FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996.
Commission file number 0-12405
IMATRON INC.
New Jersey
I.D. No. 94-2880078
389 Oyster Point Blvd, South San Francisco, CA 94080
(415) 583-9964
Indicate by check mark whether the Registrant (1) had filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
At October 30, 1996, 77,355,833 shares of the Registrant's common stock (no par
value) were issued and outstanding.
Total Number of Pages: 15
================================================================================
1
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
IMATRON INC.
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
PART I. FINANCIAL INFORMATION PAGE
Item 1. Condensed Consolidated Financial Statements
Condensed Consolidated Balance Sheets - 3
September 30, 1996 (unaudited and restated) and
December 31, 1995.
Condensed Consolidated Statements of Operations - 4
Three and Nine Months Ended
September 30, 1996 (unaudited and restated) and
1995 (unaudited).
Condensed Consolidated Statements of Cash Flows - 5
Nine Months Ended
September 30, 1996 (unaudited and restated)
and 1995 (unaudited).
Notes to Condensed Consolidated Financial 6
Statements (unaudited).
Item 2. Management's Discussion and Analysis of Financial 10
Condition and Results of Operations.
PART II. OTHER INFORMATION 12
SIGNATURES 13
================================================================================
2
<PAGE>
<TABLE>
FORM 10Q/A SEPTEMBER 30, 1996
====================================================================================================================================
IMATRON INC.
Condensed Consolidated Balance Sheets
(Amounts in thousands)
<CAPTION>
(Restated)
------------
September 30, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS:
Current Assets
Cash and cash equivalents $ 8,378 $ 7,269
Short-term investments 18,953 1,266
Accounts receivable (net of allowance for doubtful accounts of $265 at
September 30, 1996 and $171 at December 31, 1995):
Trade accounts receivable 6,413 3,083
Accounts receivable from affiliate 2,535 2,957
Notes receivable -- 250
Inventories 9,718 8,937
Prepaid expenses 672 563
-------- --------
Total current assets 46,669 24,325
Property and equipment, net 9,570 6,260
Other assets 338 291
======== ========
Total assets $ 56,577 $ 30,876
======== ========
LIABILITIES & SHAREHOLDERS' EQUITY:
Current liabilities
Borrowings under line of credit $ -- $ 992
Accounts payable 1,587 2,785
Other accrued liabilities 5,495 5,607
Capital lease obligations - due within one year 1,199 689
-------- --------
Total current liabilities 8,281 10,073
Deferred income on sale leaseback transactions 1,551 1,267
Capital lease obligations 4,900 3,311
-------- --------
Total liabilities 14,732 14,651
Minority interest expense - Notes 8 and 9 11,887 --
SHAREHOLDERS' EQUITY
Common stock, no par value; authorized - 100,000 shares; issued and outstanding
77,248 shares at 1996 and
68,835 at 1995; 87,954 72,282
Additional paid-in capital 7,390 1,500
Deferred compensation (125) --
Accumulated deficit (65,261) (57,557)
-------- --------
Total shareholders' equity 29,958 16,225
-------- --------
Total liabilities and shareholders' equity $ 56,577 $ 30,876
======== ========
<FN>
The accompanying notes are an integral part of these condensed consolidated financial statements.
</FN>
====================================================================================================================================
3
</TABLE>
<PAGE>
<TABLE>
FORM 10Q/A SEPTEMBER 30, 1996
====================================================================================================================================
IMATRON INC.
