As filed with the Securities and Exchange Commission on September 23, 1997
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
________________________
SHELDAHL, INC.
(Exact name of registrant as specified in its charter)
Minnesota 41-0758073
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1150 Sheldahl Road
Northfield, Minnesota 55057
(507) 663-8000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive office)
______________________
James E. Donaghy
Chief Executive Officer
Sheldahl, Inc.
1150 Sheldahl Road
Northfield, Minnesota 55057
(507) 663-8000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
______________________
COPIES TO:
Robert E. Tunheim, Esq.
Lindquist & Vennum
P.L.L.P.
4200 IDS Center
Minneapolis, Minnesota 55402
Telephone: (612) 371-3211
Fax: (612) 371-3207
Kenneth L. Henderson, Esq.
Eric L. Cohen, Esq.
Robinson Silverman Pearce
Aronsohn & Berman LLP
1290 Avenue of the Americas
New York, New York 10104
Telephone: (212) 541-2000
Fax: (212) 541-4630
Approximate date of commencement of proposed sale to public: As soon
as practicable after this Registration Statement becomes effective.
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans, please check the
following box: _
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box: X
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier effective registration statement for the same offering. _
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. _
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. _
CALCULATION OF REGISTRATION FEE
Title of Each Class of
Securities to be
Registered Common Stock, $.25 par value.....
Amount to be
Registered 1,250,000
Proposed Maximum
Offering Price
Per Share(1) $20.50
Proposed Maximum
Aggregate Offering
Price $25,625,000
Amount of
Registration Fee $7,766
(1)Estimated solely for the purpose of determining the registration fee
pursuant to Rule 457(c) and based on the average of the high and low sales
prices for the Registrant's Common Stock on September 16, 1997 as reported on
the Nasdaq National Market.
__________________________________
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 that 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.
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, DATED SEPTEMBER 23, 1997
UP TO 1,250,000 SHARES
SHELDAHL, INC.
Common Stock
The up to 1,250,000 shares of Common Stock (including preferred
stock purchase rights) of Sheldahl, Inc., a Minnesota corporation
("Sheldahl" or the "Company"), offered hereby (the "Common Stock") may be
sold from time to time by the stockholders identified herein or their
transferees, pledgees, donees or other successors in interest (the "Selling
Shareholders").
The shares of Common Stock to which this Prospectus relates (the
"Shares") may be issued to the Selling Shareholders (i) upon conversion of
the Company's Series B Convertible Preferred Stock held by the Selling
Shareholders (the "Series B Preferred Stock"), (ii) as accrued dividends on
the Series B Preferred Stock and (iii) upon the exercise of outstanding
warrants held by the Selling Shareholders (the "Warrants"). The Company
will not receive any of the proceeds from the sale of the Shares offered
hereby, but the Company will receive proceeds from the exercise of the
Warrants by the Selling Shareholders. There can be no assurance, however,
that the Warrants will be exercised.
Offers and sales of the Shares by the Selling Shareholders may be
made from time to time during the effectiveness of this registration, on one
or more exchanges, in the over-the-counter market, or otherwise, at prices and
on terms then prevailing, or at prices related to the then-current market
price, or in negotiated transactions or in a combination of any such methods
of sale. See "Plan of Distribution." The filing by the Company of this
Prospectus in accordance with the requirements of Form S-3 is not an admission
that any person whose Shares are included herein is an "affiliate" of the
Company.
The Company's Common Stock is traded on the Nasdaq National Market
under the symbol SHEL. On September 18, 1997, the last reported sales price
of the Common Stock as reported on the Nasdaq National Market was $20.625 per
share.
- -------------
THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" BEGINNING ON PAGE 5 OF THIS PROSPECTUS.
- --------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
- --------------
No dealer, salesperson or any other person has been authorized to
give any information or to make any representations in connection with this
offering other than those contained in this Prospectus, and, if given or made,
such information or representations 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 buy any security other than securities
offered by this Prospectus, or an offer to sell or a solicitation of an offer
to buy any securities by any person in any jurisdiction in which such offer or
solicitation is not authorized or is unlawful. The delivery of this Prospectus
shall not, under any circumstances, create any implication that the
information herein is correct as of any time subsequent to the date of this
Prospectus.
September 23, 1997
This Prospectus contains and incorporates by reference certain
forward-looking statements based on current expectations which involve risks
and uncertainties. Actual results and the timing of certain events may differ
materially from those projected in such forward-looking statements due to a
number of risk factors, including those set forth below. The Company has
tried, wherever possible, to identify these forward-looking statements by
using words such as "believe," "anticipate," "estimate," "expect" and
similar expressions. The Company undertakes no obligation to release publicly
the results of any revisions to any such forward-looking statements that may
be made to reflect events or circumstances after the date of this Prospectus
or to reflect the occurrence of unanticipated events.
THE COMPANY
See "Risk Factors" for information prospective investors should consider.
Unless the context requires otherwise, all references in this Prospectus to
"Sheldahl" or the "Company" refer to Sheldahl, Inc. and its subsidiary.
Novaclad(R), Novaflex(R), ViaGrid(R), Flexbase(R) and Z-Link(R) are
registered trademarks of the Company.
