<PAGE> 1
As filed with the Securities and Exchange Commission on April 14, 1997.
Registration No. 333-861
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
FORM S-3/A-1
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. [ ]
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> 2
PROSPECTUS DATED APRIL ___, 1997
102,500 Shares
CRITICARE SYSTEMS, INC.
COMMON STOCK
The shares offered hereby (the "Shares") consist of 102,500 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 shareholders listed herein
under "Selling Shareholders" (the "Selling Shareholders") upon exercise of the
Warrant (defined below) issued by the Company to C.C.R.I. Corporation ("CCRI").
The Warrant was issued by the Company to CCRI on September 21, 1995 and was
amended on November 1, 1996 (the "Warrant") pursuant to the terms of a certain
Consulting Agreement by and between CCRI and the Company dated September 21,
1995 (the "Consulting Agreement"). The Warrant was issued to CCRI in
consideration of its services provided and to be provided to the Company
pursuant to the Consulting Agreement. The Warrant was initially exercisable
for up to 150,000 shares of the Company's Common Stock pursuant to certain
vesting criteria. CCRI has previously exercised the Warrant for and sold
47,500 shares. Accordingly, the Warrant is exercisable for up to 102,500
Shares of which all 102,500 Shares are vested at April 10, 1997. CCRI also
transferred Warrants exercisable for 15,000 shares to each of the two other
Selling Shareholders listed herein. 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 Shareholders. 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 Shareholders.
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 Shareholders. The Company will not receive any
proceeds from the sale of the Shares by the Selling Shareholders.
The Selling Shareholders have 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 Shareholders 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 April 10, 1997, the last reported sale price of the
Common Stock on the Nasdaq National Market was $5-3/16 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 April __, 1997.
<PAGE> 3
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 60661-2511, 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. Such reports and other information filed with the
Commission may also be available at the Commission's site on the World Wide Web
at http:www.sec.gov.
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, 1996.
(b) The Company's Quarterly Reports on Form 10-Q for the quarters ended
September 30, 1996 and December 31, 1996.
(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.
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<PAGE> 4
THE COMPANY
Criticare designs, manufactures and markets vital signs and gas monitoring
instruments and related noninvasive sensors used to monitor patients in many
health care 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.
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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 46.2% of the Company's
total net sales for the 1996 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.
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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 Shareholders.
SELLING SHAREHOLDERS
The 102,500 shares of the Company's Common Stock described in this
Prospectus are issuable by the Company to the shareholders listed below upon
exercise of the Warrant. Except for the ownership of the Shares and CCRI's
services to the Company as a consultant, the Selling Shareholders have not had
any material relationship within the past three years with the Company.
Beginning on September 21, 1995, the Company engaged CCRI 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 Shareholders may offer the Shares for resale from time
to time. See "Plan of Distribution."
The Shares being offered by the Selling Shareholders hereby are issuable
by the Company to the Selling Shareholders pursuant to the Warrant. The
Warrant was initially issued by the Company to CCRI in consideration of CCRI's
services to the Company under the Consulting Agreement by and among the Company
and CCRI. Pursuant to terms of the Warrant, as amended, the Selling
Shareholders are 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 102,500
shares of the Company's Common Stock issuable under the Warrant. The Warrant
terms set forth the following vesting schedule: (a) 56,250 shares upon
execution and delivery of the amended Warrant (i.e., November 1, 1996); (b)
18,750 shares on December 31, 1996 if, on or before said date, the closing
price of the Company's Common Stock, wherever listed, is $4.50 per share or
higher; (c) 37,500 shares on February 28, 1997 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 on May 31, 1997 if, on or before said
date, the closing price of the Company's Common Stock, wherever listed, is
$9.00 per share or higher. The Warrant also provides that any of the above
stock performance criteria for a specific period are not met for such period,
but in a subsequent period the stock performance criteria in such subsequent
period are met, then, in addition to the Shares
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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, 1997 shall not be exercisable and the Warrant shall
terminate as to such unvested shares after September 21, 1997. As of April 1,
1997, the Warrant was fully vested as to 65,000 Shares. However, in
consideration of CCRI's services in attracting certain financing for the
Company, the Company chose to vest the remaining 37,500 Shares. Accordingly,
the Warrant is currently vested for the full 102,500 Shares.
