As filed with the Securities and Exchange Commission on June 25, 1996
--Registration No.
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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.)
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389 Oyster Point Boulevard
South San Francisco, California 94080
(415) 583-9964
(Address, including zip code and telephone number,
including area code, of registrant's principal executive offices)
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S. Lewis Meyer
President and Chief Executive Officer
Imatron Inc.
389 Oyster Point Boulevard
South San Francisco, California 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
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Approximate date of commencement of proposed sale to the public: As soon as
practicable after this Registration Statement becomes effective.
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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
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Title of Proposed Proposed
Each Class Maximum Maximum
of Securities Amount to Offering Aggregate Amount of
to Be Be Price Per Offering Registration
Registered Registered Share Price Fee
- ------------- ----------- ---------- --------- -------------
Common 6,283,700 $5.75 $36,131,275 $12,459.04
Stock Shares (1) (1)
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(1) Estimated pursuant to Rule 457(c) solely for purposes of determining
the registration fee, based on the average of the high and low sales
prices on June 18, 1996, as reported on the NASDAQ National Market
System.
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.
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Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective. This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sale of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.
SUBJECT TO COMPLETION, DATED JUNE 21, 1996
PROSPECTUS
6,283,700 Shares
IMATRON INC.
Common Stock No Par Value
This Prospectus relates to the sale of up to 6,283,700 shares of Common
Stock, no par value, of Imatron Inc. (the "Company") by shareholders of the
Company (the "Selling Shareholders"). A total of 4,000,000 shares are currently
issued and outstanding (the "Outstanding Shares"); a total of 2,283,700 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.
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THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
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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 June 21, 1996
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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.................................................... 14
EXPERTS................................................................. 14
LEGAL OPINION........................................................... 14
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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 to be held on
June 28, 1996, filed April 29, 1996; the Company's Report on Form 10-Q for the
period ended March 31, 1996, filed on May 15, 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.
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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 July, 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
supportive approaches - increasing the number of coronary artery disease risk
assessment centers in operation, which in turn, both directly and indirectly,
increases the demand
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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
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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.
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.
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
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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.
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
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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. Lead time can be
significant between authorization of manufacturing to delivery 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 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
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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.
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
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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.
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.
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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.
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.
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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.
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:
Name of Selling Shares Shares Available Percent Owned
Securityholder Beneficially for Sale Under After Completion
Owned(1) this Prospectus of the Offering(2)
- --------------- ------------ ---------------- ------------------
Comptoir Prive 105,800 21,800 *
de Gestion S.A.
CUF Finance 48,373 27,373 *
S.A.
12
<PAGE>
Wood Gundy 109,091 109,091 *
(London) Ltd.
M. Fund Sicav 193,636 43,636 *
The Gifford 81,800 81,800 *
Fund, Ltd.
Jose Maria 3,395,455 2,700,000(4) *
Salema Garcao(3)
Luis Jorge Serras 600,000 600,000 *
Jose Laranjeiro 905,455 500,000 *
Osvaldo Gomes
Armando Jose 400,000 400,000 *
Rinaldi Balbi
Eduardo Guedes 200,000 200,000 *
de Queiroz de
Mendia
Carlos Spynola 200,000 200,000 *
Teixeira
Dr. Jose Diogo 100,000 100,000 *
Ferreira Martins
Maria Madalena 100,000 100,000 *
Bello Pimentel
Jose Antonio 100,000 100,000 *
Reymao Nogueira
Jose Filipe Nobre 100,000 100,000 *
Guedes
Banco Espirito 1,000,000 1,000,000 *
Santo
Internacional
All Selling 7,639,610 6,283,700 1.5%
Shareholders as a
Group
- -----------------------------
* Less than 1%
13
<PAGE>
(1) 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, and includes
shares issuable upon exercise of Warrants. See footnote (2) below.
(2) 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 71,239,500 shares of
Common Stock issued and outstanding as of June 4, 1996.
(3) Maria Luisa Garcao shares power to dispose of the Shares held by Jose
Maria Salema Garcao.
(4) Includes 2,000,000 shares which are issuable upon the exercise of
Warrants held by the selling Shareholder.
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.
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.
14
<PAGE>
No dealer, salesman or any other
person has been authorized to give any
information or to make any
representation not contained in this 6,283,700 Shares
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 Imatron Inc. This
Prospectus does not constitute an
offer to sell or a solicitation of an IMATRON INC.
offer to buy any securities other than
those specifically offered hereby or No Par Common Stock
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 PROSPECTUS
shall under any circumstances create
any implication that the information
contained herein is correct as of any
time subsequent to the date hereof.
June 21, 1996
15
<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............................... $12,460.00
Printing and engraving expenses................ 500
Legal fees and expenses2....................... 5,000
Accounting fees and expenses................... 3,500
Total................................. $21,460.00
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 the
Company
- --------
1 Including legal expenses associated with Blue Sky filings.
2 Including legal expenses associated with Blue Sky filings.
16
<PAGE>
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.
ITEM 16. Exhibits.
Exhibit No. Description
- ----------- -----------
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 April 29, 1990.8
- --------
3 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.
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 herein 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 May 2, 1989 and incorporated herein 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.
17
<PAGE>
3.7 Certificate of Amendment of Certificate of Incorporation filed
with the New Jersey Secretary of State on December 7, 1990.9
3.8 Bylaws, as amended as of April 30, 1992.10
4.1 Form of Common Stock Purchase Warrant which expires December
31, 2000, issued to investors in connection with the Private
Offering which concluded October 19, 1995.11
4.2 Form of Registration Rights Agreement between the Company and
investors in the Private Offering which concluded October 19,
1995.12
4.3 Common Stock Purchase Agreement between the Company and
investors in a private sale dated May 24, 1996.
4.4 Common Stock Warrant Purchase Agreement between the company
and Jose Maria Salema Garcao dated May 24, 1996.
5.1 Opinion of Counsel as to the 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).
- --------
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.
