As filed with the Securities and Exchange Commission on February 1, 1996
--Registration No. 33-________
FORM S-3
SECURITIES AND EXCHANGE COMMISSION
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
IMATRON INC.
(Exact name of issuer specified in its charter)
New Jersey 94-2880078
(State of incorporation) (I.R.S. Employer Identification No.)
--------------------
389 Oyster Point Boulevard
South San Francisco, CA 94080
(415) 583-9964
(Address, including zip code and telephone
number, including area code, of registrant's principal
executive offices)
--------------------
S. Lewis Meyer
President and Chief Executive Officer
Imatron Inc.
389 Oyster Point Boulevard
South San Francisco, CA 94080
(415) 583-9964
(Name, address including zip code, and telephone number,
including area code, of agent for service)
Copies to:
Roger S. Mertz, Esq.
Severson & Werson
One Embarcadero Center, 25th Floor
San Francisco, California 94111
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Approximate date of commencement of proposed sale to the public: As soon as
possible after this Registration Statement becomes effective.
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<PAGE>
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box: ( )
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box: ( X )
<TABLE>
CALCULATION OF REGISTRATION FEE
===========================================
<CAPTION>
Title of Amount to be Proposed maximum Proposed maximum Amount of
each class registered offering price aggregate offering registration fee
of securities per share price
to be registered
<S> <C> <C> <C> <C>
Common Stock 2,000,000 $1.81(1) $3,620,000(1) $1,248
Shares
===========================================
<FN>
(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 January 23, 1996, as reported on the NASDAQ National Market
System.
</FN>
</TABLE>
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 February 1, 1996
PROSPECTUS
2,000,000 Shares
IMATRON INC.
Common Stock No Par Value
--------------------
All of the 2,000,000 shares of Common Stock offered hereby are being sold
by Imatron Inc. (the "Company" or "Imatron"). The Company's Common Stock is
traded over-the-counter on the NASDAQ National Market System under the symbol
"IMAT." On January 23, 1996 the last reported sale price of the Common Stock was
$1.91 per share.
--------------------
THESE SECURITIES INVOLVE A HIGH DEGREE OF RISK.
SEE "RISK FACTORS."
--------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION NOR HAS THE COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
- ------------------------------------------------------------------------------
Proceeds to
Price to Public Commissions Company(1)
Per Share $1.91 $0.13 $1.78
Total $3,820,000 $267,400 $3,552,600
- ------------------------------------------------------------------------------
1 Before deduction of offering expenses, which are not expected to exceed
$11,748, payable by the Company.
The Date of this Prospectus is February 1, 1996
1
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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
PRICE RANGE OF COMMON STOCK ................................................ 12
PLAN OF DISTRIBUTION ....................................................... 13
EXPERTS .................................................................... 13
LEGAL OPINION .............................................................. 13
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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, 1994, filed April 11, 1995 (File No. 0-12405) and all amendments thereto;
the Company's definitive Proxy Statement filed pursuant to Section 14 of the
Exchange Act in connection with the annual meeting of shareholders held on June
2, 1995, filed May 1, 1995; the Company's Quarterly Reports on Form 10-Q for the
periods ending March 31, 1995, June 30, 1995, and September 30, 1995 filed on
May 12, 1995, August 14, 1995 and November 14, 1995, respectively; and the
description of the Company's Common Stock contained in a registration statement
filed under the Exchange Act, including any amendment or report filed for the
purpose of updating such description, are hereby incorporated by reference into
this Prospectus. All documents filed by the Company with the Commission pursuant
to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of Common Stock shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the date of filing of such documents, except the Board Compensation
Committee Report on Executive Compensation and the Performance Graph included in
the Proxy Statement pursuant to Item 402(k) and (l) of Regulation S-K. Any
statement contained in a document incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any statement so modified or superseded
shall not be deemed, except as so modified or superseded, to constitute a part
of this Prospectus. The Company will provide without charge to each person,
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
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requests should be directed to the Chief Financial Officer, Imatron Inc., 389
Oyster Point Boulevard, South San Francisco, California 94080, telephone no.
(415) 583-9964.
