Registration No. 33-______
As filed with the Securities and Exchange Commission on September 14, 1995
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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ADVANCED NMR SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-2457487
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
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46 Jonspin Road
Wilmington, Massachusetts 01887
(508) 657-8876
(Address, including zip code, and telephone number, including area
code, of registrant's principal executive offices)
Jack Nelson, Chairman
ADVANCED NMR SYSTEMS, INC.
46 Jonspin Road
Wilmington, Massachusetts 01887
(508) 657-8876
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
With copy to:
Bruce A. Rich, Esq.
Reid & Priest LLP
40 West 57th Street
New York, New York 10019
(212) 603-2000
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement as
determined by market conditions and other factors.
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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]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number
of the earlier effective registration statement for the same. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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Proposed Proposed
Title of Maximum Maximum
Each Class of Amount Offering Aggregate Amount of
Securities to to be Price Offering Registration
be Registered Registered Per Share(*) Price(*) Fee(**)
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Common Stock,
$.01 par
value per
share(*) 2,331,722 shs(*) $ 3.75 $8,743,957.50 $3,015.16
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* Issuable upon exercise of Warrants. Includes, pursuant to Rule
416, an additional undeterminable amount of shares of Common Stock
by virtue of the anti-dilution provisions of the Warrants.
** Estimated solely for purposes of determining the registration fee
pursuant to Rule 457(g).
The Registrant hereby amends this Registration Statement on such
date or dates 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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<PAGE>
PRELIMINARY PROSPECTUS DATED SEPTEMBER 13, 1995
SUBJECT TO COMPLETION
PROSPECTUS
ADVANCED NMR SYSTEMS, INC.
2,331,722 Shares
Common Stock, $.01 Par Value
Issuable Upon Exercise of 2,331,722 Common Stock Purchase Warrants
This Prospectus relates to the offering by Advanced NMR Systems,
Inc., a Delaware corporation (the "Company"), of up to 2,331,722 shares
of Common Stock, $.01 par value per share (the "Common Stock"),
issuable upon exercise of up to 2,331,722 Advanced NMR Common Stock
Purchase Warrants (the "Warrants"). On August 31, 1995 (the "Effective
Date"), the Company issued the Warrants to the holders of shares of
common stock, $.01 par value per share of Medical Diagnostics, Inc.,
("MDI"), upon the merger (the "Merger") of MDI into ANMR Acquisition
Corp., a wholly-owned subsidiary of the Company ("Acquisition Corp."),
pursuant to an Agreement and Plan of Merger, dated as of May 2, 1995
(the "Merger Agreement"), by and among the Company, MDI and Acquisition
Corp.
The Warrants were issued under a Warrant Agreement, dated as of
August 31, 1995 (the "Warrant Agreement"), between the Company and
American Stock Transfer & Trust Company, as Warrant Agent (the "Warrant
Agent"). The Warrants entitle the holders thereof to purchase shares
of Common Stock at a price per share of $3.75, subject to customary
anti-dilution adjustments. Each Warrant may be exercised until 5:00
p.m., New York City time, on the earlier of August 30, 2000, the fifth
anniversary of the Effective Date, or the date fixed for redemption of
the Warrants.
The Warrants are subject to redemption at the option of the Company,
in whole but not in part, at a redemption price of $.05 per Warrant, in
the event that the average market price of Common Stock has been at
least $4.50 per share (subject to adjustment for stock splits and
combinations) for any twenty consecutive trading days after the
Effective Date. Any Warrants not exercised prior to the date fixed for
redemption thereafter will represent only the right to receive, upon
surrender, the redemption price therefor.
The Warrants are quoted on the NASDAQ National Market System ("NMS")
under the symbol "ANMRW." On September __, 1995, the closing sales
price for a Warrant on the NASDAQ NMS was $__________.
The shares of the Company's Common Stock are quoted on the NASDAQ
NMS under the symbol "ANMR." On September __, 1995, the closing sales
price for a share of Common Stock as quoted on the NASDAQ NMS was
$__________.
The Company will receive proceeds from the exercise of the Warrants,
but not from the sale of the underlying Common Stock. See "Use of
Proceeds."
All expenses of the registration of the shares of the Company's
Common Stock issuable upon exercise of the Warrants covered by this
Prospectus, estimated to be $30,000, are to be borne by the Company.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH
DEGREE OF RISK. SEE "RISK FACTORS" ON PAGE 7 HEREIN.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE 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 __________, 1995
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.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities 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"). These reports, proxy statements and other information
can be inspected and copied at the public reference facilities
maintained by the Commission at Room 1024 of the Commission's office at
450 Fifth Street N.W., Washington, D.C. 20549, and at its regional
offices located at New York Regional Office, 7 World Trade Center, 13th
Floor, New York, New York 10048; and 500 West Madison Street, 14th
Floor, Chicago, Illinois 60661. 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.
This Prospectus does not contain all the information set forth in
the Registration Statement filed by the Company with the Commission
(the "Registration Statement") with respect to the securities to which
this Prospectus relates, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For
further information with respect to the Company and the securities
offered hereby, reference is made to the Registration Statement,
including the exhibits thereto. Each summary in this Prospectus of
information included in the Registration Statement or any exhibit
thereto is qualified in its entirety by reference to such information
or exhibit.
INCORPORATION OF CERTAIN INFORMATION BY REFERENCE
Except to the extent modified or superseded by information contained
herein, the Company's Annual Report on Form 10-K for the year ended
December 31, 1994, the Company's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1995, and June 30, 1995, respectively, the
Company's Reports on Form 8-K filed on May 5, 1995 and September 8,
1995, respectively, and the Joint Proxy Statement of the Company and
MDI, dated August 3, 1995, for the Company's 1995 Annual Meeting of
Stockholders, as filed with the Commission, are hereby incorporated by
reference in this Prospectus. Any statement contained in a document
incorporated or deemed to be 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 modifies or supersedes
such statement. Any such statement so modified or superseded shall not
be deemed, except as so modified or superseded, to constitute a part of
this Prospectus.
All documents filed 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 this offering shall be deemed incorporated by reference
in this Prospectus and to be a part hereof from the date of filing of
such documents.
The Company undertakes to provide without charge to each person,
including any beneficial owner, to whom a copy of this Prospectus has
been delivered, upon the written or oral request of any such person, a
copy of any of the documents or information incorporated by reference
herein, other than exhibits to such documents unless such exhibits are
specifically incorporated by reference into such documents. Requests
should be directed to Jack Nelson, Chairman, Advanced NMR Systems,
Inc., 46 Jonspin Road, Wilmington, Massachusetts 01887; telephone
number (508) 657-8876.
