<PAGE>
As filed with the Securities and Exchange Commission on December 28, 1999
Registration No.333-89649
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
---------------------------
FISCHER IMAGING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
---------------------------
DELAWARE 36-2756787
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
12300 N. Grant Street, Denver, Colorado 80241
(303) 452-6800
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive office)
---------------------------
Morgan W. Nields
Chairman of the Board and
Chief Executive Officer
Fischer Imaging Corporation
12300 N. Grant Street
Denver, Colorado 80241
(303) 452-6800
(Name, address and telephone number of agent for service of process)
---------------------------
Copies To:
Paul Hilton, Esq.
Brobeck, Phleger & Harrison LLP
370 Interlocken Boulevard, Suite 500
Broomfield, Colorado 80021
(303) 410-2001
Approximate date of commencement of proposed sale to public: From time to time
after the effective date of this Registration Statement.
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, 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 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 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.
---------------------------
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, as amended, or until this registration statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
<PAGE>
506,667 Shares
Fischer Imaging Corporation
Common Stock
-----------------------
This prospectus relates to 506,667 shares of Fischer Imaging Corporation
common stock, that may be offered for sale or otherwise transferred from time to
time by one of our stockholders. See "Selling Stockholder." We will not
receive any proceeds from the sale of these shares and we will pay substantially
all of the expenses incurred in connection with this offering other than selling
commissions.
Any or all of these shares may be offered from time to time in one or more
transactions (which may include block transactions) on the Nasdaq National
Market or in the over-the-counter market, in negotiated transactions or
otherwise, at fixed prices, which may be changed, at market prices prevailing at
the time of sale, at negotiated prices, or without consideration, or by any
other legally available means. The selling stockholder may offer these shares
directly or by or through brokers, dealers, agents or underwriters who may
receive compensation in the form of discounts, concessions, commissions or
otherwise.
The selling stockholder and any brokers, dealers, agents or underwriters
that participate in the distribution of the shares may be deemed to be
"underwriters" within the meaning of the Securities Act of 1933, as amended (the
"Securities Act"), in which event any discounts, concessions and commissions
received by any such brokers, dealers, agents or underwriters and any profit on
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act. The aggregate net proceeds
to the selling stockholder from the sale of the shares will be the purchase
price of such shares less any commissions. See "Plan of Distribution." No
underwriting arrangements have been entered into by the selling stockholder as
of the date hereof.
Our common stock is traded on the Nasdaq National Market under the symbol
"FIMG." On December 2, 1999, the last reported sale price of our common stock
on the Nasdaq National Market was $2 1/32 per share.
-----------------------
The Shares of Common Stock Offered Hereby Involve a High Degree of Risk.
See "Risk Factors" Beginning on page 7.
-----------------------
These Securities Have Not Been Approved or Disapproved by the Securities
Exchange Commission or any State Securities Commission nor has the Securities
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 December 28, 1999.
<PAGE>
You should rely only on information contained in or incorporated by
reference in this prospectus. Neither we nor the selling stockholder has
authorized anyone to provide you with different information. Neither we nor the
selling stockholder is making an offer of these securities in any state where
the offer is not permitted. You should not assume that the information provided
by the prospectus is accurate as of any date other than the date on the front of
this prospectus.
TABLE OF CONTENTS
Page
WHERE YOU CAN FIND MORE INFORMATION.............................. 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE.................. 5
SUMMARY.......................................................... 6
RISK FACTORS..................................................... 7
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS.................. 17
USE OF PROCEEDS.................................................. 18
DESCRIPTION OF FISCHER CAPITAL STOCK............................. 18
MARKET PRICE OF FISCHER COMMON STOCK............................. 21
SELLING STOCKHOLDER.............................................. 23
PLAN OF DISTRIBUTION............................................. 24
EXPERTS.......................................................... 26
LEGAL MATTERS.................................................... 26
-3-
<PAGE>
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and other reports, proxy statements and other
information with the Securities and Exchange Commission. You may read and copy
any reports, statements or other information we file at the Securities and
Exchange Commission's Public Reference Room at 450 Fifth Street, N.W.,
Washington, D.C. 20549. Please call the Securities and Exchange Commission at 1
(800) SEC-0330 for further information on the Public Reference Room. Our
Securities and Exchange Commission filings are also available to the public from
commercial document retrieval services and at the web site maintained by the
Securities and Exchange Commission at "http://www.sec.gov."
