As filed with the Securities and Exchange Commission on August 14, 1996
Registration No.
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
--------------
AMTECH SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Arizona 86-0411215
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) I.D. Number)
131 South Clark Drive, Tempe, Arizona 85281
(602) 967-5146
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
Jong S. Whang
Amtech Systems, Inc.
131 South Clark Drive
Tempe, Arizona 85281
(602) 967-5146
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------------
The Commission is requested to send copies of all
communications to:
Christopher D. Johnson
Squire, Sanders & Dempsey
40 North Central Avenue, Suite 2600
Phoenix, Arizona 85004
(602) 528-4000
Approximate date of commencement of proposed sale to the public: As soon as
practicable from time to time after the date of this Registration Statement.
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. | |
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. | |
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. | |
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. | |
CALCULATION OF REGISTRATION FEE
=========================================================================================================================
Proposed Proposed
Maximum Maximum
Aggregate Aggregate
Title of Each Class of Amount to be Price Per Offering Amount of
Securities to be Registered Registered(1) Share Price Registration Fee
- -------------------------------------------------------------------------------------------------------------------------
Common Stock 134,500 (2) $178,550 (3) $100
=========================================================================================================================
(1) This Registration Statement covers (i) up to 94,500 shares of Common Stock
issued or to be issued pursuant to options (the "Options") granted from
time to time pursuant to the Company's 1983 Stock Option Plan (the "Plan"),
which Options are reflected by Incentive Stock Option Agreements (the
"Option Agreements"), and (ii) up to 40,000 shares of Common Stock to be
issued pursuant to Directors Stock Purchase Agreements (the "Directors
Agreements") entered into from time to time between the Company and certain
directors of the Company, granting such Directors rights to purchase shares
of Common Stock (the "Purchase Rights"). This Registration Statement
covers, in addition to the shares of Common Stock being registered hereby,
a presently indeterminate number of additional shares of Common Stock that
may become issuable in certain events upon exercise of the Purchase Rights
and the Options pursuant to adjustments in the number of shares of Common
Stock for which a Purchase Right or Option is exercisable. The foregoing
amounts of shares of Common Stock have been adjusted to reflect a 2-for-1
forward stock split of the Company's outstanding Common Stock effected
March 29, 1996.
(2) The purchase price for such shares of Common Stock range from $0.625 to
$2.60 per share. Such amounts have been adjusted to reflect a 2-for-1
forward stock split of the Company's outstanding Common Stock effected
March 29, 1996.
(3) This amount represents the purchase price to be paid for the shares
pursuant to the Directors Agreements or Option Agreements, as applicable.
================================================================================
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, as amended (the "Securities Act") or until this
Registration Statement shall become effective on such date as the Commission,
acting pursuant to said Section 8(a), may determine.
================================================================================
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED August 14, 1996
Prospectus
AMTECH SYSTEMS, INC.
134,500 Shares of Common Stock
This Prospectus relates to 94,500 shares of the $.01 par value common stock
(the "Common Stock"), of AMTECH SYSTEMS, INC. ("Amtech" or the "Company") which
may be issued pursuant to options (the "Options") granted from time to time
pursuant to the Company's 1983 Stock Option Plan (the "Plan"), which Options are
reflected by Incentive Stock Option Agreements (the "Option Agreements"). This
Prospectus also relates to 40,000 shares of Common Stock which may be issued
pursuant to Directors Stock Purchase Agreements (the "Directors Agreements")
entered into from time to time between the Company and certain directors of the
Company, granting such Directors rights to purchase shares of Common Stock (the
"Purchase Rights"). This Registration Statement covers, in addition to the
shares of Common Stock being registered hereby, a presently indeterminate number
of additional shares of Common Stock that may become issuable in certain events
upon exercise of the Purchase Rights and the Options pursuant to adjustments in
the number of shares of Common Stock for which a Purchase Right or Option is
exercisable. The foregoing amounts of shares of Common Stock have been adjusted
to reflect a 2-for-1 forward stock split of the Company's outstanding Common
Stock effected March 29, 1996. The shares of Common Stock underlying the Options
and Purchase Rights are hereinafter collectively referred to as the "Offered
Securities." See "SELLING STOCKHOLDERS" and "PLAN OF DISTRIBUTION."
The Common Stock is traded on the Nasdaq SmallCap Market under the symbol
"ASYS." On August 5, 1996, the closing price for the Common Stock was $4.4375
per share.
FOR A DISCUSSION OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY
PROSPECTIVE INVESTORS, SEE "RISK FACTORS."
----------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
AGENCY NOR HAS THE COMMISSION OR ANY SUCH AGENCY PASSED
UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------------
The date of this Prospectus is _______________,1996.
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 with the Commission 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 at the following Regional
Offices of the Commission: Northeast Regional Office, 7 World Trade Center,
Suite 1300, New York, New York 10048; and Midwest Regional Office, 500 W.
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such material can
be obtained from the Public Reference Section of the Commission at Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, upon payment of prescribed
rates.
The Company has filed with the Securities and Exchange Commission,
Washington, D.C. 20549, a Registration Statement on Form S-3 under the
Securities Act with respect to the Common Stock offered hereby. This Prospectus
does not contain all the information set forth in the Registration Statement and
the exhibits and the schedules thereto. For further information with respect to
the Company and the Common Stock, reference is made to the Registration
Statement including the exhibits and schedules thereto, copies of which may be
inspected at the Public Reference Room of the Securities and Exchange
Commission, Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and
copies of any part thereof may be obtained from the office of the Securities and
Exchange Commission in Washington, D.C. upon the payment of the prescribed fee.
The statements contained in this Prospectus and the contents of any contract or
other document filed as an exhibit are of necessity brief descriptions thereof,
are not necessarily complete and the full text of such statements is qualified
in its entirety by reference to such contract or document.
2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents have been filed with the Commission by the Company
and are hereby incorporated by reference into this Prospectus: (i) the Company's
Annual Report on Form 10-K for the fiscal year ended September 30, 1995; (ii)
the Company's Quarterly Report on Form 10-Q for the quarter ended December 31,
1995; (iii) the Company's Quarterly Report on Form 10-Q for the quarter ended
March 31, 1996, (iv) the description of the Company's Common Stock contained in
the Company's Registration Statement on Form 8-A filed with the Commission
pursuant to Section 12(g) of the Exchange Act, and (v) the description of the
Company's Redeemable Common Stock Purchase Warrants contained in the Company's
Registration Statement on Form 8-A filed with the Commission pursuant to Section
12(g) of the Exchange Act. All other documents and reports filed pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act from the date of this
Prospectus and prior to the termination of the offering of the Common Stock
shall be deemed to be incorporated by reference herein and shall be deemed to be
a part hereof from the date of the filing of such reports and documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as 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, on written or oral request of such person, a copy
of any or all documents which are incorporated herein by reference (not
including the exhibits to such documents, unless such exhibits are specifically
incorporated by reference in the document which this Prospectus incorporates).
Requests should be directed to the Secretary, Amtech Systems, Inc. 131 South
Clark Drive, Tempe, Arizona 85281, telephone number (602) 967-5146, facsimile
number (602) 968-7363.
3
PROSPECTUS SUMMARY
The following summary of selected portions of this Prospectus is qualified
in every respect by the more detailed information contained elsewhere herein,
including the financial statements and related notes incorporated by reference
herein. The risks of an investment in the Securities offered hereby are
described under RISK FACTORS. Each prospective investor is urged to read this
Prospectus in its entirety.