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SUMMARY
THE COMPANY
General
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Advanced NMR Systems, Inc. ("ANMR" as a separate company and ANMR
and its subsidiaries collectively sometimes the "Company") develops,
manufactures and markets a family of technically advanced products
related to ultra-fast magnetic resonance imaging ("MRI") systems. ANMR
manufactures the InstaScan system, a sophisticated high-speed retrofit
package for enhancing conventional MRI systems. ANMR is also the
exclusive integrator of very high field (3T and 4T) MRI systems using
some of General Electric Medical Systems ("GEMS") Signa MR components,
third party components and an ANMR component. ANMR has a 61% ownership
interest in Advanced Mammography Systems, Inc. ("AMS"). AMS has
developed a dedicated MRI breast imaging system and is negotiating with
certain medical facilities for its installation. On August 31, 1995,
Medical Diagnostics, Inc. ("MDI") became a wholly-owned subsidiary of
ANMR through consummation of the Merger. MDI provides advanced
radiology services such as MRI and Single Photon Emission Computed
Tomography ("SPECT") to patients in Massachusetts, New York, Virginia,
West Virginia and Tennessee through a network of mobile and fixed
equipment at hospital, clinic and freestanding facilities, and also
rehabilitation services for motor vehicle accident victims.
ANMR is a Delaware corporation. Its executive office is located at
46 Jonspin Road, Wilmington, Massachusetts 01887, and its telephone
number is (508) 657-8876.
ANMR
----
From its inception in 1983 until November 1992, ANMR was exclusively
an R&D operation. In 1992, ANMR's transition to a manufacturing
operation was initiated with the first commercial sale of its 1.5T
InstaScan system and receipt of clearance from the U.S. Food and Drug
Administration ("FDA") to market such system to clinical institutions.
Calendar year 1993 marked the modification of ANMR's agreement with
GEMS (the "GEMS Agreement") and the initial implementation of its sales
and marketing program to sell the InstaScan system. The GEMS Agreement
was further modified as of June 30, 1994 in which revenues from the
sale of high field 3T and 4T systems would contribute to satisfying the
GEMS obligation under the 1993 GEMS Agreement.
MRI systems provide medical images for the diagnosis and detection
of disease. The systems use large magnets, digital computers and
controlled radio waves to derive cross-sectional (two dimensional) and
volume (three-dimensional) pictures of human and animal anatomy and to
provide information, which can be displayed either on film or a video
monitor, about the concentration and the physical and chemical
environment of atomic nuclei without the need for invasive surgery.
This is in contrast to other currently available diagnostic techniques
such as Positron Emission Tomography ("PET"), Computerized Axial
Tomography ("CAT") and conventional X-ray equipment that subject living
tissue to potentially harmful ionizing radiation. MRI systems present
no known risk to most patients; however, the long imaging times
associated with commercially available systems may result in degraded
image quality due to patient movement and motion of the internal organs
(especially of the heart and of the abdominal organs) during the
scanning period.
ANMR has developed the Instascan system which is significantly
faster than other commercially available systems and has demonstrated
that the adverse effects of any motion, patient or organ, can be
substantially eliminated. In addition, natural physiological motions
can actually be visualized by acquiring multiple InstaScan images and
showing them in a movie sequence. Following ANMR's lead, manufacturers
of MRI systems are now including Echo Planar Imaging ("EPI") in their
systems.
The following significant events have occurred at ANMR since January
1, 1994: ANMR was awarded an imaging patent for its new technology
referred to as Catch and Hold and received clearance from the FDA for
commercial sale of the Catch and Hold technology; installed its second
InstaScan system at Massachusetts General Hospital (MGH) to be used
specifically for clinical application; installed its first 3T Instascan
retrofit at the University of Pittsburgh; installed an EPI upgrade for
the National Institutes of Health (NIH) for the development
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of an EPI upgrade of its 4T MRI system; received two purchase
orders for integrating and installing 3T MRI systems and announced
the receipt of an additional nine purchase orders for its InstaScan
systems from various research and clinical sites; appointed a Vice
President of Sales and Marketing who was a former head of sales for
GEMS; hired a GEMS senior scientist as an Engineering Program Manager;
concluded an agreement to expand its strategic alliance with GEMS
through June 30, 1997 as the exclusive system integrator of the
high field 3T and 4T MRI system; entered into an alliance with the
University of Texas and Elscint, Ltd. to develop, manufacture and
distribute a highly sophisticated, fully integrated functional
neuroimaging system; and received regulatory clearance in Japan
for the commercial sales of its InstaScan system.
In March 1993, the GEMS Agreement was modified providing, in part,
for the minimum purchase by GEMS of 100 InstaScan systems by the end of
calendar year 1994 with installation by the end of calendar year 1995.
If by December 31, 1995, GEMS has not paid ANMR for the 100 units, it
was to pay ANMR $100,000 for each unit of the first 75 units not
purchased and $50,000 for each of units 76-100 not purchased. The GEMS
purchase obligation was modified as of June 30, 1994 in an agreement
with GEMS pursuant to which revenues from the sale of 3T and 4T systems
will contribute to satisfying the GEMS obligation under the 1993 GEMS
Agreement. The 1994 modification covers a three year period through
June 30, 1997. The GEMS purchase obligation is subject to usual
conditions of sale, including changes in health care regulations
covering MRI products. The GEMS period of exclusivity for the
InstaScan system terminated on December 31, 1994. At December 31,
1994, seventeen InstaScan sales and two 3T sales were credited to this
arrangement with GEMS. As of January 1, 1995, sales of the InstaScan
system are no longer limited under the 1993 GEMS Agreement. All future
sales of the InstaScan system will be sold directly to customer sites
or through GEMS and will be negotiated on mutually acceptable terms
with each customer. Purchase orders of the InstaScan systems obtained
after December 31, 1994 will generally not be credited towards the
dollar value of GEMS's obligation under the 1993 GEMS Agreement.
In July 1994, ANMR concluded an agreement with GEMS for the sale of
3T and 4T research MR systems to GEMS through June 1997. These
systems, while not yet submitted to the FDA for clearance for clinical
use, will be sold to premier research institutions throughout the
world. The first such system was installed at the University of
Pittsburgh in April 1994. This first system was developed in
collaboration with the MRI group at the corporate research and
development center of GEMS. All future systems will be integrated by
ANMR at its plant.
In June 1992, ANMR licensed (the "ANMR License Agreement") to AMS
the right to use ANMR's InstaScan technology in the development of a
dedicated breast imaging system (the "Field of Use"). As consideration
for the ANMR License Agreement, AMS paid to ANMR $1,680,000 and issued
4,000,000 shares of AMS Common Stock, of which 2,750,000 shares are
subject to an escrow arrangement for release based upon AMS achieving
certain future minimum pre-tax income, or the market price of the AMS
common stock reaching certain levels.
