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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 4, 1997
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
___________
INVISION TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 94-3123544
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
___________
7151 GATEWAY BLVD.
NEWARK, CALIFORNIA 94560
(510) 739-2400
(Address, including zip code, and telephone number, including area code,
of registrant's principal executive offices)
___________
CURTIS P. DISIBIO
CHIEF FINANCIAL OFFICER
INVISION TECHNOLOGIES, INC.
7151 Gateway Blvd.
Newark, California 94560
(510) 739-2400
(Name, address, including zip code, and telephone number, including area
code, of agent for service)
___________
COPIES TO:
ROBERT L. JONES, ESQ. DEBORAH LAWSON CLEVELAND, ESQ.
COOLEY GODWARD LLP CORPORATE COUNSEL
FIVE PALO ALTO SQUARE INVISION TECHNOLOGIES, INC.
3000 EL CAMINO REAL 7151 GATEWAY BLVD.
PALO ALTO, CALIFORNIA 94306-2155 NEWARK, CALIFORNIA 94560
(650) 843-5000 (510) 739-2400
FAX (650) 857-0663 FAX (510) 608-0770
___________
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective 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
<TABLE>
<CAPTION>
Proposed Maximum Proposed Maximum Amount of
Title of Shares Amount to be Offering Price Per Aggregate Offering Registration
to be Registered Registered Share (1) Price (1) Fee(1)
<S> <C> <C> <C> <C>
Common Stock, par
value $.001 per
share. . . . . . . . . . . . 28,538 shares $ 217,603 $ 7.63 $ 100
</TABLE>
(1) Estimated in accordance with Rule 457(c) for the purpose of computing the
amount of the registration fee based on the average of the high and low
sales prices of the Registrant's Common Stock as reported on the Nasdaq
Nation Market on December 2, 1997. As such fee would be less than $100,
the $100 minimum fee is paid.
___________
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS
REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH
SECTION 8(a) OF THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION
STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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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.
<PAGE>
SUBJECT TO COMPLETION, DATED DECEMBER 4, 1997
PROSPECTUS
28,538 SHARES
INVISION TECHNOLOGIES, INC.
COMMON STOCK
___________________
All of the shares of Common Stock offered hereby (the "Offering") were
issued by InVision Technologies, Inc. (the "Company" or "InVision") in a private
placement in 1996 to Fredrick R. Roder (the "Selling Stockholder") and are being
offered hereby by the Selling Stockholder. The Company's Common Stock is traded
on the Nasdaq National Market under the symbol "INVN." The last reported sales
price of the Company's Common Stock on the Nasdaq National Market on December 3,
1997 was $6.94 per share.
The Selling Stockholder, directly or through agents, broker-dealers or
underwriters, may sell the Common Stock offered hereby from time to time on
terms to be determined at the time of sale, in transactions on the Nasdaq
National Market or in privately negotiated transactions. The Selling
Stockholder and any agents, broker-dealers or underwriters that participate in
the distribution of the Common Stock may be deemed to be "underwriters" within
the meaning of the Securities Act of 1933, as amended (the "Act"), and any
commission received by them and any profit on the resale of the Common Stock
purchased by them may be deemed to be underwriting discounts or commissions
under the Act. See "Selling Stockholder" and "Plan of Distribution."
________________
THIS OFFERING INVOLVES A HIGH DEGREE OF RISK.
SEE "RISK FACTORS" COMMENCING ON PAGE 3 HEREOF.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
________________
No underwriting commissions or discounts will be paid by the Company in
connection with this offering. Estimated expenses payable by the Company in
connection with this offering are $10,000. The Company will not receive any
proceeds from the sale of shares being offered hereby.
________________
The date of this Prospectus is December , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the information reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "SEC"). Such reports, proxy
statements and other information may be inspected and copied at the public
reference facilities maintained by the SEC at Room 1024, Judiciary Plaza, 450
Fifth Street, N.W., Washington, D.C. 20549, and at the SEC's regional offices
located at Seven World Trade Center, Suite 1300, New York, New York 10048, and
at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois
60661-2511. Copies of such material may be obtained by mail from the Public
Reference Section of the SEC at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C. 20549, at prescribed rates. The SEC also maintains a Web site
that contains reports, proxy and information statements and other information
regarding registrants that file electronically with the SEC at the address
http://www.sec.gov. The Company's Common Stock is listed on the Nasdaq National
Market, and such reports, proxy statements and other information can also be
inspected and copied at the offices of The Nasdaq Stock Market, 1735 K Street,
N.W., Washington DC 20006.
The Company has filed with the SEC a registration statement on Form S-3
(herein referred to, together with all amendments and exhibits, as the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"). This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the SEC. For further information,
reference is hereby made to the Registration Statement. Copies of the
Registration Statement and the exhibits and schedules are available as described
above.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents, filed or to be filed with the Commission under the
Exchange Act are hereby incorporated by reference into this Prospectus:
(a) The Company's Annual Report on Form 10-K, as amended, for the fiscal
year ended December 31, 1996;
(b) The Company's Quarterly Reports on Form 10-Q, as amended, for the
quarterly periods ended March 31, June 30, and September 30, 1997;
(c) The Company's Current Report on Form 8-K filed September 10, 1997;
(d) The Company's Current Report on Form 8-K filed October 7, 1997; and
(e) The description of the Common Stock contained in the Company's
Registration Statement on Form 8-A, filed April 18, 1996.
All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering shall be deemed to be incorporated by reference
herein and to be a part hereof from the date of filing of such documents. Any
statement contained in this Prospectus or 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, including any
beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the documents that have been
incorporated by reference herein (not including exhibits to such documents
unless such exhibits are specifically incorporated by reference herein or into
such documents). Such request may be directed to InVision Technologies, Inc.,
Attention: Chief Financial Officer, 7151 Gateway Blvd., Newark, California
94560, telephone (510) 739-2400.
InVision intends to furnish its stockholders with annual reports containing
audited consolidated financial statements examined by its independent public
accountants and quarterly reports containing unaudited consolidated financial
information for the first three quarters of each fiscal year.
