PROSPECTUS
2,645,144 Shares
IMATRON INC.
Common Stock No Par Value
This Prospectus relates to the sale of up to 2,645,144 shares of Common
Stock, no par value, of Imatron Inc. (the "Company") by shareholders of the
Company (the "Selling Shareholders"). A total of 73,448 shares are currently
issued and outstanding (the "Outstanding Shares"); a total of 2,571,696 shares
are issuable upon the exercise of outstanding warrants (the "Warrants") (the
"Warrant Shares"). All of the Outstanding Shares and the Warrants were
previously issued by the Company to the Selling Shareholders in private
transactions. The Outstanding Shares and the Warrant 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 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 May 24, 1996
<PAGE>
TABLE OF CONTENTS
AVAILABLE INFORMATION....................................................... 3
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE............................. 3
THE COMPANY................................................................. 4
RISK FACTORS................................................................ 5
USE OF PROCEEDS............................................................. 12
OFFERING PRICE....................................................... ...... 12
SELLING SHAREHOLDERS.........................................................12
PLAN OF DISTRIBUTION........................................................ 15
EXPERTS..................................................................... 15
LEGAL OPINION............................................................... 15
<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 under the symbol "IMAT." 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, 1995, filed March 29, 1996 (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
28, 1996, filed April 29, 1996; 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, including
any beneficial owner, to whom this Prospectus is delivered, upon written or oral
request of such person, a copy of any and all of the 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 number (415)
583-9964.
<PAGE>
THE COMPANY
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 a scanning electron beam. CT refers to a
diagnostic imaging device in which cross-sectional (tomographic) images of a
patient's anatomy are acquired from multiple intensity readings taken as an
x-ray source rotates around the patient. Ultrafast CT technology is more than 20
times faster than conventional computed tomography, enabling users to perform
certain tests involving organs in motion (e.g. the heart) that no other medical
imaging equipment is able to perform.
For over a decade, the scanner has been used in large and mid-sized
hospitals and free standing imaging clinics. The Company also provides service,
parts, and maintenance to hospitals and clinics that operate its scanners. The
technological advantage provided by high-speed tomography now provides Imatron
the opportunity to develop a new and additional market, by performing simple,
low cost, non-invasive screening to detect the earliest signs of heart disease
by means of the Coronary Artery Scan ("CAS"). This vast new market involves
activity in both diagnostic services and equipment manufacturing.
The Company is also engaged in the related businesses of performing
research and development for itself and others in the field of CT devices and of
licensing its patents and know-how in the field of imaging sciences.
Imatron 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.
In 1993, Imatron organized HeartScan Imaging, Inc. as a wholly-owned
subsidiary to develop and operate a network of company-owned coronary artery
disease risk assessment centers in cooperation and conjunction with the
established medical (primarily cardiology) community in specific metropolitan
areas. In that same year, HeartScan opened a test facility adjacent to Imatron's
headquarters. In July, 1995, it opened its first coronary artery disease risk
assessment center in Seattle, Washington. In January, 1996, it opened its second
facility in Houston, Texas. It plans to open similar facilities in Washington,
D.C. and Pittsburgh, Pennsylvania, in May, 1996. HeartScan's centers deliver the
CAS diagnostic test together with other risk factor tests in a manner consistent
with established channels of patient referral, as well as with the new channels
of patient referral being created by health care reform and the growth of
managed-care systems.
A significant component of HeartScan's approach is to offer the CAS
procedure and a full battery of coronary artery disease risk assessment testing
to consumers without necessarily requiring a physician's referral, an approach
designed to result in more rapid acceptance of the test and a shorter return on
the investment cycle. This is achieved by means of two broad and mutually
<PAGE>
supportive approaches - increasing the number of coronary artery disease risk
assessment centers in operation, which in turn, both directly and indirectly,
increases the demand for Imatron's C-150/Evolution scanner currently in
distribution. HeartScan management believes that the market for coronary artery
disease risk assessment centers is very large and that HeartScan's comprehensive
heart disease screening approach is both revolutionary and highly effective.
HeartScan Imaging, Inc. was incorporated in Delaware in April, 1993. Its
executive offices are currently co-located with those of Imatron Inc. at 389
Oyster Point Boulevard, South San Francisco, California 94080, and its telephone
number is (415) 583-9964.
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. Imatron was incorporated in February, 1983 and
in April, 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 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 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. In 1995, the Company incurred a net loss of $2,449,000.