The Company
Amtech Systems, Inc. is engaged primarily in the manufacture and marketing
of several items of capital equipment, one of which is patented, used by
customers in the manufacture of semiconductors. The Company's Processing/Loading
products are designed to permit its customers to increase the degree of control
over their semiconductor chip manufacturing environment and to reduce exposure
to contaminants by limiting human contact during the process. The Company's
wholly-owned subsidiary, Tempress Systems, Inc., is engaged in the complementary
business of manufacturing and selling horizontal diffusion furnaces for
semiconductor fabrication. The Company also has a 45% ownership interest and 50%
voting interest in Seil Semicon, Inc., a South Korean start-up joint venture
that plans to develop and operate a silicon test wafer reclaiming business. In
addition, the Company recently obtained a U.S. patent on technology on which it
expects to base a proposed new photo chemical vapor deposition ("CVD") product
for use in semiconductor manufacturing facilities. The Company has engaged the
University of California, Santa Cruz, to conduct a study to determine the
feasibility of such a product. If the results of the study are favorable, the
Company intends to commence to design, manufacture and market a photo CVD
product. See "THE COMPANY -- CVD Technology."
Until recently, the Company also was engaged in the technical contract
personnel business through a subsidiary, Echelon Service Company ("Echelon") in
Baltimore, Maryland. In December 1995, the Company disposed of the stock of
Echelon in order to allow the Company to focus on its core semiconductor
equipment business.
Written requests for further information should be directed to the
Secretary, Amtech Systems, Inc., 131 South Clark Drive, Tempe, Arizona 85281;
Facsimile Number (602) 968- 7363.
The Offering
Securities Offered: 134,500 shares of Common Stock which may be
issued pursuant to options (the "Options")
granted from time to time pursuant to the
Company's 1983 Stock Option Plan (the "Plan")
and pursuant to Directors Stock Purchase
Agreements (the "Directors Agreements")
entered into from time to time between the
Company and certain directors of the Company,
pursuant to which such Directors have been
granted rights to purchase shares of Common
Stock (the "Purchase Rights").
4
Common Stock Outstanding: 4,109,668 shares outstanding as of July 19,
1996.
Estimated Proceeds If all of the Options and Purchase
Rights are exercised, the estimated proceeds
to the Company will be approximately $178,550.
The Company will not receive any of the
proceeds from the subsequent sale of the
Common Stock.
Use of Proceeds Any proceeds received by the Company from time
to time upon exercise of the Options or the
Purchase Rights will be added to the Company's
working capital and will be used for general
corporate purposes. The Company will not
receive any of the proceeds from the
subsequent sale of the Common Stock.
NASDAQ Symbols Common Stock: ASYS
5
THE COMPANY
Amtech Systems, Inc. is engaged primarily in the manufacture and marketing
of several items of capital equipment, one of which is patented, used by
customers in the manufacture of semiconductors. The Company's Processing/Loading
product line (Atmoscan(R), IBAL and load stations) is designed to permit its
customers to increase the degree of control over their semiconductor chip
manufacturing environment and to reduce exposure to contaminants by limiting
human contact during the process. The Company's wholly-owned subsidiary,
Tempress Systems, Inc., is engaged in the complementary business of producing
and selling horizontal diffusion furnaces for semiconductor fabrication. The
Company also has a 45% ownership interest and 50% voting interest in Seil
Semicon, Inc., a South Korean start-up joint venture that plans to develop and
operate a silicon test wafer reclaiming business. In addition, the Company
recently obtained a U.S. patent on technology on which it expects to base a
proposed new photo chemical vapor deposition ("CVD") product for use in
semiconductor manufacturing facilities. The Company has engaged the University
of California, Santa Cruz, to conduct a study to determine the feasibility of
such a product. If the results of the study are favorable, the Company intends
to commence to design, manufacture and market a photo CVD product. See
"SEMICONDUCTOR EQUIPMENT BUSINESS," below.
Until recently, the Company also was engaged in the technical contract
personnel business through a subsidiary, Echelon Service Company ("Echelon") in
Baltimore, Maryland. In December 1995, the Company disposed of the stock of
Echelon in order to allow the Company to focus on its core semiconductor
equipment business. See "RECENT EVENTS -- Sale of Contract Personnel Business,"
below.
SEMICONDUCTOR EQUIPMENT BUSINESS
General
The Company is engaged primarily in the manufacture and marketing of
several items of capital equipment used by customers in the manufacture of
semiconductors. Semiconductors, or semiconductor "chips," are made of silicon
and are part of the circuitry of electronic computers. The manufacture of
semiconductors involves many complex operations during which silicon wafers (the
substrates from which chips are made) are inserted in a diffusion furnace and
subjected to the precise flow of gases under very intense heat. The Company's
Processing/Loading product line is intended to permit customers using horizontal
diffusion furnaces to increase the degree of control over the manufacturing
environment and to reduce exposure to contaminants by reducing the amount of
human contact during the process. Following an industry trend, the size of
individual chips has tended to decrease and the size of the wafers from which
chips are made has tended to increase. As a result, the value of each wafer has
increased because each is the source of an increased number of chips. As the
value of wafers increase, so too does the importance of control over the
manufacturing environment. In addition to the Company's Processing/Loading
product line, through its wholly owned subsidiary, Tempress Systems, Inc., the
Company manufactures and sells horizontal diffusion furnaces.
6
There is also a trend in the industry, related to the trend to smaller
chips, to the use in new semiconductor manufacturing facilities of newer
technology, vertical diffusion furnaces, which are more efficient to use than
older technology horizontal diffusion furnaces in certain manufacturing
processes of smaller chips on larger wafers. Vertical diffusion furnaces are,
however, significantly more expensive to purchase than horizontal diffusion
furnaces. The Company's Processing/Loading product line is useable with
horizontal diffusion furnaces only. The Company's target market consists of
customers who wish to increase the efficiency of their existing semiconductor
manufacturing facilities equipped with horizontal diffusion systems. With the
addition of Tempress' operations, the Company also can provide its customers
with efficient integrated horizontal diffusion furnace systems. The Company's
target market also includes customers who build new facilities but whose
operations do not require the higher priced vertical diffusion furnace systems.
Based on market information obtained through customer and market contacts, the
Company believes that a majority of worldwide semiconductor manufacturing
facilities are equipped with horizontal diffusion furnaces, as compared with
vertical diffusion furnaces. While the Company estimates that in the next
several years the percentage of facilities in the world equipped with each type
of system will become equal, it believes that a significant demand for its
present product line will continue to exist, although there can be no assurance
in that regard. The Company plans to increase its share of the market by
expanding its manufacture and sales of horizontal diffusion furnaces. Tempress
recently acquired a 9,900 square foot facility in Heerde, The Netherlands, for
its European operations. Tempress expects to move its operations into the new
facility in the fall of 1996.
Processing/Loading Equipment
Atmoscan(R)
The Company's "Atmoscan(R)" is a patented controlled environment wafer
processing system for use with horizontal diffusion furnaces. It is comprised of
a fanged quartz tube and several metal parts. When in use, the flanaged tube is
loaded with wafers and inserted into the diffusion furnace under a nitrogen
controlled environment. The technology protected by the Company's Atmoscan(R)
patents is a processing method that includes a cantilever tube that carries
wafers and through which a purging inert gas flows during the loading and
unloading of wafers into and out of the diffusion furnace.
The Company believes that among the major advantages afforded by the
Atmoscan(R) product are increased control of the environment of the wafers
during the gaseous and heating process, thereby increasing yields and decreasing
manufacturing costs, and a decreased need for the cleaning of diffusion furnace
tubes, which ordinarily involves substantial expense and equipment down time.
Additional significant economies in the manufacturing process are also believed
to result.
The Company has manufactured and sold Atmoscan(R) units to major
semiconductor manufacturers in the United States, the Pacific Rim and Europe,
including at various times to International Business Machines, Intel
Corporation, Samsung, Digital Equipment Corp., Motorola, SGS-Thompson and
others. During fiscal 1995, Atmoscan(R) units were sold in a price range of
approximately $26,000 (for simpler models without accessories or ancillary
items) to approximately $70,000 (for more complex models). As discussed
elsewhere, sales of Atmoscan(R)
7
have declined from their peak in 1989, due to an industry trend toward use of
vertical diffusion furnaces.
The Company has designed and sells an open cantilever paddle system as an
alternative to the closed processing method of the Atmoscan(R). The per unit
price is approximately $13,000-$18,000, depending upon the customer's
specifications.
