As filed with the Securities and Exchange Commission on October 2, 1995
--Registration No. 33-________
==========================================================================
FORM S-3
SECURITIES AND EXCHANGE COMMISSION
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
IMATRON INC.
(Exact name of issuer specified in its charter)
New Jersey 94-2880078
(State of incorporation) (I.R.S. Employer Identification No.)
--------------------
389 Oyster Point Boulevard
South San Francisco, CA 94080
(415) 583-9664
(Address, including zip code and telephone number,
including area code, of registrant's principal executive offices)
--------------------
S. Lewis Meyer
President and Chief Executive Officer
Imatron Inc.
389 Oyster Point Boulevard
South San Francisco, CA 94080
(415) 583-9964
(Name, address including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Roger S. Mertz, Esq.
Severson & Werson
One Embarcadero Center, 25th Floor
San Francisco, California 94111
----------------------------------------
Approximate date of commencement of proposed sale to the public:
As soon as possible after this Registration Statement becomes effective.
-----------------
<PAGE>
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: ( )
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: ( X )
CALCULATION OF REGISTRATION FEE
==============================================
Title of each Proposed Proposed
class of Amount maximum maximum Amount of
securities to to be offering price aggregate registration
be registered registered per unit offering fee
price
Common 126,488
Stock Shares(1) $2.34(2) $ 295,982
Common 100,000
Stock Shares(3) $1.00(4) $ 100,000
Common 1,325,000
Stock Shares(5) $1.50(4) $1,987,500
Total 1,551,488 $2,383,482 $822
==============================================
- --------------
(1) Represents shares currently issued and outstanding to a consultant for
professional services.
(2) Estimated pursuant to Rule 457(c) solely for determination of
registration fee, based on the average of the high and low prices on
September 25, 1995.
(3) Issuable upon the exercise of options expiring November 15, 1999 to
purchase shares of Common Stock.
(4) Determined pursuant to Rule 457(g).
(5) Issuable upon the exercise of Warrants expiring December 31, 1996 to
purchase shares of Common Stock.
ii
<PAGE>
The Registrant hereby amends this Registration Statement on such date or date(s)
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission acting pursuant to said Section 8(a)
may determine.
iii
<PAGE>
IMATRON INC.
CROSS REFERENCE SHEET
---------------------
Item Number and Headings in
Form S-3 Registration Statement Caption in Prospectus
1. Forepart of the Registration PLAN OF DISTRIBUTION
Statement and Outside Front FACING PAGE; OUTSIDE FRONT
Cover Page of Prospectus..... COVER PAGE OF PROSPECTUS
2. Inside Front and Outside Back AVAILABLE INFORMATION;
Cover Pages of Prospectus.... INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE TABLE
OF CONTENTS
3. Summary Information, Certain
Factors and Ratio of Earnings to
Fixed Charges................... THE COMPANY, RISK FACTORS
4. Use of Proceeds................. USE OF PROCEEDS
5. Determination of Offering Price OFFERING PRICE
6. Dilution....................... NOT APPLICABLE
7. Selling Security Holders....... SELLING SHAREHOLDERS
8. Plan of Distribution........... PLAN OF DISTRIBUTION
9. Description of Securities
to be Registered............... NOT APPLICABLE
10. Interests of Named
Experts and Counsel............ NOT APPLICABLE
11. Material Changes............... NOT APPLICABLE
12. Incorporation of Certain INCORPORATION OF CERTAIN
Information by Reference....... DOCUMENTS BY REFERENCE
13. Disclosure of Commission.......
Position on Indemnification for
Securities Act Liabilities..... NOT APPLICABLE
iv
<PAGE>
PROSPECTUS
1,551,488 Shares
IMATRON INC.
Common Stock No Par Value
--------------------
This Prospectus relates to the sale of up to 1,551,488 shares of Common
Stock, no par value, of Imatron Inc. (the "Company") by shareholders of the
Company (the "Selling Shareholders"). A total of 126,488 shares are currently
issued and outstanding ("Outstanding Shares"); a total of 100,000 shares are
issuable upon conversion of outstanding options ("Options") ("Option Shares");
and a total of 1,325,000 shares are issuable upon the exercise of outstanding
Warrants ("Warrants") (the "Warrant Shares"). All of the Outstanding Shares, the
Options and the Warrants were previously issued by the Company to the Selling
Shareholders in private transactions. The Warrant Shares, the Option Shares and
the Outstanding Shares are collectively referred to in this Prospectus as the
"Shares". The Selling Shareholders intend to sell the Shares from time to time
in open market and/or private sales, or by any other appropriate method.
The Company will receive proceeds upon the exercise of the Options and/or
the Warrants by the Selling Shareholders, but will not receive any of the
proceeds from the sale of the Shares. The Company has agreed to bear all of the
expenses in connection with the registration (but not the sale) of the Shares.
--------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS."
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The Date of this Prospectus is October 2, 1995
<PAGE>
PROCEEDS TABLE
--------------
Price to Solicitation Proceeds to Issuer
Public (1) Fee or Other Persons (2)
---------- ------------ --------------------
Common Stock
1999 Options $ 1.00 $-0- $ 100,000
1996 Warrants
Per Share $ 1.50 $-0- $1,987,500
(1) The Options to purchase 100,000 shares are exercisable through November
15, 1999 at a price of $1.00 per share. The Warrants to purchase
1,325,000 shares are exercisable through December 31, 1996 at a price
of $1.50 per share.
(2) All proceeds realized from the exercise of the Options and/or the
Warrants, if any, will go to the Company.
TABLE OF CONTENTS
-----------------
AVAILABLE INFORMATION
INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE
THE COMPANY
RISK FACTORS
USE OF PROCEEDS
OFFERING PRICE
SELLING SHAREHOLDERS
PLAN OF DISTRIBUTION
EXPERTS
LEGAL OPINION
<PAGE>
AVAILABLE INFORMATION
Imatron Inc. ("Imatron" or the "Company") is subject to the informational
requirements of the Securities and Exchange Act of 1934, as amended (the
"Exchange Act"), and, in accordance therewith, files reports, proxy statements
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports, proxy statements and other information filed by the
Company with the Commission can be inspected and copied at Room 1024, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Regional Offices of the
Commission at Room 1204, Everett McKinley Dirksen Building, 219 South Dearborn
Street, Chicago, Illinois 60604; and Room 1102, 26 Federal Plaza, New York, New
York 10007. Copies of such material can be obtained from the Public Reference
Section of the Commission, at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. Shares of the Company's Common Stock are traded on the NASDAQ
National Market System. Information concerning the Company may also be obtained
by contacting NASDAQ/NMS.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the year ended December 31,
1994, filed April 11, 1995 (File No. 0-12405) and all amendments thereto; the
Company's definitive Proxy Statement filed pursuant to Section 14 of the
Exchange Act in connection with the annual meeting of shareholders held on June
2, 1995, filed May 1, 1995; the Company's Quarterly Reports on Form 10-Q for the
periods ending March 31 and June 30, 1995 filed on May 12, 1995 and August 14,
1995, respectively; and the description of the Company's Common Stock contained
in a registration statement filed under the Exchange Act, including any
amendment or report filed for the purpose of updating such description, are
hereby incorporated by reference into this Prospectus. All documents filed by
the Company with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of Common Stock shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the date of
filing of such documents, except the Board Compensation Committee Report on
Executive Compensation and the Performance Graph included in the Proxy Statement
pursuant to Item 402(k) and (l) of Regulation S-K. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any statement so modified or superseded shall not be deemed, except
as so modified or superseded, to constitute a part of this Prospectus. The
Company will provide without charge to each person to whom this Prospectus is
delivered, upon written or oral request of such person, a copy of any and all of
the information that has been incorporated by reference in this Registration
Statement filed with the Commission under the Exchange Act with respect to the
Common Stock offered by the Prospectus, other than certain exhibits to such
documents. Such requests should be directed to the Chief Financial Officer,
Imatron Inc., 389 Oyster Point Boulevard, South San Francisco, California 94080,
telephone no. (415) 583-9964.