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 Registration Statement on Form S-3
filed with the Commission on May 10, 1996 (File No. 333-3529) and incorporated
herein by reference.
12 Filed as an Exhibit to the Company's Registration Statement on Form S-3
filed with the Commission on May 10, 1996 (File No. 333-3529) and incorporated
herein by reference.
18
<PAGE>
ITEM 17. Undertakings.
A. Rule 415 Offering.
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement:
(i) To include any Prospectus required by Section
10(a)(3) of the Securities Act;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in the
Registration Statement;
(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;
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 Exchange Act that are incorporated by
reference in this Registration Statement.
(2) That, for the purpose of determining any liability under
the Securities Act, each such post-effective amendment shall be deemed to be a
new Registration Statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(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 Exchange Act; 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.
19
<PAGE>
B. Filings Incorporating Subsequent Exchange Act Documents By
Reference.
The Company hereby undertakes that, for purposes of determining any
liability under the Securities Act, each filing of the Company's annual report
pursuant to Section 13(a) or Section 15(d) of the Exchange Act 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 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.
20
<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 June 15,
1996.
IMATRON INC.
By: s/S. Lewis Meyer
----------------------------------
S. Lewis Meyer
President and Chief Executive Officer
21
<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, as amended,
this Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
- --------- ----- ----
S. LEWIS MEYER President, Chief June 21, 1996
- -------------- Executive Officer and
S. Lewis Meyer Director
DOUGLAS P. BOYD Chairman of the Board June 21, 1996
- ---------------
Douglas P. Boyd
GARY H. BROOKS Vice President Finance, June 21, 1996
- -------------- Chief Financial Officer,
Gary H. Brooks and Chief Accounting
Officer
JOHN L. COUCH Director June 21, 1996
- -------------
John L. Couch
Director June 21, 1996
- ----------------
Giovanni Lanzara
TERRY ROSS Director June 21, 1996
- ----------
Terry Ross
ALDO TEST Director June 21, 1996
- ---------
Aldo Test
22
<PAGE>
IMATRON INC.
INDEX TO EXHIBITS FILED WITH
FORM S-3 REGISTRATION STATEMENT
6,283,700 Shares of Common Stock
Sequential
Exhibit No. Description Page No.
- ----------- ----------- --------
4.3 Common Stock Purchase Agreement between 24
Company and Investors in a Private Sale dated
May 24, 1996.
4.4 Common Stock Warrant Purchase Agreement 38
between Company and Jose Maria Salema Garcao
dated May 24, 1996.
5.1 Opinion of Counsel as to legality of securities 45
being registered.+
24.1 Consent of independent auditors. 48
24.2 Consent of counsel. 46
Reference is made to Exhibit 5.1.
25.1 Power of Attorney (contained in signature pages) 22
23
Exhibit 4.3
24
<PAGE>
COMMON STOCK PURCHASE AGREEMENT
THIS COMMON STOCK PURCHASE AGREEMENT is made as of May 24, 1996 between
IMATRON INC., a New Jersey corporation (the "Company"), and each of the
purchasers (individually a "Purchaser" and collectively the "Purchasers") whose
names and authorized signatures appear on the signature page hereto (the
"Signature Page").
R E C I T A L S:
WHEREAS, the Company has authorized the issuance and sale outside of
the United States of 4,000,000 shares of its Common Stock (the "Shares"); and
WHEREAS, the Purchasesr desire to purchase and the Company desires to
sell the Shares on the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of these premises and the mutual
covenants and agreements herein contained and other valuable consideration, the
receipt and adequacy of which the parties hereto acknowledge, the parties have
agreed as follows:
1. Purchase and Sale of Shares. The Company agrees to sell to the
Purchasers and upon the basis of the representations and warranties, and subject
to the terms and conditions, set forth in this Agreement, the Purchasers,
severally but not jointly, agree to purchase that number of the Shares for the
purchase price set forth opposite such Purchaser's name on the Signature Page.
2. Closing; Escrow. The closing of the purchase and sale of the Shares
pursuant to Section 1 hereof shall take place on May 24, 1996 (the "Closing
Date"). At the Closing each of the Purchasers shall deliver the purchase price
for such Purchaser's Shares into an Imatron Escrow Account at Silicon Valley
Bank (Acct. # 3300 14953) subject to the terms and conditions hereinafter set
forth. The Company shall promptly cause certificates to be issued evidencing the
Shares to be purchased by each Purchaser and shall hold such certificates until
the registration statement provided for in Section 7 below (the "Registration")
shall have been declared effective by the Securities and Exchange Commission at
which time such certificates shall be delivered to the Purchasers in accordance
with their instructions. In the event the Registration shall not have be
declared effective by July 24, 1996, upon written notice to the Company given
within sixty (60) days thereafter, each Purchaser shall be entitled to rescind
the purchase and sale of the Shares acquired by such Purchaser and to
immediately receive back from the Company the Purchase Price paid therefor.
3. Representations and Warranties of the Purchasers. Each Purchaser,
severally but not jointly, represents and warrants to, and agrees with, the
Company:
(a) This Agreement has been duly authorized, executed, and
delivered by the Purchaser and is a valid and binding agreement enforceable in
accordance with its terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium, and similar laws of general applicability
relating to or affecting creditors' rights generally and to general principles
25
<PAGE>
of equity; and the Purchaser has full corporate power and authority necessary to
enter into this Agreement and to perform its obligations hereunder.
(b) No consent, approval, authorization, or order of any court,
governmental agency or body, or arbitrator having jurisdiction over the
Purchaser is required for execution of this Agreement, including, without
limitation, the purchase of the Shares, or the performance of the Purchaser's
obligations hereunder.
(c) The Purchaser understands that no federal or state agency has
passed on or made any recommendation or endorsement of the Shares.
