U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-SB
General Form For Registration of Securities
of Small Business Issuers
Under Section 12 (b) or (g) of the Securities Exchange Act of 1934
ACCUIMAGE DIAGNOSTICS CORP.
(Name of Small Business Issuer in its Charter)
Nevada 33-0713615
- ---------------------------- ---------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
400 Oyster Point Blvd., Suite 114, South San Francisco, California 94080-1917
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (650) 875-0192
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which each class is
to be registered to be registered
None None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value per share
(Title of Class)
<PAGE>
ACCUIMAGE DIAGNOSTICS CORP.
FORM 10-SB
TABLE OF CONTENTS
PART I
Item 1. Description of Business
Item 2. Management's Discussion and Analysis or Plan of Operation
Item 3. Description of Property
Item 4. Security Ownership of Certain Beneficial Owners and Management
Item 5. Directors, Executive Officers, Promoters and Control Persons
Item 6. Executive Compensation
Item 7. Certain Relationships and Related Transactions
Item 8. Description of Securities
PART II
Item 1. Market Price of and Dividends on the Registrant's Common Equity
and other Shareholder Matters
Item 2. Legal Proceedings
Item 3. Changes in and Disagreements with Accountants
Item 4. Recent Sales of Unregistered Securities
Item 5. Indemnification of Directors and Officers
PART F/S
Financial Statements
PART III
Item 1. Index to Exhibits
Item 2. Description of Exhibits
<PAGE>
PART I
ITEM 1. DESCRIPTION OF BUSINESS
(a) Business Development
AccuImage Diagnostics Corp. ("AccuImage" "Company" or "Issuer") was
incorporated in Nevada on February 2, 1990 as Black Pointe Holdings, Inc. On
June 27, 1996, the Company changed its name to AccuImage Diagnostics Corp.
Immediately prior to such time the Company had been inactive. On September 30,
1997, pursuant to a Stock Exchange Agreement, the Company obtained all of the
issued and outstanding shares of AccuImage Inc., a Nevada corporation, which
owned the exclusive rights to certain computer software and technology which the
Company had been licensing. The Company issued 4,000,000 shares of its common
stock to acquire AccuImage Inc. On June 30, 1998, the shareholders of AccuImage,
Inc. surrendered without consideration 2,000,000 shares of the common the stock
received in the share exchange, and the Company reallocated those shares among
the certain original shareholders to complete the exchange transaction as
originally contemplated among the parties. Subsequent to the exchange, AccuImage
Inc. was formally dissolved. The Company's website is www.accuimage.com.
(b) Business of Issuer
(1) Principal products or services and their markets
AccuImage Diagnostics Corp. is engaged in the design, development, and
marketing of high-speed 2D, 3D, and 4D medical image visualization on low-cost
personal computer (PC) platform workstations. AccuImage workstations process
images obtained from standard medical CT scanners, MRI scanners, and Ultrasound
scanners that are connected to standard hospital networks using the DICOM
standard. AccuImage provides sophisticated 3D and 4D rendering technology in a
low-cost, easy to use, high-speed, interactive product package. AccuImage
products utilize the Windows95/98/NT operating system as well as modern consumer
oriented computer systems. AccuImage software supports 3D and 4D shaded surface
rendering, volume rendering, MIP, curved reformatting, and endoscopic
"fly-throughs" of body cavities. All functions are performed in real-time with
full user interactivity. AccuImage workstations are installed at leading
hospitals and clinics internationally, including University of California, San
Francisco, UCLA, Mayo Clinic, Stanford University, University of Munich,
Singapore National University, Youngsei Hospital, University of Graz, Heartscan
USA and Heartscan South Africa.
Background Technology
The development of the computed axial tomography (CAT) scanner in the
mid-1970's provided the ability to view anatomical images of the interior of the
human body. The CAT device allows an X-ray beam to rotate around a specific area
of the body and deliver the appropriate amount of X-radiation for the tissue
being studied. These X-ray snapshots are pictures of the internal anatomy from
different angles. A computer then assists in forming a composite readable image.
CAT scanning has revolutionized medicine, especially neurology, by facilitating
the diagnosis of brain and spinal cord disorders, cancer, and other conditions.
Two more recently developed techniques are Magnetic Resonance Imaging (MRI) and
Ultrasound Imaging (USI). These processes use radio and ultra-sound waves,
respectively, to non-invasively image the interior of the body, often with
greater effect than with X-ray technology. These technologies as well as
Positron Emission Tomography (PET) scanning and Nuclear Medicine (NM) cameras
are all capable of imaging cross section slices of the body.
The existence of a series of cross sections of the human body in
digital format provides the opportunity to form 3D images of internal
structures. The cross section slices can be stacked into a cubic matrix, and
sophisticated ray-tracing and surface rendering algorithms can be applied to
extract a three-dimensional image of an internal organ such as the heart and its
blood vessels. For example, if the cross section images can be obtained in
milliseconds, using an Ultrafast(TM) Scanner known as Electron Beam Tomography
(EBT), then a 3D image of a beating heart can be formed. This type of display is
referred to as 4D.
In parallel with the development of cross section imaging, conventional
X-ray imaging increasingly is being performed in a digital format. Fluoroscopic
images are digitized into a digital video stream. Conventional X-ray films are
scanned and stored in a digital format. New digital image sensors have been
developed that replace film and provide the digital image without an intervening
X-ray film (Digital Radiography). This collection of techniques is known as
Picture Archiving and Communications (PACs). It is believed to be the way that
modern hospitals in the near future will manage x-ray diagnosis and image
storage.
The digital revolution in medical imaging means that images can be
shared inside and outside the hospital with the aid of network technology
including the Internet and private Intranets. The American College of Radiology,
American College of Cardiology and other professional organizations have in
recent years sponsored the development of a standard image format so that images
from various devices can be shared in a common display format. This standard is
known as DICOM. The wide-spread adoption of the DICOM standard creates the
business opportunity for AccuImage and others to participate in an exploding
market for applications software that provides solutions for users of network
distributed medical images.
The AccuImage Technology
The underlying "engine" of the AccuImage technology is a special
application of three-dimensional computer graphics and statistical image
enhancement. That technology is similar to technologies used in engineering and
other fields. The distinction is in its application to body tissues. To
function, the discrete tissues must be digitally recognized and recorded. When
converted to that form, the medical images not only can be handled with far
greater ease and speed but also can be viewed and manipulated with far greater
flexibility than ever before. This allows the viewer to rapidly view
inaccessible body areas and look for the abnormal details necessary for a
reliable medical diagnosis. This can be done safely, painlessly and with no side
effects.
AccuImage has two substantial advantages over other various companies
who provide the ability to view and process medical images. First, AccuImage
software is developed exclusively for the Microsoft Windows operating system
using Intel Processors. As such the installed base of more than 80 million PCs
worldwide are all potential users of AccuImage products. Second, AccuImage
software is optimized for speed and ease of use. Taking advantage of the power
of the latest multi-processor PCs with clock speeds of 400MHz and higher,
AccuImage workstations can perform most functions in real-time which greatly
eases the burden of learning to use the software, as well as the product's value
when making medical diagnoses.
The Products
AccuImage markets and continues to enhance products that provide
solutions for the medical professional who needs to view and manipulate 2D, 3D
and 4D medical images easily and quickly. The base products are the WebPACS
Portal and the AccuView image viewer. All other products add additional
functionality to these basic products and can be seamlessly integrated on the
standard PC hardware platform.
o WebPACS Portal: The WebPACS Portal is installed at a clinic or hospital
that has an installed medical acquisition device. This product provides
data access and search capabilities to medical personnel through the use of
standard web browser features. The Portal Frontpage is created and serviced
by AccuImage. The Frontpage has the latest AccuImage software products
available for download and sale, as well as links to the data itself. Each
entry into an AccuImage WebPACS Portal represents the potential sale of
other software products. Each placed AccuImage WebPACS Portal represents
another permanently placed sales agent.
o AccuView: AccuView provides universal accessibility to view, share, and
process medical images. AccuView can interface with any existing
server-based PACS system, or it can be the foundation of a low-cost,
high-performance distributed PACS system using the power of NT-based
networking and standard PC desktop computers.
Specifically, AccuView is a Viewer/Browser program that enables viewing of
DICOM formatted images stored on a local PC, or on any network drive.
AccuView is extendible using a series of powerful plug-in modules that
provide additional network services and advanced processing functions.
AccuView can display all medical images that are formatted with the DICOM
standard including cine images from angiography, ultrasound, nuclear
medicine, as well 2D and 3D images from conventional radiography, CT and
MRI.
o AccuNet: AccuNet provides advanced DICOM receive service. Using this
module, data can be received from any modality and/or workstation vendor
that adheres to the DICOM standard and has an Internet connection. For
example, doctors can use this module to receive data at home or in their
office.
o AccuTrans: AccuTrans provides advanced DICOM send service. Data can be sent
to any workstation connected to a network or the Internet with resident
AccuNet software running.
o AccuPrint: AccuPrint provides the capability to print medical images on
inexpensive paper printers and Codonics network printers through an
easy-to-use, Microsoft Word based document assembly interface.
o AccuEdit: AccuEdit allows the user to edit away unwanted tissue structures
before manipulating the medical data with other plugin modules. Single
image editing, slab editing and barrel volume editing are all included.
Editing may be performed using axial coronal and sagittal views. Data can
also be resampled, cropped and filtered.
o AccuFilm: AccuFilm provides the capability to print medical images on laser
film imagers using digital data transfer. Supported laser interfaces
include 3M P831 and other protocols. Images can be printed from any
AccuImage plugin module..
o AccuScore: AccuScore provides calcium scoring, reporting, and database
management for quantifying the amount of calcium in coronary arteries as
obtained using Imatron EBT or spiral/helical CT image data. Included are 3D
Agatston scoring, interpolated plaque volume and calcium mass
determination, context-driven auto reporting, and database storage of
clinical parameters.
o AccuProjector: AccuProjector provides the capability to perform maximum
intensity projections, multi-planar reformatting, and 3D rendering to
display vascular and other body structures. Region data is selectable using
a real-time rotatable rectangular volume and true 3D curved volumes that
follow a vessel. The program processes a contiguous sequence of CT or MRI
image data. 2D vascular projections are possible in any arbitrary plane
with user definable increments. The resulting images may be stored or sent
to a color printer via the standard NT platform.
o AccuVRT: AccuVRT utilizes a volume rendering technique with transparent
full color output to display multiple tissues in various hues. This method
may be used to render "life-like" renditions of all tissues in the body.
Hallmark applications to date include diagnosis of vascular anomalies,
renal disease, tumor characterization, as well as pre-surgical planning and
post-surgical follow-up.
o AccuScope: AccuScope enables the user to design a specific flight path
through a vessel, airway, or colon using set key-frames and
auto-navigation. Volume data along this flight path are rendered on the
surface of the lumen. With this information at hand, virtual imaging using
CT data is now a viable asset to the diagnosis. It is foreseeable that
uncomfortable studies such as barium enemas, and costly studies such as
angiograms, may become confirmation tools rather than procedures necessary
for initial diagnosis.
(2) Distribution methods of the products or services
In the U.S. there are more than 600,000 such professionals who
occasionally need to view the 200 million medical images that are acquired
annually. The international market is three times larger. Most of these
professionals already own or use at least one PC type computer system. The
growth of the Internet and its penetration into homes and offices provides a
pathway for the wide-scale interchange of medical images. Already most hospitals
are acquiring or planning acquisition of internal Picture Archiving and
Communications (PACS) networks that are connected to the Internet. The new DICOM
standard insures that all of the various digital images on PACS systems will be
readable in a common format.
As mentioned previously, medical images in digital format are produced
directly by CAT, MRI, USI, and NM devices. These techniques account for up to
40% of all medical images produced. In addition there is an increasing tendency
for traditional film--based images to be digitized using scanners in order to
store these images in digital format and make them available on PACS systems. It
is widely believed that over the next ten years or so this trend will continue
until most medical images are stored digitally and viewed on medical imaging
workstations.
Installed Sites
AccuImage products are installed at leading medical institutions
world-wide. These include: University of California, San Francisco, California;
Stanford University Medical Center, Stanford, California; Heartscan Imaging, So.
San Francisco, California; Mayo Clinic, Rochester, Minnesota; St. Johns
Cardiovascular Center, Harbor-UCLA, California; Colorado Imaging Center, Denver,
Colorado; University of Munich, Germany; Younsei University, Seoul, South Korea;
Kyongbuk University Hospital, Taegu, South Korea; Shields Cine, Connecticut,
Spokane, Washington; Heartscan South Africa, Pretoria; Hua Shan Hospital,
Shanghai; National Singapore University, Singapore.
(3) Status of any publicly announced new product or service
The Company has not publicly announced any new product or services.
(4) Competitive business conditions and the small business
issuer's competitive position in the industry and methods of
competition
AccuImage's 3D visualization products face competition both from the
manufacturers of imaging equipment and from other independent companies offering
competing products. Nearly all manufactures of CT and MRI scanners offer some
form of 3D-visualization workstation as an optional accessory for their
scanners. The principal companies include GE Medical Systems, Philips Medical
Systems, Picker International, Siemens Medical Systems, and Toshiba Medical
Systems. Independent suppliers of 3D visualization products include Advanced
Visual Systems, Inc., Engineering Animations Inc., Focus Imaging Inc., ISG
Technologies Inc., ScImage Inc., TomTec Imaging Systems GmbH, Vital Images Inc.,
Volumetric Medical Imaging Inc., and Voxar. In addition, Ultrasound Imaging is
beginning to enter the 3D visualization industry with companies such as Medison
Co., Ltd, Life Imaging Systems Inc, and Hewlett-Packard Co., offering products.
Market Protection.
The Company acquired its underlying technology under a contract from a
German developer, who was the original developer. At the present time the
Company and its predecessors have relied upon the secret and proprietary nature
of the source code in protecting its special techniques from the competition. It
has plans to file, but at this time has not, for copyrights in the U.S. as well
as other countries. When the Company does so, Management believes that the
copyrights will extend its protection to a degree. However, that protection
cannot prevent competitors from entering the market in digital displays similar
to those of the AccuImage proprietary software. The Company can, however, stop
competitors from doing so in the exact same manner.
The Company also relies on trade secrets and proprietary know-how which
it seeks to protect, in part, through appropriate confidentiality and
proprietary information agreements. These agreements generally provide that all
confidential information developed or made known to the individual by the
Company during the course of the individual's relationship with the Company is
not to be disclosed to third parties, except in specific circumstances, and that
all inventions conceived by the individual in the course of rendering services
to the Company shall be the Company's exclusive property. There can be no
assurance that confidentiality or proprietary information agreements will not be
breached, that remedies for any breach would be adequate, or that the Company's
trade secrets will not otherwise become known to, or independently developed by,
competitors.
(5) Sources and availability of raw materials and the names of
principal suppliers
The Company does not rely on any raw materials for its business
operation.
(6) Dependence on one or a few major customers
The Company does not rely nor is it dependent on one or a few major
customers.
(7) Patents, trademarks, licenses,franchises, concessions,royalty
agreements or labor contracts, including duration
The Company claims no patents, trademarks, licenses, franchises,
concessions or royalty agreements. It has no labor contracts.
(8) Need for any government approval of principal products or
services and effect of existing or probable governmental
regulations on the business
Within the United States the use of devices in medical procedures is
restricted to those which have been granted approval by the Food and Drug
Administration ("FDA") under the Federal Food, Drug and Cosmetic Act. This
approval is known as Pre Market Approval ("PMA"). Although limited marketing for
use of products on an experimental basis is possible without full approval,
obviously, no commercial demand exists unless the device has received full
approval. Furthermore, medical providers will be hesitant to acquire devices
that utilize unapproved procedures.
The FDA either grants or refuses approval after a formal written
request, known as the Pre Market Notification, is made for a specific device to
be used for a specific procedure. Ordinarily, the applicant must demonstrate, to
the satisfaction of the FDA, that the use of that device for the proposed
procedure or product would be reliable and safe and, if applicable, will have no
side effects currently or in the future. This process can require extensive
testing, often lasting over an extended period and costing large sums. However,
if a substantially similar device has previously received approval for the same
or similar applications, Section 510(k) of the Food, Drug and Cosmetic Act
allows the FDA to grant PMA without extensive testing and data.
AccuImage received 510(k) approval from the FDA to market its products
on August 29, 1996. Currently, AccuImage has FDA approval for all but two of its
software plugins, which the Company has submitted for approval and is waiting
for a reply. Outside the U.S., there is no uniform method of approval for
medical devices. The Company also expects to apply for, and obtain, the
necessary approvals from those countries in which the projected volume of sales
warrant the effort. In certain instances, those applications may be arranged
through existing sales representative organizations in the countries with whom
the Company develops relationships. As no approvals are required for this
technology in most of the Third World, including the Middle East, Central
America and South America, sales may commence in those areas as soon as the
Company has a distribution network in place. Orders can also be delivered to
dealers and manufacturer's representative organizations in such countries.
The federal governmental and certain states have enacted
costs-containment measures such as the establishment of maximum fee standards in
an attempt to limit the extent and cost of governmental reimbursement of
allowable medical expenses under Medicare, Medicaid and similar governmental
programs. A number of states have adopted or are considering the adoption of
similar measures. Such limitations have led to a reduction in, and may further
limit funds available for, diagnostic testing, and as a result may inhibit or
reduce demand by healthcare providers for the Company's products. Additionally,
hospitals may continue to face other capital constraints which prevent them from
investing in such equipment. While the Company cannot predict what effect the
policies of governmental entities and other third-party payers will have on
future sales of the Company's products, there can be no assurance that such
policy would not have a material adverse impact on the business of the Company.
(9) Estimate of amount spent during each of the last two fiscal
years on research and development activities, and the cost
thereof borne directly by customers
During the last two years the Company has engaged in extensive research
and development activities, developing the various products and services
described above. The Company estimates that is spent approximately $300,000
during 1998 on such research and development, and it expects to spend
approximately the same amount in 1999.
(10) Costs and effects of compliance with environmental laws
AccuImage's business operations are not regulated by environmental laws
and regulations.
(11) Number of total employees and number of full time employees
The Company currently has seven full time employees and two full time
independent contractors.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
(a) The Company has identified three market trends that are reasonably
likely to have an impact on the Company's demand for its products and hence, its
liquidity.
1. Competitive pressures on HMOs, clinics and hospitals demand that
treatment becomes more efficient. These organizations require software solutions
that provide data connectivity, functional scalability and superb medical
diagnostic capability at a reasonable price.
2. The growth of the Internet and its penetration into homes and offices
provides a pathway for the wide-scale interchange of medical images. A new data
standard for medical images (DICOM) insures that all of the various digital
images are readable in a common format.
3. The wide-spread use of the Internet and adoption of the DICOM standard
creates the business opportunity for AccuImage to participate in an exploding
market for applications software that provides solutions for users of network
distributed medical images.
(b) Internal and external sources of liquidity
Liquidity improved with approximately $450,000 raised through equity
financing using a Private Offering Memorandum that closed in February, 1999. The
Company also secured a $100,000 loan in September, 1998 through a private party.
During the next 12 months, the Company's foreseeable cash requirements will
be met by a combination of revenue generated by the Company's sales staff, bank
financing and additional equity financing.
Recently, AccuImage signed a long-term OEM agreement with Imatron, Inc., a
market leader in CT cardiac imaging to provide the medical visualization
software sold with each new CT scanner. AccuImage has software distributors in
Germany, Italy and Taiwan. The Company's sales staff is selling beta version of
the newest generation of software to customers on a limited basis. AccuImage has
FDA clearance on all but two of its software plugins requiring 510(k) filings.
The Company will widely market its new software suite after incorporating
customer feedback, and obtaining FDA approval on the remaining plugins.
Product Liability
The Company's business exposes it to potential product liability claims
which are inherent in the manufacture and sale of medical devices, and as such
the Company may face substantial liability to patients for damages resulting
from the faulty design or manufacture of products. The Company is in the process
of obtaining product liability insurance coverage, however it does not currently
maintain such coverage. There can be no assurance that product liability claims
will not exceed coverage limits or that such insurance will continue to be
available at commercially reasonable rates, if at all. Consequently, a product
liability claim or other claim in excess of insured liabilities or with respect
to uninsured liabilities could have a material adverse effect on the Company.
Product Recalls.
Complex medical devices, such as the Company's products, can experience
performance problems in the field that require review and possible corrective
action by the manufacturer. The Company periodically receives reports from users
of its products relating to performance difficulties they have encountered.
These or future product problems could result in market withdrawals or recalls
of products, which could have a material adverse effect on the Company's
business, financial condition and results of operations.
Risks of Low-Priced Stocks; Penny Stock Regulations.
The Company's Common Stock is traded over-the-counter on NASD'S "Electronic
Bulletin Board." As such, the Company's Common Stock is subject to Rule 15g-9
under the Exchange Act, which imposes additional sales practice requirements on
broker-dealers which sell such securities to persons other than established
customers and institutional accredited investors. For transactions covered by
this rule, a broker-dealer must make a special suitability determination for the
purchaser and have received the purchaser's written consent to the transaction
prior to sale. Consequently, the rule may affect the ability of broker-dealers
to sell the Company's Common Stock and may affect the ability of purchasers in
this Offering to sell any of the Common Stock acquired pursuant to this
Memorandum in the secondary market.
Share Price Volatility.
The trading price of the Common Stock could be subject to wide fluctuations
in response to quarter to quarter variations in operating results, changes in
earnings estimates by analysts, announcements of technological innovations or
new products by the Company or its competitors, general conditions in the
software and computer industries and other events or factors. In addition, in
recent years the stock market in general, and the shares of technology companies
in particular, have experienced extreme price fluctuations. This volatility has
had a substantial effect on the market price of securities issued by many
companies for reasons unrelated to the operating performance of the specific
companies. These broad market fluctuations may adversely affect the market price
of the Common Stock.
Year 2000 Compliance
The Company uses a significant number of computer software programs and
operating systems in its internal operations. The use of computer programs that
rely on two-digit date programs to perform computations and decision-making
functions may cause computer systems to malfunction in the year 2000 and lead to
significant business delays and disruptions. While the Company believes that the
software applications that it uses or has developed are year 2000 compliant, to
the extent that any of these software applications contain source code that is
unable to appropriately interpret the upcoming calendar year 2000, some level of
modification or possible replacement of such source code or applications will be
necessary. The Company is currently unable to predict the extent to which the
year 2000 issue will affect its customers or strategic partners, or the extent
to which it would be vulnerable to any failure by the customers or strategic
partners to remedy any year 2000 issues on a timely basis. The failure of a
customer or strategic partner subject to the year 2000 issues to convert its
systems on a timely basis or a conversion that is incompatible with the
Company's systems could have a material adverse effect on the Company's
business, financial condition and results of operations.
Forward-looking Statements
The discussion contained in this ITEM 2 and the prior section, ITEM 1, is
"forward looking" as that term is contemplated by Section 27A of the Securities
Act of 1933 and Section 12E of the Securities Exchange Act of 1934, including,
without limitation, statements regarding the Company's expectations, beliefs,
intentions or strategoies regarding future business operations and projected
earnings from its products and services, which are subject to many risks.
All forward-looking statements included in this document are based on
information available to the Company on the date hereof, and the Company assumes
no obligation to update any such foward-looking statements. The Company's
actual results may differ materially as a result of certain factors, including
those set forth hereafter and elsewhere in this Form 10-SB. Potential investors
should consider carefully the previously stated factors, as well as the more
detailed information contained elsewhere in this Form 10-SB, before making a
decision to invest in the common stock of the Company.
ITEM 3. DESCRIPTION OF PROPERTY
Principal Property
The Company's principal office is located at 400 Oyster Point Blvd., Suite
114, South San Francisco, California 94080. The property is a seven-room suite
of approximately 2,500 square feet. The property is leased from an unaffiliated
third party for a period of two years for an annual rental of $45,000 payable
monthly in the amount of $3,750. The Company maintains tenant fire and casualty
insurance on its property located in such building in an amount deemed adequate
by the Company.