Condensed Consolidated Statements of Operations
(Amounts in thousands, except per share data)
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1996 1995 1996 1995
-------- -------- -------- --------
(Restated) (Restated)
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 6,376 $ 244 $ 12,393 $ 9,532
Product sale-leaseback
arrangements -- -- 1,774 953
Service 1,070 1,079 2,658 4,581
Development contracts 1,250 1,250 3,750 4,387
Clinic 295 132 869 271
-------- -------- -------- --------
Total revenues 8,991 2,705 21,444 19,724
-------- -------- -------- --------
Cost of revenues:
Product 4,649 999 10,020 8,325
Product sale-leaseback
arrangements -- -- 1,774 953
Service 827 997 2,299 3,271
Development contracts 1,250 1,250 3,750 3,728
Clinic 545 425 1,511 989
-------- -------- -------- --------
Total cost of revenues 7,271 3,671 19,354 17,266
-------- -------- -------- --------
Gross profit / (loss) 1,720 (966) 2,090 2,458
Operating expenses:
Research and development 879 779 2,380 2,539
Marketing and sales 1,140 648 3,121 2,208
Gen. and admin 1,202 709 3,040 1,913
-------- -------- -------- --------
Total operating expenses 3,221 2,136 8,541 6,660
-------- -------- -------- --------
Total operating loss (1,501) (3,102) (6,451) (4,202)
Other income, net 2,072 16 2,233 4,014
Interest expense (416) (46) (650) (109)
-------- -------- -------- --------
Income (loss) before
provision for income taxes 155 (3,132) (4,868) (297)
Provision for income taxes -- -- -- --
-------- -------- -------- --------
Income (loss) before
minority interest expense 155 (3,132) (4,868) (297)
Non-cash return to minority
interest 436 -- 2,836 --
-------- -------- -------- --------
Net loss $ (281) $ (3,132) $ (7,704) $ (297)
======== ======== ======== ========
Net income per share $ (0.00) $ (0.06) $ (0.11) $ (0.01)
======== ======== ======== ========
Number of shares used
in per share calculation 76,986 55,488 73,359 54,764
======== ======== ======== ========
<FN>
The accompanying notes are an integral part of these condensed consolidated financial statements.
</FN>
====================================================================================================================================
4
</TABLE>
<PAGE>
<TABLE>
FORM 10Q/A SEPTEMBER 30, 1996
====================================================================================================================================
IMATRON INC.
Condensed Consolidated Statements of Cash Flows
(Amounts in thousands)
(Unaudited)
<CAPTION>
Nine Months Ended
September 30,
----------------------
1996 1995
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (7,704) $ (297)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 918 1,207
Amortization of deferred compensation 18 --
Non cash return to minority interest 2,836 --
Common stock issued for services 129 --
Provision for bad debt (100) --
Other Income -- (4,000)
Changes in operating assets and liabilities:
Accounts and notes receivable (2,558) 3,835
Inventories (781) (613)
Prepaid expenses and deposits (109) (104)
Other assets 207 (20)
Accounts payable (1,198) (1,503)
Other accrued liabilities (112) 536
Deferred income 284 --
-------- --------
Net cash used in operating activities (8,170) (959)
Cash flows from investing activities:
Capital expenditures (1,501) (1,055)
Purchases of available-for-sale securities (22,036) --
Maturities of available-for-sale securities 3,068 --
Sales of marketable securities 1,015 --
-------- --------
Net cash used in investing activities (19,454) (1,055)
Cash flows from financing activities:
Payments of obligations under capital leases (616) --
Payment of notes payable (992) --
Proceeds from issuance of notes payable -- 800
Issuance of common stock 15,543 1,033
Proceeds from issuance of preferred stock of
consolidated subsidiary 14,798 --
-------- --------
Net cash provided by financing activities 28,733 1,833
-------- --------
Net increase (decrease) in cash and
cash equivalents 1,109 (181)
Cash and cash equivalents, at beginning of the period 7,269 1,694
-------- --------
Cash and cash equivalents, at end of the period $ 8,378 $ 1,513
======== ========
Supplemental Disclosure of Non cash Investing and Financing Activities:
Deferred compensation of common stock
option grant of consolidated subsidiary $ 143 $ --
======== ========
Cash paid for interest on obligations $ 410 $ 188
======== ========
<FN>
The accompanying notes are an integral part of these condensed consolidated financial statements
</FN>
====================================================================================================================================
5
</TABLE>
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
IMATRON INC.
Notes to Condensed Consolidated Financial Statements
(Unaudited)
- --------------------------------------------------------------------------------
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for annual
consolidated financial statements. In the opinion of management, adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and nine month
periods ended September 30, 1996 are not necessarily indicative of the results
that may be expected for the year ended December 31, 1996. For further
information, refer to the consolidated financial statements and notes thereto
included in the Company's Annual Report to Shareholders for the year ended
December 31, 1995.
2. BASIS OF CONSOLIDATION
The consolidated financial statements include the accounts of Imatron Inc. and
its subsidiary HeartScan Imaging, Inc. (collectively the "Company"). All
intercompany accounts and transactions have been eliminated in consolidation.
3. SHORT-TERM INVESTMENTS
Short-term investments consist of certificates of deposit and debt securities.
The certificates of deposit have been classified as held to maturity and the
debt securities have been classified as available for sale. The maturity of all
debt securities is less than one year and the unrealized gain/loss of the
securities is immaterial at September 30, 1996.