ANMR believes other dedicated use (or partial body) MRI scanners
might be developed for fields of use in addition to mammography. AMS
has not been granted the right to use any technology now or hereafter
obtained by ANMR in connection with any other dedicated use MRI
scanners. However, AMS has been granted a 50% interest in any net
profits, as defined in the ANMR License Agreement (after allocation of
development expenses), derived by ANMR from the sale or license of
dedicated use MRI scanners utilizing or based upon the Licensed
Technology outside of the Field of Use. The ANMR License Agreement
provides that (i) any inventions outside the Field of Use developed
solely by ANMR or an ANMR entity shall be owned by ANMR or such ANMR
entity and automatically licensed to AMS on an exclusive, worldwide
basis, within the Field of Use, (ii) any inventions developed solely by
AMS shall be automatically licensed to ANMR on an exclusive, worldwide
basis for use solely outside the Field of Use, and (iii) any inventions
outside the Field of Use jointly developed by ANMR and AMS or an ANMR
entity shall be jointly owned in equal shares by ANMR, on the one hand,
and AMS or an ANMR entity, on the other hand, and AMS or an ANMR entity
shall automatically license its interest to ANMR on an exclusive,
worldwide basis. Accordingly, ANMR would obtain the right to future
technology developed by AMS for use in connection with mammography, and
AMS shall obtain the right to further technology developed by ANMR for
use outside the Field of Use.
AMS is continuing its mission to develop a dedicated MR breast
imaging system. Over the past year, AMS has developed an imaging
technique to suppress fat in breast images. This technology is
particularly useful in
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imaging dense breasts which present a problem in interpreting
conventional X-ray images. This new technique was developed as a
collaboration between ANMR and AMS. AMS has completed a prototype
of its dedicated MR breast imaging system and is currently
negotiating with certain medical facilities for its installation.
To optimize ANMR's and AMS's operating efficiency, ANMR and AMS
entered into a Shared Services Agreement as of January 25, 1993 whereby
the companies share common expenses and functions, for example,
executive officers, marketing, field service, accounting, regulatory
approvals, and manufacturing operations. This agreement has been
extended to January 24, 1996. From an engineering and manufacturing
perspective, this Shared Services Agreement has greatly facilitated
development of the prototype mammography scanner and has also
benefitted ANMR's development of enhancements to its InstaScan
products.
In January 1995, AMS called for redemption of all of its remaining
outstanding redeemable warrants to purchase shares of its common stock.
Warrants for 226,000 shares had previously been exercised prior to the
call. All of the outstanding warrants were exercised prior to the
redemption date for approximately 774,000 shares of AMS common stock at
the exercise price of $3.00 per share. Consequently, no warrants were
actually redeemed. AMS is using the $2.3 million proceeds from the
exercise of the warrants for continuing research and development and
for general working capital purposes.
MDI
---
MDI was founded in 1984 to operate mobile radiology services as a
full-service medical provider under its own clinic licenses where such
operation is allowed under state regulation. It used the proceeds from
a 1992 public offering in part to acquire minority interests in current
MDI operations from certain partners, to acquire imaging businesses
operating in New York, Virginia, West Virginia and Tennessee and to
enter into the rehabilitation business in Massachusetts.
Effective November 5, 1993, MDI acquired certain assets from, and
entered into contractual arrangements to provide MRI services to, a
privately held professional medical corporation which provides MRI
services to a regional network of hospitals and clinics located in the
Finger Lakes region of New York State.
In May 1994, MDI completed its acquisition of Meritus Health Systems
and affiliates ("Meritus") headquartered in Roanoke, Virginia. Meritus
provides MRI and SPECT imaging services in Virginia, West Virginia and
Tennessee.
MDI often acts as a full-service medical provider in its radiology
services business, particularly MRI services, providing MRI and SPECT
equipment and technologists and typically providing or arranging for
the necessary physician and support personnel, scheduling and screening
of patients, maintaining medical and administrative records,
establishing charges and billing and collecting revenues from patients
and third-party payers. In these instances, host hospitals generally
function as a landlord for an MDI subsidiary or affiliate operating the
MRI or SPECT services. By operating in this manner, MDI is able to
control the hours of operation for its units and manage patient
scheduling, permitting MDI to more fully utilize its equipment. MDI is
also able to expand demand for its services by marketing directly to
referring physicians and third-party payers, the primary sources of MRI
patient business, including physicians who are not affiliated with the
host hospitals. MDI believes that controlling all or most of the
radiology services, including holding the required clinic licenses when
possible, enhances its ability to negotiate renewals or extensions of
its arrangements with the hospitals.
A majority of MDI's MRI services are provided under the "full-
service" model. SPECT services are provided under both vendor and
provider models. In circumstances where MDI does not operate as a
provider, it endeavors to improve utilization and operating performance
by applying the marketing and other skills it has developed as a
provider to these operations.
On January 31, 1995, MDI entered the rehabilitation market through
its acquisition of 75% of the net assets of the MVA Center for
Rehabilitation, Inc. in Springfield, MA, and entered into a partnership
to provide physician care, physical therapy and case management to
motor vehicle accident victims. MDI is evaluating this business and,
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although no assurances can be given, MDI anticipates opening additional
MVA centers and may seek to develop other opportunities in niche
rehabilitation markets.
The MDI Merger
--------------
Upon the Merger, ANMR issued 6,670,157 shares of ANMR Common Stock
and 2,331,722 Warrants and also paid an aggregate of $11,196,102
(exclusive of any payments in lieu of the issuance of fractional
shares) to the holders of common stock, $.01 par value per share, of
MDI (the "MDI Common Stock"). The outstanding options and warrants for
the purchase of an aggregate of 560,894 shares of MDI Common Stock
became exercisable for ANMR Common Stock, ANMR Warrants and/or cash.
Pursuant to the Merger Agreement, each share of MDI Common Stock was
exchangeable for (i) $8.00 in cash (the "Cash Consideration"), or (ii)
2.861 shares of ANMR Common Stock plus one Warrant (collectively, the
"Share Consideration"), or (iii) a combination of the Cash
Consideration and the Share Consideration, provided that not more than
37.5% of the MDI Common Stock could be exchanged for the Cash
Consideration. Based upon elections made by MDI Stockholders, the Cash
Consideration was pro rated so each stockholder who had elected the
Cash Consideration received $4.02 in cash, 1.423 shares of ANMR Common
Stock and .4975 of a Warrant for each MDI share exchanged.
The Cash Consideration was financed in part by a $9 million five-
year term loan facility and a $6 million revolving credit facility to
MDI from Chemical Bank, and guaranteed by ANMR and certain of MDI's
subsidiaries. The loan facilities are secured by a first lien on
specified assets of MDI, ANMR and certain designated subsidiaries, and
a pledge of ANMR's unescrowed shares of AMS Common Stock. The balance
of the loan proceeds was used to repay MDI's prior bank facility and
for general working capital.
Upon the Merger, the ANMR Board of Directors was increased from
seven to ten persons and John A. Lynch, Edward J. Connors and Milton L.
Glass, designees of the prior MDI Board, were added as directors to the
ANMR Board and Mr. Lynch was elected Senior Vice President of ANMR.
The ANMR Board also approved a change in the Company's fiscal year to
September 30, from December 31, to conform to the MDI fiscal year.