<PAGE>
THE COMPANY
Imatron Inc. (the "Company" or "Imatron") is a technology-based company
principally engaged in the business of designing, manufacturing and marketing a
high performance computed tomography (CT) scanner that uses Electron Beam
Tomography ("EBT") technology based on a scanning electron beam. The scanner is
used in large and mid-sized hospitals and free-standing imaging clinics. The
Company provides service, parts and maintenance to hospitals and clinics that
operate its scanners.
Using patented electron beam technology, the Imatron scanner captures and
displays high-speed cine (or motion picture) images of the heart and joints in
motion as well as high-speed still images of the head and body. Imatron's
scanner can acquire computed tomography ("CT") images at a rate of 50 to 100
milliseconds per slice in contrast to conventional CT scanners that require
between 1 and 10 seconds per slice. Because of its high speed of image
acquisition derived from using an electron beam to generate x-rays, the Imatron
CT scanner can image moving body tissues such as the human heart in stop-motion
(still image) or in real time (cine or motion picture). This high imaging rate
is achieved by the use of electronic scanning methods that require no mechanical
motion. Scanning is performed by an electron beam under computer control using a
software program that permits a wide variety of options.
The Company is also engaged in performing research and development for
others in the field of CT devices and licensing its patents and know-how in the
fields of imaging sciences. The Company holds a 3% interest in InVision
Technologies, Inc. ("InVision"), (formerly Imatron Industrial Products, Inc.) a
corporation organized in 1990 to engage in the development of an explosives
detection scanner and to which Imatron has licensed certain of its technology.
The Company was incorporated in New Jersey in February 1983. Its executive
offices are located at 389 Oyster Point Boulevard, South San Francisco,
California 94080 and its telephone number is (415) 583-9964.
HeartScan Imaging, Inc. ("HSI"), incorporated in Delaware in 1993, is a
wholly-owned subsidiary of Imatron. HSI operates a coronary artery scanning
(CAS) test facility and corporate demonstration site in South San Francisco,
California and is engaged in the business of developing other CAS clinics.
RISK FACTORS
The securities offered hereby are speculative and involve a high degree of
risk. Prospective investors may lose all or a part of their investment.
Consequently, the following factors, in addition to the other information
contained in this Prospectus, should be considered carefully in evaluating the
Company and its business before purchasing the securities offered hereby:
SHORT OPERATING HISTORY; LOSSES TO DATE. Imatron was incorporated in
February 1983 and in March 1983 became the successor to Imatron Associates, a
limited partnership established in February 1981. Imatron operated as a
development-stage company until the fourth quarter of 1984, at which time it
recognized its initial sale of an ULTRAFAST CT(R) scanner. Imatron has incurred
losses each quarter from inception in February 1981 through December 31, 1990.
Its first recorded profitable year was the year ended December 31, 1991 during
<PAGE>
which a $4,000,000 payment for the licensing of technology to Siemens
Corporation was received. The Company incurred net losses of $2,871,000 and
$6,523,000 in the years ended December 31, 1993 and 1992, respectively. 1994 was
the Company's first year of profit from operations. There is no assurance that
Imatron can operate profitably in the future. In the past, Imatron has funded
its losses primarily through the sale of securities in two public offerings and
several private placements, through the exercise of options and warrants,
through the 1991 license for medical uses of its electron-beam technology to
Siemens Corporation, and through revolving lines of credit.
NEED FOR ADDITIONAL FINANCING. To satisfy the Company's future capital and
operating requirements, additional public or private financing or profitable
operations will be required. If future public or private financing is required
by the Company, holders of the Company's securities may experience dilution. If
such financing cannot be obtained, the Company may seek to sell or license
additional portions of its technology, to sell some or all of its other assets
or to merge with another company.
MATERIAL DEPENDENCE UPON KEY PERSONNEL. The Company has been and will
continue to be materially dependent upon the technical expertise of its
engineering management personnel. The loss of a significant number of such
personnel would have a materially adverse effect upon the Company's business and
future prospects. The Company does not maintain key-man life insurance.
HIGH COST OF SCANNER. The distributor list price of Imatron's ULTRAFAST CT
scanner is significantly higher than that of commercially available conventional
CT scanners and slightly higher than the price of "top-of-the-line" scanners.
Such pricing may limit the market for Imatron's product. Potential customers'
budgetary limitations, including those imposed by government regulation, may
often compel the purchase of lower cost, conventional CT scanners.
LIMITED CLINICAL DEMONSTRATION OF CERTAIN ADVANTAGES OF COMPANY'S SCANNER.
The Company's scanners have been used in a clinical environment on humans since
April 1983. Clinical use of a scanner containing the new features of the C-150
model began in August 1992, and 17 C-150 scanners are currently installed in a
clinical setting. The Company believes that market acceptance of the ULTRAFAST
CT scanner continues to depend in substantial part upon the clinical
demonstration of certain asserted technological advantages and diagnostic
capabilities. There is no assurance that these advantages will result in the
development of a significant market for the ULTRAFAST CT that will allow the
Company to operate profitably.
PRODUCT LIABILITY RISKS. As a manufacturer and marketer of medical
diagnostic equipment, the Company is subject to potential product liability
claims. For example, the exposure of normal human tissue to x-rays, which is
inherent in the use of CT scanners for diagnostic imaging, may result in
potential injury to patients, thereby subjecting the Company to possible
liability therefor. The Company presently maintains primary and excess product
liability insurance with aggregate limits of $5,000,000 per occurrence. No
assurance can be given that the Company's product liability insurance coverage
will continue to be available or, if available, that it can be obtained in
sufficient amounts or at reasonable cost or that it will prove sufficient to pay
any claims that may arise.
<PAGE>
RELIANCE ON PRODUCT DEVELOPMENT. Imatron continually seeks to develop
product enhancements and improve product reliability. Imatron's future success
may depend on its ability to complete certain product enhancement and product
reliability projects currently in progress, as well as on its continued ability
to develop new products or product enhancements in response to new products that
may be introduced by other companies. There can be no assurance that Imatron
will be able to continue to improve product reliability, or introduce new
product models or product enhancements as required to remain competitive.