4. INVENTORIES
Inventories consist of
(in thousands of dollars):
September 30, December 31,
1996 1995
------------- --------------
Purchased parts and sub-assemblies $3,690 2,594
Service parts 995 1,079
Work-in-process 4,969 2,403
Finished goods 64 2,861
============= ==============
TOTAL $9,718 $8,937
============= ==============
5. INCOME (LOSS) PER SHARE
Net loss per common share is computed using the weighted average number of
common shares outstanding. Stock options and warrants have not been included in
the computation as their effect would have been antidilutive.
================================================================================
6
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
6. TRANSACTIONS WITH SIEMENS CORPORATION
The following table represents the percent of revenues attributable to the
development and distribution agreements between the Company and Siemens
Corporation:
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
1996 1995 1996 1995
---- ---- ---- ----
Net product sales - 100% 2% 17%
Service 22% 49% 18% 39%
Development contracts 100% 100% 100% 100%
Total revenues 17% 76% 21% 40%
Siemens has 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.
7. JOINT VENTURE
As of September 30, 1996 Imatron's interest in the Joint Venture is carried in
the accompanying condensed consolidated financial statements at no value. The
Company has no financial commitments to the Joint Venture and is prepared to
abandon its interest. The Company intends to carry this investment at no value
until such time as the Joint Venture can demonstrate that it will be able to
sustain profitable operations. Once profitable operations are sustained, the
Company will account for the Joint Venture investment on the equity method.
Summarized financial information for the Joint Venture is not included in the
notes to the consolidated financial statements for the period ended or as of
September 30, 1996, as such information is not considered material to the
operations of Imatron Inc.
The following table represents the percent of revenues attributable to the Joint
Venture between the Company and Imatron Japan K.K.:
Three months ended Nine months ended
September 30, September 30,
------------------ ------------------
1996 1995 1996 1995
---- ---- ---- ----
Net product sales 22% - 44% 59%
Service 24% 11% 23% 22%
Total revenues 19% 5% 33% 37%
8. EQUITY TRANSACTIONS
In May 1996, Imatron sold 4,000,000 shares of common stock in a private
placement offering, netting proceeds of $10,400,000.
In June 1996, Imatron completed a private placement offering whereby 100,000
shares of HeartScan Series A Preferred Stock were sold at $160 per share and
realized net proceeds of $14,798,000. The preferred stock is convertible on a
ten-to-one basis into HeartScan common shares at any time. Mandatory conversion
of the preferred stock into common stock will occur upon the successful
completion of a HeartScan initial public offering. The HeartScan Series A
Preferred Stock may be exchanged at the sole option of the holder into Imatron
common stock at an exchange price of $5.00 per share until the earlier of a) a
two year period following closing of the Preferred Stock offering; or b) a
HeartScan initial public offering. If there is no initial public offering within
24 months of the Preferred Stock closing, holders may convert the
================================================================================
7
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
HeartScan Series A Preferred Stock into Imatron common stock, at a conversion
price equal to the greater of $1.50 per share or a 27% discount from the
weighted average closing price of Imatron common stock for the 90 day Period
immediately preceding 24 months of the Preferred Stock closing and each date
that is 3 months thereafter to and including the 48th month of the Preferred
Stock closing.
In accordance with the Private Placement Summary Offering Memorandum (including
the supplement thereto) dated March 1996, Imatron and HeartScan covenanted and
agreed with the purchasers of "the Shares", that on the Closing Date no less
than $12,000,000 of the net proceeds from the sale of "the Shares" less all
expenses of the offering, would be contributed to the capital of HeartScan
without additional consideration.
The HeartScan Series A Preferred Stock is held entirely by unaffiliated third
parties and is classified in the accompanying balance sheet at June 30, 1996 as
minority interest.
The terms of the preferred stock provide certain additional rights to the
holders including participation and approval of any future HeartScan equity
financing and approval of transactions with affiliates.
The terms of the Series A Preferred Shares include 1,000,000 authorized shares
and 100,000 issued and outstanding shares at June 30, 1996.
