As filed with the Securities and Exchange Commission on April 21, 1999
Registration No. 333-68271
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
AMENDMENT NO. 4 TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3152648
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
200 NORTH WESTLAKE BOULEVARD, SUITE 202,
WESTLAKE VILLAGE, CALIFORNIA 91362 (805) 381-2700
(Address, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
----------------------
STEPHEN ROSS
DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
200 NORTH WESTLAKE BOULEVARD, SUITE 202
WESTLAKE VILLAGE, CALIFORNIA 91362
(805) 381-2700
(Name, Address, Including Zip Code, and Telephone Number,
Including Area Code, of Agent For Service)
----------------------
Copies to:
MURRAY MARKILES, ESQ.
TROOP STEUBER PASICH REDDICK & TOBEY, LLP
2029 CENTURY PARK EAST, 24TH FLOOR
LOS ANGELES, CALIFORNIA 90067
(310) 728-3000
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of this Registration Statement.
If the only securities 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, 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 for the same
offering. [ ]
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 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. [ ]
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.
<PAGE>
PROSPECTUS
DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
100,000 SHARES OF COMMON STOCK
This is an offering of 100,000 shares of common stock of Dental/Medical
Diagnostic Systems, Inc. Chrysalis Dental, Inc., the selling stockholder named
in this prospectus is offering all of the shares to be sold in the offering.
Dental/Medical will not receive any of the proceeds from the offering.
The common stock is quoted on the Nasdaq SmallCap Market under the symbol
"DMDS" and on the Boston Stock Exchange under the symbol "DMD." On April 19,
1999, the high and low prices of the Common Stock on the Nasdaq SmallCap Market
was $8.06 and $7.88, respectively, and the bid and the ask prices of the
Common Stock on the Boston Stock exchange was $8.25 and $8.75, respectively.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THE PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE
MAY NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER
TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE
SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
INVESTING IN THE SHARES INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
---------------
The date of this prospectus is April 21, 1999
Page 2
<PAGE>
TABLE OF CONTENTS
PAGE
----
ABOUT DENTAL/MEDICAL DIAGNOSTIC SYSTEMS..................................4
RISK FACTORS.............................................................5
USE OF PROCEEDS.........................................................12
SELLING STOCKHOLDER.....................................................13
PLAN OF DISTRIBUTION....................................................14
WHERE YOU CAN FIND MORE INFORMATION.....................................15
LEGAL MATTERS...........................................................16
EXPERTS.................................................................16
Page 3
<PAGE>
ABOUT DENTAL/MEDICAL DIAGNOSTIC SYSTEMS
Dental Medical Diagnostic Systems, Inc. designs, develops, manufactures and
sells high technology dental equipment. Our primary product emphasis for
approximately the past two years has been on the manufacture and sale of an
intraoral camera system known as the "TeliCam II System," an updated version of
the intraoral camera system, the "TeliCam Elite," and an intraoral camera
network known as the InTELInet, for use in connection with the TeliCam II
System. TeliCam System II and Elite systems sales have recently been below
levels of prior comparable periods, a trend that we expect to continue. However,
during approximately the last twelve months our primary product emphasis has
begun to shift toward a tooth whitening and curing device known as the Apollo
95E, which we now market both domestically and internationally. We believe that
the Apollo 95E produces faster results than other products currently available
in the marketplace. This product is designed to harden composite material in
three seconds or less, and to produce teeth whitening in a dental office in less
than one hour.
We also began marketing the whitening materials, Apollo Secret, to be used with
the Apollo 95E in November 1998. We plan to begin marketing the chemical
composite filling material, Apollo Cure, also for use with the Apollo 95E,
during the second quarter of 1999. Apollo Secret power whitening offers the
following benefits:
o a reduction of patient discomfort;
o the procedure can be performed by a dental assistant or
hygienist in most states (generally in less than 40
minutes);
o the ability to whiten the patient's teeth up to ten shades
lighter; and
o no surface damage to the tooth enamel or pulp.
