<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 22, 1997
REGISTRATION NO. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
SBS TECHNOLOGIES, INC.
(Exact Name of Registrant as Specified in its Charter)
NEW MEXICO 85-0359415
(State of Incorporation) (I.R.S. Employer Identification No.)
2400 LOUISIANA BOULEVARD NE
AFC BUILDING 5, SUITE 600
ALBUQUERQUE, NEW MEXICO 87110
(505) 875-0600
(Address of Principal Executive Offices)
COPY TO:
MR. CHRISTOPHER J. AMENSON ALISON K. SCHULER, ESQUIRE
SBS TECHNOLOGIES, INC. Schuler, Messersmith & McNeill
2400 LOUISIANA BOULEVARD NE 5700 Harper Drive, NE Suite 430
AFC BUILDING 5, SUITE 600 Albuquerque, New Mexico 87109
ALBUQUERQUE, NEW MEXICO 87110 (505) 822-8826
(505) 875-0600
(Name, Address, Including Zip Code, and
Telephone Number, Including Area Code,
of Agent for Service)
APPROXIMATE DATE 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, check the following box and
list the Securities Act registration statement number of 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>
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Titles of Each Class of Amount to be Proposed Proposed Amount of
Securities to be Registered Registered Maximum Maximum Registration Fee
Offering Aggregate
Price Per Offering Price(2)
Security(2)
- ----------------------------------------------------------------------------------------------------------------------
Common Stock under warrants 249,999 shares(1) $34 $8,499,966
Common Stock 200,000 shares $34 $6,800,000
- ----------------------------------------------------------------------------------------------------------------------
Total Registration Fee $4,636.35
- ----------------------------------------------------------------------------------------------------------------------
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Indicates the aggregate number of shares of Common Stock, no par value,
("Common Stock") authorized and reserved for issuance and which may be sold upon
the exercise of warrants which previously have been granted.
(2) Estimated solely for the purpose of computing the registration fee pursuant
to Rule 457(c) and, as to the Common Stock underlying warrants, Rule 457 (g).
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.
(ii)
<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement
becomes effective. This prospectus shall not constitute an offer to sell or
the solicitation of an offer to buy nor shall there be any sale of these
securities in any State in which such offer, solicitation or sale would be
unlawful prior to registration or qualification under the securities laws of
any such State.
<PAGE>
Prospectus
(Subject to Completion)
Dated January 22, 1997
449,999 Shares of Common Stock
SBS TECHNOLOGIES, INC.
This Prospectus is being used in connection with the offer and sale from
time to time (i) by certain persons of shares ("Warrant Shares") of the no par
value common stock of the Company ("Common Stock") which may be acquired upon
the exercise of warrants vested as of June 30, 1996, and thereafter exercisable
at various times, ("Warrants") for Common Stock which they received in
connection with the acquisition by the Company of GreenSpring Computers, Inc. on
April 28, 1995, and (ii) by certain persons of shares ("Logical Shares") of
Common Stock which they received in connection with the acquisition by the
Company of Logical Design Group, Inc. on August 19, 1996. The identified sellers
of the Warrant Shares and the Logical Shares are referred to collectively as the
"Selling Shareholders". The Warrant Shares and the Logical Shares are referred
to collectively as the "Shares". The Company will not receive any of the
proceeds from the sale of the Shares by the Selling Shareholders, although the
Company will receive the proceeds of Warrant exercises by the Selling
Shareholders who hold Warrants.
The Shares may be sold from time to time by the Selling Shareholders or by
pledgees, donees, transferees or other successors in interest. These sales may
be made on the National Market System of the National Association of Securities
Dealers Automated Quotation System ("NASDAQ") or otherwise at market prices then
prevailing or at negotiated fees. All selling and other expenses (including
discounts, commissions or fees) incurred by the Selling Shareholders in
connection with the sale of the Shares will be paid by the Selling Shareholders
or by the purchasers of the Shares, except that the expenses of preparing and
filing this Prospectus and the related Registration Statement with the
Securities and Exchange Commission and of registering or qualifying the Shares
will be paid by the Company. See "Plan of Distribution".
The Selling Shareholders and brokers through whom sales of the Shares are
made may be deemed to be "underwriters" within the meaning of Section 2(11) of
the Securities Act of 1933, as amended (the "Act"). Any profits realized by the
Selling Shareholders or those brokers on the sale of the Shares may be deemed to
be underwriting commissions under the Securities Act.
The Common Stock of SBS Technologies, Inc. is listed on the NASDAQ National
Market System under the symbol "SBSE". The closing price of the Company's
Common Stock as reported on NASDAQ on January 21, 1997, was $30.75.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE 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.
No person is authorized to give any information or to make any
representations, other than as contained in this Prospectus, in connection with
the offer made in this Prospectus, and any information or representation not
contained herein must not be relied upon as having been authorized by the
Company or the Selling Shareholders. This Prospectus does not constitute an
offer to sell or a solicitation of an offer to buy any Shares offered hereby to
any person in any jurisdiction where it is unlawful to make such an offer or
solicitation to that person. Neither the delivery of this Prospectus nor any
sale hereunder shall under any circumstances create any implication that
information contained herein is correct as of any time subsequent to the date
hereof.
SEE "RISK FACTORS", PAGE 7, FOR DISCUSSION OF CERTAIN FACTORS WHICH
SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS IN THE COMMON STOCK OFFERED
HEREBY.
The date of this Prospectus is January , 1997.
<PAGE>
STATEMENT OF AVAILABLE INFORMATION
A Registration Statement on Form S-3, including amendments thereto,
relating to the Common Stock offered hereby has been filed by the Company with
the Securities and Exchange Commission (the "Commission"), Washington, D.C.
20549. This Prospectus does not contain all of the information set forth in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Common Stock, reference is made
to that Registration Statement, and exhibits and schedules thereto. Statements
contained in this Prospectus as to the contents of any contract or other
document referred to are not necessarily complete, and in each instance
reference is made to the copy of that contract or other document filed as an
exhibit to the Registration Statement, each such statement being qualified in
all respects by that reference. SBS Technologies, Inc. is subject to the
informational requirements of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and in accordance with those requirements files reports
and other information with the Commission. Information, including reports and
proxy and information statements, filed by SBS Technologies, Inc. (and by it
under its previous name of SBS Engineering, Inc.) with the Commission and a copy
of the Registration Statement, including exhibits thereto, can be inspected and
copied at the public reference facilities of the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street N.W., in Washington, D.C., 20549, or at its
Regional Office located at 1801 California Street, Suite 4800, Denver, Colorado
80202-2648. Copies of this material can be obtained from the Public Reference
Section of the Commission, 450 Fifth Street N.W., Washington, D.C., 20549, at
prescribed rates. SBS Technologies, Inc. Common Stock is listed on the National
Association of Securities Dealers, Inc. National Market System. Reports, proxy
and information statements, and other information concerning the Company can be
inspected at the National Association of Securities Dealers, Inc. at 1735 K
Street, NW, Washington, D.C. 20006. The Commission maintains a web site that
contains proxy and information statements and other information regarding
registrants, such as the Company, that file electronically with the Commission
and the address of that site is www.sec.gov.