RELIANCE ON PATENTS AND PROPRIETARY TECHNOLOGY. Imatron relies heavily on
proprietary technology. Imatron is the exclusive sublicensee under one patent
expiring in 1999 held by the University of California ("UC") relating to the
general concept of the ULTRAFAST CT scanner. Imatron holds the exclusive rights
under the patent pursuant to a sublicensee agreement with Emersub, Inc. (the
"Sublicensor"), a wholly owned subsidiary of Emerson Radio Corp., a former
principal shareholder of Imatron. Pursuant to the sublicense agreement, Imatron
is obligated to pay to the Sublicensor a continuing royalty of 2.125% of sales
of products utilizing the technology (2.0% of which would be paid by the
Sublicensor to UC). Loss by Imatron of its rights under the patent as a result
of termination of its sublicense from the Sublicensor, or the underlying
license, could have a material adverse effect upon Imatron's business and future
prospects. There are no present disputes with either UC or the Sublicensor.
In addition Imatron holds 20 U.S. patents of its own and has filed 3 U.S.
patent applications covering various integral elements of the scanner,
including, among others, its X-ray detector and its electron beam assembly.
Imatron has filed applications corresponding to several of the U.S. applications
in various European Patent Convention countries, Canada and Japan. There can be
no assurance that any such applications will result in the issuance of any
patents to Imatron. Imatron's patents and patent applications have not been
tested in litigation and no assurance can be given that patent protection will
be upheld or will be as extensive as claimed. Furthermore, no assurance can be
given as to Imatron's ability to finance litigation against parties which may
infringe upon such patents or defend litigation against Imatron by parties which
may claim that Imatron's scanner infringes upon their patents.
In the event some or all of the Company's patent applications are denied
and/or some or all of its patents are held invalid, the Company would be
prevented from precluding its competitors from using the protected technology
set forth in such patent applications or patents. Because the Company's products
involve confidential proprietary technology and know-how, the Company does not
believe such a loss of patent rights would have a material adverse effect upon
the Company.
LIQUIDATION PREFERENCE. The Company has three holders of Series A Preferred
Stock (the "Series A Holders") who own 1,100,000 issued and outstanding Series A
Preferred shares. If the Company were to be liquidated (for example, following a
sale of all of the Company's assets or as a result of a bankruptcy proceeding),
out of any proceeds available for distribution to shareholders after payment of
creditors, the Series A Holders would be entitled to receive its liquidation
preference of $2.00 per share of Series A Preferred Stock plus accrued but
unpaid dividends, if any, prior to any distribution of proceeds to any holders
of Common Stock.
<PAGE>
SALES OF SHARES BY MAJOR STOCKHOLDER. Approximately 6% of the total
outstanding shares of the Company's Common Stock on an as-converted basis is
held by one stockholder--FI.M.A.I. Holding, S.A. ("FI.M.A.I.") which has
indicated in documents filed with the Securities and Exchange Commission that it
intends to sell shares of the Company's Common Stock in open market sales,
private sales or registered public offerings. In addition, an affiliate of
FI.M.A.I. holds approximately another 6% of the total outstanding shares of the
Company's Common Stock on an as-converted basis. Sales of a substantial number
of shares of the Company's Common Stock could adversely affect the market price
at which investors could sell the Shares.
LIMITED OR SINGLE SOURCES OF SUPPLY. The Company manufactures its scanners
at its South San Francisco, California facility. To date the typical
manufacturing cycle has required at least six months. Based on inventory, lead
time can be significant between the receipt of an order and the shipment of a
scanner.
Many of the components and sub-assemblies used in the scanner have been
developed and designed by Imatron to its custom specifications and are
obtainable from limited or single sources of supply. In view of the customized
nature of many of these components and sub-assemblies, there may be long lead
times between order and shipment of scanners. Delays in delivery of components
and sub-assemblies could adversely affect Imatron's present and future
production schedules. The Company has made and continues to make inventory
investments to acquire long lead time components and sub-assemblies to minimize
the impact of such delays.
Disruption or termination of limited or sole sources of supply could have a
temporary adverse effect on the Company's ability to meet scheduled delivery
dates. In recent years, the Company has developed alternative sources for many
of its scanner subcomponents and continues its programs to qualify vendors for
the remaining critical parts.
FOOD AND DRUG ADMINISTRATION AND OTHER GOVERNMENTAL REGULATION. Amendments
to the Federal Food, Drug, and Cosmetic Act ("Amendments") enacted in 1976, and
regulations issued or authorized thereunder, provide for regulation by the
Federal Food and Drug Administration ("FDA") of the marketing, manufacture,
labeling, packaging, sale and distribution of "medical devices," including the
Company's scanner. Among these regulations are requirements that medical device
manufacturers register their manufacturing facilities with the FDA, list devices
manufactured by them, file various reports and comply with specified "good
manufacturing practice" (GMP) regulations. The FDA enforces additional
regulations regarding the safety of equipment utilizing x-rays, including CT
scanners. Various states also impose similar regulations.
The Amendments also impose certain requirements which must be met prior to
the initial marketing of certain medical devices introduced into commerce after
May 28, 1976. These range from a minimum obligation to wait 90 days after
notification to the FDA before introduction of medical devices substantially
equivalent to devices on the market prior to May 28, 1976, to a maximum
obligation to comply with the potentially expensive and time-consuming process
of obtaining FDA authorization prior to the commercial marketing of new medical
devices. The Company has received appropriate clearances from the FDA to market
both the C-100 XL and C-150 ULTRAFAST CT scanner and believes that it is
presently in substantial compliance with the GMP requirements and other
regulatory issues promulgated by the FDA.
<PAGE>
The FDA, through its Center for Devices and Radiological Health (the
"Center"), also regulates the safety and efficacy of radiological devices.
Although the Company believes it is in compliance with all applicable
radiological health standards and regulations promulgated by the Center, there
can be no assurance that the ULTRAFAST CT scanner will continue to comply with
all such standards and regulations that may be promulgated. In any event,
compliance with all such requirements can be costly and time consuming, with a
resultant materially adverse effect upon the development of the Company's
business and its future profitability.
FDA clearance to market does not guarantee or imply reimbursement by third
party payers such as Medicare, Medicaid, Blue Cross/Blue Shield or private
health insurers. Medicare and Medicaid reimburse for procedures that are
generally accepted or that have been proven safe and effective. The Health Care
Financing Administration ("HCFA"), which oversees Medicare and Medicaid, will
not authorize payment for procedures which are considered to be experimental.
HCFA has determined that diagnostic examinations of the head and other parts of
the body performed by CT scanners are covered if the contractor who administers
the local Medicare program finds that medical and scientific literature and
opinion support the effective use of a scan for the particular condition.
The Federal government and certain states have enacted cost-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 the purchase of diagnostic equipment such as the Company's scanner and in
the number of diagnostic imaging procedures performed in hospitals and other
medical institutions such as imaging clinics.
