As filed with the Securities and Exchange Commission on May 16, 1996
Registration No. 333-2080
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------------------------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
-----------------------------------------------------------------
DESTRON FEARING CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 84-1079037
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
490 VILLAUME AVENUE
SOUTH ST. PAUL, MINNESOTA 55075
TELEPHONE: (612) 455-1621
(Address, including zip code, and telephone number,
including area code, of registrant's
principal executive offices)
RANDOLPH K. GEISSLER
490 VILLAUME AVENUE
SOUTH ST. PAUL, MINNESOTA 55075
TELEPHONE: (612) 455-1621
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
Copies of communications to:
MICHELE D. VAILLANCOURT, ESQ.
TREVOR V. GUNDERSON, ESQ.
WINTHROP & WEINSTINE, P.A.
3000 DAIN BOSWORTH PLAZA
60 SOUTH SIXTH STREET
MINNEAPOLIS, MINNESOTA 55402
TELEPHONE: (612) 347-0700
--------------------------
Approximate date of commencement of proposed sale to the public:
FROM TIME TO TIME, AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being offered on this Form are to be offered pursuant to
dividend or interest reinvestment plans, check the following box. |_|
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
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. |_|
---------------------------
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
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.
SUBJECT TO COMPLETION, PRELIMINARY PROSPECTUS DATED MAY 16, 1996
PROSPECTUS
625,000 SHARES
DESTRON FEARING CORPORATION
COMMON STOCK
This Prospectus relates to the sale of up to 625,000 shares (the
"Shares") of Common Stock of Destron Fearing Corporation (the "Company") by
certain selling stockholders (the "Selling Stockholders"). See "Selling
Stockholders." The Company will not receive any of the proceeds from the sale of
Shares by the Selling Stockholders.
The Company's Common Stock is currently traded on the Nasdaq SmallCap
Market under the symbol "DFCO." On May 15, 1996, the last bid price for the
Company's Common Stock reported thereon was $3.38 per share. See "Price Range
of Common Stock."
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR
HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
================================================================================
PRICE TO PROCEEDS TO SELLING
PUBLIC (1) STOCKHOLDERS (1) (2)
- --------------------------------------------------------------------------------
Per Share............................ $ $
- --------------------------------------------------------------------------------
Total................................ $ $
================================================================================
(1) Based on the average of the bid and asked prices for the Common Stock
as reported on the Nasdaq SmallCap Market on __________, 1996. The
actual Price to Public will be based on market prices on the respective
dates of sale, which may be more or less than the Price to Public set
forth above.
(2) The Shares are being offered for the accounts of the Selling
Stockholders. The Company will pay the expenses of this offering except
for the fees of any counsel to the Selling Stockholders. The aggregate
Proceeds to Selling Stockholders will be the total Price to Public,
less aggregate agent's commissions and underwriters' discounts, if any,
and other expenses to the Selling Stockholders of the issuance and
distribution.
----------------------
The Selling Stockholders may sell the Shares from time to time
directly, through agents designated from time to time, or through dealers or
underwriters also to be designated, on terms to be determined at the time of
sale. To the extent required, the specific Shares to be sold, the names of the
Selling Stockholders, the purchase price, the public offering price, the names
of any such agents, dealers or underwriters, and the amount of any applicable
commissions or discount with respect to a particular offer will be set forth in
an accompanying Prospectus supplement. Such Prospectus supplement will also set
forth information regarding indemnification by the Company of the Selling
Stockholders and any underwriter, dealer or agent against certain liabilities,
including liabilities under the Securities Act of 1933 ("Securities Act"). See
"Plan of Distribution."
The Selling Stockholders and any broker-dealers, agents or underwriters
that participate with the Selling Stockholders in the distribution of the Shares
may be deemed to be "underwriters" within the meaning of the Securities Act, and
any commissions received by them and any profit on the resale of the Shares
purchased by them may be deemed to be underwriting commissions or discounts
under the Securities Act. See "Plan of Distribution."
The date of this Prospectus is ____________, 1996.
AVAILABLE INFORMATION
The Company is subject to the information requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the Commission's regional offices located at Northwestern Atrium Center,
Suite 1400, 500 West Madison Street, Chicago, Illinois 60661 and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material may also
be obtained by mail from the Public Reference Section of the Commission at 450
Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates.
This Prospectus is part of a Registration Statement on Form S-3 (the
"Registration Statement") which the Company has filed with the Commission under
the Securities Act of 1933, as amended (the "Securities Act"), relating to the
securities offered hereby. This Prospectus omits certain information contained
in the Registration Statement, to which reference is hereby made for further
information with respect to the Company and the Shares offered hereby. Copies of
the Registration Statement may be inspected without charge at the offices of the
Commission or obtained at prescribed rates from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, which have been filed by the Company with the
Commission, are incorporated by reference in this Prospectus: (i) the Company's
Annual Report on Form 10-KSB for the fiscal year ended September 30, 1995; (ii)
the Company's Proxy Statement dated January 24, 1996 for its annual meeting of
stockholders held on February 29, 1996; (iii) the Company's reports on Form
10-QSB for the quarters ended December 31, 1995 and March 31, 1996; and (iv) the
description of the Company's Common Stock contained in the Company's
Prospectus/Proxy Statement dated October 12, 1993 filed by the Company with the
Commission (File No. 0-19688). All documents filed by the Company with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Prospectus and prior to the termination of the offering
of the Shares offered hereby shall be deemed to be incorporated by reference
into this Prospectus and to be a part hereof from the date of filing such
documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as modified or
superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including a
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any or all documents that have been or may be
incorporated by reference herein (other than exhibits to such documents which
are not specifically incorporated by reference into such documents). Such
requests should be directed to the Chief Financial Officer at the Company's
principal executive offices at 490 Villaume Avenue, South St. Paul, Minnesota
55075, telephone number (612) 455-1621.
