<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 28, 1999
REGISTRATION NO. 333-03589
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
POST-EFFECTIVE AMENDMENT NO. 1
ON FORM S-3
TO
FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-----------
IMATEC, LTD.
(Exact name of Registrant as specified in its charter)
DELAWARE 3861 11-3289398
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
-----------
IMATEC, LTD.
150 East 58th Street
New York, NY 10155
(Address of principal place of business)
HANOCH SHALIT
Chief Executive Officer
150 East 58th Street
New York, NY 10155
(212) 826-0440
(Name, address, and telephone number of principal executive offices and
agent for service)
Copies to:
- --------------------------------------------------------------------------------
ROBERT STEVEN BROWN, ESQ.
Brock Silverstein LLC
800 Third Avenue, 21st Floor
New York, New York 10022-4611
(212) 371-2000 / (212) 371-5500 (Telecopy)
[email protected]
- --------------------------------------------------------------------------------
<PAGE>
Approximate date of commencement of proposed sale to the public: As
soon as practicable after the effective date of this Registration Statement.
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, check the following box. |X|
If this Form is filed to register additional securities 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>
PROPOSED PROPOSED
MAXIMUM MAXIMUM
OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE PRICE PER OFFERING REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED UNIT PRICE FEE
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Common Stock, par value $.0001 per share 4,000,000 shares $6.50 $26,000,000 $7,228
(1)(2)
Common Stock, par value $.0001 per share 835,177 shares $0.79 (4) $665,553 $185
(2)(3)
- ---------------------------------------------------------------------------------------------------------------------
TOTAL 835,177 shares $26,665,553 $7,413
- --------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Represents the shares of Common Stock issuable upon the exercise of the
Warrants.
(2) Estimated solely for purposes of calculation of the registration fee in
accordance with Rule 457(g) under the Securities Act of 1933, as amended.
(3) Represents shares of Common Stock that may be sold by a certain stockholder
of the Company.
(4) Estimated in accordance with Rule 457(c) under the Securities Act solely for
the purpose of computing the amount of the registration fee, based upon the
average of the bid and the ask price of the common stock ($0.7969) as reported
on the OTC Bulletin Board on October 14, 1999.
-----------
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 Securities and Exchange Commission, acting
pursuant to Section 8(a), may determine.
================================================================================
<PAGE>
SUBJECT TO COMPLETION, DATED OCTOBER 28, 1999
PROSPECTUS
IMATEC, LTD.
4,835,177 SHARES
OF COMMON STOCK
-----------
In an initial public offering in October 1996, we issued Warrants to
purchase our common stock. Under this prospectus, we are offering the shares of
our common stock that holders of Warrants may purchase upon exercising the
Warrants. This prospectus also relates to the offering of 835,177 shares of
common stock by a selling stockholder. We will not receive any proceeds from the
sale of the selling stockholder's shares of common stock.
The common stock may be offered from time to time by the selling
stockholder through ordinary brokerage transactions in the over-the-counter
markets, in negotiated transactions or otherwise, at market prices prevailing at
the time of sale or at negotiated prices.
Our common stock and warrants currently trade on the OTC Bulletin Board
under the symbols "IMEC" and "IMECW," respectively. On October __, 1999, the
last reported bid price of the common stock and warrants on the OTC Bulletin
Board was $_____ and $____, respectively.
Our principal executive offices are located at 150 East 58th Street,
New York, New York 10155.
THE WARRANT EXPIRATION DATE OF THE 4,000,000 WARRANTS ISSUED IN OUR
INITIAL PUBLIC OFFERING IS OCTOBER 28, 1999.
THE SECURITIES OFFERED HEREBY INVOLVE RISKS WHICH ARE DESCRIBED IN THE
"RISK FACTORS" SECTION BEGINNING ON PAGE 3 OF THIS PROSPECTUS.
-----------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS
PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
-----------
THE DATE OF THIS PROSPECTUS IS OCTOBER 28, 1999
<PAGE>
-----------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary............................................................ 2
The Company..................................................... 2
The Offering.................................................... 3
Risk Factors.................................................................. 3
Use of Proceeds...............................................................10
Selling Stockholder...........................................................10
Plan of Distribution..........................................................10
Description of the Warrants...................................................11
Description of Capital Stock..................................................12
Disclosure of SEC Position on Indemnification for Securities Act Liabilities..13
Legal Matters.................................................................13
Experts.......................................................................13
Where You Can Find More Information...........................................13
</TABLE>
This prospectus contains and incorporates by reference certain forward
looking statements within the meaning of the Private Securities Litigation
Reform Act of 1995 with respect to our business, financial condition and results
of operations, including, without limitation, statements under the captions
"Business" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in our annual and quarterly reports. These forward
looking statements reflect our plans, expectations and beliefs and, accordingly,
are subject to certain risks and uncertainties. We cannot guarantee that any of
such forward looking statements will be realized. Factors that may cause actual
results to differ materially from those contemplated by such forward looking
statements include, among others, the factors discussed in the section of this
prospectus entitled "Risk Factors."
<PAGE>
PROSPECTUS SUMMARY
The following summary is qualified in its entirety by the detailed
information and financial statements, including the notes thereto, contained or
incorporated by reference in this prospectus.
