or agent of the Company; provided,
however, that no director or officer shall be entitled to indemnification
unless, with respect to the conduct that is the subject of the Action, he acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interest of the Company and, with respect to any criminal action or
proceeding, he had no reasonable cause to believe his conduct was unlawful.
This indemnification obligation mirrors the permissive indemnification provided
under section 145 of the Delaware Corporation Law. The determination of whether
indemnification is proper under the circumstances, unless made by a court,
shall be made (a) by arbitration; (b) by the Board of Directors by a majority
vote of a quorum consisting of directors who are not parties to the subject
Action; (c) if such quorum is not obtainable or, even if obtainable, a quorum of
disinterested directors so directs, by independent legal counsel in a written
opinion; or (d) by the affirmative vote of a majority of the shares entitled to
vote thereon.
Article VI, section 6.01 of the Company's Restated By-Laws provides
that a director or officer is not liable to the Company for damages arising
out of any action taken or omitted to be taken by such person if he exercised
and used the same degree of care and skill as a prudent man would have
exercised or used under the circumstances in the conduct of his own affairs or
took or omitted to take such action in reliance on the advice of the Company's
counsel or statements made or information furnished by officers or employees
of the Company which he had reasonable grounds to believe were true.
In April 1987, the Company entered into indemnity agreements with
Messrs. Von der Ruhr, Lai, Osowski, Houm and Datsopoulos. These agreements
provide that the Company will indemnify those persons, to the extent permitted
under Delaware law, against certain liabilities and expenses, including
liabilities and expenses arising under the Securities Act, to which they may
become subject as a result of serving as officers and/or directors of the
Company. The agreements also provide for the advancement of litigation
expenses by the
9
<PAGE> 12
Company to these Individuals. The Company is not required to provide
indemnification (and shall be reimbursed for any advances) in the event the
claim arose out of the individual's misconduct, as defined under the
agreements. The agreements also contain a provision which requires that no
stockholder derivative action may be brought against any of these individuals
after the expiration of two years after his termination as an officer or
director.
The indemnification provided as set forth above is not exclusive of any
other rights to which a director or an officer of the Company may be entitled.
The general effect of the foregoing provisions is to reduce the
circumstances in which an officer or director may be required to bear the
economic burdens of the foregoing liabilities and expenses.
Item 16. Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description
------- -----------
<S> <C>
5 Opinion of Counsel.
23.1 Consent of Deloitte & Touche LLP, Independent Auditors.
23.2 Consent of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c. (included in Exhibit 5).
24 Power of Attorney (incorporated by reference to the signature
page of this Registration Statement).
</TABLE>
Item 17. Undertakings
The undersigned Registrant undertakes as follows:
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; and
(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; provided, however, that paragraphs 1(a) and (b) will not apply if
the information required to be included in a post effective amendment by those
paragraphs is contained in periodic reports filed by the Registrant pursuant
to section 13 or 15(d) of the Exchange Act and which are incorporated by
reference in this Registration Statement.
2. That, for the purposes 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. 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 15(d) of the Securities Exchange Act of 1934 (and, where
applicable, each filing of an employee benefit plan annual report pursuant to
section 15(d) of the
10
<PAGE> 13
Securities Exchange Act of 1934) that is incorporated by reference in the
Registration Statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
5. 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 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.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
11
<PAGE> 14
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 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Milwaukee, State of Wisconsin, on the 1st day of
February, 1996.
CRITICARE SYSTEMS, INC.
BY /s/ Gerhard J. Von der Ruhr
------------------------------------------
Gerhard J. Von der Ruhr, Chairman
of the Board and Chief Executive Officer
POWER OF ATTORNEY
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons on behalf
of the Registrant, in the capacities indicated below. Each person whose
signature appears below hereby appoints Gerhard J. Von der Ruhr and Richard J.
Osowski and each of them individually, his true and lawful attorney-in-fact,
with power to act with or without the other and with full power of substitution
and resubstitution, in any and all capacities, to sign any or all amendments
(including post-effective amendments) to the Registration Statement and file
the same with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents full power and authority to do and perform each
and every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitutes, may lawfully cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Gerhard J. Von der Ruhr
- --------------------------- Chairman of the Board, Chief February 1, 1996
Gerhard J. Von der Ruhr Executive Officer, Treasurer and
Director
/s/ N.C. Joseph Lai
- --------------------------- Vice Chairman of the Board, February 1, 1996
N.C. Joseph Lai Senior Vice President, Secretary
and Director
/s/ Richard J. Osowski
- --------------------------- Senior Vice President-Finance February 1, 1996
Richard J. Osowski and Assistant Secretary
(Principal Accounting Officer
and Principal Financial Officer)
/s/ Karsten Houm
- --------------------------- Director February 1, 1996
Karsten Houm
/s/ Milton Datsopoulos
- ---------------------------
Milton Datsopoulos Director February 1, 1996
</TABLE>
12
<PAGE> 15
EXHIBIT INDEX
Exhibit Page
Number Description Number
------- ----------- ------
5 Opinion of Counsel
23.1 Consent of Deloitte & Touche LLP,
Independent Auditors
23.2 Consent of Reinhart, Boerner,
Van Deuren, Norris & Rieselbach, s.c.
(included in Exhibit 5)
24 Power of Attorney
(included on the signature page hereto)
13
<PAGE> 1
EXHIBIT 5
<PAGE> 2
February 9, 1996
Criticare Systems, Inc.
20925 Crossroads Circle
Waukesha, Wisconsin 53186
Gentlemen: Re: Registration Statement on Form S-3
We have acted as counsel for Criticare Systems, Inc., a Delaware
corporation (the "Company"), in connection with the Company's registration of
150,000 shares (the "Shares") of its $.04 par value common stock at the request
of C.C.R.I. Corporation ("CCRI"). The Shares are issuable to CCRI upon its
exercise of a certain Warrant issued to it by the Company on September 21,
1995, provided certain vesting criteria set forth under the Warrant have been
satisfied as to the portion of the Warrant then exercised.
In such capacity we have examined, among other documents, the Restated
Certificate of Incorporation of the Company, as amended, a certificate of good
standing issued by the Secretary of State of the State of Delaware and the
Registration Statement on Form S-3 to be filed by the Company with the
Securities and Exchange Commission on or shortly after the date of this letter
covering the sale by CCRI of the Shares. Based on the foregoing and such
additional investigation as we have deemed necessary, it is our opinion that:
1. The Company is a corporation existing in good standing under the laws
of the State of Delaware.
2. The Shares, when issued upon valid exercise of the Warrant and upon
payment by CCRI of the exercise price therefor, will be legally issued,
fully-paid and nonassessable, except as set forth in Wisconsin Statutes section
180.0622(2)(b) as interpreted.
We consent to the filing of a copy of this opinion as an exhibit to the
Registration Statement on Form S-3.
REINHART, BOERNER, VAN DEUREN,
NORRIS & RIESELBACH, s.c.
BY /s/ Robert E. Bellin
-------------------------------
Robert E. Bellin
<PAGE> 1
EXHIBIT 23.1
<PAGE> 2
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement of
Criticare Systems, Inc. on Form S-3 of our reports dated August 1, 1995,
appearing and incorporated by reference in the Annual Report on Form 10-K of
Criticare Systems, Inc. for the year ended June 30, 1995, and to the reference
to us under the heading "Experts" in the Prospectus, which is part of such
Registration Statement.
/s/ Deloitte & Touche LLP
Deloitte & Touche LLP
Milwaukee, Wisconsin
February 9, 1996