IBAL
"IBAL" is an acronym for "Individual Boats with Automated Loading." Boats
are quartz trays that hold silicon wafers while they are being processed in
diffusion furnaces. IBAL is a device, including software, which automatically
places boats into Atmoscan(R) tubes or on open cantilever paddle systems before
they are inserted in the diffusion furnace and automatically removes the trays
after completion of the process. The Company has sold units of the IBAL for
approximately $20,000 to $25,000 each, not including the price of the
Atmoscan(R) or open cantilever paddle system. Use of the IBAL products reduces
human handling and, therefore, reduces exposure of wafers to contaminants during
the loading and unloading of the process tubes.
The IBAL Butler is a robotics device which further automates the loading of
wafers into the diffusion furnace by automatically transferring wafer carriers
onto the IBAL for loading into the Atmoscan(R) for the appropriate furnace tube.
The unit price for the IBAL Butler is approximately $40,000.
The IBAL Queue provides a convenient staging area for the operator to place
boats on a load station and automates the loading of those boats onto the IBAL
Butler. IBAL Queue was first developed and offered for sale in the fourth
quarter of 1993 and the first unit was shipped during the second quarter of
fiscal 1994. The unit price for the IBAL Queue is $27,000.
Load Stations
The products described above are offered and sometimes sold as a complete
system, mounted on a device called a "load station," which also includes an
ultra-clean environment for wafer loading by filtering and controlling the flow
of air. The Company began shipping load stations in fiscal 1992. The price for
the load station alone (in addition to the price for the component systems
described above) is approximately $60,000, depending upon the complexity of a
customer's requirements. Depending on configuration, which varies from order to
order, complete load stations with loaders and IBAL automation have been sold at
prices between $150,000 and $320,000.
Diffusion Furnaces
Through its wholly owned subsidiary, Tempress Systems, Inc., the Company
produces and sells horizontal diffusion furnaces with the Tempress(R) trademark
under the Amtech/Tempress name. These furnaces utilize existing industry
technology for sale to customers who do not require the advanced automation of,
or cannot incur the major expense of acquiring, vertical diffusion furnaces.
While the major advantage of vertical diffusion
8
furnaces is their susceptibility to increased automation, which decreases the
degree of human intervention in the manufacturing process, the use of horizontal
diffusion furnaces, with less automation, is more economical for larger size
chips and multi-model semiconductor manufacturing. While overall market demand
for horizontal diffusion furnaces is declining, the Company believes that a
niche market will persist. The price range of automated diffusion furnace
systems is approximately $100,000 to $680,000, depending on the customer's
requirements.
The Company has transitioned from being a distributor of horizontal
diffusion furnaces substantially assembled by suppliers to being a manufacturer.
The Company continues to acquire the frames and covers for furnaces from
subcontractors. This transition has resulted in an increase in both the number
and variety of products offered by the Company and is part of a plan to expand
its sales, marketing and manufacturing capabilities. The Company has expended
substantial sums to acquire assets and to fund the start-up and operation of the
horizontal diffusion furnace business. The Company acquired certain assets
previously owned by a bankrupt company, Tempress B.V., located in The
Netherlands. That business involved the development, manufacture and sale of a
number of different products, including a horizontal diffusion furnace. The
Company also acquired from the bankrupt estate the right to use the trade name
"Tempress" in connection with such furnaces. The right to use the tradename
"Tempress" is also held by three subsidiaries of the former Tempress B.V. in
connection with the sale of other Tempress products and services unrelated to
the horizontal diffusion furnace. The Company has hired a number of former
Tempress technical and sales personnel to design, manufacture and sell its own
furnace products under the "Tempress" name. The Company believes that the causes
of the Tempress bankruptcy were related to the fact that Tempress was
undercapitalized and that large expenditures were incurred in the development of
other products, and was not related to the quality or reputation of the Tempress
products. Accordingly, the Company believes that a diffusion furnace product
designed by former Tempress product engineers and sold under the "Tempress" name
will be accepted by the Company's targeted market.
There is, of course, no assurance of success in the Company's efforts to
design and market horizontal diffusion furnace products. If the Company's
efforts do not succeed, the Company may suffer significant losses. The Company's
ability to carry out its plan is subject to risk, arising in part from the
cyclical nature of the business. There is a further risk that, as is estimated
by at least one market research firm, the installation of new vertical diffusion
furnaces will increase at a faster rate than is estimated by the Company. In
that case, the demand for and sales of the Company's horizontal diffusion
furnaces may be below the Company's estimates, its revenue and possible earnings
may not increase as expected and the period of losses for The Netherlands
operation may extend for a period longer than the start-up phase.
CVD Technology
The Company has patented a certain invention which it believes may be of
significant importance to the semiconductor manufacturing industry. It is now
having a research study conducted to determine the feasibility of developing
semiconductor manufacturing equipment using this patented invention. The
invention relates to an improvement to the photo-assisted
9
CVD process used in the manufacture of certain semiconductors. The improvement
uses ultraviolet light to activate the deposition reactions rather than thermal
heat or plasma, which are presently the common means in commercial CVD
processing. This photo-assisted CVD process is separate and distinct from the
diffusion process in which the Company's existing products are used and its use
is not limited to horizontal diffusion furnace facilities as are the Company's
existing products.
A photo-assisted CVD process is potentially attractive for the manufacture
of semiconductors because it allows a less severe processing environment. First,
the photo-assisted CVD processes occur at lower temperatures and the lower
temperature reduces the risk of defects in the deposited materials. In this
process, ultraviolet or UV light is used as the energy source to effect the
deposition of chemicals on the wafers. The photo-assisted CVD processes also
avoid radiation damage which can occur with currently prevalent processes.
Furthermore, photo-assisted CVD processes based on the Company's patented method
are more readily adaptable to the use of larger wafers (the silicon substrates
from which semiconductor chips are made) than other CVD processes now in use.
The trend in the industry is to the use of larger size wafers and smaller size
chips.
The Company has not determined whether a commercially feasible product can
be developed from this technology. The Company has entered into a Research
Agreement with the Regents of the University of California ("University")
whereunder a feasibility study is being undertaken by the University under the
direction of Roger W. Anderson, Ph.D. It is anticipated that, if the results of
the University study are favorable, the Company will design and develop
specifications for an initial photo-assisted CVD device. The initial device is
expected to have one "chamber,"containing a number of light pipes and a pedestal
(called a susceptor) to hold wafers and would be sold to academic and industry
research facilities. If use by such facilities results in acceptance of the
technology by the industry, the Company will attempt to develop a fully
automatic multi-chamber, multi-wafer product for mass production of
semiconductors. The automation (or robotic) components of the product are
expected to be procured from other manufacturers.
The Company's current plans for the proposed new photo CVD product are
conceptual only. Detailed planning is expected to be done if, as and when the
University study demonstrates the product's commercial feasibility. The
development of first a research laboratory product and then an industrial
product is expected to take a period of approximately two to three years.
The total cost of the photo-assisted CVD product development effort is
expected to be approximately $3,200,000, expended in stages over a two to three
year period. All of the Company's plans and estimates are subject to significant
uncertainties.
Wafer Reclaiming Venture
In November 1995, the Company entered into a joint venture agreement
pursuant to which it acquired a 45% ownership interest and a 50% voting interest
in Seil Semicon, Inc. Seil Semicon, Inc., which is in the preliminary start-up
phase intends to develop and operate a silicon test wafer reclaiming business.
The Company agreed to invest $500,000 in the venture,
10
$425,000 of which has been paid and up to $75,000 of which may be called at the
time Seil Semicon obtains $3 million in third party financing. Seil Semicon has
acquired real property for construction of the reclamation facility. The
ultimate success of the venture depends on a number of factors, including
securing adequate financing, of which there can be no assurances.
Sales & Marketing
The Company markets its products by participation in trade shows, by direct
customer contact by the Company's sales personnel (the President and two
salesmen in the United States and two sales and marketing personnel located in
The Netherlands) and through independent sales representatives and distributors.
