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As filed with the Securities and Exchange Commission on May 26, 2000
File No. 333-_______
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-3
REGISTRATION STATEMENT UNDER
THE SECURITIES ACT OF 1933
INTERNATIONAL REMOTE IMAGING SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 94-2579751
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
9162 ETON AVENUE
CHATSWORTH, CALIFORNIA 91311
(818) 709-1244
(Address of Principal Executive Offices)
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<S> <C>
DR. JOHN A. O'MALLEY Copies of communications sent to:
CHAIRMAN OF THE BOARD DANIEL G. CHRISTOPHER, ESQ.
INTERNATIONAL REMOTE IMAGING SYSTEMS, INC. GUTH ROTHMAN & CHRISTOPHER LLP
9162 ETON AVENUE 10866 WILSHIRE BOULEVARD, SUITE 1250
CHATSWORTH, CALIFORNIA 91311 LOS ANGELES, CALIFORNIA 90024
(818) 709-1244 (310) 474-8809
(Name and address of agent for service)
</TABLE>
Approximate date of commencement of proposed sale to the public: From time to
time after the effective date of the Registration Statement, as determined by
market conditions and the potential selling stockholders.
If the only securities being registered on this form are to be offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If the only securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [ X ]
If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ] ________________________
If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ] ________________________
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF SECURITIES TO BE REGISTERED AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
REGISTERED(1) PER SHARE(2) OFFERING PRICE(2) REGISTRATION FEE
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<S> <C> <C> <C> <C>
Common Stock, par value $.01 per share 2,520,826 $1.35 $3,403,115.10 $898.50
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(1) Pursuant to Rule 416 of the Securities Act of 1933, as amended, this
Registration Statement also covers such additional securities as may become
issuable to prevent dilution resulting from stock splits, stock dividends
and similar events.
(2) Pursuant to Rule 457(c), estimated solely for the purpose of calculating
the registration fee on the basis of the average of the high ($1 5/6) and
low ($1 3/8) per share sale prices of the Registrant's Common Stock on the
American Stock Exchange on May 25, 2000.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
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PROSPECTUS
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INTERNATIONAL REMOTE IMAGING SYSTEMS, INC.
UP TO 2,520,826 SHARES OF COMMON STOCK
The stockholders listed in the Table of Selling Stockholders on page 8 may
use this prospectus from time to time to offer for sale up to 2,520,826 shares
of our common stock. The shares of common stock covered by this prospectus
consist of 2,309,556 shares of outstanding common stock and up to 211,270 shares
of common stock issuable upon the conversion of preferred stock into our common
stock and the exercise of outstanding warrants.
The selling stockholders acquired their shares of our common stock,
preferred stock and related warrants through four distinct transactions. Thermo
Amex Convertible Growth Fund I, L.P purchased its shares of our common stock and
related warrants in our private placement of our equity securities in May 1995.
In January 2000, we acquired the common stock of Poly U/A Systems, Inc. held by
Mrs. Celia Klein, Mr. Mitchell Klein and Mr. Douglas Harris in return for shares
of our common stock, shares of our preferred stock and related warrants to
purchase shares of our common stock under the same terms as our 1999 tender
offer for all of the outstanding common stock of Poly U/A. In February 2000, we
issued warrants to purchase shares of our common stock to Brill Securities, Inc.
and Lawrence Berk in connection with our agreement for Brill Securities, Inc. to
act as our investment consultants through February 10, 2002. In April 2000, we
acquired additional shares of Poly U/A common stock from Poly UA 1000 LLC, Dr.
Raymond Jallow and Mr. Ralph Engh. See "Selling Stockholders" beginning on page
8
INVESTMENT IN OUR COMMON STOCK INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" ON PAGE 2.
We are not offering any shares of common stock to the public and will not
directly receive any proceeds from the sale of shares under this prospectus. We
may indirectly receive proceeds of up to approximately $486,001.20 to the extent
that any selling stockholders exercise their rights under the warrants. We are
paying the cost of registering the shares of common stock to which this
prospectus relates as well as various related expenses. The selling stockholders
are individually responsible for all selling commissions, transfer taxes and
other costs related to the offer and sale of their shares. If required, the
number of shares to be sold, the public offering price of those shares, the
names of any broker-dealers and any applicable commission or discount will be
included in a supplement to this prospectus, called a prospectus supplement.
Our common stock is traded on the American Stock Exchange under the symbol
"IRI." On May 25, 2000, the closing sale price of our common stock on the
American Stock Exchange was $1.375 per share.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THE SECURITIES DESCRIBED IN THIS
PROSPECTUS OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this prospectus is May 26, 2000.
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RISK FACTORS
This Registration Statement on Form S-3, of which this prospectus forms a
part, contains a discussion of various risk factors and other information that
should be carefully considered. The risks and uncertainties described below are
not the only ones that impact us. Additional risks and uncertainties not
presently known to us or that we currently deem immaterial may also have an
adverse impact on us. Among other things, this prospectus contains
forward-looking statements that are based on certain assumptions about future
risks and uncertainties. We believe that our assumptions are reasonable.
Nonetheless, it is likely that at least some of these assumptions will not come
true. Accordingly, our actual results will probably differ from the outcomes
contained in any forward-looking statements. These differences could be
material. Factors that could cause or contribute to such differences include,
among other things, those discussed below, as well as those discussed elsewhere
in this Registration Statement on Form S-3, of which this prospectus forms a
part.
WE HAVE A POTENTIAL FOR CONTINUING OPERATING LOSSES.
We have incurred net losses for the past three years. There can be no
assurance that we will be able to restore annual profitability. Furthermore, as
of July 31, 2001, we will be obligated to repay all amounts due under an
outstanding subordinated note. We currently owe $7.0 million under that note. At
maturity, we may not be capable of repaying the note and may seek to refinance
this debt obligation. There can be no assurance that we will be able to repay
the amounts owing under the note or that we will be able to successfully
refinance this debt.
