As filed with the Securities and Exchange Commission on April 28, 1998.
Registration No. 333-49577
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U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
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PRE-EFFECTIVE
AMENDMENT NO. 1
TO FORM S-3
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
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AETRIUM INCORPORATED
(Exact name of registrant as specified in its charter)
MINNESOTA 41-1439182
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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2350 HELEN STREET
NORTH ST. PAUL, MINNESOTA 55109
(612) 704-1800
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
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DARNELL L. BOEHM
CHIEF FINANCIAL OFFICER AND SECRETARY
2350 HELEN STREET
NORTH ST. PAUL, MINNESOTA 55109
(612) 704-1800
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
Thomas C. Thomas, Esq.
Oppenheimer Wolff & Donnelly LLP
3400 Plaza VII, 45 South Seventh Street
Minneapolis, Minnesota 55402
(612) 607-7000
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Approximate date of commencement of proposed sale to the public:
From time to time after the effective date of this Registration Statement.
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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
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT PRICE REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, $.001 par value........... 930,000 Shares $14.3125 (2) $13,310,625 (2) $3,926.63 (3)
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</TABLE>
(1) The amount to be registered hereunder consists of 930,000 shares of
Common Stock to be sold by certain selling shareholders.
(2) Estimated solely for the purpose of calculating the amount of the
registration fee pursuant to Rule 457(c) under the Securities Act of
1933, based upon the average of the high and low sales prices of the
registrant's Common Stock on April 24, 1998, as reported by the Nasdaq
National Market.
(3) A registration fee equal to $4,124.59 was previously paid with the
Registration Statement filed with the Securities and Exchange
Commission on April 7, 1998.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
<PAGE>
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 THE 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 APRIL 28, 1998
PROSPECTUS
930,000 SHARES
AETRIUM INCORPORATED
COMMON STOCK
-----------------------
This Prospectus relates to 930,000 shares of Common Stock, par value
$0.001 per share (the "Common Stock"), of Aetrium Incorporated (the "Company"),
that may be offered for sale for the account of certain shareholders of the
Company as stated herein under the heading "Selling Shareholders." The shares
being offered by the Selling Shareholders hereunder include: (i) 900,000 shares
of outstanding Common Stock issued to certain Selling Shareholders in a private
transaction in connection with the purchase by the Company of substantially all
of the rights, title and interest in the assets of, and the assumption of
certain liabilities of, the equipment division of WEB Technology, Inc., pursuant
to an Asset Purchase Agreement dated as of March 20, 1998 (the "WEB Purchase
Agreement"); and (ii) 30,000 shares of outstanding Common Stock issued to one
Selling Shareholder in a private transaction in connection with the purchase by
the Company of substantially all of the rights, title and interest in the assets
of, and the assumption of certain liabilities of, Forward Systems Automation,
Inc., pursuant to an Asset Purchase Agreement dated as of March 28, 1997 (the
"FSA Purchase Agreement") (the WEB Purchase Agreement and the FSA Purchase
Agreement are collectively referred to as the "Purchase Agreements").
The Selling Shareholders have advised the Company that sales of the
shares offered hereunder by them or by their respective pledgees, donees,
transferees or other successors in interest, may be made from time to time on
the Nasdaq National Market, in the over the counter market, in ordinary
brokerage transactions, in negotiated transactions, or otherwise, at market
prices prevailing at the time of the sale or at negotiated prices. See "Plan of
Distribution."
The Selling Shareholders and any broker-dealers or other persons acting
on their behalf in connection with the sale of Common Stock hereunder may be
deemed to be an "underwriter" within the meaning of the Securities Act of 1933,
as amended (the "Securities Act"), and any commissions received by the Selling
Shareholders and any profit realized by them on the resale of Common Stock as
principals may be deemed to be underwriting commissions under the Securities
Act. As of the date hereof, there are no special selling arrangements between
any broker-dealer or other person and any of the Selling Shareholders.
The Company will not receive any part of the proceeds of any sales
of shares pursuant to this Prospectus. Pursuant to the terms of the Purchase
Agreements, the Company will pay all the expenses of registering the shares,
except for selling expenses incurred by the Selling Shareholders in connection
with this offering, including any fees and commissions payable to broker-dealers
or other persons, which will be borne by the Selling Shareholders. In addition,
the Purchase Agreements provide for certain other usual and customary terms,
including indemnification by the Company of the Selling Shareholders against
certain liabilities arising under the Securities Act.
THE SHARES OF COMMON STOCK OFFERED HEREBY INVOLVE CERTAIN RISKS. SEE
"RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS.
The Company's Common Stock is traded on the Nasdaq National Market
under the symbol "ATRM". On April 24, 1998, the last sale price of the Common
Stock on the Nasdaq National Market was $14.00 per share.
-----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------
THE DATE OF THIS PROSPECTUS IS ______________, 1998.