As required by the Warrant, in recognition of the fact that Selling
Shareholders may wish to be legally permitted to sell any Shares acquired upon
exercise of the Warrant when they deem 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 Shareholders from time to time on the Nasdaq National Market or in
privately-negotiated transactions.
<TABLE>
<CAPTION>
Number of Shares Number of Shares
Name of Beneficially Owned Number of Shares Beneficially Owned
Selling Shareholder Prior to Offering Being Offered Hereby After Offering
- -------------------- ------------------ -------------------- ------------------
<S> <C> <C> <C>
C.C.R.I. Corporation 72,500* 72,500* 0
Barrett K. Silver 15,000* 15,000* 0
M&K Partners 15,000* 15,000* 0
</TABLE>
- ------------
*Represents the aggregate number of shares of the Company's
Common Stock which the Selling Shareholder may acquire upon
exercise of the Warrant.
PLAN OF DISTRIBUTION
The Shares being offered by the Selling Shareholders 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 each Selling Shareholder
determines from time to time. Each Selling Shareholder shall have the sole and
absolute discretion not to accept any purchase offer or make any sale of Shares
if he or it deems the purchase price to be unsatisfactory at any particular
time.
The Selling Shareholders 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
Shareholders 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 Shareholders 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
Shareholders. The Selling Shareholders 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 Shareholders have agreed that they 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 Shareholders, alternatively, may sell all or any part of the
Shares offered hereby through an underwriter. The Selling Shareholders have
not entered into any agreement with a prospective underwriter and there is no
assurance that any such agreement will be entered into. If any Selling
Shareholder enters into such an agreement or agreements, the relevant details
will be set forth in a supplement or revisions to this Prospectus.
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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, 1996 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.
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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 Shareholders .... 5
Plan of Distribution .... 6
Experts ................. 7
Legal Matters ........... 7
</TABLE>
102,500 Shares
CRITICARE SYSTEMS, INC.
COMMON STOCK
PROSPECTUS
April __, 1997
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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
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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).
99 Amended Consultant Warrant Agreement
</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.
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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 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> 13
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 27th day of
March, 1997.
CRITICARE SYSTEMS, INC.
BY /s/ Gerhard J. Von der Ruhr
-----------------------------------------
Gerhard J. Von der Ruhr, Chairman
of the Board and Chief Executive Officer
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>
Chairman of the Board, Chief
/s/ Gerhard J. Von der Ruhr Executive Officer, Treasurer
- --------------------------- and Director March 27, 1997
Gerhard J. Von der Ruhr
Vice Chairman of the Board,
/s/ N.C. Joseph Lai Senior Vice President,
- --------------------------- Secretary and Director March 27, 1997
N.C. Joseph Lai
Senior Vice
President-Finance and
Assistant Secretary
(Principal Accounting
/s/ Richard J. Osowski Officer and Principal
- --------------------------- Financial Officer) March 27, 1997
Richard J. Osowski
/s/ Karsten Houm
- --------------------------- Director March 27, 1997
Karsten Houm
/s/ Milton Datsopoulos
- --------------------------- Director March 31, 1997
Milton Datsopoulos
</TABLE>
12
<PAGE> 14
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Page
Number Description Number
- ------- ----------- ------
<S> <C> <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*
(included on the signature page hereto)
99 Amended Consultant Warrant Agreement
</TABLE>
- ----------------
*Incorporated by reference to the signature page to the Company's Form S-3
effective February 28, 1996.
13
<PAGE> 1
EXHIBIT 5
<PAGE> 2
[REINHART , BOERNER, VAN DEUREN
NORRIS & RIESELBACH, S.C. LETTERHEAD]
April 14, 1997
Criticare Systems, Inc.
20925 Crossroads Circle
Waukesha, Wisconsin 53186
Gentlemen: Re: Registration Statement on Form S-3
(the "Registration Statement")
We have acted as counsel for Criticare Systems, Inc., a Delaware
corporation (the "Company"), in connection with the Company's registration of
102,500 shares (the "Shares") of its $.04 par value common stock at the request
of the selling shareholders listed on the Registration Statement. The Shares
are issuable to the selling shareholders upon their exercise of a certain
amended Warrant issued to one of the selling shareholders by the Company on
November 1, 1996.