The Company is dependent on its President, J.S. Whang, for continuing
relationships with key customers. There are presently eight independent sales
representatives, each covering a specified geographical area on an exclusive
basis. The areas now covered by representatives are the State of Florida, the
New England area, Northern Europe, Central Europe (including Germany), France,
India, Italy, Korea, Taiwan, and the People's Republic of China. Representatives
are paid a commission as specified from time to time in the Company's commission
schedule, which at present is higher for complete units and lower for spare
parts and accessories.
During fiscal 1995, two customers accounted for 28% and 11% respectively,
of equipment sales. No other customers accounted for 10% or more of this
segment's sales.
Semiconductor equipment sales generally fluctuate with the level of capital
spending in the semiconductor industry. The semiconductor business is cyclical.
Competition
The Company is not aware of any significant product which directly competes
with the Atmoscan(R), however, there are several processing systems and various
configurations of existing manufacturing products which provide advantages
similar to those that the Company believes the Atmoscan(R) provides to
semiconductor manufacturers. Notwithstanding the industry trend to the use of
vertical diffusion furnaces (with which Atmoscan(R) is not useable), the Company
believes that a number of customers are and will continue to be willing to buy
Atmoscan(R) units for use with horizontal diffusion furnaces because the
Atmoscan(R) provides better results in terms of more uniform wafer temperature
and dispersion of heated gases in the semiconductor manufacturing process, less
exposure of semiconductor wafers to contaminants, and other technical advantages
which afford to its users a higher yield and, therefore, a lower per item cost
in the manufacture of semiconductors. The Company believes that there are
several products in the market which perform the same functions as the IBAL
automation products, IBAL Atmoscan(R), IBAL Butler and IBAL Queue, but they are
more complex and more expensive. The IBAL products are intended for customers
who do not require the more complex systems. Load stations are sold to customers
that are upgrading their existing facilities with other products of the Company.
These load stations provide a cleaner environment to those they replace and can
reduce the down-time for the upgrade as these load stations were specifically
designed to accept the Company's products without further modification. Products
competitive with the Company's load station are sold by several well-established
firms, larger than the Company. The Company believes, however, that there is a
niche market for its load stations because
11
Atmoscan(R) and IBAL are included as components. The cantilever system is
designed for easy assembly and disassembly to minimize down-time during
maintenance. The Company currently sells its horizontal diffusion furnaces to
customers who purchase them in small quantities and that it will maintain a
competitive position through its policy of providing competitive prices and
product support services designed for the customer's specific requirements.
Employees
The Company presently employs 44 people (including the corporate officers
and four contract employees) in its semiconductor equipment business; 16 in
manufacturing, 14 in engineering, seven in administration, and seven in sales
positions. Of these, 27 are employed at the Company's offices and plant in
Tempe, Arizona, and 17 at Tempress' facility in The Netherlands.
FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC OPERATIONS
AND EXPORT SALES
The following table shows the amounts of revenue attributable to the
Company's foreign sales for the past three fiscal years (the United States
equipment sales being included in the table for comparison purposes). All
foreign sales were associated with the Company's semiconductor equipment
business and none were to affiliates.
1995 1994 1993
---------------------------- ----------------------------- ------------------------------
United States (1) $2,462,852 (36%) $2,472,176 (51%) $2,003,064 (49%)
Far East (2) 3,483,419 (51%) 1,136,432 (26%) 1,798,670 (44%)
Europe (3) 493,786 (7%) 222,376 (5%) 286,152 (7%)
India 424,011 (6%) 500,095 (12%) - (0%)
--------- ----- --------- ------ --------- ------
Total $6,864,068 (100%) $4,331,079 (100%) $4,087,886 (100%)
- ----------
(1) Includes sales in Canada, which are not material.
(2) Includes Korea, Singapore, Taiwan, Japan and the People's Republic of China.
(3) Includes sales in Israel, which are not material.
12
RISK FACTORS
Any investment in the securities offered hereby will involve a high degree
of risk. Prospective investors should carefully consider the following risk
factors before making an investment decision.
1. New Horizontal Diffusion Furnace Product. The Company has invested
approximately $1.6 million in cash in the acquisition of assets currently used
by Tempress in the manufacture and sale of horizontal diffusion furnaces and to
fund the start-up losses and operation of that business. Those assets include
certain items purchased from another company which had previously acquired the
entire business of a bankrupt company, Tempress B.V., located in The
Netherlands. The Company recently acquired a facility in The Netherlands for
Tempress' operations. The Company also acquired from the bankrupt estate the
right to use the trade name "Tempress" in connection with such furnaces. The
Company has also hired a number of former Tempress technical and sales personnel
with a view to designing, manufacturing and selling its own furnace products
under the "Tempress" name. The Company believes that the causes of the Tempress
bankruptcy were related to the fact that Tempress was undercapitalized and that
large expenditures were incurred in the development of other products and
unrelated to the quality and customer acceptance of the Tempress horizontal
diffusion furnace. The Company further believes that employing certain former
Tempress personnel and using that trade name will facilitate the Company's
efforts to sell its furnace products. While the expenses associated with this
new expansion are expected to result in an initial period of operating losses
for the Company, such losses are expected to be recovered during subsequent
periods if the expansion is successful. There is of course no assurance of
success in this effort and if the Company's efforts do not succeed, the Company
may suffer the permanent loss of approximately $1,600,000. There is a further
risk that, as is estimated by at least one market research firm, the
installation of new vertical diffusion furnaces will increase at a faster rate
than is estimated by the Company. In that case, the demand for and sales of the
Company's horizontal diffusion furnaces may be below the Company's estimates,
its revenue and possible earnings may not increase as expected and the period of
losses for The Netherlands operation may extend beyond the start up phase. See
"THE COMPANY" and RISK FACTOR NO. 5, below.
2. Proposed New Photo CVD Product. A substantial portion of the Company's
cash has been and will continue to be applied to the development of a proposed
new photo-assisted CVD product based on patented technology which has not yet
been shown to be functionally or economically feasible. On March 2, 1994, the
Company entered into an agreement with the University of California, Santa Cruz
("University"), whereunder the University is conducting certain research with a
view to determining the feasibility of a successful development effort. Although
the Company plans to terminate the research and development at any time if it
does not appear to be commercially feasible, termination would result in the
incurrence of substantial losses. The Company's management estimates that it
will need to expend approximately $3.2 million to develop marketable models of a
photo-assisted CVD product. However, actual expenditures may materially exceed
the Company's present estimates because of unexpected technical engineering or
manufacturing requirements, general price increases, etc. The estimated
expenditures for the development of the proposed new product do not include any
provision for
13
the expansion of facilities for the manufacture of such new product. Since
operating revenues are unlikely to result in sufficient cash flow to provide
such additional funds, the source of such funds may be additional capital
investment which, if available when required, would dilute the ownership
percentage of shareholders of the Company.
3. Adequacy of Financing. Additional financing is expected to be required
for the implementation of the Company's plans for expansion. There is no
assurance that any additional financing will be available if and when required,
or, even if available, that it would not materially dilute the ownership
percentage of the then existing shareholders.
4. Assumptions. The Company's plans for the financing and development of
its proposed business expansion are based on the experience, market information
and judgment of Management and upon certain assumptions. Management's
assumptions include in particular, the Company's ability to obtain the share of
the horizontal diffusion furnace market formerly held by Tempress, the success
of its expanded sales and marketing force, the feasibility of its proposed new
photo-assisted CVD product, the development of a market for the new product, the
sufficiency of funds available for its development and marketing and, if those
assumptions prove to be invalid, the availability of other opportunities for
expansion. Management also assumes that sales for the Company's existing
products will continue at current levels for approximately three years. There is
no assurance that the Company's plans will be realized or that any of the
assumptions made will prove to be correct. Even if the assumptions underlying
its plans prove to be correct, there can be no assurance that the Company will
not incur substantial operating losses in attaining its goals. See "THE
COMPANY."