<PAGE>
No person has been authorized to give any information or to make any
representations not contained or incorporated by reference in this Prospectus in
connection with the offer described in this Prospectus and, if given or made,
such information and representations must not be relied upon as having been
authorized by the Company or the Selling Shareholders. Neither the delivery of
this Prospectus nor any sale made under this Prospectus will under any
circumstances create any implication that there has been no change in the
affairs of the Company since the date hereof or since the date of any documents
incorporated herein by reference. This Prospectus does not constitute an offer
to sell or a solicitation of an offer to buy any securities other than the
securities to which it relates, or an offer or solicitation in any state to any
person to whom it is unlawful to make such offer in such state.
AVAILABLE INFORMATION
The Company is subject to the informational 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 filed by the Company pursuant to the Exchange
Act may be inspected and copied at the public reference facilities maintained by
the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C.
20549 and at the regional offices of the Commission located at Seven World Trade
Center, Suite 1300, New York, New York 10048 and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
also be obtained from the Public Reference Section of the Commission at
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed
rates. In addition, the Commission maintains a Web site that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. The address of the Commission's
Web site is http://www.sec.gov.
The Company has filed with the Commission a Registration Statement on
Form S-3 under the Securities Act. This Prospectus does not contain all of the
information, exhibits and undertakings set forth in the Registration Statement,
certain portions of which are omitted as permitted by the Rules and Regulations
of the Commission. Copies of the Registration Statement and the exhibits are on
file with the Commission and may be obtained, upon payment of the fee prescribed
by the Commission, or may be examined, without charge, at the offices of the
Commission set forth above. For further information, reference is made to the
Registration Statement and its exhibits.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the Commission by the Company (File
No. 0-22166) are incorporated by reference in this Prospectus: (1) the Company's
Annual Report on Form 10-K for the year ended December 31, 1997; (2) the
Company's Current Report on Form 8-K as filed with the Commission on April 15,
1998; (3) all other reports filed by the Company pursuant to Sections 13(a) or
15(d) of the Exchange Act since December 31, 1997; and (4) the description of
the Company's Common Stock contained in its Registration Statement on Form 8-A
and any amendments or reports filed for the purpose of updating such
description.
All documents filed by the Company pursuant to Sections 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 hereunder will be deemed to be incorporated by
reference in this Prospectus and to be a part hereof from the date of filing of
such documents. Any statement contained herein or in a document all or any
portion of which is incorporated or deemed to be incorporated by reference
herein will 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
<PAGE>
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 will 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 written or oral request of such person, a
copy of any or all of the documents referred to above which are incorporated by
reference in this Prospectus (other than exhibits to such documents unless such
exhibits are specifically incorporated by reference into the information that
this Prospectus incorporates). Requests should be directed to Aetrium
Incorporated, 2350 Helen Street, North St. Paul, Minnesota 55109, Attention: Lee
A. Schafer; telephone (612) 704-1800.
<PAGE>
THE COMPANY
THIS PROSPECTUS CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS. FOR THIS
PURPOSE, ANY STATEMENTS CONTAINED IN THIS PROSPECTUS THAT ARE NOT STATEMENTS OF
HISTORICAL FACT MAY BE DEEMED TO BE FORWARD-LOOKING STATEMENTS. WITHOUT LIMITING
THE FOREGOING, WORDS SUCH AS "MAY," "WILL," "EXPECT," "BELIEVE," "ANTICIPATE,"
"ESTIMATE" OR "CONTINUE" OR THE NEGATIVE OR OTHER VARIATIONS THEREOF OR
COMPARABLE TERMINOLOGY ARE INTENDED TO IDENTIFY FORWARD-LOOKING STATEMENTS.
THESE STATEMENTS BY THEIR NATURE INVOLVE SUBSTANTIAL RISKS AND UNCERTAINTIES,
AND ACTUAL RESULTS MAY DIFFER MATERIALLY DEPENDING ON A VARIETY OF FACTORS,
INCLUDING THOSE DESCRIBED UNDER THE CAPTION "RISK FACTORS."
GENERAL
Aetrium Incorporated (the "Company") designs, manufactures and
markets a variety of electromechanical equipment used in the handling and
testing of microelectronic components, including semiconductor devices known as
integrated circuits ("ICs") and other forms of electronic components. The
Company's primary focus is on high volume electronic component types and on the
latest package designs. The Company's products are purchased primarily by
semiconductor manufacturers and are used in the "back-end" of semiconductor
manufacturing processes. The Company's products automate critical functions to
improve manufacturing yield, raise quality levels, reduce manufacturing costs
and increase product reliability.
The Company has three principal product lines. The largest, in terms of
revenue, is its broad line of test handlers, which incorporate thermal
conditioning, contactor and automated handling technologies to provide automated
handling of ICs and other electronic components during production test cycles.
Test handler products are primarily produced by the Company's North St. Paul,
San Diego, and Aetrium FSA divisions. Change kits to adapt the Company's test
handlers to different IC package configurations and to upgrade installed
equipment for enhanced performance also represent a significant part of the
Company's revenue. The Company's second product line consists of its IC
Automation Products, which are produced by the North St. Paul Division. These
products are sold to original equipment manufacturers ("OEMs") to incorporate as
the automated handling components of such OEM's own proprietary equipment for a
variety of other IC processing requirements, such as marking, lead scanning, and
lead trim and form. The Company's third product line is specialty test
equipment, which include reliability test equipment and environmental test
equipment. The Company's reliability test systems provide IC manufacturers with
IC performance data to aid in the evaluation and improvement of IC designs and
manufacturing processes to increase IC yield and reliability and are produced in
North St. Paul, Minnesota. The Company's environmental test equipment products
provide burn-in testing of ICs and are produced in the Company's Lawrence
Division.