OUR SUCCESS DEPENDS LARGELY ON SALES OF HIGH-PRICED LABORATORY INSTRUMENTS.
Historically, we derived most of our revenues from the sale of two families
of high-priced instruments - The Yellow IRIS urinalysis workstations and the
PowerGene genetic analyzers. We recently entered into a letter of intent to sell
Perceptive Scientific Instruments--a division which manufactures and markets the
PowerGene genetic analyzers--and have restated our financial information to
account for PSI as a discontinued operation. Our remaining product line, The
Yellow IRIS, has list prices ranging from $100,000 to $195,000 depending on
model and configuration. Relatively modest declines in unit sales or gross
margins for this product line could diminish our revenues and profits.
WE ARE IN THE PROCESS OF DEVELOPING A NEW OPERATING PLATFORM FOR THE YELLOW
IRIS.
We currently use a unique multi-band image processor in The Yellow IRIS
family of workstations. The manufacturer has discontinued production of this
processor. While we have secured a large inventory of these processors and
routinely acquire more from customer "trade-ins," we must complete development
of our new platform using an off-the-shelf new microprocessor before we exhaust
our supply of the old multi-band image processors. The failure to successfully
and timely complete this transition would have a material and adverse affect on
new system sales.
WE RELY ON SOME SINGLE-SOURCE SUPPLIERS FOR KEY COMPONENTS OF OUR INSTRUMENTS,
AND IF ANY OF THESE SUPPLIERS DISCONTINUE PRODUCTION OF THESE COMPONENTS, OR WE
ARE UNABLE TO REPLACE UNAVAILABLE COMPONENTS, IT COULD HARM OUR BUSINESS.
Certain key components of our instruments are manufactured by single-source
suppliers. For example, Roche Diagnostics is the sole source for our proprietary
CHEMSTRIP/IRIStrip urine test strips and related urine test strip readers, both
used in The Yellow IRIS Models 300 and 500. Any of our single-source suppliers
could encounter production problems. If any single-source supplier has an
interruption in its production or discontinues a key component, the volume of
our instrument sales could be diminished and could harm our business, financial
condition and operating results.
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In the past, single-source suppliers have discontinued their production of
key components and we have successfully replaced those discontinued components
with satisfactorily replacements components. However, if we are unable to
replace unavailable components in the future, we are likely to experience a
decrease in instrument sales.
THE INTENSIFYING COMPETITION WE FACE FROM BOTH ESTABLISHED ENTITIES AND NEW
ENTRIES IN THE MARKET MAY ADVERSELY AFFECT OUR REVENUES AND PROFITABILITY.
There are many companies with active research and development programs both
in and outside of the clinical laboratory imaging systems field. Many of these
companies have considerable experience in areas of competing interest to us.
Additionally, we cannot determine if other firms are conducting potentially
competitive research, which could result in the development and introduction of
products that are either comparable or superior to the products we sell.
Specifically, if a competitor introduces a new product that is comparable or
superior to any model of The Yellow IRIS, then our unit sales or gross margins
could be diminished. This in turn could have a material adverse effect on our
overall financial condition and operations. Further, new product introductions,
product enhancements and the use of other technologies by our competitors could
lead to a loss of market acceptance and cause a decline in sales or gross
margins.
OUR SUCCESS DEPENDS ON OUR ABILITY TO ATTRACT, RETAIN AND MOTIVATE MANAGEMENT
AND OTHER SKILLED EMPLOYEES.
Our success depends in significant part upon the continued services of key
management and skilled personnel. Competition for qualified personnel is intense
and there are a limited number of people with knowledge of, and experience in,
our industry. We do not have employment agreements with most of our key
employees. However, we generally enter into agreements with our employees
regarding patents, confidentiality and related matters. We do not maintain life
insurance polices on our employees. Our loss of key personnel, especially
without advance notice, or our inability to hire or retain qualified personnel,
could have a material adverse effect on our instrument sales and our ability to
maintain our technological edge. We cannot guarantee that we will continue to
retain our key management and skilled personnel, or that we will be able to
attract, assimilate and retain other highly qualified personnel in the future.
ANY FAILURE TO SUCCESSFULLY INTRODUCE OUR FUTURE PRODUCTS AND SYSTEMS INTO THE
MARKET COULD ADVERSELY AFFECT OUR BUSINESS.
The commercial success of our future products and systems depends upon
their acceptance by the medical community. Our future product plans include
capital-intensive laboratory instruments. We believe that these products can
significantly reduce labor costs, improve precision and offer other distinctive
benefits to the medical research community. However, there is often market
resistance to products which require significant capital expenditures or which
eliminate jobs through automation. We can make no assurance that the market will
accept our future products and systems, or that sales of our future products and
systems will grow at the rates expected by our management.
IF WE FAIL TO MEET CHANGING DEMANDS OF TECHNOLOGY, WE MAY NOT CONTINUE TO BE
ABLE TO COMPETE SUCCESSFULLY WITH OUR COMPETITORS.
The market for our products and systems is characterized by rapid
technological advances, changes in customer requirements, and frequent new
product introductions and enhancements. Our future success depends upon our
ability to introduce new products that keep pace with technological
developments, enhance current product lines and respond to evolving customer
requirements. Our failure to meet these demands could result in a loss of our
market share and competitiveness and could harm our revenues and results of
operations.
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ANY FAILURE OR INABILITY TO PROTECT OUR TECHNOLOGY AND CONFIDENTIAL INFORMATION
COULD ADVERSELY AFFECT OUR BUSINESS.