ITEM 4. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
(a) Security ownership of certain beneficial owners
The following table sets forth information, to the best knowledge of the
Company as of June 21, 1999, with respect to each person known by the Company to
own beneficially more than 5% of any class of the Company's outstanding common
stock.
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership(a) of Class
- -------------- ------------------- ----------------------- --------
Common Stock Douglas P. Boyd 1,573,232 (b) 16.1%
1115 Lakeview Drive
Hillsborough,CA 94010
Common Stock B Jack Iles in Trust 1,306,100 (c) 13.4%
355 Burrard Street
7th Floor
Vancouver, BC V6C 2G8
Common Stock Geraldine Celestre 1,135,732 11.7%
254 Loyola Drive
Millbrae, CA 94030
Common Stock Chung Lew 500,000 5.1%
c/o US Trust
114 West 47th Street
New York, NY 10036
(a) As of June 21, 1999, 9,747,100 shares of common stock were issued and
outstanding. Unless otherwise noted, the security ownership disclosed
in the table is of record and beneficial.
(b) Includes 1,485,732 shares owned directly and 62,500 vested stock
options. Also includes 25,000 shares owned by Dr. Boyd's wife to which
Dr. Boyd disclaims any beneficial interest.
(c) Includes 940,000 shares held in trust for certain individuals to which
Mr. Iles disclaims any beneficial interest.
shares held.
(b) Security ownership of management
The following table sets forth information, to the best knowledge of the
Company as of June 21, 1999, with respect to the beneficial ownership of each
officer and director , and all directors and executive officers as a group.
Name and Address of Amount and Nature of Percent
Title of Class Beneficial Owner Beneficial Ownership(1) of Class
- -------------- ------------------- ---------------------- --------
Common Stock Allen B. Poirson, Ph.D. 100,000 (2) 1.0%
2 Guerrero St., Apt. 302
San Francisco, CA 94103
Common Stock Robert Taylor, Ph.D. 26,000 (3) 0.3%
c/o AccuImage Diagnostics
Corp.
400 Oyster Point Blvd.,#114
S. San Francisco, CA 94080
Common Stock Douglas P. Boyd, Ph.D. 1,573,232 (4) 16.1%
1115 Lakeview Drive
Hillsborough, CA 94010
Common Stock Alexander R. Margulis, M.D. 33,730 (5) 0.3%
8 Tara Hill Rd.
Tiburon, CA 94920
Common Stock Chris Shepherd 475,416 (6) 4.9%
2317 150B Street
White Rock, BC V4A 8B1
Common Stock All directors and executive 2,208,378 22.7%
officers as a group
(5 persons)
(1) As of June 21, 1999, there were 9,747,100 common shares outstanding.
Unless otherwise noted, the security ownership disclosed in this table
is of record and beneficial.
(2) Consists of vested stock options. (3) Consists of vested stock options.
(4) Includes 1,485,732 shares owned directly and 62,500 vested stock options.
Also includes 25,000 shares owned by Dr. Boyd's wife to which Dr. Boyd
disclaims any beneficial interest.
(5) Includes 18,750 vested stock options and 15,000 shares owned by
Dr.Margulis' wife to which Dr. Margulis disclaims any beneficial interest.
(6) Includes 236,666 shares owned directly and 43,750 vested stock options.
Also includes 85,000 shares owned by Mr. Shepherd's wife to which
Mr. Shepherd disclaims any beneficial interest.
ITEM 5. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS
The directors and executive officers of the Company and their respective
ages are as follows:
Name Age Position
- ---- --- --------
Allen B. Poirson, Ph.D. 38 President, Chief Executive Officer and
Director
Douglas P. Boyd, Ph.D. 56 Director and Chairman of the Board
Alexander R. Margulis, M.D. 76 Director
Chris Shepherd 52 Director, Acting Chief Financial Officer
Robert Taylor 30 Chief Technology Officer
Shelley Staggs 36 Vice-President Sales and Marketing
Bruce Borden 47 Advisor
All directors hold office until the next annual meeting of stockholders and
until their successors have been duly elected and qualified. There are no
agreements with respect to the election of directors. Aside from expenses to
attend the Board of Directors meetings, the Company has not compensated its
directors for service on the Board of Directors or any committee thereof. As of
the date hereof, no director has accrued any expenses or compensation. Officers
are appointed annually by the Board of Directors and each executive officer
serves at the discretion of the Board of Directors. There are no family
relationships between any of the directors and executive officers. The Company
does not have any standing committees at this time.
Allen Poirson, Ph.D, Director, President and CEO. Dr. Poirson has twelve
years of experience as a research scientist and has published extensively in the
fields of medical imaging, mathematics, biology, and computer science. He earned
both his B.A.(1983) and Ph.D.(Vision Sciences; 1992) from Stanford University
and has held research positions in the Howard Hughes Medical Institute at New
York University, NASA-Ames Research Center, and since 1996, in the Neuroscience
Department at Stanford University. Dr. Poirson is an expert in software
development, internet communications and leading-edge medical technology
including magnetic resonance imaging (MRI).
Douglas P. Boyd, Ph.D, Director. Dr. Boyd received a Bachelor of Science
degree from the University of Rochester in 1963 and Doctor of Philosophy in
Physics from Rutgers University in 1969. He was a member of the technical staff
of the Bell Telephone Laboratories, Murray Hill, from 1968-1969. From 1969-1976
he was a Research Physicist at Stanford University. From 1976 to 1982 he was a
Professor of Radiology at the University of California, San Francisco and, since
that date and continuing presently, is an Adjunct Professor of Radiology with
the University. From 1981 to present, he has been employed by Imatron Inc., a
publicly traded company he founded and a leading supplier of Ultrafast CT
Scanners for general medical and cardiac diagnostic imaging. At Imatron Dr. Boyd
served as CEO until 1988 and is currently Chairman of the Board and Chief
Technology Officer. He is also a Director of InVision Technologies, Inc., a
public company that manufactures and sells an advanced scanner system for
explosives detection in airport baggage. He has published more than 100
scientific and technical articles in the fields of medical imaging and related
technology and holds numerous UI.S. patents for his inventions including several
patents in the field of CT scanning using fan beams, Xenon detectors, and
scanning electron beams. He has been nominated for various awards in the fields
of medical imaging and explosives detection including the Professor Sabino Di
Rienzo International Award and the Conway Safe Skies Award.
Alexander R. Margulis, M.D., Director. Dr. Margulis was graduated from
Harvard Medical School with M.D. degree in 1950, following which he performed
Residency in Radiology, University of Michigan, Ann Arbor, Michigan. He was
admitted to the American Board of Radiology in 1954. Assistant Professor,
University of Minnesota, Minneapolis. Assistant, Associate and Full Professor,
Washington University, St. Louis. Professor & Chairman, Department of Radiology,
University of California, San Francisco 1963-1989, 1980-1993 Professor of
Radiology, Associate Chancellor & Special Projects Director, Magnetic Resonance
Science Center. 1993-present Special Consultant to the Vice Chancellor for
University Advancement & Planning, University of California, San Francisco, and
Professor of Radiology. Seven (7) honorary doctorates Aix-Marseilles; Catholic
University, Louvain Medical College of Wisconsin. Karolinska Institute,
Stockholm: University of Munich, Germany. University of Toulouse, France,
University of Montpellier, France. Multiple gold medals. Multiple honorary
memberships in radiologic societies throughout the world. Honorary Professor,
Karolinska Institute. Foreign member, Serbia Academy of Arts & Sciences 1989.
Foreign member, Russian Academy of Medical Sciences 1995. Senior member,
Institute of Medicine. President, Society of Gastrointestinal Radiology 1972,
Association University Radiologists, USA 1966. San Francisco Radiologic Society
1967. Society of Chairmen Academic Radiology Departments (SCARD) 1968.
California Academy of Medicine 1979. Society of Magnetic Resonance in Medicine
1983-1984. Member of numerous editorial board of medical journals. Over 250
articles concerned with intestinal radiology, magnetic resonance imaging in
magnetic resonance spectroscopy and radiologic and health policy issues. Most
important books - Alimentary Tract Radiology, four (4) editions (C.V. Mosby, St.
Louis), Clinical Magnetic Resonance Imaging, 1983, and Biomedical Magnetic
Resonance Imaging, 1984 (both Radiology Research and Education Foundation).
Scientific Director, STAR (Schering Training in Advances in Radiology) 1993.
Chairman of the Board of the Medical Advisory Board, R-2 Technologies, Los
Angeles, 1995.
Chris R. Shepherd, Director and Acting CFO. Mr. Shepherd was raised in
Regina, Sask and attended University of Regina, articulating in the B.A.
Economics Program. From 1971 to 1981 he was an employee or independent
distributor for a Toronto based international engineered building manufacturing
company. His current positions in private companies include President, Arco
Structures Inc., an Alberta company; President, Seacrest Development Corp.,
Surrey, B.C.; President, Olympic Silver Resources Inc., a Nevada company;
Director, Vanasia International Educational Consultancy Ltd., Vancouver, B.C.
Mr. Shepherd has been involved in the financing, strategic planning, and
marketing of syndicated real estate investment projects. He is experienced in
management, administration, and contracts. He has been a consultant to several
public companies requiring seed capital financing or investor relations
consulting services.
Robert Taylor, Ph.D., Chief Technology Officer. Dr. Taylor has over ten
years experience developing commercial software for PC-based visualization and
analysis applications. He received both his B.S. (1990) and his Ph.D. (1996) in
Physics from Imperial College of Science, Technology and Medicine, London,
England. His professional software game products have sold over one million
copies.
Shelley Staggs, Vice-President Sales and Marketing Manager. Ms. Staggs has
15 years experience in medical sales to hospitals. She earned her B.S. in
Radiologic Technology from Univ. of Oklahoma (1983) and holds a National ARRT
license as well as being a certified radiological technologist (Texas license).
Since 1993 she has been the CT and MRI Product Manager for Siemens Medical
Systems. During that tenure, she built a solid customer base in eight western
states -- California, Oregon, Washington, Idaho, Montana, Nevada, Alaska, and
Hawaii.
Bruce Borden, Advisor. Mr. Borden, a Harvard graduate, has twenty-five
years of experience in the computer industry in corporate management, business
and product development. He has been CEO, CTO, VP Business Development, and held
other engineering management positions as well. Mr. Borden has led the
development of software for electronic mail, networking, operating systems,
graphics and visualization, and hardware designs for computer systems,
networking, image processing and graphics. This background encompasses a number
of well known companies including (from most recent): Kubota Graphics Corp.,
Ardent Computer, Silicon Graphics, 3Com Corp.(founder), and the Rand
Corporation.
ITEM 6. EXECUTIVE COMPENSATION
The Summary Compensation Table shows certain compensation information
for the Chief Executive Officer and the Company's most highly paid executive
officers (collectively referred to as the "Named Executive Officers").
Compensation data for other executive officers is not presented in the graphs
because aggregate compensation for such executive officers does not exceed
$100,000 for services rendered in all capacities during the fiscal year. This
information includes the dollar value of base salaries, bonus awards, the number
of SARs/options granted, and certain other compensation, if any, whether paid or
deferred.
SUMMARY COMPENSATION TABLE
The following table sets forth the aggregate compensation paid by the Company to
certain named individuals for services rendered during the periods indicated:
<TABLE>
<CAPTION>
Long Term Compensation
Annual Compensation Awards
<S> <C> <C> <C> <C> <C> <C>
Name and Principal Year Salary Bonus Other Annual Restricted Securities
Position Compensation Stock Underlying
(c) Award Options/ SARs
- --------------------------- --------------- ------------ -------- ---------------- -------------- -----------------
Allen B. Poirson, 1999 (d) $70,000 -0- $1,000 -0- $47,000 (e)
President and CEO (a) 1998 $70,000 -0- -0- -0- -0-
Robert Taylor, Chief 1999 (d) $52,000 -0- -0- -0- $13,000 (f)
Technology Officer (b)
- --------------------------- --------------- ------------ -------- ---------------- -------------- -----------------
</TABLE>
(a) Dr. Poirson was appointed President and Chief Executive Officer on June 15,
1998.
(b) Mr. Taylor was appointed Chief Technology Officer effective June 21,
1999. Prior to that date, he was an independent contractor with the
Company.
(c) Represents the Company's matching contributions to its 401(k) plan.
(d) Figures represent compensation through June 30, 1999.
(e) Represents vested options granted by the Company on June 15, 1998 at the
value of the exercise price. Does not include an additional 300,000 options
that have not vested.
(f) Represents vested options granted by the Company on February 19, 1999 at
the value of the exercise price.
There are no standard arrangements pursuant to which the Company's
directors are compensated for any services provided as director other than
reimbursement for expenses relating to attendance at Board of Directors
meetings.
ITEM 7. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
(a) Transactions during the last two years involving any Director or Executive
Officer of the Company:
Douglas P. Boyd, Ph.D., a director and shareholder of the Company, is also
Chairman of the Board of Imatron, Inc., a New Jersey corporation, ("Imatron")
based in South San Francisco, California. Imatron is engaged in the business of
providing imaging technology and services for its products and for the products
of others. On April 14, 1999, Imatron and the Company entered into a Product
Development, Distribution, and Warranty Support Agreement which provides for
Imatron to be the exclusive distributor of AccuImage products to certain new
customers and to be its provider of on-site corrective maintenance, warranty and
customer support for systems the Company has sold. Approximately seventy-five
percent of the Company's evenue comes from its development and distribution
arrangement with Imatron.
ITEM 8. DESCRIPTION OF SECURITIES
The Company is authorized to issue two classes of shares, Common Stock and
Preferred Stock. The total number of shares of Common Stock the Company is
authorized to issue is Fifty Million shares with a par value of one tenth cent
each, of which 9,747,100 are issued and outstanding. The total number of shares
of Preferred Stock the Company is authorized to issue is Ten Million shares with
a par value of one-tenth cent each, none of which are issued and outstanding.
Should the Company, in the future, deem it necessary or appropriate to issue
that stock, the Board of Directors has the authority, under the Certificate of
Incorporation, to establish different series of any class of stock and to
determine the relative rights, preferences, privileges and limitations of each
such series.
The holders of the Common Stock shall always be entitled to one vote per
share of Common Stock in the election of directors and upon each other matter
coming before any vote of shareholders. Neither the Company's Articles of
Incorporation nor its bylaws provide for dividend, voting, or preemption rights.
Nor are there any provisions that would delay, defer, or prevent a change in
control of the Company.
In January, 1998, the Company adopted the 1998 Stock Option Plan, setting
aside 1,600,000 for issuance. As of June 21, 1999, the Company had granted
to its employees and directors 1,173,000 options exercisable for Company Common
Stock. The exercise price varies depending on the trading price of the
Company's common stock on the date of issuance among other factors.
Pursuant to a 1998 private placement offering, the Company issued 930,000
warrants redeemable for Company Common Stock at $1.00 per share.
There are currently 9,747,100 shares of Company common stock issued and
outstanding, which includes 4,552, 100 shares designated as "free trading" and
5,195,000 shares designated as "restricted securities". Of these 5,195,000
"restricted securities", 1,049,789 have satisfied the one year holding period of
Rule 144, and may be publicly sold in accordance with this Rule; the
effectiveness of this Form 10-SB will enable the Company to have "current public
information" available for resale of restricted securities.
PART II
ITEM 1. MARKET PRICE OF AND DIVIDENDS ON THE REGISTRANT'S COMMON EQUITY AND
OTHER SHAREHOLDER MATTERS
(a) Market information
The Company's common stock is traded over-the-counter on NASD'S
"Electronic Bulletin Board" under the symbol "AIDP". Quotations commenced in
August, 1997.
The price range of high and low bid for the Company's common stock for
the periods shown is set forth below:
Period High Low
------ ---- ---
4/1/99 - 6/24/99 .6250 .2800
1/1/99 - 3/31/99 .8125 .2500
10/1/98 - 12/31/99 .9375 .1875
7/1/98 - 9/30/98 .8125 .2812
4/1/98 - 6/30/98 1.0000 .4375
1/1/98 - 3/31/98 .6875 .4062
10/1/97 - 12/31/97 .8125 .3750
8/1/97 - 9/30/97 1.7500 .5625
The Company is filing this Form 10-SB
(b) Stockholders
As of June 21, 1999 there were approximately ninety-nine shareholders
of record of AccuImage Common Stock. No shares of preferred stock have been
issued.
(c) Dividends
The Company has never declared a cash dividend. Nevada Revised Statutes
section 78.288 limits the Company's ability to pay dividends on its common stock
if any such dividend would render the Company insolvent.
ITEM 2. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceeding.
ITEM 3. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
Since approximately April 1997, the Company's accountant has been
Schvaneveldt and Company of Salt Lake City, Utah. There have been no
disagreements between the Company and their accountants.
ITEM 4. RECENT SALES OF UNREGISTERED SECURITIES
Pursuant to a 1996 private placement offering, 990,000 shares of
Common Stock were sold to fifty-four non-U.S. residents to raise capital for the
Company. The shares were exempt under Rule 506 of Regulation D and Section 4(2)
of the Securities Act of 1933.
On September 30, 1997, the Company acquired all of the outstanding
stock of AccuImage Inc., a Nevada corporation, in exchange for 4,000,000 shares
of "restricted" Company Common Stock. Shares in the following amounts were
issued to:
Name Shares
Geraldine and Carmelo Celestre, JTROS 1,710,000
Douglas Boyd, Ph.D. and Inyoung Boyd 1,710,000
Sam C.H. Wu 380,000
Uwe Mundry 200,000
The shares were exempt from registration under rule 4(2) of the Securities Act
of 1933.
On June 30, 1998, these former shareholders of AccuImage, Inc.
surrendered to the Company without consideration 2,000,000 shares of the common
the stock received in the share exchange, and the Company reallocated those
shares among the Company's shareholders to follow the intent of the exchange
transaction as originally contemplated among the parties. See Exhibit 2.1,
Rescission and Transfer Agreement for share allocation. The issuance was exempt
under Section 4(2) of the Securities Act of 1933.
In September, 1998, the Company conducted a private placement offering
of up to 1,200,000 shares of "restricted" (as that term is defined under Rule
144 of the Securities Act of 1933) Common Stock under
Rule 506 of Regulation D and Section 4(2) of the Securities Act of 1933 to
"accredited" investors at a price of $0.50 per share. Ten individuals purchased
930,000 Units, which consisted of (a) one share of Common Stock and (b) one
warrant redeemable for Company Common Stock at a price of $1.00 per share.
ITEM 5. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Company's Articles of Incorporation and bylaws authorize the
Company to provide indemnification of its directors and officers. The Company
currently does not maintain any such liability insurance.
Section 78.751(1) of the Nevada Revised Statutes ("NRS") authorizes a
Nevada corporation to indemnify any director, officer, employee, or corporate
agent "who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding, whether civil,
criminal, administrative or investigative, except an action by or in the right
of the corporation" due to his or her corporate role. Section 78.751(1) extends
this production "against expenses, including attorneys' fees, judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her in
connection with the action, suit or proceeding if he or she acted in good faith
and in a manner which he or she reasonably believed to be in or not opposed to
the best interests of the corporation, and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his or her conduct was
unlawful."
Section 78.751(2) of the NRS also authorizes indemnification of the
reasonable defense or settlement expenses of a corporate director, officer,
employee or agent who is sued, or is threatened with a suit, by or in the right
of the corporation. The party must have been acting in good faith and with the
reasonable belief that his or her actions were not opposed to the corporation's
best interests. Unless the court rules that the party is reasonably entitled to
indemnification, the party seeking indemnification must not have been found
liable to the corporation. To the extent that a corporate director, officer,
employee, or agent is successful on the merits or otherwise in defending any
action or proceeding referred to in Section 78.751(1) or 78.751(2), Section
78.751(3) of the NRS requires that he be indemnified "against expenses,
including attorneys' fees, actually and reasonably incurred by him or her in
connection with the defense."
Section 78.751(4) of the NRS limits indemnification under Section
78.751(1) and 78.751(2) to situations in which either (a) the stockholders, (b)
the majority of a disinterested quorum of directors, or (c) independent legal
counsel determine that indemnification is proper under the circumstances.
Pursuant to Section 78.751(5) of the NRS, the corporation may advance an
officer's or director's expenses incurred in defending any action or proceeding
upon receipt of an undertaking. Section 78.751(6)(a) provides that the rights to
indemnification and advancement of expenses shall not be deemed exclusive of any
other rights under any by-law, agreement, stockholder vote or vote of
disinterested directors. Section 78.751(6)(b) extends the rights to
indemnification and advancement of expenses to former directors, officers,
employees and agents, as well as their heirs, executors and administrators.
Regardless of whether a director, officer, employee or agent has the right to
indemnity, Section 78.752 allows the corporation to purchase and maintain
insurance on his behalf against liability resulting from his or her corporate
role.
PART F/S
Financial Statement and Supplementary Data
The Company's audited financial statements for the years ended
September 30, 1998 and 1997 and for the interim period ending March 31, 1999,
have been examined to the extent indicated in their reports by Schvaneveldt and
Company, Certified Public Accountant, and have been prepared in accordance with
generally accepted accounting principles and pursuant to the Regulation S-B as
promulgated by the Securities and Exchange Commission and are included herein.
(a) Audited Financial Statement for the fiscal year end
Report of Independent Certified Public Accountants
Balance Sheets as of September 30, 1998 and September 30, 1997
Statements of Operations for the Years Ended September 30, 1998,
1997 & 1996
Statements of Stockholders' Equity for the period from October 1, 1995
to September 20, 1998
Statements of Cash Flows for the Years Ended September 30, 1998,
1997 & 1996
Notes to Financial Statements
- -----------------------------------------------------------------------------
Independent Auditors Report
Schvaneveldt & Company
Certified Public Accountant
275 East South Temple, #300
Salt Lake City, Utah 84111
(801) 521-2392
Darrell T. Schvaneveldt, C.P.A.
To the Board of Directors
AccuImage Diagnostics Corp.
I have audited the accompanying balance sheets of AccuImage Diagnostics Corp.,
as of September 30, 1998 and 1997, and the related statements of operations,
stockholders' equity, and cash flows for the fiscal years ended September 30,
1998, 1997 and 1996. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing standards.
These standards require that I plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatements. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and the significant estimates made by
management, as well as evaluating the overall financial statements presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the aforementioned financial statements present fairly, in all
material respects, the financial position of AccuImage Diagnostics Corp., as of
September 30, 1998 and 1997, and the results of its operations and its cash
flows for the fiscal years ended September 30, 1998, 1997 and 1996, in
conformity with generally accepted accounting principles.
/S/ Schvaneveldt & Company
May 10, 1999
Schvaneveldt & Company
- -------------------------------------------------------------------------------
AccuImage Diagnostics Corp.
BALANCE SHEETS
September 30, 1998 & 1997
September September
30, 1998 30, 1997
Assets
Current Assets
Cash On Hand $2,117 $333,762
Accounts Receivable 17,226 136,625
Less Allowance for Uncollectible Accounts -0- (38,900)
Inventory 12,366 8,521
Consigned Goods -0- 27,053
Prepaid Expense 3,667 8,700
License Rights for Resale 81,850 -0-
------ -------
Total Current Assets 117,226 475,761
Equipment, Property & License
Office Equipment - Net 37,959 39,577
Software - Net 25,021 22,941
Licenses - Net 73,686 213,426
------ -------
Total Equipment, Property & License 136,666 275,944
Other Assets
Deferred Private Offering Costs 22,290 -0-
Security Deposit 4,318 401
Incorporation Costs - Net -0- 1,186
Total Other Assets 26,608 1,587
------ -----
Total Assets $280,500 $753,292
======== ========
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $18,981 $-0-
Accrued Expenses 83,263 113,817
Payroll Taxes Payable 204 14,332
Sales & Use Taxes Payable 5,270 5,000
License Fee Payable -0- 49,672
Product Warranty Reserve 29,665 29,665
Accrued Income & Franchise Taxes -0- 7,755
Notes Payable 156,500 -0-
------- ---
Total Current Liabilities 293,883 220,241
Stockholders' Equity
Preferred Shares 10,000,000 Shares Authorized
at $0.001 Par Value (None Issued)
Common Shares 50,000,000 Authorized at $0.001
Par Value;8,732,100 Shares & 8,582,100 Shares
Issued & Outstanding Respectively 8,732 8,582
Paid In Capital 1,067,268 992,418
Deficit Accumulated (1,089,383) (467,949)
----------- ---------
Total Stockholders' Equity (13,383) 533,051
-------- -------
Total Liabilities & Stockholders' Equity $280,500 $753,292
======== ========
The accompanying notes are an integral part of these financial statements.