THE COMPANY
We were incorporated in 1988 to develop, design, market and license our
proprietary technology. Our technology enhances image reproduction by reducing
the distortion that normally occurs in the imaging process. We create
applications, known as Imatec 20/20 Systems, for use in the medical imaging,
graphic arts, computers, cinematography and TV/video markets. Each application
is a system, of hardware and software components designed for a specific market.
Based on the results of extensive testing, we developed an Imatec 20/20 System
for medical diagnostic imaging devices which we believe improves the quality of
film reproduction of images taken by imaging devices such as Magnetic Resonance
Imaging scanners computer tomography scanners and Ultrasound scanners. The
Imatec 20/20 System for medical diagnostic imaging devices improves the quality
of film reproduction regardless of the type of medical imaging film used. We
have also developed an Imatec 20/20 System for the medical imaging field of
teleradiology, which relates to viewing the same medical image on different
monitors in separate locations. Although the first applications of our
technology were for the medical diagnostic imaging field, which only require
black and white reproduction, we have developed an Imatec 20/20 System designed
to reduce distortions of reproduction of color images to facilitate our
development of Imatec 20/20 Systems for non-medical imaging fields.
Our technology is designed to correct the existing tone and color
distortions between an original image and its reproduction. Unlike our Imatec
20/20 Systems, current imaging systems create distorted reproductions which are
usually adjusted subjectively. Aspects of our technology are set forth in three
United States patents and one European patent, referred to herein as the
"Patents", which have been licensed to us by Dr. Hanoch Shalit, our President
and Chief Executive Officer. We designed, built and tested a prototype of an
Imatec 20/20 System that can be used with MRI, CT and Ultrasound scanners.
Our strategy is to:
- protect our proprietary technology, including the Imatec 20/20 by
enforcing our legal rights with respect thereto, including
pursuing our current litigation with Apple Computers,
- market our technology and the Imatec 20/20 Systems for licensing
purposes, and
- continue to research and develop other applications of our
technology in the medical imaging field and in other imaging
fields, such as graphic arts, cinematography, computers and
TV/video. We do not presently intend to engage in any
manufacturing, sales, distribution or service activities with
respect to the Imatec 20/20 Systems or products that incorporate
our technology.
2
<PAGE>
THE OFFERING
<TABLE>
<S> <C>
Securities Offered by the Company.................... We are offering 4,000,000 shares of our common stock issuable upon the
exercise of the Warrants.
Securities Offered by the Selling Stockholder........ 835,177 shares of our common stock may be sold by our selling stockholder. We
will not receive any proceeds from the sale of these shares.
Expiration of Warrants............................... The Warrants will expire on October 28, 1999.
Exercise of Warrants................................. The Warrants became exercisable on October 29, 1996. Each
Warrant entitles its holder to purchase one share of our
common stock at an exercise price of $6.50 per share.
Listing or Quotation of Common Stock................. Our common stock and warrants currently trade on the OTC Bulletin Board under
the symbols "IMEC" and "IMECW," respectively.
Registration......................................... We will use our best efforts to register the common stock being sold under
this registration statement continuously effective.
Use of Proceeds...................................... We will not receive any proceeds from the sale of the common stock by our
selling stockholder. To the extent that any Warrants are exercised, we will
receive the exercise price for the common stock we issue. The proceeds, if
any, will be used for working capital purposes.
</TABLE>
RISK FACTORS
WE ARE A DEVELOPMENT STAGE COMPANY AND OUR FUTURE PROFITABILITY IS
UNCERTAIN.
We are in the development stage and have earned nominal revenues from
operations. Since our formation in November 1988, our principal activities have
been:
- research and development related to our technology and the Imatec
20/20 System for the medical diagnostic imaging field,
- testing the Imatec 20/20 System designed for the medical
diagnostic imaging field, and
- securing the intellectual property rights to our technology,
including filing and obtaining patents.
Primarily as a result of expenses incurred in connection with research
and development and related activities, as of December 31, 1997 and 1998, we
have had an accumulated stockholder's deficit of $4,860,327 and $5,636,986,
respectively. We have continued to incur losses since December 31, 1998. We may
experience problems, delays, expenses, difficulties and risks normally
encountered by a company in the development stage, many of which may be beyond
our control. Such risks may include, but are not limited to, unanticipated
problems relating to the continued developing, testing and marketing
3
<PAGE>
of our technology. In addition, we will also face a number of risks specific to
entities attempting to introduce new technologies, including, but not limited
to:
- the existence or development of competing technologies, including
those technologies that are incompatible with our technology,
- our inability to respond in a timely manner to changing
technologies, and
- the potential obsolescence of our technology as a result of
changing technologies.
We expect to continue to incur losses until our revenues exceed our
expenses. There can be no assurance that the application of our technology to
the medical diagnostic imaging field, or to any other field, will be successful,
or that we will be able to successfully license or otherwise exploit our
technology or any of the Imatec 20/20 Systems. There can be no assurance that we
will ever be profitable.
WE MAY NEED ADDITIONAL FINANCING.
We may require additional financing and, if required, there can be no
guarantee that it will be available to us on acceptable terms, or at all.
Factors that may lead to a need for additional financing include changes in
technologies or the need to directly engage in the manufacture, sales,
distribution and service of products based on our technology. There can be no
assurance that we will not suffer from these or any other problems, any of which
may have a material adverse effect on our business.
OUR TECHNOLOGY MAY NOT GAIN MARKET ACCEPTANCE.