<PAGE>
THE COMPANY
THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS AND
UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
ANTICIPATED IN THESE FORWARD-LOOKING STATEMENTS AS A RESULT OF CERTAIN FACTORS
INCLUDING THOSE SET FORTH IN THE "RISK FACTORS" SECTION AND ELSEWHERE IN THIS
PROSPECTUS.
The Company is a leading manufacturer of standard bus embedded computer
components that perform a broad range of central processing unit ("CPU"),
general purpose input/output ("IO"), special purpose I/O interface and
high-performance bus interconnect functions. The Company capitalizes on its
design expertise and customer service capabilities to enhance product quality
and reduce time to market for OEM customers.
The Company's objective is to become a leading supplier of board level
components to the standard bus embedded computer market. The Company intends to
continue its growth through a combination of internal growth and acquisitions.
Internal growth is achieved through expanding its existing product lines through
new product development and through increasing penetration of its existing
customer base. The Company currently participates in a number of attractive
markets, including the Intel-based VME CPU board market, the IndustryPack ("IP")
market in general purpose I/O, the standard bus embedded computer bus
interconnect market, the telemetry interface market and the MIL-STD-1553
standard avionics interface market.
Unlike computers targeted at business computing applications, embedded
computers perform a single function or a closely related group of functions,
such as I/O and data processing, as part of a larger system and with a high
degree of reliability. Embedded computers generally are design-specific
solutions that require substantial engineering expertise, have extended product
lives reflecting the long product cycles of the systems into which they are
incorporated and often must adhere to specific size and operating requirements.
As a result, the Company believes that performance, reliability, supplier
stability and customer support are often the primary factors in the decision to
purchase a particular embedded computer solution.
OEM's requiring embedded computers either construct systems based on
standard bus designs together with off-the-shelf I/O, processor and memory
modules, or they develop custom or proprietary solutions. Standard bus
solutions generally enable product designers to develop systems quickly and with
a high degree of confidence in the reliability of the solution, to capitalize on
the lower cost of industry-standard components and to modify designs easily so
that a single product design can serve multiple applications. As a result of
these factors, standard bus systems today constitute a large and growing portion
of the embedded computer market. According to a recent industry study,
BOARD-LEVEL EMBEDDED COMPUTER MARKETS AND TRENDS, the standard bus embedded
computer market is projected to grow from approximately $2.5 billion in 1995 to
approximately $3.9 billion in 1999.
The most popular embedded computer standard today is VME, which is widely
used in aerospace and military, telecommunications, networking, industrial
automation and control, medical instruments and automated test and measurement
applications. According to BOARD-LEVEL EMBEDDED COMPUTER MARKETS AND TRENDS,
the VME-bus embedded computer market is projected to grow from approximately
$1.2 billion in 1995 to approximately $2.3 billion in 1999. The modular nature
of standard-bus embedded computers, their wide range of applications and the
variety of bus architectures available have resulted in a highly fragmented
market. The variety of standard bus embedded computer architectures supports a
growing market for products that interconnect various types of standard bus
embedded computers.
The Company sells its products through a combination of direct sales and
independent manufacturers' representatives. The Company's products serve a
broad range of functions including commercial, communications, industrial
automation, medical device, military and space, test and measurement and
transportation. The Company's customers include The Boeing Company,
Caterpillar,
<PAGE>
Inc., Eastman Kodak Company, General Electric Company and Lockheed Martin
Corporation. International sales constituted approximately 16% of the Company's
sales in fiscal 1996.
The Company completed, on November 22, 1996, the acquisition of Bit 3
Computer Corporation ("Bit 3"), a manufacturer of high-performance bus
interconnect hardware that enables embedded computers of differing standards to
communicate. The total purchase price for the outstanding common stock of Bit 3
was $24 million, of which $20 million was paid out of the proceeds of a public
offering of Common Stock and the balance is to be paid out of cash flow from
Company operations. As a result of the acquisition, the Company recorded
approximately $9.8 million in intangible assets, including goodwill, which will
be amortized on a straight-line basis over the estimated benefit period of ten
years. Although Bit 3's current operating profit offsets the amortization
expense and the earnings dilution associated with the public offering, there can
be no assurance that Bit 3's operations will continue to perform at current
levels. A decrease in Bit 3's operating profit could adversely affect the
Company's overall net income and earnings per share. In addition, there can be
no assurance that changes in further markets or technologies will not require
more rapid levels of goodwill amortization in such a way that overall Company
financial condition or results of operations would be adversely affected. In
connection with the acquisition, the Company recorded an $11 million earnings
charge in the second fiscal quarter of fiscal 1997. The earnings charge was
based on an assessment by the company in conjunction with an independent
valuation firm, of purchased technology of Bit 3. The assessment determined
that $11 million of Bit 3's purchase price represented technology that does not
meet the accounting definitions of "completed technology," and thus should be
charged to earnings under generally accepted accounting principles. Based on
the Company's historical financial performance and the historical financial
performance of Bit 3, the Company currently expects to incur a significant net
loss for the second fiscal quarter of 1997 as a result of the earnings charge.
The Company funded $20 million of the total purchase price for Bit 3 with
proceeds of a public offering of its Common Stock which was also completed on
November 22, 1996. In the public offering, 1,500,000 shares of Common Stock
were sold on behalf of the Company and 300,000 shares of Common Stock were sold
on behalf of selling shareholders. In addition to the purchase of Bit 3, the
Company applied proceeds of the public offering to the repayment of outstanding
long-term debt. Remaining proceeds will be used for general working capital
requirements.
The Company was incorporated in New Mexico in November 1986. The Company's
executive offices are located at 2400 Louisiana Boulevard, NE, AFC Building 5,
Suite 600, Albuquerque, New Mexico 87110, and its telephone number is
(505)875-0600. References in this Prospectus to the "Company" or "SBS" are to
SBS Technologies, Inc. and its consolidated subsidiaries. The Company has four
subsidiaries, Berg Systems International, Inc. ("BSI"), Bit 3 Computer
Corporation ("Bit 3"), GreenSpring Computers, Inc. ("GreenSpring") and Logical
Design Group, Inc. ("LDG"). IndustryPack-Registered Trademark- is a registered
trademark of the Company.
<PAGE>
RISK FACTORS
IN ADDITION TO THE OTHER INFORMATION IN THIS PROSPECTUS, PROSPECTIVE
INVESTORS SHOULD CONSIDER CAREFULLY THE FOLLOWING RISK FACTORS IN EVALUATING AN
INVESTMENT IN THE COMPANY AND BEFORE PURCHASING ANY SHARES OF THE COMMON STOCK
OFFERED HEREBY. THIS PROSPECTUS CONTAINS FORWARD-LOOKING STATEMENTS THAT
INVOLVE RISKS AND UNCERTAINTIES. THE COMPANY'S ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THE RESULTS DISCUSSED IN THE FORWARD-LOOKING STATEMENTS.