We have filed a registration statement on Form S-3 to register with the
Securities and Exchange Commission the common stock offered by this prospectus.
This prospectus is part of that registration statement. As allowed by
Securities and Exchange Commission rules, this prospectus does not contain all
the information you can find in the registration statement or the exhibits to
the registration statement.
You can obtain a complete copy of the registration statement, including
exhibits, without charge by submitting a request in writing or by telephone to
us at the following address:
Investor Relations
Fischer Imaging Corporation
12300 N. Grant Street
Denver, Colorado 80241
(303) 452-6800
No dealer, salesperson or other person has been authorized to give any
information or to make any representations, other than those contained in this
Prospectus, in connection with the offering covered by this Prospectus. If
given or made, such information or representations must not be relied upon as
having been authorized by the Company. This Prospectus does not constitute an
offer to sell, or a solicitation of any offer to buy, the securities offered
hereby in any jurisdiction where, or to any person to whom, it is unlawful to
make such offer or solicitation. Neither the delivery of this Prospectus nor any
sale hereunder shall, in any circumstances, create an implication that there has
not been any change in the facts set forth in this Prospectus or in the affairs
of the Company since the date hereof.
-4-
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Securities and Exchange Commission allows us to "incorporate by
reference" information filed with it, which means that we can disclose important
information to you by referring you directly to those documents. The
information incorporated by reference is considered to be a part of this
prospectus. In addition, information we file with the Commission in the future
will automatically update and supersede information contained in this prospectus
and any accompanying prospectus supplement. We are incorporating by reference
the documents listed below and any future filings made with the Commission under
Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until
all of the shares of common stock described in this prospectus are sold:
. Annual Report on Form 10-K for the fiscal year ended December 31, 1998;
. Quarterly Report on Form 10-Q for the fiscal quarter ended April 4,
1999;
. Quarterly Report on Form 10-Q for the fiscal quarter ended July 4, 1999;
. Quarterly Report on Form 10-Q for the fiscal quarter ended October 3,
1999;
. Current Report on Form 8-K filed April 16, 1999.
You may request a copy of these filings at no cost by writing us at 12300
N. Grant Street, Denver, Colorado 80241, Attention: Investor Relations, or by
telephoning us at (303) 452-6800.
-5-
<PAGE>
SUMMARY
The following summary is qualified in its entirety by reference to the more
detailed information appearing elsewhere in this prospectus or incorporated
herein by reference. Each prospective investor is urged to read this prospectus
and the incorporated documents in their entirety. An investment in the
securities offered hereby involves a high degree of risk. See "Risk Factors."
The Company
Fischer Imaging Corporation designs, manufactures and markets specialty and
general purpose medical imaging systems for the diagnosis and treatment of
disease. Our newest product lines are directed towards medical specialties in
which image-guided, minimally-invasive therapies are replacing open surgical
procedures. These products are used primarily in the diagnosis and treatment of
breast cancer, heart disease and vascular disease. We also design and
manufacture specialty x-ray imaging components and subsystems for several
leading medical products companies as an original equipment manufacturer (OEM)
and sell general radiology systems for use in hospitals, clinics and physicians'
offices.
Our principal executive office is located at 12300 N. Grant Street, Denver,
Colorado 80241, and our telephone number is (303) 452-6800.
The Offering
We are registering an aggregate of 506,667 shares of our common stock to be
offered for sale by one of our stockholders. Shares of common stock may be
acquired from us by this stockholder, on a one-for-one basis, upon the
conversion of the 506,667 shares of our Series D Convertible Preferred Stock
currently held by this stockholder. If all of the shares offered are sold in
this offering, there will be approximately 7,535,522 shares of common stock
outstanding and no shares of Series D Convertible Preferred Stock outstanding.
We will not receive any of the proceeds from the sale of the common stock by the
selling stockholder.
-6-
<PAGE>
RISK FACTORS
In evaluating our business, investors should carefully consider the
following risk factors in addition to the other information included or
incorporated by reference in this prospectus. In addition, certain information
included or incorporated by reference in this prospectus is forward-looking.