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 the selling shareholders 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 the selling shareholders 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/A-1 of our reports dated August 2, 1996,
appearing and incorporated by reference in the Annual Report on Form 10-K of
Criticare Systems, Inc. for the year ended June 30, 1996, 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
April 14, 1997
<PAGE> 1
EXHIBIT 99
4
<PAGE> 2
150,000 Warrants
THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "ACT"), AND MAY NOT BE OFFERED OR
SOLD EXCEPT (I) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE ACT,
(II) TO THE EXTENT APPLICABLE, PURSUANT TO RULE 144 UNDER THE ACT (OR ANY
SIMILAR RULE UNDER SUCH ACT RELATING TO THE DISPOSITION OF SECURITIES), OR
(III) UPON THE DELIVERY BY THE HOLDER TO THE COMPANY OF AN OPINION OF COUNSEL,
REASONABLY SATISFACTORY TO COUNSEL TO THE ISSUER, STATING THAT AN EXEMPTION
FROM REGISTRATION UNDER SUCH ACT IS AVAILABLE.
AMENDED
CONSULTANT WARRANT AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of November,
1996, by and between CRITICARE SYSTEMS, INC. (the "Company") and C.C.R.I.
CORPORATION (the "Consultant") (together, the "Parties").
RECITALS
A. As of September 21, 1995, the Company and the Consultant entered into a
Consulting Agreement under which the Consultant received Warrants to purchase
common stock of the Company ("Common Stock"), which were, in part, contingent
upon Consultant achieving certain benchmark values, some of which were
substantially, though not literally, attained.
B. Company and Consultant desire to amend and extend Consultant's Warrant
Agreement.
AGREEMENTS
It is agreed by and between the parties for and in consideration of the
premises and the mutual covenants herein contained and for other good and
valuable consideration, as follows:
1. The Company hereby confirm and acknowledges that it has granted to the
Consultant on September 21, 1995, Warrants to purchase 150,000 shares of Common
Stock (the "Warrant") upon the terms and conditions herein set forth subject to
the terms and conditions of the Consulting Agreement. The Warrant is granted
as compensation for services and as to all "vested" shares shall have a life of
five years from the date of grant.
<PAGE> 3
2. The purchase price of the shares of Common Stock which may be purchased
pursuant to the Warrant is $2.00 per share. The bid price at the time our
discussions were initiated.
3. The Warrant shall continue for five years after the date of grant set
forth in section 1, unless sooner terminated or modified under the provisions
of this Agreement or the Consulting Agreement, and shall automatically expire
at midnight on the fifth anniversary of such date.
4. The Warrant shall vest in equal increments set forth below:
(a) The Warrant is exercisable as to 56,250 shares upon execution and
delivery of this Warrant Agreement.
(b) The second increment of 18,750 shares shall vest and become
exercisable on December 31, 1996 if on or before said date the closing price of
the Common Stock wherever listed is $4.50 per share or higher.
(c) The third increment of 37,500 shares shall vest and become
exercisable on February 28, 1997, if on or before said date the closing price
of the Common Stock wherever listed is $7.00 per share or higher.
(d) The fourth and final 37,500 shares shall vest and become exercisable
on May 31, 1997 if on or before such date the closing price of the Common Stock
wherever listed is $9.00 per share or higher.
In the event that any of the stock performance parameters set forth above for a
specific period is not met for such period, but in a subsequent period the
stock performance parameters in such subsequent period are met, then in
addition the shares which would otherwise be exercisable for such subsequent
period pursuant to the terms hereof with respect to that performance parameter,
any shares which have not vested for a prior period or periods shall also
become exercisable on such subsequent period vesting date. Warrant shares
which have not vested as of September 21, 1997 in accordance with these terms
shall not be exercisable and this Warrant shall terminate as to such unvested
shares after September 21, 1997.