Sheldahl is a leading producer of high quality flexible printed
circuitry and flexible laminates, principally for sale to the data
communication and automotive electronics markets. Flexible circuitry is used
to provide electrical connection between components and electronic systems and
also as a substrate to support electronic devices. Flexible circuits consist
of polyester or polyimide film to which copper foil is laminated and processed
through various imaging, etching and plating processes. Flexible circuits can
be further processed by surface mount attachment of electronic components to
produce an interconnect assembly. Flexible circuits provide advantages over
rigid printed circuit boards by accommodating packaging contour and motion and
reducing size and weight.
Over the past three years, the Company has introduced three high
performance products based on proprietary thin film laminate technology:
Novaclad, ViaGrid and Via-Thin(TM) (high density substrates). These Novaclad-
based products provide substantial benefits compared to traditional flexible
circuits, including the capability for very fine circuit traces (down to 1
mil, or .001") as well as greater heat tolerance and dissipation. The Company
has designed these products to enable integrated circuit ("IC")
manufacturers to package future generations of ICs economically by attaching
the silicon die to Via-Thin or a high density substrate manufactured by other
circuitry manufacturers using the Company's Novaclad or ViaGrid products. As
ICs are becoming increasingly powerful, they produce more heat and require a
greater number of connections to attach the silicon die, placing substantially
greater demands on IC packaging materials.
The Company has invested approximately $55 million in an advanced new
production facility in Longmont, Colorado (the "Longmont Facility") to
produce its Novaclad-based products in commercial volumes. As of November
1995, the Company anticipated investing approximately $38 million in the
Longmont Facility. Changes in the product characteristics of high density
substrates relating to precious metal plating, solder mask overcoat and
testing, plus the installation of assembly equipment not originally
anticipated, significantly increased the original investment to bring the
Longmont Facility on line. Recent purchases of land and equipment needed to
increase originally anticipated capacity also contributed to the total
investment in the Longmont Facility.
The Company originally expected to commence production in the Longmont
Facility in April 1996. However, the realization of full volume production has
been delayed by over 18 months due to late delivery of certain production
equipment as a result of financial difficulties of a key supplier, a longer
than anticipated installation and check out period, and a far more rigorous
and lengthy qualification process by the Company's customers and their
customers. After extensive and successful testing of Via-Thin(TM), the
Company believes that it is in the final phase of full qualification with
several customers and anticipates that only limited testing remains prior to
commencement of volume production.
The Company is a Minnesota corporation and its principal executive
offices are located at 1150 Sheldahl Road, Northfield, Minnesota 55057. Its
telephone number is (507) 663-8000.
RECENT DEVELOPMENTS
The Company's unaudited results for the fourth quarter of fiscal 1997
ended August 29, 1997 indicates that the results were below expectations. The
Company's unaudited net loss may range from $3.0 million to $3.1 million, or
$.32 to $.33 per share, for the fourth quarter. Fourth quarter revenues are
expected to be approximately $27.0 million. The fourth quarter loss was
principally the result of the lack of production volume in the Longmont
Facility. The Company also experienced lower than anticipated automotive
interconnect shipments resulting from product mix and its temporary effect on
certain manufacturing capacity, which had a negative effect on sales and
earnings. The Company expects to release its fourth quarter and 1997 fiscal
year-end financial results by mid-October 1997.
On August 29, 1997, the Company sold an aggregate of 15,000 shares of
Series B Convertible Preferred Stock ("Series B Preferred Stock"), to the
Selling Shareholders pursuant to the Convertible Preferred Stock Purchase
Agreement among the Company and the Selling Shareholders (the "Agreement").
Pursuant to the terms of the Agreement, the Company has the right, subject to
the satisfaction of certain conditions, to require the Selling Shareholders to
purchase shares of Series C Convertible Preferred Stock, par value $1.00 per
share, with terms identical to the Series B Preferred Stock for an aggregate
additional purchase price of up to $15 million. The Series B Preferred Stock
is entitled to dividends. The conversion price for the Series B Preferred
Stock is dependent on the market prices for the Company's Common Stock. In
connection with the issuance of the Series B Preferred Stock, the Company
granted to each Selling Shareholder Warrants to purchase shares of the
Company's Common Stock. The aggregate amount of shares of Common Stock the
Company is obligated to issue under the Warrants is 67,812 shares at an
exercise price of $27.65 per share. The Company also granted to the Selling
Shareholders certain registration rights with respect to the shares of the
Company's Common Stock issuable to the Selling Shareholders upon conversion of
the Series B Preferred Stock, accrued dividends and the Warrants. This
Prospectus relates to the shares of Common Stock issuable to the Selling
Shareholders pursuant to the Agreement. The foregoing description of the
Agreement, the Warrants and the registration rights does not purport to be
complete and is qualified in its entirety by reference to the Company's report
on Form 8-K, filed on September 10, 1997, which includes such agreements as
exhibits and is incorporated herein by reference.
RISK FACTORS
The securities offered hereby involve a high degree of risk.
Accordingly, in analyzing an investment in these securities, prospective
investors should carefully consider the following risk factors, along with
other information referred to herein. No investor should participate in this
offering unless such investor can afford the loss of his or her entire
investment.
Because of the variety and uncertainty of the factors affecting the
Company's operating results, past financial performance and historic trends
may not be a reliable indicator of future performance. These factors, as well
as other factors affecting the Company's operating performance, and the fact
that the Company participates in a highly dynamic and competitive industry,
may result in significant volatility in the Company's Common Stock price.