Page 2
PROSPECTUS SUMMARY
The following information is qualified in its entirety by the more
detailed information and financial statements of Destron Fearing Corporation,
including the notes thereto, incorporated by reference in this Prospectus.
THE COMPANY
Destron Fearing Corporation ("Destron" or the "Company") develops,
manufactures, and markets a broad line of electronic and visual identification
devices for the companion animal, livestock, laboratory animal, fish and
wildlife markets worldwide. The Company's products include visual ear tags,
injectable transponders, injecting systems and readers.
The Company's principal offices are located at 490 Villaume Avenue,
South St. Paul, Minnesota 55075, and its telephone number is (612) 455-1621.
THE OFFERING
Common Stock Offered
by the Selling Stockholders...................... 625,000 shares
Common Stock Outstanding........................... 11,640,232 shares
Nasdaq SmallCap Symbol............................. "DFCO"
Page 3
RISK FACTORS
PROSPECTIVE INVESTORS SHOULD BE AWARE OF THE FOLLOWING RISK FACTORS AND
SHOULD REVIEW CAREFULLY THE INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS.
RECENT LOSS; POTENTIAL CASH SHORTAGE
Although the Company had net income of $491,000 and $661,000 during the
fiscal years ended September 30, 1994 and 1995, respectively, it reported a net
loss of $962,000 during the six months ended March 31, 1996, and there can be no
assurance that the Company will not experience losses in the future. The
Company's principal sources of working capital during the fiscal year ended
September 30, 1995 were net income of $661,000, proceeds from the issuance of
common stock on the exercise of stock options and warrants, and its bank line of
credit. For the six month period ended March 31, 1996, the Company's principal
sources of working capital came from the issuance of 625,000 shares of common
stock in a private placement of $2.0 million, new borrowings of $875,000 from
private investors and additional borrowings on the Company's bank line of credit
of $1,753,000. These funds were used to repay long-term obligations of
$1,245,000 and to provide additional working capital for operations. Although
the Company has been able to finance its operations from among these sources
during fiscal 1994, 1995 and the six month period ended March 31, 1996, there
can be no assurance it will continue to have sufficient cash to meet ongoing
cash needs for operations and debt service. If the Company is unable to obtain
additional financing when needed, it would be required to significantly scale
back plans for growth and perhaps reduce the scope of its operations.
DEPENDENCE ON PRINCIPAL CUSTOMERS
For the fiscal year ended September 30, 1995, Schering-Plough accounted
for 41% of Destron's net sales. For the fiscal year ended September 30, 1994,
sales to Pacific States Marine and Rhone Merieux (a subsidiary of Rhone Polenc,
a French drug and chemical company) each represented 13% of net sales. The loss
of, or a significant reduction in orders from, the Company's major customers
could have a material adverse effect on the financial condition and results of
operations of the Company.
RECENT LOSS OF SALES; INVENTORY BUILD-UP; LATE PAYMENT OF PURCHASES
In October, 1995, Destron's United States distributor, Schering-Plough,
notified the Company that it would suspend purchases for an indefinite period to
allow it to sell its existing inventory of the Company's product. In response to
this notification, the Company curtailed purchases of materials required to
manufacture the product, but, because of long lead times and outstanding
commitments with suppliers, the Company still received significant quantities of
product to meet Schering-Plough's previous forecasts. This resulted in an
inventory accumulation that now exceeds the level which management believes will
be sold in the near term. Management believes that these inventories ultimately
will be purchased by Schering-Plough or disposed of by the Company through
alternate means. Disposal of such inventories through alternate means could
result in losses to the Company. Such losses, if significant, would have a
material adverse impact on the Company's results of operations. While there can
be no assurance as to the amount or timing of any payments from Schering-Plough,
the Company has the right to recover the costs of the transponders and other
components and packaging from Schering-Plough under the terms of the agreement.
The loss of the Schering-Plough revenue since October 1995 combined with
an inventory build-up has reduced the Company's working capital and caused the
Company to defer payments of amounts due to a supplier. While the Company has
reached a tentative agreement on payment terms with this supplier, there can be
no assurance that the Company can comply with these terms or that the supplier
will continue its forbearance of the delinquent status of the Company's account.
If the Company is unable to comply with the new agreement or to obtain the
supplier's continued cooperation, action on the part of the supplier to enforce
the contract would have a material adverse affect on the Company.
Page 4
RECOVERY OF ELECTRONIC READER INVESTMENT
As a condition of its distributorship agreement with Schering-Plough, the
Company provided electronic readers to Schering-Plough under terms that require
payments to be made to the Company as the animal identification product is sold
by veterinarians to consumers. As of March 31, 1996, the Company had provided
readers with a total cost of $1,034,000 to Schering-Plough. Through March 31,
1996, the Company had received only nominal payments related to such readers.
While management believes that this amount ultimately will be realized, it is
possible that consumer purchases of the companion animal identification product
will be insufficient to ensure complete repayment of this amount.
POSSIBLE NEGATIVE OUTCOME OF LITIGATION
In November 1993, the Company initiated a lawsuit against three
competitors in the U.S. District Court of Colorado alleging infringement of its
patent issued regarding certain technology used in a transmitter for
transmitting an identification signal for an animal (U.S. Patent No. 5,211,129).
At a hearing held on November 12, 1993, the Court determined it did not have
jurisdiction in Colorado over two of the defendant competitors and dismissed the
Company's Colorado lawsuit against them without prejudice. The Court allowed the
case against the third defendant competitor to proceed but did not grant the
temporary injunction requested by the Company. On December 1, 1993, the two
dismissed defendant competitors commenced an action against the Company in the
U.S. District Court of Southern Illinois (which subsequently was transferred to
the U.S. District Court of Colorado) requesting actual damages of $20,000,000.