(d) The Company has given the Purchaser the opportunity to have
answered all of the Purchaser's questions concerning the Company and its
business and has made available to the Purchaser all information requested by
the Purchaser which is reasonably necessary to verify the accuracy of other
information furnished by the Company. The Purchaser has received and evaluated
all information about the Company and its business which the Purchaser deems
necessary to formulate an investment decision, and does not desire any further
information.
(e) The Purchaser understands that the Shares are being offered and
sold to him or her or it in reliance on specific exemptions or non-application
from the registration requirements of federal and state securities laws,
including, including but not limited to the exemptions provided for under
Regulation S ("Regulation S") and Regulation D ("Regulation D") under the United
States Securities Act of 1933, as amended (the "Securities Act"). Except as
otherwise defined herein, capitalized terms used herein and not defined herein
shall have the same meanings given to them in Regulation S and Regulation D. The
Purchaser further understands that the Company is relying upon the truth and
accuracy of the representations, warranties, agreements, acknowledgements, and
understandings of the Purchaser set forth herein in order to determine the
applicability of such exemptions or non-applications and the suitability of the
Purchaser to acquire the Shares.
(f) The Purchaser is not a U.S. Person (as defined in Regulation S)
and is not an affiliate of the Issuer.
(g) No offer of the Shares was made to the Purchaser in the United
States and at the time the buy order for the Shares was originated the Purchaser
was located outside the United States.
(h) The Purchaser is aware that the Shares have not been
registered under the Securities Act and may be offered or sold only pursuant to
registration under the Securities Act or an available exemption therefrom. The
Purchaser is acquiring the Shares for investment and without any present
intention to engage in a distribution thereof.
(i) The Purchaser is either (i) acquiring the Shares for the
Purchaser's own account; or (ii) for the account of another for which the
Purchaser acts as a fiduciary, in which case the Purchaser will so advise the
Company. If acting as a fiduciary, the Purchaser makes
26
<PAGE>
the representations, warranties, and covenants as set forth herein on its own
behalf and as agent for and on behalf of such other party.
(j) The Purchaser has the knowledge and experience in financial and
business matters to evaluate the merits and risks of the proposed investment.
(i) The Purchaser is an "Accredited Investor" as that term is
defined under Rule 501 adopted pursuant to the Securities Act. "Accredited
Investors" are defined in Rule 501 to include, among others: (1) Various
specified institutional investors (such as banks, savings and loan associations,
licensed brokers or dealers, insurance companies, investment companies, small
business investment companies, employee benefit plans having assets in excess of
$5,000,000, and self-directed plans having investment decisions made solely by
persons that are Accredited Investors); (2) Any entity with total assets in
excess of $5,000,000, not formed for the specific purpose of acquiring the
securities offered; (3) Any person who had individual income in excess of
$200,000 in each of the two most recent years or joint income with that person's
spouse in excess of $300,000 in each of those years and has a reasonable
expectation of reaching the same income level this year; (4) Any person whose
individual net worth (or joint net worth with the person's spouse) at the time
of purchase exceeds $1,000,000; (5) Directors and executive officers of the
Company; (6) Trusts with total assets in excess of $5,000,000 not formed for the
specific purpose of acquiring the securities offered, whose purchase is directed
by a sophisticated person prescribed in Rule 506(b)(2)(ii); and (7) Any entity
in which all the equity owners are deemed accredited.
(k) The Purchaser: (i) will not, during the period commencing on
the Closing Date and ending upon on the effective date of the Registration (the
"Restricted Period"), offer or sell the Shares in the United States, to a U.S.
Person or for the account or benefit of a U.S. Person or other than in
accordance with Rule 903 or 904 of Regulation S; and (i) will, after the
expiration of the Restricted Period, offer, sell, pledge, or otherwise transfer
the Shares only pursuant to registration under the Securities Act or an
available exemption therefrom and, in any case, in accordance with applicable
state and foreign securities laws.
(l) No Purchaser, or any affiliate or other person acting on behalf
of the Purchaser or any such affiliate has engaged, or will engage, in any
Directed Selling Efforts with respect to the Shares or any distribution, as that
term is used in the definition of Distributor, with respect to the Shares.
(m) The transactions contemplated by this Agreement: (i) have not
been pre- arranged with a purchaser located in the United States or who is a
U.S. Person; and (ii) are not part of a plan or scheme to evade the registration
provisions of the Securities Act.
(n) The Purchaser has no put options, short positions, or other
similar instruments with respect to any of the Company's securities and has not
entered and does not have the intention of entering, into any such instruments
with respect to the Shares or securities of the same class.
27
<PAGE>
(o) If the Purchaser offers and sells the Shares during the
Restricted Period, then it will do so only (i) in accordance with the provisions
of Regulation S, (ii) pursuant to registration of the Shares under the
Securities Act, or (iii) pursuant to an available exemption from the
registration requirements of the Securities Act.
(p) The Purchaser understands that each share certificate
evidencing the Shares will bear a legend reflecting the foregoing.
4. Representations and Warranties of the Company. The Company
represents and warrants to, and agrees with, the Purchaser that:
(a) The Shares: (i) are free and clear of any security interests,
liens, claims, or other encumbrances; (ii) have been duly and validly authorized
and issued and are, and on the Closing Date will be, fully paid and
non-assessable; (iii) will not have been, individually and collectively, issued
or sold in violation of any pre-emptive or other similar rights of the holders
of any securities of the Company; and (iv) will not subject the holders thereof
to personal liability by reason of being such holders.
(b) There is no pending or, to the best knowledge of the Company,
threatened action, suit, proceeding, or investigation before any court,
governmental agency or body, or arbitrator having jurisdiction over the Company
or any of its affiliates that would materially affect the execution by the
Company of, or the performance by the Company of its obligations under, this
Agreement.
(c) The Company is a reporting issuer as defined in Regulation S.
(d) The sale of the Shares pursuant to this Agreement will be made
in accordance with the provisions and requirements of Regulation S and
Regulation D and applicable state or foreign law.
(e) No offer to buy the Shares was made to the Company by any
person in the United States.