Federal legislation also requires states participating in Federal medical
expense reimbursement and funding programs to adopt requirements that hospitals
and other health care facilities, such as imaging clinics, obtain a Certificate
of Need ("CON") for major capital expenditures, in the absence of which they
will be denied reimbursement for services and funding relating to such capital
expenditures. A number of states have enacted CON legislation beyond Federal
requirements, such as requiring private physicians to obtain a CON for any CT
scanner, regardless of cost. There can be no assurance that Imatron's potential
customers will be able to secure CON's or will be willing to pursue the
application procedure.
The health care industry is highly regulated. The implementation of certain
health care reforms currently being considered by the executive branch of the
federal government may directly affect the Company's business. Both existing and
future governmental regulations could adversely impact the market for the
Company's ULTRAFAST CT scanner and the Company's business. The Company's
operations are also subject to regulation by other federal, state and local
governmental entities empowered to enforce pertinent statutes and regulations,
such as those enforced by the Occupational Safety and Health Agency and the
Environmental Protection Agency. In some cases state or local regulations may be
stricter than regulations imposed by the federal government. The Company was
most recently inspected by the State of California Department of Occupational
Safety and Health Administration in November, 1993. Minor violations were
identified by Cal/OSHA and were immediately corrected by the Company. Follow up
inspection by Cal/OSHA yielded satisfactory results without issuance of further
notice of violation. The Company believes it is in substantial compliance with
California regulations.
<PAGE>
COMPETITION. The Company competes with a number of other diagnostic imaging
equipment manufacturers. The Company's principal competition is from current
manufacturers of conventional CT scanners, including General Electric Company,
Siemens Corporation, Elscint, Picker International, Inc., Philips Electronics,
B.V., and Toshiba Corporation. Non-invasive diagnostic imaging techniques such
as ultrasound, radioisotope imaging, digital subtraction angiography and
magnetic resonance imaging are also partially competitive with the Company's
scanners, particularly in the cardiac imaging market. Each of the companies
named above, as well as Diasonics, Inc. and ADAC Laboratories, markets equipment
using one or more of these techniques. All of these companies have greater
financial resources and larger and more established staffs than those of the
Company and their products are in most cases substantially less expensive than
the ULTRAFAST CT scanner.
The Company believes that to compete successfully against these
competitors, it must demonstrate that the ULTRAFAST CT scanner is both an
acceptable substitute for conventional CT scanners in scanning areas of the body
where motion is not a limitation and a valuable cardiac diagnostic tool capable
of producing useful images of the heart. Although the Company believes that the
ULTRAFAST CT can produce images of a quality and resolution as good as or
superior to images produced by state of the art conventional CT scanners, it
lacks certain features that many competing premium scanners offer. These include
lack of a high-resolution mode for imaging the temporal bones and inner ear and
lower functionality in software used for automatically positioning the patient.
There is no certainty that potential purchasers of the Company's scanner will
accept it without such features.
Also, the Company believes that customers and potential customers expect a
continuing development effort to improve the functionality and features of the
scanner. The Company continually seeks to develop product enhancements and
improve product reliability. Imatron's future success may depend on its ability
to complete certain product enhancement and product reliability projects
currently in progress, as well as on its continued ability to develop new
products or product enhancements in response to new products that may be
introduced by other companies. There can be no assurance that Imatron will be
able to continue to improve product reliability or introduce new product models
or product enhancements as required to remain competitive.
Other factors, in addition to those described above, that a potential
purchaser would consider in the decision to replace a conventional CT scanner
with an ULTRAFAST CT scanner include purchase price, patient throughput
capacity, anticipated operating expenses, estimated useful life and post-sale
customer service and support. The Company believes that its scanner and/or the
Company is competitive with respect to each of these factors.
AGREEMENTS WITH SIEMENS CORPORATION. In March 1991, the Company entered
into several related agreements with Siemens Corporation ("Siemens"). These
agreements and the Company's relationship with Siemens were substantially
restructured in March 1995. The Company transferred all of its interest in five
patents subject to a royalty-bearing license back in exchange for cancellation
of a loan. The parties also substituted for the existing Development Agreement a
collaborative research agreement pursuant to which they will jointly conduct
research and development over a three-year period to improve the Company's C-150
product. Siemens was appointed the Company's exclusive distributor for the C-150
scanner in the United States, Canada, Europe and India. The Company retains
exclusive distribution rights in the rest of the world. The Company and Siemens
also granted reciprocal licenses to each other covering electron beam technology
relating to the design and manufacture of electron beam products.
<PAGE>
RELIANCE ON DISTRIBUTORS. A substantial portion of the Company's sales of
its scanners is done through distributors. There is no assurance that the
Company's distributors will actually meet their contractual minimums on a timely
basis. Failure by the distributors to meet their obligations could adversely
affect the Company.
NO DIVIDENDS ON PREFERRED AND COMMON STOCK. The Company has not paid any
dividends on its Preferred or Common Stock since inception. Even if its future
operations result in revenues and/or profitability, as to which there can be no
assurance, there is no present anticipation that dividends will be paid. Rather,
the Company expects that any future earnings will be applied toward the further
development of the Company's business.
USE OF PROCEEDS
The Company will not receive any part of the proceeds from the sale of the
Shares by the Selling Shareholders. As described under "Selling Shareholders", a
portion of the Shares will be acquired by the Selling Shareholders upon exercise
of options and/or warrants previously sold to them. Upon the exercise of an
option or a warrant, the Company will receive the applicable exercise price per
share from the Selling Shareholder. The Company will use such proceeds, if any,
to increase working capital.
OFFERING PRICE
This Prospectus may be used from time to time by the Selling Shareholders
who offer the Common Stock registered hereby for sale. The offering price of
such Common Stock will be determined by the Selling Shareholder and may be based
on market price prevailing at the time of sale, at prices relating to such
prevailing market prices, or at negotiated prices. The market price of the
Company's Common Stock on the date of any proposed sale, as listed on the Nasdaq
National Market System, symbol "IMAT", is the most significant but not the only,
factor used to determine the offering price of the Shares.
SELLING SHAREHOLDERS
The following provides certain information with respect to the Common Stock
beneficially owned by the Selling Shareholders who are entitled to use this
Prospectus. The information in the table is as of the date of this Prospectus.
No Selling Shareholder has had a material relationship with the Company other
than as a result of the ownership of Capital Stock. The Common Stock offered by
this Prospectus may be offered from time to time by the Selling Shareholders
named below or their nominees:
<PAGE>
Shares Shares Available Percent Owned
Name of Selling Beneficially for Sale Under After Completion
Security holder Owned Warrants this Prospectus of the Offering
(1) (2) (3) (4)
- --------------- ------------ -------- ---------------- ----------------
Sachio Okamura 126,488 -0- 126,488 *
Belmont Invest- 170,000 40,000 40,000 *
ments Ltd.(5)
First Marathon -0- 40,000 40,000 *
Capital Corp.