In this lawsuit, the plaintiffs sought to invalidate the above-described patent
of the Company and alleged unfair competition, violation of U.S. antitrust laws
by the Company, interference with business relationships and abuse of process
due to the actions the Company allegedly took in obtaining, announcing and
enforcing its patent rights against the plaintiffs.
The trial in the litigation commenced on January 8, 1996. On January 29,
1996, the jury in the trial returned a verdict in favor of the Company and found
that the defendants had willfully infringed on the Company's patent and awarded
damages of approximately $444,000. However, the defendants have announced that
they will appeal the verdict, although as of the date of this Prospectus, no
appeal had been filed to the Company's knowledge. The defendants have until
thirty (30) days after the District Court's final judgment (which was rendered
on April 25, 1996) to file an appeal. While management and its legal counsel
continue to believe that the ultimate outcome of this litigation will not have a
significant adverse impact on the Company's future financial position, cash
flows or results of operations, there can be no assurance of the ultimate
outcome of the litigation.
Destron is aware of litigation threatened against one of its distributors
by the third-party defendant in one of the Colorado lawsuits. Such threatened
litigation involves potential antitrust and patent claims. To the Company's
knowledge, no specific amount of damages has been identified in this threatened
litigation. Destron's management believes that the third party defendant's
claims have no merit. However, Destron is obligated to defend, indemnify and
hold the distributor harmless from and against all liabilities, claims, demands,
expenses or damages (including attorneys' fees) relating to or arising out of,
directly or indirectly, this Colorado lawsuit if the distributor is made a party
to any subsequently commenced litigation involving the same or related claims.
If the claimant is successful in any lawsuit filed against Destron's
distributor, and if Destron is obligated to indemnify such distributor in
connection with any such lawsuit, the fulfillment of such obligation could have
a material adverse effect on the financial condition and results of operations
of the Company.
RELIANCE ON EXPORT SALES
Export sales by the Company to locations outside of the United States
constituted approximately $2,018,000, $1,786,000, and $2,275,000 for the six
months ended March 31, 1996, the year ended September 30, 1995, and the year
ended September 30, 1994, respectively. The Company generally sells its products
at prices quoted in U.S. dollars to limit the risks associated with currency
exchange rate fluctuations. However, fluctuations in foreign exchange rates may
adversely affect the Company's ability
Page 5
to compete against local product offerings and adversely affect the Company's
results of operations. In addition, export sales expose the Company to the risks
inherent in international sales, including unpredictable and inconsistent
regulatory requirements, political and economic changes and disruptions, tariffs
or other restrictions on unencumbered trade, transportation or shipping delays,
and difficulties in staffing and managing foreign operations.
NEGATIVE FACTORS AFFECTING ANIMAL IDENTIFICATION MARKET
Although the animal identification market is believed to have great growth
potential, this business has yet to achieve strong results due to numerous
factors, including food safety concerns, international technology standards,
national infrastructures, Food and Drug Administration ("FDA") reviews, Federal
Communications Commission ("FCC") approvals, the requirement for approval of
insecticides by the Environmental Protection Agency ("EPA"), and slaughterhouse
removal of transponders. In addition, with respect to sales of electronic
identification devices for fish, many of the principal customers are government
contractors that rely on funding from the United States government, and thus the
market could be adversely affected by any decline in the availability of
government funds. The Company has submitted toxicology data to the FDA for its
consideration in approval of transponders for injection into livestock, which
approval would be required before Destron could sell transponders for use in the
United States. Thus, the Company's transponders which are currently sold for use
with livestock are sold outside of the United States. There is no assurance that
these impediments to market growth will be removed in the near future.
COMPETITION
Competitors are beginning to enter the miniature injectable transponder
market. Such competitors may have significantly greater financial, technical,
marketing or other resources than the Company which may allow them to develop
and market competitive products. Although management believes the Company is
able to compete effectively based on the quality and performance of its
products, there can be no assurance that the Company will continue to compete
successfully with its current or future competitors.
DEPENDENCE ON PROPRIETARY PROTECTION
Destron's success will depend, in part, on its ability to maintain patent
and trade secret protection, obtain future patents and licenses, and operate
without infringing on the proprietary rights of third parties. There can be no
assurance that any patent application, when filed, will result in an issued
patent, or that Destron's existing patents, or any patents that may be issued in
the future, will provide Destron with significant protection against
competitors. Moreover, there can be no assurance that any patents issued to or
licensed by Destron will not be infringed upon or designed around by others. In
such event, the Company may not have sufficient resources to defend its patent
or to compete with new products or designs. Destron also relies to a lesser
extent on unpatented proprietary technology, and no assurance can be given that
others will not independently develop substantially equivalent proprietary
information, techniques or processes or that Destron can meaningfully protect
its rights to such unpatented proprietary technology.
RESTRICTIONS IMPOSED BY GOVERNMENT REGULATION
Destron is subject to federal, state and local regulation and Destron
cannot predict the extent to which it may be affected by legislative and other
regulatory developments concerning its products and the health care field
generally. Destron is required to obtain regulatory approval before marketing
most of its products. The Company's readers must and do comply with the FCC Part
15 Regulations for Electromagnetic Emissions, and its insecticide products have
been approved by the EPA and are produced under EPA regulations. Destron's
products also are subject to compliance with foreign government agency
requirements. The Company's contracts with its distributors generally require
the distributor to obtain all necessary regulatory approvals from the
governments of the countries into which they sell the
Page 6
Company's products. However, any such approval may be subject to significant
delays. Some regulators also have the authority to revoke approval of previously
approved products for cause, to request recalls of products and to close
manufacturing plants in response to violations. Any such actions could
materially adversely affect Destron's business.