(f) None of the Company, any affiliate of the Company, or any
person acting on behalf of the Company or any such affiliate has engaged, or
will engage, in any Directed Selling Efforts with respect to the Shares or any
distribution, as that term is used in the definition of Distributor, with
respect to the Shares.
(g) The transactions contemplated by this Agreement: (i) have not
been prearranged with a purchaser who is in the United States or who is a U.S.
Person; and (ii) are not part of a plan or scheme to evade the registration
provisions of the Act.
(h) Neither the Company, nor any affiliate of the Company, nor any
person acting on their behalf, has undertaken or carried out any activity for
the purpose of, or that could reasonably be expected to have the effect of,
conditioning the market in the United States for any of the Shares, including,
but not limited to, general solicitation activities or advertising.
28
<PAGE>
5. Restrictions on Transferability of Shares
(a) Restrictions on Transferability. The Shares shall not be sold,
assigned, transferred or pledged except upon the conditions specified in this
Agreement, which conditions are intended to ensure compliance with the
provisions of the Securities Act. Each Purchaser will cause any proposed
purchaser, assignee, transferee, or pledgee of the Shares to agree to take and
hold such securities subject to the provisions and upon the conditions specified
in this Agreement.
(b) Restrictive Legends. Until the sale or transfer of the Shares
by the Purchasers shall be subject to an effective registration under Securities
Act, each certificate representing the Shares and any other securities issued in
respect of such securities upon any stock split, stock dividend,
recapitalization, merger, consolidation or similar event shall (unless otherwise
permitted by the provisions of Section 7 below) be stamped or otherwise
imprinted with the following legends (in addition to any legend required under
applicable state securities laws):
"THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER
THE U.S. SECURITIES ACT OF 1933, AND SUBJECT TO
CERTAIN EXCEPTIONS, MAY NOT BE SOLD IN THE UNITED
STATES OR TO U.S. PERSONS. ANY SALE, TRANSFER,
PLEDGE OR OTHER DISPOSITION THEREOF IN THE UNITED
STATES OR TO U.S. PERSONS 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."
Each Purchaser consents to the Company making a notation on its records
and giving instructions to any transfer agent of the Shares in order to
implement the restrictions on transfer established in this Agreement. As used
hereinafter the term "Restricted Securities" shall mean the securities of the
Company required to bear the legend set forth in this section.
(c) Notice of Proposed Transfers. The holder of each certificate
representing Restricted Securities by acceptance thereof agrees to comply in all
respects with the provisions of this Section 4. Prior to any proposed sale,
assignment, transfer or pledge of any Restricted Securities, unless there is in
effect a registration statement under the Securities Act covering the proposed
transfer, the holder thereof shall give written notice to the issuer thereof of
such holder's intention to effect such transfer, sale, assignment or pledge.
Each such notice shall describe the manner and circumstances of the proposed
transfer, sale, assignment or pledge in sufficient detail, and shall, if
reasonably requested by the issuer, be accompanied, at such holder's expense by
either (i) written opinion of legal counsel who shall be, and whose legal
opinion shall be, reasonably satisfactory to the Company addressed to the
Company, to the effect that the proposed transfer of the Restricted Securities
may be effected without registration under the Securities Act, or (ii) a "no
action" letter from the Securities and Exchange Commission (the "Commission") to
the effect that the transfer of such securities without registration will not
result in a recommendation by the staff of the Commission that action be taken
with respect thereto,
29
<PAGE>
whereupon the holder of such Restricted Securities shall be entitled to transfer
such Restricted securities in accordance with the terms of the notice delivered
by the holder to the Company.
6. Covenants of the Company. The Company covenants and agrees with the
Purchaser to refrain from engaging, and to insure that none of its affiliates
will engage, in any Directed Selling Efforts with respect to the Shares or any
distribution, as that term is used in the definition of Distributor, with
respect to the shares.
7. Registration.
(a) Certain Definitions. As used in this Section, the following
terms shall have the following respective meanings:
(i) "Commission" shall mean the Securities and Exchange
Commission or any other federal agency at the time administering the Securities
Act.
(ii) "Holder" shall mean any Purchaser holding Registrable
Securities and any person holding Registrable Securities to whom the rights
under this Agreement have been transferred in compliance with Section 7.3
hereof.
(iii) "Registrable Securities" means the Shares; provided,
however, that shares of the Company's Common Stock or other securities shall
only be treated as Registrable Securities if and so long as (A) such securities
have not been sold to or through a broker or dealer or underwriter in a public
distribution or a public securities transaction, or (B) all such securities may
be sold by the Holder thereof under Rule 144 promulgated under the Securities
Act, or a successor rule, within such period as Purchaser may sell all such
securities.
(iv) The terms "register," "registered" and "registration"
refer to a registration effected by preparing and filing a registration
statement in compliance with the Securities Act, and the declaration or ordering
of the effectiveness of such registration statement.
(v) "Registration Expenses" shall mean all expenses, except as
otherwise stated below, incurred by the Company in complying with this Section
4, including, without limitation, all registration, qualification and filing
fees, printing expenses, escrow fees, fees and disbursements of counsel for the
Company and all reasonable fees and disbursements of one counsel for the selling
Holders, blue sky fees and expenses and the expense of any special audits
incident to or required by any such registration (but excluding the compensation
of regular employees of the Company which shall be paid in any event by the
Company and Selling Expenses (as hereinafter defined)).
(vi) "Selling Expenses" shall mean all underwriting discounts,
selling commissions and stock transfer taxes applicable to the securities
registered by the Holders and, except as set forth above.
(vii) "1934 Act" shall mean the Securities Exchange Act of
1934, as amended.
30
<PAGE>
(b) Registration of Shares. Within sixty (60) days following the
Closing Date the Company will use its diligent best efforts to effect such
registration as soon as practicable as will permit or facilitate the sale and
distribution of the Shares.