FACTORS THAT MAY CAUSE SUCH A DIFFERENCE INCLUDE, BUT ARE NOT LIMITED TO, THOSE
DISCUSSED BELOW.
ACQUISITION OF BIT 3
The Company's recent acquisition of Bit 3 involves numerous risks
including difficulties in the assimilation of the operations, technologies
and products of Bit 3, diversion of management's attention from other
business concerns, risks of entering markets in which the Company has no or
limited direct prior experience and in which competitors may have stronger
market positions, and the potential loss of key employees of Bit 3. In
particular, the Company anticipates that the two selling shareholders of Bit
3 ("Sellers") will remain as employees of the Company under one-year
employment agreements. There can be no assurance that the Sellers will
remain with the Company for the period covered by their employment
agreements. In addition, the Company intends to operate Bit 3 in the
Minneapolis metropolitan area with its current employee base. Although the
Company has sought to retain these employees, there can be no assurance that
these employees will continue to remain with Bit 3. The acquisition could
increase the rate of employee turnover, which could have an adverse impact on
Bit 3's performance and the Company's results of operations.
Achieving the anticipated benefits of the acquisition will depend in part
upon whether the integration of the two companies' businesses can be
accomplished in an efficient and effective manner, and there can be no assurance
that this will occur. The integration of Bit 3 will require, among other
things, integration of the Company's and Bit 3's respective product offerings
and the coordination of their sales and marketing and research and development
efforts. The difficulties of that integration may be increased by the necessity
of coordinating geographically separated organizations. The inability of
management to successfully integrate the operations of the Company and Bit 3
could have a material adverse effect on the Company's business, financial
condition and results of operations.
Bit 3 has experienced fluctuations in its operating results in the past and
may experience those fluctuations in the future as a result of factors such as
changes in the marketplace, technology evolution and competition. Given the
possibility of these fluctuations, the Company believes that comparisons of the
results of its operations for preceding quarters are not necessarily meaningful
and that the results for any one period should not be relied upon as an
indication of future performance.
As a result of the acquisition, the Company recorded approximately $9.8
million in intangible assets, including goodwill, which will be amortized on a
straight line basis over the estimated benefit period of ten years. Although
Bit 3's current operating profit offsets the amortization expense and the
earnings dilution associated with this offering, there can be no assurance that
Bit 3's operations will remain at their current levels. A decrease in Bit 3's
operating profit could adversely affect the Company's overall net income and
earnings per share. In addition, there can be no assurance that changes in
future markets or technologies will not require more rapid levels of goodwill
amortization in such a way that overall Company financial condition or results
of operations would be adversely affected. In connection with the acquisition,
the Company recorded an $11 million earnings charge in the second fiscal quarter
of 1997. The earnings charge was based on an assessment by the Company, in
conjunction with an independent valuation firm, of purchased technology of Bit
3. The assessment determined that $11 million of Bit 3's purchase price
represented technology that does not meet the accounting definitions of
"completed technology," and thus should be charged to earnings under generally
accepted accounting principles. Based on the Company's historical financial
performance and the historical financial performance of Bit 3, the Company
currently
<PAGE>
expects to incur a significant net loss for the second fiscal quarter of 1997 as
a result of the earnings charge. See "-Fluctuations in Operating Results;
Expected Second Quarter Loss."
The Company relied upon certain representations and warranties about Bit 3
made by the Sellers of Bit 3 in the Acquisition Agreement, as well as the
Company's own due diligence investigation. There can be no assurance that these
representations and warranties are true and correct or that the Company's due
diligence investigation discovered all matters of a material nature relating to
the acquisition.
FLUCTUATIONS IN OPERATING RESULTS; EXPECTED SECOND QUARTER LOSS
The Company has experienced fluctuations in its operating results in the
past and may experience those fluctuations in the future. Sales, on both an
annual and a quarterly basis, are subject to fluctuations as a result of a
variety of factors, many of which are beyond the control of the Company. These
factors include the timing of customer orders, manufacturing delays, delays in
shipment due to component shortages, cancellations of orders, the mix of
products sold, cyclicality or downturns in the markets served by the Company's
customers, including significant reductions in defense spending affecting
certain of the Company's customers, and regulatory changes. In addition, the
Company tends to experience an increase in sales during its first fiscal
quarter, which ends on September 30, due to purchases made by United States
("U.S.") government agencies and contractors at the end of the U.S. government's
fiscal year which also ends on September 30. The Company primarily experiences
this effect in its avionics and telemetry product lines. Similarly, the Company
tends to experience little or no growth in sales during its second fiscal
quarter, as sales dependent on U.S. government funding are often delayed during
the start of the U.S. government's new fiscal year. Given the possibility of
those fluctuations, the Company believes that comparisons of the results of its
operations for preceding quarters are not necessarily meaningful and that the
results for any one quarter should not be relied upon as an indication of future
performance. If the Company's sales or earnings for any quarter are less than
the level expected by securities analysts or the market in general, those
shortfalls could have an immediate and significant adverse impact on the market
price of the Company's Common Stock.
In connection with the acquisition of Bit 3, the Company recorded an $11
million earnings charge in the second fiscal quarter of 1997. The earnings
charge is based on an assessment by the Company, in conjunction with an
independent valuation firm, of purchased technology of Bit 3. The assessment
determined that $11 million of Bit 3's purchase price represented technology
that does not meet the accounting definitions of "completed technology," and
thus should be charged to earnings under generally accepted accounting
principles. Based on the Company's historical financial performance and the
historical financial performance of Bit 3, the Company currently expects to
incur a significant net loss for the second fiscal quarter of 1997 as a result
of the earnings charge.
INTEGRATION OF ACQUISITIONS; EXPANSION THROUGH ACQUISITIONS
The Company has increased the scope of its operations primarily through the
addition of four new product lines acquired since 1992. BSI was acquired in
1992, GreenSpring was acquired in 1995, LDG was added in August 1996, and Bit 3
was acquired in November 1996. There can be no assurance that the Company's
management and financial controls, personnel, and other corporate support
systems will be adequate to manage the increase in the size and the diversity of
scope of the Company's operations as a result of the recent acquisitions. In
addition, there can be no assurance that the Company's acquisitions will be
accretive to earnings or that the companies acquired will continue to perform at
their historical levels.
A major element of the Company's business strategy is to continue to pursue
acquisitions that either expand or complement its business. There can be no
assurance that the Company will be able to identify and acquire acceptable
acquisition candidates on terms favorable to the Company, and in a timely
manner. A substantial portion of the Company's capital resources could be used
for these acquisitions. Consequently, the Company may require additional debt
or equity financing for future acquisitions, which
<PAGE>
may not be available on terms favorable to the Company, if at all. As the
Company proceeds with its acquisition strategy, the Company will continue to
encounter the risks associated with the integration of the acquisitions
described above.
The Company anticipates that one or more potential acquisition
opportunities, including some that could be material, may become available in
the near future. If and when appropriate acquisition opportunities become
available, the Company intends to pursue them actively. No assurance can be
given that any acquisition by the Company will or will not occur, that if such
an acquisition does occur that it will not materially and adversely affect the
Company or that any such acquisition will be successful in enhancing the
Company's business.