We have the exclusive rights to market products to the dental market
incorporating certain digital x-ray technology being developed by Suni Imaging
Microsystems, Inc. Suni will keep the rights to developed microchip technology
underlying the x-ray system it develops for us. Digital x-ray systems, including
competitive systems currently on the market, reduce radiation exposure compared
to conventional x-ray systems and allow dentists to view x-ray images in
real-time without the time-consuming process of film development and eliminate
the need to use and dispose of chemicals required to develop conventional x-ray
film. The technology being developed for us by Suni, if successfully developed,
will provide the following benefits:
o an improved image quality digital x-ray system;
o a price expected to be lower than competitive systems; and
o database storage and recall of images for comparison
purposes similar to competitive systems.
We plan to launch this product internationally beginning in the third quarter of
1999 but do not guarantee that we will achieve this schedule. If our digital
x-ray technology is successfully developed, marketing of this technology
domestically will begin if, and when, FDA approval is granted. We cannot assure
you that the FDA will approve our 510(k) filing.
Dental/Medical was organized in New York in 1981 under the name Edudata
Corporation and reincorporated in Delaware in 1983. Dental/Medical's principal
executive offices are located at 200 North Westlake Boulevard, Suite 202,
Westlake Village, California 91362, (805) 381-2700.
Page 4
<PAGE>
RISK FACTORS
Investment in the shares covered by this prospectus involves a significant
degree of risk. You should carefully consider all of the information in this
prospectus, and, in particular, should evaluate the following risks related to
an investment in the shares.
WE HAVE A LIMITED OPERATING HISTORY UPON WHICH TO EVALUATE OUR LIKELIHOOD OF
SUCCESS.
We have only manufactured and distributed our TeliCam systems since October 1995
and manufactured and distributed our Apollo 95E since March 1998. Therefore, we
have a limited relevant operating history upon which to evaluate the likelihood
of our success. Factors such as the risks, expenses and difficulties frequently
encountered in the operation and expansion of a relatively new business and the
development and marketing of new products must be considered in evaluating the
likelihood of success of our company.
WE HAVE A HISTORY OF LOSSES AND ACCUMULATED DEFICIT AND THIS TREND OF LOSSES MAY
CONTINUE IN THE FUTURE.
For the period from October 23, 1995 to March 2, 1996 we had a net loss of
$1,625,213. For the fiscal year ended December 31, 1997 we had a net loss of
$2,044,729 and for the fiscal year ended December 31, 1998 we had a net loss of
$1,816,702. At December 31, 1998, our accumulated deficit was $5,349,493. Our
ability to obtain and sustain profitability will depend, in part, upon the
successful marketing of our existing products and the successful and timely
introduction of new products. Although the Company was profitable in the quarter
ended December 31, 1998, there can be no assurance that the Company will
continue to be profitable.
FLUCTUATION IN QUARTERLY RESULTS MAY RESULT IN DECLINES IN OUR STOCK PRICE.
Certain quarterly influences may affect our business. Sales are generally higher
in the fourth quarter due to the purchasing patterns of dentists in the United
States and are generally lower in the first quarter due primarily to the effect
upon demand of increased purchases in the prior quarter. It is also expected
that our business will experience lower sales in the summer months as a
consequence of holiday vacations and a lesser number of trade shows. These
fluctuations could result in significant fluctuations, including significant
declines in our stock price.
ONE OF OUR PRIMARY PRODUCTS HAS HAD A SIGNIFICANT DECLINE IN SALES AND IF THIS
DECLINE CONTINUES WE MAY NOT BE ABLE TO ACHIEVE PROFITABILITY.
The TeliCam systems, together with related products such as the InTELInet
system, and the Apollo 95E have been our primary products and during the last
nine months have made up a substantial portion of our revenue. We believe that
the market for intraoral cameras, such as the TeliCam systems, is a market that
has declined. TeliCam systems sales have recently been below levels of prior
comparable periods, a trend which we expect to continue. For example, TeliCam
systems sales for the year ended December 31, 1998 were approximately $6,500,000
as compared to approximately $15,300,000 for TeliCam systems sales for the year
ended December 31, 1997.
Page 5
<PAGE>
AS A RESULT OF THE DECLINE IN SALES OF THE TELICAM, OUR FUTURE DEPENDS ON OUR
ABILITY TO DEVELOP AND INTRODUCE NEW PRODUCTS.