PATENTS. Our commercial success depends in part on our ability to protect
and maintain our automated intelligent microscopy (or AIM) and other proprietary
technology. We have received patents with respect to portions of the
technologies of AIM. However, ownership of technology patents may not insulate
us from potentially damaging competition. Patent litigation relating to clinical
laboratory instrumentation patents (like the ones we own) often involve complex
legal and factual questions. Therefore, we can make no assurance that claims
under patents currently held by us, or our pending or future patent
applications, will be sufficiently broad to adequately protect what we believe
to be our proprietary rights. Additionally, one or more of our patents could be
circumvented by a competitor. We believe that our proprietary rights do not
infringe upon the proprietary rights of third parties. However, third parties
may assert infringement claims against us in the future. If we are unsuccessful
in our defense against any infringement claim our patents, or patents in which
we have licensed rights, may be held invalid and unenforceable.
TRADE SECRETS. We have trade secrets, unpatented technology and proprietary
knowledge related to the sale, promotion, operation, development and
manufacturing of our products. We generally enter into confidentiality
agreements with our employees and consultants. However, we cannot guarantee that
our trade secrets, unpatented technology or proprietary knowledge will not
become known or be independently developed by competitors. If any of this
proprietary information becomes know to third parties, we may have no practical
recourse against these parties.
COPYRIGHTS. We claim copyrights in our software and the ways in which it
assembles and displays images. We also claim trademark rights in the United
States and other foreign countries. However, we can make no assurance that we
will be able to obtain enforceable copyright and trademark protection, nor that
this protection will provide us a significant commercial advantage.
POTENTIAL LITIGATION EXPENSES. Offensive or defensive litigation regarding
patent and other intellectual property rights could be time-consuming and
expensive. Additionally, litigation could demand significant attention from our
technical and management personnel. Any change in our ability to protect and
maintain our proprietary rights could materially and adversely affect our
financial condition and results of operations.
WE OPERATE IN A CONSOLIDATING INDUSTRY WHICH CREATES BARRIERS TO OUR MARKET
PENETRATION.
The healthcare industry in recent years has been characterized by
consolidation. Large hospital chains and groups of affiliated hospitals prefer
to negotiate comprehensive supply contracts for all of their supply needs at
once. Large suppliers can often equip an entire laboratory and offer these
hospital chains and groups one-stop shopping for laboratory instruments,
supplies and service. Larger suppliers also typically offer annual rebates to
their customers based on the customer's total volume of business with the
supplier. The convenience and rebates offered by these large suppliers are
administrative and financial incentives that we do not offer our customers. Our
plans for further market penetration in the urinalysis market of The Yellow IRIS
family of workstations will depend in part on our ability to overcome these and
any new barriers resulting from continued consolidation in the healthcare
industry.
SINCE WE OPERATE IN THE MEDICAL TECHNOLOGY INDUSTRY, OUR PRODUCTS ARE SUBJECT TO
GOVERNMENT REGULATION THAT COULD IMPAIR OUR OPERATIONS.
Most of our products are subject to stringent government regulation in the
United States and other countries. These regulatory processes can be lengthy,
expensive and uncertain. Additionally, securing necessary clearances or
approvals may require the submission of extensive official data and other
supporting information. Our failure to comply with applicable requirements could
result in fines, recall or seizure of products, total or partial suspension of
production, withdrawal of existing product approvals or
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clearances, refusal to approve or clear new applications or notices, or criminal
prosecution. If any of these things occur, they could harm our business. Changes
in existing federal, state or foreign laws or regulations, or in the
interpretation or enforcement of these laws, could also materially and adversely
affect our business.
CHANGES IN GOVERNMENT REGULATION OF THE HEALTHCARE INDUSTRY COULD ADVERSELY
AFFECT OUR BUSINESS.
Federal and state legislative proposals are periodically introduced or
proposed that would affect major changes in the healthcare system, nationally,
at the state level or both. Future legislation, regulation or payment policies
of Medicare, Medicaid, private health insurance plans, health maintenance
organizations and other third-party payors could adversely affect the demand for
our current or future products and our ability to sell our products on a
profitable basis. Moreover, healthcare legislation is an area of extensive and
dynamic change, and we cannot predict future legislative changes in the
healthcare field or their impact on our industry or our business.
OUR NET OPERATING LOSS CARRYFORWARDS COULD BE REDUCED IF THERE IS A "CHANGE OF
OWNERSHIP" UNDER SECTION 382 OF THE INTERNAL REVENUE CODE.
At December 31, 1999, we had federal net operating loss carryforwards of
approximately $17.5 million. Section 382 of the Internal Revenue Code imposes an
annual limitation on the utilization of net operating loss carryforwards based
on a statutory rate of return (usually the "applicable federal rate," as defined
in the Internal Revenue Code) and the value of the corporation at the time of a
"change of ownership" as defined by Section 382. If substantially all of our
outstanding options and warrants are exercised on or before December 31, 2000,
there will be a "change in ownership" under Section 382. Most of our currently
exercisable warrants and options are out-of-the-money, with exercise prices
ranging from $.69 to $7.80 per share. However, if the market price of our common
stock increases, a sufficient number selling stockholders may choose to exercise
their warrants and options. This may result in a change of ownership under
Section 382. If this set of circumstances occurs, the limitations imposed by
Section 382 could trigger a substantial write-down of our deferred tax assets
and a corresponding charge to our earnings in the relevant quarter.
WE ARE SUBJECT TO ANTI-TAKEOVER PROVISIONS IN OUR CHARTER THAT COULD DELAY OR
PREVENT AN ACQUISITION OF OUR COMPANY, EVEN IF SUCH AN ACQUISITION WOULD BE
BENEFICIAL TO OUR STOCKHOLDERS.
Certain provisions of our certificate of incorporation, our bylaws and
Delaware law could, together or separately, delay or prevent a third party from
acquiring us, even if doing so might be beneficial to our stockholders. These
provisions may also limit the price that investors might be willing to pay for
shares of our common stock. Some of these provisions:
o establish a classified board of directors;
o authorize the issuance of preferred stock with rights and privileges
which could be senior to the common stock, without prior stockholder
approval;
o limit the right of stockholders to call a special meeting of
stockholders; and
o prohibit stockholder action by written consent.