Although we have successfully tested the Imatec 20/20 Systems with
respect to the medical diagnostic imaging field, our technology has not been
widely accepted in the marketplace and there can be no assurance that a market
for our products or our technology will develop. Consequently, although we will
seek to license our technology and the Imatec 20/20 Systems to third parties in
the medical diagnostic imaging field, there can be no assurance that we will be
successful in generating any licensing income. In addition, part of our strategy
is to continue to research and develop our technology for other applications in
the medical imaging areas and in other imaging fields, such as graphic arts,
computer, cinematography and TV/video fields. Our Imatec 20/20 Systems reduce
the distortion of reproduction of color images, which we believe will facilitate
the application of an Imatec 20/20 System to non-medical imaging fields. There
can be no assurance, however, that we will be able to apply our technology to
any other markets or that a market will develop for the Imatec 20/20 Systems in
the medical diagnostic imaging field or any other field. Nor can we offer any
assurance that our technology or the Imatec 20/20 Systems will ever receive
acceptance from any intended users.
OUR INDUSTRY IS SUBJECT TO RAPID TECHNOLOGICAL CHANGE.
The image enhancement field is subject to rapid and significant
technological change that may render the Imatec 20/20 Systems, our technology or
products that incorporate our technology obsolete or incompatible with the
machines they are intended to complement. In addition, rapid technological
changes may impose additional, unforeseen costs if we are required to modify our
technology and the Imatec 20/20 Systems to adapt to such changes. There can be
no assurance that we will be able to successfully modify or upgrade our
technology and Imatec 20/20 Systems as may be necessary in a timely manner, or
at all.
4
<PAGE>
There are a number of entities that are engaged in the research and
development of image enhancement products, including some entities that build
image enhancement devices that compete directly with our technology or the
Imatec 20/20 Systems in the color management field. These entities may in the
future develop technologies or products that compete render our technology
obsolete. Potential and current competitors include independent companies,
universities and public and private research organizations, most of which are
well established and have substantially greater marketing, financial,
technological and other resources than we do. In addition, the medical imaging
field in particular is dominated by large, well established corporations. There
can be no assurance that competitors to Imatec 20/20 Systems will not succeed in
securing patents and developing technologies or products that are more effective
than our technology or the Imatec 20/20 Systems. As a result, our technology and
the Imatec 20/20 Systems may become obsolete or non-competitive.
WE HAVE LIMITED MARKETING CAPABILITIES, AND NO MANUFACTURING, SALES,
DISTRIBUTION AND TECHNICAL SUPPORT CAPACITIES.
We do not presently intend to engage in the manufacturing process or
the accompanying sales, distribution and technical services support functions.
We are therefore dependent on licensees of our technology or the Imatec 20/20
Systems and other third parties in connection with the manufacturing,
distribution and service of products that incorporate our technology or the
Imatec 20/20 Systems. The manufacturing, sales, distribution and service of
products are capital and labor intensive, and beyond our current capabilities.
Similarly, we have, and will continue to have for the foreseeable future,
limited marketing and licensing capabilities. Our marketing and licensing
strategy will rely on unaffiliated licensees and other third parties to
successfully manufacture and effect sales of products which incorporate our
technology or the Imatec 20/20 Systems as well as provide the necessary service,
repair and technical support. There can be no assurance that we will be able to
rely on unaffiliated licensees and third parties to successfully effect the
manufacture, sales and service of products incorporating our technology or the
Imatec 20/20 Systems, or that we will not have to make significant additional
capital expenditures in the event that we cannot rely on such licensees and
third parties. Moreover, any additional capital expenditures are beyond our
current means, and may also include the employment of additional personnel to
successfully effect the manufacture, sales, distribution or service of products
incorporating our technology or the Imatec 20/20 Systems.
WE MAY NOT BE ABLE TO ENFORCE OUR INTELLECTUAL PROPERTY RIGHTS.
We are the exclusive licensee of the patents relating to our
technology. The owner and licensor of the patents is Dr. Hanoch Shalit, our
President and Chief Executive Officer. Notwithstanding our exclusive licensing
agreement with Dr. Shalit, there can be no assurance that others will not
independently develop similar technologies, or design around the Patents. If
others are able to design around the patents, our business will be materially
adversely affected. Further, we will have very limited, if any, protection of
its proprietary rights in those jurisdictions where we have not effected any
patent filings or where we fail to obtain patent protection. Even though the
Patents have been issued by the United States Patent and Trademark Office and
the European Patent Office, challenges may be instituted by third parties as to
the validity and enforceability of the Patents. There also can be no assurance
that others will not be able to successfully assert a claim with regard to the
Patents, our technology or the Imatec 20/20 Systems under their own intellectual
property rights. The costs of litigation or settlement in connection with the
defense of any third party challenges relative to the validity and
enforceability the patents and to prevent any infringement of the Patents by
third parties, which in accordance to the license agreement are our
responsibilities, could be substantial. Moreover, in the event that we are
unsuccessful in any such litigation, we could be materially adversely affected.
5
<PAGE>
In certain instances, for business reasons, we may choose not to seek
patent protection for all of our innovations. In those instances, we may rely on
trade secrets and know-how to protect our innovations. There can be no assurance
that protectable trade secrets or know-how will be established or, if
established, that they will remain protected, or that others will not
independently and lawfully develop similar or superior innovations. We require
all employees to sign non-disclosure, non-competition, confidentiality and
invention assignment agreements. Similarly, all directors, consultants and other
parties to whom confidential information has been or will be disclosed have
agreements containing confidentiality provisions and covenants not to compete.