THE COMPANY
Imatron is a technology-based company principally engaged in the
business of designing, manufacturing, and marketing a high performance computed
tomography (CT) scanner that uses a scanning electron beam. CT refers to a
diagnostic imaging device in which cross-sectional (tomographic) images of a
patient's anatomy are acquired from multiple intensity readings taken as an
x-ray source rotates around the patient. Ultrafast CT technology is more than 20
times faster than conventional computed tomography, enabling users to perform
certain tests involving organs in motion (e.g. the heart) that no other medical
imaging equipment is able to perform.
For over a decade, the scanner has been used in large and mid-sized
hospitals and free standing imaging clinics. The Company also provides service,
parts, and maintenance to hospitals and clinics that operate its scanners. The
technological advantage provided by high-speed tomography now provides Imatron
the opportunity to develop a new and additional market, by performing simple,
low cost, non-invasive screening to detect the earliest signs of heart disease
by means of the Coronary Artery Scan ("CAS"). This vast new market involves
activity in both diagnostic services and equipment manufacturing.
The Company is also engaged in the related businesses of performing
research and development for itself and others in the field of CT devices and of
licensing its patents and know-how in the field of imaging sciences.
Imatron was incorporated in New Jersey in February, 1983. Its executive
offices are located at 389 Oyster Point Boulevard, South San Francisco,
California 94080, and its telephone number is (415) 583-9964.
In 1993, Imatron organized HeartScan Imaging, Inc. as a wholly-owned
subsidiary to develop and operate a network of company-owned coronary artery
disease risk assessment centers in cooperation and conjunction with the
established medical (primarily cardiology) community in specific metropolitan
areas. In that same year, HeartScan opened a test facility adjacent to Imatron's
headquarters. In July, 1995, it opened its first coronary artery disease risk
assessment center in Seattle, Washington. In January, 1996, it opened its second
facility in Houston, Texas. It plans to open similar facilities in Washington,
D.C. and Pittsburgh, Pennsylvania, in May, 1996. HeartScan's centers deliver the
CAS diagnostic test together with other risk factor tests in a manner consistent
with established channels of patient referral, as well as with the new channels
of patient referral being created by health care reform and the growth of
managed-care systems.
A significant component of HeartScan's approach is to offer the CAS
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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 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 March, 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 March, 1983 became the successor to Imatron Associates, a limited partnership
established in February, 1981. Imatron operated as a development-stage company
until the fourth quarter of 1984, at which time it recognized its initial sale
of an ULTRAFAST CT(R) scanner. Imatron 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. Through September 30, 1995, the Company incurred a net
loss of $297,000. There is no assurance that Imatron can operate profitably in
the future. In the past, Imatron has funded its losses primarily through the
sale of securities in two public offerings and 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. Recently, the Company raised $9,957,700 in two
offerings of Common Stock to certain institutional investors.
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
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assets or to merge with another company. In addition, HSI will need substantial
additional financing to fund its plan to own and operate CAS clinics. To date
HSI has been unable to raise such funds and has relied upon the Company for
financing. In the event HSI cannot raise such funds it will have to curtail its
expansion activities.
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 a scanner containing the new features
of the C-150 model began in August, 1992, and 47 C-150 scanners are currently
installed in a clinical setting. Imatron's worldwide installed base consists of
62 CT scanners. The Company believes that market acceptance of the ULTRAFAST CT
scanner continues to depend in substantial part upon the clinical demonstration
of certain asserted technological advantages and diagnostic capabilities. There
is no assurance that these advantages will result in the development of a
significant market for the ULTRAFAST CT that will allow the Company to operate
profitably.
Product Liability Risks. As a manufacturer and marketer of medical
diagnostic equipment, the Company is subject to potential product liability
claims. For example, the exposure of normal human tissue to x-rays, which is
inherent in the use of CT scanners for diagnostic imaging, may result in
potential injury to patients, thereby subjecting the Company to possible
liability therefor. The Company presently maintains primary and excess product
liability insurance with aggregate limits of $5,000,000 per occurrence. No
assurance can be given that the Company's product liability insurance coverage
will continue to be available or, if available, that it can be obtained in
sufficient amounts or at reasonable cost or that it will prove sufficient to pay
any claims that may arise.
Reliance on Product Development. Imatron continually seeks to develop
product enhancements and improve product reliability. Imatron's future success
may depend on its ability to complete certain product enhancement and product
reliability projects currently in progress, as well as on its continued ability
to develop new products or product enhancements in response to new products that
may be introduced by other companies. There can be no assurance that Imatron
will be able to continue to improve product reliability, or introduce new
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product models or product enhancements as required to remain competitive.