There is no assurance that Imatron can return to profitable operations in the
future. In the past, Imatron has funded its losses primarily through the sale of
securities in two public offerings and a number of 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. In 1995, the Company raised $9,882,000 (net of offering costs)
in two offerings of Common Stock to certain institutional investors. The Company
has an accumulated deficit of $57,557,000.
Management believes that cash, cash equivalents and short-term
investments existing at December 31, 1995 and the estimated proceeds from
ongoing sales of products and services in 1996 will provide the Company with
sufficient cash for operating activities and capital requirements through
December 31, 1996.
Need for Additional Financing. To satisfy the Company's future capital
and operating requirements, profitable operations or additional public or
private financing 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. In addition, HSI will need substantial
additional financing to fund its plan to own and operate CAS clinics. To date
HSI has been unable to raise such funds and has relied upon the Company for
financing. In the event HSI cannot raise such funds it will have to curtail its
expansion activities.
<PAGE>
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 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 the C-100 XL scanner model began in
February 1989 and twenty-seven 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 claims. 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.
Reliance On Patents And Proprietary Technology. Imatron relies heavily
on proprietary technology which it attempts to protect through patents and trade
secrets.
<PAGE>
In February 1981, the Company was granted the exclusive use for five
years and non-exclusive use thereafter of certain technology and a patent
pending owned by the University of California (UC) under the terms of a license
agreement between UC and Emersub, a wholly-owned subsidiary of a former
principal shareholder of the Company, and a sublicense agreement between Emersub
and Imatron Associates (the predecessor to the Company), respectively. In June
1986, the license and sublicense agreements were amended to extend the Company's
exclusive use of the technology through the remaining 9-year life of the patent
in exchange for modified minimum annual royalty payments. Under the terms of
Emersub's license with UC, Emersub was obligated to make certain additional
payments in connection with the license. In October 1990, pursuant to subsequent
amendments of the license and sublicense agreements, the Company issued an
aggregate of 132,813 shares of Series A Preferred Stock to UC and Emersub in
satisfaction of this obligation. The University of California converted their
125,000 Series A Preferred Stock into 625,000 common stock shares in 1993.
Emersub converted their 7,813 Series A Preferred Stock into 39,065 common stock
shares in September 1995.
In addition, the sublicense agreement, as amended, requires the Company
to pay annual royalties to Emersub equal to 2.125% of net sales of certain of
the Company's products. The Company's Chairman of the Board, Dr. Douglas P.
Boyd, receives 6% of all of the royalties paid by Emersub to UC. Loss by Imatron
of its rights under the patent as a result of termination of its sublicense from
Emersub, 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 Emersub.
Development of portions of the technology covered by the UC patent and
sublicensed to Imatron has been funded in substantial part through research
financing made available to UC by the National Institutes of Health. As a result
of such financing, it is possible that the U. S. Government may assert certain
claims in such UC patents, including the right to a royalty-free license for
governmental use.
In addition, Imatron holds twenty-seven U.S. Patents of its own (each
with a remaining life in excess of 3 years) and has filed three U.S. patent
applications covering various integral components of the scanner including,
among others, its electron beam assembly and its x-ray detector and has filed
applications corresponding to several of these patents and 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 a patent to
the Company. 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
the Company's ability to finance litigation against parties which may infringe
upon such patents or parties which may claim that the Company's scanner
infringes upon their patents. However, the agreement signed by the Company and
Siemens Corporation in March 1991 allows Siemens Corporation to enter litigation
in favor of Imatron.
<PAGE>
On March 31, 1995, the Company and Siemens Corporation ("Siemens")
entered into an agreement (the "Memorandum of Understanding") relating in part
to certain of the Company's patents. Pursuant to the agreement, the Company
transferred to Siemens five patents, two of which cover features of the
Company's C-150 scanner, in consideration of the cancellation by Siemens of a $4
million term loan to the Company. As part of the agreement Siemens granted to
the Company a non-exclusive, irrevocable, perpetual license to the five patents.
The license is subject to a royalty of $20,000 for each new C-150 unit produced
by the Company beginning with the twenty-first C-150 unit produced in any year.
Siemens has recently asserted a claim against the Company regarding the
lapse of certain foreign registrations of one of the patents assigned to Siemens
by the Company in connection with the March 31, 1995 agreement between the
companies. The technology involved in the patent is not used presently in any of
the Company's products. The Company believes that it can provide a new patent to
Siemens to replace the lapsed patent. While the resolution of the claim is not
expected to have a material effect on the Company's financial position it could
however, have a material effect on the results of operations of a particular
future period if resolved unfavorably.