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RISK FACTORS
The shares of the Company's Common Stock issuable upon exercise of
the Warrants are speculative in nature and involve a high degree of
risk. In addition to the other information in this Prospectus, the
following information should be considered carefully by potential
purchasers in evaluating the Company and its business before making an
investment in the shares of Common Stock offered hereby:
Significant Indebtedness and Debt Service After Merger. The
financing related to the Merger has resulted in a high level of
indebtedness for the Company. At March 31, 1995, on a pro forma and
consolidated basis assuming that the Merger closed as of March 31,
1995, the Company would have had indebtedness for borrowed money of
approximately $21 million, including the current portion of long-term
debt of approximately $8 million, representing approximately 71% of
stockholders' equity. The Company's high level of indebtedness has
several important consequences, including, but not limited to: (i)
significant interest expense and principal repayment obligations
resulting in substantial annual fixed charges; (ii) significant
limitations on its ability to obtain financings, make capital
expenditures and acquisitions and take advantage of other significant
business opportunities that may arise; and (iii) increased
vulnerability to adverse general economic and industry conditions. In
addition, under the credit agreements with the bank, the Company will
be required to comply with significant affirmative and negative
covenants and financial ratios, including interest coverage, debt
service coverage and debt to tangible net worth. Non-compliance could
result in the acceleration of such indebtedness.
History of Net Losses. From its inception in 1983 until November
1992, ANMR was engaged exclusively in research and development
activities. In 1992, ANMR's transition to a manufacturing operation
was initiated with the first commercial sale of its 1.5T InstaScan
system and receipt of clearance from the FDA to market such system to
clinical institutions. From its inception through June 30, 1995, ANMR
had aggregate gross revenues of $11,861,000 from sales of the InstaScan
system and related products. ANMR's cash requirements have been
exceeding its resources due primarily to expenditures related to
research and development. ANMR, including consolidated results of AMS,
has incurred net losses of $3,547,000, $6,167,000 and $5,493,000 for
each of the fiscal years ended December 31, 1994, 1993 and 1992,
respectively. ANMR believes that, based on MDI's earnings history, the
additional cash flow to be provided by MDI after consummation of the
Merger could provide ANMR with net operating income commencing in
fiscal year 1996, assuming certain expected savings and efficiencies
are achieved.
Adverse Accounting and Tax Consequences of Goodwill. The Merger was
accounted for by the purchase method of accounting. Under this
accounting method, the majority of the purchase price for MDI --
approximately $29 million -- was allocated to the intangible asset
goodwill which represents approximately 47% of the total assets and
approximately 87% of the stockholders equity of the Company post-
Merger. The Company will incur an annual non-cash charge to operations
for the amortization of goodwill of approximately $1 million over the
next 30 years, which will not be deductible for income tax purposes.
No Assurance of Future Sources of Capital to Support and Grow
Business. The Company will require capital to finance its continued
investment in research and development, and to support and grow its
existing businesses, particularly its MRI technologies. Inasmuch as
ANMR expects to incur additional operating losses with respect to its
MRI technologies following the Merger and the bank facilities restrict
the ability of MDI to upstream funds to ANMR, there can be no assurance
that ANMR will have adequate working capital to fund these activities.
Volatility of Common Stock Price. The market price of the Company's
Common Stock historically has been volatile. Factors such as quarter-
to-quarter variations in revenues and announcements of technological
innovations or new products by ANMR or its competitors, customers or
suppliers could cause the market price of the Common Stock to fluctuate
significantly, even with the addition of the MDI business. In
addition, in recent years the stock markets in general, and the market
prices for diagnostic imaging service companies in particular, have
experienced
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significant volatility, which often may be unrelated to the operating
performance of the affected companies. Such volatility could adversely
affect the market price of the Company's Common Stock.
Lack of Dividends; Restrictions on Payment of Dividends. Neither
ANMR nor MDI has ever paid a dividend to its stockholders. The Company
intends to retain all available earnings, if any, generated by its
operations for the development and growth of its business and does not
anticipate paying any cash dividends on its Common Stock in the
foreseeable future. In addition, the payment of cash dividends is
restricted under the bank credit agreement.
Unpredictable Results of Healthcare Reform Initiatives. Many
competing proposals have been introduced in Congress and various state
legislatures to reform the present health care systems. The Company
cannot predict the health care reforms that may be enacted or the
effect that any such reforms may have on their respective businesses.
The ability of many of MDI's patients or health care providers to pay
for MDI's services depends upon governmental and private insurer
reimbursement policies. A significant change in these policies could
adversely affect MDI's businesses.
Reliance on Arrangement with GEMS. One of the products manufactured
by ANMR is the InstaScan System. The InstaScan retrofit has been
configured to only GEMS Signa Systems as ANMR had an exclusive
marketing arrangement with GEMS through December 31, 1994.
Reconfiguring its units to make InstaScan compatible with other
manufacturers' MRI systems would require substantial time and involve
substantial costs. There can be no assurance that any effort by ANMR
to make InstaScan compatible with other manufacturer's systems would
ultimately be successful.
Technological Development Limited By Third Party Patents. ANMR's
business is dependent upon the ability to offer systems which
incorporate the most current technology. This requires substantial
expenditures for research and development. In addition, some of this
technology is protected by patents and patent applications of others to
which ANMR has no rights. Such patents, if valid, may limit the
proposed business of ANMR to new technologies and new magnetic
resonance diagnostic methods outside the scope of such patents. In the
event that one or more patent holders were to assert a claim of
infringement with respect to any product or technology which ANMR may
develop, no assurance can be given that such claim would not be
successful, and if successful, that its impact on ANMR would not be
materially adverse.
Potential Adverse Impact of Competing Services and Equipment. The
health services and equipment industry is highly competitive. Since
ANMR develops imaging products that ultimately function as one
component part of a larger system, it is dependent in large part upon
manufacturers of such complete MRI systems to accept and endorse ANMR's
products. Most of these systems' manufacturers have the capability to
develop and manufacture imaging components, such as echo planar
imaging, similar to those developed by ANMR. There can be no assurance
that these manufacturers will continue to accept and endorse ANMR's
products. Some entities have, and others may develop, competing
products or services which may be superior to those proposed by ANMR
and/or AMS. Many of these other entities have greater resources and
more substantial marketing capabilities than ANMR and AMS.
Furthermore, in some cases, other imaging equipment such as PET
scanners, conventional x-rays, CAT scanners, nuclear medicine systems
and ultrasound systems may be used instead of MRI systems for certain
diagnostic procedures, and there are several other methods presently in
practice for the detection of breast cancer. These other equipment
systems may be less expensive to purchase, install and maintain and
involve lower patient charges for their use. MDI competes with
hospitals, private clinics, physicians and therapist rehabilitation
practices and other independent providers of rehabilitation services,
many of which possess greater financial resources or are better known
than MDI.