AccuImage Diagnostics Corp.
STATEMENTS OF OPERATIONS
For the Years Ended September 30, 1998, 1997 & 1996
1998 1997 1996
---- ---- ----
Revenues
Sales $440,444 $360,324 $-0-
Installation 2,900 4,972 -0-
----- ----- ---
Total Revenues 443,344 365,296 -0-
Costs of Goods Sold
Beginning Inventory $8,521 $-0- $-0-
Purchases & Costs 155,040 142,517 -0-
Commission & Fees -0- 11,550 -0-
Ending Inventory (12,366) (8,521) -0-
-------- ------- ---
Total Cost of Goods Sold 151,195 145,546 -0-
------- ------- ---
Gross Profit 292,149 219,750 -0-
Operating & Administration
Expenses 918,927 705,513 5,480
------- ------- -----
Loss from Operations (626,778) (485,763) (5,480)
Other Income or (Expenses)
Interest Income 5,344 27,339 -0-
Franchise & Other Taxes -0- (2,525) -0-
--- ------- ---
Total Other Income
(Expenses) 5,344 24,814 -0-
----- ------ ---
Net Loss ($621,434) ($460,949) ($5,480)
========== ========== ========
Loss Per Share ($.07) ($.10) ($.00)
Weighted Average
Shares Outstanding 8,594,600 4,582,100 6,421,122
The accompanying notes are an integral part of these financial statements.
AccuImage Diagnostics Corp.
STATEMENTS OF STOCKHOLDERS' EQUITY
October 1, 1995 to September 30, 1998
Common Stock Paid In Accumulated
Shares Amount Capital Deficit
Balance, October 1, 1995 7,000,000 7,000 -0- (1,520)
Shares Returned to Company
for Cancellation (3,407,900) (3,408) 3,408
Net Loss for the Fiscal Year
Ended September 30, 1996 (5,480)
-------
Balance, September 30, 1996 3,592,100 3,592 3,408 (7,000)
Shares Issued for Cash at
$1.00 Per Share 990,000 990 989,010
Shares Issued to Acquire 100%
of AccuImage, Inc. 4,000,000 4,000
Net Loss for Fiscal Year
Ended September 30, 1997 (460,949)
---------
Balance, September 30, 1997 8,582,100 8,582 992,418 (467,949)
Shares Issued for Cash at
$.50 Per Share 150,000 150 74,850
Net Loss for Fiscal Year
Ended September 30, 1998 (621,434)
---------
Balance, September 30, 1998 8,732,100 $8,732 $1,067,268($1,089,383)
========= ====== ========== ==========
The accompanying notes are an integral part of these financial statements.
AccuImage Diagnostics Corp.
STATEMENTS OF CASH FLOWS
For the Years Ended September 30, 1998, 1997 & 1996
September September September
30, 1998 30, 1997 30, 1996
Cash Flows from Operating Activities
Net (Loss) ($621,434) ($460,949) ($5,480)
Adjustments to Reconcile Net Loss,
to Net Cash Used by Operating
Activities
Depreciation 9,360 5,989 -0-
Amortization 138,845 47,835 -0-
Provisions for Uncollectible Accounts (38,900) 38,900 -0-
Provisions for Warranty Reserve -0- 29,665 -0-
Changes in Operating Assets & Liabilities
(Increase) in Accounts Receivable 119,399 (136,625) -0-
(Increase) in Inventory (3,845) (8,521) -0-
(Increase) in Consigned Goods 27,053 (27,053) -0-
(Increase) in Prepaid Expenses 5,033 (8,700) -0-
(Increase) in License Rights (81,850) -0- -0-
(Increase) in Security Deposit (3,917) (401) -0-
(Decrease) Increase in Accrued
Expenses (30,554) 113,817 -0-
Increase in Payroll Taxes Payable (14,128) 14,332 -0-
Increase in Sales & Use Tax Payable 270 4,874 -0-
(Decrease) Increase in Licenses Fees
Payable (49,672) 49,672 -0-
(Decrease) Increase in Income &
Franchise Tax (7,755) 2,525 -0-
Increase (Decrease) in Accounts Payable 18,981 -0- (650)
------ --- -----
Net Cash Used by
Operating Activities (533,114) (334,640) (6,130)
Cash Flows from Investing Activities
Purchase of Office Equipment (7,741) (45,566) -0-
Cash from Subsidiary -0- 10,002 -0-
Purchase of Nectec License -0- (10,000) -0-
Purchase of NIT License -0- (164,500) -0-
Purchase of Technology License -0- (61,534) -0-
Purchase of Software -0- (50,000) -0-
--- -------- ---
Net Cash Used by
Investing Activities (7,741) (321,598) -0-
Cash Flows from Financing Activities
Proceeds from Long Term Debt 156,500 -0- -0-
Proceeds from Sale of Common Stock 75,000 990,000 -0-
Deferred Private Offering Memorandum
Costs (22,290) -0- -0-
-------- --- ---
Net Cash Provided by
Financing Activities 209,210 990,000 -0-
------- ------- ---
Increase (Decrease) in
Cash & Cash Equivalent (331,645) 333,762 (6,130)
Cash & Cash Equivalents
at Beginning of Year 333,762 -0- 6,130
------- --- -----
Cash & Cash Equivalents
at End of Year $2,117 $333,762 $-0-
====== ======== ====
Disclosures of Cash Used by
Operating Activities
Interest $1,388 $-0- $-0-
Taxes - Income Based -0- -0- -0-
The accompanying notes are an integral part of these financial statements.
AccuImage Diagnostics Corp.
NOTES TO FINANCIAL STATEMENTS
NOTE #1 - Corporate History
The Company was organized on February 2, 1990 under the laws of the State of
Nevada as Black Pointe Holdings, Inc. On June 27, 1996, the Company filed a
Certificate of Amendment at the office of the Secretary of State, State of
Nevada, changing the name to AccuImage Diagnostics Corp.
The Articles of Incorporation state the Company's purpose as, "the purpose for
which this corporation is organized is to engage in any lawful activity both
within and outside of the state of Nevada".
NOTE #2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period
when the goods or services are shipped or performed to the customer.
C. The Company considers all short term, highly liquid investments that
are readily convertible within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options and
other convertible issues that may be exercised within ten years of the
financial statement dates.
E. Inventories: Inventories are stated at the lower of cost, determined
by the FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of leasehold
improvements is depreciated (amortized) over the lesser of the length
of the related assets or the estimated lives of the assets.
Depreciation is computed on the straight line method for reporting
purposes and for tax purposes.
G. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
H. Non Cash Investing & Financing Activities: The Company has had no
non cash investing or financing activities.
NOTE #3 - Stockholders' Equity
The Company is authorized to issue two classes of shares which shall be
designated Common Stock and Preferred Stock, respectively. The total number of
shares of Common Stock the Company is authorized to issue is Fifty Million
shares, whose par value shall be one-tenth cent each. The total number of shares
of Preferred Stock the Company is authorized to issue is Ten Million shares,
whose par value shall also be one-tenth cent each. Preferred Stock may be issued
from time to time in one or more series, and the Board of Directors of the
Company is hereby authorized to determine the designation of any such series, to
fix the number of shares of any such series, and to determine and alter the
rights, preferences, privileges and restrictions granted to or imposed upon any
wholly unissued series of Preferred Stock. The Board of Directors is also
authorized, within the limits and restrictions stated in any resolution or
resolutions of the board originally fixing the number of shares constituting any
series of Preferred Stock, to increase or decrease (but not below the number of
shares of such series then outstanding) the number of shares of such series
subsequent to the issuance of shares of that series.
The holders of the Common Stock shall always be entitled to one vote per share
of Common Stock in the election of directors and upon each other matter coming
before any vote of shareholders.
In 1996, a shareholder returned at no cost to the Company 3,407,900 shares of
its issued and outstanding shares for cancellation.
Stock Options
At a meeting of the Board of Directors held on August 29, 1997, the
Company approved a Stock Option Plan which authorized the future
issuance of options for 1,600,000 shares of the Company's common stock.
On January 5, 1998, the Company granted options to acquire 900,000
shares of its common stock at $0.38 per share. The option price is
equal to the trading price at the date of the option ratification. The
options have a life of 10 years from January 5, 1998.
On June 15, 1998, the Company granted its newly elected President and
Chief Executive Officer, options to purchase 400,000 shares of its
common stock at $0.46875 per share. These options have a life of 10
years from June 15, 1998. The shares vest 100,000 shares on the first
anniversary of the grant date and 25,000 shares each quarter
thereafter.
On June 21, 1998, the Company granted to the Executive Assistant to the
President, options to purchase 20,000 shares of common stock at $0.42
per share. The options may be exercised for 10 years from the grant
date and 10,000 shares vest six months from grant date and 5,000 each
quarter thereafter.
On November 1, 1998, the Company granted to an employee, options to
acquire 20,000 shares of its common stock at $0.42 per share, 10,000
shares vest six months from the grant date and the remaining 10,000
shares vest twelve months from the grant date. The options may be
exercised 10 years from the grant date.
NOTE #4 - Compensation Agreement
On June 15, 1998, the Company agreed to pay its President $140,000 annually. The
Agreement provides for an annual bonus of $60,000 if revenues and profit goals
as pre-determined by the Board of Directors are met. The Agreement requires
written notice of thirty days by either party to terminate.
On June 21, 1998, the Company signed an Employment Agreement with the Executive
Assistant to the President. The Agreement provides for a base salary of $40,000
annually and may be canceled by either party by written notice of thirty days.
On November 1, 1998, the Company signed an Employee Agreement with an employee
to be Vice President of Sales of Marketing. The Agreement provides for a base
salary of $40,000 and commission guaranteed to be not less than $36,000 annual.
This Agreement can be canceled with a written notice of three months.
NOTE #5 - Income Taxes & Net Operating Loss Carryforwards for Income Tax
Purposes
The Company has incurred losses that can be carried forward to offset future
earnings if conditions of the Internal Revenue Codes are met. These losses are
as follows:
Year Of Loss Amount Expiration Date
- -----------------------------------------------------
1990 $ 1,470 2010
1991 120 2011
1992 120 2012
1993 120 2013
1994 120 2014
1995 170 2015
1996 5,480 2016
1997 460,949 2017
1998 621,432 2018
The Company has adopted FASB 109 to account for income taxes. The Company
currently has no issues that create timing differences that would mandate
deferred tax expense. Net operating losses would create possible tax assets in
future years. Due to the uncertainty as to the utilization of net operating loss
carryforwards an evaluation allowance has been made to the extent of any tax
benefit that net operating losses may generate.
1998 1997 1996
---- ---- ----
Current Tax Liability of Net
Operating Loss
Carryforwards at Current
Prevailing Federal
Tax Rate $ 374,307 $ 163,020 $ 2,306
Evaluation Allowance ( 374,307) ( 163,020) ( 2,306)
---------- ---------- --------
Net Tax Liability $ -0- $ -0- $ -0-
========== ========== ========
Current Income Tax Expense $ -0- $ -0- $ -0-
Deferred Income Tax Expenses -0- -0- -0-
NOTE #6 - Equipment, Property & Licenses
The cost of equipment and property is depreciated over the estimated useful life
of the related assets. Depreciation is completed on the straight line method for
financial reporting purposes. Maintenance and repairs are charged to operations
when occurred. Betterments and revenues are capitalized.
The following is a summary of equipment, property and license at cost with
purchase allowance valuation and accumulated depreciation.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C>
1998 1997 1998 1997
1998 1997 Depreciation Depreciation Accumulated Accumulated
Assets Cost Cost Amortization Amortization Depreciation Amortization
- ----------------------------------------------------------------------------------------------
Office Equipment $53,307 $45,566 $ 9,360 $ 5,989 $ 5,348 $5,989
Software 22,929 22,929 1,336 6,664 3,840 6,664
Software 7,420 7,420 744 744 1,488 744
Licenses 140,916 305,416 135,579 40,427 67,230 91,991
-----------------------------------------------------------------------
Total 224,572 381,331 147,019 53,824 87,906 105,388
=======================================================================
</TABLE>
In 1998, Licenses that the Company had estimated would have a useful life of ten
years were canceled by the licensor. These licensees had an original cost of
$164,500. The Company wrote off the remaining unamortized cost of $118,240 as
amortized expense in the year ended September 30, 1998.
NOTE #7 - Business Combinations
On September 30, 1997, the Company issued 4,000,000 shares of its common stock
to acquire AccuImage, Inc., in a business combination accounted for as a
purchase. AccuImage Inc., was primarily engaged in medical visualization
technology. On June 30, 1998, shareholders of AccuImage, Inc., surrendered
without consideration 2,000,000 shares of the common stock received in the
initial business combination and that the 2,000,000 shares so received would be
reallocated to the original shareholders of AccuImage Diagnostics Corporation.
Subsequent to the exchange AccuImage, Inc., would be dissolved.
NOTE #8 - Foreign Source Revenues
The Company has had revenues from sources outside of the United States, all
sales originated in and were accounted for in U.S. dollars.
1998 1997
Country Amount Amount
--------------------------------------------------------
Taiwan 40,000 $ -0-
Korea 90,606
Germany 39,000
South Africa 21,000
Singapore 40,000
China 27,900
-------------------------------------------------------
Total Foreign Sales $40,000 $218,506
========================
NOTE #9 - Product Warranty
During the year ended September 30, 1998 & 1997, the Company sold its products
to various users throughout the world. Each sale was tailored to meet the needs
of the customer. As part of each sale the Company gave product warranties for
training, usage and adapting the product to the specific needs of the Customer.
The Company has no history of what such warranties may cost based upon actual
performance. To provide for the cost of the warranty in the same period as the
sale accorded a reserve for warranty has been provided at 8% of product sales.
NOTE #10 - New Technical Pronouncements
In 1997, SFAS No. 129, "Disclosure of Information about Capital Structure" was
issued effective for periods ending after December 15, 1997. The Company has
adopted the disclosure provisions of SFAS No. 129 effective with the fiscal year
ended September 30, 1998.
In June 1997, SFAS No. 130, "Reporting Comprehensive Income" was issued
effective for fiscal years beginning after September 30, 1997, with earlier
application permitted. The Company has elected to adopt SFAS No. 130 effective
with the fiscal year ended September 30, 1998. Adoption of SFAS No. 130 is not
expected to have a material impact on the Company's financial statements.
In June 1997, SFAS No. 131, "Disclosures about Segments of an Enterprise and
Related Information" was issued for fiscal year beginning after September 30,
1997, with earlier application permitted. The Company has elected to adopt SFAS
No. 131, effective with the fiscal years ended September 30, 1998. Adoption of
SFAS No. 131 is not expected to have a material impact on the Company's
financial statements.
NOTE #11 - Licenses
NIT License
The Company holds an exclusive license from Neo Imagery Technology,
Inc., a California Corporation, (NIT). The NIT license grants the
Company to employ the technology and any modifications or improvements
thereto and to commercially distribute the technology. The technology
relates to the three-dimensional medical imagining computer software.
The territory of the license is the entire world. The license commences
on May 15, 1997 and terminates September 17, 1998. The Company paid NIT
a license fee of $50,000 and shall pay NIT a royalty of 35% of its
gross income from the sales, rentals, leases, licenses or royalties
from the technology on sales occurring prior to the close of business
on July 31, 1997 and 25% of its gross income on sales occurring
thereafter. Not withstanding the foregoing, royalties shall not be less
than $2,000 for the period ending on the close of business on July 31,
1997 and $100,000 per year for each year thereafter.
Upon expiration of the Licensing Agreement on September 17, 1998, the
License was not extended. The Company holds ten Licenses for resale
that are not affected by the non renewal of the License Agreement.
NETEC License
The Company paid $10,000 to National Science and Technology Development
Agency, Bangkok Thailand, for a license to act as an "exclusive
authorized reseller" of hardware and software known as CalScore 1.0.
The license expires five year from the inception date of February 17,
1997.
Exclusive Purchase and Development Contract
On September 17, 1995, AccuImage Inc., the Company's wholly owned
subsidiary entered into an Agreement with Mr. Uwe Mundy (the developer)
of Erlangen, Germany. The developer has developed a 3-D medical imaging
software packaging referred to as AIDP. The developer grants to the
Company an exclusive license to use and sell the AIDP software for a
period of ten years. The developer will be paid a license fee of
$34,000 and an additional $200,000 based upon 5% of sales revenues.
Subsequent to September 30, 1998, the Company and Mr. Uwe Mundy signed
a Severance Agreement and General Release that concluded Mr. Mundy's
employment, paid him $24,000 in severance pay, authorized the issuance
of 220,000 shares of common stock, restricted, and released the Company
from all other obligations to which Mr. Mundy may have had claim.
NOTE #12 - Service and Support Agreement
On September 30, 1997, the Company entered into an agreement, with Imatron, a
New Jersey Corporation. Imatron, Inc., AccuImage, Inc., and AccuImage
Diagnostics Corp., have the same individual acting as Chairman of the Board and
as Director. The agreement was modified in an updated version on November 10,
1997. The agreement provides for Imatron to be the exclusive authorized service
provider for all products sold by the Company subject to Imatron's review on a
product by product basis Imatron has the right to exclude sites based upon
geography and/or staffing. Following are the broad general terms of the
agreement.
Installation Services
Installation of an AccuImage system will be done for a flat fee,
(billable to AccuImage) for any site not electing to purchase a
warranty extension.
Installation will be done at no charge for sites electing to purchase a
warranty extension at the time of system purchase. This is done as a
sales incentive to AccuImage.
If installation services are performed, a warranty extension is sold by
AccuImage, but Imatron elects to refuse service (unable per above) than
the standard installation fee of $2,500 will apply.
Warranty Service
Imatron will perform Warranty on all AccuImage systems for a flat rate
fee (chargeable to AccuImage), with or without a Warranty Extension.
AccuImage will provide parts replacement, or repair, for all defective
FRU's during the term of the initial 12 month warrant. This is in
effect a warranty pass-through from the original equipment manufacturer
and/of reseller.
Software Support and Customer Training
AccuImage will perform initial software installation prior to shipment.
Imatron will install follow on updates/upgrades as needed. Customer
installed updates/upgrades will be performed by the customer with
Imatron providing assistance as necessary.
AccuImage will provide Technical Support to Imatron as needed.
Customer application training remains the responsibility of AccuImage.
Imatron will provide "system operations" training and assistance as
needed for no additional charge.
- -------------------------------------------------------------------------------
(b) Interim Financial Statements
INDEX
Balance Sheets as of March 31, 1999 (Unaudited) & September 30, 1998
Statement of Operations (Unaudited) for the Period October 1, 1998 to
March 31, 1999 and the Period October 1, 1997 to March 31, 1998
and the Period January 1, 1999 to March 31, 1999 and the Period
January 1, 1998 to March 31, 1998
Statements of Cash Flows (Unaudited) for the Period October 1, 1998 to
March 31, 1999 and the Period October 1, 1997 to March 31, 1998
Notes to Interim Financial Statements
- ----------------------------------------------------------------------
AccuImage Diagnostic Corp.
BALANCE SHEETS
March 31, 1999 (Unaudited) & September 30, 1998
March September
31, 1999 30, 1998
-------- ---------
Assets
Current Assets
Cash $134,083 $2,117
Accounts Receivable 155,298 17,226
Inventory 9,576 12,366
Consigned Goods
Prepaid Expenses -0- 3,667
License Rights for Resale 81,850 81,850
------ ------
Total Current Assets 380,807 117,226
Equipment, Property & License
Office Equipment, Net 25,209 37,959
Software Net 21,987 25,021
License Net 58,583 73,686
------ ------
Total Equipment, Property & License 105,779 136,666
Other Assets
Deferred Private Offering Costs -0- 22,290
Security Deposit 4,318 4,318
----- -----
Total Other Assets 4,318 26,608
----- ------
Total Assets $490,904 $280,500
======== ========
Liabilities & Stockholders' Equity
Current Liabilities
Accounts Payable $45,487 $18,981
Accrued Expenses 13,402 83,263
Payroll Tax Payable 204 204
Sales & Use Tax Payable 10,088 5,270
Product Warranty Reserve 29,665 29,665
Notes Payable 106,500 156,500
------- -------
Total Current Liabilities 205,346 293,883
Stockholders' Equity
Preferred Shares 10,000,000 Shares Authorized
at $0.001 Par Value (None Issued)
Common Shares 50,000,000 Authorized at $0.001
Par Value; 9,747,000 Shares 8,732,000 Shares
Issued and Outstanding Respectively 9,747 8,732
Paid In Capital 1,427,463 1,067,268
Deficit Accumulated (1,151,652) (1,089,383)
----------- -----------
Total Stockholders' Equity 285,558 (13,383)
------- --------
Total Liabilities & Stockholders' Equity $490,904 $280,500
======== ========
The accompanying notes are an integral part of these financial statements.
AccuImage Diagnostic Corp.
STATEMENT OF OPERATIONS (UNAUDITED)
For the Period October 1, 1998 to March 31, 1999
and the Period October 1, 1997 to March 31, 1998
and the Period January 1, 1999 to March 31, 1999
and the Period January 1, 1998 to March 31, 1998
October October January January
1, 1998 1, 1997 1, 1999 1, 1998
to March to March to March to March
31, 1999 31, 1998 31, 1999 31, 1998
-------- -------- -------- --------
Revenues
Sales $479,764 $358,974 $283,979 $286,574
Installation -0- -0- -0- -0-
--- --- --- ---
Total Revenues 479,764 358,974 283,979 286,574
Cost of Goods Sold
Beginning Inventory 12,366 8,521 12,366 8,521
Purchase & Costs 90,963 102,639 52,200 42,596
Commissions & Fees -0- -0- -0- -0-
Ending Inventory (9,576) (11,072) (9,576) (11,072)
------- -------- ------- --------
Total Costs of Goods Sold 93,753 100,088 54,990 40,045
------ ------- ------ ------
Gross Profit 386,011 258,886 228,989 246,529
Operating & Administrative
Expenses
453,001 516,569 237,638 182,484
------ ------- ------- -------
Loss from Operations (66, (257,683) (8,649) 64,045
Other Income (Expenses)
Interest Income 4,720 4,884 4,211 1,074
----- ----- ----- -----
Net Loss ($62,270) ($252,799) ($4,438) $65,119
========= ========== ======== =======
The accompanying notes are an integral part of these financial statements.
AccuImage Diagnostic Corp.
STATEMENTS OF CASH FLOWS (UNAUDITED)
For the Period October 1, 1998 to March 31, 1999
and the Period October 1, 1997 to March 31, 1998
March March
31, 1999 31, 1998
Cash Flows from Operating Activities
Net Profit (Loss) ($62,270) ($252,799)
Adjustments to Reconcile Net Loss to
Net Cash Used by Operating Activities
Depreciation 6,240 4,680
Amortization 18,138 69,424
Rounding 10 (1)
Changes in Operating Assets & Liabilities
(Increase) Decrease in Accounts Receivable (138,072) (107,081)
(Increase) Decrease in Inventory 2,790 (2,551)
(Increase) Decrease in Prepaid Expenses 3,667 8,700
(Increase) Decrease in License Rights -0- -0-
(Increase) Decrease in Security Deposits -0- (3,917)
(Increase) Decrease in Consigned Goods -0- (3,809)
(Decrease) Increase in Accounts Payable 26,506 -0-
(Decrease) Increase in Accrued Expenses (69,861) (2,337)
(Decrease) Increase in Payroll Tax Payable -0- (14,128)
(Decrease) Increase in Sales & Use Tax Payable 4,818 -0-
----- ---
Net Cash Used by Operating Activities (208,034) (303,819)
Cash Flows from Investing Activities
Equipment Purchased -0- (1,054)
Net Cash Used in Investing Activities -0- (1,054)
--- -------
Cash Flows from Financing Activities
Proceeds from Long Term Debt -0- -0-
Proceed from Sale of Common Stock 390,000 -0-
Deferred Private Offering Memorandum Costs -0- -0-
Payment on Notes Payable (50,000) -0-
Net Cash Provided by
Financing Activities 340,000 -0-
Increase (Decrease) in
Cash & Cash Equivalents 131,966 (304,873)
Cash & Cash Equivalents at
Beginning of Period 2,117 333,762
----- -------
Cash & Cash Equivalents at
End of Period $134,083 $28,889
======== =======
Disclosures of Cash Used by Certain Operating
Activities
Interest $1,750 $-0-
Taxes-Income Based -0- -0-
The accompanying notes are an integral part of these financial statements.