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FORWARD LOOKING STATEMENTS
THIS PROSPECTUS MAY CONTAIN FORWARD-LOOKING STATEMENTS WHICH INVOLVE RISKS
AND UNCERTAINTIES. WHEN USED IN THIS PROSPECTUS, THE WORDS "ANTICIPATE,"
"BELIEVE," "ESTIMATE," AND "EXPECT" AND SIMILAR EXPRESSIONS AS THEY RELATE TO
THE COMPANY OR ITS MANAGEMENT ARE INTENDED TO IDENTIFY SUCH FORWARD-LOOKING
STATEMENTS. THE COMPANY'S ACTUAL RESULTS, PERFORMANCE, OR ACHIEVEMENTS COULD
DIFFER MATERIALLY FROM THE RESULTS EXPRESSED IN, OR IMPLIED BY, THESE
FORWARD-LOOKING STATEMENTS. FACTORS THAT COULD CAUSE OR CONTRIBUTE TO SUCH
DIFFERENCES INCLUDE RISKS RELATED TO MARKET ACCEPTANCE OF THE COMPANY'S SINGLE
PRODUCT, FLUCTUATIONS IN THE COMPANY'S QUARTERLY AND ANNUAL OPERATING RESULTS,
THE LOSS OF ORDERS OF THE COMPANY'S PRODUCT, INCLUDING THE LOSS OF THE COMPANY'S
MOST RECENT ORDER FROM THE FAA, LOSS OF ANY OF THE COMPANY'S SOLE SOURCE
SUPPLIERS, INTENSE COMPETITION, RELIANCE ON LARGE ORDERS, CONCENTRATION OF THE
COMPANY'S CUSTOMERS, RISKS RELATED TO THE LENGTHY SALES CYCLES FOR THE CTX 5000,
BUDGETING LIMITATIONS OF THE COMPANY'S CUSTOMERS AND PROSPECTIVE CUSTOMERS, AND
THE RISKS RELATED TO THE COMPANY'S LIMITED MANUFACTURING EXPERIENCE, AS WELL AS
THOSE DISCUSSED IN "RISK FACTORS" AND ELSEWHERE IN THIS PROSPECTUS.
THE COMPANY
InVision Technologies, Inc. ("InVision" or "The Company") was incorporated
in Delaware in September 1990. Unless the context otherwise requires,
"InVision" and the "Company" refer to InVision Technologies, Inc., a Delaware
corporation, including its wholly-owned subsidiaries, Imatron Federated Systems,
Inc., and Quantum Magnetics, Inc. ("Quantum"). The Company's executive offices
are located at 7151 Gateway Blvd., Newark, California 94560, and its telephone
number is (510) 739-2400.
RISK FACTORS
AN INVESTMENT IN THE SHARES BEING OFFERED HEREBY INVOLVES A HIGH DEGREE OF
RISK. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK
FACTORS, IN ADDITION TO OTHER INFORMATION CONTAINED OR INCORPORATED BY REFERENCE
IN THIS PROSPECTUS, IN EVALUATING AN INVESTMENT IN THE SHARES OF COMMON STOCK
OFFERED HEREBY.
HISTORY OF LOSSES; NO ASSURANCE OF PROFITABILITY
The Company commenced operations in September 1990, remained in the
development stage through 1994 and received its first revenues from product
sales in the first quarter of 1995. The Company has experienced net losses for
each quarter and year from inception through December 31, 1996 and, as of
September 30, 1997, had an accumulated deficit of approximately $20.7 million.
Although the Company has recently been profitable on a quarterly basis, there
can be no assurance that the Company will maintain profitability on a quarterly
basis or achieve and maintain profitability on an annual basis. The Company
expects to expand its manufacturing, research and development, sales and
marketing, and administrative capabilities. The anticipated increase in the
Company's operating expenses caused by this expansion could have a material
adverse effect on the Company's business, financial condition or results of
operations if revenues do not increase at an equal or greater rate.
SINGLE PRODUCT; UNCERTAINTY OF MARKET ACCEPTANCE
The CTX 5000 currently is the only product offered by the Company (other
than the products of Quantum, which are primarily in the prototype stage and
have not been offered on a broad scale basis) and the Company derives
substantially all of its revenues from the sale of CTX 5000 units. The
Company's orders to date have been received from a limited number of
customers and the substantial majority of these have been from a single
customer, the FAA. The commercial success of the CTX 5000 will depend upon
its acceptance by domestic and international airports, government agencies
and airlines as a useful and cost-effective alternative to less expensive,
higher throughput (i.e. bags per hour) competing products employing different
technologies. The large capital commitment (approximately $1.0 million)
required to purchase the CTX 5000 may limit the marketability of the CTX
5000. In addition, the Company's failure to compete successfully with
respect to throughput, the ability to scan all sizes of baggage, the ease of
integration of the CTX 5000 into existing baggage handling systems and other
factors could delay, limit or prevent market acceptance of the CTX 5000.
Moreover, the market for explosive detection systems ("EDS") technology is
largely undeveloped, and the Company believes that the overall demand for EDS
technology will depend significantly upon public perception of the risk of
terrorist attacks. There can be no assurance that the public will perceive
the threat of terrorist bombings to be substantial or that the airline
industry and governmental
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agencies will actively pursue EDS technology. As a result, there can be no
assurance the Company will be able to achieve market penetration, revenue
growth or profitability.
FLUCTUATIONS IN OPERATING RESULTS
The Company's past operating results have been, and its future operating
results will be, subject to fluctuations resulting from a number of factors,
including: the timing and size of orders from, and shipments to, major
customers; budgeting and purchasing cycles of its customers; delays in product
shipments caused by custom requirements of customers or ability of the customer
to accept shipment; the timing of enhancements to the CTX 5000 by the Company or
introduction of new products by its competitors; changes in pricing policies by
the Company, its competitors or suppliers, including possible decreases in
average selling prices of the CTX 5000 in response to competitive pressures; the
proportion of revenues derived from competitive bid processes; the mix between
sales to domestic and international customers; market acceptance of enhanced
versions of the CTX 5000; the availability and cost of key components; the
availability of manufacturing capacity; and fluctuations in general economic
conditions. The Company also may choose to reduce prices or to increase
spending in response to competition or to pursue new market opportunities, all
of which may have a material adverse effect on the Company's business, financial
condition or results of operations. The Company's systems revenues in any period
are derived from sales of multiple CTX 5000 systems to a limited number of
customers and are recognized upon shipment which, in view of the high sales
price of one CTX 5000, causes minor variations in the number of orders, or the
timing of shipments, to substantially affect the Company's quarterly revenues.
Because a significant portion of the Company's quarterly operating expenses are,
and will continue to be, relatively fixed in nature, such revenue fluctuations
will cause the Company's quarterly and annual operating results to vary
substantially. Accordingly, the Company believes that period-to-period
comparisons of its results of operations are not meaningful and cannot be relied
upon as indicators of future performance. In addition, to the extent the Company
acquires additional technology by merger or otherwise, certain costs generally
associated with such transactions will be expensed in the quarter the
acquisition is consummated. Any such costs will have an adverse effect on the
Company's operating results in the period in which they are incurred. In the
quarter ending September 30, 1997, the Company incurred approximately $700,000
in such costs associated with the acquisition of Quantum. Because of all of the
foregoing factors, the Company's operating results may be below the expectations
of public market analysts and investors in some future quarters, which would
likely result in a decline in the trading price of the Common Stock.