Utilization of Longmont Facility
The Company has completed construction of, and installation of equipment
to be used in, the Longmont Facility, but has not commenced volume production
of its ViaGrid and Via-Thin(TM) products at this facility. The Company had
originally expected to begin volume production at the Longmont Facility in
April 1996, but the Company has suffered delays in delivery and installation
of certain production equipment as a result of financial difficulties of a key
supplier, a longer than anticipated installation and testing period, and a far
more rigorous and lengthy qualification process by the Company's customers and
their customers than the Company anticipated. The Company is producing
Novaclad for sale to the market and internal use and has now begun initial
prequalification production of Via-Thin(TM) in quantities sufficient for full
product qualification testing. ViaGrid is an emerging product still in the
early stages of market acceptance and volume production of ViaGrid is not
expected until the market has accepted Via-Thin(TM). The Company believes
that it has validated the technical capabilities of its processes and
equipment at the Longmont Facility, although there can be no assurance that
validation problems or difficulties will not materialize once volume
production has commenced. The Company's ability to begin volume production of
Via-Thin(TM) is subject to final qualification by the Company's customers, and
in some cases, their customers, as well as the ability of its production
equipment to produce sufficient quantities of products at acceptable quality
levels. Once the Longmont Facility has commenced volume production of Via-
Thin(TM), the Company still expects that it will not initially produce
sufficient sales volume or profit contribution to offset the depreciation and
other expenses related to its operation. As a result, the Longmont Facility
has had a material adverse effect on the Company's results of operations and
will continue to have such an effect until sales of the Company's Novaclad and
Via-Thin(TM) products increase sufficiently to cover expenses.
Market Acceptance of New Products
A significant portion of the Company's anticipated future success in the
data communication market and a significant portion of future revenue growth
of the Company will depend on market acceptance of its Novaclad, ViaGrid and
Via-Thin(TM) products. Although the Company believes that these products have
attractive performance characteristics and utility in a potentially broad
range of products, sales of these Novaclad-based products will depend on the
Company's ability to (i) convince potential customers that the advantages and
applications of these products justify the expense and production changes
necessary to incorporate the Company's products into the customer's
manufacturing process; (ii) work with designers of integrated circuit ("IC")
packages and electronics to incorporate these products; (iii) qualify these
products for inclusion in the customer's products within the time requirements
of the customer's design cycle and (iv) produce sufficient quantities of these
products in a timely manner. Moreover, these products will compete with
certain other thin film laminates or alternative materials offered by other
manufacturers and such materials may achieve wider market acceptance than the
Company's products. Failure of the Company's Novaclad, ViaGrid and Via-
Thin(TM) products to achieve timely or sufficient market acceptance would have
a material adverse effect on the Company's results of operations.
Dependence on Automotive Market
Sales to the automotive market as a percentage of total sales were
approximately 69.2% in fiscal 1996 and 67.5% in fiscal 1997. The Company's
production of component products for the automotive market fluctuates as
automotive manufacturers begin production of new models and end production of
others. A decrease in the number of the Company's electronic components
included in new models could have a material adverse effect on the Company's
results of operations. A general downturn in the automotive market could have
a material adverse effect on the demand for the electronic components supplied
by the Company to its customers in the automotive market. In addition, as the
automotive industry continues to qualify and reduce the number of suppliers
and demand higher performance products at a lower cost, there can be no
assurance that the Company will be able to maintain its current sales volumes
at existing profit margins to automotive manufacturers and their suppliers.
Capital Intensive Business
The Company's business is capital intensive. In the past four years,
the Company has invested approximately $104 million in total capital
expenditures, including approximately $55 million in the Longmont Facility.
In order to remain competitive, the Company must continue to make significant
expenditures for capital equipment, expansion of operations and research and
development. If the Company is successful in introducing its Novaclad-based
products, it may be required to make additional capital investments to
increase manufacturing capacity before significant revenues and positive cash
flow can be derived from the initial investment in the Longmont Facility. The
Company believes it will be able to fund its near-term anticipated working
capital and capital expenditure requirements from (i) funds generated from
operations, (ii) bank borrowings and (iii) funds received from the potential
sale of up to $15.0 million of its Series C Preferred Stock to the original
purchasers of its Series B Preferred Stock. The Company is also exploring
other sources of capital, including strategic partners and the issuance of
additional long-term debt. However, there can be no assurance that
unanticipated developments will not create an earlier need for additional
capital, that additional capital will be available when needed by the Company
or that such capital will be available on terms acceptable to the Company.
Customer Concentration
The Company's customer base is concentrated. Based on unaudited
preliminary data prepared by management, during fiscal 1997, the Company's ten
largest customers for the 1997 fiscal year accounted for approximately 60.7%
of net sales, and 11.5%, 10.6% and 7.4% of the Company's net sales during
fiscal 1997 were to Ford Motor Company, Motorola, Inc. and Molex
Incorporated, respectively. The Company expects that sales to a relatively
small number of customers will continue to account for a significant portion
of sales for the foreseeable future, and the loss of, or a significant decline
in orders from, one of the Company's key customers could have a material
adverse effect on the Company's results of operations.