Potential Adverse Impact of Government Regulation. The manufacture,
marketing and use of magnetic resonance systems and MRI services are
subject to various federal and state regulations, including premarket
clearance by the FDA for the MRI Systems. Such clearance may take
considerable time to obtain and in some cases may not be granted.
Until required FDA or state approvals are obtained, neither
governmental agencies nor private
-8-
<PAGE>
insurers will reimburse AMS for the cost of magnetic resonance systems
and diagnostic procedures. Furthermore, reimbursement may not be
authorized even after approvals are granted or it may be delayed for
substantial periods after such approvals. The market for the Company's
products and services, particularly the MDI services, is also adversely
affected by state certificate of need ("CON") laws, which in some
states limit the establishment of new facilities and services as well
as the purchase of major medical equipment. There can be no assurance
that CONs can be obtained if needed and without a costly and time
consuming administrative process. In addition, federal and state
health care and related regulations are subject to constant change.
The Company cannot predict what changes may be enacted which may affect
its business or the manner in which its business would be affected by
such changes. In addition, manufacturers of medical devices are
subject to FDA regulations, including compliance with good
manufacturing practice regulations. There can be no assurance that
these laws and regulations will not have an adverse impact on the
Company in the future.
Potential Adverse Impact of Reliance on Governmental and Private
Reimbursement of Health Care Costs. ANMR products are used in both
clinical and research environments. Clinical customers will depend
upon governmental and private insurer reimbursement policies. In
addition, in most cases, the ability of patients or health care
providers to pay for the services which MDI provides depends upon
governmental and private insurer reimbursement policies. Consequently,
such policies have a direct effect on the ability of patients and
providers to use and pay for services rendered by ANMR customers to
these parties and the ability of patients and health care providers to
use and pay for MDI's services. As a result, any significant adverse
change in such reimbursement policies would likely adversely affect
ANMR's and MDI's business.
Under federal cost-containment legislation currently in effect,
hospital inpatients covered by Medicare are classified into diagnostic
related groups ("DRGs") in accordance with the patients' diagnoses, and
reimbursement to hospitals for these patients is limited to
predetermined amounts assigned to particular DRGs. Similarly, some
states limit reimbursement of health care costs by select payers
according to predetermined amounts. These predetermined amounts do not
necessarily cover all of the cost of the medical services actually
provided. Currently, the DRG program is not applicable to outpatient
services such as those generally provided MDI and, consequently, many
health care providers have an incentive to refer patients to diagnostic
imaging services on an outpatient basis. If in the future DRG program
is expanded to include outpatient services, MDI's business may be
materially and adversely affected.
Most health care insurers compensate a service provider, such as
MDI, for a percentage of its charge for MRI scans based upon the
"reasonable and customary" fee for such service for that geographical
area. The determination of what is "reasonable and customary" is in
the insurer's sole discretion. As a result, MDI must seek the payment
balance, if any, directly from the patient, which, given the costs of
debt collection, may be impractical. In addition, certain states,
including Massachusetts, prohibit this so-called "balance billing" of
patients under certain circumstances, and in other states, MDI has
agreed with one or more insurers not to balance bill their patients.
MDI also contracts with managed care payers for a negotiated fee-per-
scan which is usually substantially below MDI's charge for such scans.
If the percentage of patients insured by managed care payers
substantially increases, or if managed care payers substantially reduce
the fee-per-scan they are willing to pay, MDI could be materially and
adversely affected. Additionally, if a substantial number of private
insurers were to adopt diagnostic related group-type reimbursement
schedules and if these schedules did not permit MDI to profitably
provide MRI services, MDI would be materially and adversely affected.
Dependence on, and Need for, Key Personnel. Because of the
specialized nature of its business, the Company is dependent upon the
efforts of its current officers and employees, and upon its ability to
attract and retain technically qualified personnel. The loss of the
services of Jack Nelson, Chairman of the Board and Treasurer of ANMR or
John A. Lynch, President of MDI and Senior Vice President of ANMR,
could materially adversely affect the Company. There is intense
competition for qualified personnel in the MRI industry, including
competition from companies with substantially greater resources than
the Company. There can be no assurance that the Company
-9-
<PAGE>
will be successful in recruiting or retaining personnel of the
requisite scientific caliber or in the requisite numbers to enable the
Company to conduct its business as planned.
USE OF PROCEEDS
Assuming all the Warrants are exercised, the Company will receive
net proceeds of approximately $8,700,000, after payment of certain
expenses. The Company estimates that the expenses will be
approximately $30,000. The proceeds to be received by the Company upon
the exercise of the Warrants will be utilized for research and
development by ANMR, marketing and working capital purposes.
DESCRIPTION OF SECURITIES
The Company's authorized capital stock currently consists of
50,000,000 shares of Common Stock. As of September 5, 1995, 30,238,571
shares of Common Stock were issued and outstanding.
Common Stock
Holders of the Company's Common Stock are entitled to one vote per
share on all matters submitted to a vote of stockholders of the Company
and to receive dividends when, as and if declared by the Company's
Board from funds legally available therefor. Upon liquidation of the
Company, holders of Common Stock are entitled to share ratably in any
assets available for distribution to stockholders after payment of all
obligations of ANMR and priority payments to any senior class of
capital stock. Holders of the Common Stock do not have cumulative
voting rights or preemptive, subscription or conversion rights.
Warrants
General. The Warrants were issued under the Warrant Agreement. The
description of the Warrant Agreement set forth below does not purport
to be complete and is qualified in its entirety by reference to the
Warrant Agreement.
Each Warrant initially entitles the holder thereof to purchase one
share of Common Stock at an exercise price of $3.75 (the "Exercise
Price"). The Exercise Price and the number of shares of Common Stock
issuable upon the exercise of each Warrant are subject to adjustment in
certain events described below. Each Warrant may be exercised on or
after the issuance thereof and until 5:00 p.m., New York City time, on
the earlier of August 30, 2000 or the date fixed for redemption of the
Warrants (as described below) in accordance with the terms of the
Warrants and the Warrant Agreement. To the extent that any Warrant
remains outstanding after such time, such unexercised Warrant will
automatically terminate.
Exercise. Warrants may be exercised by surrendering to the Warrant
Agent, American Stock Transfer & Trust Company (the "Warrant Agent") a
signed Warrant certificate indicating the warrantholder's election to
exercise all or a portion of the Warrants evidenced by such
certificate. Surrendered certificates must be accompanied by payment
of the aggregate Exercise Price in respect of the Warrants to be
exercised, which payment may be made in cash or by certified or
official bank check payable to the order of the Company. No
adjustments as to cash dividends with respect to the Common Stock will
be made upon any exercise of Warrants.
If fewer than all the Warrants evidenced by any certificate are
exercised, the Warrant Agent will deliver to the exercising
warrantholder a new Warrant certificate representing the unexercised
Warrants. The Company will not be required to issue fractional shares
of its Common Stock upon exercise of any Warrant, and in lieu thereof
will pay an amount equal to the same fraction of the current market
value per share of Common Stock, determined as provided in the Warrant
Agreement.