As a result of the decline in the intraoral camera market, our future depends
upon our ability to develop and successfully introduce new products to make up
for the diminished sales of the Telicam systems. Development of new product
lines is risk intensive and often requires:
o long-term forecasting of market trends;
o the development and implementation of new designs;
o compliance with extensive governmental regulatory requirements; and
o a substantial capital commitment.
Also, the medical and dental device industry is characterized by rapid
technological change. As technological changes occur in the marketplace, we may
have to modify our products in order to become or remain competitive or ensure
that our products do not become obsolete. If we fail to anticipate or respond in
a cost-effective and timely manner to government requirements, market trends or
customer requirements, or if there are any significant delays in product
development or introduction, this could have a material adverse effect on our
business.
IF WE ARE UNABLE TO RAISE ADDITIONAL CAPITAL TO FINANCE RESEARCH AND DEVELOPMENT
OF OUR NEW PRODUCTS WE MAY BE FORCED TO FOREGO THE DEVELOPMENT OF NEW PRODUCTS
AND POSSIBLY EVEN LIMIT CURRENT OPERATIONS.
We anticipate that we will need additional capital during the calendar year 1999
to satisfy our expected increased working capital and research and development
requirements for our planned new products. We are currently exploring
alternatives to fulfill these requirements, but cannot assure you that
additional financing will be available when needed or that, if available, it
will be on terms favorable to us or our stockholders. If needed funds are not
available, we may be required to limit or forego the development of new products
or even limit current operations, which could have a material adverse effect on
our business, operating results and financial condition. If we raise needed
funds through the sale of additional shares of our common stock it may result in
dilution to current stockholders.
Page 6
<PAGE>
WE SUBSTANTIALLY DEPEND UPON THIRD PARTIES FOR SEVERAL CRITICAL ELEMENTS OF OUR
BUSINESS, INCLUDING THE DEVELOPMENT AND LICENSING FOR DISTRIBUTION OF OUR
PRODUCTS AND IF THESE THIRD PARTIES DO NOT DELIVER WE MAY BE FORCED TO LIMIT
OPERATIONS.
We are dependent upon third party developers and suppliers for the development
and manufacture of all of the components used in our dental equipment and for
the development and manufacture of our consumable products. Outside of updating
our current products, we do not develop any of our technology. Instead of
developing technology, we continually seek out third parties that own new and
innovative technology that they may be willing to license to us or develop into
new dental products under a development agreement. We have had problems in the
past obtaining a marketable product from companies with whom we had entered into
a licensing arrangement. We entered into a licensing agreement with Ion Laser
Technology under which ILT was unable to develop a product in accordance with
the delivery schedule established by our agreement that met our specifications;
as a result, we were forced to find an alternative product to that which we had
contracted with ILT.
Under licensing and development arrangements we have obtained exclusive
marketing rights to products for the dental market incorporating certain digital
x-ray technology developed by Suni. We have paid significant non-refundable
advances to, and are dependant upon Suni to successfully develop the digital
x-ray technology and to commercialize the digital x-ray technology. We do not
guarantee that Suni will be successful in this endeavor. If Suni should not
develop a digital x-ray product which is accepted in the marketplace, and has
sufficient sales to achieve profits, this could have a material adverse effect
on our future prospects.
IF WE DO NOT MAKE CERTAIN REQUIRED MINIMUM ROYALTY PAYMENTS TO SUNI, WE WILL
LOSE OUR EXCLUSIVE RIGHTS TO THE DIGITAL X-RAY TECHNOLOGY DEVELOPED FOR US BY
SUNI.
In order to maintain our rights to be the exclusive dental licensee of the
digital x-ray technology developed by Suni, our agreement with Suni requires us
to make minimum royalty payments. The royalty payments begin coming due when
products incorporating the developed technology are introduced to the market. We
cannot guarantee that we will be able to make the minimum royalty payments
required to maintain our rights to be the exclusive distributor. If we do not
make the required royalty payments, Suni will be able to license the developed
technology to our competitors, or grant an exclusive license to a competitor,
which could have a material adverse effect on our operating results and
financial condition.