Reliance on Patents and Proprietary Technology. Imatron relies heavily
on proprietary technology. Imatron is the exclusive sublicensee under one patent
expiring in 1999 held by the University of California ("UC") relating to the
general concept of the ULTRAFAST CT scanner. Imatron holds the exclusive rights
under the patent pursuant to a sublicensee agreement with Emersub, Inc. (the
"Sublicensor"), a wholly owned subsidiary of Emerson Radio Corp., a former
principal shareholder of Imatron. Pursuant to the sublicense agreement, Imatron
is obligated to pay to the Sublicensor a continuing royalty of 2.125% of sales
of products utilizing the technology (2.0% of which would be paid by the
Sublicensor to UC). Loss by Imatron of its rights under the patent as a result
of termination of its sublicense from the Sublicensor, or the underlying
license, could have a material adverse effect upon Imatron's business and future
prospects. There are no present disputes with either UC or the Sublicensor. In
March, 1995, the Company entered into a Memorandum of Understanding (the "MOU")
with Siemens Corporation ("Siemens"). Pursuant to the terms of the MOU, the
Company transferred all of its interest in five United States patents and all
foreign corresponding patents to Siemens in exchange for cancellation of a loan.
Imatron retained a non-exclusive irrevocable and perpetual royalty-bearing
license under the transferred patents.
In addition, Imatron holds 27 U.S. patents of its own and has filed 3
U.S. patent applications covering various integral elements of the scanner,
including, among others, its X-ray detector and its electron beam assembly.
Imatron has filed applications corresponding to several of the U.S. applications
in various European Patent Convention countries, Canada and Japan. There can be
no assurance that any such applications will result in the issuance of any
patents to Imatron. Imatron's patents and patent applications have not been
tested in litigation and no assurance can be given that patent protection will
be upheld or will be as extensive as claimed. Furthermore, no assurance can be
given as to Imatron's ability to finance litigation against parties which may
infringe upon such patents or defend litigation against Imatron by parties which
may claim that Imatron's scanner infringes upon their patents.
In the event some or all of the Company's patent applications are
denied and/or some or all of its patents are held invalid, the Company would be
prevented from precluding its competitors from using the protected technology
set forth in such patent applications or patents. Because the Company's products
involve confidential proprietary technology and know-how, the Company does not
believe such a loss of patent rights would have a material adverse effect upon
the Company.
Limited or Single Sources of Supply. The Company manufactures its
scanners at its South San Francisco, California facility. To date the typical
manufacturing cycle has required at least four months. Based on inventory, lead
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time can be significant between the receipt of an order and the shipment of a
scanner.
Many of the components and sub-assemblies used in the scanner have been
developed and designed by Imatron to its custom specifications and are
obtainable from limited or single sources of supply. In view of the customized
nature of many of these components and sub-assemblies, there may be long lead
times between order and shipment of scanners. Delays in delivery of components
and sub-assemblies could adversely affect Imatron's present and future
production schedules. The Company has made and continues to make inventory
investments to acquire long lead time components and sub-assemblies to minimize
the impact of such delays.
Disruption or termination of limited or sole sources of supply could
have a temporary adverse effect on the Company's ability to meet scheduled
delivery dates. In recent years, the Company has developed alternative sources
for many of its scanner subcomponents and continues its programs to qualify
vendors for the remaining critical parts.
Food and Drug Administration and Other Governmental Regulation.
Amendments to the Federal Food, Drug, and Cosmetic Act ("Amendments") enacted in
1976, and regulations issued or authorized thereunder, provide for regulation by
the Federal Food and Drug Administration ("FDA") of the marketing, manufacture,
labeling, packaging, sale and distribution of "medical devices," including the
Company's scanner. Among these regulations are requirements that medical device
manufacturers register their manufacturing facilities with the FDA, list devices
manufactured by them, file various reports and comply with specified "Good
Manufacturing Practice" (GMP) regulations. The FDA enforces additional
regulations regarding the safety of equipment utilizing x-rays, including CT
scanners. Various states also impose similar regulations.