DEPENDENCE ON SUPPLIERS
Certain key components used in the Company's products have been designed by
the Company to its specifications and are currently available only from one or a
limited number of suppliers. The Company currently does not have long-term
agreements with these suppliers. Moreover, in view of the high cost of many of
these components, the Company does not maintain significant inventories of some
necessary components. If the Company's suppliers were to experience financial,
operational, production or quality assurance difficulties, the supply of
components to the Company would be reduced or interrupted. In the event that a
supplier were to cease operations, discontinue a product or withhold supply for
any reason, the Company may be unable to acquire such product from alternative
sources within a reasonable period of time. The Company also uses a variety of
independent third party manufacturers and subassemblers. The inability of the
Company to develop alternative sources for single or sole source components, to
find alternative third party manufacturers or subassemblers, or to obtain
sufficient quantities of these components could result in delays or
interruptions in product shipments, which could have a material adverse effect
on the Company's business, financial condition or results of operations.
COMPETITION
The market for explosive detection systems is intensely competitive and is
characterized by continuously developing technology and frequent introductions
of new products and features. The Company expects competition to increase as
other companies introduce additional and more competitive products in the EDS
market and as the Company develops additional capabilities and enhancements for
the CTX 5000 and new applications for its certified technology. Historically,
the principal competitors in the market for explosive detection systems have
been the Company, Vivid Technologies, Inc., EG&G Astrophysics, Heimann Systems
GmbH, Thermedics Detection Inc., and Barringer Technologies Inc. Each of these
competitors provides EDS solutions and products for use in the inspection of
checked luggage, although to date only the Company's CTX 5000, operating as two
units in parallel to meet the throughput requirement, has been certified by the
FAA. The Company is aware of certain major corporations competing in other
markets that intend to enter the EDS market. In particular, in January 1996
Lockheed Martin Corporation received a two-year grant in the amount of
approximately $8.5 million from the FAA
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for the design and development of a CT-based EDS which it transferred to a
newly-formed affiliate, L-3 Communications Corporation ("L-3"), in May 1997.
Announcements of currently planned or other new products may cause customers
to delay their purchasing decisions for EDS products, which could have a
material adverse effect on the Company's business, financial condition or
results of operations. Each of the Company's competitors may have
substantially greater financial resources than the Company. There can be no
assurance that the Company will be able to compete successfully with its
competitors or with new entrants to the EDS market.
The Company believes that its ability to compete in the EDS market is based
upon such factors as: product performance, functionality, quality and features;
quality of customer support services, documentation and training; and the
capability of the technology to appeal to broader applications beyond the
inspection of checked baggage. Although the Company believes that the CTX 5000
is superior to its competitors' products in its explosive detection capability
and accuracy, the CTX 5000 must also compete on the basis of price, throughput,
the ability to handle all sizes of baggage, and the ease of integration into
existing baggage handling systems. Certain of the Company's competitors may
have an advantage over the Company's existing technology with respect to these
factors. As of the date of this Prospectus, the CTX 5000 has an average selling
price of approximately $1.0 million, compared to substantially lower prices for
systems offered by the Company's competitors; has a throughput rate of
approximately 300 bags per hour ("bph"), compared to rates claimed to exceed
1,000 bph by certain of the Company's competitors; has a gantry size which
limits the ability of the unit to accept all sizes of baggage; and requires that
the baggage remain still while being scanned, making it difficult to integrate
into the continuously moving baggage handling systems found in most airports.
There can be no assurance that the Company will be successful in convincing
potential customers that the CTX 5000 is superior to other systems given all of
the necessary performance criteria, that new systems with comparable or greater
performance, lower price and faster or equivalent throughput will not be
introduced, or that, if such products are introduced, customers will not delay
or cancel existing or future orders for the Company's system. Further, despite
the addition of the quadrupole resonance ("QR") technology through the
acquisition of Quantum in September 1997 (see "-Risks Related to the Acquisition
of Quantum"), there can be no assurance that the Company will be able to enhance
the CTX 5000 to better compete on the basis of cost, throughput, accommodation
of baggage size and ease of integration, that the Company will be able to
develop additional EDS products based wholly or in part on the Quantum QR
technology, or that the Company will otherwise be able to compete successfully
with existing or new competitors. The failure of the Company to develop such
enhancements or otherwise successfully compete in the EDS market for any of the
above reasons would have a material adverse effect on the Company's business,
financial condition or results of operations.
DEPENDENCE ON LARGE ORDERS; CUSTOMER CONCENTRATIONS; LENGTHY SALES CYCLE
In any given fiscal year, the Company's revenues have principally
consisted, and the Company believes will continue to consist, of orders of
multiple units from a limited number of customers. While the number of
individual customers may vary from period to period, the Company is nevertheless
dependent upon these multiple orders for a substantial portion of its revenues.
There can be no assurance that the Company will obtain such multiple orders on a
consistent basis. During the first nine months of 1997, approximately $32.8
million, or 85.8%, of the Company's revenues were generated from sales to the
Company's five largest customers. During the fiscal year ended December 31,
1996, revenues from the Company's six largest customers were approximately
$14.0 million, or 88.4%, of the Company's revenues. During the fiscal year
ended December 31, 1995, revenues from the Company's three largest customers
were approximately $6.8 million, or 74.0%, of the Company's revenues. To date,
all orders for the CTX 5000 from United States customers have been entirely
funded by the FAA, and the Company's largest sales contract to date, for 54 CTX
5000 systems, is with the FAA. There can be no assurance that such funding or
sales will continue in the future. The Company's inability to obtain sufficient
multiple orders or the failure of the FAA to continue such purchases or funding
would have a material adverse effect on the Company's business, financial
condition or results of operations. Moreover, the timing and shipment of such
orders could cause the operating results in any quarter to differ from the
projections of securities analysts, which could adversely affect the trading
price of the Common Stock. Losses arising from customer disputes regarding
shipping schedules, product condition or performance, or the Company's inability
to collect accounts receivable from any major customer could also have a
material adverse effect on the Company's business, financial condition or
results of operations.
The Company's revenues depend in significant part upon the decision of a
government agency to upgrade and expand existing facilities, alter workflows and
hire additional technical expertise in addition to procuring the CTX 5000, all
of which involve a significant capital commitment as well as significant future
support costs. The sales cycle of the CTX 5000 is often lengthy due to the
protracted approval process that typically accompanies large
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capital expenditures and the time required to manufacture the CTX 5000 and
install and assimilate the CTX 5000. Typically, six to twelve months may
elapse between a new customer's initial evaluation of the Company's system
and the execution of a contract. Another three months to a year may elapse
prior to shipment of the CTX 5000 as the customer site is prepared and the
CTX 5000 is manufactured. During this period the Company expends substantial
funds and management resources but recognizes no associated revenue. See
"--Fluctuations in Operating Results."