The Company was incorporated in Minnesota in December 1982. The
Company's executive offices are located at 2350 Helen Street, North St. Paul,
Minnesota 55109, and its telephone number is (612) 704-1800.
RECENT DEVELOPMENTS
Pursuant to an Asset Purchase Agreement dated as of March 20, 1998 (the
"WEB Purchase Agreement"), the Company, through its wholly-owned subsidiary,
Aetrium-WEB Technology, L.P., purchased substantially all of the rights, title
and interest in the assets of, and assumed certain liabilities of, the equipment
division of WEB Technology, Inc., a Delaware corporation ("WEB"), on April 1,
1998. The total consideration paid by the Company for the assets of WEB was
$7,835,000 ($500,000 of which
<PAGE>
will be paid no later than June 30, 1998, subject to any post-closing
adjustments to the purchase price) and 900,000 shares of Common Stock (the
"Acquired WEB Shares"). Pursuant to the terms of the WEB Purchase Agreement, the
Company distributed the Acquired WEB Shares to the shareholders of WEB in
accordance with their proportionate ownership interests. The Company granted the
Selling Shareholders a one-time demand registration right pursuant to which the
shares offered hereby have been registered. Under the terms of the WEB Purchase
Agreement, the Selling Shareholders are restricted from selling any of the
Acquired WEB Shares during the period that commences on the seventh day of the
last month of each of the Company's fiscal quarters and ends on the third
business day after the Company releases financial results for such quarter.
Additionally, certain Selling Shareholders are further restricted from selling
any of the Acquired WEB Shares held by such Selling Shareholders under a Right
of First Refusal Agreement with the Company pursuant to which such Selling
Shareholders agreed to provide a right of first refusal to the Company on any
sale of such Selling Shareholders' Acquired WEB Shares until March 31, 2000.
Pursuant to an Asset Purchase Agreement between the Company and Forward
Systems Automation, Inc. ("FSA") dated as of March 28, 1997 (the "FSA Purchase
Agreement"), the Company, through its wholly-owned subsidiary, Aetrium-FSA,
L.P., purchased substantially all of the rights, title and interest in the
assets of, and assumed certain liabilities of, FSA. On April 1, 1997 (the
"Closing Date"), the total consideration paid by the Company for the assets of
FSA was $4,000,000 (subject to any post-closing adjustments to the purchase
price) and 186,000 shares of Common Stock (the "Acquired FSA Shares"). Pursuant
to the terms of the FSA Purchase Agreement, the Acquired FSA Shares are to be
held in escrow and disbursed in amounts of 62,000 shares on each of the first
three (3) anniversary dates of the Closing Date. The Acquired FSA Shares,
however, are subject to forfeiture only in the event that Farid J. Sabounchi's
employment with the Company is terminated (either voluntarily or for Cause (as
defined in the FSA Purchase Agreement)) prior to the applicable disbursement
date. Subsequent to the Closing Date, FSA changed its name, pursuant to the FSA
Purchase Agreement, to Futuristix Inc. ("Futuristix"). On April 1, 1998, the
Company disbursed the first installment of 62,000 shares of Common Stock to
Futuristix.
Under the terms of the FSA Purchase Agreement, FSA is restricted from
selling any of the Acquired FSA Shares if the Board of Directors of the Company
(the "Board") determines, in its good faith judgment, that the Company's
disclosure obligations under the registration statement would require the
disclosure of material information that the Company has a bona fide business
purpose for preserving as confidential (the "Blackout Period"). The Blackout
Period expires on the earlier to occur of (i) the date on which such material
information is disclosed to the public or ceases to be material or the Company
is otherwise able to comply with its disclosure obligations, or (ii) sixty (60)
days after the Board makes such good faith determination.
<PAGE>
RISK FACTORS
The following risk factors relating to the Company should be considered
in evaluating an investment in the Common Stock.
DEPENDENCE ON SEMICONDUCTOR INDUSTRY
The Company is in the business of supplying capital equipment to the
manufacturers of integrated circuits and other electronic components within the
semiconductor industry. This industry has been subject to significant market
fluctuations and periodic downturns. Often these developments have had a
disproportionate effect on capital equipment suppliers. The Company has
developed and acquired product lines for the semiconductor market segments which
it feels provide favorable growth opportunities and, accordingly, the Company's
business is most sensitive to market fluctuations in those specific segments.
The Company's future financial performance may be materially adversely affected
by market fluctuations in the semiconductor industry in general, and more
particularly by fluctuations in the industry segments within the Company's
primary focus.