Additionally, in December 1999, the Board of Directors of IRIS approved and
adopted a shareholders rights plan. Under the terms of the plan, each
shareholder of record at the close of business on February 7, 2000 received
rights to purchase shares of a new Series C Preferred Stock. Each share of
Series C Preferred Stock would be the economic equivalent of 1,000 shares of
IRIS Common Stock. The Company currently has approximately 9.7 million
outstanding shares of common stock. The rights will be exercisable only if a
person or group acquires 20% or more of the IRIS Common Stock, or announces a
tender offer for 20% or more of the IRIS Common Stock, without board approval.
If the rights are triggered, all stockholders (except the hostile party) will be
entitled to purchase shares of the Series C Preferred Stock at a price based on
a substantial discount from the market price of the IRIS Common
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Stock. The Board of Directors may terminate the plan at any time or redeem the
rights prior to their becoming exercisable.
We also are subject to Section 203 of the Delaware General Corporation Law
which, subject to certain exceptions, prohibits a Delaware corporation from
engaging in any of a broad range of business combinations with any "interested
stockholder" for a period of three years following the date that such
stockholder became an interested stockholder.
DEFECTIVE PRODUCTS MAY SUBJECT US TO LIABILITY.
Our products are used to gather information for medical decisions and
diagnosis. Accordingly, the manufacture and sale of our products entails an
inherent risk of product liability arising from an inaccurate, or allegedly
inaccurate, test result. We currently maintain product liability insurance
coverage for up to $1.0 million per incident and up to an aggregate of $2.0
million per year. We also currently maintain a product liability umbrella policy
for coverage of claims aggregating more than $5.0 million. Although management
believes this liability coverage is sufficient protection against future claims,
there can be no assurance of the sufficiency of these policies. We have not
received any indication that our insurance carrier will not renew our product
liability insurance at or near current premiums; however, we cannot guarantee
that this will continue to be the case. In addition, any failure to comply with
Federal Drug Administration regulations governing manufacturing practices could
hamper our ability to defend against product liability lawsuits.
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THE COMPANY
We design, develop, manufacture and market in vitro diagnostic, or IVD,
imaging systems for urinalysis testing based on patented and proprietary
automated intelligent microscopy, or AIM, technology for automating microscopic
procedures performed in clinical laboratories, as well as special purpose
centrifuges and other small instruments. Our microscopy technology combines our
capabilities in automated specimen presentation, including our patented
slideless microscope, and proprietary high-speed digital processing hardware and
software to classify and present images of microscopic particles in easy-to-view
displays. Our systems provide customers with better and more rapid results and
labor cost-savings over manual methods of performing microscopy. We sell our
products directly and through distributors to hospital and reference clinical
laboratories, as well as to veterinary, physician office and research
laboratories.
Our company was incorporated in California in 1979 and reincorporated in
Delaware in 1987. Our executive offices are located at 9162 Eton Avenue,
Chatsworth, California 91311 and our telephone number is (818) 709-1244.
USE OF PROCEEDS
We will not directly receive any proceeds from the sale of shares under
this prospectus. We may indirectly receive proceeds of up to approximately
$486,001.20 to the extent that any selling stockholders exercise their rights
under their warrants. The actual amount of any proceeds will equal the number of
shares purchased multiplied by the exercise price of the warrants exercised. We
will use any proceeds from the exercise of warrants for debt repayment and
general corporate purposes.
SELLING STOCKHOLDERS
In May 1995 we completed a private placement of our equity securities. In
that offering we sold 3,000 shares of Convertible Preferred Stock to Thermo
Amex. In connection with that offering, in December 1996 we issued them warrants
to purchase 84,720 additional shares of our common stock. On October 7, 1999,
Thermo Amex converted all of its shares of Convertible Preferred Stock into 2
million shares of our common stock. We have previously registered 1,180,000
shares of our common stock for resale by Thermo Amex on a Registration Statement
on Form S-3 (filed on May 15, 1997). This prospectus relates to those previously
registered shares as well as an 1,340,826 additional shares of our common stock
(for a total of 2,520,826). Of the total number of shares covered by this
prospectus, 2,084,270 shares may be sold from time to time by Thermo Amex,
84,270 shares of which will be issuable upon exercise of the Thermo Amex's
warrants.
In September 1999, we conducted a tender offer for all of the then
outstanding common stock of Poly U/A. After the expiration of that tender offer,
each of Ms. Cecilia Klein, Mr. Mitchell Klein and Mr. Douglas Harris notified us
of their desire to tender their shares of Poly U/A in return for shares of our
common stock on essentially the same terms as the initial Poly U/A tender offer.
After we accepted their offer, in exchange for each tendered share of Poly U/A
common stock and a signed release of claims, each of Ms. Klein, Mr. Klein and
Mr. Harris received the following:
o three shares of our common stock;
o one share of our Series B Preferred Stock; and
o a Series G Warrant, exercisable to purchase three shares of common
stock.
Our Series B Preferred Stock has a liquidation preference of $3 per share.
We may convert the Series B Preferred Stock at any time into a number of shares
of our common stock equal to the liquidation value divided by the market price
of our common stock at the time of conversion (subject to a minimum value of
$2.00 per share). If it is still outstanding on August 3, 2002, the Series B
Preferred Stock will automatically
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convert under the same formula on that day. Based on the average closing price
of $1.425 per share for the five-day period ending May 25, 2000, the call price
would be the $2.00 minimum, and we could convert the Series B Preferred Stock
held by each of Ms. Klein, Mr. Klein and Mr. Harris into 3000 shares of our
common stock.