RELIANCE ON DEFENSE SPENDING
In each of fiscal 1994, 1995 and 1996, the majority of the Company's sales
was derived directly or indirectly from the U.S. Department of Defense. The
Company expects that the Department of Defense will continue to be a significant
source of sales. There can be no assurance that changes in the geopolitical
environment or in national policy will not result in significantly reduced
defense spending which could materially and adversely affect the Company's
business, financial condition or results of operations. In addition, the
Company believes that many of its potential customers will rely on U.S.
government funding for the purchase of the Company's products. Accordingly,
sales to these customers may be adversely affected by delays in obtaining, or
the unavailability of, those funds caused by budget constraints or bureaucratic
processes.
RELIANCE ON INDUSTRY STANDARDS; FUNDAMENTAL TECHNOLOGY CHANGE
Most of the Company's products are developed to meet certain industry
standards, including MIL-STD-1553, Telemetry IRIG Standards and various ANSI
standards. These standards are continuing to develop and are subject to change.
Elimination or obsolescence of these standards could materially adversely affect
the design, manufacture and sale of the Company's products and require costly
redesign to meet new or emerging standards. In addition, the Company's success
will depend in part on its ability to develop products that evolve with changing
industry standards and customer preferences. There can be no assurance that the
Company will be successful in developing those products in a timely manner, or
that the Company will be successful in selling the products it develops. The
Company's delay or failure to adapt to changing industry standards could have a
material adverse effect on the Company's business, financial condition and
results of operations.
Many of the Company's product designs rely on state of the art digital
technology. There is no assurance that future advances in technology may not
make obsolete the Company's existing product lines, resulting in increased
competition and requiring the Company to undertake costly redesign of its
products to maintain its competitive position. There can be no assurance that
the Company will be able to incorporate the new technology into its existing
products or redesign its existing products in order to compete effectively.
Moreover, new and enhanced products and solutions affecting the Company's
markets are continually being introduced by the Company's competitors. These
products and solutions can be expected to affect the competitive environment in
the markets in which they are introduced. Because new products and technologies
require commitments well in advance of sales, decisions with respect to those
commitments must accurately anticipate both future demand and the technology
that will be available to meet that demand. There can be no assurance that the
Company will be able to successfully adapt to future technological changes and
failure to do so may materially adversely affect the Company's business,
financial condition or results of operations.
UNCERTAINTY OF MARKET DEVELOPMENT
<PAGE>
Many of the Company's potential customers design and manufacture standard
bus embedded computer systems internally. Increased market acceptance of the
Company's products and services is dependent in part on these customers relying
on the Company to provide embedded computer system components rather than
designing and manufacturing these products internally. The Company believes
that a number of factors will be important to achieve increased market
acceptance of its products and services. These factors include the quality of
the Company's design and production expertise, the increasing use and complexity
of embedded computer systems in new and traditional products, the expansion of
markets that are served by standard bus embedded computers, time-to-market
requirements of the Company's actual and potential customers, the assessment of
direct and indirect cost savings and the willingness to rely on the Company for
mission-critical applications by customers. The Company believes that in many
customer applications, the cost of its products may exceed or be perceived to
exceed the cost of internal development. Failure to achieve increased market
acceptance of the Company's products will have a material adverse effect on the
Company's ability to achieve its growth objectives.
COMPETITION
The standard bus embedded computer industry is highly-competitive and
fragmented, and the Company's competitors differ depending on product type,
company size, geographic market and application type. The Company faces
competition in each of its product lines. The Company believes that because of
the diverse nature of the Company's products and the fragmented nature of the
embedded computer market, there is little overlap of competitors for each
product line. Competitive factors across the Company's product lines include:
performance, customer support, product longevity, supplier stability, breadth of
product offerings and reliability. Many of the Company's existing and potential
competitors have financial, technological and marketing resources significantly
greater than those of the Company and may have established relationships with
customers or potential customers that afford them a competitive advantage.
There can be no assurance that the Company will be able to compete effectively
in its current or future markets or that competitive pressures will not
adversely affect its business, financial condition or results of operations.
In the Company's recently acquired CPU product line, the Company competes
with a number of other suppliers of VME CPU boards. The Company's direct
competitors include other companies that build VME CPU boards based on Intel
microprocessor technology such as Force Computers, Inc. (which has recently
agreed to be acquired by Solectron Corporation), Performance Technologies, Inc.,
RadiSys Corporation, VME Microsystems, Inc. ("VMIC") and XYCOM, Inc.
Indirectly, however, the Company also competes with suppliers of VME CPU boards
based on other microcomputer architectures such as Motorola 68OxO, Sparc and
PowerPC.
In the generalized computer I/0 product area serviced by GreenSpring and
its IP product line, the Company has two classes of competition. The first
class includes companies that compete directly by selling IP products. The
second class includes companies that compete with I/0 products using a different
implementation to provide functionally equivalent products. The Company's
competitors in each of these classes include Computer Products, Inc., Systran,
Inc. and VMIC.
In the telemetry market, the Company competes with other suppliers of open
architecture telemetry solutions. It also indirectly competes with suppliers of
traditional, closed architecture telemetry systems. The Company's competitors
include Aydin Vector Division, Lockheed Martin Telemetry and Instrumentation,
Terametrix, Inc. and Veda, Inc.
In the avionics interface market, the Company competes with a number of
other companies that produce similar avionics interface products. The Company's
competitors include Ballard Technologies, Inc., Data Devices Corporation,
Digital Technology, Inc., DY-4, Inc., Excalibur Technologies Corporation and
Gesellschaft Fur Angewandte Informatik und Mikroelekemik, GmbH.
<PAGE>
In the connectivity market, the Company competes with broad-based direct
competitors and competitors who have single or targeted products that compliment
their main systems business. The Company's competitors include VMIC, Systran,
Inc. and Performance Computers.
RELIANCE ON SPECIALIZED MARKETS
Many of the Company's products, including its telemetry and avionics
interface products, target specialized markets that support attractive profit
margins. There can be no assurance that these markets will continue to support
these margins or that these specialized markets will continue to provide the
Company with an environment to support current sales levels or acceptable growth
rates.
AVAILABILITY OF COMPONENT MATERIALS
Many of the Company's products contain state of the art digital electronic
components. The Company is dependent upon third parties for the continuing
supply of many of these components, some of which are obtained from a sole
supplier, such as Xilinx, Inc., or a limited number of suppliers, for which
alternate sources may be difficult to locate. Moreover, suppliers may
discontinue or upgrade some of the products incorporated into the Company's
products, which could require the Company to redesign a product to incorporate
newer or alternative technology. Although the Company believes that it has
arranged for an adequate supply of components to meet its short term
requirements, the Company does not have contracts which would assure
availability and price. Lack of timely availability of components could cause
delays in shipment of product and affect the Company's revenues during certain
periods as well as lead to customer dissatisfaction. Limited availability of
components could also require the Company to pay premiums for parts to make
shipment deadlines and thus adversely affect the Company's profit margin, or
cause the Company to increase its inventory of scarce parts and thus adversely
affect the Company's cash flow. There can be no assurance that the Company will
continue to be able to obtain all of the components it requires or that the
price of certain components in short supply will not materially and adversely
affect its business, financial condition or results of operations.