Management believes that the Company's future profitability and
long term growth will depend on the continued introduction of new products which
embody either newly developed technology or improvements of existing products.
There is no assurance of any short term or long term success in any development
or acquisition effort or in penetrating any market. Since its present product
line consists of equipment suitable only for semiconductor manufacturing
facilities using horizontal furnace technology, the most significant market for
the Company's existing products is most likely to be limited to existing
horizontal furnace facilities or new facilities which, because of cost
considerations, are likely to continue to buy new horizontal furnaces.
5. Demand for Horizontal Diffusion Furnace Equipment. Demand for the
Company's existing products, which are used in conjunction with horizontal
diffusion furnaces, has declined in recent years because of a trend to competing
newer vertical diffusion furnace technology in the industry. Based on
Management's market information, the Company expects the market for such
products to remain relatively stable for a period of approximately three years,
although there is no assurance in that regard. Rather than expecting to increase
sales as the result of a growing market, therefore, the Company expects to
achieve that result by increasing its share of an existing market. Realization
of that expectation will depend on the success of its plan to expand its sales
and marketing force and its product line. Such expansion is expected to result
in more complete sales coverage in Europe and in the ability of the Company to
offer a more complete product mix, which will result in an increase in sales and
revenue. Among the uncertainties affecting the Company's plan is the reaction of
other capital equipment manufacturers competing for greater shares of the same
market.
14
6. Cyclical Nature of the Semiconductor Manufacturing Industry. The
semiconductor industry in which the Company sells its products is highly
cyclical and has historically experienced periodic downturns, which often have
had a severe effect on the demand for semiconductor manufacturing equipment.
Prior semiconductor industry downturns have resulted in significant reductions
in the Company's net sales, gross margin and net income. Moreover, this business
will continue to be dependent on the capital expenditures of semiconductor
manufacturers, which in turn will be largely dependent on the current and
anticipated market demand for integrated circuits and products utilizing
integrated circuits. Semiconductor manufacturers are currently experiencing a
significant decrease in order bookings. In addition, the prices for
semiconductors have declined dramatically, squeezing manufacturers' margins.
These factors may affect semiconductor manufacturers' decisions to purchase
capital equipment such as the Company's products. Further price declines due to
increased supply of semiconductors may have a material adverse effect on the
Company's business and results of operations.
7. Dependence on Certain Foreign Markets; Risks Associated with Foreign
Operations. During its most recent fiscal year, ended on September 30, 1995, 64%
of the Company's equipment sales were made to foreign customers in the Far East
(51%), Europe (7%) and in India (6%). Foreign sales are expected to increase
significantly as the result of the Company's proposed expansion of its
horizontal diffusion business in Europe. While the Company's business has not
been adversely affected in the past by its foreign business, there is a risk
that it may be adversely affected in the future. Such risk includes possible
losses on account of currency exchange rate fluctuations, possible future
prohibitions against repatriation of earnings, or proceeds from disposition of
investments, and from possible social and military instability in the case of
India, South Korea and possibly elsewhere.
The Company's wholly owned subsidiary, Tempress Systems, Inc.,
conducts its operations in The Netherlands. As a result, such operations are
subject to the taxation policies, employment and labor laws, transportation
regulations, import and export regulations and tariffs, foreign exchange
restrictions, international monetary fluctuations, and other political, economic
and legal policies of that nation, the European Economic Union and the other
European nations in which it conducts business. Consequently, the Company may
encounter unforseen or unfamiliar difficulties in conducting its European
operations. Changes in such laws and regulations may have a material adverse
effect on the Company's operations.
8. Competition. The semiconductor equipment industry is competitive and the
Company is relatively small in size and resources in comparison with its
competitors. There is risk that larger, better financed competitors will develop
and market more advanced products than those now proposed by the Company or that
competitors with greater financial resources may decrease prices thereby putting
the Company under financial pressure.
9. Dependence on President. The company is now dependent for its management
and important business relationships on the active participation of Mr. Jong S.
Whang, its President. The loss of his services would materially and adversely
affect the business of the Company and its future prospects. There is presently
insurance on the life of Mr. Whang for the benefit of the Company, in the amount
of $1,000,000 (which may be increased to $2,000,000), but there is no assurance
that such amount will be sufficient to cover the cost of
15
finding and hiring a suitable replacement for Mr. Whang. It may not be feasible
for any successor to maintain the same relationships.
10. Joint Venture. In November 1995, the Company entered into a joint
venture agreement pursuant to which it acquired a 45% ownership interest and a
50% voting interest in Seil Semicon, Inc. Seil Semicon, Inc., which is in the
preliminary start-up phase intends to develop and operate a silicon test wafer
reclaiming business. The Company agreed to invest $550,000 in the venture,
$425,000 of which has been paid and $125,000 of which will be due at the time
Seil Semicon obtains $3 million in third party financing. Seil Semicon has
acquired real property for construction of the reclamation facility. The
ultimate success of the venture depends on a number of factors, including
securing adequate financing, of which there can be no assurances. If the venture
is unable to obtain third party financing, or experiences delays in obtaining
third party financing, the Company may be required to invest additional funds in
the venture, terminate the venture or attempt to divest its interest in the
venture, any of which could result in significant losses to the Company. There
can be no assurance that the venture ever becomes operational or profitable.
11. Possible Disputes. The Company has entered into a research agreement
with the University whereunder a feasibility study is to be undertaken by the
University to develop a prototype model of a product embodying the Company's
patented photo-assisted CVD technology. The University claims rights in certain
pre-existing intellectual property related to certain photo-assisted CVD designs
and processes. While it is understood that the Company's patented technology is
to be the primary focus of the study, it is recognized that inventions based on
the University's own claims may result from the study. If so, the Company will
have a period of 90 days after disclosure to it by the University of such an
invention in which to elect to obtain an exclusive, royalty-bearing license to
make, use and sell any such invention first actually reduced to practice in the
performance of the study. If the Company elects to obtain such a license, it
will have 120 days to negotiate the terms of a license agreement. It is possible
that the Company and the University may fail to agree on the terms of a license
agreement within that 120-day period. If the company fails to enter into a
license agreement, the Company will no longer have any rights with respect to
such inventions. Furthermore, the royalty rate under any license agreement is to
be between .5% and 2% depending on the relative contribution of the parties to
the development of any such invention. Disputes could arise between the parties
as to such contributions or to the time when the invention was first reduced to
practice, which disputes may cause delays in negotiating the terms of a license
agreement and could result in litigation.
12. Product Protection and Infringement. The Company has been issued a
number of patents covering some of its products. The issuance of those patents
do not, however, provide assurance that any of them will protect the Company's
products from infringement or otherwise enhance their value. Furthermore, while
the Company does not believe that its products infringe on the proprietary
rights of any other parties, there can be no assurance that the Company will, in
the future, have all the patents or other proprietary rights necessary for the
conduct of its business; or that other parties will not assert infringement
claims against the Company.
16
13. Possible Loss of NASDAQ Eligibility. While the Company's Common Stock
is now included on the Nasdaq SmallCap Market ("Nasdaq"), their continued
inclusion will depend on the Company's ability to meet certain eligibility
requirements established for the Nasdaq SmallCap System. Loss of Nasdaq
eligibility could result if the Company sustains material operating losses or if
the market price of the securities falls below certain specified levels (below
$1.00 per share in the case of the Common Stock). If any of the Company's
securities are ineligible for trading on the Nasdaq system, such securities may
be subject to a rule under the Securities Exchange Act of 1934 that imposes
additional sales practice requirements on broker-dealers who sell such
securities to persons other than established customers and accredited investors
(generally institutions with assets in excess of $5,000,000 or individuals with
a net worth in excess of $1,000,000 or annual income exceeding $200,000 or
$300,000 jointly with their spouse). For transactions covered by the rule, the
broker-dealer must make a special suitability determination for the purchaser
and receive the purchaser's written consent to the transaction prior to the
sale. The rule may adversely affect the ability of broker-dealers to sell the
Company's securities, and consequently may limit the public market for and the
trading price of the securities.