The Series G Warrants entitle each of Ms. Klein, Mr. Klein and Mr. Harris
to purchase up to 6000 shares of common stock, half at $1.00 per share and the
other half at $2.00 per share. The Series G Warrants expire on August 6, 2002.
We have the right to redeem any unexercised portion of the Series G Warrants for
a nominal amount of cash at any time after the 30-day average closing price of
our common stock exceeds 200% of the warrant exercise price.
On February 10, 2000, we entered into an agreement with Brill Securities
retaining them as our investment consultants for a period of two years (through
February 10, 2002). As compensation for its services, Brill Securities and
Lawrence Berk were each awarded warrants to purchase 50,000 shares of common
stock at $1.50 per share.
In April 2000, we acquired an additional 51,000 shares of common stock of
Poly U/A from Poly UA 1000 LLC, Mr. Raymond Jallow and Mr. Ralph W. Engh, three
remaining stockholders of Poly U/A. Each of these selling stockholders signed a
release of all claims against the Company and received 291,556 shares of common
stock.
The following table sets forth the number of shares of common stock beneficially
owned by each selling stockholder as of May 25, 2000.
<TABLE>
<CAPTION>
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BENEFICIALLY OWNED
NUMBER OF SHARES NUMBER OF SHARES SHARES AS A PERCENT OF
BENEFICIALLY REGISTERED OUTSTANDING COMMON
SELLING STOCKHOLDER OWNED FOR SALE STOCK (1)
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Thermo Amex Convertible Growth Fund I, L.P. 2,084,270(2) 2,084,270(2) 21.5%
- ------------------------------------------------ -------------------------- ----------------- -------------------------
Celia Klein 15,000(3) 15,000(3) *
- ------------------------------------------------ -------------------------- ----------------- -------------------------
Mitchell Klein 15,000(3) 15,000(3) *
- ------------------------------------------------ -------------------------- ----------------- -------------------------
Douglas Harris 15,000(3) 15,000(3) *
- ------------------------------------------------ -------------------------- ----------------- -------------------------
Brill Securities, Inc. 50,000(4) 50,000(4) *
- ------------------------------------------------ -------------------------- ----------------- -------------------------
Lawrence Berk 50,000(4) 50,000(4) *
- ------------------------------------------------ -------------------------- ----------------- -------------------------
Poly UA 1000 LLC 280,122(5) 280,122(5) 2.9%
- ------------------------------------------------ -------------------------- ----------------- -------------------------
Raymond Jallow 7,717(5)(6) 5,717(5) *
- ------------------------------------------------ -------------------------- ----------------- -------------------------
Ralph W. Engh 9,717(5)(6) 5,717(5) *
- ------------------------------------------------ -------------------------- ----------------- -------------------------
</TABLE>
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* Less than 1% of the total outstanding shares of our common stock.
(1) Based upon 9,700,847 shares of our common stock outstanding as of April 30,
2000.
(2) Includes warrants to purchase an aggregate of 84,270 shares of our common
stock at an exercise price of $3.56 per share or an aggregate exercise
price of approximately $300,000.
(3) Includes up to 3000 shares of our common stock issuable upon conversion of
Series B Preferred Stock and 6000 shares of our common stock issuable upon
exercise of Series G Warrants.
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(4) Warrants to purchase 50,000 shares of our common stock at an exercise price
of $1.50 per share or an aggregate exercise price of $75,000.
(5) Messrs. Jallow and Engh are each managing members of Poly UA 1000 LLC. They
both disclaim beneficial ownership of the 280,122 share of our common stock
held by Poly UA 1000 LLC.
(6) Each of Dr. Raymond Jallow and Mr. Ralph Engh are the beneficial holders of
an additional warrant to purchase 39,500 shares of our common stock, and an
option to purchase 10,000 shares of our common stock.
The selling stockholders may offer shares under this prospectus from time
to time and may elect to sell none, some or all of the shares set forth next to
their name. As a result, we cannot estimate the number of shares of common stock
that the selling stockholders will beneficially own after termination of sales
under this prospectus. In addition, the selling stockholders may have sold,
transferred or otherwise disposed of all or a portion of their shares of common
stock since the date on which they provided information for this table. We have
made no independent inquiries about this, and we are relying on written
commitments from the selling stockholders to notify us of any changes in their
beneficial ownership after the date they originally provided this information.
PLAN OF DISTRIBUTION
This prospectus is for the public resale of shares of our common stock that
was previously issued to the selling stockholders in connection with our sale of
equity securities to Thermo Amex, our tender offer for all of the outstanding
common stock of Poly U/A, our business arrangement with Robert Brill Brown and
Lawrence Berk, on behalf of Brill Securities, Inc. and an agreement we entered
into with Poly UA 1000 LLC, Mr. Raymond Jallow, Mr. Ralph Engh. This prospectus
also covers the public sale of our common stock issuable to the selling
stockholders upon the conversion of all or a portion of their preferred stock
and the exercise of all or a portion of their warrants. This prospectus does not
cover the initial issuance of shares of common stock, preferred stock or
warrants described in this prospectus.
The selling stockholders may offer shares under this prospectus from time
to time and may elect to sell none, some or all of the shares set forth opposite
their name in the table of selling stockholders above. The selling stockholders
may sell shares on the American Stock Exchange, in the over-the-counter market
or in private transactions. At the time of sale, they may sell shares of our
common stock at the prevailing price on the American Stock Exchange or at
related or negotiated prices. The selling stockholders may sell to or through
one or more broker-dealers, and these broker-dealers may receive underwriting
discounts, concessions or commissions from the selling stockholders. For
example, selling stockholders may sell shares by one or more of the following
methods:
o block trade in which the broker or dealer attempts to sell the shares
as an agent but may position and resell a portion of the block as a
principal to facilitate the transaction;
o purchases by a broker or dealer as a principal and resales by that
broker or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o face to face transactions between selling stockholders and purchasers
without a broker-dealer.