9. RESTATEMENT
In March 1997, subsequent to the Company finalizing its 1996 consolidated
financial statements, the Securities and Exchange Commission ("SEC") announced
its position on accounting for the issuance of convertible preferred stock with
a nondetachable conversion feature that is deemed "in the money" at the date of
issue (a "beneficial conversion feature"). The beneficial conversion feature is
initially recognized and measured by allocating a portion of the preferred stock
proceeds equal to the intrinsic value of that feature to additional
paid-in-capital. The intrinsic value is calculated at the date of issue as the
difference of the conversion price and the quoted market price of the Company's
common stock, into which the security is convertible, multiplied by the number
of shares into which the security is convertible. The discount resulting from
the allocation of proceeds to the beneficial conversion feature is treated as a
dividend and is recognized as a return to the preferred shareholders over the
minimum period in which the preferred shareholders can realize that return (i.e.
from the date the securities are issued to the date they are first convertible).
The accounting for the beneficial conversion feature requires the use of an
unadjusted quoted market price (i.e. no valuation discounts allowed) as the fair
value used in order to determine the intrinsic value dividend. Additionally,
preferred dividends of a subsidiary are included in minority interest as charge
against income.
Prior to applying the accounting described above in its previously issued
financial statements, the Company had not recognized an intrinsic value dividend
on the HeartScan preferred stock which was issued in June 1996. The discounted
conversion features of this preferred stock into Imatron common stock (the
immediate conversion at $5.00 per share and the conversion in two years from the
date of the preferred stock issuance at a 27% discount) was provided to the
preferred shareholders, in essence to provide them with an exit strategy in the
absence of a HeartScan IPO. Thus, the Company did not believe a discount should
be recognized on a contingently issuable security.
Furthermore, at the time of agreeing to the terms of the transaction the $5 per
share immediate conversion price was above the market price of the Company's
common stock but at the time the HeartScan preferred stock was actually issued,
the market price had increased to $5.75 and thereafter, it dropped below $5
again. Accordingly, the Company did not believe that any calculation of the
discount should include the impact of this short-term market fluctuation.
In December 1997, the staff of the SEC gave a speech further refining its March
1997 announcement. Based on discussions with the staff of the SEC in April 1998,
the staff concluded that the Company should retroactively apply its announcement
because it should be applied to contingently issuable securities and, as
discussed in the December speech, the portion attributable to the discount that
could have been obtained immediately on conversion (even though the shares had
not been registered yet) should be recognized on the day the preferred shares
were issued. The balance of the discount based on a market value of $5.75 per
common share is being recognized over two years from the date of issuance.
================================================================================
8
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
The consolidated financial statements as of and for the year ended December 31,
1996 have been restated to give effect to the accounting treatment described
above. The restatement resulted in (1) a reclassification in the consolidated
balance sheet of $5,890,000 reducing minority interests and increasing
additional paid-in capital (equity) and (2) the recognition of a minority
interest charge of $3,272,000 (including $2,400,000 as of the date of the
preferred shares were issued) in the consolidated statement of operations
increasing the Company's net loss from $10,465,000 to $13,737,000. The remaining
discount of $2,618,000 will be charged to minority interests through June 30,
1998.
The restatement of the previously issued 1996 consolidated financial statements,
in order to apply the accounting described herein for the intrinsic value of the
beneficial conversion features, does not affect the cash flows of the Company.
The minority interest is recognized as an increase in minority interest in the
balance sheet. If the preferred shareholders elect to convert their shares to
Imatron common stock, the minority interest will then convert to Imatron equity.
================================================================================
9
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations:
Three months ended September 30, 1996 versus 1995
Overall revenues for the third quarter ended September 30, 1996 of $8,991,000
increased $6,286,000 or 232% compared to 1995 revenues of $2,705,000. Net
product revenues increased to $6,376,000 from $244,000 in 1995 primarily because
of increases in scanner shipments from zero in 1995 to four in 1996. Service
revenues remained flat in 1996 due to an increase in service contracts which was
offset by a decrease in spares shipments. Development contract revenue is
consistent with the three year Memorandum of Understanding entered into with
Siemens in March 1995. Clinic revenues related to HeartScan Imaging, Inc.
("HeartScan") increased to 295,000 in 1996 from 132,000 in 1995 because of
additional coronary artery disease risk assessment centers ("clinics") operating
in 1996.
Total cost of revenues as a percent of revenues for the third quarter of 1996 is
lower at 81% as compared with 136% in 1995. Product cost of revenues as a
percent of product revenues decreased to 73% in 1996 from 409% in 1995 due to
shipment of four scanners with higher margins compared to zero shipments in
1995. Service cost of revenues as a percent of service revenue decreased to 77%
in 1996 from 92% in 1995. Development contract revenue and cost of revenue is
equal due to the terms of the three year Memorandum of Understanding with
Siemens. Clinic cost of revenues as a percent of clinic revenues decreased to
185% as compared to 322% primarily due to additional revenues related to the
establishment of new HeartScan clinics.