There can be no assurance, however, that any such confidentiality or non-compete
provisions will be complied with or will be enforceable.
WE MAY NEED FDA CLEARANCE.
We are not certain whether we, or a potential licensee of our
technology or the Imatec 20/20 Systems for medical imaging applications, will
obtain any required clearances for medical devices from the United States Food
and Drug Administration for the Imatec 20/20 Systems. The clearance process is
expensive and time consuming. In order to clinically test, produce, and market a
medical device that requires FDA clearance, we or a licensee, as the case may
be, must satisfy numerous mandatory procedures, regulations, and safety
standards established by the FDA, and comparable state and foreign regulatory
agencies. Typically, these standards require that the products be cleared by the
FDA as safe and effective for their intended use prior to being marketed for
human applications. In the event that any FDA clearances are required, there can
be no assurance that the applicable clearances will be granted, or that the
length of time for clearance will not be extensive, or that the cost of
attempting to obtain any applicable clearances will not be prohibitive.
The FDA employs a rigorous system of regulations and requirements
governing the clearance processes for medical devices, requiring, among other
things, the presentation of substantial evidence, including clinical studies,
establishing the safety and efficacy of new medical devices. The principal
methods by which FDA clearance is obtained are pre-market approval, which is for
products that are not comparable to any other product in the market, or filing a
pre-market notification under Section 510(k) of the Federal Food, Drug and
Cosmetic Act, which is for products that are substantially equivalent to
products that have already received FDA clearance. Although both methods may
require clinical testing of the products in question under an approved protocol,
because pre-market approval clearance relates to more unique, invasive and
potentially higher risk products, it is more complex and time consuming.
Applicants under the 510(k) procedure must prove that the products for which
clearance is sought are substantially equivalent to products on the market prior
to the Medical Device Amendments of 1976, or products approved thereafter
pursuant to the 510(k) procedure. The review period for a 510(k) application is
approximately 90 days from the date of filing the application, although there
can be no assurance that the review period will not be longer.
Under the pre-market approval procedure, the applicant is required to
conduct substantial clinical testing to determine the safety, efficacy and
potential hazards of the product. The review period under a pre-market approval
application is 180 days from the date of filing, and the application is not
automatically deemed cleared if not rejected during that period. The preparation
of a pre-market approval application is significantly more complex, expensive
and time consuming than the 510(k) procedure. Further, the FDA can request
additional information, which can prolong the clearance process.
Based upon the non-invasive nature of our technology, we believe
primarily that only a 510(k) application and approval will be required for the
Imatec 20/20 System for medical imaging applications, although there can be no
assurance that a pre-market approval will not be required.
6
<PAGE>
In order to conduct human clinical studies for any medical procedure
proposed for our products, we or a licensee, as the case may be, could also be
required to obtain an investigational device exemption from the FDA or clearance
of an institutional review board, which would further increase the time before
potential FDA clearance. In order to obtain an investigational device exemption,
we or a licensee, as the case may be, may be required to submit an application
to the FDA or an institutional review board, including a complete description of
the product, and detailed medical protocols that would be used to evaluate the
product. In the event an application were found to be in order, an
investigational device exemption would ordinarily be granted promptly
thereafter.
The FDA also imposes various requirements on manufacturers and sellers
of medical devices under its jurisdiction, such as medical device listing,
labeling, manufacturing practices, record keeping and reporting requirements.
The FDA may also require post-market testing and surveillance programs to
monitor a product's effect. In the event that we or a licensee, as the case may
be, is required to obtain clearance for the Imatec 20/20 Systems, there can be
no assurance that the appropriate clearance from the FDA will be obtained, that
the process to obtain such clearance will not be excessively expensive or
lengthy, or that we or a licensee, as the case may be, will have sufficient
funds to pursue such clearances. Accordingly, our inability to receive requisite
clearance for the Imatec 20/20 Systems would prevent us from commercializing our
technologies as intended, and would have a material adverse effect on our
business.
Even after regulatory clearance is obtained, any clearance may include
significant limitations on indicated uses. Further, regulatory clearances are
subject to continued review, and later discovery of previously unknown problems
may result in restrictions with respect to a particular product or manufacturer,
including withdrawal of the product from the market, or sanctions or fines being
imposed on us or our licensees, as the case may be.
Distribution of the Imatec 20/20 Systems or licensing of our technology
in countries other than the United States may be subject to regulation in those
countries. There can be no assurance that we or a licensee, as the case may be,
will be able to obtain the approvals necessary outside of the United States.
WE ARE DEPENDENT ON OUR PRESIDENT AND CHIEF EXECUTIVE OFFICER.
We depend on the continued involvement of Dr. Shalit. The loss or
unavailability of Dr. Shalit could materially adversely affect us. We are the
sole beneficiary of a "key man" life insurance policy on the life of Dr. Shalit
in the principal amount of $1,000,000.
OUR MANAGEMENT HAS LIMITED BUSINESS EXPERIENCE.
Since our inception in 1988, we have primarily engaged in research and
development activities and the manufacture of test and pre- production
prototypes of an Imatec 20/20 System for the medical diagnostic imaging field.