In making sales, the brokers or dealers retained by the selling
stockholders may arrange for other brokers or dealers to participate in the
resales.
The selling stockholders and any broker-dealers that participate in the
distribution may be deemed to be "underwriters" within the meaning of the
Securities Act. Any commissions received by broker-dealers and any profits
realized on the resale of shares by them may be deemed to be underwriting
discounts and commissions under the Securities Act. To the extent required under
the Securities Act, a supplemental prospectus will be filed disclosing:
-9-
<PAGE> 11
o the name of any such broker-dealers;
o the number of shares involved;
o the price at which such shares are to be sold;
o the commissions paid or discounts or concessions allowed to such
broker-dealers, where applicable;
o that such broker-dealers did not conduct any investigation to verify
the information set out or incorporated by reference in this
prospectus, as supplemented, and
o other facts material to the transaction.
We are paying the cost of registering the shares of common stock to which
this prospectus relates as well as various related expenses. The selling
stockholders are individually responsible for all selling commissions, transfer
taxes and other costs related to the offer and sale of their shares.
With regard to the resale of shares by Thermo Amex, we have agreed to keep
the Registration Statement of which the prospectus forms a part continuously
effective until December 31, 1999, or if later, the last to occur of the
following:
o the date which is three years after the date the Registration
Statement is first ordered effective by the SEC in the event that the
warrants have been exercised in full on a net exercise basis; and
o the date which is three years after the latest exercise of the
warrants for cash.
With regard to the resale of shares by Ms. Klein, Mr. Klein and Mr. Harris,
we have agreed to use reasonable efforts to keep the Registration Statement
effective for two years.
In no event will we keep the Registration Statement of which this
prospectus forms a part effective later than the date on which all the selling
stockholders' have sold all of their shares of our common stock under
circumstances in which the buyers may resell their shares of our common stock
without registration under the Securities Act.
Each time a selling stockholder sells shares using this prospectus, that
stockholder must give us and our transfer agent a Notice of Transfer, in the
form attached as Appendix A. If the Notice is not delivered, the transfer agent
will not transfer the shares sold and will not remove the Securities Act legend
from them.
FORWARD-LOOKING STATEMENTS
Certain information contained in this prospectus, or incorporated into it
by reference, includes "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995 and is subject to the safe
harbor created by that Act. These forward-looking statements include our views
and those of our management with respect to future financial results, capital
requirements, market growth, new product introductions and the like, and are
generally identified by phrases such as "anticipates," "believes," "estimates,"
"expects," "intends," "plans" and words of similar meaning. There are several
important factors that could cause actual results to differ materially from
those anticipated in the forward-looking statements. We have identified some of
those factors in the discussions under "Risk Factors" beginning on page 2 and
elsewhere in this prospectus, and in the documents incorporated by reference
into this prospectus.
AVAILABLE INFORMATION
As a public company, we are required to file reports, proxy statements and
other information with the SEC. This information may be inspected and copied at
the Public Reference Section of the SEC at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the SEC's regional office at 5757
Wilshire Boulevard, Suite 500, Los Angeles, California 90036. Copies of this
information may also be
-10-
<PAGE> 12
obtained from the Public Reference Section of the SEC at Room 1024, Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, at prescribed rates. This
information is also available for inspection at the offices of the American
Stock Exchange at 86 Trinity Place, New York, NY 10006-1881. The SEC maintains a
Web site at http://www.sec.gov. The Web site contains information about certain
companies, including us, that file information electronically with the SEC.
We have filed a Registration Statement on Form S-3 under the Securities
Act, with the SEC covering the shares of common stock offered in this
prospectus. This prospectus does not contain all of the information contained in
that Registration Statement or in its exhibits. For more information about us
and our common stock offered in this prospectus, please refer to the
Registration Statement and its exhibits. If this prospectus contains a
description of the provisions of a contract or other document, the description
is merely intended as a summary of the document's relevant terms. Where the
document is filed as an exhibit to the Registration Statement, the investor
should refer to the exhibit for a full statement of its provisions. The
Registration Statement and its exhibits may be inspected at the SEC's public
reference facilities described above. Copies of these documents may be obtained
from the SEC at its principal office in Washington, D.C. upon payment of the
charges prescribed by the SEC.
DOCUMENTS INCORPORATED BY REFERENCE
We have previously filed the following documents with the SEC and they are
incorporated by reference in this prospectus:
(1) our Annual Report on Form 10-K for the fiscal year ended December 31,
1999;
(2) our Quarterly Report on Form 10-Q for the quarter ended March 31,
2000;
(3) the description of our common stock contained in our Registration
Statement on Form 8-A filed June 22, 1993; and
(4) our Current Reports on Form 8-K filed January 26, 2000, February 4,
2000 and March 27, 2000 and May 23, 2000
All documents filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act of 1934 after the date of this prospectus and before
the termination of the offering of the common stock under this prospectus are
also incorporated in this prospectus by reference. These documents should be
considered a part of this prospectus from the date they are filed with the SEC.
Any statement contained in this prospectus, whether directly or by incorporation
by reference, may be modified or superseded by the information contained in any
of these documents.
Upon request, we will provide a copy of all of the information that has
been incorporated by reference in this prospectus, other than exhibits, to each
person, including any beneficial owner, to whom a prospectus is delivered, at no
charge. Requests should be directed to the Corporate Secretary of International
Remote Imaging Systems, Inc., by mail at 9162 Eton Avenue, Chatsworth,
California 91311 or by telephone at (818) 709-1244.
LEGAL MATTERS
The validity of the securities offered hereby has been passed upon for us
by the law firm of Guth Rothman & Christopher LLP, Los Angeles, California.