Operating expenses of $3,221,000 increased $1,085,000 or 51% compared to 1995
expenses of $2,136,000. R&D expenses of $879,000 in 1996 reflect the portion of
R&D spending not covered by the Siemens research and development contract.
Selling expenses increased to $1,140,000 from $648,000 in 1995 due primarily to
higher marketing costs for HeartScan clinics. Administrative expenses increased
$493,000 to $1,202,000 due to increases in bank fees related to the Exim Bank
credit line and overhead expenses related to the establishment of new HeartScan
clinics.
Other income increased to $2,072,000 for the third quarter of 1996 from $16,000
in the comparable period of 1995. The increase was attributable to the gain on
sale of 59,090 shares of Invision Technologies common stock at $30.00 per share
for a gain of $1,756,000. Interest expense increased to 416,000 for the third
quarter of 1996 from $46,000 in the comparable period of 1995 due primarily to
an increase in capital lease obligations related to scanners leased back by
HeartScan.
The Company incurred a non-cash charge to income of $436,000 recorded as
minority interest expense in the third quarter of 1996 in connection with
certain beneficial conversion features granted to the holders of the HeartScan
convertible Series A Preferred Stock (see Note 9 to the Notes to the Condensed
Consolidated Financial Statements).
Nine months ended September 30, 1996 versus 1995
Overall revenues for the nine months ended 1996 of $21,444,000 increased
$1,720,000 or 9% compared to revenues of $19,724,000 for the same period in
1995. Net product revenues, including $1,774,000 under the sale-leaseback
arrangements, increased 35% to $14,167,000 in 1996 from $10,485,000 in 1995 due
to nine scanners shipped in 1996 compared to seven in 1995. Service revenues
decreased 42% to $2,658,000 in 1996 due primarily to a lower volume of spares
shipments. The decrease in the development contract revenue of 15% to $3,750,000
in 1996 resulted from the lower revenue recognized under the Memorandum of
Understanding entered into with Siemens as compared to the previous development
agreement terminated in March 1995. Clinic revenues related to HeartScan
Imaging, Inc. increased to $869,000 in 1996 from $271,000 in 1995 as a result of
three clinics operating for nine months in 1996 compared to one in 1995.
Total cost of revenues as a percent of revenues for nine months ended 1996
increased to 90% as compared to 88% in 1995. Product cost of revenues as a
percent of product revenues decreased to 83% in 1996 from 88% in 1995 due higher
margins on scanners shipped. Service cost of revenues as a percent of service
revenues increased to 86% in 1996 from 71% 1995 due primarily to a decrease in
spares shipments. Development contract cost of revenues is equal to the revenue
recognized under the Memorandum of Understanding with Siemens. Clinic cost of
revenues as a percent of clinic revenues decreased to 174% in 1996 from 365% in
1995 due to the establishment of additional HeartScan clinics.
================================================================================
10
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
Operating expenses of $8,541,000 in 1996 increased $1,881,000 or 28% in 1995
expenses of $6,660,000. R&D expenses of $2,380,000 in 1996 reflect the portion
of R&D spending not related to the Siemens research and development contract.
Selling expenses increased to $3,121,000 in 1996 from $2,208,000 in 1995 due to
higher marketing expenses incurred by HeartScan Imaging prior to the HeartScan
private placement. Administrative expenses increased $1,127,000 to $3,040,000
due to increases in investor relations expenses and overhead expenses related to
the establishment of new HeartScan clinics.
Other income decreased to $2,233,000 in 1996 due to the $4,000,000 recorded in
1995 for the transfer of five Imatron EBT patents to Siemens and the
cancellation of Siemens' existing minimum purchase obligations under the
previous distribution agreement. This was partially offset by income derived
from the sale of 59,090 shares of Invision Technologies common stock at $30.00
per share for a gain of $1,756,000. Interest expense increased to 650,000 for
the first nine months of 1996 from $109,000 in the comparable period of 1995 due
primarily to increase in capital lease obligations in 1997.
The Company incurred a non-cash charge to income of $2,836,000 recorded as non
cash return to minority interest in the third quarter of 1996 in connection with
certain beneficial conversion features granted to the holders of the HeartScan
convertible Series A Preferred Stock (Note 9 to the Notes to the Condensed
Consolidated Financial Statements).