(c) Expenses of Registration. All Registration Expenses incurred in
connection with a registration pursuant to Section 4 shall be borne by the
Company. Unless otherwise stated, all Selling Expenses relating to securities
registered on behalf of the Holders and all other Registration Expenses shall be
borne by the Holders of such securities pro rata on the basis of the number of
shares so registered.
(d) Registration Procedures. In the case of each registration,
qualification or compliance effected by the Company pursuant to this Agreement,
the Company will keep each Holder advised in writing as to the initiation of
each registration, qualification and compliance and as to the completion
thereof. At its expense the Company will:
(i) Prepare and file with the Commission a registration
statement with respect to such securities and use its best efforts to cause such
registration statement to become and remain effective for at least three hundred
sixty-five (365) days or until the distribution described in the Registration
Statement has been completed; provided, however, that (i) such 365-day period
shall be extended for a period of time equal to the period the Holder refrains
from selling any securities included in such registration at the request of an
underwriter of Common Stock (or other securities) of the Company; and (ii) in
the case of any registration of Registrable Securities on Form S-3 which are
intended to be offered on a continuous or delayed basis, such 365-day period
shall be extended, if necessary, to keep the registration statement effective
until all such Registrable Securities are sold, provided that Rule 415, or any
successor rule under the Act, permits an offering on a continuous or delayed
basis, and provided further that applicable rules under the Securities Act
governing the obligation to file a post-effective amendment permit, in lieu of
filing a post-effective amendment which (I) includes any prospectus required by
Section 10(a)(3) of the Securities Act or (II) reflects facts or events
representing a material or fundamental change in the information set forth in
the registration statement, the incorporation by reference of information
required to be included in (I) and (II) above to be contained in periodic
reports filed pursuant to Section 13 or 15(d) of the 1034 Act in the
registration statement.
(ii) Prepare and file with the Commission such amendments and
supplements to such registration statement and the prospectus used in connection
with such registration statement as may be necessary to comply with the
provisions of the Securities Act with respect to the disposition of all
securities covered by such registration statement.
(iii) Use its best efforts to register and qualify the
securities covered by such registration statement such other securities or Blue
sky laws of such jurisdictions as shall be reasonably requested by the Holders;
provided that the Company shall not be required in connection therewith or as a
condition thereto to qualify to do business or to file a general consent to
service of process in any such states or jurisdictions, unless the Company is
already subject to service in such jurisdiction and except as may be required
under the Securities Act.
31
<PAGE>
(iv) In the event of any underwritten public offering, enter
into and perform its obligations under an underwriting agreement, in usual and
customary form with the managing underwriter or such offering. Each Holder
participating in such underwriting shall also enter into and perform its
obligations under such an agreement.
(v) Notify each Holder of Registrable Securities covered by
such registration statement at any time when a prospectus relating thereto is
required to be delivered under the Act of the happening of any event as a result
of which the prospectus included in such registration statement, as then in
effect, includes an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(vi) Cause all such Registrable Securities registered pursuant
hereunder to be listed on each securities exchange on which similar securities
issued by the Company are then listed.
(vii) Provide a transfer agent and registrar for all
Registrable Securities registered pursuant hereunder and a CUSIP number for all
such Registrable Securities registered, in each case not late than the effective
date of such registration.
(viii) Furnish to the Holders participating in such
registration and to the underwriters of the securities being registered such
reasonable number of copies of the registration statement, preliminary
prospectus, final prospectus and such other documents as such underwriters may
reasonably request in order to facilitate the public offering of such
securities.
(e) Indemnification.
(i) The Company will indemnify each Holder, each of its
officers and directors and partners, and each person controlling such Holder
within the meaning of Section 15 of the Securities Act or the 1934 Act, with
respect to which registration, qualification or compliance has been effected
pursuant to this Agreement, and each underwriter, if any, and each person who
controls any underwriter within the meaning of Section 15 of the Securities Act
or the 1934 Act, against all expenses, claims, losses, damages or liabilities
(or actions in respect thereof), including any of the foregoing incurred in
settlement of any litigation, commenced or threatened, arising out of or based
on any untrue statement (or alleged untrue statement) of a material fact
contained in any registration statement, prospectus, offering circular or other
document, or any amendment or supplement thereto, incident to any such
registration, qualification or compliance, or based on any omission (or alleged
omission) to state therein a material fact required to be stated therein or
necessary to make the statements therein, in the light of the circumstances in
which they were made, not misleading, or any violation by the Company of the
Securities Act, or the 1934 Act, or any rule or regulation promulgated under the
Securities Act, or the 1934 Act, applicable to the Company in connection with
any such registration, qualification or compliance, and the Company will
reimburse each such Holder, each of its officers and directors, and each person
controlling such Holder, each such underwriter and each person who controls any
such underwriter, for any legal and any other expenses reasonably incurred, as
such expenses are incurred, in connection with investigating, preparing
32
<PAGE>
or defending any such claim, loss, damage, liability or action; provided,
however, that the Company will not be liable (i) for amounts paid in settlement
of any such loss, claim, damage, liability or action if such settlement is
effected without the consent of the Company (which consent shall not be
unreasonably withheld) and (ii) in any such case to the extent that any such
claim, loss, damage, liability or expense arises out of or is based on any
untrue statement or omission or alleged untrue statement or omission, made in
reliance upon and in conformity with written information furnished to the
Company by an instrument duly executed by such Holder, controlling person or
underwriter and stated to be specifically for use therein.