RETENTION AND RECRUITMENT OF KEY EMPLOYEES
The Company's ability to maintain its competitive position and to develop
and market new products depends, in part, upon its ability to retain key
employees and to recruit and retain additional qualified personnel, particularly
engineers. There can be no assurance that the Company will be able to continue
to retain or recruit those personnel. An inability by the Company to retain and
recruit key employees could have a material adverse effect on the Company's
business, financial condition and results of operations.
NO PATENT PROTECTION
Although the Company believes that some of its processes and equipment may
be proprietary, the Company has not sought patent protection for its technology.
The Company has relied upon trade secret laws, industrial know-how and employee
confidentiality agreements. There can be no assurance that the Company's
processes and equipment provide it with a sufficient competitive advantage to
overcome its lack of patent protection, or that others will not independently
develop equivalent or superior products or technology. Furthermore, there can
be no assurance that trade secret protection will be established, or that
secrecy obligations will be honored. Also, to the extent that consultants,
employees and other parties apply technological information developed
independently, by them or others, to Company projects, disputes may arise as to
the proprietary rights to that information, which may not be resolved in favor
of the Company.
In addition, litigation may be necessary to enforce the Company's
proprietary rights, to protect the Company's trade secrets, to determine the
validity and scope of the intellectual property rights of others or to defend
against claims of infringement. That litigation could result in substantial
costs and diversion of
<PAGE>
resources and could have a material adverse effect on the Company's business,
financial condition and results of operations.
Moreover, because patent applications in the United States are not publicly
disclosed until the patents issue, patent applications may have been filed that
relate to the Company's products and technology. The Company does not believe
that it infringes any patents of which it is aware; however, there can be no
assurance that patent infringement claims will not be asserted against the
Company. If these claims were asserted, these claims might have a material
adverse effect on the Company's business, financial condition or results of
operations. If infringement or invalidity claims are asserted against the
Company, litigation may be necessary to defend the Company against those claims,
and in certain circumstances the Company may choose to seek to obtain a license
under the third-party's intellectual property rights. There can be no assurance
that those licenses will be available on terms acceptable to the Company, if at
all.
PRODUCT LIABILITY
The Company's products and services potentially may be subject to product
liability or government or commercial warranty claims. The Company maintains
primary product liability insurance with a general aggregate limit of $2
million, $1 million per occurrence, and an $8 million excess policy. While the
Company has never been the subject of any such claims, considering the wide use
of the Company's products in a variety of applications, as well as the
propensity of claimants initially to pursue all possible contributors in a legal
action, there can be no assurance that that coverage will be adequate to protect
the Company from liability, or that the Company will be able to continue that
insurance in effect for premiums acceptable to the Company. In the event of a
successful lawsuit against the Company, a lack or insufficiency of insurance
coverage could have a material adverse effect upon the Company.
DEPENDENCE UPON CERTAIN OFFICERS
The success of the Company is dependent in part upon the services of
certain executive officers and other key employees. The Company maintains key
man insurance on the lives of each of its executive officers in the amount of $1
million. Executive Officers also have entered into employment agreements with
the Company for varying lengths of time. Other key employees are retained by a
combination of employment agreements and incentive stock option plans. Loss of
the services of such employees could have a material adverse effect on the
Company's business.
CONTROL BY MANAGEMENT
Upon completion of this offering, the Officers and Directors of the Company
will beneficially own approximately 16% of the Company's issued and outstanding
Common Stock. The Company's Articles of Incorporation do not permit cumulative
voting. The Officers and Directors' ownership if voted together provides
management with the power to influence significantly all matters requiring
approval by the shareholders of the Company, including the election of Directors
and approval of stock option and stock purchase plans.
POTENTIAL DILUTIVE EFFECT OF OUTSTANDING WARRANTS AND OPTIONS AND REGISTRATION
RIGHTS
The Company, in connection with its acquisition of GreenSpring in August
1995, issued warrants to purchase 400,000 shares of Common Stock at an exercise
price of $4.50 per share (the "GreenSpring Warrants"). The holders of the
GreenSpring Warrants were also granted the right to sell alongside a Company
registration. The Company is obligated to register the GreenSpring Warrants
under the Securities Act of 1933 (the "Securities Act"). In April 1996, the
Company registered under the Securities Act 150,001 GreenSpring Warrants, as
well as certain options held by the Company's Chief Executive Officer, President
and Chief Operating Officer, Mr. Amenson. The balance of the GreenSpring
Warrants is the Warrants registered in this offering. As of November 18, 1996,
295,377 of the GreenSpring Warrants remained, of which 128,711 were exercisable
and warrants to purchase 166,666 shares of Common Stock
<PAGE>
become exercisable over the next two years. The holders of the GreenSpring
Warrants also possess until August 2000 the right to sell shares of Common Stock
underlying the GreenSpring Warrants alongside the Company should the Company
file a registration statement during this period.
Additionally, in connection with the Company's acquisition in August 1996
of LDG, the Company granted to the two selling shareholders of LDG registration
rights and piggyback rights covering an aggregate of 200,000 shares of the
Company's Common Stock. These are the LDG Shares registered in this offering.
These demand, piggyback and alongside registration rights may negatively
influence the Company's ability to raise additional equity capital in the
future. To the extent that outstanding options or warrants to purchase the
Company's Common Stock are exercised, there will be additional dilution in
excess of that resulting from use of common and common equivalent shares in
earnings calculations.
As of December 31, 1996, the Company had 377,197 vested options and
579,184 options subject to vesting.
LIMITED PUBLIC FLOAT; TRADING; VOLATILITY OF STOCK PRICE
The Company's Common Stock is traded on the Nasdaq National Market. While
a public market currently exists for the Company's Common Stock, the number of
shares in the public market is approximately 84% of the 5,499,616 shares of
Common Stock that will be outstanding at the completion of this offering.
Trading volume in the four weeks ended December 31, 1996 averaged 225,260 shares
traded per day. Thus, trading of relatively small blocks of stock can have a
significant impact on the price at which the stock is traded. In addition, the
Nasdaq National Market has experienced, and is likely to experience in the
future, significant price and volume fluctuations which could adversely affect
the market price of the Common Stock without regard to the operating performance
of the Company. The Company believes factors such as quarterly fluctuations in
financial results, announcements of new technologies impacting the Company's
products, announcements by competitors or changes in securities analysts'
recommendations may cause the market price to fluctuate, perhaps substantially.
These fluctuations, as well as general economic conditions, such as recessions
or high interest rates, may adversely affect the market price of the Common
Stock. See "-Fluctuations in Operating Results; Expected Second Quarter Loss."