Page 7
<PAGE>
THE GOVERNMENT EXTENSIVELY REGULATES OUR PRODUCTS AND FAILURE TO COMPLY WITH
APPLICABLE REGULATIONS COULD RESULT IN FINES, SUSPENSIONS, SEIZURE ACTIONS,
PRODUCT RECALLS, INJUNCTIONS AND CRIMINAL PROSECUTIONS.
The United States Food and Drug Administration, as well as state and foreign
agencies, regulate almost all aspects of our medical devices including:
o entry into the marketplace;
o design;
o testing;
o manufacturing procedures;
o reporting of complaints;
o labeling; and
o promotional activities.
Under the Federal Food, Drug, and Cosmetic Act, FDA has the authority to control
the introduction of new products into the marketplace. Unless specifically
exempted by the agency, medical devices enter the marketplace through either FDA
clearance of premarket approval application or FDA approval of an application
for 510k clearance. FDA conducts periodic inspections to assure compliance with
it's regulations.
Unless specifically exempted by FDA's regulations, we will need to file a 510k
submission or PMA application for any new products developed in the future
including any using digital x-ray technology. The process of obtaining a
clearance or approval can be time-consuming and expensive. Compliance with FDA's
regulatory requirements can be expensive and time consuming. We do not guarantee
that the required regulatory approvals or clearances will be obtained. Any
approval or clearance obtained from FDA may, include significant limitations on
the use of the medical device which is the subject of the approval or clearance.
We cannot market a medical device if needed FDA approval or clearance is not
granted. Inability to obtain such approval or clearance could result in a delay
or suspension of the manufacture and sale of affected medical devices. Any such
delay or suspension would have a material adverse effect on our business. In
addition, changes in existing regulations or the adoption of new regulations
could make regulatory compliance by us more difficult in the future. The failure
to obtain the required regulatory clearances or to comply with applicable
regulations could result in one or more of the following:
o fines;
o delays or suspensions of device clearances;
o seizure actions;
o mandatory recalls;
o injunction action; and
o criminal prosecution.
Page 8
<PAGE>
WE ARE WAITING FOR A CALIFORNIA MEDICAL/DEVICE MANUFACTURING LICENSE AND IF WE
DO NOT RECEIVE THIS LICENSE WE MAY BE FORCED TO DELAY OR SUSPEND THE MANUFACTURE
AND SALE OF OUR PRODUCTS.
The State of California requires that each facility manufacturing a medical
device apply for and obtain from the State's Department of Health Services a
Medical Device Manufacturing License. To qualify for the license, a facility
must be in compliance with FDA's regulatory requirements. We filed a timely
application for this license and in early March of 1999 the DHS conducted an
inspection of our manufacturing facility in Irvine, California and found no
"reportable observations." We received a list of adjustments and clarifications
recommended by the DHS. We filed a response to this list on March 19, 1999 and
we expect to receive a California Medical Device Manufacturing License in early
May, 1999. We cannot guarantee that DHS will grant our license. We cannot
manufacture devices at our facility if the license is not granted. Inability to
obtain this license could result in a delay or suspension of the manufacture and
sale of our medical devices. Any such delay or suspension would have a material
adverse effect on our business.
THE LOSS OF OUR CHIEF EXECUTIVE OFFICER COULD RESULT IN THE LOSS OF A
SIGNIFICANT PORTION OF OUR BUSINESS BECAUSE OF HIS PERSONAL RELATIONSHIPS IN THE
INDUSTRY.
Our success is highly dependent upon our Chairman of the Board and Chief
Executive Officer, Robert H. Gurevitch. Unlike larger companies, we rely heavily
on a small number of officers to conduct a large portion of our business. The
loss of service of Robert H. Gurevitch along with the loss of his numerous
contacts and relationships in the industry would have a material adverse effect
on our business. We have entered into an Employment Agreement with Robert H.
Gurevitch under which he has agreed to render services to us until October 1,
1999. We have obtained "key person" life insurance on Mr. Gurevitch in the
amount of $2,000,000, of which we are the sole beneficiary, but there can be no
assurance that the proceeds of such insurance will be sufficient to offset the
loss to us in the event of his death.