14. No Dividends. The Company has never paid cash dividends on its Common
Stock and has no plans to do so in the foreseeable future. The Company intends
to retain earnings, if any, for business use.
15. Authorization of Preferred Stock. The Company's Articles of
Incorporation authorizes the issuance of up to 100,000,000 shares of preferred
stock with such rights and preferences as may be determined from time to time by
the Board of Directors. Accordingly, the Board of Directors may, without
shareholder approval, issue preferred stock with dividend, liquidation,
conversion, voting or other rights which could adversely affect the voting power
or other rights of the holders of the Company's Common Stock. In addition, the
issuance of such preferred stock may have the effect of rendering more difficult
or discouraging an acquisition of the company or changes in control of the
Company. Although the Company does not currently intend to issue any shares of
its preferred stock there can be no assurance that the Company will not do so in
the future.
16. Technological Change. Semiconductor manufacturing equipment and
processes are subject to rapid technological change. The Company believes that
its future success will depend in part upon its ability to continue to enhance
its existing products and their process capabilities and to develop and
manufacture new products with improved process capabilities that enable
semiconductor manufacturers to fabricate semiconductors more efficiently. New
product introductions could contribute to quarterly fluctuations in operating
results as orders for new products commence and orders for existing products
decline. Failure to introduce new products successfully in a timely manner could
result in loss of competitive position and reduced sales of existing products.
Furthermore, the inability to produce such products or any failure to achieve
market acceptance could have a material adverse effect on the Company's business
and results of operations.
17. Litigation and Contract Disputes. From time to time, the Company is a
party to litigation and disputes incidental to its business and commercial
transactions generally. The Company currently is not engaged in litigation, but
a certain semiconductor manufacturer has
17
threatened to assert a breach of contract claim against the Company. The Company
does not believe it breached any obligations to such party and, if a claim is
filed, the Company intends to assert defenses against such claim.
USE OF PROCEEDS
Assuming that all of the Options and all of the Purchase Rights are
exercised, the net proceeds to the Company are estimated to be approximately
$178,550. The proceeds will be allocated to the Company's working capital for
Company operations. The Company will not receive any of the proceeds from the
subsequent sale of the Common Stock.
18
SELLING SHAREHOLDERS
The following table provides certain information with respect to the Common
Stock beneficially owned by each Selling Shareholder as of July 19, 1996. Except
as set forth below, none of such Selling Shareholders has had a material
relationship with the Company other than as a result of ownership of the
securities of the Company. The Offered Securities may be offered from time to
time by the Selling Shareholders named below or their nominees, and this
Prospectus may be required to be delivered by persons who may be deemed to be
underwriters in connection with the offer or sale of such securities. Because
(i) the Selling Shareholders may offer all or some of the Offered Securities
held by them pursuant to offerings contemplated by this Prospectus, (ii) the
Offered Securities are not necessarily being underwritten on a firm commitment
basis, and (iii) the Selling Shareholders may purchase additional shares of
Common Stock or Common Stock equivalents from time to time, the Company cannot
accurately estimate the amount of shares of Common Stock to be held by the
Selling Shareholders after completion of the offerings contemplated by this
Prospectus. The following table assumes that each Selling Shareholder will sell
all Offered Securities, which may not be the case.
The Company has agreed to register such securities under the Securities Act
and to pay all expenses in connection therewith (other than brokerage
commissions and fees and expenses of counsel). Such securities have been
included in the Registration Statement of which this Prospectus is a part. This
Prospectus may be used from time to time by the Company to issue the shares of
Common Stock covered herein upon the exercise of Options or the exercise of the
Purchase Rights.
19
- ----------------------------------------------------------------------------------------------------------------------------------
Shares of Common Stock Shares of Common Stock
Beneficially Owned Prior to Owned Following the
the Offering(1)(3) Shares Offering(1)(2)(3)
--------------------------------------- Offered --------------------------------------
Selling Stockholder Number Percent Herein Number Percent
- ----------------------------------------------------------------------------------------------------------------------------------
Dr. Aime Avniel 10,000 (6) * 10,000 (7)(8) 0 0%
8552 E. Via Del Palacio
Scottsdale, Arizona 85258
- ----------------------------------------------------------------------------------------------------------------------------------
Donald F. Johnston (4) 11,250 (9) * 10,000 (10)(11) 1,250 (8) *
13615 N. Robertson Drive
Sun City West, Arizona 85375
- ----------------------------------------------------------------------------------------------------------------------------------
Alvin Katz (4) 130,000 (12) 3.16% 10,000 (11)(13) 120,000 (8) 2.92%
301 N. Birch Road
Boca Raton, FL 33304
- ----------------------------------------------------------------------------------------------------------------------------------
Bruce R. Thaw (4) 51,000 (14) 1.24% 10,000 (11)(15) 41,000 (8) 1.0%
45 Banfi Plaza
Farmingdale, New York 11735
- ----------------------------------------------------------------------------------------------------------------------------------
J.S. Whang (4) 138,976 (16) 3.37% 15,000 (17) 123,976 (8) 3.02%
131 South Clark Drive
Tempe, AZ 85281
- ----------------------------------------------------------------------------------------------------------------------------------
Robert T. Hass (4) 13,500 (18) * 10,000(8)(19) 5,500 (8) *
131 South Clark Drive
Tempe, AZ 85281
- ----------------------------------------------------------------------------------------------------------------------------------
Eugene R. Hartman 10,000 (20) * 10,000(8)(21) 0 0%
1607 Waltham Court
Lutherville, MD 21093
- ----------------------------------------------------------------------------------------------------------------------------------
Carol Bernhardt (5) 4,500 (22) * 4,500(8)(23) 0 0%
131 South Clark Drive
Tempe, AZ 85281
- ----------------------------------------------------------------------------------------------------------------------------------
Katherine Burgess (5) 5,000 (24) * 5,000(8)(25) 0 0%
131 South Clark Drive
Tempe, AZ 85281
- ----------------------------------------------------------------------------------------------------------------------------------
Jihyo Rhieu (5) 0 0% 50,000(8)(26) 0 0%
131 South Clark Drive
Tempe, AZ 85281
- ----------------------------------------------------------------------------------------------------------------------------------
All Selling Shareholders as a 374,226 (26) 8.92% 134,500 291,726(28) 7.07%
Group
- ----------------------------------------------------------------------------------------------------------------------------------
* Represents less than 1%.
(1) Assumes all of the Options and Purchase Rights are exercised and
no additional shares are acquired.
(2) Assumes all of the shares offered are sold by the Selling
Stockholders.
(3) The percentages shown include the shares of Common Stock actually
owned as of July 19, 1996, and the shares of Common Stock with
respect to which the person had the right to acquire beneficial
ownership within 60 days of such date pursuant to options. All
shares of Common Stock that the identified person had the right to
acquire within 60 days of July 19, 1996, upon the exercise of
options, are deemed to be
20
outstanding when computing the percentage of the securities owned
by such person, but are not deemed to be outstanding when
computing the percentage of the securities owned by any other
person.
(4) Mr. Whang is the Company's President, CEO and a director. Mr. Hass
is the Vice President-Finance, Chief Financial Officer, Treasurer,
Secretary, and a director. Messrs. Johnston, Katz and Thaw are
presently directors.
(5) Currently an employee of the Company.
(6) Includes 10,000 shares issuable upon presently exercisable
Purchase Rights.
(7) Pursuant to a Directors Stock Purchase Agreement dated May 13,
1993, Dr. Avniel has the right to purchase up to 10,000 shares of
Common Stock at a purchase price of $1.06 per share. Dr. Avniel's
purchase rights were to expire on June 30, 1995, however, the
Board of Directors of the Company extended the Agreement until 30
days after the effective date of a registration statement
registering the shares subject to the Agreement.