SHARES ELIGIBLE FOR FUTURE SALE
Future sales by existing shareholders could adversely affect the prevailing
market price of the Common Stock. Upon completion of the offering, the Company
will have 5,499,616 shares of Common Stock outstanding. Of these shares,
approximately 152,486 shares will be eligible for sale in the public market
without restriction pursuant to Rule 144(k) or Rule 701 under the Securities
Act. Approximately 1,330,200 additional shares outstanding upon completion of
the offering will be eligible for sale pursuant to Rule 144.
ABSENCE OF DIVIDENDS
Since its inception, the Company has not paid cash dividends on its Common
Stock. The Company intends to retain future earnings, if any, to provide funds
for business operations and, accordingly, does not anticipate paying any cash
dividends on its Common Stock in the foreseeable future. Pursuant to its Credit
Agreement, dated April 28, 1995, as amended, with NationsBank of Texas, N.A.
("NationsBank"), neither the Company nor any of its subsidiaries may, directly
or indirectly, make any cash or other distributions (such as dividends) on or in
respect of any person's interest as a shareholder in the
<PAGE>
Company.
SELLING SHAREHOLDERS
The following table sets forth the names of each of the Selling
Shareholders who are eligible to sell (whether or not they have a present intent
to do so) and the positions, offices and other material relationships which the
Selling Shareholder has had with the Company or its affiliates since December
31, 1993.
POSITION WITH THE COMPANY
SELLING SHAREHOLDER SINCE DECEMBER 31, 1993
James Kenneth Boyette President of Logical Design Group, Inc., a
subsidiary of the Company, since
August 1996(1)
Charles D. Pugh Vice President for Marketing
and Sales of Logical Design
Group, Inc., a subsidiary
of the Company, since
August 1996(1)
L & V Lehmann Trust None
dated January 1991
X. Kim Rubin Executive Vice President of GreenSpring
Computers, Inc., a subsidiary of the
Company, since April 1995(2)
Fred A. Trevor Employee of GreenSpring Computers, Inc.,
a subsidiary of the Company, since
April 1995(2)
Kevin Yurek Employee of GreenSpring Computers, Inc., a
subsidiary of the Company, since
April 1995(2)
Joseph Zabkar President of GreenSpring
Computers, Inc., a subsidiary of the
Company, since April 1995(2)
1 The Company acquired Logical Design Group, Inc. in August 1996. The
Selling Shareholder was employed by Logical Design Group, Inc. before that
acquisition.
2 The Company acquired GreenSpring Computers, Inc. in April 1995. The
Selling Shareholder was employed by GreenSpring Computers, Inc. before that
date.
<PAGE>
The following table sets forth the name of each Selling Shareholder as of
December 31, 1996, the number of shares of Common Stock owned by each Selling
Shareholder as of December 31, 1996, the number of Warrant Shares issuable upon
exercise of the vested Warrants issued in connection with the Company's
acquisition of GreenSpring Computers, Inc. in April 1995 and the number of
Logical Shares issued in connection with the Company's acquisition of Logical
Design Group, Inc. in August 1996, the number of Shares eligible to be sold by
each Selling Shareholder pursuant to this Prospectus and the percentage of
outstanding Common Stock to be owned by each Selling Shareholder after the
offering. The "*" indicates less than one percent of outstanding Common Stock
after this offering.
<TABLE>
<CAPTION>
NAME OF OWNER NUMBER OF NUMBER OF NUMBER OF PERCENT OF
SHARES SHARES OFFERED SHARES TOTAL SHARES
OWNED OWNED AFTER OUT-STANDING
(1,2) OFFERING AFTER
(2) OFFERING
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
James Kenneth Boyette 127,047 127,047 -0- -0-
Charles D. Pugh 72,976 72,953 23 -0-
L & V Lehmann Trust dated
January 1991 174,366 174,366 -0- -0-
X. Kim Rubin 128,171(3) 56,670 71,501(3) 1.3%
Fred A. Trevor 6,335 3,168 3,167 *
Kevin Yurek 347 174 173 *
Joseph Zabkar 28,993(4) 15,621 13,372(4) *
</TABLE>
(1) A person is deemed to be the beneficial owner of securities that can be
acquired by such person within 60 days from the date of this Prospectus
upon exercise of options or warrants. Each beneficial owner's percentage
ownership is determined by assuming that options or warrants that are
held by such person and that are exercisable within 60 days from the
date of this Prospectus have been exercised.
(2) Includes Common Stock owned through the SBS Technologies, Inc. 401(k)
Profit Sharing Plan.
(3) Includes options to purchase 37,500 shares of Common Stock currently
exercisable under the Company's stock option plans.
(4) Includes options to purchase 4,000 shares of Common Stock currently
exercisable under the Company's stock option plans.
<PAGE>
PLAN OF DISTRIBUTION
The Selling Shareholders, or their pledgees, donees, transferees or other
successors in interest, may sell Shares in any of the following ways: (i)
through dealers, (ii) through agents, (iii) or directly to one or more
purchasers. The distribution of the Shares may be effected from time to time in
one or more transactions (which may involve crosses or block transactions) (a)
on the Nasdaq National Market System (or on such national stock exchanges upon
which shares of Common Stock may be traded from time to time) in transactions
pursuant to and in accordance with the rules of that System, (b) in the
over-the-counter market, or (c) in transactions other than on that System or in
the over-the-counter market, or a combination of those transactions. Any such
transaction may be effected at market prices prevailing at the time of sale, at
prices related to those prevailing market prices, at negotiated prices or at
fixed prices. The Selling Shareholders, or their pledgees, donees, transferees
or other successors in interest, may effect these transactions by selling Shares
to or through broker-dealers, and those broker-dealers may receive compensation
in the form of discounts, commissions, or commissions from the Selling
Shareholders, or their pledgees, donees, transferees or other successors in
interest, and/or commissions from purchasers of Shares for whom they may act as
agent. The Selling Shareholders, or their pledgees, donees, transferees or
other successors in interest, and any broker-dealers or agents that participate
in the distribution of Shares by them might be deemed to be underwriters, and
any discounts, commissions, or concessions received by any such broker-dealers
or agents might be deemed to be underwriting discounts and commissions, under
the Securities Act of 1933 ("Securities Act"). Affiliates of one or more
Selling Shareholders, or their pledgees, donees, transferees or other successors
in interest, may act as principal or agent in connection with the offer or sale
of Shares by the Selling Shareholders, or their pledgees, donees, transferees or
other successors in interest. In addition, any shares which qualify for sale
pursuant to Rule 144 under the Securities Act may be sold under Rule 144 rather
than pursuant to this Prospectus. The Company will not receive any of the
proceeds from the sale of the Shares, although it will pay the expenses in
preparing the Registration Statement and registering the Shares. The Company
does receive proceeds from the issuance of Shares to the Selling Shareholders,
or their pledgees, donees, transferees or other successors in interest, upon
their exercise of the Warrants. The Selling Shareholders have been advised that
they, and their pledgees, donees, transferees or other successors in interest,
are subject to the applicable provisions of the Securities Exchange Act of 1934,
including without limitation Rules 10b-5, 10b-6, and 10b-7 thereunder.
<PAGE>
DESCRIPTION OF COMMON STOCK
The description of the Company's Common Stock to be offered pursuant to
this Prospectus has been incorporated by reference into this Registration
Statement. See "Documents Incorporated by Reference".