DEPENDENCE ON RETENTION AND ATTRACTION OF KEY EMPLOYEES
The Company's operations are materially dependent upon the services of
Randolph K. Geissler, Chief Executive Officer and President. The loss of the
services of Mr. Geissler could have a material adverse effect on the Company's
operating results. Destron is also dependent on the principal members of its
management, marketing and technical staff, the loss of whose services might
impede the achievement of Destron's business objectives. Furthermore, recruiting
and retaining additional qualified management, marketing and technical personnel
will also be important to Destron's success. There can be no assurance that
Destron will be able to retain skilled and experienced management, marketing and
technical personnel on acceptable terms, given the competition for such
experienced individuals. Except for Mr. Geissler, the Company has no key person
insurance covering its officers or other employees, and has no non-compete
agreements with any other of its employees. The Company has required all new key
employees (including all members of management) to enter into a confidentiality
agreement which prohibits the disclosure of confidential information proprietary
to Destron or to a third party for whom Destron is performing work during the
term of each such employee's employment with Destron and for five years
thereafter.
ABSENCE OF DIVIDENDS
Destron has not paid any cash dividends since inception and does not
anticipate paying cash dividends in the foreseeable future. In addition,
Destron's current agreement with its principal bank lender prohibits the payment
by the Company of dividends. See "Dividend Policy."
POTENTIAL VOLATILITY OF STOCK PRICE
The market price of Destron's Common Stock may be highly volatile. Factors
such as fluctuations in Destron's operating results, announcements of
technological innovations or new commercial products by Destron or its
competitors, government regulations, developments in or disputes regarding
patent or other proprietary rights, economic and other external factors and
general market conditions may have a significant effect on the market price of
Destron's Common Stock. See "Price Range of Common Stock."
RISKS OF LOW-PRICED STOCK
If the shares of Destron's Common Stock were to be suspended or delisted
from the Nasdaq system, the Common Stock would be subject to rules under the
Exchange Act which impose additional sales practice requirements on
broker-dealers who sell such securities to persons other than established
customers and "accredited investors" (for example, individuals with a net worth
in excess of $1,000,000 or an annual income exceeding $200,000, or $300,000
together with their spouses). For transactions covered by such rules, a
broker-dealer must make a special suitability determination of the purchase and
must have received the purchaser's written consent to the transaction prior to
the sale. Consequently, such rules, if applicable, could affect the ability of
broker-dealers to sell shares of Destron Common Stock.
The Securities and Exchange Commission (the "Commission") has enacted
rules that define a "penny stock" to be any equity security that has a price (as
therein defined) of less than $5.00 per share, subject to certain exceptions,
including securities listed on an exchange and, generally, the Nasdaq system.
Even if the price of Destron's Common Stock was less than $5.00 per share for
purposes of the penny stock rules, it would be exempt from the "penny stock"
rules because it is quoted on the Nasdaq system. For any transaction involving a
penny stock, unless exempt, the rules require the delivery, prior to any
transaction in a penny stock, of a disclosure schedule prepared by the
Commission relating to the penny
Page 7
stock market. Disclosure also is required to be made regarding the risks of
investing in penny stocks in both public offerings and in secondary trading and
regarding commissions payable to both the broker-dealer and the registered
representative, current quotations for the securities, and the rights and
remedies available to an investor in cases of fraud in penny stock transactions.
Finally, monthly statements must be sent disclosing recent price information for
the penny stocks held in the account and information on the limited market in
penny stocks. If shares of Destron Common Stock are no longer quoted on the
Nasdaq system or are not otherwise exempt from the provisions of the
Commission's "penny stock" rules, such rules may affect the ability of
broker-dealers to sell shares of Destron Common Stock, including the Shares
being sold pursuant to this Prospectus.
This Prospectus contains forward-looking statements. Actual results could differ
significantly from those set forth in such statements for a number of reasons,
including those identified in the risk factors set forth above. In addition,
factors that may affect the Company's revenues, use of capital, expenses and/or
cash flow include, but are not limited to, the introduction of competing
products with performance equivalent to or exceeding that of the Company's
products, a claim (whether or not successfully made) that the Company's products
infringe a patent held by another company or individual, any performance
problems involving the Company's products, changes in technology that could
cause the Company's products to become obsolete, the departure of key members of
management and/or key employees, regulatory requirements that would make the
Company's products difficult or uneconomical to produce, and general economic
conditions. Additional information regarding the risks and uncertainties of the
Company's business are described in the Company's Quarterly Report on Form
10-QSB for the quarter ended March 31, 1996.
RECENT DEVELOPMENTS
In January 1995, the Company entered into an agreement with
Schering-Plough Animal Health, an operating unit of Schering-Plough Corporation
("Schering-Plough"), under which Schering-Plough became the exclusive
distributor in the United States for the Company's electronic identification
products for companion animals. The Company's electronic identification products
are miniaturized transponders which incorporate a microchip containing a unique
identification code for each animal in which a transponder is implanted. A
transponder can be implanted in an animal by veterinarians using a hypodermic
syringe in a non-surgical procedure. An animal with an implanted transponder can
then be identified with an associated reader device which uses radio frequencies
to interrogate the transponder and read the identification code. On March 7,
1995, Schering-Plough announced that its animal health unit, Schering-Plough
Animal Health, had signed an agreement with the American Kennel Club, Inc.
("AKC") to develop and maintain a nationwide AKC Companion Animal Recovery
Database for the Company's electronic animal identification system. In May 1995,
Schering-Plough began to market the products to veterinarians and consumers and
initiated a program that includes the distribution of readers to veterinarians
and animal shelters. The Company believes the implementation of a permanent
identification system and an associated database will help to reduce the number
of stray and lost companion animals which are euthanized annually.