PUBLIC AGENCY CONTRACT AND BUDGET CONSIDERATIONS
Substantially all of the Company's customers to date have been public
agencies or quasi-public agencies. In contracting with public agencies, the
Company is subject to public agency contract requirements which vary from
jurisdiction to jurisdiction and which are subject to budgetary processes and
expenditure constraints. Budgetary allocations for explosive detection systems
are dependent, in part, upon governmental policies which fluctuate from time to
time in response to political and other factors, including the public's
perception of the threat of commercial airline bombings. Many domestic and
foreign government agencies have experienced budget deficits that have led to
decreased capital expenditures in certain areas. The Company's results of
operations may be subject to substantial period-to-period fluctuations as a
result of these and other factors affecting capital spending. A reduction of
funding for explosive detection technology deployment could materially and
adversely affect the Company's business, financial condition or results of
operations. Future sales to public agencies will depend, in part, on the
Company's ability to meet public agency contract requirements, certain of which
may be onerous or even impossible for the Company to satisfy. In addition,
public agency contracts are frequently awarded only after formal competitive
bidding processes, which have been and may continue to be protracted, and
typically contain provisions that permit cancellation in the event that funds
are unavailable to the public agency. There can be no assurance that the
Company will be awarded any of the contracts for which its products are bid or,
if awarded, that substantial delays or cancellations of purchases will not
result from protests initiated by losing bidders.
LIMITED FIELD OPERATIONS; DEPENDENCE ON OPERATOR PERFORMANCE
As of September 30, 1997, 66 CTX 5000 systems had been shipped to 15
airports in ten countries around the world. A majority of these units were
installed since January 1996, and the Company's customers have only limited
experience with the operation of the CTX 5000 in high-volume airport
operations. Many of the factors necessary to make the overall baggage
scanning system a success, such as the CTX 5000's integration with the
baggage handling system, ongoing system maintenance and the performance of
operators, are beyond the control of the Company. In particular, once the
CTX 5000 identifies a threat, the operator must make a determination whether
the threat is actual or a false alarm and, therefore, whether or not to allow
the bag to continue onto the aircraft. Unsatisfactory performance of
operators can lead to reduced efficacy of the CTX 5000. The failure of the
CTX 5000 to perform successfully in deployments, whether due to the limited
experience of the Company's customers with the CTX 5000, operator error or
any other reason, may have an adverse effect on the market's perception of
the efficacy of the CTX 5000, which in turn could have a material adverse
effect on the Company's business, financial condition or results of
operations.
LIMITED MANUFACTURING EXPERIENCE; MANAGEMENT OF GROWTH
As of September 30, 1997, the Company had produced a total of 66 CTX 5000
systems and had not sustained then current production levels for any significant
period of time. As a result of the FAA's recent order of 54 CTX 5000 systems,
the Company is in the process of substantially increasing its rate of
manufacture of the CTX 5000, which has placed significant demands on the
Company's management, working capital and financial and management control
systems. Failure to upgrade the Company's operating, management and financial
control systems when necessary, or difficulties encountered during such
upgrades, could have a material adverse effect on the Company's business,
financial condition or results of operations. The success of the increase in
production capability will depend in part upon the Company's ability to continue
to improve and expand its engineering and technical resources and to attract,
retain and motivate key personnel. The failure of the Company to establish such
production capability or to increase its revenues sufficiently to compensate for
the increase in operating expenses resulting from current or any future
expansion would have a material adverse effect on the Company's business,
financial condition or results of operations.
To accommodate the increase in the manufacturing rate, the Company has
recently moved to a new, substantially larger, manufacturing facility. The
operations of this new facility require the Company to incur substantially
larger fixed costs than it has experienced in the past. Failure of the FAA to
perform under the
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December 1996 purchase contract, or failure to maintain an order rate
sufficient to fully utilize this new manufacturing facility, each could have
a material adverse effect on the Company's business, financial condition or
results of operations.
NO ASSURANCE OF CONTINUED CERTIFICATION; RISK OF CERTIFICATION OF COMPETING
TECHNOLOGIES; RISK OF CHANGING STANDARDS
The FAA has the responsibility for setting and maintaining performance
standards for explosive detection systems for all U.S. airlines, both in the
United States and abroad. The FAA Final Criteria for Certification of EDS,
published in September 1993, requires, among other things, a throughput of 450
bph for an explosive detection system. The Company's CTX 5000 unit currently
has been tested by the FAA at less than 450 bph and therefore has not been
certified as a single unit. The CTX 5000, when combined in a system consisting
of two units, was certified by the FAA in 1994. To date no other EDS has been
certified by the FAA. There currently is no requirement that U.S. airlines or
airports (or international airlines or airports) deploy FAA-certified explosive
detection systems or that U.S. airlines or airports (or most international
airlines or airports) deploy explosive detection systems at all. Should the
standards be lowered, resulting in other lower priced or higher throughput
explosive detection systems becoming certified, or should other competitive
systems otherwise become certified, the Company would lose a significant
competitive advantage. Under such circumstances, there can be no assurance that
the Company's product would be able to compete successfully with these systems.
Accordingly, the certification by the FAA of any competing EDS could have a
material adverse effect on the Company's business, financial condition or
results of operations. In addition, should the FAA increase its certification
standards, there can be no assurance that the CTX 5000 would meet such
standards.
The Company intends to continue to modify the CTX 5000 in an effort to make
throughput enhancements, cost reductions and other modifications to the CTX 5000
based upon the availability of adequate funds. Any such modifications or
updated versions of the CTX 5000 may require FAA approval in order to retain
certification or may require re-certification. There can be no assurance that
any such modifications will be approved or, if required, certified by the FAA,
and the failure to gain approval or certification for such products could have a
material adverse effect on the Company's business, financial condition or
results of operations. The Company believes that its long-term success will
depend in part upon its ability to manufacture an EDS that meets or exceeds the
throughput standards of the FAA Final Certification Criteria without being
combined with another unit.
COMPETITION FOR FAA GRANTS
The U.S. Government currently plays an important role in funding the
development of EDS technology and sponsoring its deployment in U.S. airports.
As of September 30, 1997, the Company had received $9.2 million from FAA grants
and contracts to develop EDS products based on computed tomography technology,
and expects to receive an additional $2.5 million for further throughput
enhancement and cost reduction activities. The Company is also aware that
Lockheed Martin Corporation was awarded a grant of approximately $8.5 million in
January 1996 from the FAA, subsequently transferred to its affiliate, L-3, for
the design and development of a CT-based EDS over a two-year period. There can
be no assurance that additional research and development funds from the FAA will
become available in the future or that the Company will receive any such
additional funds. Failure by the FAA to continue to sponsor the Company's
technology could have a material adverse effect on the Company's business,
financial condition or results of operations. In addition, the grant to L-3 and
any future grants to the Company's other competitors may improve such
competitors' ability to develop and market high detection EDS technology and
cause the Company's customers to delay any purchase decisions, which could have
a material adverse effect on the Company's ability to market the CTX 5000 and on
the Company's business, financial condition or results of operations.