Presently, our only executive officer is Dr. Hanoch Shalit. Dr. Shalit has
limited experience in operating a business engaged in the licensing of
intellectual property. Therefore, our ability to succeed will depend upon our
ability to hire and retain senior level, highly-skilled personnel experienced in
the operation of certain aspects of our business, such as accounting,
management, licensing and marketing. Competition for qualified personnel is
intense and there can be no assurance that we will be successful in attracting
and retaining personnel. Our failure to attract and retain additional qualified
personnel would have a material adverse effect on our business.
WE HAVE DO NOT HAVE ANY PRODUCT LIABILITY INSURANCE.
7
<PAGE>
Our business could expose us to product liability claims. We currently
have no product liability insurance, although we intend to attempt to obtain
such insurance before any of our products are sold commercially. There can be no
assurance we will be able to obtain product liability insurance on acceptable
terms or that such insurance, if obtained, will provide adequate coverage
against potential liabilities.
OUR OFFICERS AND DIRECTORS CONTROL THE COMPANY.
Our current officer and directors own approximately 23.3% of the issued
and outstanding shares of our common stock. Accordingly, although not
representing a majority of our voting securities, our current management will
nevertheless be able to significantly influence the election of our directors
and generally direct our affairs.
WE HAVE NOT PAID DIVIDENDS.
We have never paid any dividends with respect to our common stock and
do not anticipate paying dividends on our common stock in the foreseeable
future. Any earnings which we may realize in the foreseeable future will be
retained to finance our growth.
WE ARE INVOLVED IN LITIGATION WITH APPLE COMPUTER CORP. AND THE OUTCOME
WILL LIKELY HAVE A SIGNIFICANT EFFECT ON OUR BUSINESS.
In February 1998, we filed a patent infringement complaint for $1.1
billion against Apple Computer Corp. in federal court in New York. The suit
alleges that Apple has infringed on the Patents by making, using, and selling
its ColorSync color management systems. The Patents include: US Letter Patent
No. 4,939,581, entitled, "Method and System in Video Image Hard Copy
Reproduction"; Patent No. 5,115,229, entitled "Method and System in Video Image
Reproduction"; and Patent No. 5,345,315, entitled "Method and System for
Improved Tone and Color Reproduction of Electronic Images on Hard Copy Using for
a Closed Loop Control." The complaint claims Apple's acts of infringement are
being committed willfully, without our consent, and with full knowledge by Apple
of our rights under the Patents. We are seeking a preliminary and permanent
injunction enjoining Apple from infringing and inducing others to infringe our
Patents. A trial by jury has been demanded on all issues.
In March 1998, Apple filed a counterclaim, alleging that the
patents-in-suit are invalid, not infringed and unenforceable. We cannot give any
assurance that we will be successful in this litigation. In the event that we do
not succeed, our business could be materially adversely affected.
OUR CHARTER AND BY-LAWS CONTAIN ANTI-TAKEOVER PROVISIONS.
Our Board of Directors has the authority to issue up to 2,000,000
shares of our preferred stock in one or more series and to determine the number
of shares in each series, as well as the designations, preferences, rights and
qualifications or restrictions of those shares without any further vote or
action by the stockholders. The rights of the holders of our common stock will
be subject to, and may be adversely affected by, the rights of the holders of
any preferred stock that we may issue in the future. The issuance of preferred
stock could have the effect of making it more difficult for a third party to
acquire a majority of our outstanding voting stock. We have no present plans to
issue shares of preferred stock. In addition, we are subject to the
anti-takeover provisions of Section 203 of the Delaware General Corporation Law.
In general, this statute prohibits a publicly-held Delaware corporation from
engaging in a "business combination" with an "interested stockholder" for a
period of three years after the date of the transaction
8
<PAGE>
in which the person became an interested stockholder, unless the business
combination is approved in a prescribed manner.
WE HAVE SHARES ELIGIBLE FOR FUTURE SALES.
Future sales of substantial amounts of our common stock, or the
perception that such sales may occur, could adversely affect the value of our
common stock and could impair our ability to raise additional capital in the
future through the sale of equity securities. After giving effect to the
issuance of our common stock upon the exercise of the Warrants, there will be
approximately 7,735,201 million shares of common stock outstanding. In addition
we have reserved the sufficient number of shares of common stock for issuance
upon the exercise of other outstanding warrants and pursuant to employee benefit
and stock incentive plans.
THERE IS NOT AN ACTIVE PUBLIC MARKET FOR THE SHARES OF OUR COMMON STOCK
ISSUABLE UPON EXERCISE OF THE WARRANTS.
There is not an active public market for our common stock or warrants,
and there can be no assurance that one will develop, or if developed, be
sustained. Our securities are quoted in the over-the-counter market National
Quotation Bureau "pink sheets" and on the NASD OTC Electronic Bulletin Board. As
a result, an investor may find it difficult to dispose of, or obtain, accurate
quotations as to the market price of our securities, which may materially
adversely affect the liquidity of the market for them. In addition, our
securities were delisted from Nasdaq and are subject to the low-priced security
or so-called "penny stock" rules that impose additional sales practice
requirements on broker-dealers who sell our securities. For any transaction
involving our common stock, the rules require, among other things, the delivery,
prior to the transaction, of a disclosure schedule required by the Securities
and Exchange Commission relating to the penny stock market. The broker-dealer
also must disclose the commission payable to both the broker-dealer and the
registered representative and current quotations for the securities. Finally,
monthly statements must be sent disclosing recent price information for the
penny stocks held in the customer's account. The prices and liquidity of our
securities may be materially adversely affected if our market makers were to
discontinue their activities for any reason.