In October 1995, Destron's United States distributor, Schering-Plough,
notified the Company that it would suspend purchases for an indefinite period to
allow it to sell its existing inventory of the Company's product. In response to
this notification, the Company curtailed purchases of materials required to
manufacture the product, but, because of long lead times and outstanding
commitments with suppliers, still received significant quantities of product to
meet Schering-Plough's previous forecasts. This resulted in an inventory
accumulation that now exceeds the level which management believes will be sold
in the near term. Management believes that these inventories ultimately will be
purchased by Schering-Plough or disposed of by the Company through alternate
means. Disposal of such inventories through alternate means could result in
losses to the Company. Such losses, if significant, would have a material
adverse impact on the Company's results of operation. While the Company has the
right to
Page 8
recover the costs of the transponders and other components and packaging from
Schering-Plough under the terms of the agreement, no assurance can be given as
to the timing and amount of any such recovery.
The loss of the Schering-Plough revenue since October 1995 combined with
an inventory build-up has reduced the Company's working capital and caused the
Company to defer payments of amounts due to a supplier. While the Company has
reached a tentative agreement on payment terms with this supplier, there can be
no assurance that the Company can comply with these terms or that the supplier
will continue its forbearance of the Company's delinquent status of its account.
If the Company is unable to comply with the new agreement or to obtain the
supplier's continued cooperation, action on the part of the supplier to enforce
the contract would have a material adverse affect on the Company.
Effective March 3, 1995, Lions Gate Capital, Ltd. ("LGC") exercised
warrants to purchase 300,000 shares of Common Stock. LGC paid the $1.00 per
share exercise price of the warrants by paying to the Company $3,000 in cash and
issuing to the Company a promissory note in the original principal amount of
$297,000 (the "LGC Note"). The LGC Note was paid in full on May 30, 1995.
On January 17, 1995, the Company filed a Registration Statement on Form
S-3 with the Securities and Exchange Commission for the registration of the
resale of up to 703,000 shares of the Company's Common Stock by certain Selling
Stockholders upon the exercise of outstanding Warrants (Registration No.
33-88574). The Company's Registration Statement on Form S-3 was declared
effective by the Securities and Exchange Commission on May 25, 1995. Through
December 31, 1995, 414,171 shares of the Company's Common Stock had been sold by
certain of the Selling Stockholders pursuant to the Company's earlier
Registration Statement on Form S-3. See "Selling Stockholders."
On April 27, 1995, the Company executed its second amendment under its
revolving credit facility from a financial institution (the "Revolving Credit
Facility"), which increased the total borrowing availability under the line from
$2,000,000 to $3,000,000 and amended certain other loan covenants. Further, on
August 24, 1995, the Company entered into its third amendment under its
Revolving Credit Agreement which increased the line of credit to $5,000,000 from
$3,000,000 and amended the interest rate to the prime rate of interest plus
0.25% from the prime rate of interest plus 1.5%. On December 28, 1995, the
Company agreed to the fourth amendment which extended the maturity deadline of
the Revolving Credit Agreement to December 31, 1996.
In March 1996, the Company borrowed a total of $875,000 (and an additional
$25,000 in April 1996) from private investors through the issuance of unsecured
notes due October 21, 1997 and bearing interest at the rate of 11% per annum. As
part of the transaction, the Company issued warrants to the noteholders to
purchase a total of 147,539 shares of the Company's common stock. The warrants
are exercisable at $4.8125 per share for a term of five (5) years beginning
March 21, 1996. The value of these warrants at the time of issuance was not
deemed to be significant. Funds received from these notes were used to retire
indebtedness that was due on March 21, 1996, and to provide additional working
capital for operations.
In April 1996, the Company borrowed $658,000 from a commercial bank
through the issuance of a promissory note collateralized by its real estate. The
note bears interest at 8.98% and is due on April 8, 2001. The terms of the note
call for 59 monthly payments of $6,668 and a final balloon payment of $533,372.
The proceeds of the loan were used to retire a previous bank loan and industrial
development revenue bonds, both of which were collateralized by real estate. The
remaining proceeds were used to provide additional working capital for
operations.
Page 9
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares
offered by this Prospectus.
PRICE RANGE OF COMMON STOCK
From April 14, 1992 through September 1, 1994, Destron Common Stock was
quoted on the Nasdaq National Market. Beginning on September 2, 1994, Destron
Common Stock was quoted on the Nasdaq SmallCap Market. The Company's Common
Stock was removed from the Nasdaq National Market on September 1, 1994 as a
result of the Company's failure to meet the requirements for continued listing.
The quotations set forth below for the first and second quarters of fiscal
1996 and the third quarter through May 1, 1996, fiscal 1995, and fiscal 1994
represent the high and low bid prices for the Common Stock as quoted on the
Nasdaq National Market and the Nasdaq SmallCap market and were provided by the
National Association of Securities Dealers, Inc. (the "NASD"). The following
quotations represent prices between dealers, do not include retail mark-ups,
mark-downs or commissions, and do not necessarily represent actual transactions.
As of May 1, 1996, there were approximately 340 stockholders of record.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED FISCAL YEAR ENDED FISCAL YEAR ENDED
SEPTEMBER 30, 1996 (1) SEPTEMBER 30, 1995 SEPTEMBER 30, 1994
---------------------- ------------------ ------------------
HIGH LOW HIGH LOW HIGH LOW
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
Fiscal Quarters
First Quarter $5.00 $2.75 $2.13 $1.50 $2.63 $1.44
Second Quarter 5.25 3.25 3.75 1.88 3.63 2.13
Third Quarter 4.38 3.44 9.00 3.00 2.88 1.50
Fourth Quarter -- -- 8.75 5.25 2.25 1.38
</TABLE>
- --------------------------
(1) The price range for the third quarter of the fiscal year ended
September 30, 1996 reflects the reported prices through May 1, 1996.