NONE OF OUR PRODUCTS ARE PROTECTED BY PATENTS, AND THERFORE, THEY MAY NOT BE
ADEQUATELY PROTECTED FROM COPYING BY COMPETITORS.
Our future success and ability to compete is dependent in part upon our
proprietary technology used in the Apollo 95E. The Apollo 95E is currently only
protected by a patent in France. Patent protection is being sought in all of the
countries of the world in which this technology can be marketed. There can be no
assurance that patents outside of France will be granted for the Apollo 95E
system, and, if granted, the patents will provide adequate protection for the
Company's technologies. Consequently, we rely primarily on trademark, trade
secret and copyright laws to protect our technology. However, there can be no
assurance that third parties will not try to copy our products. In addition,
many foreign countries' laws may not protect us from improper use of our
proprietary technology overseas. We may not have adequate remedies if our
proprietary rights are breached and therefore a breach of our proprietary rights
could have a material adverse effect on our financial condition.
Page 9
<PAGE>
WE ARE SUSCEPTIBLE TO PRODUCT LIABILITY SUITS AND IF A LAWSUIT IS BROUGHT
AGAINST US IT COULD RESULT IN US HAVING TO PAY LARGE LEGAL EXPENSES AND/OR
JUDGMENTS.
Although we have not yet had any product liability claims, because of the nature
of the medical/dental device industry, there can be no assurance that we will
not be subject to such claims in the future. Our products come into contact with
more vulnerable areas of the human body, such as the mouth, tongue, teeth and
gums, and, therefore, the sale and support of dental products makes us
susceptible to the risk of such claims. A successful product liability claim or
claim arising as a result of use of our products brought against us, or the
negative publicity brought up by such claim, could have a material adverse
effect upon our business. We maintain product liability insurance with coverage
limits of $10,000,000 per occurrence and $11,000,000 per year. While we believe
that we maintain adequate insurance coverage, we do not guarantee that the
amount of insurance will be adequate to satisfy claims made against us in the
future, or that we will be able to obtain insurance in the future at
satisfactory rates or in adequate amounts.
THE YEAR 2000 ISSUE COULD HAVE AN IMPACT ON OUR INFORMATION TECHNOLOGY AND
NON-INFORMATION TECHNOLOGY SYSTEMS AS WELL AS THOSE OF OUR SUPPLIERS AND/OR
CUSTOMERS, ANY OF WHICH COULD NEGATIVELY AFFECT SALES OF OUR PRODUCTS.
The Year 2000 readiness issue, which is common to most businesses, arises from
the inability of information systems, and other time and date sensitive products
and systems, to properly recognize and process date-sensitive information or
system failures. Estimates of the potential cost and effects of Year 2000 issues
vary significantly among businesses, and it is extremely difficult to predict
the actual impact. Recognizing this uncertainty, management is continuing to
actively analyze, assess and plan for various Year 2000 issues across its
businesses.
The Year 2000 issue has an impact on both information technology systems and
non-information technology systems, such as manufacturing systems and physical
facilities including, but not limited to, security systems and utilities. We
have tested all of our information technology systems and non-information
technology systems for Year 2000 readiness. All of our non-information
technology systems are Year 2000 compliant. With respect to information
technology systems, our strategy is to replace all non-Year 2000 compliant
information technology systems by June 30, 1999. As of April 15, 1999, our
in-house data network is Year 2000 compliant. Also as of April 15, 1999, eighty
percent of our workstations are Year 2000 compliant, with the remainder to be
replaced with Year 2000 compliant workstations by June 30, 1999. Although our
management believes that its efforts will be successful and the costs will be
immaterial to our consolidated financial position and results of operations, it
also recognizes that any failure or delay could cause a potential impact.
Page 10
<PAGE>
The Year 2000 readiness of our customers varies. We are not investigating
whether or not our customers are evaluating and/or preparing their own systems
to be Year 2000 compliant. These efforts by customers to address Year 2000
issues may affect the demand for certain products and services; however, the
impact on our revenue is highly uncertain.