MANAGEMENT OF GROWTH
Company sales have increased at an average annual compounded growth
rate of approximately 35% during the period from 1986 through 1997. Since
December 1995, the Company has acquired several businesses and product lines: EJ
Systems in December 1995; Forward Systems Automation in April 1997; the Handler
Division of Advantek, Inc. in October 1997; and the equipment division of WEB
Technology, Inc. in April 1998. The Company's strategy is to continue to grow
its revenue base through product acquisition and development. The Company also
expects increases in demand for its products resulting from general growth in
the semiconductor industry. The Company's ability to manage future growth will
be dependent on its success in assimilating these recent and future
acquisitions. The Company's ability to continue to meet increasing production
requirements and manage future growth will also depend in part on its success in
attracting and retaining additional management and technical personnel at each
of its operating locations. Industry growth and low unemployment rates have
increased the competition for such personnel. If the Company is unable to manage
growth effectively and meet increasing production requirements, customer
confidence could erode and demand for the Company's products could deteriorate,
which could materially and adversely affect the Company's business and operating
results.
FUTURE ACQUISITIONS
The Company has pursued in the past and continues to pursue
acquisitions of complementary technologies, product lines or businesses. Future
acquisitions by the Company could result in dilutive issuances of equity
securities, and the incurrence of additional debt and amortization expenses
related to goodwill and other intangible assets that could adversely affect the
Company's profitability. In addition, gross profit margins of acquired products,
necessary product or technology development expenditures and other factors that
may be involved in any such acquired business could result in dilution to the
Company's earnings. Acquisitions also may involve numerous other risks,
including difficulties in the assimilation of the operations and products of the
acquired business, dependence on new products and processes, the diversion of
management's attention from other business concerns, risks of entering markets
in which the Company has no or limited direct prior experience, the potential
loss of key employees of the acquired business and difficulties in attracting
additional key employees necessary to absorb added management responsibilities.
No assurance can be given as to the effect of any future acquisition on the
Company's business or operating results.
<PAGE>
DEPENDENCE ON NEW PRODUCTS AND PROCESSES
The market for the Company's products is characterized by rapid
technological change and evolving industry standards and is highly competitive
with respect to timely product innovation. The development of more complex ICs
has driven the need for new equipment and processes to produce such devices at
an acceptable cost. The Company believes that its future success will depend in
part upon its ability to anticipate changes in technology IC package types and
industry standards and to successfully develop and introduce new and enhanced
products on a timely basis. As a result, the Company expects to continue to make
significant investments in research and development and to continue to consider
from time to time the strategic acquisition of businesses, products and
technologies complementary to the Company's business. If the Company is unable
for technological or other reasons to introduce products in a timely manner in
response to changes in the industry or if products or product enhancements that
the Company develops or acquires do not achieve market acceptance, the Company's
business and operating results could be materially and adversely affected.
POTENTIAL FLUCTUATIONS IN QUARTERLY RESULTS
The Company's operating results may fluctuate based on factors such as
the cancellation and rescheduling of orders, seasonal fluctuations in business
activity, product announcements by the Company or its competitors, and changes
in pricing policies by the Company, its competitors or its suppliers. If
anticipated shipments in any quarter do not occur or are delayed, expenditure
levels could be disproportionately high, and the Company's operating results for
that quarter would be adversely affected. The Company attempts to maintain a
backlog of orders sufficient to reduce the impact of these factors, but there
can be no assurance that backlog levels will be maintained.
COMPETITION
The markets for the Company's test handlers, IC Automation products and
reliability and environmental test systems are highly competitive. Aetrium
competes with a number of companies ranging from very small businesses to large
companies, some of which have substantially greater financial, manufacturing,
marketing and product development resources than the Company. Although the
Company believes its products have competitive advantages over its current
competitors' products, there can be no assurance that the Company will be able
to compete successfully against current and future sources of competition or
that the competitive pressures faced by the Company will not adversely affect
its financial performance.
CUSTOMER CONCENTRATION
Many of the Company's end user customers purchase through the Company's
international distributors, and one of the Company's international distributors
represented approximately 12% of the Company's 1997 net sales. Three of the
Company's end customers accounted for approximately 18%, 14% and 10%,
respectively, of the Company's 1997 net sales. The Company intends to continue
efforts to broaden its base of customers. However, a reduction, delay or
cancellation of orders from one or more of its significant customers, or the
loss of one or more of such customers could have a material adverse effect on
the Company's business and operating results.
<PAGE>
RELIANCE ON THIRD PARTY DISTRIBUTION CHANNELS
The Company markets and sells its test handlers and reliability and
environmental test equipment primarily through third party manufacturers'
representatives and international distributors that are not under the direct
control of the Company. The Company has limited internal sales personnel. A
reduction in the sales efforts by the Company's current manufacturers'
representatives or distributors or termination of their relationships with the
Company could adversely affect the Company's business and operating results.
OEM CUSTOMERS FOR IC AUTOMATION PRODUCTS
The Company markets its IC Automation modules to a number of IC
processing equipment OEMs. The Company's ability to retain its OEM customers and
attract new OEM customers depends on a number of factors, including the changing
needs and financial condition of these customers. Failure of any OEM customer
may not only result in loss of IC Automation product line sales, but also loss
on outstanding receivables due from such OEM.