Such forward-looking information involves significant risks and uncertainties,
including those discussed below, that could cause actual results to differ
significantly from those expressed in any forward-looking statements made by, or
on behalf of, us. See "Disclosure Regarding Forward-Looking Statements."
Continued Losses Will Undermine Our Ability to Remain in Operation and Will
Threaten Our Liquidity
We have experienced significant losses in four of the five years ended
December 31, 1998 and to date during 1999. Although we were profitable in 1995
and for the first nine months of 1996, we have incurred significant losses since
that time. In addition, we are currently experiencing negative cash flow.
Significant factors giving rise to recent losses include excessive manufacturing
capacity and related costs, intense competition for certain of our products,
declining margins and demand for OEM products and a general slowdown in capital
expenditures by hospitals. We have undertaken certain cost cutting measures and
downsized personnel, but continue to experience weak liquidity and losses.
Future results (not "losses") will depend on many factors, including our
ability to maintain or increase gross margins, control or reduce manufacturing
and other costs, implement our marketing and sales strategies in the United
States and internationally, maintain orders under OEM agreements, renew OEM
agreements on favorable terms and develop and introduce new products that
successfully compete. Our success will also depend on demand for our products.
There can be no assurance that we will be profitable in future periods.
Fluctuations in Financial Results Could Adversely Affect Our Stock Price
We have experienced, and will likely continue to experience, significant
quarterly and annual fluctuations in net revenues and operating results,
depending on such factors as the timing of large system shipments to customers,
the timing of orders under OEM contracts and related manufacturing and shipment
scheduling, new product introductions and new marketing programs by us and our
competitors, delays in contract development projects, the effect of economic
conditions on our markets, the effects of managed healthcare on capital
expenditures and reimbursement, increases in marketing and research costs in
relation to sales, regulatory clearance of new products, seasonal purchasing
patterns of hospitals and the timing of purchasing decisions by customers.
Additionally, because the timing of the occurrence of such factors is
difficult to anticipate and many of our costs are fixed, we may not be able to
sufficiently reduce our costs in periods when our revenues are less than
anticipated, and we may suffer unexpected losses or lower income, if any, in
these periods. Any of these events would cause our stock price to decline.
Technological Change and New Products Could Make Our Products Obsolete
The market for our products is characterized by rapid and significant
changes in competitive technologies, evolving medical industry standards and the
frequent introduction of new products. Alternative surgical procedures or
technologies or new medications may also be developed and marketed. Products
based on new technologies could replace or reduce the importance of current
procedures that utilize our products and render these products uncompetitive.
Accordingly, our success will depend in part
-7-
<PAGE>
on our ability to respond quickly to new product introductions, marketing
campaigns and medical and technological changes through the development of new
products. There can be no assurance that we will be able to develop new products
in the future on a timely or cost-effective basis, if at all, or that our
current products will not be rendered obsolete or noncompetitive.
New Product Development and Market Acceptance of Our New Products is Important
to Our Future Success
We have a number of potential new products in various stages of
development. We have focused our recent research and development efforts on the
development of SenoScan, which is a full-field digital mammography system, for
which clinical trials are continuing but which has not yet received pre-market
clearance from the United States Food and Drug Administration (FDA). See "Risk
Factors--Governmental Regulation of Our Manufacturing and Products is Extensive
and Compliance Problems Could Lead to Serious Sanctions." In addition, we have
expended significant efforts on ultrasound, full-field digital mammography and
associated advanced image processing applications.
These products involve technological innovation and require significant
planning, design, development and testing at the technological, product and
manufacturing process levels. These activities require significant investments
in research and development, equipment, inventory, manufacturing and marketing.
Lengthy and expensive clinical trials could also be required prior to submission
to the FDA for FDA clearance or approval. There can be no assurance that we will
be able to successfully design, manufacture and market these new products or
that the new products will receive FDA clearance or approval.
In addition, our newest products may be used with minimally-invasive
surgical procedures, and we believe that we must demonstrate to physicians and
managed healthcare organizations the clinical benefits, safety, efficacy and
cost-effectiveness of our products for such procedures. In particular, we must
demonstrate that our products are an attractive alternative to other products
and methods that may be widely accepted. There can be no assurance that surgeons
will embrace such techniques as replacements for open surgical procedures or
that hospitals will be willing to invest in and utilize our products. Lack of
widespread acceptance of these products could have a material adverse effect on
our future revenues and earnings.