(8) The shares of Common Stock to be issued have been adjusted to
reflect (i) a 2-for-1 reverse stock split of the Company's Common
Stock effected June 3, 1993, and (ii) a 2-for-1 forward stock
split of the Company's Common Stock effected March 29, 1996
(9) Includes 10,000 shares issuable upon presently exercisable
Purchase Rights.
(10) Pursuant to a Directors Stock Purchase Agreement dated April 19,
1994, Mr. Johnston has the right to purchase up to 10,000 shares
of Common Stock at a purchase price of $1.75 per share.
(11) The shares of Common Stock to be issued have been adjusted to
reflect a 2-for-1 forward stock split of the Company's Common
Stock effected March 29, 1996
(12) Includes 10,000 shares issuable upon presently exercisable
Purchase Rights.
(13) Pursuant to a Directors Stock Purchase Agreement dated May 1,
1995, Mr. Katz has the right to purchase up to 10,000 shares of
Common Stock at a purchase price of $2.235 per share.
(14) Includes 10,000 shares issuable upon presently exercisable
Purchase Rights, and warrants to purchase 9,000 shares of Common
Stock at an exercise price of $2.25 per share.
(15) Pursuant to a Directors Stock Purchase Agreement dated May 1,
1995, Mr. Thaw has the right to purchase up to 10,000 shares of
Common Stock at a purchase price of $2.235 per share.
(16) Includes (i) 9,488 shares held jointly with Mr. Whang's spouse and
(ii) the 15,000 shares issuable upon the exercise of the presently
exercisable Options.
(17) Represents shares underlying Options granted pursuant to an
Incentive Stock Option Agreement dated May 11, 1983, pursuant to
which Mr. Whang has the right to purchase up to 15,000 shares of
Common Stock at an option exercise price of $1.76 per share.
(18) Includes 8,000 shares issuable upon presently exercisable Options.
(19) Represents shares underlying options granted pursuant to an
Incentive Stock Option Agreement dated October 14, 1992, pursuant
to which Mr. Hass has the right to purchase up to 10,000 shares of
Common Stock at an option exercise price of $0.625 per share.
(20) Includes 10,000 shares issuable upon presently exercisable
Options.
(21) Represents shares underlying Options granted pursuant to an
Incentive Stock Option Agreement dated February 19, 1991, pursuant
to which Mr. Hartman has the right to purchase up to 10,000 shares
of Common Stock at an option exercise price of $1.125 per share.
21
(22) Includes 4,500 shares issuable upon presently exercisable Options.
(23) Represents shares underlying Options granted pursuant to Incentive
Stock Option Agreements dated August 17, 1988 and January 17,
1991, pursuant to which Ms. Bernhardt has the right to purchase up
to 4,000 and up to 500 shares of Common Stock at option exercise
prices of $1.00 and $2.60 per share, respectively.
(24) Includes 5,000 shares issuable upon presently exercisable Options.
(25) Represents shares underlying options granted pursuant to an
Incentive Stock Option Agreement dated December 21, 1991, pursuant
to which Ms. Burgess has the right to purchase up to 5,000 shares
of Common Stock at an option exercise price of $1.00 per share.
(26) Represents shares underlying Options granted pursuant to an
Incentive Stock Option Agreement dated June 28, 1991, pursuant to
which Mr. Rhieu has the right to purchase up to 50,000 shares of
Common Stock at an option exercise price of $1.03 per share.
(27) Includes 42,500 shares issuable upon exercise of presently
exercisable Options, 40,000 shares of issuable upon exercise of
presently exercisable Purchase Rights, and 9,000 shares issuable
upon exercise of presently exercisable warrants.
22
DETERMINATION OF OFFERING PRICE
The offering price of the Common Stock subject to this Prospectus has been
contractually established as follows: The Options are exercisable at prices
ranging from $0.625 to $2.60 per share, depending upon the terms of the Option
Agreement between the Optionee and the Company, such exercise price determined
as the fair market value on the date of grant of each Option. The Directors
Purchase Rights are exercisable at prices ranging from $1.06 to $2.235 per
share, depending upon the terms of the Directors Agreement between the Director
and the Company, such purchase price determined as the fair market value on the
date of grant of each Purchase Right. This Prospectus may be used from time to
time by the Company to issue the shares of Common Stock covered herein upon the
exercise of Options or the exercise of the Purchase Rights.
PLAN OF DISTRIBUTION
The Company will cause the issuance of the shares of Common Stock to
Directors or the Optionees upon proper exercise of the Purchase Rights or the
Options, as the case may be. The Common Stock issuable on exercise of the
Purchase Price or Options, when issued, will be included in the outstanding
shares of the Company quoted on the Nasdaq SmallCap Market.
The Company will pay the expenses incident to the registration of the
securities offered hereby. The Company will not pay any expenses incident to the
offering and sale of the Common Stock by the holders thereof.
Transfer Agent and Warrant Agent
The Transfer Agent for the Common Stock and the Redeemable Warrants is
American Securities Transfer, Incorporated, of 938 Quail Street, Suite 101,
Lakewood, Colorado 80202-1817.
23
RECENT EVENTS
Sale of Contract Personnel Business. In October 1995, the Board of
Directors of the Company determined to dispose of the contract personnel
business in order to allow the Company to focus on its core semiconductor
equipment business. On December 29, 1995, Amtech entered into an Agreement and
Plan of Reorganization and Corporate Separation with Eugene R. Hartman, a Vice
President and director of Amtech and the President of Echelon (the "Agreement"),
to split-off the contract personnel business operated by Amtech through Echelon.
On January 29, 1996, the parties closed the split-off transaction (the
"Split-Off") effective as of December 31, 1995. The Company transferred all of
the stock of Echelon held by it to Mr. Hartman in exchange for 98,016 shares of
Amtech Common Stock held by Mr. Hartman. The total consideration for the Echelon
stock was valued at approximately $800,000. A cash dividend in the amount of
$393,368 was distributed by Echelon to Amtech prior to the Spilt-Off in order to
equalize values. Pursuant to the Agreement, Mr. Hartman acquired all of the
assets and assumed all of the liabilities of Echelon.
Prior to entering into the Echelon Agreement with Mr. Hartman, the Company
sought and negotiated offers from third parties. However, in the opinion of the
Board, the best offer was tendered by Mr. Hartman. The transaction was conducted
at arms' length, and management does not believe that a better deal could have
been made with unrelated third parties.
As of January 26, 1996, Mr. Hartman resigned as an officer of Amtech and as
of February 29, 1996, Mr. Hartman ceased to be a director of the Company upon
election of his successor at the Company's annual meeting of shareholders.
Industry Slowdown. Semiconductor manufacturers currently are experiencing a
significant decrease in order bookings. In addition, the prices for
semiconductors have declined dramatically, squeezing manufacturers' margins.
These factors may affect semiconductor manufacturers' decisions to purchase
capital equipment such as the Company's products. Further price declines due to
increased supply of semiconductors may have a material adverse effect on the
Company's business and results of operations.
Increased Backlog. During recent periods, the Company has been experiencing
a significantly greater order backlog than prior periods. The increase in the
backlog is due in substantial part to a substantial multi-year order, expanded
product line and customers' requested delays in deliveries from that scheduled
in the original purchase orders. Also, the Company has experienced long
lead-times in purchasing certain components from suppliers of quartz parts,
which has and is resulting in the Company taking up to six months to deliver
equipment that contains such quartz parts.
EXPERTS
The financial statements of the Company as of September 30, 1995, and for
each of the three years in the period ended September 30, 1995, incorporated by
reference herein and in the registration statement, have been audited by Arthur
Andersen LLP, independent public
24
accountants, as indicated in the reports with respect thereto, in reliance upon
the authority of said firm as experts in giving said reports.
LEGAL MATTERS
The legality of the securities offered hereby has been passed upon for the
Company by Squire, Sanders & Dempsey, Phoenix, Arizona.