INTERNATIONAL OPERATIONS
For the years ended December 31, 1995, 1996 and 1997, approximately
47%, 28% and 30%, respectively, of the Company's net sales were derived from
shipments to international customers, and the Company expects that international
sales will continue to account for a significant portion of its net sales. The
Company's international business may be adversely affected by governmental,
political and economic conditions, including tariff regulations, import quotas
and other factors. While foreign sales are priced in dollars, fluctuations in
currency exchange rates may reduce the demand for the Company's products by
increasing the price of the Company's products in the currency of the countries
to which the products are sold.
DEPENDENCE ON SENIOR MANAGEMENT AND KEY EMPLOYEES
The Company's success depends on the performance of its executive
officers and other key personnel. The loss of the services of any of its
executive officers or other key employees could have a material adverse effect
on the Company. The Company's future success will also depend in part upon its
ability to attract and retain highly qualified personnel. The Company has not
purchased key-man life insurance on any of its executive officers or other key
employees and currently does not intend to purchase such insurance.
PROTECTION OF INTELLECTUAL PROPERTY
The Company currently holds several U.S. patents with respect to its
products and technology. There can be no assurance, however, that patents will
be granted in the future or that any patents will be valid or otherwise of value
to the Company. The Company also relies on a combination of copyright,
trademark, trade secret, unfair competition, and other intellectual property
laws, nondisclosure agreements and other protective measures to protect its
rights. Such protection, however, may not preclude competitors from developing
products similar to the Company's products. In addition, the laws of certain
foreign countries do not protect the Company's intellectual property rights to
the same extent as do the laws of the United States. Although the Company
continues to implement protective measures and intends to defend its proprietary
rights vigorously, there can be no assurance that these efforts will be
successful.
<PAGE>
The Company is not aware of any basis for any infringement claim against it;
however, there can be no assurance that third parties will not assert
intellectual property infringement claims against the Company.
DEPENDENCE ON SUPPLIERS
Certain significant components used in the Company's products,
including certain contactor components, printed circuit boards, refrigeration
systems, and vacuum pumps, are currently available only from sole or limited
sources. Although to date the Company has been able to obtain adequate supplies
of these components and maintains inventories of its more critical components,
the Company's inability in the future to develop alternative sources or to
obtain sufficient sole or limited-source components could result in delays or
reductions in product introductions or shipments, which could have a material
adverse effect on the Company's operating results.
VOLATILITY OF STOCK PRICE
The Company's Common Stock has experienced in the past, and could
experience in the future, substantial price volatility as a result of a number
of factors, including quarter to quarter variations in the actual or anticipated
financial results of the Company, announcements by the Company, its competitors
or its customers, government regulations, and developments in the semiconductor
industry. In addition, the stock market has experienced extreme price and volume
fluctuations which have affected the market price of many technology companies
in particular and which have at times been unrelated to the operating
performance of the specific companies whose stock is traded. Broad market
fluctuations, as well as economic conditions generally and in the semiconductor
industry specifically, may adversely affect the market price of the Company's
Common Stock.
ANTI-TAKEOVER PROVISIONS: POSSIBLE ISSUANCE OF PREFERRED STOCK; AUTHORITY TO
DIFFERENTIATE COMMON STOCK
The Company's Restated Articles of Incorporation authorize the issuance
of 2,000,000 shares of undesignated stock (the "Undesignated Stock"). The
Company's Board of Directors has the power to issue any or all of the shares of
Undesignated Stock, including the authority to establish the rights and
preferences of the Undesignated Stock, without shareholder approval. In
addition, the Board of Directors has the authority to establish one or more
separate classes or series of Common Stock. Furthermore, as a Minnesota
corporation, the Company is subject to certain "anti-takeover" provisions of the
Minnesota Business Combinations Act. These provisions and the power to issue the
Undesignated Stock and to establish separate classes or series of Common Stock
may, in certain circumstances, deter or discourage takeover attempts and other
changes in control of the Company not approved by management and the Board. As a
result, the Company's shareholders may lose opportunities to dispose of their
shares at the higher prices generally available in takeover attempts or that may
be available under a merger proposal. In addition, these statutory provisions,
the existence of the Undesignated Stock and the Board of Directors' broad
authority with respect to the Common Stock may have the effect of permitting the
Company's current management to retain its position and place it in a better
position to resist changes that shareholders may wish to make if they are
dissatisfied with the conduct of the business.
<PAGE>
YEAR 2000 ISSUES
Many existing computer programs use only two digits to identify a year
in the date field, with the result that data referring to the year 2000 and
subsequent years may be misinterpreted by these programs. If present in the
computer applications of the Company or its suppliers and not corrected, this
problem could cause computer applications to fail or to create erroneous results
and could cause a disruption in operations and have an adverse effect on the
Company's business and results of operations. The Company has evaluated its
principal computer systems and has determined that they are substantially Year
2000 compliant. The Company has initiated discussions with its key suppliers to
determine whether they have any Year 2000 issues. The Company has not incurred
any material expenses to date in connection with this evaluation, and does not
anticipate material expenses in the future, depending upon the status of its key
suppliers with respect to this issue.