DIVIDEND POLICY
The Company has never paid or declared any cash dividends on its Common
Stock and does not intend to pay cash dividends on its Common Stock in the
foreseeable future. The Company presently expects to retain its earnings to
finance the development and expansion of its business. Furthermore, the
Company's current agreement with its principal bank lender prohibits the
Company's payment of dividends. The payment by the Company of cash dividends, if
any, on its Common Stock in the future will be subject to the discretion of the
Board of Directors and will depend on the Company's earnings, financial
condition, capital requirements and other relevant factors. See "Description of
Capital Stock."
Page 10
SELLING STOCKHOLDERS
The following table sets forth the number of shares of Common Stock
beneficially owned by each of the Selling Stockholders as of May 1, 1996 and
after the offering, assuming the sale of all Shares (of which there can be no
assurance).
<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR OWNED AFTER
TO OFFERING (1) OFFERING (1)
---------------------------- SHARES --------------------
BENEFICIAL OWNER NUMBER PERCENT (2) TO BE SOLD NUMBER PERCENT (2)
- ---------------- ------------- ----------- ------------------- ------ ---------
<S> <C> <C> <C> <C> <C>
Ellis Limited Partnership 15,000 * 15,000 0 0
Kenneth B. Heithoff 8,750 * 8,750 0 0
Gary S. Holmes 10,000 * 10,000 0 0
Dr. William R. Kennedy 7,500 * 7,500 0 0
Dr. William R. and Marla C.
Kennedy 5,000 * 5,000 0 0
Anita H. Kunin 6,250 * 6,250 0 0
Piper Jaffray as Cust. FBO
Kenneth A. Macke IRA 7,500 * 7,500 0 0
First Trust NA, Trustee
Dorsey & Whitney Retirement
Plan 7,500 * 7,500 0 0
Leslie D. Parker, Jr. 10,000 * 10,000 0 0
Perkins Capital Mgmt. Pft Shar
Plan & Trust 7,500 * 7,500 0 0
Perkins Foundation 9,000 * 5,000 4,000 *
The Provident Bank custodian for
the Perkins Opportunity Fund 400,000 350,000 50,000 *
Perkins & Prtnrs; Pft Shar Plan &
Trust 15,000 * 15,000 0 0
Daniel S. and Patrice M. Perkins 7,500 * 7,500 0 0
Daniel S. Perkins Trustee
FBO Daniel S. Perkins Trust 5,000 * 5,000 0 0
Patrice M. Perkins Trustee
FBO Patrice M. Perkins Trust 2,500 * 2,500 0 0
Richard C. Perkins 7,500 * 7,500 0 0
Piper Jaffray as Cust. FBO
James G. Peters IRA 5,000 * 5,000 0 0
David H. and Lise B. Potter 5,000 * 5,000 0 0
Pyramid Partners, LP 100,000 * 100,000 0 0
Piper Jaffray as Cust. FBO *
Harold Roitenberg IRA 10,000 10,000 0 0
John F. Rooney 7,500 * 7,500 0 0
Donald M. and Pauline H. Roux 5,000 * 5,000 0 0
Shawn P. Weinand 5,000 * 5,000 0 0
David R. Weir 5,000 * 5,000 0 0
Dave M. Westrum 5,000 * 5,000 0 0
-------- --------
All Selling Stockholders 679,000 5.8% 625,000 54,000
as a group (26 persons) *
========== ========== ========
</TABLE>
Page 11
- ---------------------------
* Less than one percent.
(1) Each person has sole voting and sole dispositive power with respect to
all outstanding shares, except as noted.
(2) Based on 11,640,232 shares outstanding as of May 1, 1996. Such amounts
do not include 2,100,000 shares of Common Stock reserved for issuance
under Destron's 1986 Director and Employee Nonqualified Stock Option
Plan, 1992 Employee Stock Option Plan and 1992 Nonemployee Director
Stock Option Plan (of which 585,500 shares were subject to outstanding
options as of April 30, 1996). The number of outstanding shares prior
to and after the offering does not include 863,488 shares subject to
outstanding warrants. However, each figure showing the percentage of
outstanding shares owned beneficially has been calculated by treating
as outstanding and owned the shares which could be purchased by the
indicated person within 60 days upon the exercise of stock options and
warrants.
Pursuant to the terms of subscription agreements between the Company and
the Selling Shareholders, the Company has agreed to pay the expenses of this
offering. None of the Selling Shareholders is affiliated with the Company, nor
does any Selling Shareholder have any material relationship with the Company.
PLAN OF DISTRIBUTION
The Shares may be sold from time to time to purchasers directly by any of
the Selling Stockholders. Alternatively, the Selling Stockholders may from time
to time offer the Shares through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Stockholders and/or the purchasers of Shares for whom they may
act as agents. The Selling Stockholders and any such underwriters, dealers or
agents that participate in the distribution of Shares may be deemed to be
underwriters, and any profit on the sale of the Shares by them and any
discounts, commissions or concessions received by them may be deemed to be
underwriting discounts and commissions under the Securities Act. The Shares may
be sold from time to time in one or more transactions at a fixed offering price,
which may be changed, or at varying prices determined at the time of sale or at
negotiated prices.
At the time a particular offer of Shares is made, to the extent required,
a supplement to this Prospectus will be distributed which will identify and set
forth the aggregate amount of Shares being offered and the terms of the
offering, including the name or names of any underwriters, dealers or agents,
the purchase price paid by any underwriter for Shares purchased from the Selling
Stockholders, any discounts, commissions and other items constituting
compensation from the Selling Stockholders and/or the Company, and any
discounts, commissions or concessions allowed or reallowed or paid to dealers,
including the proposed selling price to the public. The Company will not receive
any of the proceeds from the sale by the Selling Stockholders of the Shares
offered hereby.
Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the Shares may not simultaneously engage in market
making activities with respect to the Shares for a period of nine business days
prior to the commencement of such distribution. In addition, and without
limiting the foregoing, the Selling Stockholders will be subject to applicable
provisions of the Exchange Act and the rules and regulations thereunder,
including, without limitation, Rules 10b-2, 10b-6 and 10b-7, which provisions
may limit the timing of purchases and sales of the Shares by the Selling
Stockholders.