The Amendments also impose certain requirements which must be met prior
to the initial marketing of certain medical devices introduced into commerce
after May 28, 1976. These range from a minimum obligation to wait 90 days after
notification to the FDA before introduction of medical devices substantially
equivalent to devices on the market prior to May 28, 1976, to a maximum
obligation to comply with the potentially expensive and time-consuming process
of obtaining FDA authorization prior to the commercial marketing of new medical
devices. The Company has received appropriate clearances from the FDA to market
both the C-100 XL and C-150 ULTRAFAST CT scanner and believes that it is
presently in substantial compliance with the GMP requirements and other
regulatory issues promulgated by the FDA.
The FDA, through its Center for Devices and Radiological Health (the
"Center"), also regulates the safety and efficacy of radiological devices.
Although the Company believes it is in compliance with all applicable
radiological health standards and regulations promulgated by the Center, there
can be no assurance that the ULTRAFAST CT scanner will continue to comply with
all such standards and regulations that may be promulgated. In any event,
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compliance with all such requirements can be costly and time consuming, with a
resultant materially adverse effect upon the development of the Company's
business and its future profitability.
FDA clearance to market does not guarantee or imply reimbursement by
third party payers such as Medicare, Medicaid, Blue Cross/Blue Shield or private
health insurers. Medicare and Medicaid reimburse for procedures that are
generally accepted or that have been proven safe and effective. The Health Care
Financing Administration ("HCFA"), which oversees Medicare and Medicaid, will
not authorize payment for procedures which are considered to be experimental.
HCFA has determined that diagnostic examinations of the head and other parts of
the body performed by CT scanners are covered if the contractor who administers
the local Medicare program finds that medical and scientific literature and
opinion support the effective use of a scan for the particular condition.
The Federal government and certain states have enacted cost-containment
measures such as the establishment of maximum fee standards in an attempt to
limit the extent and cost of governmental reimbursement of allowable medical
expenses under Medicare, Medicaid and similar governmental programs. A number of
states have adopted or are considering the adoption of similar measures. Such
limitations have led to a reduction in, and may further limit funds available
for the purchase of diagnostic equipment such as the Company's scanner and in
the number of diagnostic imaging procedures performed in hospitals and other
medical institutions such as imaging clinics.
Federal legislation also requires states participating in Federal
medical expense reimbursement and funding programs to adopt requirements that
hospitals and other health care facilities, such as imaging clinics, obtain a
Certificate of Need ("CON") for major capital expenditures, in the absence of
which they will be denied reimbursement for services and funding relating to
such capital expenditures. A number of states have enacted CON legislation
beyond Federal requirements, such as requiring private physicians to obtain a
CON for any CT scanner, regardless of cost. There can be no assurance that
Imatron's potential customers will be able to secure CON's or will be willing to
pursue the application procedure.
The health care industry is highly regulated. The implementation of
certain health care reforms currently being considered by the executive and
legislative branches of the federal government may directly affect the Company's
business. Both existing and future governmental regulations could adversely
impact the market for the Company's ULTRAFAST CT scanner and the Company's
business. The Company's operations are also subject to regulation by other
federal, state and local governmental entities empowered to enforce pertinent
statutes and regulations, such as those enforced by the Occupational Safety and
Health Agency and the Environmental Protection Agency. In some cases state or
local regulations may be stricter than regulations imposed by the federal
government. The Company was most recently inspected by the State of California
Department of Occupational Safety and Health Administration in November, 1993.
Minor violations were identified by Cal/OSHA and were immediately corrected by
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the Company. Follow up inspection by Cal/OSHA yielded satisfactory results
without issuance of further notice of violation. The Company believes it is in
substantial compliance with California regulations.
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.
Competition. The Company competes with a number of other diagnostic
imaging equipment manufacturers. The Company's principal competition is from
current manufacturers of conventional CT scanners, including General Electric
Company, Siemens Corporation, Elscint, Picker International, Inc., Philips
Electronics, B.V., and Toshiba Corporation. Non-invasive diagnostic imaging
techniques such as ultrasound, radioisotope imaging, digital subtraction
angiography and magnetic resonance imaging are also partially competitive with
the Company's scanners, particularly in the cardiac imaging market. Each of the
companies named above 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
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ability to complete certain product enhancement and product reliability projects
currently in progress, as well as on its continued ability to develop new
products or product enhancements in response to new products that may be
introduced by other companies. There can be no assurance that Imatron will be
able to continue to improve product reliability or introduce new product models
or product enhancements as required to remain competitive.
Other factors, in addition to those described above, that a potential
purchaser would consider in the decision to replace a conventional CT scanner
with an ULTRAFAST CT scanner include purchase price, patient throughput
capacity, anticipated operating expenses, estimated useful life and post-sale
customer service and support. The Company believes that its scanner and/or the
Company is competitive with respect to each of these factors.