<PAGE>
SELLING SHAREHOLDERS
The following table sets forth certain information, as of April 24,
1998, and as adjusted to reflect the sale of the shares offered hereby, with
respect to the beneficial ownership of the Common Stock by the Selling
Shareholders. Except as set forth in the footnotes below, none of the Selling
Shareholders or their respective affiliates has held any position or office or
maintained any material relationship with the Company or its predecessors or
affiliates over the past three years.
<TABLE>
<CAPTION>
SHARES BENEFICIALLY
OWNED AFTER
SHARES OF COMMON COMPLETION OF
STOCK BENEFICIALLY NUMBER OF SHARES THE OFFERING (2)
OWNED PRIOR TO THE BEING ------------------------------
SELLING SHAREHOLDERS OFFERING (1) OFFERED NUMBER % OF CLASS (3)
- -------------------- ------------------ ---------------- ------ --------------
<S> <C> <C> <C> <C>
Scott Bensmiller.............................. 29,610 29,610 0 *
Arthur and Marla Bloom, JTWOS................. 22,590 22,590 0 *
Jill Bloom.................................... 19,260 19,260 0 *
Scott Bloom................................... 19,260 19,260 0 *
Edward Boothman............................... 92,430 92,430 0 *
Jackie Candelier.............................. 14,760 14,760 0 *
Carol Carr.................................... 11,790 11,790 0 *
Damon L. Coalson.............................. 8,100 8,100 0 *
Brian Cunningham.............................. 3,690 3,690 0 *
Edward Etess.................................. 99,810 99,810 0 *
Edward Etess & Rebecca Lamont-
Etess, Co-Trustees UAD 9/28/84
Etess Community Property Trust............. 60,570 60,570 0 *
Stanley Droch, Trustee UAD 12/22/83
Estess Children Irrevocable Trust
for the benefit of Lori Ida Etess.......... 6,120 6,120 0 *
Lori Ida Etess................................ 2,970 2,970 0 *
Michael H. Etess.............................. 14,670 14,670 0 *
John Estridge................................. 8,370 8,370 0 *
William J. Evans, Jr.......................... 30,420 30,420 0 *
Futuristix Inc (4)............................ 186,000(5) 30,000 156,000 *
Barbra Gerard................................. 3,690 3,690 0 *
Bart Gilbert.................................. 3,780 3,780 0 *
Donna Huff.................................... 7,380 7,380 0 *
Jerry Kelley.................................. 7,380 7,380 0 *
Douglas Magde................................. 720 720 0 *
Hal Preston................................... 18,000 18,000 0 *
Scott Roberson................................ 3,690 3,690 0 *
Dr. Bahman Teimourian......................... 49,320 49,320 0 *
John W. Walkoviak............................. 720 720 0 *
Keith E. Williams............................. 106,290 106,290 0 *
Karen M. Williams............................. 123,840 123,840 0 *
Keith E. Williams, Cust Dona
Marleen Williams UGMA TX...................... 41,130 41,130 0 *
Bartholomew E. Williams....................... 41,130 41,130 0 *
Marlys A. Williams............................ 41,130 41,130 0 *
Joel Witt..................................... 7,380 7,380 0 *
</TABLE>
- ------------------------------------------
* Less than one percent (1%)
<PAGE>
(1) The Selling Shareholders possess sole voting and investment power with
respect to the shares shown.
(2) This assumes all shares being offered and registered hereunder are sold,
although the Selling Shareholders are not obligated to sell any shares.
(3) Based upon 9,702,812 shares of Common Stock outstanding as of April 24,
1998.
(4) Farid J. Sabounchi is the sole shareholder of Futuristix. Mr. Sabounchi is
the President of the Aetrium FSA Division.
(5) These shares were issued in connection with the FSA Purchase Agreement.
124,000 of these shares of Common Stock are held in escrow and subject to risk
of forfeiture. See "The Company -- Recent Developments."
PLAN OF DISTRIBUTION
The Selling Shareholders have advised the Company that sales of the
shares offered hereunder by them, or by their respective pledgees, donees,
transferees or other successors in interest, may be made from time to time in
the over-the-counter market, through negotiated transactions or otherwise, at
market prices prevailing at the time of sale or at negotiated prices. The shares
may be sold by one or more of the following methods: (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 pursuant to this Prospectus; and (c) ordinary
brokerage transactions and transactions in which the broker solicits purchasers.
Sales may be made pursuant to this Prospectus to or through broker-dealers who
may receive compensation in the form of discounts, concessions or commissions
from the Selling Shareholders or the purchasers of Common Stock for whom such
broker-dealer may act as agent or to whom they may sell as principal, or both
(which compensation as to a particular broker-dealer may be in excess of
customary commissions). To the extent required, one or more supplemental
prospectuses will be filed pursuant to Rule 424 under the Securities Act to
describe any material arrangements for the sales of the shares offered hereunder
when such arrangements are entered into by the Selling Shareholders and any
other broker-dealers that participate in the sale of the shares. In addition,
any shares that qualify for sale pursuant to Rule 144 under the Securities Act
may be sold under Rule 144 rather than pursuant to this Prospectus. No period of
time has been fixed within which the shares covered by this Prospectus may be
offered or sold.