In order to comply with certain states' securities laws, if applicable,
the Shares will be sold in such jurisdictions only through registered or
licensed brokers or dealers. In certain states the Shares may not be sold unless
the Shares have been registered or qualified for sale in such state, or unless
an exemption from registration or qualification is available and is obtained.
Page 12
DESCRIPTION OF CAPITAL STOCK
COMMON STOCK
The Company is authorized to issue up to 20,000,000 shares of Common
Stock, $.01 par value, of which 11,640,232 shares were outstanding as of May 1,
1996. At May 1, 1996, there were approximately 340 holders of record of the
Company's Common Stock.
Holders of Common Stock are entitled to receive such dividends as are
declared by the Board of Directors of the Company out of funds legally available
for the payment of dividends. The Company expects to retain any earnings to
finance the development of its business. Furthermore, the Company's agreement
with its principal bank lender prohibits the Company's payment of dividends.
Accordingly, the Company does not anticipate the payment of any dividends on the
Common Stock for the foreseeable future. In the event of any liquidation,
dissolution or winding-up of the Company, the holders of Common Stock will be
entitled to receive a pro rata share of the net assets of the Company remaining
after payment or provision for payment of the debts and other liabilities of the
Company.
Holders of Common Stock are entitled to one vote per share in all matters
to be voted upon by stockholders. There is no cumulative voting for the election
of directors, which means that the holders of shares entitled to exercise more
than 50% of the voting rights in the election of directors are able to elect all
of the directors. Holders of Common Stock have no preemptive rights to subscribe
for or to purchase any additional shares of Common Stock or other obligations
convertible into shares of Common Stock which may hereafter be issued by the
Company.
All of the outstanding shares of Common Stock are, and the shares to be
sold pursuant to this offering will be, fully paid and non-assessable. Holders
of Common Stock of the Company are not liable for further calls or assessments.
Norwest Bank Minnesota, N.A., Minneapolis, Minnesota, is the Transfer
Agent for the Common Stock.
SECTION 203 OF THE DELAWARE GENERAL CORPORATION LAW
The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. That section provides, with certain exceptions, that a
Delaware corporation may not engage in any of a broad range of business
combinations with a person or affiliate or associate of such person who is an
"interested stockholder" for a period of three years from the date that such
person became an interested stockholder unless: (i) the transaction resulting in
a person's becoming an interested stockholder, or the business combination, is
approved by the board of directors of the corporation before the person becomes
an interested stockholder; (ii) upon consummation of the transaction which
resulted in the stockholder becoming an interested stockholder, the interested
stockholder owned at least 85% of the voting stock of the corporation
outstanding at the time the transaction commenced (excluding shares owned by
persons who are both officers and directors of the corporation and shares held
by certain employee stock ownership plans); or (iii) on or after the date the
person becomes an interested stockholder, the business combination is approved
by the corporation's board of directors and by the holders of at least 66-2/3%
of the corporation's outstanding voting stock at an annual or special meeting,
excluding shares owned by the interested stockholder. An "interested
stockholder" is defined as any person (other than the corporation or any direct
or indirect majority-owned subsidiary of the corporation) that is (i) the owner
of 15% or more of the outstanding voting stock of the corporation or (ii) an
affiliate or associate of the corporation who was the owner of 15% or more of
the outstanding voting stock of the corporation at any time within the three
year period immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder.
Page 13
INDEMNIFICATION AND WAIVER OF DIRECTOR LIABILITY
The Delaware Corporation Law provides that a corporation shall have the
power to indemnify its current and former officers, directors and employees for
liability arising out of certain actions. The Company has included in its Bylaws
a provision to indemnify its directors and officers to the fullest extent
permitted by Delaware law, including circumstances in which indemnification is
otherwise discretionary. Such indemnification may be available for liabilities
arising in connection with this offering. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers or persons controlling the Company pursuant to such indemnification
provisions, the Company has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.
The Company has adopted in its Certificate of Incorporation a provision
which limits personal liability for breach of the fiduciary duty of its
directors to the extent provided by Section 102(7) of the Delaware Corporation
Law. Such provision eliminates the personal liability of directors for damages
occasioned by breach of fiduciary duty, except for liability based on the
director's duty of loyalty to the Company, liability for acts or omissions not
made in good faith, liability for acts or omissions involving intentional
misconduct or knowing violation of law, liability based on payments of improper
dividends, transactions for which the director derived any improper personal
benefit, and liability for acts occurring prior to the date such provision was
added.
LEGAL MATTERS
The validity of the shares of Common Stock being offered hereby will be
passed upon for the Company by Winthrop & Weinstine, P.A., Minneapolis,
Minnesota.
EXPERTS
The consolidated financial statements for the years ended September 30,
1995 and September 30, 1994, incorporated by reference in this Prospectus and
elsewhere in the Registration Statement, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their report with respect
thereto, and are included herein in reliance upon the authority of said firm as
experts in giving said report.