We May be Unable to Protect Our Patents and Proprietary Rights
We seek to protect our proprietary rights through a combination of
technical experience, patent, trade secret and trademark protection and
nondisclosure agreements. Our future success will depend in part on our ability
to obtain and enforce patent protection for our products and processes, to
preserve our trade secrets and to operate without infringing on the patent or
proprietary rights of others. While we have numerous United States and foreign
issued patents and pending patent applications covering various aspects of our
products, there can be no assurance that our patents, and any patents that may
be issued in the future, will provide us with significant competitive advantages
or protection of our intellectual property. No assurance can be given that any
patents owned or applied for by us will not be challenged, invalidated or
circumvented.
Moreover, the laws of some foreign countries do not protect our proprietary
rights in our products to the same extent as do the laws of the United States.
We anticipate that any attempt to enforce our patents likely would be time
consuming and costly. In addition, since many other companies hold patents in
fields in which we operate, we could be found to have infringed third-party
patents and, as a result, could be required to alter our products or processes,
pay licensing fees (which may not be available to us on
-8-
<PAGE>
commercially reasonable terms, if at all) or cease manufacturing and selling any
infringing products, and pay damages for past infringement.
In addition, we rely on trade secrets and proprietary know-how, which we
seek to protect, in part, through appropriate confidentiality and proprietary
information agreements. There can be no assurance that proprietary information
or confidentiality agreements with employees, consultants and others will not be
breached, that we would have adequate remedies for any breach, or that our trade
secrets will not otherwise become known to or independently developed by
competitors. We could incur substantial costs in suits in which we may assert
our patent rights against others or in defending against suits brought by
others.
In April 1992, we filed a patent infringement lawsuit against Lorad, now
owned by Trex Medical Corporation, in the United States District Court for the
District of Colorado. We own patent No. 5,078,142, covering certain features of
our Mammotest stereotactic breast biopsy system. We believe that Lorad has
infringed certain claims of our patent with the introduction of its mammographic
biopsy system. In April 1998, following receipt of patent No. 5,735,264, we
filed a second patent suit against Trex Medical Corporation, also in United
States District Court for the District of Colorado. In July 1998, the United
States District Court granted our Motion to Consolidate the two patent
infringement suits. The consolidated suit seeks to enjoin Lorad and its agents
from the manufacture, use and sale of the allegedly infringing stereotactic
breast biopsy system. We are also seeking treble damages and attorney's fees.
We have incurred and will continue to incur substantial costs in connection with
this litigation.
We have received notice from the holder of a United States patent alleging
infringement by certain of our products and offering us a license to use the
patent on terms that are not acceptable to us. We believe that only one former
product and one current product could potentially be implicated by the patent.
Based on the foregoing, we believe that, if required to take a license to the
patent, any license fees payable would not have a material adverse effect on our
financial position. However, there can be no assurances that our other products
could not potentially be implicated by this patent or that this matter will not
otherwise have a material adverse effect on us.
We Face Significant Competition from Major Multinational Corporations
We encounter and expect to continue to encounter intense competition in the
sale of our products. We believe that the principal competitive factors
affecting the market for our products include the clinical aspects of the
products, product features, product performance and quality, upgrade
flexibility, price and customer service. Our competitors include large
multinational corporations and their operating units, including GE Medical
Systems, Siemens AG (Siemens), Philips Medical Systems (Philips), Toshiba
America Medical Systems, Inc. (Toshiba), Shimadzu Precision Systems, Inc. -
Medical Systems Division (Shimadzu) and Picker International, Inc. (Picker), as
well as a number of other companies such as Trex Medical Corporation. These
companies typically have larger installed customer bases and far greater
financial, management, manufacturing, sales, marketing and other resources than
we. As a result, they may be able to adapt more quickly to new or emerging
technologies and changes in customer requirements, or to devote greater
resources to the development, manufacture, promotion and sale of their products
than we.