Robert Friedland -0- 40,000 40,000 *
Daniel Gillespie 50,000 100,000 100,000 *
Global Health -0- 400,000 400,000 *
Sciences Fund
Jon and Linda -0- 10,000 10,000 *
Gruber(6)
Malik M. Hasan -0- 100,000 100,000 *
Lagunitas -0- 65,000 65,000 *
Partners(7)
Chung H. Lew -0- 95,000 95,000 *
Old Canada -0- 40,000 40,000 *
Investments
Peripatetic -0- 125,000 125,000 *
Investments Ltd.
Rosemary Reilly 160,000 40,000 40,000 *
Dr. Jarvis Ryals -0- 80,000 80,000 *
John Tognetti -0- 40,000 40,000 *
Paul Tutsch -0- 70,000 70,000 *
Hermine -0- 40,000 40,000 *
Wekerle(8)
Wall Street 100,000(9) -0- 100,000 *
Consultants
All Selling 506,488 1,325,000 1,551,488 *
Shareholders as
a Group
<PAGE>
- --------------
* Less than 1%
(1) None of the Selling Shareholders has had any position, office or material
relationship with the Company within the last three years.
(2) Includes shares owned prior to this offering and the shares which are
issuable upon the exercise of the options and Warrants held by the Selling
Shareholders. The number of shares being offered hereby is shown in the
"Shares Available for Sale Under this Prospectus" column. See footnote (3)
below.
(3) Warrants for the purchase of the individual and aggregate number of shares
of Common Stock shown below.
(4) Percentages are based upon the assumption that, upon the completion of this
offering, the respective Selling Security holder has sold the Common Stock
listed as "Shares Available for Sale Under this Prospectus" and are
computed on the basis of full dilution and 55,170,465 shares of Common
Stock issued and outstanding as of September 11, 1995.
(5) Ricardo Salomon shares power to dispose of the Shares held by Belmont
Investments Ltd.
(6) Includes shares beneficially owned individually, by spouse, by Lagunitas
Partners and by clients of Gruber & McBaine, a money management firm. J.
Patterson McBaine, President of Gruber & McBaine Capital Management shares
power to vote and dispose of 559,100 of the shares beneficially owned by
Jon and Linda Gruber. Charles C. McGettigan and Myron A. Wick, III, general
partners of Proactive Partners own 195,000 of the shares beneficially owned
by Jon and Linda Gruber.
(7) Lagunitas Partners general partners Jon Gruber, J. Patterson McBaine and
Gruber & McBaine Capital Management (Jon Gruber, Chairman and J. Patterson
McBaine, President) share the power to vote and dispose of the shares
beneficially owned by Lagunitas Partners.
(8) Michael Wekerle shares power to dispose of the Shares held by Hermine
Wekerle.
(9) Consists of options to purchase shares of common stock.
The Outstanding Shares were acquired by Selling Shareholders from the
Company in partial payment of professional fees for certain consulting services
provided in 1993 relating to the negotiation of distribution agreements on
behalf of the Company. The Option Shares, issuable upon the exercise of options,
were acquired by Selling Shareholders from the Company in partial consideration
of professional services provided. The Warrant Shares, issuable upon the
exercise of the Warrants, were acquired by the Selling Shareholders from the
Company in a private placement transaction. The Company conducted a private
offering of Units under the exemption available pursuant to Rule 505 of
Regulation D and Section 4(2) (the "Private Offering"). The offering commenced
in December, 1991 and concluded September 15, 1992. Each Unit consisted of three
shares of Imatron Common Stock, one Imatron Common Stock Purchase Warrant and
<PAGE>
one share of InVision Technologies, Inc. ("InVision") Series A Preferred Stock.
The Company currently holds approximately a 3% interest in InVision. None of the
Company's common shares or the InVision shares are included in this registration
statement. Proceeds from the Private Offering were used to reduce accounts
payable and notes payable and to purchase manufacturing inventory necessary for
the production of an advanced version of a proprietary scanner which was
announced for sale in April, 1992, and to the extent not so used, then for
general corporate purposes.
PLAN OF DISTRIBUTION
The Company has been advised by the Selling Shareholders that the Selling
Shareholders intend to sell their Shares from time to time in transactions on
the NASDAQ National Market System, in private negotiated sales, or by other
appropriate methods. Such sales may be made to purchasers directly by the
Selling Shareholders or through underwriters, dealers or agents, who may receive
compensation in the form of underwriting discounts, concessions or commissions
from the Selling Shareholders and/or the purchasers of shares for whom they may
act as agents, although the Selling Shareholders have not expressed any present
intention of using any underwriters in connection with the sale of the shares of
Common Stock covered by this Prospectus.
The Company will pay substantially all of the expenses incident to the
registration of the Shares. The Company will not pay any expenses incident to
the offering and sale of the Common Stock to the public, including, but not
limited to commissions and discounts of underwriters, dealers or agents.
EXPERTS
The financial statements of Imatron Inc. appearing in Imatron Inc.'s Annual
Report (Form 10-K) for the year ended December 31, 1994, have been audited by
Ernst & Young LLP, independent auditors, as set forth in their report thereon
included therein and incorporated herein by reference. Such financial statements
are incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
LEGAL OPINION
The legality of the shares of Common Stock offered will be passed upon for
the Company by Severson & Werson, One Embarcadero Center, 26th Floor, San
Francisco, CA 94111.
<PAGE>
No dealer, salesman or any
other person has been authorized to
give any information or to make any
representation not contained in 1,551,488 Shares
this Prospectus in connection with
the offer made hereby. If given or
made, such information or
representation must not be relied
upon as having been authorized by
the Imatron Inc. This Prospectus
does not constitute an offer to IMATRON INC.
sell or a solicitation of an offer
to buy any securities other than No Par Common Stock
those specifically offered hereby
or an offer to buy to any person in
any jurisdiction in which such an
offer or solicitation would be
unlawful. Neither the delivery of
this Prospectus nor any sale made
hereunder shall under any PROSPECTUS
circumstances create any
implication that the information
contained herein is correct as of
any time subsequent to the date
hereof.
October 2,1995
<PAGE>
PART II. INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table sets forth all expenses payable by the Company in
connection with the issuance and distribution of the Common Stock being
registered.(1) All the amounts shown are estimates except for the registration
fee.
Registration fee.......................................$822
Printing and engraving expenses........................$500
Legal fees and expenses(2)...........................$5,000
Accounting fees and expenses........................$ 2,500
Total..........................................$8,822
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article IX of the Bylaws of the Company sets forth the extent to which
officers or directors of the Company may be indemnified against any liabilities
which they may incur. The general effect of such Bylaw provision is that any
person made a party to an action, suit or proceeding by reason of the fact that
he is or was a director, officer, employee or agent of the Company, or of
another corporation or other enterprise which he served as such at the request
of the Company, shall be indemnified by the Company against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by it in connection with such action, suit or proceeding, to
the full extent permitted under the laws of the State of New Jersey.