LEGAL MATTERS
Legal matters with respect to the Common Stock being offered by this
Prospectus will be passed upon for the Company by Schuler, Messersmith &
McNeill, Albuquerque, New Mexico.
EXPERTS
The financial statements of SBS Technologies, Inc. as of June 30, 1995 and
1996, and for each of the years in the three-year period ended June 30, 1996,
are incorporated by reference herein and in the registration statement in
reliance upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the authority
of said firm as experts in accounting and auditing.
RECENT EVENTS
On November 22, 1996, the Company completed its acquisition of Bit 3 and
its public offering of 1,800,000 shares of Common Stock, 300,000 of which were
offered on behalf of selling shareholders. Proceeds of the public offering paid
to the Company were used to acquire Bit 3 and pay off long-term debt. The
remaining proceeds will be used for general working capital purposes. In
connection with the acquisition, the Company recorded approximately $9.8 million
in intangible assets, including goodwill, which will be amortized on a straight
line basis over the estimated benefit period of ten years. The Company also
recorded an $11 million earnings charge in its second fiscal quarter of 1997
based on an assessment that that amount of Bit 3's purchase price represented
technology that does not meet the accounting definitions of "completed
technology," and thus should be charged to earnings under generally accepted
accounting principles. See the discussion on the acquisition of Bit 3 and the
public offering under "The Company" above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which are on file with the Securities and Exchange
Commission (File No. 1-10981), are incorporated in this Prospectus by reference
and made a part hereof:
(1) The Company's Annual Report on Form 10-K for the year ended June 30,
1996, filed pursuant to Section 13 of the Securities Exchange Act of 1934
("Exchange Act").
(2) The Company's Form 10-K/A, amending its Form 10-K for the fiscal year
ended June 30, 1996.
(3) The Company's Form 10-Q for the quarter ended September 30, 1996.
(4) The description of the Company's Common Stock contained in the
Company's Registration Statement on Form 8-A filed November 2, 1995 under
Section 12 of the Exchange Act, including any further amendment or report filed
for the purpose of updating that description.
All documents filed pursuant to Sections 13(a), 13(c), 14 and 15(d) of the
Exchange Act subsequent to the date of this Prospectus and before the
termination of the offering made hereby shall be deemed to be incorporated by
reference into this Prospectus and to be a part hereof from the respective dates
of filing of those documents. Any statement contained in a document
incorporated or deemed to be
<PAGE>
incorporated by reference herein shall be deemed to be modified or superseded
for all purposes to the extent that a statement contained in this Prospectus or
any other subsequently filed document that is also incorporated by reference
herein modifies or supersedes that statement. Any such statements so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
The documents incorporated herein by reference (other than exhibits not
specifically incorporated by reference) are available without charge upon the
written or oral request of a person, including a beneficial owner, to whom a
Prospectus is delivered. The written or oral request should be directed to
Christopher J. Amenson, President, 2400 Louisiana Boulevard, NE, AFC
Building 5, Suite 600, Albuquerque, New Mexico 87110.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following are the actual or estimated expenses incurred or to be
incurred by the Registrant in connection with this offering. These expenses do
not include underwriting commissions, if any, which will be paid by the Selling
Shareholders.
ITEM AMOUNT OF MONEY
---- ---------------
Registration Fee $ 4,636.35
Blue Sky Fees & Expenses $ 1,000.00*
Legal Fees $ 8,000.00*
Accountants Fees $ 3,000.00*
Stock Transfer Fees $ 100.00*
Miscellaneous $ 500.00*
Total $17,236.35*
* Estimated Expenses
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Amended Articles of Incorporation provide that the directors
of the Company will not be personally liable to the Company or its shareholders
for monetary damages for any breach of a director's fiduciary duty as a
director, except for liability for breach or for failure to perform the duties
of the office of director in compliance with the New Mexico Business Corporation
Act, as amended, if that breach or failure constitutes wilful misconduct or
recklessness (or, in the case of an ownership interest in the Company, if the
breach or failure constitutes negligence, willful misconduct or recklessness).
The Bylaws of the Company provide for indemnification, in accordance with
the New Mexico Business Corporation Act, as amended, ("Corporation Act") of
directors and officers of the Company for certain expenses (including attorney's
fees), judgments, fines and settlement amounts incurred by that person in any
action or proceeding, on account of services as a director or officer of the
Company, as a director or officer of any subsidiary of the Company, or as a
director or officer of any other company or enterprise for which the person
provides services at the request of the Company. The Company believes that
these provisions and agreements are necessary to attract and retain qualified
persons as directors and officers. The Corporation Act currently provides that
if the proceeding was by or in the right of the corporation, indemnification may
be made only against reasonable expenses and may not be made for proceedings in
which the person is adjudged to be liable to the corporation. No
indemnification is permitted for any proceeding charging improper personal
benefit to the person, whether or not involving action in the person's official
capacity, if the person is adjudged to be liable on the basis that personal
benefit was improperly received by the person.
ITEM 16. EXHIBITS
The following Exhibits are filed with this Registration Statement:
----------------------------------------------------------------------
----------------------------------------------------------------------
Exhibit No. Description of Exhibit
-----------
----------------------------------------------------------------------
<PAGE>
----------------------------------------------------------------------
4.1 ARTICLE VI OF THE ARTICLES OF INCORPORATION,
AS AMENDED, AS INCLUDED IN THE ARTICLES OF
INCORPORATION OF SBS TECHNOLOGIES, INC. FILED
AS EXHIBIT 3.1 OF THE REGISTRANT'S FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 1995. *
----------------------------------------------------------------------
4.2 ARTICLES I, II OF THE BYLAWS OF SBS
ENGINEERING, INC., AS AMENDED, AS INCLUDED IN
THE BYLAWS FILED AS EXHIBIT 3.2 OF THE
REGISTRANT'S FORM 10-Q FOR THE QUARTER ENDED
DECEMBER 31, 1995.*
----------------------------------------------------------------------
4.3 FORM OF CERTIFICATE EVIDENCING COMMON STOCK,
FILED AS EXHIBIT 4.3 OF THE REGISTRANT'S
REGISTRATION STATEMENT ON FORM S-3 (NO.
333-58), EFFECTIVE APRIL 16, 1996.*
----------------------------------------------------------------------
5 OPINION OF SCHULER, MESSERSMITH & MCNEILL.
----------------------------------------------------------------------
23.1 CONSENT OF SCHULER, MESSERSMITH & MCNEILL
(INCLUDED IN EXHIBIT #5).
----------------------------------------------------------------------
23.2 CONSENT OF KPMG PEAT MARWICK LLP.
----------------------------------------------------------------------
24 POWER OF ATTORNEY (INCLUDED IN SIGNATURE PAGE
FORMING A PART HEREOF).
----------------------------------------------------------------------
----------------------------------------------------------------------
* INCORPORATED BY REFERENCE
<PAGE>
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933.
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof), which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement.
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 that are incorporated by reference in the registration
statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities being 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.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference.