Variability of Quarterly Results
Historically, the Company's quarterly results of operations have
fluctuated significantly primarily because of the timing of orders from its
larger customers. Due to this and the inherent uncertainty associated with
the development of new products and production facilities, the Company expects
that its quarterly results of operations will continue to be subject to
significant fluctuations.
Customers' Product Obsolescence and Standards
The Company supplies component products primarily to the automotive
electronics and data communication markets. Substantially all of the products
in these markets which incorporate the Company's component products are
subject to technological obsolescence, performance standards and pricing
requirements. The Company's future success in these markets will depend upon
its ability to (i) work closely with manufacturers to design end products or
applications which incorporate the Company's products and achieve market
acceptance, (ii) develop technologies to meet the evolving market requirements
of its customers, (iii) continue to deliver high-performance, cost-effective
products and (iv) expand its sales and marketing efforts domestically and
internationally. There can be no assurance that the Company will continue to
meet the current qualification requirements of its major customers, meet new
qualification requirements imposed by its customers or continue to be selected
as a supplier by new customers.
Dependence on Key Personnel
The Company's business is dependent on the efforts and abilities of its
executive officers and key personnel, especially in the development, marketing
and manufacturing of its Novaclad, ViaGrid and Via-Thin(TM) products. The
Company's continued success will also depend on its ability to continue to
attract and retain qualified employees. The loss of services of any key
personnel could have a material adverse effect on the Company. The Company
does not have key-person life insurance on any of its employees.
Intense Competition
The market segments served by the Company are highly competitive. Some
of the Company's competitors have substantially greater financial and
marketing resources than the Company. Although the Company believes
performance and price characteristics of its Novaclad-based products will
provide competitive solutions for its customers' needs, there can be no
assurance that its customers will not choose other technologies due to such
customers' familiarity with the competing technology, the financial resources
of the supplier or the ease of incorporating alternative technology into
customers' manufacturing processes. In addition, there can be no assurance
that other competitors will not enter the markets served by the Company. The
Company's results may be adversely affected by the actions of its competitors,
including the development of new technologies, the introduction of new
products or the reduction of prices. There also can be no assurance that the
Company will be able to take actions necessary to maintain its competitive
position.
Possible Volatility of Stock Price
Factors such as announcements by the Company or its competitors,
fluctuations in the Company's operating results, general conditions in the
automotive and data communication markets or the worldwide economy or changes
in earnings or estimates by analysts could cause the price of the Company's
Common Stock to fluctuate, perhaps substantially. Also, prices for many
technology company stocks, including the Common Stock, may fluctuate widely
for reasons that are not always related to the operating performance of such
companies.
Reliance on Specialized Manufacturing Facilities
The Company has separate manufacturing and assembly facilities, certain
of which perform processes dependent upon products produced at its other
facilities. The Company's flexible laminates are produced at one facility and
further processed into printed circuitry in a separate facility, both located
in Northfield, Minnesota. Further assembly is performed at two facilities in
South Dakota. Delays or disruption at its flexible laminate facility may
result in an insufficient supply of materials for its flexible printed
circuitry facility and its assembly facilities. The Company's Novaclad,
ViaGrid and Via-Thin(TM) products will be manufactured primarily at the
Longmont Facility. Each of these facilities contains or will contain
specialized equipment which is not quickly replaceable. While the Company
carries business interruption insurance, any natural or other event affecting
any one of these facilities or the manufacturing equipment could materially
and adversely affect the Company's position in its markets and results of
operations.
Dependence on Certain Suppliers
The Company is dependent upon single source suppliers for certain of the
raw materials used in the Company's manufacturing processes. While the
Company has not experienced significant problems in the delivery of these
materials or services, the Company believes an interruption in the supply of
such materials or services could have a material adverse effect on the
Company's results of operations.
Patents, Trademarks and Proprietary Rights
The Company's success depends, to a large extent, on its ability to
maintain a competitive proprietary position in its product areas. The Company
has received certain patents with respect to its products and processes and
has several other patent applications pending. There can be no assurance that
patents will be issued on the basis of the Company's applications, that any
patent issued to the Company will not be challenged, invalidated or
circumvented or that the rights granted under any patent will provide
significant benefits to the Company. The Company is aware of a patent which
may cover certain plated through holes of double-sided circuits made of the
Company's Novaclad material. Although no claims have been made against the
Company under this patent, the owner of the patent may attempt to construe the
patent broadly enough to cover certain Novaclad products manufactured
currently or in the future by the Company. The Company believes that prior
commercial art and conventional technology, including certain patents of the
Company, exist which would allow the Company to prevail in the event any such
claim is made under this patent. Any action commenced by or against the
Company could be time consuming and expensive and could result in requiring
the Company to enter into a license agreement or cease manufacture of any
products ultimately determined to infringe such patent. In addition to patent
protection, the Company also attempts to protect its trademarks through
registration and proper use. The Company also attempts to protect its
proprietary information as trade secrets by taking security precautions at its
facilities. Further, the Company maintains confidentiality through the use of
secrecy or confidentiality agreements and other measures intended to prevent
the public dissemination of trade secret information. There can be no
assurance that these steps will prevent misappropriation of the Company's
proprietary rights or that third parties will not independently develop
functionally equivalent or superior non-infringing technology.