EXPERTS
The consolidated financial statements incorporated in this prospectus by
reference to the Annual Report on Form 10-K of International Remote Imaging
Systems, Inc. for the year ended December 31, 1999 have been so incorporated in
reliance on the report of PricewaterhouseCoopers LLP, independent accountants,
given on the authority of said firm as experts in auditing and accounting.
-11-
<PAGE> 13
APPENDIX A
Notice of Transfer Pursuant to Registration Statement
[DATE]
Continental Stock Transfer & Trust Company
2 Broadway
New York, New York 10004
Attention: Compliance Department
Re: International Remote Imaging Systems, Inc. (the "Company")
----------------------------------------------------------
Ladies and Gentlemen:
Please be advised that ______________________________________________________
[INSERT NAME OF SELLING STOCKHOLDER AS IT APPEARS IN THE TABLE OF SELLING
STOCKHOLDERS] has sold _____________ shares of the Company's common stock
pursuant to a Registration Statement on Form S-3 (File No. 333-________). We
hereby certify that (1) the above-named beneficial owner of the transferred
shares is named as a selling stockholder in the related prospectus dated
December __, 1999, (2) the transferred shares are included in the prospectus
opposite such owner's name and (3) the prospectus delivery requirements of the
Securities Act of 1933, as amended, have been satisfied.
Sincerely,
________________________________________
(Name)
By: ____________________________________
(Authorized Signature)
Name: __________________________________
Title: _________________________________
cc: International Remote Imaging Systems, Inc.
9162 Eton Avenue
Chatsworth, California 91311
Attn: Controller
<PAGE> 14
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS. IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, THE SELLING STOCKHOLDERS NAMED IN THIS PROSPECTUS OR
ANY UNDERWRITER. NEITHER THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE
HEREUNDER SHALL UNDER ANY CIRCUMSTANCE CREATE ANY IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN OUR AFFAIRS SINCE THE DATE OF THIS PROSPECTUS. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN ANY JURISDICTION IN
WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN WHICH THE PERSON MAKING
SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR TO ANYONE TO WHOM IT IS
UNLAWFUL TO MAKE SUCH SOLICITATION.
___________________________
TABLE OF CONTENTS
Page
-----
Risk Factors 2
The Company 7
Use of Proceeds 7
Selling Stockholders 7
Plan of Distribution 9
Forward-Looking Statements 10
Available Information 10
Documents Incorporated
by Reference 11
Legal Matters 11
Experts 11
Sample Notice of Transfer Appendix A
Up to 2,520,826 Shares
INTERNATIONAL REMOTE
IMAGING SYSTEMS, INC.
COMMON STOCK
____________
PROSPECTUS
____________
May 26, 2000
<PAGE> 15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The expenses to be paid by us in connection with the distribution of
securities being registered, are estimated as follows:
Securities and Exchange Registration Fee..............$ 898.50
Accounting Fees and Expenses.......................... 15,000
Legal Fees and Expenses............................... 25,000
Miscellaneous Expense................................. 5,000
----------
Total.................................................$45,898.50
==========
The selling stockholders will be responsible for all selling commissions,
transfer taxes and related charges in connection with the offer and sale of
their shares.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article SEVENTH of our certificate of incorporation contains certain
provisions permitted under the Delaware General Corporate Law relating to the
liability of directors. The provisions eliminate a director's liability for
monetary damages for a breach of fiduciary duty, except in certain circumstances
involving wrongful acts, such as the breach of a director's duty of loyalty or
acts or omissions that involve intentional misconduct or knowing violation of
law. Our certificate of incorporation also contains provisions requiring us to
indemnify its directors and officers to the fullest extent permitted by the
Delaware General Corporate Law.
Section 145 of the Delaware General Corporate Law provides, in part, that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any suit or proceedings because such
person is or was a director, officer, employee or agent of the corporation or
was serving at the request of the corporation, as a director, officer, employee
or agent of another corporation, against all costs actually and reasonably
incurred by him in connection with such suit or proceedings if he or she acted
in good faith and in a manner he reasonably believed to be in or not opposed to
the best interests of the corporation. Similar indemnity is permitted to be
provided to such persons in connection with an action or suit by or in the right
of the corporation, provided such person acted in good faith and in a manner he
or she believed to be in or not opposed to the best interests of the
corporation, and provided further (unless a court of competent jurisdiction
otherwise determines) that such person shall not have been adjudged liable to
the corporation.
We also maintain insurance policies under which our directors and officers
are insured, Within the limits of these policies, these policies provide our
directors and officers with insurance against expenses in connection with the
defense of actions, suits or proceedings, and certain liabilities that might be
imposed as a result of such actions, suits or proceedings, to which they are
parties by reason of being or having been directors or officers of the company.
ITEM 16. EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4.1 Specimen of Common Stock Certificate (1)
5.1 Legal Opinion of Guth Rothman & Christopher LLP
23.1 Consent of Guth Rothman & Christopher LLP (included in
legal opinion filed as Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP
--------------
(1) Incorporated by reference to our Registration Statement on Form
S-3, as filed with the Securities and Exchange Commission on
March 27, 1996 (File No. 333-02001).
<PAGE> 16
ITEM 17. UNDERTAKINGS
(a) Rule 415 Offering. The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most
recent post-effective amendment thereof) which, individually or
in the aggregate, represent a fundamental change in the
information set forth in this Registration Statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in this Registration
Statement or any material change to such information in this
Registration Statement;
provided, however, that paragraphs 1(i) and 1(ii) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed by the registrant
pursuant to Section 13 or section 15(d) of the Securities Exchange Act that
are incorporated by reference in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference. The
undersigned registrant hereby undertakes that, for purposes of determining
any liability under the Securities Act, each filing of the registrant's
annual report pursuant to section 13(a) or section 15(d) of the Securities
Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Act) that
is incorporated by reference in this Registration Statement shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed
to be the initial bona fide offering thereof.