DEPENDENCE ON KEY PERSONNEL
The Company's performance depends in part on the expertise of certain
technical personnel with skills in the disciplines of x-ray physics, image
reconstruction and expert systems design. Much of the Company's proprietary
technology is known only by certain technical employees and might be unavailable
should such individuals leave the Company. In addition, the Company's
proprietary technology related to the Quantum QR technology is known only by
certain technical employees of Quantum and might be unavailable should such
individuals leave the Company. The number of scientists qualified to perform
the development required by the Company is extremely limited. The Company also
depends on the skills of certain key management personnel. While the Company
maintains key-man life insurance for Dr. Sergio Magistri, its President and
Chief Executive
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Officer, in the amount of $3.0 million, the Company does not maintain key
person life insurance for any of its other employees and has employment
agreements with only four of its executive officers, which agreements the
employees may terminate at will. The Company also has employment agreements
with nine of the Quantum key personnel. There can be no assurance that these
individuals will continue employment with the Company. The loss of certain
key personnel or failure of the Company to attract and retain new key
personnel, particularly as the Company seeks to expand, could materially
adversely affect the Company's business, financial condition or results of
operations.
DEPENDENCE ON PROPRIETARY TECHNOLOGY
The Company's performance depends in part upon its proprietary technology.
In the United States, the Company relies upon patents, copyrights and trade
secrets for the protection of the proprietary elements of the CTX 5000 and the
Company's CT technology. There can be no assurance, however, that the Company
could enforce such patents, trade secrets or copyrights. The Company has two
United States patents for automatic concealed object detection systems using a
pre-scan stage which expire in the years 2010 and 2011 (the "Patents"). There
can be no assurance that the Patents would be effective in preventing CT-based
competition. In accordance with certain Federal Acquisition Regulations
included in the Company's development contract, dated September 27, 1991, with
the FAA (the "FAA R&D Contract"), the U.S. Government has rights to use certain
of the Company's proprietary technology developed after the award of the FAA R&D
Contract and funded by the FAA R&D Contract. The U.S. Government may use such
rights to produce or have produced for the U.S. Government competing products
using the Company's CT technology. In the event that the U.S. Government were
to exercise these rights, the Company's exclusivity in supplying the U.S.
Government with certified CT-based explosive detection systems could be
materially adversely affected. In addition, the Company acquired certain
patents, trade secrets and copyrights related to the QR technology in connection
with the acquisition of Quantum. There can be no assurance, however, that the
Company could enforce such patents, trade secrets or copyrights. The inability
of the Company to enforce such patents, trade secrets or copyrights could
prevent the Company from realizing the benefits it anticipates from the
acquisition of Quantum. Further, the Quantum QR technology was developed in
part with funds received from the U.S. Government and, as described above, the
U.S. Government has certain rights to the use of such QR technology. In the
event that the U.S. Government were to exercise these rights, the Company's
exclusivity in supplying the U.S. Government with QR-based explosive detection
systems could be materially adversely affected.
The Company generally enters into confidentiality agreements with each of
its employees, and on a case-by-case basis enters into similar agreements with
distributors, customers, and potential customers. In addition, the Company
limits access to distribution of its software, documentation and other
proprietary information. There can be no assurance that these agreements will
not be breached, that the Company will have adequate remedies for any breach, or
that the Company's trade secrets will not otherwise become known to or
independently developed by others. Outside the United States, the time period
for filing foreign counterparts of the Patents has expired, and the Company has
not sought or obtained patent protection (except to the extent of licenses held
under patents owned by Imatron Inc.) and has relied to date primarily on
software copyrights and trade secrets for the protection of its proprietary
technology. The absence of a foreign counterparts to the Patents could
adversely affect the Company's ability to prevent a competitor from using
technology similar to technology used in the CTX 5000. There can be no
assurance that the steps taken by the Company to protect its proprietary
technology will be adequate or that its competitors will not be able to develop
similar, functionally equivalent or superior technology.
The Company in the past has received, and from time to time in the future
may receive, communications from third parties alleging infringements by the
Company or one of its suppliers of patents or other intellectual proprietary
rights owned by such third parties. There can be no assurance that any
infringement claims (or claims for indemnification resulting from infringement
claims against third parties, such as customers) will not be asserted against
the Company. If the Company's product is found to infringe a patent, a court
may grant an injunction to prevent making, selling or using the product in the
applicable country. Protracted litigation may be necessary to defend the
Company against alleged infringement of others' rights. Irrespective of the
validity or success of such claims, defense of such claims could result in
significant costs to the Company and the diversion of time and effort by
management, either of which by itself could have a material adverse effect on
the business, financial condition or results of operations of the Company.
Further, adverse determinations in such litigation could result in the Company's
loss of proprietary rights, subject the Company to significant liabilities
(including treble damages in certain circumstances), or prevent the Company from
selling its products. If infringement claims are asserted against the Company,
the Company may seek to obtain a license of such third party's intellectual
property rights, which may not be available under reasonable terms or at all.
In addition, litigation may be necessary to enforce patents issued to or
licensed exclusively to the Company and to protect trade secrets or know-how
owned or licensed by the Company and, whether or not the Company is successful
in defending such intellectual property, the
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Company could incur significant costs and divert considerable management and
key technician time and effort with respect to the prosecution of such
litigation, either of which by itself could have a material adverse effect on
the business, financial condition or results of operations of the Company.
INTERNATIONAL BUSINESS; FLUCTUATION IN EXCHANGE RATES; RISK OF CHANGE IN FOREIGN
REGULATIONS
The Company markets its products to customers outside of the United States
and, accordingly, is exposed to the risks of international business operations,
including unexpected changes in regulatory requirements, changes in foreign
control legislation, possible foreign currency controls, uncertain ability to
protect and utilize its intellectual property in foreign jurisdictions, currency
exchange rate fluctuations or devaluation, tariffs or other barriers,
difficulties in staffing and managing foreign operations, difficulties in
obtaining and managing vendors and distributors, and potentially negative tax
consequences. International sales are subject to certain inherent risks
including tariffs, embargoes and other trade barriers, staffing and operating
foreign sales and service operations and collecting accounts receivable. The
Company is also subject to risks associated with regulations relating to the
import and export of high technology products. The Company cannot predict
whether quotas, duties, taxes or other charges or restrictions upon the
importation or exportation of the Company's products in the future will be
implemented by the United States or any other country. Fluctuations in currency
exchange rates could cause the Company's products to become relatively more
expensive to customers in a particular country, leading to a reduction in sales
or profitability in that country. There can be no assurance that any of these
factors will not have a material adverse effect on the Company's business,
financial condition or results of operations.