Environmental Matters
The Company's production processes require the use, storage and disposal
of certain substances which are considered hazardous under applicable federal
and state laws. Accordingly, the Company is subject to a variety of
regulatory requirements for the handling of such substances. The Company has
maintained a safety and environmental compliance program for a number of
years. An inadvertent mishandling of materials or similar incident, however,
could adversely affect the operations of the Company and result in costly
administrative or legal proceedings. In addition, future environmental
regulations could add to overall costs of doing business.
Anti-Takeover Provisions
The Company's Articles of Incorporation and the Minnesota Business
Corporation Act include certain "anti-takeover" provisions. These
provisions, including the power to issue additional stock and to establish
separate classes or series of stock, may, in certain circumstances, deter or
discourage takeover attempts and other changes in control of the Company not
approved by the Board. In addition, in June 1996, the Board of Directors of
the Company adopted a Rights Agreement (the "Rights Agreement"), commonly
called a poison pill. Pursuant to the terms of the Rights Agreement, one
right (a "Right") was issued in respect of each share of the Company's
Common Stock outstanding. Such Rights also attach to each share of Common
Stock issued subsequent to the adoption of the Rights Agreement, including the
Shares offered hereby. Each Right entitles the holder thereof to purchase a
fraction of a share of the Company's Series A Preferred Stock or, in certain
instances, Common Stock of the Company or stock of an Acquiring Person (as
defined below) in the event that (i) a third party or a group (an "Acquiring
Person") acquires beneficial ownership of 15% or more of the Common Stock or
(ii) a tender offer or exchange offer that would result in a person or group
becoming an Acquiring Person is commenced. The Rights Agreement will be in
effect through June 2006 and could have the effect of discouraging tender
offers or other transactions which could result in shareholders receiving a
premium over the market price of Common Stock.
USE OF PROCEEDS
The Company will not receive any proceeds from the sale of the Shares by
the Selling Shareholders. If the Warrants are exercised in full, the Company
will receive approximately $1,875,000. Such amount is intended to be used by
the Company for working capital purposes. There can be no assurance, however,
that the Warrants will be exercised.
SELLING SHAREHOLDERS
The Shares of Common Stock offered hereby by the Selling Shareholders
are issuable (i) upon conversion of the Series B Preferred Stock held by the
Selling Shareholders, (ii) as accrued dividends on the Series B Preferred
Stock and (iii) upon the exercise of outstanding warrants held by the Selling
Shareholders (the "Warrants"). The Series B Preferred Stock and the
Warrants were issued to the Selling Shareholders in connection with a private
placement in August 1997.
The number of Shares registered on the registration statement of which
this Prospectus is a part and the number of Shares offered hereby have been
determined by agreement between the Company and the Selling Shareholders. The
number of Shares of Common Stock that will ultimately be issued to the Selling
Shareholders upon conversion of the Series B Preferred Stock is dependent upon
a conversion formula which relies, in part, on the closing bid price of the
Common Stock preceding the date of conversion and therefore cannot be
determined at this time. The Series B Preferred Stock may be converted into
shares of Common Stock from time to time at a conversion price equal to the
lesser of (i) 110% of the average closing bid price for the five consecutive
trading days immediately preceeding August 29, 1997 and (ii) 101% of the
average of the lowest closing bid prices for five consecutive trading days
during the 30 consecutive trading days immediately preceeding the date of
conversion of the Series B Preferred Stock. The Warrants are exercisable for
an aggregate of 67,812 Shares of Common Stock.
The amount of Common Stock shown in the following table represents
approximately 1.8 times the amount into which the full 15,000 shares of Series
B Preferred Stock might have been converted on August 29, 1997 based on the
then conversion price of $25.3693. The amount of Common Stock shown in the
table also includes 88,690 shares of Common Stock representing accrued
dividends for three years on the Series B Preferred Stock based on the
conversion price of $25.3693, as well as 67,812 shares of Common Stock
issuable to the Selling Shareholders upon exercise of the Warrants:
Common Stock Number of
Beneficially Shares of Owned After
Owned Prior to Common Stock Offering(2)(3)
Selling Shareholder Offering(1) Offered(2) Number Percent
Southbrook International
Investments, Ltd. 412,575 412,575 0 *
Proprietary Convertible
Investment Group, Inc. 406,962 406,962 0 *
HBK Cayman L.P. 203,481 203,481 0 *
HBK Offshore Fund Ltd. 203,481 203,481 0 *
Brown Simpson Strategic
Growth Fund, L.P. 12,274 12,274 0 *
Brown Simpson Asset
Management, LLC (4) 11,227 11,227 0 *
___________________________
* Less than 1%.
(1) The Purchase Agreement limits the conversion and exercise rights of a
Selling Shareholder to the extent that the shares of Common Stock held by
such Selling Shareholder after a conversion of Series B Preferred Stock
and/or exercise of the Warrant issued to such Selling Shareholder would
exceed 4.999% of the then issued and outstanding shares of Common Stock
following such conversion and/or exercise.
(2) Represents the maximum number of Shares that may be sold by each Selling
Shareholder pursuant to this Prospectus; provided, however, that pursuant
to Rule 416 under the Securities Act of 1933, as amended, the Registration
Statement of which this Prospectus is a part shall also cover any
additional shares of Common Stock which become issuable in connection with
the Shares registered for sale hereby by reason of (i) any stock dividend,
stock split, recapitalization or other transaction effected without the
receipt of consideration which results in an increase in the Company's
number of outstanding shares of Common Stock or (ii) decreases in the
conversion price applicable to the Series B Preferred Stock. In the event
Rule 416 is not available, the Company is obligated to register such
additional shares of Common Stock.