Agreements with Siemens Corporation. In March, 1991, the Company entered
into several related agreements with Siemens Corporation ("Siemens"). These
agreements and the Company's relationship with Siemens were substantially
restructured in March, 1995. The Company transferred all of its interest in five
patents subject to a royalty-bearing license back in exchange for cancellation
of a loan. The parties also substituted for the existing Development Agreement a
collaborative research agreement pursuant to which they will jointly conduct
research and development over a three-year period to improve the Company's C-150
product. Siemens was appointed the Company's exclusive distributor for the C-150
scanner in the United States, Canada, Europe and India. The Company retains
exclusive distribution rights in the rest of the world. The Company and Siemens
also granted reciprocal licenses to each other covering electron beam technology
relating to the design and manufacture of electron beam products. 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. In the Company's opinion, the resolution of this claim is not expected
to have a material effect on the financial position of the Company, but it could
be material to the net income of a particular future quarter (or year), if
resolved unfavorably.
Reliance on Distributors. A substantial portion of the Company's sales
of its scanners is done through distributors. There is no assurance that the
Company's distributors will actually meet their contractual minimums on a timely
basis. Failure by the distributors to meet their obligations could adversely
affect the Company.
No Dividends on Preferred and Common Stock. The Company has not paid
any dividends on its Preferred or Common Stock since inception. Even if its
future operations result in revenues and/or profitability, as to which there can
be no assurance, there is no present anticipation that dividends will be paid.
Rather, the Company expects that any future earnings will be applied toward the
further development of the Company's business.
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USE OF PROCEEDS
The proceeds to be received by the Company from the sale of the
2,000,000 shares of Common Stock offered by the Company hereby, based on the
assumed public offering price of $1.91 per share, will be $3,820,000, less
payment of any commissions and other expenses of the offering, which are
expected to be approximately $279,148. While Imatron currently has no
commitments for use of the net proceeds of the offering, it anticipates that the
proceeds will be used in several main areas, including the development of
domestic and international markets ($500,000), the establishment of clinical
research and customer demonstration facilities ($1,000,000), advances to its
subsidiary HeartScan Imaging, Inc. to finance HeartScan's operations pending
completion of that company's current round of financing ($1,040,000), the
expansion of clinical research programs, and the development of clinical
applications for its products ($1,000,000) (all amounts are approximations). If
substantially less than the maximum proceeds are obtained, the Company will
apply the proceeds toward those uses in the order of priority in which they are
set forth in the preceding sentence. To the extent that the proceeds of the
offering are not used for these purposes, they will be used to reduce accounts
payable and for other general corporate purposes.
PRICE RANGE OF COMMON STOCK
Imatron's Common Stock is traded in the over-the-counter market on the
NASDAQ National Market System under the symbol "IMAT." The following table sets
forth, for the calendar quarters indicated, the high and low sales prices as
reported by the NASDAQ/NMS.
High Low
---- ---
Year Ended December 31, 1994
First Quarter ......................$ 2.06 $ 0.50
Second Quarter .................... $ 1.88 $ 0.81
Third Quarter ..................... $ 1.41 $ 0.88
Fourth Quarter .................... $ 1.56 $ 0.88
Year Ended December 31, 1995
First Quarter ..................... $ 1.31 $ 0.97
Second Quarter .................... $ 1.22 $ 0.81
Third Quarter ..................... $ 3.53 $ 0.81
Fourth Quarter .................... $ 2.97 $ 1.47
12
<PAGE>
Period Ended January 23, 1996
First Quarter ..................... $ 2.34 $ 1.72
On January 23, 1996, the last reported sales price of Imatron's Common
Stock was $1.91.
PLAN OF DISTRIBUTION
The Company shall offer the Shares on a "best-efforts" basis through
its own efforts using its salaried employees without the payment of any
commission, and through the efforts of various placement agents who will receive
commissions in an amount not to exceed 7% of the gross proceeds of the offering.
None of the placement agents are obligated or intend themselves to take (or
purchase) any of the Common Stock. The Shares will be offered and sold in
privately negotiated transactions.