We have investigated the Year 2000 readiness of our key suppliers. Our direction
of this effort is to ensure that there are adequate components and supplies
available to us to minimize any potential business interruptions. Our assessment
of our key suppliers is now complete and we have determined that our policy of
maintaining an inventory of components and supplies sufficient to last a minimum
of a one to three months will be adequate to minimize almost any potential
business interruptions. We believe that our one to three month inventories will
allow enough time for our suppliers to remedy Year 2000 problems that may arise
in their respective businesses.
The Year 2000 issue presents a number of other risks and uncertainties that
could impact us, such as public utilities failures, potential claims against us
for damages arising from products and services that are not Year 2000 compliant,
and the response ability of certain government commissions of the various
geographic areas where Dental/Medical conducts business. While we continue to
believe the Year 2000 issues described above will not materially affect our
financial position, it remains uncertain as to what extent, if any, we may be
impacted.
If we, our customers or suppliers are unable to resolve any Year 2000 compliance
problems in a timely manner, we could face business interruptions or a shutdown,
financial loss, regulatory actions, reputational harm and/or legal liability. We
anticipate that all of our internal systems will be Year 2000 compliant by June
30, 1999 and that we will have adequate components and supplies in our
inventories to minimize any potential business interruptions that may result
from Year 2000 compliance problems suffered by our suppliers. As a result, we
have determined that we will not be developing any contingency plans that
address a reasonably likely worst case scenario.
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<PAGE>
USE OF PROCEEDS
We will not receive any proceeds from the sale of the shares offered by
Chrysalis Dental, Inc., under this prospectus. Chrysalis Dental, Inc. will pay
all costs, expenses and fees in connection with the registration of the shares
offered under this prospectus.
Page 12
<PAGE>
SELLING STOCKHOLDER
We are registering 100,000 shares of common stock on behalf of Chrysalis Dental,
Inc. We issued the 100,000 shares of common stock to Chrysalis Dental, Inc. as
the purchase price for our acquisition of a worldwide license to technology
owned by Chrysalis Dental, Inc. in October of 1998. We agreed to register the
common stock on a Form S-3 Registration Statement.
We do not know if, when, or in what amounts Chrysalis Dental, Inc. will sell
shares of the common stock. Thus, we cannot estimate how many shares Chrysalis
Dental, Inc. will hold after completion of the offering.
<TABLE>
<CAPTION>
Common Stock Owned Prior to the Offering
----------------------------------------
Number of Number of
Shares of Percent of Shares to be
Common Stock Class Sold
--------------- ------------ --------------
<S> <C> <C> <C>
Chrysalis Dental, Inc. 100,000 1.9% 100,000
</TABLE>
Page 13
<PAGE>
PLAN OF DISTRIBUTION
We are registering the shares on behalf of Chrysalis Dental, Inc. As used in
this prospectus, Chrysalis Dental, Inc. includes donees and pledgees selling
shares received from Chrysalis Dental, Inc. after the date of this prospectus.
Chrysalis Dental, Inc. will pay all costs, expenses and fees in connection with
the registration of the shares offered under this prospectus.
The shares may be offered and sold by Chrysalis Dental, Inc. directly to
purchasers or through one or more underwriters, brokers, dealers or agents, in
one or more types of transactions:
o on the Nasdaq SmallCap Market or the Boston Stock Exchange,
o in negotiated transactions,
o through put or call options relating to the shares,
o through short sales of shares, or
o a combination of these methods of sale, at market prices or
at negotiated prices.
Chrysalis Dental, Inc. has advised us that it has not entered into any
agreements, understandings or arrangements with any underwriters or
broker-dealers regarding the sale of their securities.
Chrysalis Dental, Inc. and any broker-dealers that act in connection with the
sale of shares might be considered "underwriters" within the meaning of Section
2(11) of the Securities Act. Any commissions received by broker-dealers and any
profit on the resale of the shares sold by them might be considered to be
underwriting discounts or commissions under the Securities Act. Because
Chrysalis Dental, Inc. may be considered an underwriter within the meaning of
Section 2(11) of the Securities Act, Chrysalis Dental, Inc. will be required to
deliver a prospectus in connection with the sale of their shares.