(3) Assumes the sale of all Shares offered hereby to unaffiliated third
parties. The Selling Shareholders may sell all or part of their
respective Shares.
(4) Represents Shares issuable solely upon exercise of Warrants.
PLAN OF DISTRIBUTION
The Shares of Common Stock of the Company offered hereby may be sold by
the Selling Shareholders, or by pledgees, donees, transferees or other
successors in interest thereof.
Offers and sales of the Shares may be made from time to time on one or
more exchanges or in the over-the-counter market, or otherwise, at prices and
on terms then prevailing or at prices related to the then-current market
price, or in negotiated transactions. The methods by which the Shares may
be sold may include, but not be limited to, the following: (a) a block trade
in which the broker or dealer so engaged will attempt to sell the Shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction; (b) purchases by a broker or dealer as principal
and resale by such broker or dealer for its account in accordance with any
method of sale described herein; (c) an exchange distribution in accordance
with the rules of such exchange; (d) ordinary brokerage transactions in which
the broker solicits purchasers; (e) privately negotiated transactions; (f)
short sales; and (g) a combination of any such methods of sale. In effecting
sales, brokers and dealers engaged by the Selling Shareholders may arrange for
other brokers or dealers to participate. Brokers or dealers may receive
commissions or discounts from the Selling Shareholders or from the purchasers
in amounts to be negotiated prior to the sale. The Selling Shareholders may
also sell such Shares in accordance with Rule 144 under the Securities Act of
1933, as amended (the "Securities Act"), if available.
From time to time the Selling Shareholders may engage in short sales,
short sales against the box, puts and calls and other transactions in
securities of the Company or derivatives thereof, and may sell and deliver
the Shares in connection therewith. From time to time Selling Shareholders
may pledge their Shares pursuant to the margin provisions of their respective
customer agreements with their respective brokers. Upon a default by a
Selling Shareholder, the broker may offer and sell the pledged Shares of
Common Stock from time to time.
The Company has agreed to use its best efforts to maintain the
effectiveness of the registration of the Shares being offered hereunder for
three years from the date of this Prospectus or such earlier date when all of
the Shares being offered hereunder have been sold or may be sold without
volume or other restrictions pursuant to Rule 144 under the Securities Act,
as determined by counsel to the Company pursuant to a written opinion letter.
The Selling Shareholders and any brokers participating in such sales may
be deemed to be underwriters within the meaning of the Securities Act. There
can be no assurance that the Selling Shareholders will sell any or all of the
Shares of Common Stock offered hereunder.
All proceeds from any such sales will be the property of the Selling
Shareholder who will bear the expense of underwriting discounts and selling
commissions. The Company is required to pay all fees and expenses incident to
the offering and sale of the Shares, including fees and disbursements (not to
exceed $2,000) of counsel to the Selling Shareholders. The Company has agreed
to indemnify the Selling Shareholders against certain losses, claims, damages
and liabilities, including liabilities under the Securities Act.
LEGAL MATTERS
The validity of the Common Stock offered hereby and certain other legal
matters will be passed upon for the Company by Lindquist & Vennum P.L.L.P.,
Minneapolis, Minnesota. Gerald E. Magnuson, Of Counsel to Lindquist & Vennum
P.L.L.P., is a director, officer and holder of Common Stock of the Company.
EXPERTS
The audited financial statements and schedule incorporated by reference in
this registration statement have been audited by Arthur Andersen LLP,
independent public accountants, as indicated in their reports with respect
thereto, and are incorporated herein in reliance upon the authority of said
firm as experts in accounting and auditing in giving said reports.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Room 1024, Washington, D.C. 20549, and the Commission's regional offices
located at 7 World Trade Center, Suite 1300, New York, New York 10048 and
Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained at prescribed rates
from the Public Reference Section of the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549. The Commission maintains a Web site that contains
reports, proxy and other information regarding the Company filed
electronically with the Commission at http://www.sec.gov. The Company's
Common Stock is quoted on the Nasdaq National Market of the National
Association of Securities Dealers Automated Quotations system ("Nasdaq"), and
such reports, proxy statements and other information regarding the Company
can be inspected at the offices of Nasdaq Operations, 1735 K Street, N.W.,
Washington, D.C. 20006.
The Company has filed with the Commission a Registration Statement
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended, with respect to the
Shares offered hereby. This Prospectus does not contain all information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the Shares offered hereby,
reference is made to such Registration Statement, copies of which may be
inspected in the public reference facilities maintained by the Commission at
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, and copies of
which may be obtained from the Commission upon payment of the prescribed fees.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions of documents heretofore filed by the
Company with the Securities and Exchange Commission (the "Commission") under
the Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated herein by reference: (1) Annual Report on Form 10-K for the year
ended August 30, 1996; (2) Quarterly Report on Form 10-Q for the quarter ended
November 30, 1996; (3) Quarterly Report on Form 10-Q for the quarter ended
February 28, 1997; (4) Quarterly Report on Form 10-Q for the quarter ended May
31, 1997; (5) Proxy Statement for Annual Meeting of Shareholders held on
January 8, 1997 (except to the extent portions of such document are not
deemed incorporated by reference into any filing under the Securities Act or
the Exchange Act); (6) Current Report on Form 8-K filed on September 10,
1997; and (7) the description of the Company's Common Stock contained in the
Company's Registration Statement on Form S-3 filed with the Commission under
the Exchange Act on October 12, 1995, declared effective on November 15,
1995 (No. 33-63373), and as such description is supplemented by Form 8-A,
filed with the Commission on June 21, 1996.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus shall be
deemed to be incorporated by reference herein and to be a part hereof from the
date of filing of such reports and documents (except to the extent portions of
such document are not deemed incorporated by reference into any filing under
the Securities Act or the Exchange Act).