OUR BUSINESS IS SUBJECT TO THE "YEAR 2000" PROBLEM.
Many currently installed computer systems and software products are
unable to distinguish between twentieth century dates and twenty-first century
dates. As a result, many companies' software and computer systems may need to be
upgraded or replaced to comply with such "Year 2000" requirements. Our business
is depend on the operations of numerous systems that could potentially be
impacted by year 2000 related problems. Those systems include, among others:
- the internal systems of our customers and suppliers,
- the hardware and software systems used in the management of our
business, and
- non-information technology systems and services used in business,
such as telephone systems and building systems.
We have internally reviewed the proprietary software systems used in
the management of our business. Although we believe that our systems are
designed to be Year 2000 compliant, we use third-party equipment software that
may not be Year 2000 complaint. Failure of third parties or currently owned
equipment or software to operate properly with regard to the Year 2000 and
thereafter could require us to incur unanticipated expenses to remedy any
problems. We do not believe that these
9
<PAGE>
expenses would have a material adverse impact on our business, prospects,
financial condition and results of operations.
We do not presently have a contingency plan for handling Year 2000
problems that are not detected and corrected prior to their occurrence. Our
failure to address any unforeseen Year 2000 issues could adversely impact our
business, prospects, financial condition and results of operations.
USE OF PROCEEDS
We will not receive any proceeds from the sale of our common stock
offered by our selling stockholder. To the extent that any holder exercises
Warrants, we will receive an exercise price of $6.50 per share of common stock
we issue. In the event that no warrants are exercised, we will not receive any
proceeds from this offering. We will use the proceeds, if any, for general
working purposes.
SELLING STOCKHOLDER
Dr. Hanoch Shalit, our selling stockholder, is offering 835,177 shares
of his common stock, representing 22.4 of our total issued and outstanding
common stock.
Dr. Hanoch Shalit is our founder and has been our Chairman of the Board
of Directors, President, Chief Executive Officer, and Secretary since our
inception in November 1988. From September 1982 until June 1987, Dr. Shalit was
employed as a senior chemist with Chemco Photo Products, a private imaging
company. From June 1987 until November 1988, Dr. Shalit was employed by the
FONAR Corporation, a public imaging company where he was the President of the
Photographic Sciences Division in charge of production, sales, and service for
the FONAR Corporation's photographic products. Dr. Shalit earned a B.S. (Honors)
in the Sciences of Photography from the Polytechnic of Central London (now known
as University of Westminster) in Great Britain in 1978 and a Ph.D. in Physics
from the University of London in 1981.
PLAN OF DISTRIBUTION
We will apply to list the common stock issuable upon exercise of the
Warrants and the common stock offered by our selling stockholder on the OTC
Bulletin Board. Our outstanding common stock and warrants are currently listed
on the OTC Bulletin Board. We have undertaken to pay expenses associated with
the shares of our common stock issued upon exercise of the Warrants and the
common stock offered by our selling stockholder, including, but not limited to,
Securities and Exchange Commission filing fees. We have agreed to indemnify the
holders of common stock issuable upon exercise of Warrants and shares of our the
common stock offered by our selling stockholder, including those arising under
the Securities Act. We do not intend that holders of the Warrants will use this
prospectus in connection with resale of our common stock.
DESCRIPTION OF THE WARRANTS
The Warrants were issued in our initial public offering on October 29,
1996 pursuant to a warrant agreement between us and Continental Stock Transfer &
Trust Company, our transfer agent. The
10
<PAGE>
following summary of certain provisions of the warrant agreement does not
purport to be complete and is qualified in its entirety by reference to the
warrant agreement and the Warrants, including the definitions of certain terms
in the warrant agreement and the Warrants.
EXERCISE PRICE: $6.50 for one share of our common stock.
Each Warrant, when exercised by its holder, will entitle the holder to
receive one fully paid and non-assessable share of our common stock at an
exercise price of $6.50 per share. The exercise price and the number of shares
of our common stock issuable upon exercise of a Warrant are both subject to
adjustment in accordance with the warrant agreement. We may redeem any
outstanding Warrants under certain circumstances for $.10 per Warrant provided
that the average closing bid price of our common stock equals or exceeds $2.50
per share for any 20 of 30 consecutive trading days.
EXPIRATION DATE: October 28, 1999.
The Warrants became exercisable on October 29, 1996. Unless exercised,
the Warrants will expire on October 28, 1999. The Warrants entitle the holders
of the Warrants to purchase, in the aggregate, 4,000,000 shares of our
outstanding common stock on a fully-diluted basis.
EXERCISE AND PAYMENT PROCEDURES
Holders may exercise the Warrants by surrendering the Warrant
certificates to Continental Stock Transfer, evidencing the Warrants to be
exercised, along with the accompanying form of election to purchase, properly
completed and executed, and the payment of exercise price. Holders may choose to
pay the exercise price in the form of cash, by a certified or official bank
check payable to the order of Imatec, Ltd., or as otherwise described in the
warrant agreement. Upon surrender of the Warrants, Continental Stock Transfer
will deliver stock certificates representing the number of whole shares of our
common stock to which the holder is entitled under the Warrants and the warrant
agreement. If less than all of the Warrants evidenced by a Warrant certificate
are exercised, Continental Stock Transfer will issue a new Warrant certificate.