-10-
<PAGE>
Antidilution and Exercise Price Adjustments. The number of shares
of Common Stock purchasable upon the exercise of each Warrant and the
Exercise Price are subject to adjustment in connection with (a) the
issuance of a stock dividend to holders of Common Stock, or a
combination or subdivision of Common Stock, and (b) certain
distributions by the Company to the holders of Common Stock of
evidences of indebtedness or of its assets (excluding cash dividends or
distributions out of earnings or out of surplus legally available for
dividends) or of convertible securities, all as set forth in the
Warrant Agreement. Notwithstanding the foregoing, no adjustment in the
Exercise Price will be made until cumulative adjustments require an
adjustment of at least $.05.
In case of any reclassification, capital reorganization or other
change to the Common Stock, or any consolidation or merger of the
Company with or into another corporation, or any sale or conveyance of
the property of the Company as an entirety or substantially as an
entirety, the Warrant Agreement will require that effective provisions
will be made so that each holder of an outstanding Warrant will have
the right thereafter to exercise his or her Warrant for the kind and
amount of securities and property receivable in connection with such
reclassification, capital reorganization, consolidation, merger or sale
by a holder of the number of shares of Common Stock for which such
Warrants were exercisable immediately prior thereto. Furthermore, if
the Company grants to the holders of Common Stock rights or warrants or
options to purchase the Company's Common Stock or securities
convertible into or exchangeable or exercisable for Common Stock, the
Company shall concurrently grant to each warrantholder the rights,
warrants or options to which such warrantholder would have been
entitled if such warrantholder were the holder of the number of shares
of Common Stock then issuable upon exercise of his or her Warrants.
Redemption. All, but not less than all, of the Warrants then
outstanding may be redeemed at the option of the Company, at a
redemption price of $.05 per Warrant, in the event that the Market
Price (as hereinafter defined) of the Common Stock has been at least
$4.50 per share (the "Target Price"). For this purpose, "Market Price"
means the average closing price reported for ANMR Common Stock on the
NASDAQ National Market System (or other principal market) for any
twenty consecutive trading days. If the Common Stock is subdivided or
combined into a greater or smaller number of shares, the Target Price
will be proportionately adjusted.
The Company must give irrevocable notice of its election to redeem
the Warrants no more than ten trading days following the end of the
twenty consecutive day period referred to in the preceding paragraph.
Notice of redemption will be mailed to warrantholders not more than 30
days nor less than 20 days before the date fixed for redemption, and in
any event not more than five trading days following delivery of the
notice to the Warrant Agent referred to in the preceding sentence. Any
Warrant so called for redemption may be exercised until 5:00 p.m., New
York City time, on the business day immediately preceding the date
fixed for redemption, and immediately thereafter any such Warrant, to
the extent not exercised, will represent only the right to receive,
upon surrender, the redemption price therefor.
Reports
The Company furnishes to its stockholders and will furnish to its
warrantholders, after the close of each fiscal year, an annual report
containing audited financial statements. In addition, the Company may
furnish to its stockholders and warrantholders such other reports as
may be authorized, from time to time, by its Board of Directors.
Transfer Agent, Registrar and Warrant Agent
American Stock Transfer & Trust Company, 40 Wall Street, 46th Floor,
New York, New York 10005, is the transfer agent, registrar and Warrant
Agent for the securities of the Company.
-11-
<PAGE>
PLAN OF DISTRIBUTION
No underwriter is being utilized in connection with this offering or
with the exercise of the Warrants. The 2,331,722 shares of ANMR Common
Stock are issuable upon exercise of the Warrants.
The Company is registering the shares of Common Stock issuable upon
exercise of the Warrants and not the resale thereof by the holders of
the shares of Common Stock after such exercise.
EXPERTS
The audited consolidated financial statements of ANMR as of December
31, 1994 and 1993, and for the three years ended December 31, 1994,
which have been incorporated by reference in this Prospectus, have been
audited by Richard A. Eisner & Company, LLP, independent public
accountants, as indicated in their reports with respect thereto which
are incorporated by reference in this Prospectus in reliance upon the
authority of said firm as experts in accounting and auditing.
The financial statements of MDI and its subsidiaries as of September
30, 1994 and 1993 and for the three years ended September 30, 1994,
which have been incorporated by reference in this Prospectus, have been
audited by Arthur Andersen LLP, independent public accountants, as
indicated in their reports with respect thereto which appears elsewhere
herein, are incorporated by reference in this Prospectus in reliance
upon the authority of said firm as experts in accounting and auditing.
LEGAL MATTERS
Legal matters relating to the Common Stock will be passed upon for
the Company by Reid & Priest LLP, 40 West 57th Street, New York, New
York 10019.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission,
Washington, D.C., a Registration Statement on Form S-3 under the
Securities Act of 1933, as amended, covering the securities offered
hereby. For further information with respect to the Company and the
securities offered hereby, reference is made to the Registration
Statement and to the exhibits filed as part thereof. Such information
is available for inspection at the Public Reference Section maintained
by the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.
Copies of the materials contained in the Registration Statement may be
obtained from the Commission upon payment of the fees prescribed by its
rules and regulations. Statements contained in this Prospectus as to
the contents of any contract or other document referred to are not
necessarily complete. In each instance, reference is made to the copy
of such contract or other document filed as an exhibit to the
Registration Statement, each such statement being qualified in all
respects by such reference.
-12-
<PAGE>
=======================================================================
TABLE OF CONTENTS
Page
----
Available Information . . . . . . . . . . . . . . . . . . . . 2
Incorporation of Certain Information
by Reference. . . . . . . . . . . . . . . . . . . . . . . . 2
The Company . . . . . . . . . . . . . . . . . . . . . . . . . 3
Risk Factors . . . . . . . . . . . . . . . . . . . . . . . . 7
Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . . 10
Description of Securities. . . . . . . . . . . . . . . . . . 10
Plan of Distribution. . . . . . . . . . . . . . . . . . . . . 12
Experts . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Legal Matters . . . . . . . . . . . . . . . . . . . . . . . . 12
Additional Information. . . . . . . . . . . . . . . . . . . . 12
-----------------
No dealer, salesman, or any other person has been authorized to give
any information or to make any representations or projections of future
performance other than those contained in this Prospectus, and any such
other information, projections, or representations if given or made
must not be relied upon as having been so authorized. The delivery of
this Prospectus or any sale hereunder at any time does not imply that
the information herein is correct as of any time subsequent to its
date. This Prospectus does not constitute an offer to sell or a
solicitation of any offer to buy any of the securities offered hereby
in any jurisdiction to any person to whom it is unlawful to make such
offer or solicitation.
======================================================================
ADVANCED NMR
SYSTEMS, INC.