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for the purposes of this Prospectus to the extent that a statement contained
herein or in any other subsequently filed document that 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
so modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents incorporated herein by reference,
other than exhibits to such documents (unless such exhibits are specifically
incorporated by reference in such documents). Written requests for such
copies should be directed to John V. McManus, Vice President-Finance,
Sheldahl, Inc., 1150 Sheldahl Road, Northfield, Minnesota 55057. Telephone
requests may be directed to John V. McManus at (507) 663-8000.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14: Other Expenses of Issuance and Distribution
SEC registration fee $ 7,766
Nasdaq listing fee 17,500
Accounting fees and expenses 7,000
Legal fees and expenses 7,500
Printing expenses 0
Blue Sky fees and expenses 0
Transfer agent and registrar fees 500
Miscellaneous 734
Total $41,000
=======
__________________
*Except for the SEC registration fee and Nasdaq listing fee, all of the
foregoing expenses have been estimated.
ITEM 15: Indemnification of Directors and Officers
Section 302A.521 of Minnesota Statutes requires the Registrant to
indemnify a person made or threatened to be made a party to a proceeding by
reason of the former or present official capacity of the person with respect
to the Registrant, against judgments, penalties, fines, including reasonable
expenses, if such person (1) has not been indemnified by another
organization or employee benefit plan for the same judgments, penalties,
fines, including, without limitation, excise taxes assessed against the
person with respect to an employee benefit plan, settlements, and reasonable
expenses, including attorneys' fees and disbursements, incurred by the person
in connection with the proceeding with respect to the same acts or omissions;
(2) acted in good faith; (3) received no improper personal benefit, and
statutory procedure has been followed in the case of any conflict of
interest by a director; (4) in the case of a criminal proceeding, had no
reasonable cause to believe the conduct was unlawful; and (5) in the case
of acts or omissions occurring in the person's performance in the official
capacity of director or, for a person not a director, in the official
capacity of officer, committee member or employee, reasonably believed that
the conduct was in the best interests of the Registrant, or, in the case of
performance by a director, officer or employee of the Registrant as a
director, officer, partner, trustee, employee or agent of another
organization or employee benefit plan, reasonably believed that the conduct
was not opposed to the best interests of the Registrant. In addition,
Section 302A.521, subd. 3, requires payment by the Registrant, upon written
request, of reasonable expenses in advance of final disposition in certain
instances. A decision as to required indemnification is made by a
disinterested majority of the Board of Directors present at a meeting at
which a disinterested quorum is present, or by a designated committee of
the Board, by special legal counsel, by the shareholders or by a court.
The Registrant's Bylaws provide for indemnification of officers, directors
and employees to the fullest extent provided by Section 302A.521.
As permitted by Section 302A.251 of the Minnesota Business Corporation
Act, the Amended and Restated Articles of Incorporation of the Registrant
eliminate the liability of the directors of the Registrant for monetary damages
arising from any breach of fiduciary duties as a member of the Registrant's
Board of Directors (except as expressly prohibited by Minnesota Statutes,
Section 302A.251, subd. 4).
Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended (the "Securities Act") may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the provisions
referenced in Item 15 of this Registration Statement or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act, and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered hereunder, 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 Securities Act and will be governed by
the final adjudication of such issue.
In addition, the Registration Rights Agreement, filed as an Exhibit
hereto, contains provisions for indemnification by the Selling Shareholders of
the Registrant and its officers, directors, and controlling persons against
certain liabilities under the Securities Act.
Item 16. Exhibits
Exhibit
Number Description
3.1 Amended and Restated Articles of Incorporation, incorporated by
reference from Exhibit 3.1 of the Registrant's Form 10-Q for the quarter
ended December 2, 1994.
3.2 Bylaws, as amended, incorporated by reference from Exhibit 3.2 of
the Registrant's Registration Statement on Form S-2 (File No. 33-79266).
4.1 Stock Purchase Agreement Relating to Purchase of Sheldahl Stock
dated March 12, 1987 between the Registrant and Sumitomo Bakelite Co., Ltd.,
as amended through January 9, 1991, incorporated by reference from Exhibit
C(4) of Registrant's Form 8-K filed January 22, 1991.
4.2 Amendment No. 4 to Stock Purchase Agreement Relating to Purchase of
Sheldahl Stock dated January 3, 1994, incorporated by reference from
Exhibit 4.2 of the Registrant's Registration Statement on Form S-2
(File No. 33-79266).