(ii) Each Holder will, if Registrable Securities held by such
Holder are included in the securities as to which such registration,
qualification or compliance is being effected, indemnify the Company, each of
its directors and officers, each underwriter, if any, of the Company's
securities covered by such a registration statement, each person who controls
the Company or such underwriter within the meaning of Section 15 of the
Securities Act, and each other such Holder, each of its officers and directors
and each person controlling such Holder within the meaning of Section 15 of the
Securities Act, against all claims, losses, damages and liabilities (or actions
in respect thereof) arising out of or based on any untrue statement (or alleged
untrue statement) of a material fact contained in any such registration
statement, prospectus, offering circular or other document, or any omission (or
alleged omission) to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, and will reimburse
the Company, such Holders, such directors, officers, persons, underwriters or
control persons for any legal or any other expenses reasonably incurred in
connection with investigating or defending any such claim, loss, damage,
liability or action, in each case to the extent, but only to the extent, that
such untrue statement (or alleged untrue statement) or omission (or alleged
omission) is made in such registration statement, prospectus, offering circular
or other document in reliance upon and in conformity with written information
furnished to the Company by an instrument duly executed by such Holder and
stated to be specifically for use therein. Notwithstanding the foregoing, the
liability of each Holder under this subsection (b) (i) shall not apply to
amounts paid in settlement of any such loss, claim, damage, liability or action
if such settlement is effected without the consent of the Holder (which consent
shall not be unreasonably withheld), and (ii) shall be limited in an amount
equal to the aggregate initial public offering price of the shares sold by such
Holder, unless such liability arises out of or is based on willful conduct by
such Holder. The obligations of the Company and Holders under this Section 7(e)
shall survive the completion of any offering of Registrable Securities in a
registration statement under this Section 7(e) and otherwise.
(f) Information by Holder. The Holder or Holders of Registrable
Securities included in any registration shall furnish to the Company such
information regarding such Holder or Holders, the Registrable Securities held by
them and the distribution proposed by such Holder or Holders as the Company may
request in writing and as shall be required in connection with any registration,
qualification or compliance referred to in this Agreement.
(g) Transfer of Registration Rights. The rights to cause the
Company to register securities granted Holders under Section 7 may be assigned
to a transferee or assignee reasonably acceptable to the Company in connection
with any transfer or assignment of Registrable Securities by a Holder provided
that: (i) such transfer may otherwise be effected in
33
<PAGE>
accordance with applicable securities laws, (ii) such assignee or transferee
acquires at least 100,000 shares of Common Stock (as appropriately adjusted upon
any stock split, stock dividend, recapitalization, merger, consolidation or
similar event) or is a subsidiary or constituent partner or affiliate of the
transferor and (iii) such assignee or transferee becomes a party to this
Agreement and assumes all of the obligations of the transferring Holder
hereunder.
8. Survival of the Representations, Warranties, etc. The respective
agreements, representations, warranties, indemnities, and other statements made
by or on behalf of the Company and the Purchasers, respectively, pursuant to
this Agreement, shall remain in full force and effect, regardless of any
investigation made by or on behalf of the other party to this Agreement or any
officer, director, or employee of, or person controlling or under common control
with, such party, and will survive delivery of any payment of the Shares.
9. Notices. All communications hereunder shall be in writing, and, if
sent to the Purchaser shall be sufficient in all respects if delivered, sent by
registered mail, or by telecopy and confirmed to the Purchaser at the addresses
set forth on the Signature Page; or, if sent to the Company, shall be delivered,
sent by registered mail, or by telecopy and confirmed to the Company at:
Imatron Inc.
389 Oyster Point Boulevard
South San Francisco, California 94080
Attention: President
Tel: (415) 583-9964
Fax: (415) 871-0418
10. Miscellaneous.
(a) This Agreement may be executed in one or more counterparts and
it is not necessary that signature of all parties appear on the same
counterpart, but such counterparts together shall constitute but one and the
same agreement.
(b) This Agreement shall inure to the benefit of and be binding
upon the parties hereto, their respective successors and, with respect to
Section 7 hereof, the officers, directors, and controlling persons thereof and
each person under common control therewith, and no other person shall have any
right or obligation hereunder.
(c) This Agreement shall be governed by, and construed in
accordance with, the laws of the State of California.
(d) The headings of the sections of this document have been
inserted for convenience of reference only and shall not be deemed to be a part
of this Agreement.
34
<PAGE>
IN WITNESS HEREOF, the parties hereto have duly executed and delivered
this Agreement, all as of the day and year first above written.
COMPANY:
IMATRON INC.
By:________________________
President
35
<PAGE>
CONTINUATION SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
DATED MAY 24, 1996
BETWEEN IMATRON INC. AND CERTAIN PURCHASERS
PURCHASER:
Purchaser's Name Number of Shares
and Address and Purchase Price Signature
- ---------------- ------------------ ---------
Jose Maria Salema Garcao 700,000 shares
Quinta Marinha Lt. CT 14 $1,820,000 ------------------
2750 Cascais, Portugal
Luis Jorge Serras 600,000 shares
R. Augusta no. 228 - 1o $1,560,000 ------------------
1100 Lisboa, Portugal
Jose Laranjeiro Osvaldo Gomes 500,000 shares
Ave. Cesario Verde, 46 $1,300,000 ------------------
2758 Cascais, Portugal
Armando Jose Rinaldi Balbi 400,000 shares
Rua General Urquiza No. 110 $1,040,000 ------------------
Ap. 201 Leblon
Rio De Janeiro, Brazil
Eduardo Guedes Q. de Mendia 200,000 shares
Trava da Arrochela no. 3 $520,000 ------------------
1200 Lisboa, Portugal
Carlos Spynola Teixeira 200,000 shares
Rua Gregorio Lopes, no 1514 $520,000 ------------------
9o Esqo
1400 Lisboa, Portugal
Dr. Jose Diogo Ferreira Martins 100,000 shares
Rua Tierno Galvan Lote 5B-11o C $260,000 ------------------
1070 Lisboa, Portugal
Maria Madalena Bello Pimentel 100,000 shares
R. D. Joao V $260,000 ------------------
12-2o Esqo
1250 Lisboa, Portugal
Jose Antonio Reymao Nogueira 100,000 shares
Ave Alvares Cabral no 28 - 4o Dto $260,000 ------------------
1250 Lisboa, Portugal
Jose Filipe Nobre Guedes 100,000 shares
Rua Martin Sainz no 7 $260,000 ------------------
2765 Estoril, Portugal
36
<PAGE>
SIGNATURE PAGE TO COMMON STOCK PURCHASE AGREEMENT
DATED MAY 24, 1996
BETWEEN IMATRON INC. AND CERTAIN PURCHASERS
PURCHASER:
Number of Shares and
Purchaser's Name and Address Purchase Price Signature
- ---------------------------- -------------------- ---------
Banco Espirito Santo Internacional 1,000,000 shares
Avenue Montchoisi No. 15 $2,600,000
1006 Lausanne, Switzerland
---------------------
Authorized Officer
37
Exhibit 4.4
38
<PAGE>
THESE SECURITIES HAVE NOT BEEN AND WILL NOT BE REGISTERED UNDER THE U.S.