The Selling Shareholders and any broker-dealers or other persons acting
on its behalf in connection with the sale of Common Stock hereunder may be
deemed to be an "underwriter" within the meaning of the Securities Act, and any
commissions received by the Selling Shareholders and any profit realized by them
on the resale of Common Stock as principals may be deemed to be underwriting
commissions under the Securities Act. As of the date hereof, there are no
special selling arrangements between any broker-dealer or other person and any
of the Selling Shareholders.
Pursuant to the terms of the Purchase Agreements, the Company will pay
all the expenses of registering the shares offered hereby, except for selling
expenses incurred by the Selling Shareholders in connection with this offering,
including any fees and commissions payable to broker-dealers or other
<PAGE>
persons, which will be borne by the Selling Shareholders. In addition, the
Purchase Agreements provide for certain other usual and customary terms,
including indemnification by the Company of the Selling Shareholders against
certain liabilities arising under the Securities Act.
VALIDITY OF COMMON STOCK
The validity of the shares of Common Stock offered hereby will be
passed upon for the Company by Oppenheimer Wolff & Donnelly LLP, Minneapolis,
Minnesota.
EXPERTS
The consolidated financial statements of the Company as of December 31,
1997 and 1996, and for each of the three years in the period ended December 31,
1997, incorporated by reference in this Prospectus have been so included in
reliance on the report of Price Waterhouse LLP, independent accountants, given
on the authority of said firm as experts in auditing and accounting.
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The table below sets forth the estimated expenses (except the SEC registration
fee, which is an actual expense) in connection with the offer and sale of the
shares of Common Stock of the registrant covered by this Registration Statement.
SEC registration fee....................................... $4,124.59
Fees and expenses of counsel for the Company............... 10,000.00
Fees and expenses of accountants for the Company........... 5,000.00
Miscellaneous.............................................. 5,000.00
----------
*Total................................................ $24,124.59
- -----------------------
* None of the expenses listed above will be borne by the Selling Shareholders.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Minnesota Statutes Section 302A.521 provides that a Minnesota business
corporation must indemnify any director, officer, employee or agent of the
corporation made or threatened to be made a party to a proceeding, by reason of
the former or present official capacity (as defined) of the person, against
judgments, penalties, fines, settlements and reasonable expenses incurred by the
person in connection with the proceeding if certain statutory standards are met.
"Proceeding" means a threatened, pending or completed civil, criminal,
administrative, arbitration or investigative proceeding, including one by or in
the right of the corporation. Section 302A.521 contains detailed terms regarding
such right of indemnification and reference is made thereto for a complete
statement of such indemnification rights. The Company's Restated Articles of
Incorporation also require the Company to provide indemnification to the fullest
extent of the Minnesota indemnification statute.
The Company maintains directors' and officers' liability insurance,
including a reimbursement policy in favor of the Company.
Pursuant to the Purchase Agreements, the directors and officers of the
Company are indemnified by the Selling Shareholders against certain civil
liabilities that they may incur under the Securities Act in connection with this
Registration Statement and the related Prospectus.
<PAGE>
ITEM 16. EXHIBITS
2.1* Asset Purchase Agreement dated as of March 20, 1998 between
the Company and WEB Technology, Inc. (filed herewith).
2.2** Asset Purchase Agreement dated as of March 28, 1997 between
the Company and Forward Systems Automation, Inc. (incorporated
by reference to Exhibit 10.16 to the Company's Annual Report
on Form 10-K for the year ended December 31, 1997 (File No.
0-22166)).
4.1* Specimen Form of the Company's Common Stock Certificate
(incorporated by reference to Exhibit 4.1 to the Company's
Registration Statement on Form SB-2 (File No. 33-64962C)).
4.2* Restated Articles of Incorporation of the Company, as amended
(incorporated by reference to Exhibit 3.1 to the Company's
Registration Statement on Form SB-2 registering the Common
Stock (File No. 33-64962C)).
4.3* Bylaws of the Company, as amended (incorporated by reference
to Exhibit 3.2 to the Company's Registration Statement on Form
SB-2 (File No. 33-64962C)).
5.1** Opinion and Consent of Oppenheimer Wolff & Donnelly LLP (filed
herewith).
23.1* Consent of Price Waterhouse LLP (filed herewith).
23.2** Consent of Oppenheimer Wolff & Donnelly LLP (see Exhibit 5.1).
24.1* Power of Attorney.
- ------------------
* Previously filed
** Filed herewith
ITEM 17. UNDERTAKINGS.
(a) The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising
after the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the registration
statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the registration statement or
any material change to such information in the
<PAGE>
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than 20% change in
the maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement.
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by registrant
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
that are incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the termination of
the offering.
(b) The undersigned registrant hereby undertakes that, for the purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 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 relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) 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 provisions described under Item 15 above, or
otherwise, the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this
Pre-Effective Amendment No. 1 to the Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of North St.