The general effect of the indemnification provisions contained in Section
14A: 3-5 of the New Jersey General Corporation Law is as follows: A director or
officer who, by reason of such directorship or officership, is involved in any
action, suit or preceding (other than an action by or in the right of the
Company) may be indemnified by the Company against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by him in connection with such action, suit or proceeding if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interest of the Company, and, with respect to any criminal
action or proceeding, had no reasonable cause to believe that his conduct was
unlawful. A director or officer who, by reason of such directorship or
officership, is involved in any action or suit by or in the right of Company may
be indemnified by the Company against expenses (including attorneys' fees)
actually and reasonably incurred by him in connection with the defense or
settlement of such action or suit if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Company, except that no indemnification may be made in respect of any claim,
issue or matter as to which he shall have been adjudged to be liable for
negligence or misconduct in the performance of his duty to the Company unless
and only to the extent that a court of appropriate jurisdiction shall approve
such indemnification.
- ----------
1 Including legal expenses associated with Blue Sky filings.
2 Including legal expenses associated with Blue Sky filings.
<PAGE>
ITEM 16. EXHIBITS
Exhibit Description
No.
3.1 Certificate of Incorporation of the Company as amended as of March 31,
1983.(3)
3.2 Certificate of Amendment of Certificate of Incorporation filed with
the New Jersey Secretary of State on June 7, 1988.(4)
3.3 Certificate of Amendment of Certificate of Incorporation filed with
the New Jersey Secretary of State on June 17, 1988.(5)
3.4 Certificate of Amendment of Certificate of Incorporation filed with
the New Jersey Secretary of State on July 26, 1988.(6)
3.5 Certificate of Correction of Certificate of Amendment of Certificate
of Incorporation filed with the New Jersey Secretary of State on
February 7, 1989.(7)
3.6 Certificate of Amendment of Certificate of Incorporation filed with
the New Jersey Secretary of State on March 29, 1990.(8)
3.7 Certificate of Amendment of Certificate of Incorporation filed with
the New Jersey Secretary of State on December 7, 1990.(9)
- ----------
3 Filed as an exhibit to the Company's Registration Statement on Form S-1
filed with the Commission on June 1, 1983 (File No. 2-84146) and
incorporated herein by reference.
4 Filed as an exhibit to the Company's Registration Statement on Form S-8
filed with the Commission on February 3, 1989 (File No. 33-26833) and
incorporated herein by reference.
5 Filed as an exhibit to the Company's Form 8 amending the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1988 filed
with the Commission on May 2, 1989 and incorporated hereby by reference.
6 Filed as an exhibit to the Company's Registration Statement on Form S-8
filed with the Commission on February 3, 1989 (File No. 33-26833) and
incorporated herein by reference.
7 Filed as an exhibit to the Company's Form 8 amending the Company's Annual
Report on Form 10-K for the fiscal year ended December 31, 1988 filed
with the Commission on Mary 2, 1989 and incorporated hereby by reference.
8 Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 and incorporated herein by reference.
9 Filed as an exhibit to the Company's Registration Statement on Form S-8
filed with the Commission on May 6, 1991 (File No. 33-40391) and
incorporated herein by reference.
<PAGE>
3.8 Bylaws, as amended as of April 30, 1992.(10)
4.1 Stock Option Agreement dated as of November 15, 1994, entered into
between Company and Wall Street Consultants pursuant to which Options
were issued to Selling Shareholders in partial payment for services.
4.2 Form of Warrant which expires December 31, 1996, issued to investors
in connection with the Private Offering which concluded September 15,
1992.(11)
5.1 Opinion of Counsel as to the legality of securities being registered.
10.1 Form of Registration Rights Agreement between the Company and
investors in the Private Offering which concluded September 15,
1991.(12)
24.1 Consent of independent auditors.
24.2 Consent of Counsel. Reference is made to Exhibit 5.1.
25.1 Power of Attorney (contained in signature pages).
- ----------
10 Filed as an exhibit to Post-Effective Amendment No. 1 to the Company's
Registration Statement on Form S-3 filed with the Commission on May 5,
1992 (File No. 33-32218) and incorporated herein by reference.
11 Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 and incorporated herein by reference.
12 Filed as an exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1992 and incorporated herein by reference.
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 of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information st forth in the 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 the registration statement;
<PAGE>
Provided, however, that paragraphs (A)(1)(i) and (A)(1)(ii) do not apply if
the registration statement is on Form S-3, or Form S-8, and the information
required or to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to Section 13 or
Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by
reference in this registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(4) To deliver or cause to be delivered with the prospectus, to each person
to whom the prospectus is sent or given, the latest annual report to security
holders that is incorporated by reference in the prospectus and furnished
pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3 under the
Securities Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X are not set forth in the
prospectus, to deliver, or cause to be delivered to each person to whom the
Prospectus is sent or given, the latest quarterly report that is specifically
incorporated by reference in the prospectus to provide such interim financial
information.
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 of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offering therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
C. ACCELERATION OF EFFECTIVENESS
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Company pursuant to the foregoing provisions, or otherwise, the Company has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company 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 Company 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>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of South San Francisco, State of California, on
October 2, 1995.
IMATRON INC.
By: /s/ S. LEWIS MEYER
-----------------------
S. Lewis Meyer
President and Chief Executive Officer
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Douglas P. Boyd and S. Lewis Meyer, or
either of them, his true and lawful attorney-in-fact, each with full power of
substitution for him in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or their or his substitutes
or substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ S. LEWIS MEYER President, Chief Executive Officer October 2, 1995
- -------------------- and Director
S. Lewis Meyer
/s/ DOUGLAS P. BOYD Chairman of the Board October 2, 1995
- --------------------
Douglas P. Boyd
/s/ GARY H. BROOKS Vice President Finance October 2, 1995
- -------------------- and Chief Financial Officer
Gary H. Brooks
/s/ UGO BUSATTI Director October 2, 1995
- --------------------
Ugo Busatti
/s/ JOHN L. COUCH Director October 2, 1995
- --------------------
John L. Couch
/s/ GIOVANNI LANZARA Director October 2, 1995
- --------------------
Giovanni Lanzara
/s/ TERRY ROSS Director October 2, 1995
- --------------------
Terry Ross
/s/ ALDO TEST Director October 2, 1995
- --------------------
Aldo Test
<PAGE>
IMATRON INC.
INDEX TO EXHIBITS FILED WITH
FORM S-3 REGISTRATION STATEMENT
1,551,488 Shares of Common Stock
Sequential
Exhibit No. Description
5.1 Opinion of Counsel as to legality of securities being registered.
24.1 Consent of independent auditors.
24.2 Consent of counsel.
Reference is made to Exhibit 5.1.