If required, the following information will be disclosed in a prospectus
supplement or, if necessary, an amendment to the registration statement:
o the specific shares to be sold,
o the respective purchase prices and public offering prices,
o the names of any agent, dealer or underwriter, and
o any applicable commissions or discounts.
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WHERE YOU CAN FIND MORE INFORMATION
Federal securities law requires us to file information with the SEC concerning
our business and operations. We file annual, quarterly and special reports,
proxy statements and other information with the SEC. You can read and copy these
documents at the public reference facility maintained by the SEC at Judiciary
Plaza, 450 Fifth Street, NW, Room 1024, Washington, DC 20549. Please call the
SEC at 1-800-SEC-0330 for further information on the public reference rooms. Our
SEC filings are also available on the SEC's Website at "http://www.sec.gov." You
can also inspect such reports, proxy statements and other information at the
offices of the Nasdaq Stock Market.
The SEC allows us to "incorporate by reference" the information we file with it,
which means that we can disclose important information to you by referring to
those documents. The information incorporated by reference is an important part
of this prospectus, and information that we file later with the Commission will
automatically update and supersede this information.
We incorporate by reference the following documents:
o Annual Report on Form 10-KSB for the year ended December 31,
1998.
o Current Report on Form 8-K filed on January 13, 1999.
o Current Report on Form 8-K filed on March 19, 1999.
o Description of our capital stock contained on page 45 of our
amendment No. 2 on Form SB-2 (File # 33-22507).
o All documents filed by us with the SEC under Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934
after the date of this prospectus and before the offering of
the common stock is terminated.
You may request a copy of the information incorporated by reference, at no cost,
by contacting us at the following address or telephone number:
Bette Smith
Dental/Medical Diagnostic Systems, Inc.
200 North Westlake Boulevard, Suite 202
Westlake Village, California 91362
(805) 381-2700
You should rely only on the information incorporated by reference or provided in
this prospectus or any supplement to this prospectus. We have not authorized
anyone else to provide you with different information. Chrysalis Dental, Inc.
should not make an offer of these shares in any state where the offer is not
permitted. You should not assume that the information in this prospectus or any
supplement to this prospectus is accurate as of any date other than the date on
the cover page of this prospectus or any supplement.
Page 15
<PAGE>
LEGAL MATTERS
Troop Steuber Pasich Reddick & Tobey, LLP, Los Angeles, California, has rendered
to Dental/Medical a legal opinion as to the validity of the common stock covered
by this prospectus.
EXPERTS
Our independent accountants, PricewaterhouseCoopers LLP, have audited the
following financial statements as indicated in their reports prepared in
connection with these financial statements:
o our consolidated balance sheet as of December 31, 1997,
o our consolidated balance sheet as of December 31, 1998,
o our consolidated statements of operations, stockholders' equity,
cash flows and comprehensive income (loss) for the ten month
period ended December 31, 1996,
o our consolidated statements of operations, stockholders' equity,
cash flows and comprehensive income (loss) for the twelve-month
period ended December 31, 1997, and
o our consolidated statements of operations, stockholders' equity,
cash flows and comprehensive income (loss) for the twelve-month
period ended December 31, 1998.
These financial statements are incorporated herein in reliance upon the
authority of PricewaterhouseCoopers LLP as experts in accounting and auditing.
Page 16
<PAGE>
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The estimated expenses, to be borne by the selling stockholder, in connection
with the offering are as follows:
<TABLE>
<CAPTION>
Amount
----------------
<S> <C>
Registration Fee Under Securities Act of 1933....... $ 195.00
NASD Filing Fee..................................... $ *
Blue Sky Fees and Expenses.......................... $ *
Printing and Engraving Certificates................. $ *
Legal Fees and Expenses............................. $ 9,500.00
Accounting Fees and Expenses........................ $ 7,500.00
Registrar and Transfer Agent Fees................... $ *
Miscellaneous Expenses.............................. $ *
----------------
TOTAL...................................... $ 17,195.00
================
<FN>
- -----------------
* Not applicable or none.
</FN>
</TABLE>
ITEM 15 INDEMNIFICATION OF DIRECTORS AND OFFICERS.