AccuImage Diagnostics Corp.
NOTES TO FINANCIAL STATEMENTS
NOTE #1 - Corporate History
The Company was organized on February 2, 1990 under the laws of the State of
Nevada as Black Pointe Holdings, Inc. On June 27, 1996, the Company filed a
Certificate of Amendment at the office of the Secretary of State, State of
Nevada, changing the name to AccuImage Diagnostics Corp.
The Articles of Incorporation state the Company's purpose as, "the purpose for
which this corporation is organized is to engage in any lawful activity both
within and outside of the state of Nevada".
NOTE #2 - Significant Accounting Policies
A. The Company uses the accrual method of accounting.
B. Revenues and directly related expenses are recognized in the period
when the goods or services are shipped or performed to the customer.
C. The Company considers all short term, highly liquid investments that
are readily convertible within three months, to known amounts as cash
equivalents. The Company currently has no cash equivalents.
D. Primary Earnings Per Share amounts are based on the weighted average
number of shares outstanding at the dates of the financial statements.
Fully Diluted Earnings Per Shares shall be shown on stock options and
other convertible issues that may be exercised within ten years of the
financial statement dates.
E. Inventories: Inventories are stated at the lower of cost, determined
by the FIFO method or market.
F. Depreciation: The cost of property and equipment is depreciated over
the estimated useful lives of the related assets. The cost of leasehold
improvements is depreciated (amortized) over the lesser of the length
of the related assets or the estimated lives of the assets.
Depreciation is computed on the straight line method for reporting
purposes and for tax purposes.
G. Estimates: The preparation of the financial statements in conformity
with generally accepted accounting principles requires management to
make estimates and assumptions that affect the amounts reported in the
financial statements and accompanying notes. Actual results could
differ from those estimates.
H. Non Cash Investing & Financing Activities: The Company has had no
non cash investing or financing activities.
NOTE #3 - Statement Preparation
The Company has prepared the accompanying financial statements with interim
financial reporting requirements promulgated by the Securities & Exchange
Commission. The information furnished reflects all adjustments which are, in the
opinion of management, necessary for a fair presentation of financial position
and results of operations.
The financial statements should be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's 1998 annual
report.
PART III
ITEM 1. INDEX TO EXHIBITS
The following exhibits are filed with this Registration Statement:
Exhibit No. Exhibit Name
- ----------- ------------
2.1 Rescission and Transfer Agreement, dated June 30, 1998
2.2 Stock Allocation Agreement, dated June 30, 1998
3.1 Articles of Incorporation of Company, filed February 2, 1990
3.2 Certificate of Amendment of Articles of Incorporation of Company,
filed June 27, 1996
3.3 Bylaws of the Company
10.1 Product Development, Distribution, and Warranty Support
Agreement, dated April 14, 1999
10.2 Company 1998 Stock Option Plan
10.3 Company 1998 Stock Option Agreement
10.4 Poirson Employment Agreement
10.5 Taylor Employment Agreement
27 Financial Data Schedule
ITEM 2. DESCRIPTION OF EXHIBITS
See Item 1 above.
SIGNATURES
In accordance with Section 12 of the Securities and Exchange Act of
1934, the registrant caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized.
ACCUIMAGE DIAGNOSTICS CORP.
(Registrant)
By: /s/ Allen B. Poirson
Date: June 30, 1999 -------------------------------
ALLEN B. POIRSON, President & CEO
EXHIBIT 2.1
RESCISSION AND TRANSFER AGREEMENT
THIS Rescission AND TRANSFER AGREEMENT (this "Agreement") is made and
entered into as of June 30, 1998, by and between those persons designated on the
signature page hereof as "AI Shareholders" and hereinafter collectively referred
to as "the AI Shareholders"; those persons designed on the signature page hereof
as the "C Group" and hereinafter collectively referred to as "the C Group"; and
AccuImage Diagnostics Corp., a Nevada corporation ("ADC"). As used in this
agreement, the terms "party" or "parties" shall refer to a person executing this
Agreement and shall include such persons or persons to whom such person is a
successor in interest as a shareholder of AI or of ADC and of the agreements
referred to herein.
RECITALS:
WHEREAS, the AI Shareholder parties owned all of the issued and
outstanding shares of AccuImage, Inc., a Nevada corporation ("AI"); and
WHEREAS, AI owned certain three dimensional medical imaging technology (the
"AI Technology"; and
WHEREAS, in 1996, the C Group agreed to acquire Black Pointe Holdings,
Inc., a Nevada corporation and rename it "AccuImage Diagnostics Corp.", and the
parties agreed through a series of transactions (the "Acquisition and Financing
Transactions") for the AI Shareholders to contribute to ADC the AI Technology
and for the Black Pointe Group to provide certain financing relating to ADC; and
WHEREAS, in consideration of the contributions to be made by the respective
parties, the parties agreed upon an allocation of the shares of ADC common stock
(the "Shares") in anticipation of the Acquisition and Financing Transactions
being consummated as agreed and as described above, and as part of that
allocation the AI Shareholders received 1,523,850 shares of ADC common stock;
and
WHEREAS, the Acquisition and Financing Transaction was never completed as
originally contemplated, and certain of the expected consideration was never
received by the parties; and
WHEREAS, AI Technology has been acquired by ADC through an exchange of ADC
common stock with the shareholders of AI pursuant to an Stock Option Agreement
dated November 1, 1996, pursuant to which ADC was granted an option to acquire
all of the issued and outstanding shares of AI which option was exercised
effective July 31, 1997; and
WHEREAS, the beneficial ownership of the AI shares has been acquired by ADC
and AI has become a wholly-owned subsidiary of ADC; and
WHEREAS, the AI Shareholders recognize that they are not entitled to
own the Shares they originally received, and the parties desire to rescind the
issuance of ADC shares to the AI Shareholders, and to agree as to the allocation
among the C Group of such shares and certain of the ADC shares of common stock
received by the AI Shareholders pursuant to the exercise of the Exchange
Agreement; and
WHEREAS, the AI Shareholders and the C Group subsequent to the agreements
provided for in connection with the Acquisition and Financing Transactions have
made certain transfers of the rights provided for herein which are intended to
be reflected by the allocations of shares of ADC common stock as hereinafter
provided.
NOW, THEREFORE, in consideration of these premises and the mutual covenants
and agreements herein contained and other valuable consideration, the receipt
and adequacy of which the parties hereto acknowledge, the parties agree as
follows:
1. Mutual Rescission. The issuance of 1,523,850 shares of ADC common stock
to the AI Shareholders and the agreement of the AI Shareholders to transfer the
AI Technology to ADC pursuant to the Acquisition and Financing Transaction are
hereby rescinded and are declared to be of no further force or effect.
2. Disposition of Consideration Received. AI Shareholders shall surrender,
without consideration, an aggregate of 2,000,000 shares of ADC common stock (the
"Shares"), which includes the 1,523,850 shares described above, in the
respective amounts set forth in Schedule A. The shares so surrendered shall then
be allocated to the C Group in accordance with Schedule B which each member of
the C Group agrees is the accurate, proper and agreed upon allocation of such
shares among the C Group shareholders. The parties agree that the C Group is
entitled to ownership of all of the shares of ADC shares of common stock
surrendered by the AI Shareholders. The parties agree this Agreement accurately
describes the allocation of the Shares among the parties and hereby release ADC,
AI and each other from any claims relating thereto other than the agreements
provided for herein.
3. Investment Representations; Restrictions on Transfer. Each party
represents and warrants to each other, to AI and to ADC that:
A. Each is aware that the Shares have not been registered under the
Securities Act by reason of their issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act pursuant
to Section 4(2) and Regulation D thereof, and that they must be held by each C
Group shareholder for an indeterminate period and each C Group shareholder must
therefore bear the economic risk of such investment indefinitely, unless a
subsequent disposition thereof is registered under the Securities Act or is
exempt from registration.
B. Each instrument representing the Shares may be endorsed with the
following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT,
OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
C. ADC need not register a transfer of legended Shares and may
instruct its transfer agent not to register the transfer of the Shares, unless
the foregoing legend is satisfied.
D. In no event shall any party sell any shares of ADC common stock
owned by such party in an open market transaction prior to October 1, 1998. Each
party agrees to surrender his shares to ADC for imposition of a legends
reflecting the foregoing.
E. Each party has the knowledge and experience in financial and
business matters to evaluate the merits and risks of the proposed investment.
F. Each party is acquiring the Shares for his own account, for
investment, and without any present intention to engage in a distribution
thereof.
G. Each party warrants that he is either and original ADC shareholder
or the rightful successor to such original shareholder holder and that he is
entitled to receive the transferred Shares pursuant to this Agreement.
4. Miscellaneous.
A. Counterpart. This Agreement may be executed in one or more
counterparts, and it is not necessary that signature of all parties appear on
the same counterpart, but such counterparts together shall constitute one and
the same agreement.
B. Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors, and no other
person shall have any right or obligation hereunder.
C. Governing Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of California.
D. Arbitration. Any controversy or claim between or among the parties,
their agents, employees and affiliates, including but not limited to those
arising out of or relating to this Agreement, including without limitation any
claim based on or arising from an alleged tort, shall, at the option of any
party, be resolved through mandatory arbitration in accordance with the rules
then in effect of the American Arbitration Association ("AAA") and Title 9 of
the U. S. Code. The location of the arbitration shall be in San Francisco,
California. The arbitrator or arbitrators shall be generally skilled in the
legal and business aspects of the subject matter at issue. The arbitrators shall
not be entitled to award punitive damages. Judgment upon the award rendered may
be entered in any court having jurisdiction.
E. Attorneys Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
will be entitled to recover reasonable attorney fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it or they
may be entitled.
F. Entire Agreement. This Agreement (including all attachments hereto)
comprises the entire agreement between the parties hereto as to the subject
matter hereof and supersedes all prior agreements and understandings between
them relating thereto. Each party may extend the time for, or waive the
performance of, any of the obligations of the other, waive any inaccuracies in
the representations or warranties of the other, or waive compliance by the other
with any of the covenants or conditions contained in this Agreement, but only by
an instrument in writing signed by the party granting such extension or waiver.
G. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement, all as of the day and year first above written.
AccuImage Diagnostics Corp.
By______________________
President
Signature Page to Rescission and Transfer Agreement dated as of June 30,
1998 Relating to AccuImage Diagnostics Corp. and AccuImage, Inc.
[Excluded]
<PAGE>
SCHEDULE A
ACCUIMAGE, INC. ALLOCATION OF SHARES SURRENDERED
RESCINDED TRANSFERRED
SHAREHOLDER SHARES SHARES
--------- -----------
Geraldine and Carmelo Celestre, 685,732 179,501
JTROS
Douglas Boyd, Ph.D. 681,832 200,362
Inyoung Boyd
Sam C.H. Wu 156,286 47,615
Tannya Boyd 6,953
Susan Boyd 3,477
Joconat & Company 3,477
Guy Celestre 6,953
Angela Celestre-Hoeber 6,953
Bridget Consiglio 6,953
Andrea Hatch 6,953
Rosalind Cordini 6,953
TOTAL 1,523,850 476,150
--------- -------
<PAGE>
SCHEDULE B
C GROUP ALLOCATION OF SHARES TRANSFERRED
SHAREHOLDER NUMBER OF SHARES
----------- ----------------
Black Pointe Venture Capital held by B.J. 12,000
Iles In Trust
Medmin Capital Ltd. 351,000
Pantages & Associates held by B.J.
Iles In Trust 300,000
Pantages & Associates 46,000
Nicole Van Laare 223,500
Marilyn Ford 243,500
Chris R. Shepherd 190,000
Maryanne R. Shepherd 141,000
Tom A. Sheperd 20,000
Uwe Mundry 100,000
Chester Kurzawski 43,000
Chung Lew 200,000
Gerhard Sennewald 30,000
Inyoung Boyd 25,000
Paul E. Banko 15,000
Paul A. Dumas 60,000
-------
TOTAL 2,000,000
---------
EXHIBIT 2.2
STOCK ALLOCATION AGREEMENT
THIS STOCK ALLOCATION AGREEMENT (this "Agreement") is made and entered
into as of June 30, 1998, by and between those persons whose signatures appear
on the signature page hereof as "AI Shareholders". As used in this Agreement,
the terms "party" or "parties" shall refer to a person executing this Agreement
and shall include such persons or persons to whom such person is a successor in
interest as a shareholder of AI or of ADC and of the agreements referred to
herein.
RECITALS:
WHEREAS, the parties hereto are all of the beneficial owners of the issued
and outstanding capital stock of AccuImage, Inc., a Nevada corporation ("AI");
and
WHEREAS, the parties hereto or their successors entered into a Stock Option
Agreement dated November 1, 1996 and a Stock Exchange Agreement dated September
30, 1997 (the "Exchange Agreement") with Accuimage Diagnostics Corp., a Nevada
corporation ("ADC") pursuant to which the parties agreed to exchange 4,000,000
shares of the common stock of ADC ("the ADC shares") for all of the issued and
outstanding capital stock of AI; and
WHEREAS, the Option has been exercised, and ADC is in the process of
issuing the ADC shares due to the parties pursuant to the exercise of the
Option; and
WHEREAS, the parties have made certain transfers of their rights
pursuant to the Exchange Agreement and desire to agree upon a final allocation
of the ADC shares:
NOW, THEREFORE, in consideration of these premises and the mutual covenants
and agreements herein contained and other valuable consideration, the receipt
and adequacy of which the parties hereto acknowledge, the parties agree as
follows:
1. Allocation of Shares. The parties agree that the ADC shares shall be
allocated as set forth on Schedule A hereto and that ADC be instructed to issued
and deliver the ADC Shares in accordance with such schedule.
2. Investment Representations. Each party represents and warrants to each
other, to AI and to ADC that:
A. Each is aware that the ADC Shares have not been registered under
the Securities Act by reason of their issuance in a transaction exempt from the
registration and prospectus delivery requirements of the Securities Act pursuant
to Section 4(2) and Regulation D thereof, and that they must be held by each
shareholder for an indeterminate period and each shareholder must therefore bear
the economic risk of such investment indefinitely, unless a subsequent
disposition thereof is registered under the Securities Act or is exempt from
registration.
B. Each instrument representing the ADC Shares may be endorsed with
the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND MAY
NOT BE SOLD, TRANSFERRED, ASSIGNED OR HYPOTHECATED UNLESS THERE IS AN
EFFECTIVE REGISTRATION STATEMENT UNDER SUCH ACT COVERING SUCH
SECURITIES, THE SALE IS MADE IN ACCORDANCE WITH RULE 144 UNDER THE ACT,
OR THE COMPANY RECEIVES AN OPINION OF COUNSEL FOR THE HOLDER OF THESE
SECURITIES REASONABLY SATISFACTORY TO THE COMPANY, STATING THAT SUCH
SALE, TRANSFER, ASSIGNMENT OR HYPOTHECATION IS EXEMPT FROM THE
REGISTRATION AND PROSPECTUS DELIVERY REQUIREMENTS OF SUCH ACT.
C. ADC need not register a transfer of legended ADC Shares and may
instruct its transfer agent not to register the transfer of the ADC Shares,
unless the foregoing legend is satisfied.
D. Each shareholder has the knowledge and experience in financial and
business matters to evaluate the merits and risks of the proposed investment.
E. Each shareholder is acquiring the ADC Shares for his own account,
for investment, and without any present intention to engage in a distribution
thereof.
F. Each shareholder warrants that he is either an original AI
shareholder or the rightful successor to such original shareholder pursuant to
the Exchange Agreement and that he is entitled to receive the ADC Shares as
provided in this Agreement.
3. Miscellaneous.
A. Counterpart. This Agreement may be executed in one or more
counterparts, and it is not necessary that signature of all parties appear on
the same counterpart, but such counterparts together shall constitute one and
the same agreement.
B. Successors. This Agreement shall inure to the benefit of and be
binding upon the parties hereto, their respective successors, and no other
person shall have any right or obligation hereunder.
C. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
D. Arbitration. Any controversy or claim between or among the parties,
their agents, employees and affiliates, including but not limited to those
arising out of or relating to this Agreement, including without limitation any
claim based on or arising from an alleged tort, shall, at the option of any
party, be resolved through mandatory arbitration in accordance with the rules
then in effect of the American Arbitration Association ("AAA") and Title 9 of
the U. S. Code. The location of the arbitration shall be in San Francisco,
California. The arbitrator or arbitrators shall be generally skilled in the
legal and business aspects of the subject matter at issue. The arbitrators shall
not be entitled to award punitive damages. Judgment upon the award rendered may
be entered in any court having jurisdiction.
E. Attorneys Fees. If any legal action or any arbitration or other
proceeding is brought for the enforcement of this Agreement or because of an
alleged dispute, breach, default, or misrepresentation in connection with any of
the provisions of this Agreement, the successful or prevailing party or parties
will be entitled to recover reasonable attorney fees and other costs incurred in
that action or proceeding, in addition to any other relief to which it or they
may be entitled.
F. Entire Agreement. This Agreement (including all attachments hereto)
comprises the entire agreement between the parties hereto as to the subject
matter hereof and supersedes all prior agreements and understandings between
them relating thereto. Each party may extend the time for, or waive the
performance of, any of the obligations of the other, waive any inaccuracies in
the representations or warranties of the other, or waive compliance by the other
with any of the covenants or conditions contained in this Agreement, but only by
an instrument in writing signed by the party granting such extension or waiver.
G. Headings. The headings of the sections of this Agreement have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement, all as of the day and year first above written.
Signature Page to Stock Allocation Agreement dated as of June 30, 1998
Relating to AccuImage Diagnostics Corp. and AccuImage, Inc.
[Excluded]
EXHIBIT 3.1
ARTICLES OF INCORPORATION
OF
BLACK POINTE HOLDINGS, INC.
The undersigned, Herbert M. Brugh, a natural person twenty-one years or
more of age, acting as incorporator of this corporation under the Nevada
Domestic Corporation Laws, adopts the following Articles of Incorporation for
such corporation:
ARTICLE I.
The name of the corporation shall be: BLACK POINTE HOLDINGS, INC..
ARTICLE II.
The street address of the principal office of the corporation is in Clark
County, at the address of 2447 Milcroft Drive, Green Valley, Nevada 89014.
ARTICLE III.
The purpose for which this corporation is organized is to engage in any
lawful activity, both within and outside of the State of Nevada.
ARTICLE IV.
The authorized capital stock of this corporation shall consist of Twenty
Five Million Thousand (25,000,000 shares of a single class of Common Stock. The
par value of each share shall be One-Tenth Cent ($0.001). The capital stock of
this corporation, after the payment of the subscription price, shall not be
subject to assessment to pay the debts of the corporation.
ARTICLE V.
The members of the governing board of this corporation shall be styled as
directors and the number thereof at the inception of this corporation shall be
one. The directors need not be shareholders of the corporation, nor residents of
the State of Nevada. The name and post office address of the initial directors
is the following:
Herbert M. Brugh
24491 Jeronimo Lane
Lake Forest, California 92630
Each director shall be elected annually. Each director shall serve until his
successor is duly elected and assumes the position as such director or until he
resigns or is lawfully removed. The number of directors may be changed by the
affirmative vote of those shareholders holding one-half of the issued and
outstanding shares of this corporation.
ARTICLE VI.
This corporation shall have perpetual existence.
ARTICLE VII.
The incorporator of this corporation is:
Herbert M. Brugh
24491 Jeronimo Lane
Lake Forest, California 92630
IN WITNESS WHEREOF, I, the undersigned constituting the sole incorporator,
for the purpose of forming this corporation under the laws of the State of
Nevada, on this 18th day of January, 1990, hereby make, file and record these
Articles of Incorporation, and certify the facts contained herein are true.
/s/ Herbert M. Brugh
--------------------
Incorporator
EXHIBIT 3.2
CERTIFICATE OF AMENDMENT
of
ARTICLES OF INCORPORATION
of
BLACK POINTE HOLDINGS, INC.
THE UNDERSIGNED, Richard Donaldson, being both the duly elected President
and Herbert M. Brugh, being the duly designed Assistant Corporate Secretary of
Black Pointe Holdings, Inc., a corporation incorporated under the laws of the
State of Nevada on February 2, 1990, hereby certifies that, by actions duly
taken, the Articles of Incorporation of that corporation were amended by action
of the shareholders at the annual meeting held on May 23, 1996, as follows:
1. Article I is amended to change the corporation's name by modifying that
Article to read as follows:
The name of the corporation shall be AccuImage Diagnostics Corp.
2. Article IV is amended to change the corporation's authorized capital by
modifying that Article to read as follows:
The corporation is authorized to issue two classes of shares
which shall be designated Common Stock and Preferred Stock,
respectively. The total number of shares of Common Stock the
corporation is authorized to issue is Fifty Million shares, whose
par value shall be one tenth cent each. The total number of
shares of Preferred Stock the corporation is authorized to issue
is Ten Million shares, whose par value shall also be one-tenth
cent each. Preferred Stock mmay be issued from time to time in
one or more series, and the board of directors of the corporation
is hereby authorized to determine the designation of any such
series, to fix the number of shares of any such series, and to
determine and alter the rights, preferences, privileges and
restrictions granted to or imposed upon any wholly unissued
series of Preferred Stock. The board of directors is also
authorized, within the limits and restrictions stated in any
resolution or resolutions of the board originally fixing the
number of shares constituting any series of Preferred Stock, to
increase or decrease (but not below the number of shares of such
series then outstanding) the number of shares of such series
subsequent to the issuance of shares of that series.
The holders of the Common Stock shall always be entitle to one
vote per share of Common Stock in the election of directors and
upon each other matter coming before any vote of shareholders
3. The Articles are amended by adding the following article, to be designated
Article VIII:
The liability of the directors of the corporation for monetary
damages shall be eliminated to the fullest extent permissible
under Nevada law.
4. The Articles are amended by adding the following article, to be designated
Article IX:
The corporation is authorized to provide indemnification of its
directors, officers, employees and agents to the fullest extent
permissible under Nevada law.
5. The Articles shall be amended by adding the following article, to be
designated Article X:
The provisions of Sections 78.378 to 78.3793 and Sections 78.441
to 78.444, Nevada Revised Statutes, do not apply to this
corporation.
THE UNDERSIGNED officers further certify that, upon a resolution duly
adopted by the Board of Directors recommending such resolution to the
shareholders, the shareholders adopted that resolution amending those Articles
by a vote of 7,000,000 shares in favor and no shares voting against such
resolution. The undersigned further certify that, upon the date of the adoption
of that resolution, there was only one class of stock authorized and that, of
that class of common stock, only 7,000,000 shares were then issued and
outstanding.
WITNESS the execution hereof on this 26th day of June, 1996.
/s/ Richard Donaldson /s/ Herbert M. Brugh
- --------------------- --------------------
Richard Donaldson, President Herbert M. Brugh, Asst. Corporate Secretary
EXHIBIT 3.3
BY-LAWS
OF
BLACK POINTE HOLDINGS, INC.
(A Nevada Corporation)
ARTICLE I
LOCATION OF PRINCIPAL OFFICE
Section 1. Principal Office. The principal office for the transaction
of business of the Corporation shall be located at 2447 Milcroft Drive, Green
Valley, Nevada or at such other address, either within or outside of the State
of Nevada, as the Board of Directors shall provide.
Section 2. Other Offices. The Corporation may also have offices at
such other places as the Board of Directors may from time to time determine the
business of the Corporation to require.