25.1 Power of Attorney (contained in signature pages)
<PAGE>
EXHIBIT 4.1
-----------
STOCK OPTION AGREEMENT
Option granted as of November 15, 1994 (the "Date of Grant") by Imatron
Inc. (the "Corporation") to Wall Street Consultants, Inc. (which together with
its assigns is sometimes hereinafter referred to as the "Grantee"):
1. THE OPTION. In further consideration of the services to be provided to
the Corporation by the Grantee pursuant to the certain retainer agreement
between the Corporation and the Grantee dated November 15, 1994 (the "Retainer
Agreement"), the Corporation grants to the Grantee, effective on the Date of
Grant, a stock option (the "Option") to purchase, on the term and conditions
herein set forth, up to the number of shares (the "Shares") of the Corporation's
fully paid, nonassessable share of common stock, ("Common Stock"), at the
purchase price for the Shares set forth in Section 2 below, such that the
aggregate purchase price shall equal $100,000, provided, however, that in no
event shall the Corporation be required to sell a fractional Share, and the
number of Shares purchasable hereunder shall be limited accordingly.
2. THE PURCHASE PRICE. The purchase price of the Shares shall be $1.00 per
share (the "Option Price"), which price is the fair market value of the Shares
as of the Date of the Grant, as such Option Price shall be adjusted from time to
time pursuant to paragraph 10.
3. EXERCISE OF OPTION.
(a) The Option is exercisable over a period ending five years from the
Date of Grant (the "Option Price"). The Option may be exercised from time to
time during the Option Period as to the total number of Shares subject to this
Option as determined under Section 1, or any lesser amount thereof, and the
Option shall continue as to any unexercised Shares.
(b) In the event the Grantee elects to exercise all or any portion of
the option, the Grantee shall deliver to the Corporation written notice (the
"Notice") of such election, which Notice shall specify the number of Shares in
respect of which the Option to be exercised, along with payment of the Option
Price of the Share in respect of which the Option is exercised. The Option Price
shall be paid in full in United States dollars at the time of exercise;
provided, however, that if any fees are owed or expenses unreimbursed pursuant
to the Retainer Agreement, then the exercise price may be paid by the Grantee
agreeing to credit the corporation therefore. If the Option is exercised in
accordance with the provisions of this Agreement, the Corporation shall deliver
as soon as practicable to the Grantee a certificate or certificates representing
the number of Shares in respect of which the Option is being exercised, which
Shares shall be registered in the holder's name.
4. RESTRICTIONS ON TRANSFER; INVESTMENT REPRESENTATIONS.
(a) The Grantee understands that: (a) The offer and the issuance of the
Option and the Shares issuable upon exercise of the Option (collectively, the
"Securities") 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 for
<PAGE>
non-public offerings; (b) The Securities have not been qualified under the
securities laws of any state, in reliance on one or more exemptions from such
qualification available for this offering and issuance of the Securities under
applicable state securities laws; and (c) Grantee must hold the Securities
indefinitely unless they are subsequently registered under the 1933 Act and
qualified under applicable state securities laws, or unless an exemption from
such registration and qualification is available.
(b) The Grantee agrees that: (i) Grantee will not attempt to transfer
the Securities in violation of the above restrictions; (ii) the Company may note
such restrictions on transfer in their respective 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 (iii) One or more legends indicating a
lack of registration under the Securities Act and a lack of qualification under
state securities laws will be imprinted on the Securities. 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.
(c) Grantee hereby represents and warrants to the Corporation as
follows: (i) Grantee is acquiring the Securities for his or her own account, for
investment, and not with a view to any sale or distribution of any interest
therein; (ii) The Grantee 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 Securities, and the Grantee is able to bear the economic risks
of such an investment; and (iii) all statements made, and information furnished,
by the Grantee in this certificate and all other information furnished by the
Grantee to the Corporation, are true and complete, to the best of the Grantee's
knowledge.
(d) The Grantee agrees that the above representations and warranties are
binding on the Grantee's successors and assigns and are made for the benefit of
the Corporation 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
Grantee's representations or warranties. The Grantee agrees to indemnify,
defend, and hold harmless such persons from any liability arising from the
falsity of any of the Grantee's representations or warranties.
5. REGISTRATION RIGHTS. The Corporation agrees that, for so long as the
Option remains exercisable and for a period of two years thereafter, whenever
the Corporation proposes to file with the Securities and Exchange Commission a
registration statement (other than as to securities issued pursuant to employee
benefit plan or as to a merger, acquisition or similar transaction subject to
Rule 145 promulgated under the Securities Act), the Corporation shall, at least
30 days prior to such filing, give written notice of such proposed filing to the
Grantee setting forth the facts with respects to such proposed filing, and shall
make its best efforts to include in any such filing
<PAGE>
the Shares subject to the Option provided that the Corporation receives a
request therefor at least 10 days prior to the proposed filing date. All fees,
disbursements and out-of-pocket expenses in connection with the filing of any
registration statement and in complying with applicable securities and blue sky
laws be borne by the Corporation. Should Corporation not be able to include the
option shares in an registration statement that relates to the public offering
of shares, (due to opposition from underwriter), Corporation agrees to file a
separate registration statement as soon as possible for the option shares.
The Corporation will indemnify and hold harmless the Grantee and each
person who controls the Grantee within the meaning of Section 15 of the Act or
Section 20 of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") form and against any and all losses, claims, damages, expenses, and
liabilities, joint or several (including any investigation, legal and other
expenses incurred in connection with, and any amount paid in any settlement
effected with the Corporation's consent (not to be unreasonably withheld) of,
any action, suit or proceeding or any claim asserted, to which they, or any of
them, may become subject under the Act, the Exchange Act or other federal or
state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities arise out of or are based on (A) any untrue
statement or alleged untrue statement of a material fact contained in the
registration statement filed with respect to the Shares (including any related
preliminary or definitive prospectus, or any amendment or supplement to such
registration statement or prospectus), (B) any omission or alleged omission to
state in such document a material fact required to be stated in it or necessary
to make the statements in it not misleading, or (C) any violation by the
Corporation of the Act, the Exchange Act, any blue sky laws or any rule or
regulation thereunder in connection with such registration; provided however,
that the Corporation will not be liable to the extent that such loss, claim,
damage, expense or liability arises form and is based solely on a material
untrue statement or omission or alleged material untrue statement or omission
made in such registration statement and in conformity with information furnished
in writing to the Corporation by the Grantee expressly for use in such
registration statement. With respect to the matter referred to in the proviso of
the foregoing sentence, the Grantee will indemnify and hold harmless the
Corporation from and against any and all losses, claims, damages, expenses, and
liabilities, joint or several, to which it may become subject under the Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise to the same extent provided in the immediately preceding
sentence.
Promptly after receipt by an indemnified party of notice of the
commencement of any action involving matters referred to in the foregoing
paragraph, such indemnified party will, if a claim in respect thereof is to be
made against any indemnifying party, thereof and the indemnifying party shall
have the right to participate in, and, to the extent the indemnifying party so
desires, jointly with any other indemnifying party similarly notified, to assume
the defense thereof at its own expense with counsel reasonably satisfactory to
the indemnified party or parties, and in such case, if the indemnified party
desires to retain its own counsel, the expense of such counsel shall be borne by
the indemnified party.