25
======================================== ======================================
NO PERSON HAS BEEN AUTHORIZED TO GIVE
ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE
CONTAINED IN THIS PROSPECTUS OR ANY
RELATED PROSPECTUS SUPPLEMENT AND, IF
GIVEN OR MADE, SUCH INFORMATION OR
REPRESENTATIONS MUST NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED. NEITHER THIS
PROSPECTUS NOR ANY PROSPECTUS SUPPLEMENT
CONSTITUTES AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY ANY
SECURITIES OTHER THAN THE SECURITIES
DESCRIBED IN THIS PROSPECTUS AND RELATED
PROSPECTUS SUPPLEMENT OR AN OFFER TO
SELL OR THE SOLICITATION OF AN OFFER TO
BUY SUCH SECURITIES IN ANY CIRCUMSTANCES
IN WHICH SUCH OFFER OR SOLICITATION IS AMTECH SYSTEMS, INC.
UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS OR ANY RELATED PROSPECTUS
SUPPLEMENT NOR ANY SALE MADE HEREUNDER 134,500 Shares of Common Stock
SHALL, UNDER ANY CIRCUMSTANCES, CREATE ___________
ANY IMPLICATION THAT THERE HAS BEEN NO
CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN
IS CORRECT AS OF ANY TIME SUBSEQUENT TO
ITS DATE.
-------------------- ---------------------------
PROSPECTUS
TABLE OF CONTENTS ---------------------------
Page
----
Available Information..................2
Incorporation of Certain Documents
by Reference.........................3
Prospectus Summary ....................4
The Company............................6
Risk Factors..........................13
Use of Proceeds.......................18
Selling Shareholders..................19
Determination of Offering Price.......23
Plan of Distribution..................23
Recent Events.........................24
Experts...............................24
Legal Matters.........................25
======================================== =====================================
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting compensation, are as
follows:
SEC registration fee.......................................................$100
Legal fees and disbursements.............................................$5,000
Accounting fees and disbursements........................................$1,000
Blue Sky fees and expenses...............................................$2,500
Miscellaneous............................................................$2,500
-------
Total...................................................................$11,100
=======
The foregoing expenses will be borne by the Company.
Item 15. Indemnification of Directors and Officers.
The right of the shareholders to sue any director for misconduct in
conducting the affairs of the Company is limited by Article 14 of the Company's
Articles of Incorporation and Arizona statutory law to actions for damages
resulting from a breach of a director's fiduciary duty of loyalty, acts or
omissions not in good faith or involving intentional misconduct or knowing
violations of the law, the unlawful payment of dividends or stock repurchases or
transactions in which a director receives an improper personal benefit. Ordinary
negligence is not a ground for such a suit.
The Company also has the right, pursuant to Article 11 of the Company's
Articles of Incorporation, to indemnify any present or former director or
officer of the Company for all expenses incurred by them in connection with any
legal action brought or threatened against such person for or on account of any
action or omission alleged to have been committed while acting in the course and
scope of the person's duties, if the person acted in good faith and in a manner
which the person reasonably believed to be in or not opposed to the best
interests of the Company, and with respect to criminal actions, had no
reasonable cause to believe the person's conduct was unlawful, provided that
such indemnification is made pursuant to then existing provisions of Arizona
statutory law at the time of any such indemnification. The statute does not
limit the liability of directors or officers for monetary damages under the
Federal securities laws.
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Company, the
Company has been informed that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is therefore unenforceable.
II-1
Item 16. Exhibits.
Method
Exhibit No. Description of Filing
----------- ----------- ---------
3.1 Articles of Incorporation A
3.2 Articles of Amendment to Articles of Incorporation, dated A
April 27, 1983
3.3 Articles of Amendment to Articles of Incorporation, dated B
May 19, 1987
3.4 Articles of Amendment to Articles of Incorporation, dated C
May 2, 1988
3.5 Articles of Amendment to Articles of Incorporation, dated G
May 28, 1993
3.6 Amended and Restated Bylaws D
5 Opinion of legal counsel *
10.1 Amended and Restated 1995 Stock Option Plan H
10.2 1995 Stock Bonus Plan H
10.3 Non-Employee Directors Stock Option Plan I
10.4 Employment Agreement with Robert T. Hass, dated May F
19, 1992
10.5 Registration Rights Agreement with J.S. Whang, dated G
January 24, 1994
10.6 J.S. Whang Stock Option Agreement A
10.7 Employment Agreement with J.S. Whang, dated October G
1, 1994
10.8 Research Agreement with The Regents of the University E
of California dated March 1, 1994, together with
amendments thereto dated March 1, 1994, March 30,
1994, March 7, 1995, June 26, 1995, October 16, 1995,
November 29, 1995, and December 4, 1995.
10.9 Amendment to Research Agreement with the Regents of *
the University of California dated July 8, 1996.
10.10 Contract of Sale (Real Property) dated June 21, 1996 *
between Tempress Systems, Inc. and Orgelmakerij Gedr.
Rell B.V.
10.11 Form of Directors Stock Purchase Agreement *
II-2
10.12 Form of Incentive Stock Option Agreement for the 1983 *
Incentive Stock Option Plan
21 Consent of accountants *
22 Subsidiaries of the Registrant E
24 Powers of Attorney See Signature
Page
- ----------
* Filed herewith.
A Incorporated by reference to the Company's Form S-18 Registration Statement
No. 2-83934-LA
B Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1987
C Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1988
D Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1991
E Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1995
F Incorporated by reference to the Company's Annual Report on Form 10-K for
the fiscal year ended September 30, 1993
G Incorporated by reference to the Company's Form S-1 Registration Statement
No. 33-77368
H Incorporated by reference to Company's Form S-8 Registration Statement
relating to the Amended and Restated 1995 Stock Option Plan and the 1995
Stock Bonus Plan filed with the Securities and Exchange Commission on
August 8, 1996
I Incorporated by reference to Company's Form S-8 Registration Statement
relating to the Non-Employee Directors Stock Option Plan filed with the
Securities and Exchange Commission on August 8, 1996
Item 17. Undertakings.
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;
II-3
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (1)(i) and (1)(ii) do not apply if the
registration statement is on Form S-3, Form S-8, and the information required to
be included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the registrant pursuant to Section 13 or 15(d) of the
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.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the registrant's annual
report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to
Section 15(d) of the Securities Exchange Act of 1934) that is
incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at
that time shall be deemed to be the initial bona fide offering
thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, Amtech Systems,
Inc. 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 to Registration
Statement on Form S-3 to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Tempe and State of Arizona on
August 13, 1996.
AMTECH SYSTEMS, INC.
an Arizona corporation
By /s/ Jong S. Whang
-----------------------------
Jong S. Whang
President
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned, constitutes and
appoints JONG S. WHANG and ROBERT T. HASS, and each of them, his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution,
for him and in his name, place and stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Form S-3
Registration Statement and to file the same with all exhibits thereto, and all
documents in connection therewith, with the Securities and Exchange Commission,
granting such attorneys-in-fact and agents, and each of them, full power and
authority to do and perform each and every act and thing requisite and necessary
to be done in and about the premises, as fully and to all intents and purposes
as he might or could do in person, hereby ratifying and confirming all that such
attorneys-in-fact and agents, or each of them, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report on Form S-3 Registration Statement has been signed below by the following
persons on behalf of the registrant and in the capacities and on the dated
indicated:
Signature Title Date
- --------- ----- ----
/s/ Jong S. Whang Chairman of the Board, August 13, 1996
- ------------------------------ President (Chief Executive Officer)
Jong S. Whang
/s/ Robert T. Hass Vice President-Finance August 13, 1996
- ------------------------------ (Chief Financial & Accounting
Robert T. Hass Officer); Director
/s/ Donald F. Johnston Director August 13, 1996
- ------------------------------
Donald F. Johnston
/s/ Alvin Katz Director August 13, 1996
- ------------------------------
Alvin Katz
/s/ Bruce R. Thaw Director August 13, 1996
- ------------------------------
Bruce R. Thaw
S-1