2,331,722 shares of Common Stock
Issuable Upon Exercise of
2,331,722 Common Stock Purchase
Warrants
---------------
PROSPECTUS
---------------
________, 1995
=======================================================================
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The expenses payable by the Registrant in connection with the
issuance and distribution of the securities being registered (other
than underwriting discounts and commissions) are estimated to be as
follows:
Registration Fees . . . . . . . . $ 3,015.16
Accounting Fees and Expenses . . 1,000.00
Legal Fees and Expenses . . . . . 17,500.00
Miscellaneous . . . . . . . . . . 8,484.84
----------
Total Expenses . . . . . . . . . $30,000.00
Item 15. Indemnification of Officers and Directors
Section 145 of the Delaware General Corporation Law ("DGCL")
permits indemnification of officers, directors, employees and agents in
certain circumstances. Section 145 also provides that a corporation
may maintain insurance against liabilities for which indemnification is
not expressly provided by statute.
Article Seventh of Advanced NMR's Certificate of Incorporation, as
amended (the "Advanced NMR Articles"), provides for indemnification of
the directors, officers, employees and agents of Advanced NMR to the
full extent then permitted by the DGCL.
Article V of Advanced NMR's Amended and Restated By-Laws (the
"Advanced NMR By-Laws") provides for indemnification by Advanced NMR of
any person (and the heirs and legal representatives of such person)
made or threatened to be made a party to any threatened pending or
completed claim, action, suit or proceeding, by reason of the fact that
he is or was a director, officer, employee or agent of Advanced NMR or
any constituent corporation absorbed in a consolidation or merger, or
serves or served with another corporation, partnership, joint venture,
trust or other enterprise at the request of Advanced NMR or any such
constituent corporation. Article V permits Advanced NMR to provide any
of the above described persons advances for expenses incurred in
defending any such action, suit or proceeding, upon receipt of an
undertaking to repay such advances if he is not entitled to
indemnification. Article V limits the personal liability of any such
person to the fullest extent permitted by the DGCL. Article V also
provides that Advanced NMR may purchase and maintain insurance, at its
expense, on behalf of any person who is or was a director, officer,
employee or agent of Advanced NMR, or is or was serving at the request
of Advanced NMR in such capacity for another corporation or other
enterprise.
Under the Merger Agreement, Advanced NMR has agreed that, to the
fullest extent permitted by the DGCL, from and after the Effective
Time, Advanced NMR shall indemnify, defend and hold harmless the
present and former officers, directors and employees of MDI or any of
its subsidiaries (the "Indemnified Parties") against all losses,
claims, damages, costs, expenses, liabilities, or, with the approval of
Advanced NMR, amounts paid in settlement in connection with any claim,
action, suit, proceeding or investigation which is in whole or in part
based on, or arising out of the fact that such person is or was a
director, officer or employee of MDI or any of its subsidiaries
("Indemnified Liabilities"), pertaining to any matter existing or
occurring at or prior to the Effective Time and all Indemnified
Liabilities which are in whole or in part based on, or arising out of,
or pertaining to the Merger Agreement or the transactions contemplated
thereby, except for a claim arising or based upon the gross negligence
or willful misconduct of the Indemnified Party. Also, for a period of
six years from the Effective Time the Advanced NMR Articles and the
Advanced NMR By-Laws shall contain indemnification provisions no less
favorable than those set forth in the MDI Articles and the MDI By-Laws.
II-1
<PAGE>
In addition, under the Merger Agreement Advanced NMR has agreed
that it will maintain for a period of six years after the Effective
Time the current policies of directors' and officers' liability
insurance maintained by MDI to the extent that such policies are
available at a cost of not greater than two times the current annual
amount paid by MDI (the "Cap") so that if comparable coverage can be
obtained only by paying an annual premium in excess of the Cap,
Advanced NMR shall only be required to obtain as much coverage as can
be obtained by paying an annual premium equal to the Cap.
Item 16. Exhibits
The Exhibits listed below either are incorporated herein by
reference or filed herewith.
Exhibit No. Description
----------- -----------
2 Agreement and Plan of Merger among Advanced NMR
Systems, Inc. ("Advanced NMR"), ANMR Acquisition
Corp. and Medical Diagnostics, Inc. ("MDI"), dated
May 2, 1995 (incorporated by reference to Exhibit 2
filed with Advanced NMR's Registration Statement on
Form S-4, and amendment thereto, declared effective
on August 3, 1995 (File No. 33-95320) ("S-4
Registration Statement")).
4.1.1 Warrant Agreement between Advanced NMR and American
Stock Transfer & Trust Company, as Warrant Agent,
relating to the Common Stock Purchase Warrants
(incorporated by reference to Exhibit 4.1.1 to the
S-4 Registration Statement).
4.1.2 Warrant Certificate (incorporated by reference to
Exhibit 2.1 filed with Advanced NMR's Registration
Statement on Form 8-A, declared effective August
31, 1995).
4.2 Specimen Certificate for Common Stock, par value
$.01 per share, of Advanced NMR (incorporated by
reference to Exhibit 4.2 to the S-4 Registration
Statement).
4.3.1 Form of Supplemental Agreement relating to Advanced
NMR's assumption of MDI's Obligations under the
Warrant Agreement between MDI and First Albany
Corporation and Janney Montgomery Scott, Inc. dated
as of February 5, 1992 (incorporated by reference
to Exhibit 4.3.1 of the S-4 Registration
Statement).
4.3.2 Form of Supplemental Agreement relating to Advanced
NMR's assumption of MDI's Obligations under the
Warrant Agreement between MDI and Jacob Agam dated
as of February 12, 1992 (incorporated by reference
to Exhibit 4.3.2 of the S-4 Registration
Statement).
4.4 Form of Warrant Certificate, dated as of March 6,
1994, issued to Dominick & Dominick, Incorporated
(incorporated by reference to Exhibit 4.4 of the S-
4 Registration Statement).
5* Opinion of Reid & Priest LLP as to the legality of
the Advanced NMR Common Stock being registered
hereunder.
23.1* Consent of Richard A. Eisner & Company, LLP,
independent public accountants for Advanced NMR.
23.2* Consent of Arthur Andersen LLP, independent public
accountants for MDI.
23.3* Consent of Reid & Priest, LLP (included in Exhibit
5).
----------------
* Filed herewith.
II-2
<PAGE>
Exhibit No. Description
----------- -----------
24* Power(s) of Attorney (included on signature page of
this Registration Statement on Form S-3).
Item 17. Undertakings
The 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 the registration
statement or any material change to such information in the
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 post-effective
amendment any of the securities being registered which remain unsold at
the termination of the offering.
(4) That, for purposes of determining any liability under the
Securities Act of 1933, each filing of the Registrant's annual report
pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of
1934 (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to 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 offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering
thereof.
(5) 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 or Regulation S-X is 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.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, and
controlling persons of the Registrant pursuant to the foregoing
provisions, or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is, therefore,
unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer, or controlling person of the
Registrant 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
II-3
<PAGE>
registered, the Registrant 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 of
1933 and will be governed by the final adjudication of such issue.