The undersigned registrant hereby undertakes that, for the 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's 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.
(c) Incorporated Annual and Quarterly Reports
The undersigned registrant hereby undertakes to deliver or cause to be
delivered with the prospectus, to each person to whom the prospectus is sent or
given, the latest annual report to security holders that is incorporated by
reference in the prospectus and furnished pursuant to and meeting the
requirements of Rule 14a-3 or Rule 14c-3 under the Securities Exchange Act of
1934; and, where interim financial information required to be presented by
Article 3 of Regulation S-X is not set forth in the prospectus, to deliver, or
cause to be delivered to each person to whom the prospectus is sent or given,
the latest quarterly report that is specifically incorporated by reference in
the prospectus to provide such interim financial information.
(d) Undertaking Concerning Claim for Indemnification Against Certain
Liabilities
<PAGE>
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.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Albuquerque, State of New Mexico, on January 21,
1997.
SBS TECHNOLOGIES, INC.
By: /s/ CHRISTOPHER J. AMENSON
-------------------------------------
Christopher J. Amenson
President and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Andrew C. Cruce and Christopher J. Amenson, and
each of them, with full power to act as his true and lawful attorney-in-fact,
with full power of substitution and resubstitution for him in his name, place
and stead, in any and all capacities to sign any and all amendments (including
post-effective amendments) to this registration statement, or a related
registration statement filed pursuant to Rule 462(b), and to 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, and each of them, full power and authority to do and perform each and
every act and thing requisite or 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 any of
them, or their or his substitute or substitutes, may lawfully do or 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 indicated
on the dates indicated.
<TABLE>
<CAPTION>
Signature Capacity Date
- --------- -------- ----
<S> <C> <C>
/s/ DR. ANDREW C. CRUCE Chairman of the Board, January 20, 1997
- -------------------------- Treasurer and Director
Dr. Andrew C. Cruce
/s/ CHRISTOPHER J. AMENSON President, Chief Executive Officer, January 20, 1997
- -------------------------- Chief Operating Officer, Director
Christopher J. Amenson (Principal Executive Officer)
/s/ SCOTT A. ALEXANDER Vice President, Secretary, Director January 20, 1997
- --------------------------
Scott A. Alexander
/s/ JAMES E. DIXON, JR. Vice President Finance and
- -------------------------- Administration, Treasurer and Chief January 20, 1997
James E. Dixon, Jr. Financial Officer (Principal Financial
and Accounting Officer)
/s/ WARREN ANDREWS Director January 20, 1997
- --------------------------
Warren Andrews
/s/ WILLIAM J. BECKER Director January 20, 1997
- --------------------------
William J. Becker
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
/s/ LAWRENCE A. BENNIGSON Director January 20, 1997
- --------------------------
Lawrence A. Bennigson
</TABLE>
<PAGE>
EXHIBIT INDEX
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Exhibit No. Description of Exhibit Page No.
- -----------
- --------------------------------------------------------------------------------
4.1 ARTICLE VI OF THE ARTICLES OF INCORPORATION,
AS AMENDED, AS INCLUDED IN THE ARTICLES OF
INCORPORATION OF SBS TECHNOLOGIES, INC. FILED
AS EXHIBIT 3.1 OF THE REGISTRANT'S FORM 10-Q
FOR THE QUARTER ENDED DECEMBER 31, 1995.*
- --------------------------------------------------------------------------------
4.2 ARTICLES I, II OF THE BYLAWS OF SBS
ENGINEERING, INC., AS AMENDED, AS INCLUDED
IN THE BYLAWS FILED AS EXHIBIT 3.2 OF THE
REGISTRANT'S FORM 10-Q FOR THE QUARTER ENDED
DECEMBER 31, 1995.*
- --------------------------------------------------------------------------------
4.3 FORM OF CERTIFICATE EVIDENCING COMMON STOCK,
FILED AS EXHIBIT 4.3 OF THE REGISTRANT'S
REGISTRATION STATEMENT ON FORM S-3
(NO. 333-58), EFFECTIVE APRIL 16, 1996.*
- --------------------------------------------------------------------------------
5 OPINION OF SCHULER, MESSERSMITH & MCNEILL
- --------------------------------------------------------------------------------
23.1 CONSENT OF SCHULER, MESSERSMITH & MCNEILL
(INCLUDED IN EXHIBIT #5)
- --------------------------------------------------------------------------------
23.2 CONSENT OF KPMG PEAT MARWICK LLP
- --------------------------------------------------------------------------------
24 POWER OF ATTORNEY (INCLUDED IN SIGNATURE PAGE
FORMING A PART HEREOF).
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
* Incorporated by reference
<PAGE>
[SCHULER, MESSERSMITH & MCNEILL LETTERHEAD]
January 21, 1997
SBS Technologies, Inc.
2400 Louisiana Blvd. NE
AFC Building 5, Suite 600
Albuquerque, NM 87110
Ladies and Gentlemen:
We have participated in the preparation of the Registration Statement on
Form S-3 (the "Registration Statement") filed January 21, 1997, with the
Securities and Exchange Commission by SBS Technologies, Inc. ("Company") for
the purpose of registering under the Securities Act of 1933, 449,999 shares
("Shares") of the Company's no par value common stock ("Common Stock"). Of
the Shares, 249,999 shares ("Warrant Shares") may be acquired upon the
exercise of vested warrants ("Warrants") for Common Stock received in
connection with the acquisition by the Company of GreenSpring Computers, Inc.
on April 28, 1995, and 200,000 shares ("LDG Shares") were issued to the two
shareholders of Logical Design Group, Inc. ("LDG") in connection with the
Company's acquisition of LDG in August 1996.
For purposes of this opinion, we have examined such records,
certificates and documents, and such questions of law, as we have deemed
necessary as a basis for the opinions hereafter expressed. In all such
examinations, we have assumed the genuineness of all signatures on original
or certified copies and the conformity to original or certified copies of all
copies submitted to us as conformed or reproduction copies. As to various
questions of fact relevant to those opinions, we have relied upon statements
and written information of representatives of the Company and of others.
Based upon the foregoing and subject to the limitations set forth
herein, it is our opinion that:
1. The Warrant Shares to be offered have been duly reserved for
issuance, have been duly authorized and, when issued, delivered and paid for
in accordance with the terms of the Warrants, will be duly and validly
issued, fully paid and non-assessable.
2. The LDG Shares to be offered have been duly authorized and validly
issued and are fully paid and non-assessable.
We consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the Prospectus forming part of the Registration Statement.
In giving that consent, we do not admit that we are in the category of those
persons whose consent is required under Section 7 of the Securities Act of
1933.
The opinions expressed in this letter are solely for your benefit and
may not be relied upon by any other person or used in any manner or for any
purpose except as specifically provided for in this opinion.
Very truly yours,
/s/ SCHULER, MESSERSMITH & McNEILL
Schuler, Messersmith & McNeill
<PAGE>
The Board of Directors
SBS Technologies, Inc.:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the prospectus.
KPMG PEAT MARWICK LLP
Albuquerque, New Mexico
January 17, 1997