ARTICLE II
SHAREHOLDERS
Section 1. Annual Meetings. The annual meeting of the shareholders
shall be held on the third Friday in the month of May of each year, beginning
with the year 1991 at the hour of 1:00 o'clock p.m. P.D.T. for the purpose of
electing Directors and for the transaction of such other business as may come
before the meeting. The Board of Directors, however, may change the time of the
annual meeting to any other date not less than 15 days nor more than 120 days
after the end of the fiscal year.
Section 2. Special Meetings. Special meetings of the shareholders for
any purpose or purposes, unless otherwise prescribed by law, may be called by
the President or by the Board of Directors, and shall be called by the President
at the request of the holders of not less than one-third of the outstanding
shares of the Corporation entitled to vote at the meeting.
Section 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Nevada, as the place of meeting for
any annual meeting or for any special meeting called by the Board of Directors.
A waiver of notice signed by all shareholders entitled to vote at a meeting may
designated any place either within or without the State of Nevada, as the place
for the holding of such meeting. If no designation is made, or if a special
meeting be otherwise called, the place of the meeting shall be the office of the
Corporation as set forth in Article I, above.
Section 4. Notice of Meeting. Written notice stating the place day and
hour of the meeting, and, in the case of a special meeting, the purpose or
purposes for which the meeting is called, shall be given not less than ten nor
more than sixty days before the date of the meeting.
Section 5. Closing of Transfer Books or Fixing of Record Date. For the
purpose of determining shareholders entitled to notice of or to vote at any
meeting of shareholders or any adjournment thereof, or shareholders entitled to
receive payment of any dividend, or in order to make a determination of the
shareholders for any other proper purpose, the Board of Directors of the
Corporation may provide that the stock transfer book shall be closed for a
stated period but not to exceed, in any case, a Sixty (60) day period. If the
stock transfer book shall be closed for the purpose of determining shareholders
entitled to notice or to vote at a meeting of shareholders, such books shall be
adopted, as the case may be, shall be the record date for such determination of
shareholders. When a determination of shareholders entitled to vote at any
meeting of shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof except where the
determination has been made through the closing of the stock transfer books and
the stated period of closing has expired.
Section 6. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a majority of the
outstanding shares are represented at a meeting, the majority of the shares so
represented may adjourn the meeting from time to time without further notice. At
such adjourned meeting at which a quorum shall be present or represented, any
business may be transacted which might have been transacted at the meeting as
originally notified. The shareholders present at the duly authorized meeting may
continue to transact business until adjournment, notwithstanding the withdrawal
of enough shareholders to leave less than a quorum.
Section 7. Proxies. At all meetings of shareholders, a shareholder may
vote by proxy executed in writing by the shareholder or by his duly authorized
attorney-in-fact. Such proxies shall be filed with the Secretary of the
Corporation before or at the time of a meeting. No proxy shall be valid after
two months from the date of its execution, unless otherwise provided in the
proxy.
Section 8. Voting of Shares. Each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at the
meeting of the shareholders,
Section 9. Voting of Shares by Certain Shareholders. Shares held by an
administrator, executor, guardian or conservator may be voted by him either in
person or by proxy, without a transfer of such shares into his name. Shares
standing in the name of a Trustee may be voted by him, either in person or by
proxy, but no Trustee shall be entitled to vote shares held by him without a
transfer of such shares into his name.
Section 10. Informal Action by Shareholders. Any action required to be
taken at a meeting of the shareholders, or any other action which may be taken
at a meeting of the shareholders, may be taken without a meeting if a consent in
writing, setting forth the action so taken, shall be signed by holders of
outstanding stock having not less than the minimum number of votes that would be
necessary to authorize or take such action at a meeting at which all shares
entitled to vote with respect to the subject matter thereof were present and
voted.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. Except for those items otherwise
specifically provided by law or elsewhere in these By-Laws, the business and
affairs of the Corporation shall be managed by the Board of Directors.
Section 2. Number, Tenure and Qualifications. The of directors who
shall constitute the Board of Directors of the Corporation shall be such number
as the Board of Directors shall at the time have designed, except that in the
absence of any such designation, such number shall be one (1). Each director
shall be elected for a term of one year and shall bold office until the next
annual meeting of the shareholders and until his successor shall have been
elected and qualified, except as otherwise provided herein or required by law.
Directors need not be residents of the State of Nevada or shareholders of the
Corporation.
Section 3. Changes in the Number of Directors. Whenever the authorized
number of directors is increased between annual meetings of the stockholders, a
majority of the directors then in office shall have the power to elect such new
directors for the balance of a term and until their successors are elected and
qualified. Any decrease in the authorized number of directors shall not become
effective until the expiration of the term of the directors then in office
unless, at the time of such decrease, there shall be vacancies on the board
which are being eliminated by the decrease.
Section 4. Vacancies. Any vacancy occurring in the Board of Directors
prior to an annual meeting may be filled by an affirmative vote of a majority of
the remaining directors though less than a quorum of the Board of Directors. A
director elected to fill a vacancy shall be elected for the unexpired term of
his predecessor in office.
Section 5. Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law immediately after,
and at the same place as, the annual meeting of the shareholders. The Board of
Directors may provide, by resolution, the time and place, either within or
without the State of Nevada, for the holding of additional regular meetings
without other notice than such resolution.
Section 6. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chairman, President or any two
directors. The person or persons authorized to call special meetings of the
Board of Directors shall give the required notice of the meeting called by them.
Section 7. Notice. Notice of any special meeting shall be given at
least three (3) days in advance thereof. The attendance of a director at a
meeting shall constitute a waiver of notice to such meeting, except where a
director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called or
convened. Neither the business to be transacted at, nor the purpose of any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of notice of such meeting.
Section 8. Quorum. A majority of the number of directors fixed by
Section 2 of this Article III, shall constitute a quorum for the transaction of
business at any meeting of the Board of Directors, but if less than such
majority is present at the meeting, a majority of the directors present may
adjourn the meeting from time to time without further notice.
Section 9. Participation in Meetings by Conference Telephone. Members
of the Board of Directors, or any committee thereof, may participate in a
meeting of such Board or committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other and such participation shall constitute presence in
person at such meeting.
Section 10. Manner of Acting. The act of the majority of the Directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors. Actions may be taken by the Board of Directors without a meeting
if all members thereof consent thereto in writing, and the writing or writings
are filed with the minutes of proceedings of the Board of Directors.
ARTICLE IV
COMMITTEES
Section 1. Committees of the Board of Directors. The Board of
Directors, by a vote of a majority of the whole Board may from time to time
designate committees of the Board, with such lawfully delegable powers and
duties as it thereby confers, to serve at the pleasure of the Board and shall,
for those committees and any others provided for herein, elect' a director or
directors to serve as the member or members, designating, if desired, other
directors as alternate members who may replace any absent or disqualified member
at any meeting of the committee. Any committee so designated may exercise the
power and authority of the Board of Directors to declare a dividend or to
authorize the issuance of stock if the resolution which designates the committee
or a supplemental resolution of the Board of Directors shall so provide. In the
absence or disqualification of any member of any committee and any alternate
member in his place, the member or members of the committee present at the
meeting and not disqualified from voting, whether or not he or she or they
constitute a quorum, may by unanimous vote appoint another member of the Board
of Directors to act at the meeting in place of the absent or disqualified
member.
Section 2. Conduct of Business. Each committee may determine the
procedural rules for meeting and conducting its business and shall act in
accordance therewith, except as otherwise provided herein or required by law.
Adequate provision shall be made for notice to members of all meetings;
one-third of the members shall constitute a quorum unless the committee shall
consist of one or two members, in which event one member shall constitute a
quorum; and all matters shall be determined by a majority vote of the members
present. Actions may be taken by any committee without a meeting if all members
thereof consent thereto in writing, and the writing or writings are filed with
the minutes of the proceedings of such committee.
ARTICLE V
OFFICERS
Section 1. Number. The officers of the Corporation shall be a Chairman
of the Board, President, one or more Vice Presidents, Secretary and a Treasurer,
each of whom shall be elected by the Board of Directors. Any two or more offices
may be held by the same person, except the offices of President and Secretary.
Section 2. Election and Term of Office. The officers of the Corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board of Directors held after each
annual meeting of the shareholders. If the election of officers shall not be
held at such meeting, such election shall be held as soon thereafter as
conveniently may be. Each officer shall hold office until his successor shall
have been duly elected and shall have qualified or until his death or until he
shall resign or shall have been removed by the Board of Directors.
Section 3. Vacancies. A vacancy in any office because of death,
resignation, disqualification or otherwise, may be filled by the Board of
Directors for the unexpired portion of the term.
Section 4. The Chairman of the Board. The Chairman of the Board shall
be the Chief Executive Officer of the Corporation and, subject to the control of
the Board of Directors, shall in general supervise the affairs and officers of
the corporation and shall, when present, preside at all meetings of the
shareholders and of the Board of Directors. Unless another officer or agent is
so designated by the Board of Directors, he shall sign, with the Secretary or
Assistant Secretary of the Corporation, certificates for shares of the
Corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the Board of Directors has authorized to be executed, and in general shall
perform all duties incident to the office of Chairman and Chief Executive
Officer and such other duties as may be prescribed from time to time.
Section 5. President. The President shall be the Chief Operating
Officer of the Corporation and, subject to the control of the Board of
Directors, shall implement the business operations and direct the business
affairs of the Corporation including establishment and supervision of
professional responsibilities and standards of the employees. Subject to the
general supervision of the Board of Directors, he may hire and manage the
various employees of the Corporation, make and execute such contracts and
agreements as are reasonable, necessary and expedient to carry out the business
affairs of the Corporation and in general perform all duties incident to the
office of President and Chief Operating Officer and such other duties as may be
prescribed from time to time. When a chairman is not elected, the President
shall fulfill all of his functions set forth above.
Section 6. Vice President. Each Vice President shall have such powers
and duties as may be delegated to him by the Board of Directors and/or the
President. One Vice-President, designated as the Senior Vice President, shall,
in the event of the death, disability, or absence of the President, perform the
duties and functions of the President as provided by these By-Laws or as may
from time to time be delegated to him by the Board of Directors.
Section 7. Secretary. The Secretary shall:
(a) keep the minutes of the shareholders' meetings and the Board
of Directors' meetings in one or more books provided for that purpose;
(b) see that all notices are duly given in accordance with the
provisions of these By-Laws as required by law;
(c) be custodian of the Corporation records and of the seal of
the Corporation and see that the seal of the Corporation is affixed to all
documents, the execution of which on behalf of the Corporation under its seal is
duly authorized;
(d) sign with the President, or Vice President, certificates for
shares of the Corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors;
(e) have general charge of the stock transfer books of the
Corporation; and
(f) in general perform all duties incident to the office of
Secretary and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.
Section 8. Treasurer. The Treasurer shall:
(a) have charge and custody of and be responsible for all funds
and securities of the Corporation; give receipts for moneys due and payable to
the Corporation from any source whatsoever, and deposit all such moneys in the
name of the Corporation in such banks, trust companies, or other depositories as
shall be selected in accordance with the provisions of Article V of these
By-Laws; and
(b) in general perform all the duties incident to the office of
Treasurer and such other duties as from time to time may be assigned to him by
the President or by the Board of Directors.
Section 9. Delegation of Authority. The Board of Directors may from
time to time delegate the powers or duties of any officer to any other officers
or agents, notwithstanding any provision hereof.
Section 10. Actions with Respect to Securities of Other Corporations.
Unless otherwise directed by the Board of Directors, the President or any
officer of the Corporation authorized by the President shall have power to vote
and otherwise act on behalf of the Corporation, in person or by proxy, at any
meeting of stockholders of or with respect to any action of stockholders of any
other corporation in which this Corporation may hold securities and otherwise to
exercise any and all rights and powers which this Corporation may possess by
reason of its ownership of securities in such other corporation.
Section 11. Salaries. The salaries or other compensation of the
officers shall be fixed from time to time by the Board of Directors and no
officer shall be prevented from receiving such salary or other compensation by
reason of the fact that he is also a director of the Corporation.
Section 12. Removal. Any officer of the Corporation may be removed at
any time with or without cause, by the Board of Directors.
ARTICLE VI
CONTRACTS, LOANS AND BANK DRAFTS
Section 1. Contracts. The Board of Directors may authorize any officer
or officers, agent or agents, to enter into a contract or execute and deliver
any instrument in the name of and on behalf of the Corporation and such
authority may be general or confined to specific instances.
Section 2. Loans. No loan shall be contracted on behalf of the
Corporation and no evidence of indebtedness shall be issued in its name unless
authorized by resolution of the Board of Directors. Such authority may be
general or confined to specific instances.
Section 3. Checks, Drafts, Etc. All checks, drafts or other orders for
the payment of money, notes, or other evidence of indebtedness issued in the
name of the Corporation shall be signed by such officer or officers, agent or
agents, of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors.
Section 4. Deposits. All funds of the Corporation or moneys otherwise
employed shall be deposited from time to time to the credit of the Corporation
in such banks, trust companies or other depositories as the Board of Directors
may select.
ARTICLE VII
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares of
the Corporation shall be in such form as shall be determined by the Board of
Directors. Unless otherwise provided by the Board, such certificates shall be
signed by the Chairman or President and the Secretary. All certificates for
shares shall be consecutively numbered. The name and address of the person to
whom the shares represented thereby are issued, with the number of shares and
date of issue, shall be entered on the stock transfer books of the Corporation.
All certificates surrendered to the Corporation for transfer shall be cancelled
and no new certificate shall be issued until the former certificate for a like
number of shares shall have been surrendered and cancelled, except that in the
case of lost, destroyed or mutilated certificates, a new certificate may be
issued therefor upon such terms and indemnity to the Corporation as the Board of
Directors may prescribe.
Section 2. Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer books of the Corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney, duly executed and filed with the Secretary of the
Corporation, and on surrender for cancellation of the certificate for such
shares. The person in whose name shares stand on the books of the Corporation
shall be deemed by the Corporation to be the owner thereof for all purposes.
Section 3. Lost or Destroyed Certificates. Where the holder of a stock
certificate claims that the certificate has been lost, destroyed or wrongfully
taken, the holder shall make an affidavit of that fact and advertise and serve
notice of the same in such manner as the Board of Directors may require, and
shall, if the directors so require, give the Corporation a bond of indemnity, in
the form and with one or more sureties satisfactory to the Board, in an amount
reasonably determined by the Board, whereupon a new certificate shall be issued
in the same tenor and for the same number of shares as the one alleged to be
lost, destroyed or wrongfully taken if the owner so requests before the
Corporation has notice that the shares have been acquired by a bona fide
purchaser. Where a stock certificate has been lost, apparently destroyed or
wrongfully taken and the owner fails to notify the Corporation of that fact
within a reasonable time after he has notice of it, and the Corporation
registers a transfer of the shares represented by the certificate before
receiving such notification, the owner is precluded from asserting against the
Corporation any claim to a new certificate. If, after the issue of a new
certificate as a replacement for a lost, destroyed or wrongfully taken
certificate, a bona fide purchaser of the original certificate presents it for
registration of transfer the Corporation must register the transfer unless
registration would result in over-issue. In addition to any rights on the
indemnity bond, the Corporation may recover the new certificate from the person
to whom it was issued or any person taking under him except a bona fide
purchaser.
Section 4. Transfer Agents or Registrars. The Board of Directors may
appoint one or more transfer agents or registrars which shall be any entity duly
authorized by the Securities and Exchange Commission. Such appointment shall be
at such times and places as the requirements of the Corporation may necessitate
and the Board of Directors may designate.
Section 5. Legend Conditions. In the event any shares of this
Corporation are issued pursuant to an exemption from permit or registration as
otherwise provided by applicable securities law which exemption requires the
imposition of a legend condition on such certificate evidencing such shares, the
person or entity issuing or transferring such shares shall cause such legend to
appear on the certificate and on the stock record therefor and shall not be
required to transfer any such shares free of such legend unless such shares are
subsequently permitted or registered as required by law or the same are
determined to be released from such requirements by a letter duly issued by the
attorney for the Corporation.
Section 6. Regulations. The issue, transfer, conversion and
registration of certificates of stock shall be governed by such other
regulations as the Board of Directors from time to time may establish.
ARTICLE VIII
INDEMNIFICATION OF OFFICERS AND DIRECTORS
Section 1. Right to Indemnification. Each person who was or is made a
party or is threatened to be made a party to or is otherwise involved in any
action, suit or proceeding, whether civil, criminal, administrative or
investigative (hereinafter a "proceeding"), by reason of the fact that he or she
is or was a director, officer, employee or agent of the Corporation or is or was
servicing at the request of the Corporation as a director, officer, employee or
agent of any other corporation or of a partnership, joint venture, trust or
other enterprise, including service with respect to an employee benefit plan
(hereinafter an "indemnitee"), whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent shall
be indemnified and held harmless by the Corporation to the fullest extent
authorized by the Nevada Domestic Corporation Laws, as the same exists or may
hereafter be amended (but, in the case of any such amendment only to the extent
that such amendment permits the Corporation to provide broader indemnification
rights than such law permitted the Corporation to provide prior to such
amendment), against all expenses, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid in
settlement) reasonably incurred or suffered by such indemnitee in connection
therewith and such indemnification shall continue as to an indemnitee who has
ceased to be a director, officer, employee or agent and shall inure to the
benefit of the indemnitee's heirs, executors and administrators; provided,
however, that except as provided in Section 2 hereof with respect to proceedings
to enforce rights to indemnification, the Corporation shall indemnify any such
indemnitee in connection with a proceeding (or part thereof) initiated by such
indemnitee only is such proceeding (or part thereof) was authorized by the board
of directors of the Corporation. The right to indemnification conferred in this
Section shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition (hereinafter an "advancement of expenses"); provided,
however, that if the Nevada Domestic Corporation Laws require, an advancement of
expenses incurred by an indemnitee in his or her capacity as a director or
officer (and not in any other capacity in w1iich service was or is rendered by
such indemnitee, including without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation an undertaking
(hereinafter an "undertaking"), by or on behalf of such indemnitee, to repay all
amounts so advanced if it shall be determined by final judicial decision from
which there is no further right to appeal (hereinafter a "final adjudication")
that such indemnitee is not entitled to be indemnified for such expenses under
this Section or otherwise.
Section 2. Right of Indemnitee to Bring Suit. If a claim under Section
1 of this Article is not paid in full by the Corporation within sixty days after
a written claim has been received by the Corporation, except in the case of a
claim for an advancement of expenses, in which case the applicable period shall
be twenty days, the indemnitee may at any time thereafter bring suit against the
Corporation to recover the unpaid amount of the claim. If successful in whole or
in part in any such suit, or in a suit brought by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the indemnitee
shall be entitled to be paid also the expense of prosecuting or defending such
suit. In (i) any suit brought by the indemnitee to enforce a right to
indemnification hereunder (but not in a suit brought by the indemnitee to
enforce a right to an advancement of expenses) it shall be a defense that, and
(ii) in suit by the Corporation to recover an advancement of expenses pursuant
to the term of an undertaking the Corporation shall be entitled to recover such
expenses upon a final adjudication that, the indemnitee has not met the
applicable standard of conduct set forth in the Nevada Domestic Corporation
Laws. Neither the failure of the Corporation (including its board of directors,
independent legal counsel, or its stockholders) to have made a determination
prior to the commencement of such suit that indemnification of the indemnitee is
proper in the circumstances because the indemnitee has met the applicable
standard of conduct set forth in the Nevada Domestic Corporation Laws, nor an
actual determination by the Corporation (including its board of directors,
independent legal counsel, or its stockholders) that the indemnitee has not met
such applicable standard of conduct, shall create a presumption that the
indemnitee has not met the applicable standard of conduct or, in the case of
such a suit brought by the indemnity, be a defense to such suit. In any suit
brought by the indemnitee to enforce a right in indemnification or to an
advancement of expenses hereunder, or by the Corporation to recover an
advancement of expenses pursuant to the terms of an undertaking, the burden of
proving that the indemnitee is not entitled to be indemnified, or to such
advancement of expenses, under this Article or otherwise shall be on the
Corporation.
Section 3. Non-Exclusivity of Rights. The rights to indemnification and
to the advancement of expenses conferred in this Article shall not be exclusive
of any other right which any person may have or hereafter acquire under any
statute, the Corporation's certificate of incorporation, by-law, agreement, vote
of stockholders or disinterred directors or otherwise.
Section 4. Insurance. The Corporation may maintain insurance, at its
expense, to protect itself and any director, officer, employee or agent of the
Corporation or another corporation, partnership, joint venture, trust or other
enterprise against any expense, liability or loss, whether or not the
Corporation would have the power to indemnify such person against such expense,
liability or loss under the Nevada Domestic Corporation Laws.
ARTICLE IX
NOTICES
Section 1. Notices. Except as otherwise specifically provided herein or
required by law, all notices required to be given to any stockholder, director,
officer, employee or agent shall be in writing and may in every instance by
effectively given by hand delivery to the recipient thereof, by depositing such
notice in the U.S. mails, postage prepaid, or by sending such notice by prepaid
telegram or mailgram. Any such notice shall be addressed to such stockholder,
director, officer, employee or agent at his or her last known address as the
same appears on the books of the Corporation. The time when such notice is
received, if hand delivered or dispatched, if delivered through the mails or by
telegram or mailgram, shall be the time of the giving of such notice. If mailed,
such notice shall be considered as given when so deposited in a depository of
the United States Postal Service.
Section 2. Waiver of Notice. Whenever any notice is required to be
given to any shareholder or Director of the Corporation, a waiver thereof in
writing, signed by the person or persons entitled to such notice, whether before
or after the time stated therein, shall be deemed to be equivalent to the giving
of such notice. Neither the business nor the purpose of any meeting need be
specified in such a waiver.
ARTICLE X
MISCELLANEOUS
Section 1. Fiscal Year. The fiscal year of the Corporation shall begin
on the first day of January and end on the last day of December in each year.
Section 2. Dividends. The Board of Directors may from time to time
declare, and the Corporation may pay, dividends on its outstanding shares in the
manner and upon the terms and conditions allowed or provided by law.
Section 3. Reserves. By resolution the board of directors may create
such reserve or reserves out of the earned surplus of the corporation as the
directors from time to time, in their discretion, think proper to provide for
contingencies, or to equalize dividends, or to repair or maintain any property
of the corporation, of for any other purpose they think beneficial to the
corporation. The directors may modify or abolish any such reserve in the manner
in which it was created.
Section 4. Corporate Seal. The Board of Directors shall provide a
corporate seal which may be in such form and contain such ins;cription as the
Board of Directors may from time to time determine consistent with the
requirements of the laws of the State of Nevada.
Section 5. Facsimile Signatures. In addition to the provisions for the
use of facsimile signatures elsewhere specifically authorized, facsimile
signatures of any officer or officers of the Corporation may be used whenever
and as authorized by the Board of Directors or a committee thereof.
Section 6. Reliance upon Books, Reports and Records. Each director,
each member of any committee designed by the Board of Directors, and each
officer of the Corporation shall, in the performance of his duties, be fully
protected in relying in good faith upon the books of the account or other
records of the Corporation, including reports made to the Corporation by any of
its officers, by an independent certified public accountant, or by an appraiser
selected with reasonable care.
Section 7. Time Periods. In any provision of these By-Laws which
requires that an act be done or not done within a specified number of days prior
to an event or that an act be done during a period of a specified number of days
prior to an event calendar days shall be used, the day of the doing of the act
shall be excluded, and the day of the event shall be included.
ARTICLE XI
AMENDMENTS
Section 1. Amendment by Shareholders. These By-Laws may be altered,
amended, or repealed and new By-Laws may be adopted by the shareholders at any
annual or special meeting of the Shareholders at which the requirement of these
By-Laws and other applicable law have been met or by their unanimous written
actions.
Section 2. Amendment by Directors. Except for the reduction of the
number of directors, these By-Laws may also be altered, amended, or repealed and
new By-Laws may be adopted by actions duly taken by the directors of this
Corporation.