As permitted by the Delaware General Corporation Law ("DGCL"), Dental/Medical's
Amended and Restated Certificate of Incorporation limits the personal liability
of directors to Dental/Medical for monetary damages for certain breaches of
fiduciary duty. Liability is not eliminated for (i) any breach of the director's
duty of loyalty to Dental/Medical or its stockholders, (ii) acts or omissions
not in good faith or which involve intentional misconduct or a knowing violation
of law, (iii) unlawful payment of dividends or stock purchases or redemptions
pursuant to Section 174 of the DGCL, or (iv) any transaction from which the
director derived an improper personal benefit.
Dental/Medical has also entered into indemnification agreements with each of its
directors and executive officers. The indemnification agreements provide that
the directors and executive officers will be indemnified to the fullest extent
permitted by applicable law against all expenses (including attorneys' fees),
judgments, fines and amounts reasonably paid or incurred by them for settlement
in any
Page 17
<PAGE>
threatened, pending or completed action, suit or proceeding, including any
derivative action, on account of their services as a director or officer of
Dental/Medical or of any subsidiary of Dental/Medical or of any other company or
enterprise in which they are serving at the request of Dental/Medical. No
indemnification will be provided under the indemnification agreements, however,
to any director or executive officer in certain limited circumstances, including
on account of knowingly fraudulent, deliberately dishonest or willful
misconduct. To the extent the provisions of the indemnification agreements
exceed the indemnification permitted by applicable law, such provisions may be
unenforceable or may be limited to the extent they are found by a court of
competent jurisdiction to be contrary to public policy.
Dental/Medical has purchased a directors and officers liability insurance policy
in the amount of $5,000,000.
ITEM 16 EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
See the Exhibit Index of this Registration Statement.
ITEM 17 UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement 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 liability under the Securities
Act, each such post-effective amendment shall be deemed to be a new Registration
Statement relating to the securities offered therein, and the offering of such
securities at that time shall be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act 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 Securities 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
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of the appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
Page 18
<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 Amendment No. 4
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Westlake Village, State of California, on April 19, 1999.
DENTAL/MEDICAL DIAGNOSTIC SYSTEMS, INC.
(Registrant)
By: /S/ ROBERT H. GUREVITCH
-----------------------------------
Robert H. Gurevitch
Chairman of the Board and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 3
Registration Statement on Form S-3 has been signed below by the following
persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
--------- ----- ----
Chairman of the Board
/s/ Robert H. Gurevitch and Chief Executive Officer April 19, 1999
- ---------------------------------
Robert H. Gurevitch
Chief Financial Officer
* and Chief Accounting Officer April 19, 1999
- ---------------------------------
Stephen Ross
* Director April 19, 1999
- ---------------------------------
Marvin H. Kleinberg
* Director April 19, 1999
- ---------------------------------
Jack D. Preston
*By: /s/ Robert H. Gurevitch
- ---------------------------------
Robert H. Gurevitch
his Attorney-In-Fact
Page 19
<PAGE>
EXHIBIT INDEX
NO. ITEM
- --- ----
4.1 Specimen Stock Certificate of the Registrant [Incorporated by
reference to Amendment No. 1 of Form SB-2 filed on April 7, 1997].
5.1 Opinion of Troop Steuber Pasich Reddick & Tobey, LLP. [Previously
Filed.]
23.1 Consent of PricewaterhouseCoopers, LLP.
23.2 Consent of Troop Steuber Pasich Reddick & Tobey, LLP (included as part
of Exhibit 5.1).
24.1 Power of Attorney (included in signature page). [Previously Filed.]
Page 20
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this amendment no. 4 to the
registration statement of Dental/Medical Diagnostics Systems, Inc. on Form S-3
of our report dated February 5, 1999, except for subsequent events described in
Note 19 as which the date is March 18, 1999, on our audits of the consolidated
financial statements of Dental/Medical Diagnostic Systems, Inc. as of December
31, 1998 and 1997 and for the years ended December 31, 1998 and 1997 and for the
ten month period ended December 31, 1996, which report is included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
1998. We also consent to the reference to our firm under the caption "Experts."
/s/ PricewaterhouseCoopers LLP
Woodland Hills, California
April 19, 1999