Liquidity and Capital Resources:
At September 30, 1996 the Company has a working capital of $38,388,000 which was
169% increase compared to the working capital of $14,252,000 at December 31,
1995. The current ratio increased to 5.6:1 from 2.4:1 at December 31, 1996.
The Company's assets increased to $56,577,000 compared to December 31, 1995
total assets of $30,876,000 primarily due to proceeds from the private placement
offerings in 1996. The increase in cash and investments was partially offset by
the operating loss incurred during the year and payment of the borrowings under
the line of credit with San Paolo Bank. Accounts receivable also increased due
to the higher number of scanners sold under the letters of credit that are
outstanding as of September 30, 1996. Inventories are higher at 10% due to the
increase in work in process. Fixed assets and lease obligations include capital
leases on HeartScan clinic scanners amounting to $5,901,000 that are guaranteed
by Imatron Inc.
The Company's management believes that the cash, cash equivalents and short-term
investments existing at September 30, 1996 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.
To satisfy the Company's capital and operating requirements beyond 1996,
profitable operations, additional public or private financing or the incurrence
of debt may be required. If future public or private financing is required by
the Company, holders of the Company's securities may experience dilution. There
can be no assurance that equity or debt sources, if required, will be available
or, if available, will be on terms favorable to the Company or its shareholders.
The Company does not believe that inflation has had a material effect on its
revenues or results of operations.
This Form 10-Q/A contains forward-looking statements which involve risk and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements as a result of certain risk
factors set forth in the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
================================================================================
11
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Not applicable.
Item 2. Changes in Securities
Not applicable.
Item 3. Defaults upon Senior Securities
Not applicable.
Item 4. Submission of Matters to a vote of Security Holders
The Company's Annual Meeting of Shareholders was held on June
28, 1996. At the meeting the nominated slate of directors was
elected. In addition, a proposal to increase the additional
shares eligible for sale under the Company's 1994 Employee
Stock Option plan from 1,000,000 to 1,800,000 shares was
approved. The proposal received 50,150,046 votes for,
1,403,348 against, and 288,719 abstentions.
Item 5. Other Information
Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
No. 11 - Computation of per share earnings.
(b) Form 8-K Reports:
Not applicable.
================================================================================
12
<PAGE>
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: June 15, 1998
IMATRON INC.
(Registrant)
/s/Gary H. Brooks
---------------------------------------
Gary H. Brooks
Vice President, Finance/Administration,
Chief Financial Officer and Secretary
================================================================================
13
FORM 10Q/A SEPTEMBER 30, 1996
================================================================================
Exhibit No. 11
IMATRON INC.
Computation of Per Share Earnings
(Amounts in thousands, except per share data)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------- --------------------
1996 1995 1996 1995
-------- -------- -------- --------
PRIMARY: (Restated) (Restated)
Weighted average common shares
outstanding 76,986 55,488 73,359 54,764
-------- -------- -------- --------
TOTAL 76,986 55,488 73,359 54,764
======== ======== ======== ========
Net loss $ (281) $ (3,132) $ (7,704) $ (297)
======== ======== ======== ========
Net loss per common share $ (0.00) $ (0.06) $ (0.11) $ (0.01)
======== ======== ======== ========
================================================================================
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
The Schedule Contains Summary Financial Information Extracted From Imatron
Inc.'s Consolidated Condensed Statements Of Income And Consolidated
Condensed Balance Sheets And Is Qualified In Its Entirety By Reference To
Such Financial Statements.
</LEGEND>
<CIK> 0000720477
<NAME> Imatron Inc.
<MULTIPLIER> 1,000
<CURRENCY> U.S.Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> Dec-31-1996
<PERIOD-START> Jul-1-1996
<PERIOD-END> Sep-30-1996
<EXCHANGE-RATE> 1
<CASH> 8378
<SECURITIES> 18953
<RECEIVABLES> 9213
<ALLOWANCES> 265
<INVENTORY> 9718
<CURRENT-ASSETS> 46669
<PP&E> 15839
<DEPRECIATION> (6269)
<TOTAL-ASSETS> 56577
<CURRENT-LIABILITIES> 8281
<BONDS> 0
0
0
<COMMON> 87954
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 56577
<SALES> 8991
<TOTAL-REVENUES> 8991
<CGS> 7271
<TOTAL-COSTS> 7271
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 416
<INCOME-PRETAX> 155
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (281)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>