WARRANT HOLDERS DO NOT HAVE COMMON STOCKHOLDER RIGHTS
The holders of the Warrants have no right to vote on matters we submit
to our stockholders and no right to receive dividends. The holders of Warrants
will not be entitled to share in our assets in the event of a liquidation,
dissolution or winding up. In the event a bankruptcy or reorganization is
commenced by or against us, a bankruptcy court may hold that unexercised
Warrants are executory contracts, subject to rejection by us with approval of
the bankruptcy court. The holders of Warrants may, even if sufficient funds are
available, receive nothing or a lesser amount as a result of any such bankruptcy
case than they would be entitled to if they had exercised their Warrants prior
to the commencement of any such case.
WE MUST KEEP THE REGISTRATION STATEMENT EFFECTIVE
We have undertaken to use our best efforts to keep the registration
statement, of which this prospectus is a part, continuously effective until the
Warrants expire or, if earlier, all of the common stock we issue upon exercise
of Warrants cease to be restricted securities. A Warrant or share of common
stock ceases to be restricted security when such Warrant or share, as
applicable:
11
<PAGE>
- has been effectively registered under the Securities Act and
disposed of in accordance with the registration statement covering
it,
- is distributed to the public pursuant to Rule 144, or
- may be sold or transferred pursuant to Rule 144(k) (or any similar
provision then in force) under the Securities Act or otherwise.
There can be no assurance that we will be able to keep this registration
statement effective.
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 20,000,000 shares of common
stock, par value $0.0001 per share and 2,000,000 shares of preferred stock, par
value $0.0001 per share. On June 30, 1999, there were 3,735,201 shares of common
stock outstanding. There are no shares of preferred stock outstanding.
COMMON STOCK
Each holder of a share of our common stock is entitled to one vote,
either in person or by proxy, on all matters that may be voted upon by the
owners of common stock at a meeting of the stockholders, including the election
of directors. The holders of common stock:
- have equal, ratable rights to dividends from funds legally
available, when as and if declared by our Board of Directors,
- are entitled to share ratably in all of our assets available for
distribution to holders of common stock upon liquidation,
dissolution or winding up of our affairs, and
- do not have pre-emptive rights, and are entitled to one
non-cumulative vote per share on all matters on which stockholders
may vote at all meetings of stockholders.
All issued and outstanding shares of our common stock are fully-paid
and non-assessable.
DISCLOSURE OF SEC POSITION
ON INDEMNIFICATION FOR SECURITIES ACT LIABILITIES
Our certificate of incorporation and by-laws provide that we shall
indemnify our directors and officers, to the fullest extend permitted under
Delaware law, including in circumstances in which indemnification is otherwise
discretionary under Delaware law.
Insofar as indemnification for liabilities arising under the Securities
Act may permitted to directors, our officers or controlling persons pursuant to
the foregoing provisions, or otherwise, we have been advised that, in the
opinion of the Securities and Exchange Commission, such indemnification is
against public policy as expressed in the Securities Act of 1933, and is,
therefore, unenforceable.
12
<PAGE>
LEGAL MATTERS
Certain legal matters with respect to the shares of our common stock
offered hereby will be passed upon for us by Brock Silverstein LLC, New York,
New York 10022.
EXPERTS
Our financial statements as of December 31, 1997 and 1998, incorporated
by referenced in this registration statement, have been audited by Most Horowitz
& Company, LLP independent public accountants, as indicated in their report with
respect thereto, and are incorporated by reference in reliance upon the
authority of Most Horowitz as experts in giving their report.
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document we file at
the SEC's public reference rooms in Washington, D.C., New York, New York, and
Chicago, Illinois. Please call the SEC at 1-800- SEC-0330 for further
information on the public reference rooms. Our SEC filings are also available to
the public at the SEC's web site at http://www.sec.gov. You may also find more
information about us at our web site at http://www.imatecltd.com.
The SEC allows us to incorporate by reference the information that we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the documents listed below and any future filings we
make with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities
Exchange Act of 1934:
a. our annual reports on Form 10-KSB for the years ended December 31,
1997and December 31, 1998, filed on April 15, 1998, and filed
April 14, 1999; respectively;
b. our quarterly reports on Form 10-QSB for the quarters ended June
30, 1999, March 31, 1999, June 30, 1998 and September 30, 1998;
c. our current reports on Form 8-K, dated March 31, 1999, August 21,
1998, July 24, 1998, April 15, 1998, June 5, 1998, October 9,
1998, October 29, 1998, January 5, 1999 and January 20, 1999 and
on Form 8-K/A dated January 13, 1998; and
d. the description of our capital stock contained in our registration
statement on Form 8-A12G, dated October 22, 1996.
You may request a copy of these filings, at no cost, by writing or
telephoning us at the following address:
Dr. Hanoch Shalit
President and Chief Executive Officer
Imatec, Ltd.