(c) Request for Acceleration of Effective Date. Insofar as indemnification for
liabilities arising under the Securities Act may be permitted to directors,
officers and controlling persons of the registrant pursuant to the
foregoing provisions, or otherwise, the registrant has been advised that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense
of any action, suit or proceeding) is asserted by such director, officer or
controlling person in connection with the securities being registered, the
registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by
the final adjudication of such issue.
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
hereby certifies that it has reasonable grounds to believe that it meets all of
the requirements for filing this Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Los Angeles, State of California, on May 26, 2000.
INTERNATIONAL REMOTE IMAGING SYSTEMS, INC.
By: /s/ John A. O'Malley
--------------------------------------
Dr. John A. O'Malley
Chief Executive Officer and President
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Dr. John A. O'Malley, as
attorney-in-fact, each with power of substitution, for such person in any and
all capacities, to sign any and all amendments and post-effective amendments to
this registration statement, and to file the same, with all exhibits thereto and
other documents in connection therewith, with the SEC, hereby ratifying and
confirming all that each of said attorneys-in-fact, or his or her substitute or
substitutes, may do or cause to be done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this amendment
has been signed below by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- --------- ----- ----
<S> <C> <C>
/s/ John A. O'Malley Chairman of the Board, Chief May 26, 2000
- ----------------------------------- Executive Officer, President and
John A. O'Malley Chief Financial Officer
/s/ Donald E. Horacek Assistant Secretary, Controller, and May 26, 2000
- ----------------------------------- Principal Accounting Officer
Donald E. Horacek
/s/ Steven M. Besbeck Director May 26, 2000
- -----------------------------------
Steven M. Besbeck
/s/ Thomas F. Kelley Director May 26, 2000
- -----------------------------------
Thomas F. Kelley
/s/ Richard G. Nadeau Director May 26, 2000
- -----------------------------------
Richard G. Nadeau
</TABLE>
<PAGE> 18
EXHIBIT INDEX
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
4.1 Specimen of Common Stock Certificate (1)
5.1 Legal Opinion of Guth Rothman & Christopher LLP
23.1 Consent of Guth Rothman & Christopher LLP (included in legal
opinion filed as Exhibit 5.1)
23.2 Consent of PricewaterhouseCoopers LLP
- ---------------
(1) Incorporated by reference to our Registration Statement on Form S-3,
as filed with the Securities and Exchange Commission on March 27, 1996
(File No. 333-02001).
<PAGE> 1
EXHIBIT 5.1
May 26, 2000
Board of Directors
INTERNATIONAL REMOTE IMAGING SYSTEMS, INC.
9162 Eton Avenue
Chatsworth, California 91311
Re: International Remote Imaging Systems, Inc., a Delaware
corporation (the "Company")
Gentlemen:
We have acted as the Company's counsel in connection with the preparation
and filing of that certain Registration Statement on Form S-3 (the "Registration
Statement") to be filed with the Securities and Exchange Commission in
connection with the registration of 2,520,826 shares (the "Shares") of the
Company's common stock, par value $.01 per share (the "Common Stock"). The
Shares consist of the following:
(1) 2,000,000 shares of Common Stock issued to Thermo Amex Convertible
Growth Fund I, L.P. upon conversion of their Series A Convertible
Preferred Stock;
(2) 84,270 shares of Common Stock issuable upon the exercise of the
Company's Common Stock Purchase Warrant;
(3) 18,000 shares of Common Stock issued to persons who sold their shares
of common stock of Poly U/A Systems, Inc. on the same terms as the
Company's September 1999 tender offer for all of the outstanding
common stock of Poly U/A (collectively, the "Poly U/A Stockholders");
(4) 9,000 additional shares of Common Stock issuable upon the call or
conversion of the Company's Series B Callable Preferred Stock issued
to the Poly U/A Stockholders;
(5) 18,000 additional shares of Common Stock issuable upon exercise of the
Company's Series G Warrants issued the Poly U/A Stockholders;
(6) 100,000 additional shares of Common Stock issuable upon exercise of
the Company's warrants issued to Brill Securities, Inc.; and
(7) 291,556 additional shares of Common Stock issued to Poly UA 1000 LLC,
Dr. Raymond Jallow and Mr. Ralph W. Engh in exchange for their shares
of Poly U/A.
As such counsel, we have examined such matters and documents as we have
deemed necessary or relevant as a basis for this opinion. Based on these
examinations, it is our opinion that (a) the shares described above in clauses
"(1)," "(3)" and "(7)" have been legally issued and are fully paid and
non-assessable, (b) the shares described above in clauses "(2)" and "(5)" will
be legally issued, fully paid and non-assessable when issued and paid for in the
accordance with the terms of the Common Stock Purchase Warrant and the Series G
Warrants, respectively, (c) the shares described above in clause "(4)" will be
legally issued, fully paid and non-assessable when issued in accordance with the
terms of the Certificate of Designations for the Series B Callable Preferred
Stock, and (d) the shares described above in clause "(6)" will be legally
issued, fully paid and non-assessable when issued and paid for in the accordance
with the terms of the warrant issued to Brill Securities, Inc.
<PAGE> 2
We consent to the use of this opinion as an exhibit to the Registration
Statement and to the reference to our firm under the caption "Legal Matters."
Very truly yours,
/s/ Guth Rothman & Christopher LLP
Guth Rothman & Christopher LLP
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated March 17, 2000 relating to the
consolidated financial statements and financial statement schedule, which
appears in the Annual Report of International Remote Imaging Systems, Inc. on
Form 10-K for the year ended December 31, 1999. We also consent to the reference
to us under the heading "Experts" in such registration statement.
/s/ PricewaterhouseCoopers LLP
- -------------------------------
PricewaterhouseCoopers LLP
Los Angeles, California
May 25, 2000