Page 14
================================================================================
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN
AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE
ANY REPRESENTATION NOT CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE
HEREBY. 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
SOLICITATION OF AN OFFER TO PURCHASE BY ANY PERSON
IN ANY JURISDICTION IN WHICH SUCH OFFER WOULD BE
UNLAWFUL. NEITHER THE DELIVERY OF THIS PROSPECTUS
NOR ANY SALE MADE HEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE ANY IMPLICATION THAT THE
INFORMATION CONTAINED HEREIN IS CORRECT AS OF ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
TABLE OF CONTENTS
PAGE
Prospectus Summary.................................. 3
Risk Factors........................................ 4
Recent Developments................................. 8
Use of Proceeds.................................... 10
Price Range of Common Stock......................... 10
Dividend Policy.................................... 10
Selling Stockholders............................... 11
Plan of Distribution............................... 12
Description of Capital Stock....................... 13
Legal Matters...................................... 14
Experts............................................ 14
625,000 Shares
DESTRON FEARING
CORPORATION
COMMON STOCK
----------
----------
PROSPECTUS
----------
__________, 1996
================================================================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth the estimated expenses to be incurred in
connection with the distribution of the shares of Common Stock offered hereby:
Company
-------
SEC registration fee $1,024.00
Legal fees and expenses 3,000.00
Accounting fees and expenses 3,000.00
Blue Sky fees and expenses 500.00
Printing expenses 500.00
Transfer agent fees and expenses 500.00
Miscellaneous 476.00
-------
TOTAL $9,000.00
=========
Each amount set forth above, except the SEC registration fee, is
estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware Corporation Law provides that a corporation
shall have the power to indemnify its current and former officers, directors,
employees and agents against expenses (including attorneys' fees), judgments,
penalties, fines and amounts paid in settlement and which were incurred in
connection with actions, suits, or proceedings in which such persons are parties
by reason of the fact that they are or were an officer, director, employee or
agent of the corporation, if they acted in good faith, reasonably believed that
the conduct was not opposed to the best interests of the corporation, and in the
case of a criminal proceeding, had no reasonable cause to believe the conduct
was unlawful. Section 145(g) also permits a corporation to purchase and maintain
insurance on behalf of its officers, directors, employees and agents against any
liability which may be asserted against, or incurred by, such persons in their
capacities as officers, directors, employees or agents of the corporation,
whether or not the corporation would have had the power to indemnify the person
against the liability under the provisions of such section.
Article XII of the Bylaws of the Registrant provides that the directors,
officers, and committee members of the Registrant and certain other persons
shall have the rights to indemnification in accordance with, and to the fullest
extent provided by, Section 145 of the Delaware Corporation Law.
II-1
ITEM 16. EXHIBITS
The following exhibits have been filed as part of this Registration Statement on
Form S-3.
EXHIBIT
NO. DESCRIPTION
5.1 Opinion of Winthrop & Weinstine, P.A. *
23.1 Consent of Winthrop & Weinstine, P.A. *
23.2 Consent of Arthur Andersen LLP, Independent Public Accountants
24.1 Powers of Attorney *
- --------------------
*Previously filed.
ITEM 17. UNDERTAKINGS
(a) If the information set forth in Paragraph (1)(i) or (1)(ii) below
is not incorporated by reference from periodic reports filed by the
Company under the Securities Exchange Act of 1934, as amended, the
Company will:
(1) File, during any period in which it offers or sells
securities, a post-effective amendment to this Registration
Statement to:
(i) Include any prospectus required by Section
10(a)(3) of the Securities Act of 1933, as amended;
(ii) Reflect in the prospectus any facts or events
which, individually or together, represent a
fundamental change in the information in the
Registration Statement; and
(iii) Include any additional or changed material
information on the plan of distribution.
(2) For determining liability under the Securities Act of
1933, as amended, treat each post-effective amendment as a new
registration statement of the securities offered, and the
offering of the securities at that time to be the initial bona
fide offering.
(3) File a post-effective amendment to remove from
registration any of the securities that remain unsold at the
end of the offering.
(b) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 (the "Act") may be permitted to directors,
officers, and controlling persons of the small business issuer pursuant
to the provisions summarized in Item 15 above, or otherwise, the small
business issuer 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 small business issuer of expenses incurred or paid
by a director, officer or controlling person of the small business
issuer 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 small business issuer 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, as amended, and will be governed by the
final adjudication of such issue.
II-2
(c) The undersigned small business issuer hereby undertakes that
it will:
(1) For determining any liability under the Securities Act of
1933, treat the information omitted from the form of
prospectus filed as part of this registration statement in
reliance upon Rule 430A and contained in a form of prospectus
filed by the small business issuer under Rule 424(b)(1) or (4)
or 497(h) under the Securities Act as part of this
registration statement as of the time the Commission declared
it effective.
(2) For determining any liability under the Securities Act of
1933, treat each post-effective amendment that contains a form
of prospectus as a new registration for the securities offered
in the registration statement, and that offering of the
securities at that time as the initial bona fide offering of
those securities.
(d) The undersigned registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act
of 1933, each filing of the registrant's annual report
pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act of 1934 (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.
II-3
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 amendment to
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of South St. Paul, State of Minnesota, on May 13,
1996.
DESTRON FEARING CORPORATION
By /s/ Thomas J. Ahmann
Thomas J. Ahmann
Chief Financial Officer,
Secretary and Treasurer
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>
* President, Chief Executive Officer May 13, 1996
- ----------------------------------------
Randolph K. Geissler and Director
* Director May 13, 1996
David A. Henderson
* Director May 13, 1996
David M. Hyduke
* Director May 13, 1996
Kenneth D. Larson
* Chief Financial Officer, May 13, 1996
Thomas J. Ahmann Secretary and Treasurer
(Principal Accounting Officer)
* /s/ Thomas J. Ahmann May 13, 1996
--------------------------------------
Thomas J. Ahmann
Pro Se and Attorney-in-Fact
</TABLE>
EXHIBIT INDEX
Exhibit No. Description of Exhibit Page
5.1 Opinion of Winthrop & Weinstine, P.A.
(Previously filed)
23.1 Consent of Winthrop & Weinstine, P.A.
(Previously filed)
23.2 Consent of Arthur Andersen LLP,
Independent Public Accountants......................
24.1 Powers of Attorney (Previously filed)
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incoporation by
reference in this registration statement of our report dated December 27, 1995,
incorporated by reference in Destron Fearing Corporation's Form 10-KSB for the
year ended September 30, 1995 and to all references to our Firm included in this
registration statement.
Minneapolis, Minnesota
May 13, 1996