CERTIFICATE OF ADOPTION
The undersigned, being the duly elected and acting corporate secretary
of this Corporation, hereby certifies that the forgoing First Amended By-Laws
were duly adopted by unanimous written actions of the incorporator and original
shareholders and directors of this Corporation, as of the 5th day of February,
1990.
/s/
---------------------------------
Corporate Secretary
EXHIBIT 10.1
PRODUCT DEVELOPMENT, DISTRIBUTION, AND WARRANTY
SUPPORT AGREEMENT
THIS AGREEMENT ("Agreement") is made as of April 14, 1999, by and
between Imatron Inc., a New Jersey corporation ("Imatron") and AccuImage
Diagnostics Corp., a Nevada corporation ("AccuImage").
Recitals:
A. Imatron is engaged in the business of providing imaging technology
and services for its products and for the products of others; and
B. AccuImage is engaged in the business providing image display
products and software and desires to contract with Imatron to provide
distribution and service on AccuImage's products for AccuImage's products.
PRODUCT DEVELOPMENT
Fee Structure:
1) Fee plus bonus paid to AccuImage for delivering a completed
Imatron Product Package (see page 2 for definition) by 5/15/99:
$50,000. For AccuImage to collect the $50,000 fee plus bonus
amount, AccuImage must have obtained FDA 510(k) product approval.
2) Fee paid to AccuImage for delivering a completed Imatron Product
Package by 6/15/99: $25,000. For AccuImage to collect the $25,000
fee amount, AccuImage must have obtained FDA 510(k) product
approval. If AccuImage has completed the product package by
6/15/99, but FDA approval has not been obtained, then the fee
paid to AccuImage is reduced to $20,000 payable upon FDA
approval.
3) Penalty suffered by AccuImage for delivering a completed package
after 6/15/99: Effective 6/15/99, AccuImage agrees to provide
Imatron free licenses of the Imatron Product Package until it is
completed (no hardware of any kind is included). Only Imatron
customers who were undergoing installation while the Imatron
Product Package was incomplete after 6/15/99 can qualify for the
free licenses. Free licenses will be released to Imatron in
complete or partial form. Completed plug-ins will be made
available to Imatron immediately, with the unfinished plug-ins
still due Imatron in accordance with this penalty provision that
states that a complete Imatron Product Package license will be
provided free of charge. Only after completion of the Imatron
Product Package, will Imatron be liable for payment to AccuImage
for software products. No fee is paid to AccuImage for late
completion of the Imatron Product Package.
4) Appropriate decrements in Bonus amount between the dates stated
in the Accelerated Delivery Date and the Delivery Date will be
calculated on daily timestamps.
Method for Determining a Completed Imatron Product Package:
A) Each software plug-in module in the Imatron Software Product
Package will be evaluated separately and deemed completed in one
of two ways:
1) If AccuImage has sold a software plug-in module to three
customers and there is substantial evidence of product
sufficiency, then that software plug-in module will be
deemed complete. Successfully placing products at customer
sites proves market acceptability in terms of functionality,
speed, image quality and ease-of-use.
2) All software plug-in modules not deemed complete by
conditions in point 1) above will be evaluated by Jeff
Sorenson, Imatron Product Manager, or an outside third party
agreeable to both Imatron and AccuImage. This person shall
adjudicate on product completion.
B) Each EBT connectivity package, the Megalink Gateway and the UPOW
Gateway, will be evaluated by Jeff Sorenson, Imatron Product
Manager or an outside third party agreeable to both Imatron and
AccuImage. This person shall adjudicate on product completion.
Technical Support:
1) AccuImage will be granted needed access to Imatron's Laser Camera
for testing the AccuFilm plug-in module.
2) AccuImage will be granted access to Imatron's scanner to test
Megalink connectivity and UPOW connectivity as well as debug
problems as they arise.
3) AccuImage will be granted a set of Imatron's proprietary format
images to be used to test the conversion from this proprietary
file structure to the DICOM standard.
Imatron Software Product Package: (list of included plug-ins)
Pricing shown is for individually-sold plug-ins and is NOT
representative of standard packaged product offerings.
AccuView Imatron Selling Price: $495 With any plug-in purchase: FREE
AccuView is a Viewer/Browser program that enables viewing of DICOM
formatted images stored on a local PC, or on any network drive.
AccuView is extendible using a series of powerful plug-in modules that
provide additional network services and advanced processing functions.
AccuView can display all medical images that are formatted with the
DICOM standard including cine images from angiography, ultrasound,
nuclear medicine, as well 2D, 3D, and 4D images from conventional
radiography, CT, MRI, and PET. Imatron format and UltraAccess format
files are directly compatible.
AccuNet Imatron Selling Price: $ 995
AccuNet provides advanced DICOM receive service. Using this module,
data can be received from any modality and/or workstation vendor that
adheres to the DICOM standard and has an Internet connection.
AccuTrans Imatron Selling Price: $ 995
AccuTrans provides advanced DICOM send service. Data can be sent to any
workstation with resident AccuNet software running.
AccuPrint Imatron Selling Price: $ 995
AccuPrint provides the capability to print medical images on
inexpensive paper printers and Codonics network printers through an
easy-to-use, Microsoft Word based document assembly interface.
AccuEdit Imatron Selling Price: $ 5,210
AccuEdit allows the user to edit away unwanted tissue structures before
manipulating the medical data with other plug-in modules. Single image
editing, slab editing and barrel volume editing are all included.
AccuFilm Imatron Selling Price: $10,210
AccuFilm provides the capability to print medical images on laser film
imagers. Supported laser interfaces include 3M P831 and P952. Support
for Kodak film imagers is included but might not be available in the
initial software release. The Plexar (DASM) interface is included-
AccuScore Imatron Selling Price: $ 9,880
AccuScore provides calcium scoring, reporting, and database management
for quantifying the amount of calcium in coronary arteries as obtained
using Imatron EBT or spiral/helical CT image data. Included are 3D
Agatston scoring, plaque volume and calcium mass determination,
context-driven auto reporting, and database storage of clinical
parameters.
AccuProjector Imatron Selling Price: $ 9,880
AccuProjector provides the capability to perform maximum intensity
projections, multi-planner reformatting, and 3D rendering to display
vascular and other body structures. The program processes a contiguous
sequence of CT or NM image data. 2D vascular projections are possible
in any arbitrary plane with user definable increments. The resulting
images may be stored or sent to a color printer via the standard NT
platform.
AccuVRT Imatron Selling Price: $14,890
AccuVRT utilizes a volume rendering technique with transparent full
color output to display multiple tissues in various hues. This method
may be used to render "life-like" renditions of all tissues in the
body. Hallmark applications to date include diagnosis of vascular
anomalies, renal disease, tumor characterization, as well as
pre-surgical planning and post-surgical follow-up.
AccuScope Imatron Selling Price: $14,890
AccuScope enables the user to design a specific flight path through a
vessel, airway, or colon using set key-frames and auto-navigation.
Volume data along this Right path are rendered on the surface of the
lumen. With this information at hand, virtual imaging using CT data is
now a viable asset to the diagnosis. It is foreseeable that
uncomfortable studies such as barium enemas, and costly studies such as
angiograms, may become confirmation tools rather than procedures
necessary for initial diagnosis.
Megalink Gateway Imatron Selling Price: $20,000
Software providing Megalink connectivity to the EBT scanner, conversion
of proprietary Imatron file format to standard DICOM format, cards that
are installed in both the AccuImage workstation and the EBT scanner
itself and the optic fiber cable linking the two devices.
UPOW Gateway Imatron Selling Price: $15,000
Software providing UPOW connectivity to the EBT scanner, conversion of
proprietary Imatron file format to standard DICOM format, an additional
Gateway computer that runs software and houses computer cards, the UPOW
card required on the Gateway computer and an eight meter cable
providing connection between the Gateway computer and EBT scanner.
DISTRIBUTION:
1. Imatron is the exclusive distributor of AccuImage products to new
EBT customers in the United States and abroad. All current and
future software plug-ins will be available to Imatron for resale
purposes. This exclusive agreement is for a period of five years
commencing on the date that it is signed by both parties.
2. Imatron is responsible for promotion, installation, sales, and
applications training of all hardware and software products
distributed by them.
3. AccuImage carries all installed base responsibilities for all
equipment and software sold by Imatron under this Distribution
section (except as provided for in the Warranty Support section
contained herein).
4. AccuImage reserves the right to solicit direct sales to the
installed base of Imatron scanners. Computer hardware servicing,
software installation and application training of sales to this
installed base will be done, at AccuImage's discretion, either by
AccuImage application engineers, or Imatron application engineers
at an agreed upon fee for this service.
5. AccuImage agrees not to run any promotions with special pricing
that discounts the stated MSRP or published actual selling price
of any plug-in or combination of plug-ins without the prior
review and written approval of Imatron. (see page 13 for
communications instructions). Such approval may not be
unreasonably withheld.
6. End user pricing will remain the discretion of Imatron.
7. AccuImage will provide Imatron with a full software suite and
production hardlock dongle free of charge for demonstration and
training purposes.
8. AccuImage agrees to achieve and maintain compliance with all
applicable Food and Drug Administration (FDA) regulations,
Medical Device Directive (MDD) provisions, and any other
regulatory or compliance requirements that apply to sales of
AccuImage products in the United States and to foreign countries.
9. AccuImage Diagnostics Corp. will supply to Imatron individual
plug-ins, with required hardware included as described in the
plug-in descriptions above, at the prices listed below. All
pricing is in U.S. Dollars. Note: These prices are derived by
discounting AccuImage's published software-only Plug-in prices by
30%. AccuFilm was then increased by $4,000 to include the Plexar
(DASM) interface hardware.
Plug-in Imatron Cost
AccuView $347 (Free with any plug-in purchase)
AccuNet $696
AccuTrans $696
AccuPrint $696
AccuEdit $3,647
AccuFilm $7,647 (Includes Plexar (DASK)
AccuScore $6,916
AccuProjector $6,916
AccuVRT $10,423
AccuScope $10,423
MegaLink $ 5,000 (or $15,000 if not sold w/ Imatron
Standard Config.)
UPOW $ 2,500 (or $12,500 if not sold w/ Imatron
Standard Config.)
10. All transfer pricing is FOB South San Francisco, CA. Payment
terms are 50% with delivery, with the balance due within 30 days
of shipment to the customer. AccuImage will ship all orders to
Imatron within 7 days of receipt.
11. For software plug-in selections of $40,000 dollars and above,
AccuImage will include PC hardware with the software. AccuImage
will continue to upgrade its standard hardware configuration to
take advantage of advances in that industry. AccuImage will
provide hardware that is certified with the "CE mark" whenever
required (currently required in Europe). AccuImage is responsible
to determine if this requirement exists and automatically ship
the "CE Marked" hardware with the order.
12. For software plug-in selections less than $40,000 dollars,
AccuImage will provide the plug-ins (which may include
specialized hardware) at the agreed upon Imatron price. If PC
hardware is required, AccuImage will add the cost of computer
hardware plus 10%.
13. When Imatron sells two AccuImage workstations in one sale to a
customer, AccuImage agrees to provide Imatron with the second
AccuImage workstation at a 50% discount off of the agreed upon
Imatron price. Hardware for this second workstation will be
provided at cost plus 10%.
14. AccuImage agrees to provide a maximum of 15 AccuImage
workstations including hardware and software at a price equal- to
hardware cost plus 10%. These workstations are to be used only in
cases where:
Imatron has booked a two workstation package (any
combination of UltraAccess workstations and AccuImage
workstations where AccuImage has been booked or sold
into the account) to a customer prior to 4/l/99,
AccuImage agrees to provide Imatron with one
workstation under this provision, Or,
Imatron is offering the AccuImage workstation as a Y2
replacement for an UltraAccess workstation.
15. In cases where AccuImage provides hardware to Imatron to upgrade
an existing AccuImage workstation, AccuImage will charge cost
plus 20% for the additional hardware required. Software is
provided free of charge as provided for in the Warranty Support
section herein.
16. All hardware (PC, Plexar-DASK Megalink, etc.) sold by AccuImage
carries a full one year parts and labor warranty and will be
implemented as detailed in the Warranty Support section herein.
17. AccuImage will provide Imatron with replacement software for its
customers free of charge if the original software is irrevocably
lost or deleted from the disk drive. Imatron will be responsible
for installation and technical support.
18. AccuImage agrees to supply all source sales and marketing
materials it produces to Imatron in a timely manner. Master
demonstration CDs containing sales and marketing material will be
produced periodically by AccuImage and sent to Imatron for
replication and distribution. Imatron may edit, print and
distribute these materials as Imatron sees fit, subject to
AccuImage's approval.
Definition of the Imatron Basic Workstation Package Configuration:
Included Modules:
----------------
AccuView AccuNet AccuTrans
AccuEdit AccuScore AccuProjector
AccuVRT AccuScope AccuPrint
Minimum Hardware:
----------------
Dual 400MI-Iz Pentium H chip set Recordable CD with software
9 Gigabyte hard-drive 512 Megabytes RAM
2 1 -inch color monitor Keyboard, mouse
10 mbit network hub Fast and wide SCISI port
Epson color ink-jet printer
Pricing to Imatron:
------------------
TOTAL: $40,000 includes software and hardware detailed above
Definition of all Imatron-sold Configurations with Pricing:
Imatron
Basic Configuration above PLUS: Cost MSRP
Only Basic Configuration $40,000 $60,000
With AccuFilm, $48,000 $70,000
With AccuFffm and MegaLink* $53,000 $809,000
With AccuFilm, MegaLink, and UPOW Gateway $55,500 $85,000
With MegaLink $45,000 $70,000
With MegaLink and UPOW Gateway $47,500 $75,000
With UPOW Gateway $42,500 $65,000
* typical configuration sold to Imatron customers.
WARRANTY SUPPORT
1. AccuImage agrees to utilize Imatron exclusively as its provider
of on-site corrective maintenance, warranty and customer support
for systems AccuImage has sold.
2. Imatron Sold AccuImage Products: Imatron will provide on-site
applications training and installation. The sale will include a
one year warranty that covers parts and on-site service performed
by Imatron. The sale will include the Platinum Phone Support
Plan, defined at the end of this document. The fee paid by
AccuImage to Imatron will be 5% of the total Imatron cost of the
product. This calculation is made using the cost figures given in
this agreement regardless of what Imatron actually paid AccuImage
for the product(s).
3. Imatron Sold AccuImage Products at Difficult Geographic
Locations: In cases where it is not reasonably possible to
provide on-site service, the customer will receive the Platinum
Phone Support Plan, and AccuImage will utilize a
return-to-factory method of correcting hardware problems. In this
case Imatron will not charge AccuImage to provide the Platinum
Phone Support.
4. AccuImage Sold AccuImage Products over USD$40,000: The sale will
include a one year warranty that covers parts and on-site service
performed by Imatron. The sale will include the Platinum Phone
Support Plan, defined at the end of this document The fee paid by
AccuImage to Imatron will be 5% of AccuImage's product MSRP. For
difficult geographic locations, AccuImage will pay Imatron for
the Platinum Phone Support package only. Application training and
installation will be performed by AccuImage, or may be
subcontracted out to Imatron at an agreed upon price and at
AccuImage's discretion.
5. AccuImage Sold AccuImage products under USD$40,000: AccuImage
will offer its customers the suite of Phone Support Plans,
defined at the end of this document. The fee paid to Imatron will
be the agreed upon Imatron fee for the customer's choice of Phone
Support Plan.
6. This Warranty Support section does not apply to systems sold by
AccuImage that are governed by pre-existing distributor
agreements with a party other than Imatron, provided they are
located outside the United States of America. Imatron may, at its
discretion, offer other AccuImage distributors technical phone
support for an agreed upon fee.
7. Imatron agrees to set-up a toll-free number (separate from the
Imatron service number) as the dial-in number for AccuImage
customers purchasing one of the Phone Support Plans, defined at
the end of this document. AccuImage reserves the right
periodically to check the efficacy of Imatron's staff in
administering phone support. Feedback from AccuImage on customer
support will be used to improve the service.
8. AccuImage will provide all software upgrades or bug related fixes
free of charge to Imatron customers. The distribution channel for
these upgrades will always be through Imatron and will remain the
responsibility of Imatron service to install while the Warranty
Support Agreement is in effect. In cases where there are unusual
costs associated with bug related fixes, AccuImage will be
charged 60% of Imatron's published labor rates, and 100% of the
material costs required to perform bug related fixes.
9. Parts supplied or services rendered by Imatron will have an
amount added to the price equal to all applicable taxes.
10. Imatron reserves the right to adjust all charges described in
this Agreement if a covered product's specifications,
attachments, or features increase the cost of performing
maintenance.
11. AccuImage agrees to provide Imatron Technical Specialists with
access to AccuImage Technical Support 24 hours/day and 7
days/week.
12. AccuImage agrees to provide reasonable on-site technical support
in critical customer situations.
13. Warranty and phone support package payments are calculated and
agreed to by both parties at the end of each month. Payment terms
are Upon Receipt.
14. AccuImage agrees that, upon termination of this agreement,
AccuImage retains all responsibilities to the installed base of
AccuImage equipment, even if sold by Imatron.
15. EXCLUDED SERVICES: Not included in the warranty service provided
by Imatron are: Defects or performance deficiencies if due to (1)
acts of God, acts of civil or military authority, floods, fires,
strikes or other causes beyond the reasonable control of Imatron;
(2) Accident, neglect, misuse, negligent handling or storage of
AccuImage products by AccuImage or any other customer, or their
respective employees, agents, contractors, or other persons
having access thereto; (3) any modification, alteration, repair,
change, or addition to covered products not made by AccuImage or
Imatron; or (4) misuse of the product or use of the product in an
extraordinary or improper manner or in a manner not contemplated
by the Operating Instructions.
Definition an Pricing of Phone Support Packages:
Platinum Gold Silver Standard
Hours/No. Calls Unlimited 20/20 5/5 212
Funct. Upgrades YES YES NO NO
Imatron Fee USD$2,000 USD$1,500 USD$250 USD$100
AccuImage USDS3,000 USD$2,000 USD$500 FREE
Customer Price Free in lieu of
Standard if MSRP
is 10k or greater
GENERAL TERMS AND CONDITIONS
Assignment:
Either party, upon giving prior written notice to the other party, may assign
this Agreement and its rights hereunder to any parent, subsidiary or affiliate
thereof or to any successor occurring by merger, consolidation, acquisition of a
substantial part of its assets or the like. Other than so provided, neither
Imatron nor AccuImage shall assign this Agreement without the prior written
consent of the other party; which consent will not be unreasonably withheld- Any
attempted assignment without the prior written consent of the other party will
be void. No assignment shall release the assignor or is primary liability
hereunder.
Force Majeure:
Neither party will be responsible or liable in any way for its failure to
perform its obligations under this Agreement during any period in which
performance is prevented or hindered by conditions beyond its control, acts of
God, fire, flood, war, embargo, court order, strikes, labor disturbances,
explosions, riots and laws, rules, regulations and orders of any government
authority.
Scope:
This agreement replaces all prior and existing agreements, contracts, and
relationships between AccuImage and Imatron including, but not limited to
purchase agreements, distribution agreements and service support agreements.
This document is valid only in its entirety.
Cancellation and Default Provisions:
Either party has the right to cancel this agreement with 90 days written notice
if the opposing party is not fulfilling the terms of this agreement. Such claims
will be made in writing and are subject to mediation by third party legal
counsel in the event of separation. This agreement may also be cancelled
voluntarily at any time if the terms of cancellation are agreed upon in writing
by both Imatron and AccuImage. Imatron or AccuImage may cancel this agreement
without the consent of the other party with one year written notice. In
addition, this Agreement will automatically terminate if either party; (a)
becomes a party to any proceeding under the Bankruptcy Act or other insolvency
law, voluntary or involuntary, if such proceeding is not dismissed within ninety
(90) days; (b) suffers a receiver to be appointed for its affairs or property;
or (c) enters into an assignment or other arrangement for the benefit of its
creditors, or suffers an attachment against or a seizure of a substantial part
of its assets, products or its parts inventory.
In the case of default by either party under this Agreement, each party will be
responsible for their own costs and expenses arising from the default, including
reasonable attorney's fees if the non-defaulting party engages legal counsel to
preserve or enforce its rights under this Agreement, including collection of any
payment due.
Termination of this Agreement will not adversely affect any rights existing as
of the effective date of termination.
Disclaimers and Limitation of Liability
IMATRON WILL NOT BE LIABLE (A) FOR PERSONAL INJURY OR PROPERTY DAMAGE TO ANY
PERSON EXCEPT PERSONAL INJURY OR PROPERTY DAMAGE CAUSED BY ITS GROSS NEGLIGENCE,
(B) FOR INCIDENTAL, SPECIAL, INDIRECT, OR CONSEQUENTIAL DAMAGES, LOSS OF PROFITS
OR INCOME, OR LOSS OF USE OR OTHER BENEFITS OF ANY PERSON, OR (C) FOR ANY
DAMAGES (REGARDLESS OF THEIR NATURE) CAUSED IN WHOLE OR IN PART BY ACCUIMAGE OR
CUSTOMER, INCLUDING BUT NOT LIMITED TO ACCUIMAGE OR CUSTOMERS FAILURE TO FULFILL
OR OBSERVE THEIR RESPECTIVE OBLIGATIONS UNDER CONDITIONS OF ANY SERVICE PROVIDED
IN THIS AGREEMENT OR IN ANY OTHER AGREEMENT WITH IMATRON IMATRON'S OBLIGATIONS
HEREUNDER ARE IN LIEU OF ALL WARRANTIES, EXPRESS OR IMPLIED.
No advertising, publicity releases, or similar public information concerning
tins Agreement, Imatron or Imatron's name, AccuImage or AccuImage's name, or the
services to be performed hereunder, shall be published or cause to be published
by either Imatron or AccuImage without the prior written consent of the other
party, which consent shall not be unreasonably withheld. Imatron will make
reasonable efforts to provide a response within fifteen (15) working days from
the date of such request. All communications hereunder shall be in writing, and,
if sent to either party, shall be sufficient in all respects if delivered, sent
by registered mail, Federal Express, or by telecopy and confirmed to such party
at:
If to Imatron:
Imatron Inc.
389 Oyster Point Blvd.
South San Francisco, CA 94080
Attn: Mr. Gary Baxter
If to AccuImage:
AccuImage Diagnostics Corp.
400 Oyster Point Blvd. Suite 114
South San Francisco, CA 940 10
Attn: Allen Poirson
This Agreement will be governed by the laws of the State of California and
constitutes the entire Agreement between AccuImage and Imatron. No provisions of
this Agreement will be deemed waived, amended or modified by either party unless
such waiver, amendment or modification be in writing signed by the party against
whom it is sought to enforce the waiver, amendment or modification. If any
provision of this agreement is held to be illegal or unenforceable, such shall
not affect the balance thereof.
Each party acknowledges that it has read this. Agreement, understands it, and
agrees to be bound by its terms and conditions. Further, each party acknowledges
that this Agreement is the complete and exclusive statement of the Agreement
between the parties, which supersedes all proposals or prior agreements, oral or
written, and all other communications between the parties relating to the
subject matter of this agreement Each party also agrees dud this agreement
effects an agency relationship, coupled with an interest, between Imatron and
AccuImage.
ACCEPTANCE:
IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Agreement to be duly executed as of the date first above written.
- ----------------------------------- -----------------------------------
Gary Baxter Allen B. Poirson, Ph.D.
Vice President, Marketing Operations President & CEO
Imatron Incorporated AccuImage Diagnostics Corp.
- ----------------------------------
Jeff Sorenson
Product Manager
Imatron Incorporated
EXHIBIT 10.2
ACCUIMAGE DIAGNOSTICS CORP.
1998 STOCK OPTION PLAN
1. Purpose and Scope. The purposes of this Plan are to induce persons of
outstanding ability and potential to join and remain with AccuImage Diagnostics
Corp. (the "Company"), to provide an incentive for such employees as well as for
non-employee consultants to expand and improve the profits and prosperity of the
Company by enabling such persons to acquire proprietary interests in the
Company, and to attract and retain key personnel through the grant of Options to
purchase shares of the Company's common stock. As used herein, the term "Option"
includes both Incentive Stock Options and Non-Qualified Stock Options.