150 East 58th Street
New York, NY 19155
(212) 826-0440
13
<PAGE>
No person has been authorized to give any information or to make any
representation other than those contained in this prospectus in connection with
the offering of the Warrants and the common stock issuable upon the exercise of
Warrants. If information or representations are given or made you must not rely
on it as if we authorized it. Neither the delivery of this prospectus nor any
sale made hereunder shall, under any circumstances, create an implication that
the information contained or incorporated by reference herein is correct as of
any time subsequent to its date or that there has been no change in our affairs
since such date. This prospectus does not constitute an offer to sell or a
solicitation of an offer to buy any securities offered hereby in any
jurisdiction in which such offer or solicitation is not permitted, or to anyone
whom it is unlawful to make such offer or solicitation.
The information in this prospectus is not complete and may be changed.
14
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemization of all expenses (subject to future
contingencies) incurred or expected to be incurred by the Company in connection
with the issuance and distribution of the securities being offered hereby (items
marked with an asterisk (*) represent estimated expenses):
SEC Registration Fee............................................ $7,413
Legal Fees and Expenses......................................... [$ ]
Blue Sky Fees (including counsel fees).......................... [$ ]
Accounting Fees and Expenses.................................... [$ ]
Transfer Agent and Registrar Fees............................... [$ ]
Printing and Engraving Expenses................................. [$ ]
Miscellaneous................................................... [$ ]
Total........................................................... [$ ]
ITEM 14. INDEMNIFICATION OF OFFICERS AND DIRECTORS
The Company's Certificate of Incorporation provides for indemnification
of personal liability of the Directors of the Corporation to the fullest extent
permitted by paragraph "7" of Subsection (b) of the Section 102 of the General
Corporation Law of the State of Delaware.
Article VIII of the By-Laws of the Company ("By-Laws"), which is set
forth below in its entirety, provides for indemnification of officers,
directors, employees and agents substantially to the extent permitted under the
Delaware General Corporation Law.
Article VIII of the By-Laws provides as follows:
"ARTICLE VIII"
INDEMNIFICATION
The corporation shall indemnify, to the extent permitted by the General
Corporation law of Delaware as amended from time to time, (a) each of its
present and former officers and directors, and (b) each of its present or former
officers, directors, agents or employees who are serving or have served at the
request of the corporation as an officer, director or partner (or in any similar
position) of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorney's fees, judgments, fines and
amounts paid in settlement actually and reasonably incurred in connection with
amounts paid in settlement actually and reasonably incurred in connection with
any threatened, pending or completed action, suit or proceeding, whether by or
in the right of the corporation by a third party or otherwise, to which such
persons is made a party or threatened to be made a party by reason of such
office in the corporation or in another corporation, partnership, joint venture,
trust or other enterprise. Such indemnification shall inure to the benefit of
the heirs, executors and administrators of any indemnified person. To the extent
permitted by the General Corporation law of Delaware, under general or specific
authority granted by the Board of Directors, (a) the corporation by specific
action of the Board of Directors may furnish such indemnification to its agents
and employees with respect to their activities on behalf of the corporation; (b)
the corporation by specific action of the Board of Directors may furnish such
indemnification to each present or former officer, director, employee or agent
of a constituent
II
<PAGE>
corporation absorbed in a consolidation or merger with the corporation and to
each officer, director, agent or employee who is or was serving at the request
of such constituent corporation as an officer, director, agent or employee of
another corporation, partnership, joint venture, trust or other enterprise; and
(c) the corporation may purchase and maintain indemnification insurance on
behalf of any of the officers, directors, agents or employees whom it is
required or permitted to indemnify as provided in this Article.
ITEM 15. EXHIBITS
(a) The following exhibits will be filed by amendment:
NO. EXHIBIT
4.1(1) Form of Specimen certificate for shares of Common
Stock.
4.2(2) Revised Form of Redeemable Warrant Agreement by
and between the Company and Continental Stock
Transfer & Trust Company, including a form of
specimen certificate for the Redeemable Warrants.
4.3(3) Rights Agreement, effective as of August 17,
1998, between the Company and Continental Stock
Transfer and Trust Company.
23.1 Consent of Most Horowitz & Company, LLP
independent public accountants.
23.2 Consent of Brock Silverstein LLC.
ITEM 16. 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. 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) of the
Securities Act if, in the aggregate, the
changes in volume and price represent no
more than a 20% change in the maximum
aggregate offering price set forth in the
"Calculation of Registration Fee" table in
the effective Registration Statement;
(iii) To include any material information with
respect to the plan of distribution not
previously disclosed in the Registration
Statement or any material change to such
information in the Registration Statement;
III
<PAGE>
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
the 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 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.
(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
foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such
liabilities (other than the payment by the registrant of
expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it
is against public policy as expressed in the Act and will be
governed by the final adjudication of such issue.
IV
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Amendment to
the Registration Statements to be signed on its behalf by the undersigned,
thereunto duly authorized, in New York, New York on October 28, 1999.
IMATEC, LTD.
By: /s/HANOCH SHALIT
------------------------------------------
Name: Hanoch Shalit
Title: President, Chief Executive Officer and
Chairman of the Board of Directors
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/HANOCH SHALIT President, Chief Executive Officer and Chairman of the October 28, 1999
- ------------------ Board of Directors
Hanoch Shalit
/s/STEVEN AI Ditector October 28, 1999
- ------------------
Steven Ai
/s/SIMON CROSS
- ------------------ Director October 28, 1999
Simon Cross
</TABLE>