4.3 Convertible Preferred Stock Purchase Agreement among the Company,
Southbrook International Investments, Ltd., HBK Cayman L.P., HBK
Offshore Fund Ltd., HBK Investments L.P., Proprietary Convertible
Investment Group, Inc. and Brown Simpson Strategic Growth Fund,
L.P., incorporated by reference from Exhibit 4.1 of Registrant's
Form 8-K filed September 10, 1997.
4.4 Certificate of Designation, Preferences and Rights of Series B
Convertible Preferred Stock, incorporated by reference from Exhibit 4.2
of Registrant's Form 8-K filed September 10, 1997.
4.5 Form of Warrant issued to Southbrook International Investments,
Ltd., HBK Cayman L.P., HBK Offshore Fund Ltd., Proprietary
Convertible Investment Group, Inc. and Brown Simpson Strategic
Growth Fund, L.P., incorporated by reference from Exhibit 4.3 of
Registrant's Form 8-K filed September 10, 1997.
4.6 Registration Rights Agreement among the Company, Southbrook
International Investments, Ltd., HBK Cayman L.P., HBK Offshore Fund
Ltd., HBK Investments L.P., Proprietary Convertible Investment
Group, Inc. and Brown Simpson Strategic Growth Fund, L.P.,
incorporated by reference from Exhibit 4.4 of Registrant's Form 8-K
filed September 10, 1997.
4.7 Certificate of Designation, Preferences and Rights of Series B
Junior Participating Preferred Stock, incorporated by reference from
Exhibit 1 of Registrant's Form 8-A, filed June 21, 1996.
5.1 Opinion and Consent of Lindquist & Vennum, counsel to the Company.
23.1 Consent of Arthur Andersen LLP.
23.2 Consent of Lindquist & Vennum P.L.L.P. (included in Exhibit 5.1 to
the Registration Statement).
24 Power of Attorney (included in the signature page of the
Registration Statement).
Item 17. Undertakings
The undersigned Registrant hereby undertakes, in accordance with Item 512
of Regulation S-K:
(a) (1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement 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;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial
bona fide offering thereof;
(4) 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) That, for purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section 13(a) or
15(d) of the Exchange Act 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; and
(c) 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
securityholders that is incorporated by reference in the Prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 and Rule 14c-3
under the Exchange Act; 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.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in this
Registration Statement 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.
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.
(i) The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act
of 1933, the information omitted from the form of Prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a form
of Prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Securities Act of 1933 shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act of 1933, each post-effective amendment that contains a form of Prospectus
shall be deemed to be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe 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 Northfield, State of Minnesota, on the 23rd day of
September, 1997.
SHELDAHL, INC.
By /s/ James E. Donaghy
James E. Donaghy, President and
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints James
E. Donaghy and John V. McManus, and each of them (with full power to act
alone), such person's true and lawful attorneys-in-fact and agents with
full power of substitution and resubstitution for such person and in such
person's name, place and stead, in any and all capacities, to sign any and
all amendments (including post-effective amendments) to this Registration
Statement, 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 full power
and authority to do and perform each and every act and thing necessary or
desirable to be done in and about the premises, as fully to all intents
and purposes as such person, hereby ratifying and confirming all that said
attorneys-in-fact and agents, or their 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 on
September 23, 1997 in the capacities indicated.
Signature Title
/s/ James S. Womack Chairman of the Board and Director
James S. Womack
/s/ James E. Donaghy President, Chief Executive Officer and
James E. Donaghy Director (principal executive officer)
/s/ John V. McManus Vice President Finance (principal
John V. McManus financial and accounting officer)
/s/ John G. Kassakian Director
John G. Kassakian
/s/ Gerald E. Magnuson Director
Gerald E. Magnuson
William B. Miller Director
/s/ Kenneth J. Roering Director
Kenneth J. Roering
Richard S. Wilcox Director
/s/ Beekman Winthrop Director
Beekman Winthrop
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
of our report and to all references to our firm included in or made a part
of this registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Minneapolis, Minnesota,
September 22, 1997
<PAGE>
Exhibit 5.1
September 23, 1997
Sheldahl,Inc.
1150 Sheldahl Road
Northfield, MN 55057
Re:Registration Statement on Form S-3
Ladies and Gentlemen:
In connection with the Registration Statement on Form S-3 filed by
Sheldahl, Inc. (the "Company") with the Securities and Exchange Commission,
relating to a public offering of up to 1,250,000 shares of Common Stock, $.25
par value ("Common Stock"), to be offered and sold by certain Selling
Shareholders (as defined therein), please be advised that as counsel to the
Company, upon examination of such corporate documents and records as we have
deemed necessary or advisable for the purposes of this opinion, it is our
opinion that:
1. The Company is a validly existing corporation in good standing under
the laws of the State of Minnesota.
2. The shares of Common Stock being offered by the Selling Shareholders
are duly authorized and, when issued to the Selling Shareholders and paid for
as contemplated by the Purchase Agreement and the Warrants, as applicable,
included in the Registration Statement as Exhibits 4.3 and 4.5, respectively,
will be validly issued, fully paid and nonassessable.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement, and to the reference to our firm under the heading
"Legal Matters" in the Prospectus comprising a part of the Registration
Statement.
Very truly yours,
/s/ Lindquist & Vennum PLLP
LINDQUIST & VENNUM P.L.L.P.
<PAGE>