<PAGE>
6. TERMINATION OF RETAINER AGREEMENT. In the event the engagement of the
Wall Street Group, Inc. under the Retainer Agreement ceases by reason of the
termination of the Retainer Agreement by either party on ninety (90) days notice
pursuant to the provisions thereof, the maximum number of Shares exercisable
hereunder shall be multiplied by a fraction, the numerator of which shall be the
number of days which shall have expired from the Date of Grant to the earlier of
the next subsequent anniversary date of the Retainer Agreement or ninety (90)
days after receipt by the Wall Street Group, Inc. of the notice of termination
sent pursuant thereto, and the denominator of which shall be 365, and such
product shall thereupon be the maximum number of Shares purchasable hereunder;
provided, however, that in no event shall the Corporation be required to sell a
fractional Share, and the number of Shares purchasable hereunder shall be
limited accordingly.
7. SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and shall
inure to the benefit of the parties' respective successors and assigns.
8. EXPIRATION OF OPTION. This Option is not exercisable after the
expiration of five years from the Date of Grant.
9. RIGHTS.
(a) The granting of this Option shall not confer upon the Grantee any
right to continue to be retained by the Corporation or any of its subsidiaries,
subject, however, to the terms of the Retainer Agreement between the Grantee and
the Corporation.
(b) The Grantee shall not, by reason of the granting to it of the
Option, have or thereby acquire any rights of a stockholder of the Corporation
with respect to any Shares unless and until it has tendered full payment of the
Option Price for such Shares.
10. ADJUSTMENT OF NUMBER OF SHARES AND OPTION PRICE. In the event that a
dividend shall be declared upon the Shares payable in shares of Common Stock,
the number of Shares then subject to the Option and the Option Price shall be
adjusted by adding to each of such Shares the number of shares of Common Stock
which would be distributable thereon if such Share had been outstanding on the
date fixed for determining the stockholders entitled to receive such stock
dividend and reducing the Option Price proportionally. In the event that the
outstanding Shares shall be changed into or exchanged for a different number or
kind of shares of stock or other securities of the Corporation or of another
corporation, whether through reorganization, recapitalization, stock split-up,
combination of shares, merger or consolidation, then there shall be substituted
for each Share subject to the Option the number and kind of shares of stock or
other securities into which each outstanding share of Common Stock shall be so
changed or for which each such share be exchanged; provided, however, that in
the event that such change or exchange results from a merger or consolidation,
and in the judgement of the Board of Directors of the Corporation such
substitution cannot be effected or would be inappropriate, or if the Corporation
shall sell all or substantially all of its assets, the Corporation shall use
reasonable efforts to effect some other adjustment of the Option which the Board
of Directors, in its sole discretion, shall deem equitable. In the event that
there shall be any change, other than as specified above in the Paragraph 10, in
the number or kind of outstanding Shares or of any stock or other securities
<PAGE>
into which such Shares shall have been changed or for which they shall have been
exchanged, then, if the Board of Directors shall determine that such change
equitably requires and adjustment in the number or kinds of Shares then subject
to the Option, such adjustment shall be made by the Board of Directors and shall
be effective and binding for all purposes of this Option. In the case of any
such substitution or adjustment as provided for in this paragraph, the Option
Price will be the option price for all shares of stock or other securities which
shall have been substituted for each Share or to which such Share shall have
been adjusted pursuant to this paragraph 10. No adjustment or substitution
provided for in this paragraph 10 shall require the Corporation to sell a
fractional Share, and the total substitution or adjustment shall be limited
accordingly.
11. RESERVE OF SHARES. The Corporation will reserve and set about and have
at all times, free from preemptive rights, a number of shares or authorized but
unissued Common Stock deliverable upon exercise of the Option, and it will have
at all times any other rights or privileges provided for therein sufficient to
enable it at any time to fulfill all of its obligations in this Agreement.
12. GOVERNING LAW. This Agreement shall be governed by, and construed and
enforced in accordance with, the laws of the State of New York.
If the foregoing is in accordance with the Grantee's understanding and
approved by it, it may so confirm by signing and returning the duplicate of this
Agreement delivered for that purpose.
DATED: November 15, 1994
IMATRON INC.
By: /s/ S. LEWIS MEYER
-----------------------
The foregoing is in accordance with the undersigned's understanding and is
hereby confirmed and agreed to as of the Date of Grant.
DATED: April 9 , 1995
WALL STREET CONSULTANTS, INC.
By: /s/ DONALD KIRSCH
-----------------------
<PAGE>
Exhibit 5.1
-----------
September 28, 1995
Imatron Inc.
389 Oyster Point Blvd.
South San Francisco, CA 94080
Gentlemen:
You have requested our opinion with respect to certain matters in
connection with the filing by Imatron Inc. (the "Company") of a Registration on
Form S-3 (the "Registration Statement") with the Securities and Exchange
Commission on behalf of certain Selling Shareholders covering the offering of up
to shares of the Company's Common Stock. 1,325,000 shares are issuable upon the
exercise of Warrants issued in a private offering which concluded on September
15, 1993 (the "Private Offering Warrant Shares"). 126,888 shares were issued
March 1994 in a private transaction as partial payment for professional services
rendered (the "Outstanding Shares"). 100,000 shares are issuable upon excercise
of options granted in November 1994 as partial payment for professional services
rendered ("Option Shares"). The Private Offering Warrant Shares, the Outstanding
Shares and the Option Shares are collectively referred to herein as the
"Shares."
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the Company's Certificate of
Incorporation and Bylaws, as amended, and such other records, documents,
certificates, memoranda and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents were due
execution and delivery are a prerequisite to the effectiveness thereof.
We do not hold ourselves out as experts in the laws of the State of New
Jersey and our opinion is based solely on a review of the New Jersey Business
Corporation Act, as reported in unofficial compilations.
On the basis of the foregoing, and in reliance thereon, we are of the
opinion that:
The Outstanding Shares are validly issued, fully paid and non-assessable
shares of the Common Stock of the Company.
The Private Offering Warrant Shares, when sold and issued in accordance
with the Warrants, the Warrant Agreements, the Registration Statement and
related Prospectus, will be validly issued, fully paid, and nonassessable.
The Option Shares, when sold and issued in accordance with the Options, the
Option Agreement, the Registration Statement and related Prospectus, will be
validly issued, fully paid, and nonassessable.
This opinion is intended solely for your benefit and is not to be made
available to or be relied upon by any other person, firm or entity without our
prior written consent.
We consent to the filing of this opinion as an exhibit to the Registration
Statement.
SEVERSON & WERSON
A Professional Corporation
By: /s/ ROGER S. MERTZ
-----------------------
Roger S. Mertz
<PAGE>
EXHIBIT 24.1
------------
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on Form S-3 (No. 33-00000) and related Prospectus of
Imatron Inc. for the registration of 1,551,448 shares of its common stock and to
the incorporation by reference therein of our report dated February 17, 1995,
except for Note 11 as to which the date is April 4, 1995 with respect to the
consolidated financial statements and schedules of Imatron Inc. included in its
Annual Report on Form 10-K for the year ended December 31, 1994, filed with the
Securities and Exchange Commission.
By: /s/ Ernst & Young
-----------------------
Ernst & Young LLP
San Francisco, California
September 28, 1995