2. Definitions. Each term set forth in this Section 2 shall have the
meaning set forth opposite such term for purposes of this Plan unless the
context otherwise requires, and for the purposes of such definitions, the
singular shall include the plural and the plural shall include the singular:
A. "Affiliate" shall mean any parent corporation or subsidiary
corporation of the Company as those terms are defined in Sections 424(e) and (f)
respectively of the Internal Revenue Code of 1986, as amended.
B. "Board" shall mean the Board of Directors of the Company.
C."Committee" shall have the meaning set forth in Section 3 hereof.
D."Company" shall mean AccuImage Diagnostics Corp., a Nevada
corporation.
E."Code" shall mean the Internal Revenue Code of 1986, as amended.
F. "Fair Market Value" for a share of Stock means the price that the
Board or the Committee acting in good faith determines, through any reasonable
valuation method (including but not limited to reference to prices existing in
any established market in which the Stock is traded), to be the price at which a
share of Stock might change hands between a willing buyer and a willing seller,
neither being under any compulsion to buy or to sell and both having reasonable
knowledge of the relevant facts.
G. "Option" shall mean a right to purchase Stock granted
pursuant to the Plan.
H. "Exercise Price" shall mean the purchase price for Stock under an
Option, as determined in Sections 7 - "Incentive Stock Options" - and 8 -
"Non-Incentive Stock Options" - below.
I. "Participant" shall mean an employee or non-employee consultant to
the Company to whom an Option is granted under the Plan.
J. "Plan" shall mean this AccuImage Diagnostics Corp. 1998 Stock
Option Plan.
K. "Stock" shall mean the $0.0001 par value common stock of the
Company.
L. "1934 Act" means the Securities Exchange Act of 1934, as amended.
3. Administration.
A. The Plan shall be administered (i) with respect to individuals who
receive options under the Plan and who are or become subject to the reporting
requirements and short-swing liability provisions of Section 16 of the
Securities Exchange Act of 1934, as amended (the "1934 Act") ("Reporting
Persons") by a committee consisting of at least two members of the Board of
Directors of the Company (the "Board"), each of whom is a non-employee director
(as such term is defined under Rule 16b-3 of the 1934 Act) (the "Reporting
Persons Committee") and (ii) with respect to all individuals who receive Options
under the Plan and who are not Reporting Persons, by a committee which consists
of at least two members of the Board (the "Stock Option Committee"). For
purposes of this Plan, references to the "Committee" shall mean the Reporting
Persons Committee, the Stock Option Committee, or both, as the context may
require.
B. The Committee shall have full authority in its discretion, subject
to and not inconsistent with the express provisions of the Plan, to grant
Options, to determine the Exercise Price and term of each Option, the persons to
whom, and the time or times at which, Options shall be granted and the number of
shares of Stock to be covered by each Option; to interpret the Plan; to
prescribe, amend, and rescind rules and regulations relating to the Plan; to
determine the terms and provisions of the option agreements (which need not be
identical) entered into in connection with the grant of Options under the Plan;
and to make all other determinations deemed necessary or advisable for the
administration of the Plan. The Board may delegate to one or more of their
members, or to one or more agents, such administrative duties as it may deem
advisable, and the Board or any person to whom it has delegated duties as
aforesaid may employ one or more persons to render advice with respect to any
responsibility the Board or such person may have under the Plan. The Board may
employ attorneys, consultants, accountants, or other persons, and the Board
shall be entitled to rely upon the advice, opinions, or valuations of such
persons. All actions taken and all interpretations and determinations made by
the Board in good faith shall be final and binding upon all Participants, the
Company, and all other interested persons. No member of the Board shall be
personally liable for any action, determination, or interpretation made in good
faith with respect to the Plan; and all members of the Board shall be fully
protected by the Company in respect of any such action, determination, or
interpretation.
4. Shares Subject to the Plan. Subject to adjustment under the provisions
of Section 14 - "Effect of Change in Stock Subject to Plan" - of the Plan, the
maximum number of shares of Stock that may be optioned or sold under the Plan is
One Million Six Hundred Thousand (1,600,000). Such shares may be authorized but
unissued shares of Stock of the Company, or issued shares of Stock reacquired by
the Company, or shares purchased in the open market expressly for use under the
Plan. If for any reason any shares of Stock as to which an Option has been
granted cease to be subject to purchase thereunder, then (unless the Plan shall
have been terminated) such shares shall become available for subsequent awards
under this Plan in the discretion of the Board. The Company shall, at all times
while the Plan is in force, reserve such number of common shares as will be
sufficient to satisfy the requirements of all outstanding Options granted under
the Plan.
5. Eligibility; Factors to be Considered in Granting Options.
A. Options may be granted to: (i) any regular full-time employee
(including officers and directors) of either the Company or any affiliate of the
Company; and (ii) any non-employee consultant of the Company.
B. In determining to whom options shall be granted and the number of
shares of Stock to be covered by each Option, the Board shall take into account
the nature the participants' duties, their present and potential contributions
to the success of the Company, and such other factors as it shall deem relevant
in connection with accomplishing the purposes of the Plan. The Board shall also
determine the time(s) of grant, the type and term of Option granted, and the
time(s) of exercise, in whole or part. A Participant who has been granted an
Option under the Plan may be granted new Options, which may be in addition to
prior Options granted under the Plan or may be in exchange for the surrender and
cancellation of prior Options having a higher or lower Exercise Price and
containing such other terms as the Board may deem appropriate.
6. Terms and Conditions of Options.
A. General. Options granted pursuant to the Plan shall be authorized
by the Board and shall be evidenced by agreements ("Option Agreements") in such
form as the Board from time to time shall approve. Such Option Agreements shall
comply with and be subject to the following general terms and conditions, and
shall also comply with and be subject to the provisions of Section 7 relating to
Incentive Stock Options or Section 8 relating to Non-Qualified Stock Options, as
applicable, as well as such other terms and conditions as set forth in this Plan
and as the Board may deem desirable, not inconsistent with the Plan
B. Employment Agreement. The Committee may, in its discretion, include
in any Option granted under the Plan a condition that the Participant shall
agree to remain in the employ of, and/or to render services to, the Company for
a period of time (specified in the Option Agreement) following the date the
Option is granted. No such Option Agreement shall impose upon the Company any
obligation to employ and/or retain the Participant for any period of time.
C. Manner of Exercise. A Participant may
exercise an Option by giving written notice of such exercise to the Company at
its principal office, attention to the Secretary, and paying the Exercise Price
either in cash in full at the time of exercise or in the discretion of the
Board:
i) by delivery of other previously outstanding common stock of
the Company,
ii) by an approved deferred payment schedule or other
arrangement, which arrangement shall be contained in writing in the Option
Agreement, in which event an interest rate will be stated which is not less than
the rate then specified which will prevent any imputation of higher interest
under Section 483 of the Code,
iii) by retention by the Company of some of the Stock as to which
the Option is then being exercised, in which case the Optionee's notice of
exercise shall include a statement (1) directing the Company to retain so many
shares that would otherwise have been delivered by the Company upon exercise of
this Option as equals the number of shares that would have been surrendered to
the Company if the purchase price had been paid with previously outstanding
stock of the Company, and (2) confirming the aggregate number of shares as to
which this Option is being thus exercised and therefore surrendered, or
iv) in any other form of legal consideration acceptable to the
Committee at the time of grant or exercise.
D. Time of exercise. Promptly after the exercise of an Option and the
payment of the Exercise Price, either in full or pursuant to the approved
payment schedule, the Participant shall be entitled to the issuance of a stock
certificate evidencing ownership of the appropriate number of shares of Stock. A
Participant shall have none of the rights of a shareholder until shares are
issued to him/her, and no adjustment will be made for dividends or other rights
for which the record date has occurred prior to the date such stock certificate
is issued.
E. Number of shares. Each Option shall state the total number of
shares of Stock to which it pertains.
F. Option Period and Limitations on Exercise. The Board may, in its
discretion, provide that an Option may not be exercised in whole or part for any
period(s) of time specified in the Option Agreement, except that the right to
exercise must be at the rate of at least 25% per year over four years from the
date the Option is granted, subject to the further conditions of the Plan and
the Option Agreement such as continued employment. However, in the case of an
Option granted to officers, directors, or non-employee consultants of the
Company or any of its affiliates, the Option may become fully exercisable,
subject to the further conditions of the Plan and the Option Agreement, at any
time or during any period established by the Company or its affiliates. The
exercise period shall be stated in the Option Agreement. No Option may be
exercised after the expiration of ten years from the Grant Date. No Option may
be exercised as to less than one hundred (100) shares at any one time, or the
remaining shares covered by the Option if less than one hundred (100).
7. Incentive Stock Options. The Board may grant Incentive Stock Options
("ISOs") which meet the requirements of Section 422 of the Code, as amended from
time to time.
A. ISOs may be granted only to employees of the Company or its
affiliates.
B. Each ISO granted under the Plan must be granted within 10 years
from the date the Plan is adopted or is approved by the shareholders of the
Company, whichever is earlier.
C. The purchase price shall not be less than the
Fair Market Value of the common shares at the time of grant, except that the
purchase price shall be 110% of the Fair Market Value in the case of any person
who owns stock possessing more than 10% of the total combined voting power of
all classes of stock of the Company or its affiliates at the time of grant.
D. No ISO granted under the Plan shall be exercisable more than 10
years from the date of grant, except that in the case of any person who owns
stock possessing more than 10% of the total combined voting power of all classes
of stock of the Company or its affiliates at the time of grant, no ISO shall be
exercisable more than five years from the date of grant.
E. To the extent that the aggregate Fair Market Value of stock
(determined at the time of grant) with respect to which ISOs are exercisable for
the first time by any individual during any calendar year under all plans of the
Company and its subsidiaries exceeds $100,000, such options shall be treated as
Non-Qualified stock options, but only to the extent of such excess. Should it be
determined that an entire option or any portion thereof does not qualify for
treatment as an ISO by reason of exceeding such maximum, or for any other
reason, such option or portion shall be considered a Non-Qualified stock option.
8. Non-Qualified Stock Options. The Board may grant Non-Qualified Stock
Options ("NSOs") under the Plan in addition to or in lieu of Incentive Stock
Options. NSOs are not intended to meet the requirements of Section 422 of the
Code, and shall be subject to the following terms and conditions:
A. NSOs may be granted to any eligible Participant.
B. The purchase price of the shares shall be determined by the Board
in its absolute discretion, but in no event shall such purchase price be less
than 85% of the Fair Market Value of the shares at the time of grant. In the
case of any person who owns stock possessing more than 10% of the total combined
voting power of all classes of stock of the Company or its affiliates at the
time of grant, the price shall be 110% of the Fair Market Value.
C. NSOs shall not be exercisable more than ten years from the date of
grant.
9. Transferability. Options granted under this Plan shall not be
transferable other than by will or by the laws of descent and distribution, and
during a Participant's life shall be exercisable only by such Participant.
Options granted under this Plan shall not be subject to execution, attachment or
other process.
10. Termination of Employment. Options held by employees, including
directors, shall terminate three months after termination of employment with the
Company or affiliate, unless:
A. If employment is terminated for cause, as such term is defined by
California law, the employer's contract of employment or the Option Agreement,
the Option shall immediately terminate.
B. If termination is due to the employee's permanent and total
disability within the meaning of Section 22(e)(3) of the Code, the Option may be
exercised at any time within one year following termination.
C. The Option Agreement by its terms specifies whether it shall
terminate later than three (3) months after termination of employment. If the
Option may be exercised later than three months following termination, any
portion exercised beyond three months shall be a non-qualified stock option.
This paragraph shall not be construed to extend the term of any Option nor to
permit anyone to exercise the Option after expiration of its term.
D. Options granted under this Plan shall not be affected by any change
of duties or position of the Participant so long as Participant continues to be
a regular, full-time employee of the Company. Any Option, or any rules and
regulations relating to the Plan, may contain such provisions as the Board shall
approve with reference to the determination of the date employment terminates.
Nothing in the Plan or in any Option granted pursuant to the Plan shall confer
upon any Participant any right to continue in the employ of the Company or shall
interfere in any way with the right of the Company to terminate such employment
at its will at any time.
11. Rights in the Event of Death. If an employee dies during the term of
this Option, his/her legal representative or representatives, or the person or
persons entitled to do so under the employee's last will and testament or under
applicable intestate laws, shall have the right to exercise this Option, but
only for the number of shares as to which the employee was entitled to exercise
this Option on the date of his death, and such right shall expire and this
Option shall terminate six (6) months after the date of Grantee's death or on
the expiration date of this Option, whichever date is sooner. In all other
respects, this option shall terminate upon such death.
12. Leaves of Absence. For purposes of the Plan, an employee on approved
leave of absence from the Company shall be considered as currently employed for
90 days following beginning the leave or for so long as his/her right to
reemployment is guaranteed by statute or contract, whichever is longer.
13. Effect of Change in Stock Subject to Plan.
A. In the event that outstanding common shares are hereafter changed
by reason of reorganization, merger, consolidation, recapitalization,
reclassification, stock split, combination of shares, stock dividends and the
like, the Board shall make adjustments as it deems appropriate in the aggregate
number of shares advisable under the Plan and the number and price subject to
outstanding option. Any adjustment shall apply proportionately and only to the
unexercised portion of options granted.
B. In the event the Company dissolves or liquidates or another entity
succeeds to its assets, or in the event of a merger or consolidation in which
the Company is not the surviving entity, or in the event of a reverse merger in
which the Company survives but its common stock immediately preceding the merger
is converted into other property by virtue of the merger, then the surviving
entity shall assume the outstanding Options or substitute similar Options for
those outstanding.
14. Agreement and Representation of Employees.
A. Acquiring stock for investment purposes. As a condition to the
exercise of any Option, the Company may require the person exercising such
Option to represent and warrant at the time of such exercise that any shares of
Stock acquired at exercise are being acquired only for investment and without
any present intention to sell or distribute such shares if, in the opinion of
Company's counsel, such representation is required or desirable under the
Securities Act of 1933 or any other applicable law, regulation, or rule of any
governmental agency.
B. Withholding. With respect to the exercise of any Option granted
under this Plan, each Participant shall fully and completely consent to whatever
the Board directs to satisfy the federal and state tax withholding requirements,
if any, which the Board in its discretion deems applicable to such exercise.
C. Delivery. The Company is not obligated to deliver any common shares
until there has been qualification under or compliance with all state or federal
laws, rules and regulations deemed appropriate by the Company. The Company will
use all reasonable efforts to obtain such qualification and compliance.
15. Amendment and Termination of Plan. The Board, by resolution, may
terminate, amend, or revise the Plan with respect to any shares as to which
Options have not been granted; provided however, that any amendment that would:
(a) increase the aggregate number of shares of common stock that may be issued
under the Plan, (b) materially increase the benefits accruing to Participants,
or (c) materially modify the requirements as to eligibility for participation in
the Plan, shall be subject to shareholder approval within 12 months before or
after adoption. It is expressly contemplated that the Board may amend the Plan
in any respect necessary to provide employees with the maximum benefits
available under and/or to satisfy the requirements of or amendments to Section
422 of the Code.
A. No termination, modification or amendment of the Plan may however,
alter or impair the rights conferred by an Option previously granted without the
consent of the individual to whom the Option was previously granted.
B. Unless sooner terminated, the Plan shall remain in effect for a
period of ten years from the date of the Plan's adoption by the Board.
Termination of the Plan shall not affect any Option previously granted.
16. Use of Proceeds. The proceeds from the sale of shares pursuant to
Options granted under the Plan shall constitute general funds of the Company.
17. Effective Date of Plan. The Effective Date of this Plan is January 5,
1998, the date it was adopted by the Board, provided the shareholders of the
Company approve this Plan within twelve (12) months after such effective date.
Any Options granted under this Plan prior to the date of shareholder approval
shall be deemed to be granted subject to such approval. Should shareholder
approval not be obtained within twelve (12) months, any Options granted pursuant
to the Plan shall be null and void
18. Indemnification of Committee. In addition to such other rights of
indemnification as they may have and subject to limitations of applicable law,
the members of the Committee shall be indemnified by the Company against all
costs and expenses reasonably incurred by them in connection with any action,
suit or proceeding to which they or any of them may be a party by reason of any
action taken or failure to act under or in connection with the Plan or any
rights granted thereunder and against all amounts paid by them in settlement
thereof or paid by them in satisfaction of a judgment of any such action, suit
or proceeding, the Board or Committee member or members shall notify the Company
in writing, giving the Company an opportunity at its own cost to defend the same
before such Committee member or members undertake to defend the same on their
own behalf.
19. Information Requirements. The Company shall provide each participant
with annual financial statements.
20. Governing Law. The Plan shall be governed by, and all questions arising
hereunder, shall be determined in accordance with the laws of State of
California as such laws are applied to agreements between California residents
entered into and to be performed entirely within California.
Date of Board Adoption: January 5, 1998
Date of Shareholder Approval: July 23, 1998
EXHIBIT 10.3
ACCUIMAGE DIAGNOSTICS CORP.
STOCK OPTION AGREEMENT
PURSUANT TO
1998 STOCK OPTION PLAN
1. Grant of Option. AccuImage Diagnostics Corp., a Nevada corporation (the
"Company"), hereby grants to the Optionee named in the Notice of Grant (the
"Optionee"), an option (the "Option") to purchase a total number of shares of
Common Stock (the "Shares") set forth in the Notice of Grant, at the exercise
price per share set forth in the Notice of Grant (the "Exercise Price") subject
to the terms, definitions and provisions of the 1998 Stock Option Plan (the
"Plan") adopted by the Company, which is incorporated herein by reference.
Unless otherwise defined herein, the terms defined in the Plan shall have the
same defined meanings in this Option.
If designated an Incentive Stock Option, this Option is intended to qualify
as an Incentive Stock Option as defined in Section 422 of the Code.
2. Exercise of Option. This Option shall be exercisable during its term in
accordance with the Exercise Schedule set out in the Notice of Grant and with
the provisions of Section 6 of the Plan as follows:
A. Right to Exercise.
i) This Option may not be exercised for a fraction of a share.
ii) In the event of Optionee's death, disability or other
termination of employment, the exercisability of the Option is governed by
Sections 6, 7 and 8 below, subject to the limitation contained in subsection
2(a)(iii).
iii) In no event may this Option be exercised after the date of
expiration of the term of this Option as set forth in the Notice of Grant.
B. Method of Exercise. This Option shall be exercisable by written
notice which shall state the election to exercise the Option, the number of
Shares in respect of which the Option is being exercised, and such other
representations and agreements as to the holder's investment intent with respect
to such shares of Common Stock as may be required by the Company pursuant to the
provisions of the Plan. Such written notice shall be signed by the Optionee and
shall be delivered in person or by certified mail to the Secretary of the
Company. The written notice shall be accompanied by payment of the exercise
Price. This Option shall be deemed to be exercised upon receipt by the Company
of such written notice accompanied by the Exercise Price.
No shares will be issued pursuant to the exercise of an Option unless
such issuance and such exercise shall comply with all relevant provisions of law
and the requirements of any stock exchange upon which the Shares may then be
listed. Assuming such compliance, for income tax purposes the Shares shall be
considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
3. Optionee's Representations. In the event the Shares purchasable pursuant
to the exercise of this Option have not been registered under the Securities Act
of 1933, as amended, at the time this Option is exercised, Optionee shall, if
required by the Company, concurrently with the exercise of all or any portion of
this Option, deliver to the Company his investment representations in the form
attached hereto as Exhibit A, and shall read the applicable rules of the
Commissioner of Corporations attached to such Investment Representation
Statement, if any.
4. Method of Payment. Payment of the Exercise Price shall be by any of the
following, or a combination thereof, at the election of the Optionee:
A. cash;
B. check; or
C. in the discretion of the Board:
i) by delivery of other previously outstanding Common Stock of
the Company,
ii) by an approved deferred payment schedule or other
arrangement, which arrangement shall be contained in writing in the Option
Agreement, in which event an interest rate will be stated which is not less than
the rate then specified which will prevent any imputation of higher interest
under Section 483 of the Code,
iii) by retention by the Company of some of the Stock as to which
the Option is then being exercised, in which case the Optionee's notice of
exercise shall include a statement (A) directing the Company to retain so many
shares that would otherwise have been delivered by the Company upon exercise of
this Option as equals the number of shares that would have been surrendered to
the Company if the purchase price had been paid with previously outstanding
stock of the Company, and (B) confirming the aggregate number of shares as to
which this Option is being thus exercised and therefore surrendered, or
iv) in any other form of legal consideration acceptable to the
Committee at the time of grant or exercise.
5. Restrictions on Exercise. This Option may not be exercised until such
time as the Plan has been approved by the shareholders of the Company, or if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would constitute a violation of any applicable
federal or state securities or other law or regulation, including any rule under
Part 207 of Title 12 of the Code of Federal Regulations ("Regulation G") as
promulgated by the Federal Reserve Board. As a condition to the exercise of this
Option, the Company may require Optionee to make any representation and warranty
to the Company as may be required by any applicable law or regulation.
6. Termination of Relationship. In the event of termination of Optionee's
consulting relationship or status as an Employee, Optionee may, to the extent
otherwise so entitled at the date of such termination (the "Termination Date"),
exercise this Option during the Termination Period set out in the Notice of
Grant. To the extent that Optionee was not entitled to exercise this Option at
the date of such termination, or if Optionee does not exercise this Option
within the time specified herein, the Option shall terminate.
7. Disability of Optionee. Notwithstanding the provisions of Section 6
above, in the event of termination of Optionee's status as an Employee as a
result of total and permanent disability (as defined in Section 22(e)(3) of the
Code), Optionee may, but only within twelve (12) months from the date of
termination of employment (but in no event later than the date of expiration of
the term of this Option as set forth in Section 10 below), exercise the Option
to the extent otherwise so entitled at the date of such termination. To the
extent that Optionee was not entitled to exercise the Option at the date of
termination, or if Optionee does not exercise such Option (to the extent
otherwise so entitled) within the time specified herein, the Option shall
terminate.
8. Death of Optionee. Notwithstanding the provisions of Section 6 above, in
the event of the death of Optionee, the Option may be exercised at any time
within twelve (12) months following the date of death (but in no event later
than the date of expiration of the term of this Option as set forth in Section
10 below), by Optionee's estate or by a person who acquired the right to
exercise the Option by bequest or inheritance, but only to the extent the
Optionee could exercise the Option at the date of death.
9. Non-Transferability of Option. This Option may not be transferred in any
manner otherwise than by will or by the laws of descent or distribution and may
be exercised during the lifetime of Optionee only by him. The terms of this
Option shall be binding upon the executors, administrators, heirs, successors
and assigns of the Optionee.
10. Term of Option. This Option may be exercised only within the term set
out in the Notice of Grant, and may be exercised during such term only in
accordance with the Plan and the terms of this Option. The limitations set out
in Section 7 of the Plan regarding Options designated as Incentive Stock Options
and Options granted to more than ten percent (10%) shareholders shall apply to
this Option.
11. Tax Consequences. Set forth below is a brief summary as of the date of
this Option of some of the federal and California tax consequences of exercise
of this Option and disposition of the Shares. THIS SUMMARY IS NECESSARILY
INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. OPTIONEE
SHOULD CONSULT A TAX ADVISOR BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
SHARES.
A. Exercise of ISO. If this Option qualifies as an ISO, there will be
no regular federal income tax liability or California income tax liability upon
the exercise of the Option, although the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price will be
treated as an adjustment to the alternative minimum tax for federal tax purposes
and may subject the Optionee to the alternative minimum tax in the year of
exercise.
B. Exercise of Non-Qualified Stock Option ("NSO"). If this Option does
not qualify as an ISO, there may be a regular federal income tax liability and a
California income tax liability upon the exercise of the Option. The Optionee
will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the fair market value of the
Shares on the date of exercise over the Exercise Price. If Optionee is an
employee, the Company will be required to withhold from Optionee's compensation
or collect from Optionee and pay to the applicable taxing authorities an amount
equal to a percentage of this compensation income at the time of exercise.