SECURITIES ACT OF 1933, AND SUBJECT TO CERTAIN EXCEPTIONS, MAY NOT BE SOLD IN
THE UNITED STATES OR TO U.S. PERSONS. ANY SALE, TRANSFER, PLEDGE OR OTHER
DISPOSITION THEREOF IN THE UNITED STATES OR TO U.S. PERSONS 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. ANY PERSON EXERCISING THIS WARRANT WILL BE
REQUIRED TO PROVIDE EITHER (I) A CERTIFICATION THAT THE WARRANT IS NOT OWNED BY
OR BEING EXERCISED BY A U.S. PERSON OR (II) AN OPINION OF COUNSEL REASONABLY
SATISFACTORY TO IT THAT THE SHARES OF COMMON STOCK ISSUABLE UPON EXERCISE OF
THIS WARRANT HAVE BEEN REGISTERED UNDER SAID ACT OR AN EXEMPTION FROM
REGISTRATION IS UNDER SAID ACT IS AVAILABLE.
IMATRON INC.
COMMON STOCK PURCHASE WARRANT
This Warrant Expires May 24, 1999
Warrant No. 96-A Shares: 2,000,000
THIS CERTIFIES that, subject to the terms and conditions herein set
forth, JOSE MARIA SALEMA GARCAO (the "Holder") is entitled to purchase from
Imatron Inc., a New Jersey corporation (the "Company"), at any time or from time
to time during the Exercise Period (as hereinafter defined) the number of shares
of fully paid and non-assessable shares of Common Stock of the Company (the
"Shares") as provided herein upon surrender hereof at the principal office of
the Company, and, at the election of the holder hereof, upon payment of the
purchase price at said office in cash or by cashier's check or by the wire
transfer of funds in a dollar amount equal to the purchase price of the Shares
for which the consideration is being given.
This Warrant shall be exercisable for that number of Shares as set
forth above, in minimum units of 100,000 shares.
1. Purchase Price. Subject to adjustment as hereinafter provided, the
purchase price of one share of Common Stock (or such securities as may be
substituted for one share of Common Stock pursuant to the provisions hereinafter
set forth) (the "Warrant Price") shall be the following:
1,200,000 shares $3.25
800,000 shares $3.75
39
<PAGE>
2. Adjustment of Warrant Price and Number of Shares. The number and
kind of securities issuable upon the exercise of this Warrant shall be subject
to adjustment from time to time upon the happening of certain events as follows:
(a) Adjustment for Dividends in Stock. In case at any time or from
time to time on or after the date hereof the holders of the Common Stock of the
Company (or any shares of stock or other securities at the time receivable upon
the exercise of this Warrant) shall have received, or, on or after the record
date fixed for the determination of eligible stockholders, shall have become
entitled to receive, without payment therefor, other or additional stock of the
Company by way of dividend (other than as provided for in Paragraph 2(b) below),
then and in each such case, the holder of this Warrant shall, upon the exercise
hereof, be entitled to receive, in addition to the number of shares of Common
Stock receivable thereupon, and without payment of any additional consideration
therefor, the amount of such other or additional stock of the Company which such
holder would hold on the date of such exercise had it been the holder of record
of such Common Stock on the date hereof and had thereafter, during the period
from the date hereof to and including the date of such exercise, retained such
shares called for during such period by this Paragraph 2.
(b) Adjustment for Changes in Common Stock. In the event of changes
in the outstanding Common Stock of the Company by reason of split-ups,
recapitalizations, reclassifications, mergers, consolidations, combinations or
exchanges of shares, separations, reorganizations, liquidations, or the like,
the number and class of shares available under the Warrant in the aggregate and
the Warrant Price shall be correspondingly adjusted by the Board of Directors of
the Company. The adjustment shall be such as will give the holder of the Warrant
on exercise for the same aggregate Warrant Price the total number, class, and
kind of shares as he would have owned had the Warrant been exercised prior to
the event and had he continued to hold such shares until after the event
requiring adjustment.
3. No Fractional Shares. No fractional shares of Common Stock will be
issued in connection with any subscription hereunder. In lieu of any fractional
shares which would otherwise be issuable, the Company shall pay cash equal to
the product of such fraction multiplied by the fair market value of one share of
Common Stock on the date of exercise, as determined by the fair market value of
one share of the Company's Common Stock on the date of exercise as determined in
good faith by the Company's Board of Directors.
4. No Stockholder Rights. This Warrant shall not entitle its holder to
any of the rights of a stockholder of the Company prior to exercise thereof.
5. Reservation of Stock. The Company covenants that during the period
this Warrant is exercisable, the Company will reserve from its authorized and
unissued Common Stock a sufficient number of shares to provide for the issuance
of Common Stock upon the exercise of this Warrant. The Company agrees that its
issuance of this Warrant shall constitute full authority to its officers who are
charged with the duty of executing stock certificates to
40
<PAGE>
execute and issue the necessary certificates for shares of Common Stock upon the
exercise of this Warrant.