5. The shares of Common Stock issuable upon exercise of the Warrant shall
be included in a Registration Statement which shall be filed with the
Securities and Exchange Commission to permit Consultant's public resale of
shares obtained upon exercise of the Warrant. The Company agrees to cause such
Registration Statement to be filed 120 days of the date of signing and delivery
of this Warrant Agreement and to its reasonable best efforts to cause such
Registration Statement to become effective as soon as reasonably possible
thereafter and to remain current and effective until the earlier to occur of
the sale of the Warrants or shares covered by such Registration Statement or
the expiration of 12 months from the date such Registration Statement was
filed. Consultant
2
<PAGE> 4
(subject to the Company's ability to defer or delay such filing if same would
not then be practicable) shall be entitled to request that such registration
be extended for six months. Thereafter, subsequent registration or extensions
would be by mutual consent of Consultant and the Company based upon what, in
such parties' discretion, would be appropriate and mutually beneficial. The
Company agrees to bear the reasonable costs and expenses of such registration
and the costs and expenses of obtaining the registration or qualification of
the shares issuable upon exercise of the Warrant in one state of Consultant's
choice.
6. Subject to the terms of section 8 hereof, this Warrant shall be
transferable upon surrender of this Warrant Agreement, with the form of
assignment attached hereto duly executed by Consultant, to the Company at its
office in the State of Wisconsin. Upon such surrender, the Company shall cause
a Warrant Certificate containing terms identical to those of this Warrant
Agreement, to be issued in the name of the transferee or transferees. If this
Warrant Agreement is assigned in respect of less than all the shares covered
hereby, Consultant shall be entitled to receive a new Warrant Agreement
covering the number of shares not so assigned.
7. Subject to the vesting requirements of section 4 above, the Warrant may
be exercised in whole or in part by delivering to the Company written notice of
exercise on the Purchase Form included herein together with payment in full for
the shares being purchased upon such exercise. The Company will, upon receipt
of said notice and payment, issue or cause to be issued to the Consultant a
stock certificate for the number of shares purchased hereby.
8. Consultant represents and agrees that: (i) the Warrant shall not be
exercisable unless the purchase of Warrant shares upon the exercise of the
Warrant is pursuant to an applicable effective Registration Statement under the
Securities Act of 1933 (the "Act") or unless in the opinion of counsel for the
Company the proposed purchase of such Warrant shares would be exempt from the
registration requirements of the Act and from the qualification requirements of
any state securities law, (ii) upon exercise of the Warrant, it will acquire
the Warrant shares for its own account for investment and not with any intent
or view to any distribution, resale or other disposition of the Warrant shares
except as permitted hereby, (iii) it will not sell or transfer the Warrant
shares unless they are registered under the Act. The Company may require as a
condition of the exercise of the Warrant that the Consultant sign such further
representations and agreements as it reasonably determines to be necessary or
appropriate to assure and to evidence compliance with the requirements of the
Act.
9. In case the Company shall at any time subdivide (by way of a stock
split or stock dividend) or combine the outstanding shares of Common Stock, the
exercise price shall be forthwith proportionately decreased (in the case of
subdivision) or increased (in the case of combination) and the number of shares
of Common Stock deliverable upon the exercise of this Warrant shall be
proportionately adjusted.
3
<PAGE> 5
10. Consultant shall have no rights as a stockholder with respect to the
shares of Common Stock which may be purchased pursuant to the Warrant until
such shares are issued to Consultant.
11. THIS AGREEMENT IS ENTERED INTO AND SHALL BE GOVERNED BY, CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF WISCONSIN.
12. The terms and conditions contained in the Consulting Agreement and as
it may be amended from time to time hereafter are incorporated into and made a
part of this Agreement by reference, as if the same were set forth herein in
full, and all provisions of the Warrant are made subject to any and all terms
of the Consulting Agreement.
13. Any notice to be given under the terms of this Agreement shall be
given in accordance with section 10 of the Consulting Agreement.
CRITICARE SYSTEMS, INC.
BY: /s/ Gerhard J. Von der Ruhr
--------------------------
Gerhard J. Von der Ruhr,
Chairman of the Board
C.C.R.I. CORPORATION
BY: /s/ Malcolm McGuire, President
-------------------------------
Malcolm McGuire, President
4