In the event some or all of the Company's patent applications are
denied and/or some or all of its patents 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.
The Company also believes that many of its proprietary technologies are
better protected as trade secrets or copyrights than by patents. Moreover,
although protection of the Company's existing proprietary technologies is
important, other factors such as product development, customer support and
marketing ability are equally important to the development of the Company's
business.
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 six months based on inventory and lead time can
be significant between authorization of manufacturing to delivery of a scanner.
<PAGE>
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 extended
delays between their order and deliver. Delays in such delivery 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. 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.
Also, certain vendors currently require cash-on-delivery or prepay
payment terms. There can be no assurance that such actions will not adversely
affect the Company's production schedule and its ability to deliver products in
a timely manner. As a result of certain vendors currently requiring
cash-on-delivery or prepay terms, the Company must maintain higher levels of
cash and other sources of credit to fund material purchases than otherwise would
be required.
Volatility of Stock Price. The market prices for securities of advanced
technology companies have historically been highly volatile, including the
market price of shares of the Company's Common Stock. Future announcements by
the Company or its competitors, including announcements concerning technological
innovations or new commercial products, results of clinical testing, changes in
government regulations, regulatory actions, health care reform, proprietary
rights, litigation and public concerns as to the safety of the Company's or its
collaborators' products, as well as period-to-period variances in financial
results could cause the market price of the Common Stock to fluctuate
substantially. In addition, the stock market has experienced extreme price and
volume fluctuations that have particularly affected the market price for many
advanced technology companies that have often been unrelated to the operating
performance of these companies. These broad market fluctuations may adversely
affect the market price of the Common Stock.
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.
<PAGE>
The Amendments also impose certain requirements which must be met prior
to the initial marketing of medical devices introduced into commerce after May
28, 1976. Other requirements imposed on medical device manufacturers include a
pre-market notification process commonly known as the 510(k) application to
market a new or modified medical device. Additionally, and specifically if
required by the FDA, a pre-market approval ("PMA") may be required. This process
is potentially expensive and time consuming and must be completed prior to
marketing a new medical device. The Company has received appropriate clearances
from the FDA to market both the C-100 and C-150 ULTRAFAST CT scanner. The
Company believes that it is presently in substantial compliance with the GMP
requirements and other regulatory issues promulgated by the FDA.
The FDA also regulates the safety and efficacy of radiological devices.
Although the Company believes it is in compliance with all applicable
radiological health regulations promulgated by the FDA, 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 payment
policies, 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.
Certain states have adopted 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 more stringent CON legislation
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 CONs or will be willing to pursue the application
procedure.
<PAGE>
The Company's primary customers operate in the healthcare industry. The
health care industry is highly regulated. 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 issued by Cal/OSHA and
were immediately corrected by the Company. The subsequent follow up inspection
in December by the same regulatory body yielded satisfactory results without the
issuance of further notice of violation. The Company believes that it is in
substantial compliance with California regulations applicable to its business.
Competition. In the non-cardiac imaging applications market (composed
principally of hospital radiology departments), the Company's principal
competition is from current manufacturers of conventional CT scanners, including
General Electric Company, Siemens Corporation, Elscint, Picker International,
Inc., Philips Medical Systems, and Toshiba Medical 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 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.
<PAGE>
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.
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 the Warrants. Upon the exercise of 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.
<PAGE>
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. The Common Stock offered by this Prospectus may be offered from time
to time by the Selling Shareholders named below or their nominees:
<TABLE>
<CAPTION>
Name of Selling Shares Beneficially Shares Available for Percent Owned After
Securityholder Owned (2) Sale Under this Completion of the
(1) Prospectus Offering (3)
<S> <C> <C> <C>
Arbinter-Omnivalor S.A. 109,091 109,091 *
Bank Ehinger & Cie AG 60,000 60,000 *
Banque Franck S.A. 120,000 120,000 *
Banque Genevoise de Gestion 38,182 38,182 *
Banque Privee Edmond de 45,455 10,909 *
Rothschild S.A.
Banque Scandinave en Suisse 109,091 109,091 *
Codell Holdings, Ltd. 30,303 30,303 *
Donaghy Inc. 65,000 65,000 *
Experta Trustee Ltd. 99,394 99,394 *
FI.M.A.I. Holding, S.A. 1,000,000 1,000,000 *
Heritage Finance & Trust 70,364 40,364 *
Company
Intercapital Limited 109,091 109,091 *
Jose Osvaldo Gomez (4) 327,273 65,455 *
Jose Maria Salema Garcao 1,000,000 185,455 1.16
(5)
Montrachet Norstar 12,121 12,121 *
Investments, Ltd.