PRODUCT LIABILITY RISKS; RISK OF FAILURE TO DETECT EXPLOSIVES; AVAILABILITY OF
INSURANCE
The Company's business exposes it to potential product liability risks
which are inherent in the manufacturing and sale of explosive detection
systems. There are many factors beyond the control of the Company that could
lead to liability claims, such as the reliability of the customer's
operators, the training of the operators after the initial installation and
training period, and the maintenance of the units by the customers. For
these and other reasons, including software and hardware limitations and
malfunctions of the CTX 5000, there can be no assurance that the systems will
detect all explosives hidden in the luggage scanned. The Company does not
believe that it would be liable for any such claims, but the cost of
defending any such claims would be significant and any adverse determination
may be in excess of the Company's insurance coverage. Moreover, the failure
of the CTX 5000 to detect an explosive would also result in negative
publicity which could have a material adverse effect on sales and may cause
customers to cancel orders already placed, either of which could have a
material adverse effect on the Company's business, financial condition or
results of operations. Many of the Company's customers require the Company
to maintain insurance at certain levels. The Company currently has product
liability insurance in the amount of $150 million. There can be no assurance
that additional insurance coverage, if required by customers or otherwise,
could be obtained on acceptable terms, if at all.
RISKS ASSOCIATED WITH POTENTIAL ACQUISITIONS
An element of the Company's strategy is to review acquisition prospects
that would complement its existing product offerings, augment its market
coverage, enhance its technological capabilities or otherwise offer growth
opportunities. Future acquisitions by the Company could result in potentially
dilutive issuances of equity securities, the incurrence of debt and contingent
liabilities, and amortization expenses related to goodwill and other intangible
assets, any of which could materially adversely affect the Company's business,
financial condition or results of operations. Acquisitions entail numerous
risks, including difficulties in the assimilation of acquired operations,
technologies and products, diversion of management's attention from other
business concerns, risks of entering markets in which the Company has no or
limited prior experience and potential loss of key employees of acquired
organizations. The Company's management has limited experience in assimilating
acquired organizations. No assurance can be given as to the ability of the
Company to successfully integrate any businesses, products, technologies or
personnel that might be acquired in the future, and the failure of the Company
to do so could have a material adverse effect on the Company's business,
financial condition or results of operations.
RISKS RELATING TO THE ACQUISITION OF QUANTUM
On September 30, 1997, InVision acquired Quantum in a stock-for-stock
merger (the "Merger") pursuant to which Quantum became a wholly-owned subsidiary
of InVision. Quantum was founded to develop and commercialize patented and
proprietary technology for inspection, detection and analysis of explosives and
other materials based on quadrupole resonance ("QR") technology, a form of
magnetic resonance. Although the Company
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<PAGE>
believes that the combination of its CT technology with Quantum's QR
technology will enhance the ability of the Company to develop and produce
products with greater detection capabilities as well as increase throughput
and decrease false alarm rates, no assurance can be given that the benefits
the Company believes will result from the Merger will be realized, or that if
realized will be at the level the Company anticipates. Factors that could
inhibit or prevent the realization of the benefits the Company anticipates
from the Merger include, but are not limited to, unanticipated difficulties
arising in integrating the CT and QR technologies in one product, the QR
technology under development may prove to be not as efficacious as currently
believed, unanticipated costs arising during the development or production of
products incorporating the QR technology, and the development by competitors
in the EDS industry of similar QR technologies that compete favorably against
those acquired from Quantum.
In addition, the integration process of rationalizing research programs,
computer and accounting systems and other aspects of operations, while
operating a larger entity with two locations, presents a significant
challenge to the management of the Company. There can be no assurance that
the integration process will be successful. The need to dedicate management
resources to the integration may detract from the day-to-day operation of the
Company's business. There can be no assurance that the Company will be
successful in its attempt to integrate the operations of Quantum into the
Company, and the failure to do so could have a material adverse effect on the
Company's business, financial condition or results of operations. In
addition, there can be no assurance that integration of the business of
Quantum, even if achieved in an efficient and effective manner, will result
in combined results of operations and financial condition superior to what
would have been achieved by either InVision or Quantum independently.
CONCENTRATION OF OWNERSHIP; CONTROL BY MANAGEMENT
As of September 30, 1997, following the closing of the acquisition of
Quantum, the Company's principal stockholder, HARAX Holding, S.A. ("HARAX") and
its affiliates holds approximately 21.9% of the Company's Common Stock, and the
present directors and executive officers of the Company and their affiliates, in
the aggregate, beneficially own approximately 11.9% of the outstanding Common
Stock, in each case including shares issuable pursuant to stock options
exercisable within 60 days of September 30, 1997. Consequently, HARAX together
with the Company's directors and executive officers, acting in concert, will
have the ability to significantly affect the election of the Company's directors
and have a significant effect on the outcome of corporate actions requiring
stockholder approval. In addition, HARAX, acting alone, will have the power to
significantly affect matters relating to the Company's affairs and business.
ANTI-TAKEOVER PROVISIONS
The Company's Certificate of Incorporation authorizes the Company's Board
of Directors to issue up to five million shares of preferred stock in one or
more series, to fix the rights, preferences, privileges and restrictions granted
to or imposed upon any wholly unissued shares of preferred stock, to fix the
number of shares constituting any such series, and to fix the designation of any
such series, without further vote or action by its stockholders. The rights of
the holders of Common Stock will be subject to, and may be materially adversely
affected by, the rights of the holders of any preferred stock that may be issued
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 the outstanding
voting stock of the Company. The Company has no present plans to issue shares
of preferred stock. In addition, in the event of certain transactions by which
the Company is acquired or becomes controlled by a single investor or group of
investors, the Board of Directors pursuant to the Company's Employee Stock
Purchase Plan, has discretion to provide that each right to purchase Common
Stock will be assumed or an equivalent right substituted by the successor
corporation, if any, or the Board may shorten the offering period and provide
for all sums collected by payroll deductions to be applied to purchase stock
immediately prior to such transaction. Furthermore, the Company's Certificate
of Incorporation provides for a staggered board and does not permit stockholder
action by written consent, both of which may have the effect of delaying or
preventing changes in control or management of the Company. The Company also is
subject to the provisions of Section 203 of the Delaware General Corporation
Law, which places restrictions on business combinations with certain interested
stockholders. The above factors, coupled with the concentration of ownership in
the directors and executive officers, could discourage certain types of
transactions involving an actual or potential change in control of the Company,
including transactions in which the holders of Common Stock might otherwise
receive a premium for their shares over then current prices, and may limit the
ability of such stockholders to cause or approve transactions which they may
deem to be in their best interests, all of which could have a material adverse
effect on the market price of the Common Stock offered hereby.