C. Disposition of Shares. In the case of an NSO, if Shares are held
for at least one year after exercise, any gain realized on disposition of the
Shares will be treated as long-term capital gain for federal and California
income tax purposes. In the case of an ISO, if Shares transferred pursuant to
the Option are held for at least one year after exercise and are disposed of at
least two years after the Date of Grant, any gain realized on disposition of the
Shares will also be treated as long-term capital gain for federal and California
income tax purposes. If Shares purchased under an ISO are disposed of within
such one-year period or within two years after the Date of Grant, any gain
realized on such disposition will be treated as compensation income (taxable at
ordinary income rates) to the extent of the excess, if any, of the fair market
value of the Shares on the date of exercise over the Exercise Price.
D. Notice of Disqualifying Disposition of ISO Shares. If the Option
granted to Optionee herein is an ISO, and if Optionee sells or otherwise
disposes of any of the Shares acquired pursuant to the ISO on or before the
later of (i) the date two years after the Date of Grant, or (ii) the date one
year after transfer of such Shares to the Optionee upon exercise of the ISO, the
Optionee shall immediately notify the Company in writing of such disposition.
Optionee agrees that Optionee may be subject to income tax withholding by the
Company on the compensation income recognized by the Optionee from the early
disposition by payment in cash or out of the current earnings paid to the
Optionee.
ACCUIMAGE DIAGNOSTICS CORP.,
a Nevada corporation
By:___________________________
OPTIONEE ACKNOWLEDGES AND AGREES THAT THE VESTING OF SHARES PURSUANT TO
THE OPTION HEREOF IS EARNED ONLY BY CONTINUING CONSULTANCY OR EMPLOYMENT AT THE
WILL OF THE COMPANY (NOT THROUGH THE ACT OF BEING HIRED, BEING GRANTED THIS
OPTION OR ACQUIRING SHARES HEREUNDER). OPTIONEE FURTHER ACKNOWLEDGES AND AGREES
THAT NOTHING IN THIS AGREEMENT, NOR IN THE COMPANY'S 1998 STOCK OPTION PLAN
WHICH IS INCORPORATED HEREIN BY REFERENCE, SHALL CONFER UPON OPTIONEE ANY RIGHT
WITH RESPECT TO CONTINUATION OF EMPLOYMENT OR CONSULTANCY BY THE COMPANY, NOR
SHALL IT INTERFERE IN ANY WAY WITH HIS RIGHT OR THE COMPANY'S RIGHT TO TERMINATE
HIS EMPLOYMENT OR CONSULTANCY AT ANY TIME, WITH OR WITHOUT CAUSE.
Optionee acknowledges receipt of a copy of the Plan and certain
information related thereto and represents that he is familiar with the terms
and provisions thereof, and hereby accepts this option subject to all of the
terms and provisions thereof. Optionee has reviewed the Plan and this Option in
their entirety, has had an opportunity to obtain the advice of counsel prior to
executing this Option and fully understands all provisions of the Option.
Optionee hereby agrees to accept as binding, conclusive and final all decisions
or interpretations of the Board upon any questions arising under the Plan.
Dated:
----------------- ----------------------------
[Optionee Signature]
<PAGE>
EXHIBIT A
FORM OF
INVESTMENT REPRESENTATION STATEMENT
Investment Letter
AccuImage Diagnostics Corp. ("Company")
400 Oyster Point Blvd., Ste. 114
South San Francisco, California 94080-1917
Re: Issuance of ______ shares of Common Stock (the "Shares")
pursuant to exercise of Stock Option
Gentlemen:
The letter is delivered to the Company in connection with the above
referenced proposed issuance of the Company's Common Stock. In connection with
such issuance, the undersigned ("Investor") agrees with the Company as follows:
1. The Investor understands that: (a) The offer and sale of the Shares
by the Company to Investor has not been registered under the Securities Act of
1933 (the "Securities Act"), in reliance on an exemption from such registration
available under the 1933 Act and rules adopted thereunder; (b) Investor must
hold the Shares indefinitely unless they are subsequently registered under the
Securities Act and qualified under applicable state securities laws, or unless
an exemption from such registration and qualification is available; and (c)
Apart from such legal restrictions on transfer, no public market is ever likely
to develop for the Shares.
2. The Investor agrees that: (a) Investor will not attempt to transfer
the Shares in violation of the above restrictions; (b) the Company may note such
restrictions on transfer in its records and refuse to recognize any transfer
which violates this agreement or for which the Company has not received an
acceptable opinion of counsel stating that such transfer will not violate such
restrictions; and (c) One or more legends indicating a lack of registration
under the Shares Act and a lack of qualification under state securities laws
will be imprinted on the Shares. One such legend shall read substantially as
follows:
THE SHARES HAVE NOT BEEN REGISTERED WITH THE SECURITIES AND EXCHANGE
COMMISSION UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND ANY SALE,
TRANSFER, PLEDGE OR OTHER DISPOSITION THEREOF MAY BE MADE ONLY (i) IN A
REGISTRATION UNDER SAID ACT OR (ii) IF AN EXEMPTION FROM REGISTRATION
UNDER SAID ACT IS AVAILABLE AND THE COMPANY HAS RECEIVED AN OPINION OF
COUNSEL TO THAT EFFECT REASONABLY SATISFACTORY TO IT.
3. Investor hereby represents and warrants to the Company as follows:
(a) Investor is acquiring the Shares for his or her own account, for investment,
and not with a view to any sale or distribution of any interest therein; (b) The
Investor has such knowledge and experience in financial and business matters as
to be capable of evaluating the merits and risks of an investment in the Shares,
and the Investor is able to bear the economic risks of such an investment; and
(c) All statements made, and information furnished, by the Investor in this
certificate and all other information furnished by the Investor to the Company,
are true and complete, to the best of the Investor's knowledge.
4. The Investor agrees that the above representations and warranties
are binding on the Investor's successors and assigns and are made for the
benefit of the Company and any other persons who may become liable for
violations of federal or state securities laws as a result of the falsity of any
of the Investor's representations or warranties. The Investor agrees to
indemnify, defend, and hold harmless such persons from any liability arising
from the falsity of any of the Investor's representations or warranties or from
the breach of any covenant of Investor contained herein.
Very truly yours,
EXHIBIT 10.4
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is entered into and effective
this 15th day of June, 1998 ("Effective Date") by and between ACCUIMAGE
DIAGNOSTICS CORP., a Nevada corporation ("Company") and ALLEN B. POIRSON
("Executive"), regarding the terms and conditions of his employment by and with
the Company.
RECITALS:
WHEREAS, Company wishes to employ Executive and Executive wishes to be
employed to provide his services to Company on the terms and conditions set
forth below.
NOW, THEREFORE, for good and sufficient consideration, the parties
agree as follows:
AGREEMENT
1. POSITION AND DUTIES: Executive will be employed as President and
Chief Executive Officer of Company, effective as of June 15, 1998, or such other
position and duties as the Company's Board of Directors ("Board") may determine
and assign, consistent with Executive's background, experience and performance.
As President and Chief Executive Officer, Executive will report to the Board,
will have profit and loss responsibility for the Company, as well as overall
responsibility for directing the Company toward the achievement of its business
objectives as approved by the Board, plus those duties of an executive officer
of the Company established from time to time by the board and such additional
duties as may be mutually agreed from time to time.
2. TERM: Executive's employment will be at will and for no specific
term, terminable at the will of either Executive or the Company on thirty (30)
days written notice, subject to the terms and conditions set forth below.
3. STANDARDS OF PERFORMANCE: Executive agrees to perform all of his
duties in a fully professional manner pursuant to the standards of skill,
competence and efficiency expected of his position, and subject to the direction
and control of the Board. He agrees to devote his full business time, energy and
attention and give his best efforts and skills exclusively to the furtherance
and best interests of the Company, and to the performance of his duties
hereunder.
A. The above notwithstanding, and specifically subject to Board
approval and the provisions of Section 6 below, the expenditure of reasonable
amounts of time for personal business, charitable, community or professional
activities will not be deemed a breach of this Agreement, provided that such
activities, individually or in the aggregate, do not interfere materially with
the performance of his duties hereunder, and further provided that in engaging
in such activities he complies fully with the non-compete and confidentiality
provisions of this Agreement and/or related policies of the Company, as they may
be modified from time to time. Executive understands and agrees that the
performance of his duties and his employment with the Company generally are
subject to all of the policies of the Company, the Board, the Company's Articles
of Incorporation and By-laws, and to and all laws and regulations applicable to
corporations generally and to the medical imaging industry in particular.
4. COMPENSATION, BENEFITS, AND PERSONNEL POLICIES:
A. As compensation for all services rendered pursuant to this
Agreement, including serving as a member of the Board, if so elected, Executive
shall be entitled to a base salary in a gross amount equivalent to $140,000
calculated on an annualized basis, and payable pursuant to the Company's regular
payroll practices. The base salary is subject to periodic review, not less
frequently than annually, and adjustment as recommended and approved by the
Board in its sole discretion.
B. Executive is also eligible to be considered for payment of an
incentive bonus of up to $60,000 for each full year of employment, calculated on
the basis of the Company's fiscal year and based on overall Company performance
in meeting revenue and profit goals, as well as any additional specific criteria
mutually agreed upon between Executive and the Board, including such matters as
return on shareholders' equity and meeting overall business objectives. For
fiscal year 1998, which concludes on September 30, 1998, the revenue and profit
goals, as well as any additional specific criteria shall be mutually agreed
between the parties. The payment of any bonus will be made in the good faith
exercise of the Board's discretion, which discretion shall be absolute. Such
bonus, if granted, may take the form of cash or securities or options to
purchase securities.
C. As of the Effective Date, Executive will be granted an option
to purchase four hundred thousand (400,000) shares of Company's common stock at
$0.__ per share, exercisable over a ten year period from the date of grant, at
an exercise price calculated at the market price of the Company's stock as of
the Effective Date, pursuant to a stock option agreement containing additional
terms and conditions as deemed appropriate by the Board, and vesting pursuant to
the following schedule: 100,000 shares on the first anniversary of the date of
grant and 25,000 shares quarterly thereafter until fully vested.
D. Executive will also be covered by and/or entitled to
participate in Company's policies and/or plans regarding benefits of employment,
including all pension, profit sharing and other retirement plans, and all group
health, hospitalization and disability insurance plans and other employee
welfare benefit plans, as are customarily available to and on the same terms as
other key executives. In addition, Executive's employment is subject to
Company's personnel and financial policies as they may be developed and modified
from time to time.
E. The Company has indicated its intention to develop a profit
sharing plan for key executive officers. When developed and implemented,
Executive will be eligible to participate in this plan on the same terms and
conditions as other key executives.
F. The Company will reimburse Executive promptly for reasonable
out-of-pocket expenses incurred in connection with the performance of his
duties, including but not limited to travel expenses, food and lodging while
away from home, and reasonable entertainment expenses, consistent with such
policies as the Company may establish from time to time and provided that
Executive provides appropriate and timely expense reports with appropriate
supporting documentation.
G. During each calendar year of employment, Executive is entitled
paid vacation, sick leave and other paid leaves in accordance with the Company's
polices with respect to paid leaves for executives.
5. TERMINATION OF EMPLOYMENT:
A. Without Cause. Company may terminate Executive's employment
without cause effective upon thirty (30) days' written notice. In the event that
the Company terminates Executive's employment without cause Executive shall be
entitled to: (i) payment of all earned but unpaid compensation through the date
of termination; (ii) payment of base salary and group health coverage for an
additional two month period, payable pursuant to the Company's regular payroll
practices at the time ("Severance Period"); and (iii) vesting of any options
that otherwise would have vested during the Severance Period. All
unvested/unvestable options shall be forfeit as of the date of termination and
the Company shall be relieved of any further obligations under the Agreement in
this regard.
B. With Cause. The Company may also terminate Executive's
employment, at any time and without any prior notice, written or otherwise, for
cause which, for purposes of this Agreement, is defined as any one of the
following: (i) criminal conduct, an act of dishonesty or material breach of this
Agreement; (ii) repeated or demonstrated failure or refusal to perform the
material duties of his position after receiving at least ten (10) days' written
notice of the nature of the failure or refusal to perform, or any failure or
refusal to follow a lawful directive of the Board; or (iii) taking any action or
conducting himself in a manner which is contrary or inimical to the best
interests or reputation of the Company, its parent, subsidiaries or affiliated
companies. In the event the Company terminates Executive for cause, he will be
entitled only to compensation earned, pro rata, and any options that have vested
pursuant to their terms, up to the date of his termination. All unvested options
shall be forfeit as of the date of termination and the Company shall be relieved
of any further obligations hereunder.
C. Incapacity. If during the period of his employment Executive
becomes temporarily disabled from performing his duties hereunder through
illness or otherwise, he will be entitled to a leave of absence with
continuation of base salary for the duration of the disability up to a maximum
in the aggregate of three (3) months. If it reasonably appears to the Company in
the good faith exercise of its judgment that the disability will be permanent,
or in any event if such disability lasts longer than three months, the Company
will have the right to terminate Executive's employment immediately thereafter
and Executive will be entitled to receive whatever benefits he may be entitled
to receive pursuant to the Company's benefit plans or policies.
D. Death. If Executive should die while actively employed
pursuant to this Agreement, the Company shall pay to his estate or designated
beneficiaries within sixty (60) days: (i) any earned but unpaid base salary
through the date of death; (ii) any bonus as determined by the Board to be
appropriate, pro rata through the date of death; and (iii) any other death
benefit made available to similarly situated executives in accordance with the
terms and conditions of Company's regular policies or programs.
E. Resignation. In the event Executive elects to resign,
Executive shall provide at least thirty (30) days' written notice of such
election to resign and shall be entitled to payment of all earned but unpaid
compensation and any options that have vested pursuant to their terms, up to the
date of termination. All unvested options shall be forfeit as of the date of
termination and the Company shall be relieved of any further obligations under
the Agreement.
6. NON-SOLICITATION AND NON-COMPETITION
A. During Executive's employment and during any Severance Period
thereafter, he will not engage, either directly or beneficially, in any outside
business or financial activity, nor render any service in any capacity to anyone
in the business of medical imaging technology. For purposes of this Section 6
and of Section 7, below, Executive agrees and understands that the Company is
defined to include any parent, subsidiary, predecessor, successor or affiliate
of the Company, and further that "engaging in business" or "rendering any
service" includes serving as an officer, director, employee, shareholder,
investor, consultant (with or without compensation) or adviser to any other
entity which engages in the Company's business in the United States. Executive
agrees that with respect to any other outside work during the employment period,
including self-employment, he is required to obtain the advance written approval
of the Company's management, which will evaluate his request taking into account
such factors as his work schedule, duties and responsibilities, any actual or
apparent conflict or incompatibility of employment, and any potential impact on
his performance. The Company's determination shall be made in its sole
discretion, and shall be final.
B. During his employment, during any Severance Period, and for
one year thereafter, except as required by his duties for the Company, Executive
will not, directly or indirectly, or in concert with others, employ nor solicit
nor influence nor otherwise cause any employee of the Company or any of its
affiliated companies to leave their employment with the Company.
7. CONFIDENTIALITY, TRADE SECRETS, AND ASSIGNMENT OF INVENTIONS:
A. Executive acknowledges and agrees that during the course of
his employment with Company, and in preparation therefore and thereafter, he
will be privy to many trade secrets and/or proprietary and other confidential or
privileged information (together "Proprietary Information") regarding the
Company which may affect, among other things, the successful conduct,
furtherance and protection of the Company's business and good will. For these
purposes, confidential information means all business information of whatever
nature regarding the Company (including any and all parents, subsidiaries,
predecessors, successors or affiliates), or about any of its products or
services or potential products or services, business plans, executives,
employees, and methods of doing business, which is not generally known to the
public at large. Trade secrets means information which derives independent
economic value from not being generally known to the public or to others who can
derive economic value from its disclosure or use and is the subject of
reasonable efforts to maintain its secrecy. This Proprietary Information
specifically includes but is not limited to technological information, customer
lists, types and prices of merchandise and orders, future plans, sales methods,
and salary and other personnel information. Executive agrees to keep all such
information in strictest confidence and not to disclose it except for legitimate
purposes of the Company and with the Company's express written consent, either
during his employment or at any time thereafter.
B. On termination of his employment, Executive shall promptly
deliver to the Company all equipment belonging to it, all code and computer
programs of whatever nature, as well as all manuals, letters, correspondence,
reports, price lists, customer lists, sales information, and all copies thereof,
and all other materials of a confidential nature regarding the Company's
business that are in his possession or control. Executive further agrees that
the remedy at law for any breach of the provisions of Sections 6 and 7 herein
will be inadequate, and that the Company will be entitled to seek appropriate
injunctive relief in addition to any remedy at law in case of any such breach.
C. Executives acknowledges and specifically agrees that fully all
work he performs within the scope of his employment, and/or all work which
relates at the time of conception or reduction to the Company's business, or
actual or anticipated research or development of the Company, and/or all work
which results from any work Executive performs for the Company, whether such
work is performed during regular business hours or otherwise, and whether
utilizing the Company's equipment, supplies, facilities or trade secret
information or otherwise, shall belong to the Company. Executive agrees to
assign, or offer to assign, or to take such other reasonable action to assure
that any and all rights to such work shall belong or otherwise be transferred to
the Company.
D. Executive further agrees, as a condition of continued
employment, to promptly disclose to the Company all ideas, processes,
inventions, improvements, developments, methods, designs, analyses, drawings,
reports and discoveries coming within the scope of the Company's business or
related to its products or to any research, design, development, application or
production work carried on by the Company, or to any problems or programs
specifically assigned to Executive, conceived alone or with others during his
employment, and whether or not conceived during regular working hours. All such
ideas, processes, programs, applications, trademarks, inventions, improvements,
developments and discoveries, whether patentable or not, shall be the Company's
sole and exclusive property, and Executive assigns and hereby agrees to assign
his entire right, title and interest in and to the same to the Company, and to
take such other reasonable action to assure that such work shall belong to and
be protected on behalf of the Company.
8. GOVERNING LAW: This Agreement will be governed by and construed
according to the laws of the State of California.
9. RESOLUTION OF DISPUTES: Any controversy between Executive and the
Company involving his employment with the Company or termination thereof,
including but not limited to enforcement, construction, or application of any
term, provision, or condition of this Agreement, except with respect to
paragraphs 6 and 7 hereof, shall be referred to non-binding mediation by a sole
mediator to be selected by agreement between the parties within ten (10)
business days. The mediation shall be scheduled and conducted as promptly as
practicable, and the costs of mediation shall be borne equally by the parties.
A. If the parties cannot themselves agree on a mediator, or if
mediation does not resolve the matter, then either party shall submit the
controversy or claim, within 180 days, to final and binding arbitration in
accordance with the Federal Arbitration Act and the rules of the Judicial and
Mediation Services ("JAMS") then in effect, such arbitration to be conducted in
the County of Santa Clara, California. Failure to initiate arbitration within
such one hundred and eighty (180) day period, or as mutually extended, shall
constitute a waiver of any and all such claims, and they shall be forever
barred. Both parties will attempt to agree upon a mutually acceptable
arbitrator. If they are unable to agree upon an arbitrator, then an arbitrator
will be selected in accordance with the then-current rules of the JAMS. The
parties further agree that arbitrator shall be entitled to award money damages,
including reasonable attorneys' fees to the prevailing party, but shall not be
entitled to award any other remedy at law or equity including but not limited to
exemplary damages, specific performance or injunctive relief. The costs of the
arbitrator will be shared equally by both parties. The parties agree that,
except as specifically excepted herein, arbitration will be their exclusive form
for resolving disputes with one another regarding the employment relationship
and this Agreement, and they expressly waive any entitlement they may have to
have controversies between them decided by a jury or a court of law.
10. ENTIRE AGREEMENT: This Agreement sets forth the entire agreement
and understanding between the parties relating to the subject matter of it, and
supersedes and merges all prior discussions between the parties about such
subject matter.
11. SEVERABILITY: In the event that one or more of the provisions
contained in this Agreement are held to be invalid, illegal, or unenforceable in
any respect by a court of competent jurisdiction, such holding shall not impair
the validity, legality, or enforceability of the remaining provisions herein.
12. SUCCESSORS AND ASSIGNS: This Agreement is binding on Executive's
heirs, executors, administrators, and other legal representatives and will be
for the benefit of the Company, its successors, and assigns.
13. NOTICES: Any notice or other communication required or given
hereunder shall be in writing and delivered personally or sent by telecopier,
certified, registered, or express mail, postage prepaid, and shall be deemed
given when so delivered personally or by telecopier, or if mailed, two days
after the date of mailing, as follows:
If to the Company, addressed to it at:
AccuImage Diagnostics Corp.
400 Oyster Point Blvd.
So. San Francisco, CA 94080
Attention: Chairman
If to Executive, addressed to him at:
Dr. Allen B. Poirson
3360 21st Street
San Francisco, CA 94110
or at such other address as either party may from time to time specify by giving
notice as provided herein.
14. INDEMNIFICATION AND INSURANCE. The Company will indemnify
Executive to the fullest extent permitted by the laws of the State of
California, as in effect at the time of the subject act or omission, and the
Executive shall be entitled to the protection of any insurance policies the
Company may elect to maintain generally for the benefit of its directors and
officers insuring against all costs, charges and expenses whatsoever incurred or
sustained by the Executive in connection with any action, suit or proceeding to
which Executive may be made a part by reason of being or having been an officer
or employee of the Company or any of its subsidiaries, predecessors, or serving
or having served any other enterprises at the request of the Company (other than
any dispute, claim or controversy brought by the Company against Executive for
breach of any provision of this Agreement).
15. SOURCE OF FUNDS. Any and all payments provided pursuant to this
Agreement shall be made in cash from the general funds of the Company and no
special or separate fund or insurance arrangement shall be established or
created and no other segregation of assets made to assure payment. To the extent
that any person acquires a right to receive payments from the Company hereunder,
such right shall be no greater than the right of an unsecured creditor of the
Company.
16. AMENDMENTS AND WAIVERS: This Agreement may not be amended,
modified, superseded, canceled, renewed, extended, or any terms waived, except
by written instrument signed by both parties, or in the case of waiver, by the
party to be charged.
IN WITNESS WHEREOF the parties hereto have executed this agreement as
of the month and date first above written.
EXECUTIVE:
--------------------------------
ALLEN B. POIRSON
ACCUIMAGE DIAGNOSTICS CORP.
By:
------------------------------
Its:
-----------------------------
EXHIBIT 10.5
AccuImage
Diagnostics Corporation
Robert Taylor, Ph.D.
74 Landcroft Road 15 March, 1999
East Dulwich, London, SE22 9JT
Dear Robert:
It is a great pleasure to offer you this employment package.
Position: Chief Technology Officer
Duties: Responsible for development and maintenance of the Acculmage
product line.
Start Date: Upon approval of H-1B visa, sponsored and procured by
Acculmage
Salary: USD$110,000/year
Fringe Benefits:
Full medical coverage; 401 (k) plan; Fifteen vacation days;
Major holidays off.
Moving Expenses:
Up to USD$7,500
Stock Options:
300,000 incentive stock options (ISOs) on the Company's common
stock. The option price is $0.50 per share, with an expiration
date 10 years after their grant date. Once issued in
accordance with the vesting schedule described below, they may
be exercised by the employee at any time prior to their
expiration date. The first issue date shall be 12 months after
employment commences (75,000 options), and then at 3-monthly
periods thereafter (18,750 options every 3 months until fully
vested). Should AccuImage terminate the employment contract
before the full vesting period, then the Employee shall be
entitled to a pro-rata share of the ISOs earned (ISOs will be
earned at a rate of 6,250 per calendar month). Should
employment terminate for any reason, the Employee will retain
the right to exercise ISOs already earned at any time prior to
their expiration dates.
Annual Reviews:
Employee will be evaluated on an annual basis by the Chief
Executive Officer. Duties, Salary and/or Fringe Benefits will
be adjusted according to the evaluation.
-------------------------- ----------------------------
Robert Taylor, Ph.D. Allen B. Poirson, Ph.D.
Chief Technology Officer President and CEO
AccuImage Diagnostics Corp. AccuImage Diagnostics Corp.