The Shemano Group, Inc. 50,000 50,000 *
Sitrick and Company Inc. 140,688 140,688 *
S. Lewis Meyer 1,037,440 400,000 *
All Selling Shareholders 4,423,493 2,645,144 2.54
as a Group
<FN>
- -----------------------------
* Less than 1%
(1) FI.M.A.I. Holding, S.A. ("FI.M.A.I.") has had the following material
relationships with the Company during the past three years: (i) Dr. Ugo
Busatti and Dr. Giovanni Lanzara have been the persons chosen by
FI.M.A.I. to be its representatives on the Company's Board of Directors
pursuant to a Series A Stock Purchase Agreement dated July 20, 1988.
Dr. Busatti resigned his directorship on March 7, 1996; (ii) FI.M.A.I.
and the Company established a joint venture company, InVision
Technologies, Inc. ("InVision") in 1990 to develop and manufacture
advanced CT technology in the baggage, parcel and freight scanning
market. FI.M.A.I., the Company and InVision are parties to a Technology
License Agreement wherein the Company has granted InVision an exclusive
license to use the Company's technology and patents for the freight
scanning market. In 1992 the Company sold a substantial part of its
interest in InVision, and as of December 14, 1995 owns approximately 1%
of InVision. The Shareholders' Agreement between FI.M.A.I. and the
Company related to InVision was substantially terminated by agreement
on December 9, 1992. Certain of the provisions of the Shareholders'
Agreement remain in effect; (iii) Pursuant to a Letter of Credit
Reimbursement Agreement entered into in February 1992 between FI.M.A.I.
and the Company, FI.M.A.I. has provided an irrevocable Letter of Credit
of up to $2,000,000 in favor of Instituto Bancario San Paolo di Torino
("Instituto Bancario") to enable the Company to obtain a $2,000,000
working capital line of credit from Instituto Bancario. The FI.M.A.I.
guaranty in favor of Instituto Bancario terminated in April 1996; (iv)
FI.M.A.I. was formerly a major shareholder of the Company, and reported
beneficial ownership of the following capital stock in the Company's
1995 Proxy Statement: 3,950,000 shares of Common Stock (representing
approximately 5.7% of the class) and 250,000 shares of Series A
Preferred Stock (representing approximately 22.6% of the class). All of
the foregoing shares, except for the Shares, have been sold.
<PAGE>
Mr. S. Lewis Meyer is President and Chief Executive Officer of the
Company and a Director. In connection with such employment the Company
entered into an Executive Employment Agreement with Mr. Meyer which
provided for an initial term ending December 31, 1993 and continuing
after such date for rolling six month periods. Pursuant to the
agreement, Mr. Meyer is entitled to a base salary of $185,000
(subsequently increased to $195,000) per year subject to annual review,
a non-qualified stock option to purchase 600,000 shares of the
Company's Common Stock at $0.58 per share (85% of the price of a share
of the Company's Common Stock on the date of grant) (subsequently
repriced to $0.56), to be vested over a four-year period, the Warrant
whose underlying shares of Common Stock are being offered hereby, such
Warrant having an original exercise price of $1.50 (subsequently
repriced to $0.75 per share) exercisable for six years commencing June
14, 1994, and certain other benefits. Mr. Meyer beneficially owns
1,037,440 shares of the Company's Common Stock including 37,440 shares
owned directly and beneficially, 600,000 shares issuable upon exercise
of the non-qualified stock option described above (of which 412,500
shares are vested), and 400,000 shares issuable upon exercise of the
Warrant.
(2) Includes shares owned prior to this offering and the shares which are
issuable upon the exercise of the 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.
<PAGE>
(3) 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 70,026,336 shares of
Common Stock issued and outstanding as of May 1, 1996.
(4) Maria Helena Gomez shares power to dispose of the Shares held by Jose
Osvaldo Gomez.
(5) Maria Luisa Garcao shares power to dispose of the Shares held by Jose
Maria Salema Garcao.
</FN>
</TABLE>
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 privately 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 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.
<PAGE>
EXPERTS
The consolidated financial statements of Imatron Inc. incorporated by
reference and appearing in Imatron Inc.'s Annual Report (Form 10-K) for the year
ended December 31, 1995, have been audited by Ernst & Young LLP, independent
auditors, as set forth in their report thereon included therein and incorporated
herein by reference. Such consolidated 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, A Professional Corporation, One
Embarcadero Center, 26th Floor, San Francisco, California 94111.
<PAGE>