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VOLATILITY OF STOCK PRICE
Since the Company's initial public offering in April 1996, the price of the
Company's Common Stock has fluctuated widely. The market price of the shares of
Common Stock, like that of the common stock of many other high technology
companies, is highly volatile. The Company believes that factors such as the
crash of TWA Flight 800, the Gore Commission report, the entering into of the
FAA contract for 54 CTX 5000 systems, and the timing and availability of funding
for future FAA orders, have greatly affected the fluctuation in the Company's
Common Stock trading price. In the future such events, as well as announcements
of technological innovations or new products by the Company or its competitors
and general market conditions, may have a significant effect on the market price
of the Common Stock. In addition, in recent years the stock market in general,
and the market for small capitalization stocks in particular, has experienced
extreme price fluctuations which have often been unrelated to the operating
performance of affected companies. Such fluctuations could adversely affect the
market price of the Company's Common Stock.
SHARES ELIGIBLE FOR FUTURE SALE; REGISTRATION RIGHTS
Sales of substantial amounts of Common Stock in the public market could
have an adverse effect on the trading price of the Common Stock. Based on
shares outstanding as of September 30, 1997 following the closing of the
acquisition of Quantum, the Company has outstanding approximately 11,882,000
shares of Common Stock. Of such shares outstanding, approximately 7,049,000
shares are freely tradable without restriction or further registration under the
Securities Act, unless held by "affiliates" of the Company as that term is
defined in Rule 144 under the Securities Act, and an additional approximately
429,000 shares are freely tradable subject to the holding period, volume
limitations and other restrictions under Rule 145 under the Securities Act, and
certain additional restrictions imposed by the contract with certain former
holders of Quantum capital stock to meet pooling-of-interests accounting
requirements. The remaining approximately 4,404,000 shares of Common Stock
outstanding (including the shares offered hereby) are "restricted securities" as
that term is defined in Rule 144, and may be sold under Rule 144 subject to the
holding period, volume limitations and other restrictions under Rule 144.
The Company has entered into an agreement with a stockholder pursuant to
which 479,318 shares are currently registered for resale under the Securities
Act, has entered into an agreement with the Selling Stockholder pursuant to
which the 28,538 shares offered hereby are registered for resale under the
Securities Act, and has entered into agreements with certain of its stockholders
and others pursuant to which such persons have the right to require the Company
to register up to an aggregate of 393,940 additional shares of Common Stock for
resale under the Securities Act. Of such shares, 213,940 shares are currently
outstanding and the remaining 180,000 shares are issuable upon the exercise of
currently outstanding warrants.
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SELLING STOCKHOLDER
The following table sets forth certain information regarding the number of
shares of Common Stock owned beneficially by the Selling Stockholder as of
September 30, 1997 following the closing of the acquisition of Quantum and the
number of shares which may be offered pursuant to this Prospectus. This
information is based upon information provided by the Selling Stockholder.
Because the Selling Stockholder may sell all, some or none of his Common Stock,
no definitive estimate as to the number of shares thereof that will be held by
the Selling Stockholder after this offering can be provided.
SHARES BENEFICIALLY
OWNED PRIOR TO
OFFERING (1) SHARES
--------------------- BEING
NAME NUMBER PERCENT OFFERED
- ---- ------ ------- -------
Fredrick R. Roder......... 28,538 0.2% 28,538
(1) Applicable percentage of ownership at September 30, 1997 is based upon
approximately 11,882,000 shares of Common Stock outstanding. Beneficial
ownership is determined in accordance with the rules of the Securities and
Exchange Commission and includes sole or shared voting or investment power
with respect to shares shown as beneficially owned.
On December 31, 1996 the Company issued 32,000 shares of Common Stock to
Mr. Roder, the Vice President, Federal Systems of the Company, in consideration
of all of the outstanding common voting stock of Imatron Federal Systems, Inc.
Mr. Roder sold 3,462 of such shares in the Company's May 1997 public offering
and is offering the remaining 28,538 shares hereby. The foregoing share
issuances have been adjusted to reflect a 2-for-1 Common Stock split in the form
of a stock dividend effected on February 7, 1997.
PLAN OF DISTRIBUTION
The shares of Common Stock offered by the Selling Stockholder may be sold
from time to time to purchasers directly by the Selling Stockholder acting as
principal for its own account in one or more transactions at a fixed price,
which may be changed, or at varying prices determined at the time of sale or at
negotiated prices. Alternatively, the Selling Stockholder may from time to time
offer the Common Stock through underwriters, dealers or agents who may receive
compensation in the form of underwriting discounts, commissions or concessions
from the Selling Stockholder and/or the purchasers of shares for whom they may
act as agent. In addition, the shares of Common Stock may be pledged from time
to time by the Selling Stockholder to a lender to secure one or more loans, and
defaults under that loan or loans may result in the pledgee acquiring title to
some or all of the shares and selling them either directly or through
underwriters, dealers or agents. Sales may be made on the Nasdaq National Market
or in private transactions.
The Selling Stockholder and any underwriters, dealers, agents or pledgees
that participate in the distribution of the Common Stock offered hereby may be
deemed to be underwriters within the meaning of the Act and any discounts,
commissions or concessions received by them and any provided pursuant to the
sale of shares by them might be deemed to be underwriting discounts and
commissions under the Act.
In order to comply with the securities laws of certain states, if
applicable, the Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states the
Common Stock may not be sold unless it has been registered or qualified for sale
or an exemption from registration or qualification requirements is available and
is complied with.
Pursuant to an agreement with the Selling Stockholder, the Company will pay
substantially all of the expenses incident to the offering and sale to the
public of the Common Stock offered hereby, other than commissions, concessions
and discounts of underwriters, dealers or agents. Such expenses (excluding such
commissions and discounts) are estimated to be approximately $10,000.
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LEGAL MATTERS
The validity of the Common Stock offered hereby has been passed upon for
the Company by Cooley Godward LLP, Palo Alto, California.
EXPERTS
The financial statements and schedules appearing in the Company's Annual
Report on Form 10-K as amended by Form 10-K/A for the fiscal year ended December
31, 1996, and in the Company's Current Report on Form 8-K filed with the
Securities and Exchange Commission on October 7, 1997, have been audited by
Price Waterhouse LLP, independent accountants, as set forth in their reports
thereon included therein and incorporated herein by reference. Such financial
statements and schedules are incorporated herein by reference in reliance upon
such report given upon the authority of such firm as experts in accounting and
auditing.