Paul and State of Minnesota, on April 24, 1998.
AETRIUM INCORPORATED
Date: April 24, 1998 By: /s/ Joseph C. Levesque
--------------------------------------
Joseph C. Levesque
Chief Executive Officer and President
(principal executive officer)
By: /s/ Darnell L. Boehm
--------------------------------------
Darnell L. Boehm
Chief Financial Officer and Secretary
(principal financial and accounting
officer)
Pursuant to the requirements of the Securities Act of 1933, this
Pre-Effective Amendment No. 1 to the Registration Statement has been signed by
the following persons on April 24, 1998 in the capacities indicated.
SIGNATURE TITLE
--------- -----
/s/ Joseph C. Levesque Chairman of the Board
- ----------------------------------
Joseph C. Levesque
* Director
- ----------------------------------
Darnell L. Boehm
* Director
- ----------------------------------
Terrence W. Glarner
* Director
- ----------------------------------
Andrew J. Greenshields
* Director
- ----------------------------------
Douglas L. Hemer
* Director
- ----------------------------------
Terrance J. Nagel
<PAGE>
AETRIUM INCORPORATED
EXHIBIT INDEX TO PRE-EFFECTIVE AMENDMENT TO
FORM S-3 REGISTRATION STATEMENT
ITEM
NO. DESCRIPTION METHOD OF FILING
- --- ----------- ----------------
2.1 Asset Purchase Agreement dated as of March 20, 1998 Previously filed
between the Company and WEB Technology, Inc.
2.2 Asset Purchase Agreement dated as of March 28, 1997 (1)
between the Company and Forward Systems Automation,
Inc.
4.1 Specimen Form of the Company's Common Stock Certificate (2)
4.2 Restated Articles of Incorporation of the Company, as (2)
amended
5.1 Opinion and Consent of Oppenheimer Wolff & Donnelly Filed herewith
LLP electronically
23.1 Consent of Price Waterhouse LLP Previously filed
23.2 Consent of Oppenheimer Wolff & Donnelly LLP See Exhibit 5.1
24.1 Power of Attorney Previously filed
(1) Incorporated by reference to Exhibit 10.16 to the Company's Annual
Report on Form 10-K for the year ended December 31, 1997 (File No.
0-22166).
(2) Incorporated by reference to an exhibit to the Company's Registration
Statement on Form SB-2 (File No. 33-64962C)
EXHIBIT 5.1
[OPPENHEIMER WOLFF & DONNELLY LLP LETTERHEAD]
April 28, 1998
Board of Directors
Aetrium Incorporated
2350 Helen Street
North St. Paul, Minnesota 55109
RE: REGISTRATION STATEMENT ON FORM S-3
Ladies and Gentlemen:
We have acted as counsel to Aetrium Incorporated, a Minnesota corporation (the
"Company"), in connection with the registration by the Company of the resale of
930,000 shares of the Company's Common Stock, $.001 par value per share (the
"Shares"), pursuant to the Company's Registration Statement on Form S-3 filed
with the Securities and Exchange Commission (the "Commission") on April 7, 1998,
as amended by Pre-Effective Amendment No. 1 filed with the Commission on the
date hereof (the "Registration Statement"), on behalf of the certain selling
shareholders named therein (the "Selling Shareholders").
In acting as counsel for the Company and arriving at the opinions expressed
below, we have examined and relied upon originals or copies, certified or
otherwise identified to our satisfaction, of such records of the Company,
agreements and other instruments, certificates of officers and representatives
of the Company, certificates of public officials and other documents as we have
deemed necessary or appropriate as a basis for the opinions expressed herein. In
connection with our examination, we have assumed the genuiness of all
signatures, the authenticity of all documents tendered to us as originals, the
legal capacity of all natural persons and the conformity to original documents
of all documents submitted to us as certified or photostatic copies.
Based on the foregoing, and subject to the qualifications and limitations stated
herein, it is our opinion that:
1. The Company had the corporate authority to issue the Shares in the
manner and under the terms set forth in the Registration Statement.
2. The Shares being registered for resale by the Selling Shareholder under
the Registration Statement have been duly authorized and are validly
issued, fully paid and nonassessable.
<PAGE>
Board of Directors
Aetrium Incorporated
April 28, 1998
Page 2
We express no opinion with respect to laws other than those of the State of
Minnesota and the federal law of the United States of America, and we assume no
responsibility as to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction.
We hereby consent to the filing of this opinion as Exhibit 5.1 to the
Registration Statement, to its use as part of the Registration Statement, and to
the use of our name under the caption "Validity of Common Stock" in the
Prospectus constituting a part of the Registration Statement.
We are furnishing this opinion to the Company solely for its benefit in
connection with the Registration Statement as described above. It is not to be
used, circulated, quoted or otherwise referred to for any other purpose. Other
than the Company, no one is entitled to rely on this opinion.
Very truly yours,
/s/ Oppenheimer Wolff & Donnelly LLP
OPPENHEIMER WOLFF & DONNELLY LLP
Plaza VII Suite 3400
45 South Seventh Street
Minneapolis, MN 55402