There is no minimum number of Shares that must be sold in order to
declare this offering effective. Accordingly, all net proceeds from the sale of
Shares will be paid directly to the Company and will not be held in escrow
pending receipt of any minimum amount of proceeds. There is no minimum
subscription amount of Shares that an investor must purchase. No investor funds
will be accepted prior to effectiveness of the Registration Statement. The
offering has no predetermined termination date.
No persons have made any firm commitment as to the number of Shares to
be purchased by them. There can accordingly be no assurance that sufficient
funds will be received to accomplish any of the anticipated uses of the proceeds
of this offering.
EXPERTS
The consolidated financial statements of Imatron Inc. appearing in the
Company's Annual Report (Form 10-K) for the year ended December 31, 1994, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by reference. The
consolidated financial statements have been 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, CA 94111.
13
<PAGE>
No dealer, salesman or any other person has been authorized to give any
information or to make any representation not contained in this Prospectus in
connection with the offer made hereby. If given or made, such information or
representation must not be relied upon as having been authorized by Imatron Inc.
This Prospectus does not constitute an offer to sell or a solicitation of an
offer to buy any securities other than those specifically offered hereby or an
offer to buy to any person in any jurisdiction in which such an offer or
solicitation would be unlawful. Neither the delivery of this Prospectus nor any
sale made hereunder shall under any circumstances create any implication that
the information contained herein is correct as of any time subsequent to the
date hereof.
2,000,000 Shares
IMATRON INC.
No Par Common Stock
PROSPECTUS
February 1, 1996
<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. All the amounts shown are estimates except for the registration fee.
Registration fee.............................................$1,248
Printing and engraving expenses....... ....................... 500
Legal fees and expenses1................ .................... 7,500
Accounting fees and expenses................................ 2,500
-----
Total.......................................................$11,748
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 may be indemnified by the Company against expenses (including attorneys'
fees) actually and reasonably incurred by him in connection with the defense or
1
<PAGE>
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(1)
3.2 Certificate of Amendment of Certificate of Incorporation
filed with the New Jersey Secretary of State on June 7, 1988
(2)
3.3 Certificate of Amendment of Certificate of Incorporation filed
with the New Jersey Secretary of State on June 17, 1988 (3)
3.4 Certificate of Amendment of Certificate of Incorporation filed
with the New Jersey Secretary of State on July 26, 1988 (4)
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 (5)
_________________________________________
1 Filed as an Exhibit to the Company's Registration Statement on Form S-1
filed with the Commission on June 1, 1983 (File No. 2-84146) and
incorporated herein by reference.
2 Filed as an Exhibit to the Company's Registrations Statement on Form S-8
filed with the Commission on February 3, 1989 (File No.33-26833) and
incorporated herein by reference.
3 Filed as an Exhibit to the Company's Form 8 amending the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1988
filed with the Commission on May 2, 1989 and incorporated hereby by
reference.
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.
2
<PAGE>
1989 (5)
3.6 Certificate of Amendment of Certificate of Incorporation filed
with the New Jersey Secretary of State on March 29, 1990 (6)
3.7 Certificate of Amendment of Certificate of Incorporation filed
with the New Jersey Secretary of State on December 7, 1990 (7)
3.8 Bylaws, as amended as of April 30, 1992 (8)
4.1 Note 6 to Consolidated Financial Statements of the Company
dated December 31, 1994 (9)
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).
____________________________________________
5 Filed as an Exhibit to the Company's Form 8 amending the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1988
filed with the Commission on May 2, 1989 and incorporated hereby by
reference.
6 Filed as an Exhibit to the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1989 and incorporated herein by reference.
7 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.
8 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.
9 Filed as part of the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1994 and incorporated herein by reference.
3
<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 of 1933;
(ii).....To reflect in the prospectus any facts or
events arising after the effective date of the registration statement(or the
most recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information 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 Securities Exchange Act of 1934 that are
incorporated by reference in this registration statement.
(2) That, for the purpose of determining any liability under
the Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(4) To deliver or cause to be delivered with the prospectus,
to each person to whom the prospectus is sent or given, the latest annual report
to security holders that is incorporated by reference in the prospectus and
furnished pursuant to and meeting the requirements of Rule 14a-3 or Rule 14c-3
under the Securities Exchange Act of 1934; and, where interim financial
information required to be presented by Article 3 of Regulation S-X are not set
forth in the prospectus, to deliver, or cause to be delivered to each person to
whom the Prospectus is sent or given, the latest quarterly report that is
specifically incorporated by reference in the prospectus to provide such interim
financial information.