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- -----------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST
NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY, THE SELLING
STOCKHOLDER OR BY ANY OTHER PERSON. THIS PROSPECTUS DOES NOT CONSTITUTE AN
OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY ANY SECURITIES OTHER THAN
THE SHARES OF COMMON STOCK OFFERED HEREBY, NOR DOES IT CONSTITUTE AN OFFER TO
SELL OR A SOLICITATION TO BUY ANY OF THE SHARES OFFERED HEREBY TO ANY PERSON
IN ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION WOULD BE UNLAWFUL OR
TO ANY PERSON TO WHOM IT IS UNLAWFUL. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY OFFER OR SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF THE COMPANY OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS
OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
______________
TABLE OF CONTENTS
PAGE
Available Information. . . . . . . . . . . . . . . . . . . . . . . . . . . .2
Incorporation of Certain Documents by Reference. . . . . . . . . . . . . . .2
Forward Looking Statements . . . . . . . . . . . . . . . . . . . . . . . . .3
The Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3
Selling Stockholder. . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Plan of Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Legal Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Experts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
28,538 SHARES
INVISION TECHNOLOGIES, INC.
COMMON STOCK
__________
PROSPECTUS
__________
DECEMBER , 1997
- -----------------------------------------------------------------------------
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<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by the Registrant in
connection with the sale of the Common Stock being registered. All the amounts
shown are estimates except for the registration fee.
Registration fee......................................... $ 100
Legal fees and expenses.................................. 6,000
Accounting fees and expenses............................. 2,500
Miscellaneous............................................ 1,400
-------
TOTAL............................................... $10,000
-------
-------
ITEM 15. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Under Section 145 of the Delaware General Corporation Law, the Registrant
has broad powers to indemnify its directors and officers against liabilities
they may incur in such capacities, including liabilities under the Securities
Act of 1933, as amended (the "Securities Act"). The Registrant's Bylaws also
provide that the Registrant will indemnify its directors and executive officers
and may indemnify its other officers, employees and agents to the fullest extent
permitted by Delaware law.
The Registrant's Certificate of Incorporation provides for the elimination
of liability for monetary damages for breach of the directors' fiduciary duty of
care to the Registrant and its stockholders. These provisions do not eliminate
the directors' duty of care and, in appropriate circumstances, equitable
remedies such an injunctive or other forms of non-monetary relief will remain
available under Delaware law. In addition, each director will continue to be
subject to liability for breach of the director's duty of loyalty to the
Registrant, for acts or omissions not in good faith or involving intentional
misconduct, for knowing violations of law, for any transaction from which the
director derived an improper personal benefit, and for payment of dividends or
approval of stock repurchases or redemptions that are unlawful under Delaware
law. The provision does not affect a director's responsibilities under any
other laws, such as the federal securities laws or state or federal
environmental laws.
ITEM 16. EXHIBITS
NUMBER DESCRIPTION OF DOCUMENT
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
24.1 Power of Attorney. Reference is made to Page II-4.
II-1
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement.
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any increase or decrease
in volume of securities offered (if the total dollar value of securities offered
would not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the form of
prospectus filed with the Commission pursuant to Rule 424(b) if, in the
aggregate, the changes in volume and price represent no more than a 20 percent
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;
PROVIDED, HOWEVER, that paragraphs (1)(a)(i) and (1)(a)(ii) do not apply if the
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
Registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act 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 herein, 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 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-2
<PAGE>
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to provisions described in Item 15, or otherwise, the
registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Securities
Act and will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Newark, State of California, on November 30, 1997.
INVISION TECHNOLOGIES, INC.
By: /S/ SERGIO MAGISTRI
----------------------------------------
Sergio Magistri
President and Chief Executive Officer
(PRINCIPAL EXECUTIVE OFFICER)
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Sergio Magistri and Curtis P. DiSibio,
and each or any one 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 Registration Statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, granting unto said
attorneys-in-fact and agents, 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
connection therewith, as fully to all intents and purposes as he might or could
do in person, hereby ratifying and confirming all that said attorneys-in-fact
and agents, or any of them, or their or his substitutes or substitute, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capabilities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Sergio Magistri President, Chief Executive November 30, 1997
- ----------------------------- Officer and Director
Sergio Magistri (PRINCIPAL EXECUTIVE OFFICER)
/s/ Curtis P. DiSibio
- ----------------------------- Vice President and Chief November 30, 1997
Curtis P. DiSibio Financial Officer
(PRINCIPAL FINANCIAL AND
ACCOUNTING OFFICER)
/s/ Douglas P. Boyd
- ----------------------------- Director November 30, 1997
Douglas P. Boyd
- ----------------------------- Director November , 1997
Giovanni Lanzara
/s/ Bruno Trezza
- ----------------------------- Director November 30, 1997
Bruno Trezza
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION OF DOCUMENT
------ ------------------------
5.1 Opinion of Cooley Godward LLP
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Cooley Godward LLP. Reference is made to Exhibit
24.1 Power of Attorney. Reference is made to Page II-4.
II-5
<PAGE>
EXHIBIT 5.1
[COOLEY GODWARD LETTERHEAD]
December 4, 1997
InVision Technologies, Inc.
7151 Gateway Blvd.
Newark, California 94560
Ladies and Gentlemen:
You have requested our opinion with respect to certain matters in connection
with the filing by InVision Technologies, Inc. (the "Company") of a
Registration Statement on Form S-3 (the "Registration Statement") with the
Securities and Exchange Commission covering the offering for resale of 28,538
shares of the Company's Common Stock (the "Shares"), with a par value of
$0.001, owned by Fredrick L. Roder.
In connection with this opinion, we have examined the Registration Statement,
the Company's Certificate of Incorporation and Bylaws, as amended, and such
other documents, records, certificates, memoranda and other instruments as we
deem necessary as a basis for this opinion. We have assumed the genuineness
and authenticity of all documents submitted to us as originals, the
conformity to originals of all documents submitted to us as copies thereof,
and the due execution and delivery of all documents where due execution and
delivery are a prerequisite to the effectiveness thereof.
On the basis of the foregoing, and in reliance thereon, we are of the opinion
that the Shares are validly issued, fully paid, and nonassessable.
We consent to the filing of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Legal Matters"
in the Prospectus included in the Registration Statement.
Very truly yours,
COOLEY GODWARD LLP
/s/ Robert L. Jones
Robert L. Jones
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 20, 1997 appearing on page
F-1 of the Company's Annual Report on Form 10-K (File No. 0-28236), as
amended, for the year ended December 31, 1996, and to the incorporation by
reference in this Registration Statement on Form S-3 of our report dated
August 22, 1997 (except as to Note 15 (Merger Agreement), which is as of
September 30, 1997), appearing on page F-1 of the Company's Report on Form
8-K (File No. 0-28236), filed on October 7, 1997.
Price Waterhouse LLP
San Jose, California
December 4, 1997