II-4
<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 Wilmington,
State of Massachusetts, on the 14th day of September, 1995.
ADVANCED NMR SYSTEMS, INC.
By: /s/ Jack Nelson
-------------------------------------
Jack Nelson, Chairman of the Board and
Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Advanced NMR Systems,
Inc., hereby severally constitute Jack Nelson and Charles Moche and
each of them singly, our true and lawful attorneys with full power to
them, and each of them singly, to sign for us and in our names in the
capacities indicated below the Registration Statement filed herewith
and any and all amendments to said Registration Statement, and
generally to do all such things in our name and behalf in our
capacities as officers and directors to enable Advanced NMR Systems,
Inc. to comply with the provisions of the Securities Act of 1933, as
amended, and all requirements of the Securities and Exchange
Commission, hereby ratifying and confirming our signatures as they may
be signed by our said attorneys, or any of them, to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of 1933, the
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Jack Nelson Chairman of the Board September 14, 1995
----------------------- (Principal Executive
Jack Nelson Officer)
/s/ Robert S. Spira Vice Chairman of the September 14, 1995
----------------------- Board
Robert S. Spira
/s/ Charles Moche Chief Financial September 14, 1995
----------------------- Accounting Officer
Charles Moche (Principal Financial
and Accounting Officer)
/s/ George Aaron Director September 14, 1995
-----------------------
George Aaron
Director
-----------------------
Edward J. Connors
Director
-----------------------
Milton L. Glass
/s/ Enrique Levy Director September 14, 1995
-----------------------
Enrique Levy
/s/ John A. Lynch Director September 14, 1995
-----------------------
John A. Lynch
Director
-----------------------
George A. Silver
/s/ Leonard A. Toboroff Director September 14, 1995
-----------------------
Leonard A. Toboroff
/s/ Sol Triebwasser Director September 14, 1995
-----------------------
Sol Triebwasser
II-5
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description
----------- -----------
5 Opinion of Reid & Priest LLP as to the legality of the
Advanced NMR Common Stock being registered hereunder.
23.1 Consent of Richard A. Eisner & Company, LLP, independent
public accountants for Advanced NMR.
23.2 Consent of Arthur Andersen LLP, independent public
accountants for MDI.
23.3 Consent of Reid & Priest, LLP (included in Exhibit 5).
24 Power(s) of Attorney (included on signature page of this
Registration Statement on Form S-4.)
REID & PRIEST LLP
A New York Registered Limited Liability Partnership
40 West 57th Street
New York, NY 10019-4097
Telephone 212 603-2000
Fax 212 603-2298
Exhibit 5
(212) 603-6780
New York, New York
September 12, 1995
Advanced NMR Systems, Inc.
46 Jonspin Road
Wilmington, MA 01887
Gentlemen:
We have acted as counsel to Advanced NMR Systems, Inc.,
a Delaware corporation ("Advanced NMR"), in connection with the
preparation of a Registration Statement on Form S-3 (the
"Registration Statement") under the Securities Act of 1933, as
amended (the "Securities Act"), relating to the registration of
2,331,722 shares of Advanced NMR Common Stock, issuable upon
exercise of up to 2,331,722 Advanced NMR Common Stock Purchase
Warrants (the "Advanced NMR Warrants").
This opinion is being rendered in connection with the
filing by Advanced NMR of the Registration Statement.
The Advanced NMR Warrants were issued under a Warrant
Agreement, dated as of August 31, 1995, between Advanced NMR and
American Stock Transfer & Trust Company, as Warrant Agent (the
"Warrant Agreement").
For purposes of this opinion, we have examined
originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Registration Statement; (ii) the Warrant
Agreement; (iii) the form of Warrant Certificate; (iv) the
Certificate of Incorporation and By-Laws of Advanced NMR, as in
effect on the date hereof; (v) resolutions adopted by the Board
of Directors of Advanced NMR relating to the approval of the
Warrant Agreement and the issuance and delivery of the Advanced
NMR Warrants; and (vi) such other documents, certificates or
other records as we have deemed necessary or appropriate.
Based upon the foregoing, and subject to the
qualifications hereinafter expressed, we are of the opinion that:
(1) Advanced NMR is a corporation duly organized,
validly existing and in good standing under the
laws of the State of Delaware.
(2) The Board of Directors of Advanced NMR has taken
such action as may be necessary to authorize the
Warrant Agreement and the issuance and delivery of
the Advanced NMR Warrants in connection therewith.
(3) The shares of Advanced NMR Common Stock included
in the Registration Statement to be issued upon
the exercise of the Advanced NMR Warrants will be
duly authorized and validly issued, and fully paid
and non-assessable when (i) the Registration
Statement shall have become effective under the
Act and (ii) the Advanced NMR Warrants shall have
been properly exercised and the exercise price
shall have been paid for in accordance with the
terms of the Warrant Agreement.
We are members of the Bar of the State of New York and
do not hold ourselves out as experts concerning, or qualified to
render opinions with respect to any laws other than the laws of
the State of New York, the Federal laws of the United States and
the General Corporation Law of the State of Delaware.
We hereby consent to the reference to this firm under
the caption "Legal Matters" in the Prospectus and to filing of
this opinion with the Securities and Exchange Commission as
Exhibit 5 to the Registration Statement. In giving the
foregoing consent, we do not thereby admit that we are in the
category of persons whose consent is required under Section 7
of the Securities Act, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Very truly yours,
/s/ Reid & Priest LLP
REID & PRIEST LLP
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
-----------------------------
We consent to the incorporation by reference in this
Registration Statement on Form S-3 of Advanced NMR Systems, Inc.
(the "Company") of our report dated March 10, 1995 on the
consolidated financial statements of the Company as of December
31, 1994 and 1993 and for each of the years in the three-year
period ended December 31, 1994 appearing in the Company's Annual
Report on Form 10-K for the year ended December 31, 1994. We
also consent to the reference to our firm under the caption
"Experts" included in the Registration Statement.
/s/ Richard A. Eisner & Company, LLP
Richard A. Eisner & Company, LLP
Cambridge, Massachusetts
September 6, 1995
EXHIBIT 23.2
[Letterhead of Arthur Andersen LLP]
Consent of Independent Public Accountants
-----------------------------------------
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form
S-3 of our reports dated November 16, 1994 (except with respect
to matters discussed in Note 12, as to which the date is January
9, 1995) on the consolidated financial statements of Medical
Diagnostics, Inc. and its subsidiaries as of September 30, 1994
and 1993 and for each of the three fiscal years ended September
30, 1994 which are included in the Joint Proxy Statement of
Advanced NMR Systems, Inc. and Medical Diagnostics, Inc. dated
August 3, 1995 which is incorporated by reference into this
Registration Statement.
We also consent to the reference to us under the heading
"experts" in such Prospectus.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
Boston, Massachusetts
September 7, 1995