6. Exercise of Warrant. This Warrant may be exercised by the registered
holder or its registered assigns, in whole or in part and in minimum units of
10,000 shares, by the surrender of this Warrant at the principal office of the
Company, together with the form of subscription hereof duly executed,
accompanied by payment in full of the amount of the Warrant Price in the form
described in this Warrant. Upon partial exercise hereof, a new warrant or
warrants containing the same date and provisions as this Warrant shall be issued
by the Company to the registered holder for the number of shares of Common Stock
with respect to which this Warrant shall not have been exercised. A Warrant
shall be deemed to have been exercised immediately prior to the close of
business on the date of its surrender for exercise as provided above, and the
person entitled to receive the shares of Common Stock issuable upon such
exercise shall be treated for all purposes as the holder of such shares of
record as of the close of business on such date. As promptly as practicable on
or after such date, the Company shall issue and deliver to the person or persons
entitled to receive the same, a certificate or certificates for the number of
full shares of Common Stock issuable upon such exercise, together with cash in
lieu of any fraction of a share as provided above.
7. Certificate of Adjustment. Whenever the Warrant Price is adjusted as
herein provided, the Company shall promptly deliver to the record holder of this
Warrant a certificate of an officer of the Company setting forth the relevant
Warrant Price or number of shares after such adjustment and setting forth a
brief statement of the facts requiring such adjustment.
8. Compliance With Securities Act. The holder of this Warrant, by
acceptance hereof, agrees that this Warrant and the shares of Common Stock to be
issued upon exercise hereof (or shares of any security into which such Common
Stock may be converted) are being acquired for investment and that the holder
will not offer, sell, or otherwise dispose of this Warrant and any shares of
Common Stock to be issued upon exercise hereof (or shares of any security into
which such Common Stock may be converted) except under circumstances which will
not result in a violation of the Securities Act of 1933, as amended (the
"Securities Act"). Upon exercise of this Warrant, the holder hereof shall, if
requested by the Company, confirm in writing its investment purpose and
acceptance of the restrictions on transfer of the shares of Common Stock.
9. Subdivision of Warrant. At the request of the holder of this Warrant
in connection with a transfer or exercise of a portion of the Warrant, upon
surrender of such Warrant for such purpose to the Company, the Company at its
expense (except for any transfer tax payable) will issue and exchange therefor
warrants of like tenor and date representing in the aggregate the right to
purchase such number of shares of such Common Stock as shall be designated by
such holder at the time of such surrender; provided, however, that the Company's
obligations to subdivide securities under this section shall be subject to and
conditioned upon the compliance of any such subdivision with applicable state
securities laws and with the Securities Act.
41
<PAGE>
10. Loss, Theft, Destruction, or Mutilation of Warrant. Upon receipt by
the Company of evidence reasonably satisfactory to it of the loss, theft,
destruction, or mutilation of this Warrant, and in case of loss, theft, or
destruction, of indemnity or security reasonably satisfactory to it, and upon
reimbursement to the Company of all reasonable expenses incidental thereto, and
upon surrender and cancellation of this Warrant, if mutilated, the Company will
make and deliver a new Warrant of like tenor and dates as of such cancellation,
in lieu of this Warrant.
11. Miscellaneous. This Warrant shall be governed by the laws of the
State of California. The headings in this Warrant are for purposes of
convenience and reference only, and shall not be deemed to constitute a part
hereof. Neither this Warrant nor any term hereof may be changed, waived,
discharged, or terminated orally but only by an instrument in writing signed by
the Company and the registered holder hereof. All notices and other
communications from the Company to the holder of this Warrant shall be by
telecopy or expedited courier service to the address furnished to the Company in
writing by the last holder of this Warrant who shall have furnished an address
to the Company in writing.
12. Exercise Period. The Exercise Period shall mean the period
commencing on the date hereof and ending on May 24, 1999.
ISSUED this 24th day of May, 1996.
IMATRON INC.
By_________________________
S. Lewis Meyer, President
ATTEST:
- -------------------------
42
<PAGE>
FORM OF ASSIGNMENT
IMATRON INC.
FOR VALUE RECEIVED the undersigned registered owner of this warrant
hereby sells, assigns, and transfers unto the Assignee named below all of the
rights of the undersigned under the within Warrant, with respect to the number
of shares of Common Stock set forth below.
Name of Assignee Address Number of Shares
- ---------------- ------- ----------------
and does hereby irrevocably constitute and appoint _____________________________
Attorney to make such transfer on the books of IMATRON INC. maintained for the
purpose, with full power of substitution in the premises.
Dated:______________________
----------------------------------
Name of Warrant Holder
Signature: ______________________
Witness: ______________________
43
<PAGE>
SUBSCRIPTION FORM
IMATRON INC.
(To be executed only upon exercise of Warrant)
The undersigned registered owner of this Warrant irrevocably exercises
this Warrant for and purchases ________________ of the number of shares of
Common Stock of IMATRON INC. purchasable with this Warrant, and herewith makes
payment therefor, all at the price and on the terms and conditions specified in
this Warrant.
Dated:_____________________
--------------------------------
(Signature of Registered Owner)
--------------------------------
(Street Address)
--------------------------------
(City) (State) (Zip Code)
44
Exhibit 5.1
45
<PAGE>
SEVERSON & WERSON
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
ONE EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94111
FAX (415) 956-0439
TELEPHONE (415) 398-3344
June 21, 1996
Imatron Inc.
389 Oyster Point Boulevard
South San Francisco, California 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
Statement 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 6,283,700 shares of the Company's Common Stock (the "Shares"),
including 2,283,700 shares which are issuable upon the exercise of Warrants
previously issued in certain private transactions.
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 where 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:
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The Shares, when sold and issued in accordance with 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
RSM/kw
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Exhibit 24.1
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CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts" in
the Registration Statement (Form S-3) and related Prospectus of Imatron Inc. for
the registration of 6,283,700 shares of its common stock and to the
incorporation by reference therein of our report dated February 9, 1996 with
respect to the consolidated financial statements of Imatron Inc. included in its
Annual Report (Form 10-K) for the year ended December 31, 1995, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
June 24, 1996
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