4
<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 of 1933, each filing of the Company's annual
report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act
of 1934 that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offering
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
C. Acceleration of Effectiveness
Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Company pursuant to the foregoing provisions, or otherwise, the Company has
been advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Securities Act, and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Company of expenses
incurred or paid by a director, officer or controlling person of the Company in
the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Company will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
5
<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 February
1, 1996
IMATRON INC.
By: s/S. Lewis Meyer
---------------------
S. Lewis Meyer
President and Chief Executive Officer
6
<PAGE>
POWER OF ATTORNEY
KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Douglas P. Boyd and S. Lewis Meyer, or
either of them, his true and lawful attorney-in-fact, each with full power of
substitution for him in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this registration statement, and to
file the same, with all exhibits thereto, and other documents in connection
therewith, with the Securities and Exchange Commission, hereby ratifying and
confirming all that each of said attorneys-in-fact or their or his substitutes
or substitute, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ S. LEWIS MEYER President, Chief Executive February 1, 1996
- ------------------ Officer and Director
S. Lewis Meyer
/s/ DOUGLAS P. BOYD Chairman of the Board February 1, 1996
- -------------------
Douglas P. Boyd
/s/ GARY H. BROOKS Vice President Finance and February 1, 1996
- ------------------ Chief Financial Officer
Gary H. Brooks
/s/ UGO BUSATTI Director February 1, 1996
- ---------------
Ugo Busatti
/s/ JOHN L. COUCH Director February 1, 1996
- -----------------
John L. Couch
/s/ GIOVANNI LANZARA Director February 1, 1996
- --------------------
Giovanni Lanzara
/s/ TERRY ROSS Director February 1, 1996
- --------------
Terry Ross
/s/ ALDO TEST Director February 1, 1996
- -------------
Aldo Test
7
<PAGE>
IMATRON INC.
INDEX TO EXHIBITS FILED WITH
FORM S-3 REGISTRATION STATEMENT
2,000,000 Shares of Common Stock
Sequential
Exhibit No. Description Page No.
- ----------- ----------- --------
5.1 Opinion of Counsel as to legality 10
of securities being registered.
24.1 Consent of independent auditors. 13
24.2 Consent of counsel.
Reference is made to Exhibit 5.1.
25.1 Power of Attorney (contained in signature pages)
8
<PAGE>
Exhibit 5.1
SEVERSON & WERSON
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW
ONE EMBARCADERO CENTER
SAN FRANCISCO, CALIFORNIA 94111
FAX (415) 956-0439
TELEPHONE (415) 398-3344
February 1, 1996
Imatron Inc.
389 Oyster Point Blvd.
South San Francisco, CA 94080
Gentlemen:
You have requested our opinion with respect to certain matters in
connection with the filing by Imatron Inc. (the "Company") of a Registration
Statement on Form S-3 (the "Registration Statement") with the Securities and
Exchange Commission covering the offering of up to 2,000,000 shares of the
Company's Common Stock (the "Shares").
In connection with this opinion, we have examined and relied upon the
Registration Statement and related Prospectus, the Company's Certificate of
Incorporation and Bylaws, as amended, and such other records, documents,
certificates, memoranda and other instruments as in our judgment are necessary
or appropriate to enable us to render the opinion expressed below. We have
assumed the genuineness and authenticity of all documents submitted to us as
originals, the conformity to originals of all documents submitted to us as
copies thereof, and the due execution and delivery of all documents were due
execution and delivery are a prerequisite to the effectiveness thereof.
We do not hold ourselves out as experts in the laws of the State of New
Jersey and our opinion is based solely on a review of the New Jersey Business
Corporation Act, as reported in unofficial compilations.
9
<PAGE>
On the basis of the foregoing, and in reliance thereon, we are of the
opinion that:
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:pa
10
<PAGE>
EXHIBIT 24.1
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-3 No. 33-00000) and related Prospectus of Imatron
Inc. for the registration of 2,000,000 shares of its common stock and to the
incorporation by reference therein of our report dated February 17, 1995, except
for Note 11 as to which the date is April 4, 1995 with respect to the
consolidated financial statements of Imatron Inc. included in its Annual
Report(Form 10-K) for the year ended December 31, 1994, filed with the
Securities and Exchange Commission.
Ernst & Young LLP
San Francisco, California
January 31, 1995