Moreover, a significant portion of our sales are to medical equipment
companies who integrate our products into their own systems or resell these
products under their own label. There can be no assurance that such companies
will not choose to purchase from alternative sources or internally manufacture
competing products. We also face competition from vendors selling used x-ray
imaging equipment, particularly general radiology systems, at prices
substantially below the prices of our new products. In addition, we compete for
acquisition opportunities, OEM and service contracts and experienced personnel.
-9-
<PAGE>
Disruptions or Discontinuance of Our Relationships with Our OEM Customers Would
Cause Our Sales to Decline
In 1998, sales under OEM contracts constituted approximately 24% of our
total revenues. GE Medical Systems (GEMS), the selling stockholder in this
prospectus and a significant customer, accounted for approximately 5.9% of our
1998 total revenues. GEMS has purchased Tilt-C positioners from us since 1994
under the terms of our OEM contract. The Tilt-C positioner is a multi-purpose
90 degree tilting table with a cantilevered table top and sophisticated
positioner controls. These are used in biopsies and other interventional
procedures, as well as in general imaging studies. By an agreement effective
March 24, 1999, GEMS surrendered 826,666 of its shares of our Series D
Convertible Preferred Stock in exchange for a non-exclusive right to manufacture
the Tilt-C system. We expect to continue our manufacturing activity for GEMS
through at least December 1999, the original expiration of our OEM contract.
See "Description of Fischer Capital Stock." The loss of this OEM relationship
could have a material adverse effect on our business and financial results.
Many of our OEM customers are also competitors and have larger installed
customer bases and far greater financial, management, manufacturing, sales,
marketing and other resources than we. The business strategies and manufacturing
practices of our OEM customers are subject to change, and such changes may
result in decisions by these customers to seek other sources for the products
currently manufactured by us or to manufacture these products internally.
Additionally, these OEM customers typically seek to obtain price
concessions from us or the pass through of cost savings achieved by us in the
form of lower prices. Our OEM contracts are usually non-exclusive. OEM customers
generally may modify, limit or terminate the contract or purchase orders under
the contract on short notice with modest or no penalties. OEM customer order
levels are influenced by factors relating to the OEM customer's business such as
sales of the product, changes in product or marketing strategy, changes in
components of the end product manufactured by others and development of new
products.
Furthermore, the timing of product orders under these OEM contracts has
fluctuated and is likely to continue to fluctuate on a quarterly or annual
basis. Under these OEM contracts, we are required to design, develop and
manufacture our products to meet the specifications of the OEM customers and,
from time to time, we may be required to correct deficiencies identified in
these products. These agreements involve complex products and changing product
specifications and requirements that may lead to the renegotiation of these
agreements from time to time. These negotiations may result in disagreements
which could adversely affect relationships with OEM customers.
Moreover, order rates under our OEM contracts can decline over the term of
the agreement and may not be renewed upon expiration, causing revenues to
decline significantly. We may not be able to replace revenues lost in such
situations. There can be no assurance that we will be able to maintain our
existing, or establish new, OEM relationships, or to replace the loss of any of
our OEM relationships with other business. The loss of any of our OEM
relationships could have a material adverse effect on us.
We Face Significant Manufacturing and Operating Risks
The scope of the product lines offered by us and the need for product
customization require a number of separate manufacturing processes and
components and significant management and engineering time and expertise.
Additionally, as we develop new products, we will be required to refine the
prototypes of these products and develop new processes to manufacture these
products in commercial quantities. We have encountered and may continue to
encounter difficulties involving inventory supply, length of
-10-
<PAGE>
production cycles and shortages of manufacturing personnel. Due to the shifting
demand for our products and the high fixed costs associated with manufacturing
these products, we may encounter difficulty managing our operating costs. There
can be no assurance that we will be able to reliably or efficiently manufacture
our existing or new products at commercially reasonable costs on a timely basis,
if at all. Failure to effectively manage the development and manufacture of our
products could adversely affect us.
A Disruption or Loss of Our Key Suppliers Could Seriously Interfere With Our
Ability to Produce Our Products
Many of the components used by us in existing products and products under
development are purchased from single sources. An interruption in the delivery
of these or other supplies would require us to identify and qualify alternative
components or vendors. There can be no assurance that we would be able to obtain
components from alternate sources on a timely basis and on a commercially
reasonable basis, if at all, and that we would not suffer a material adverse
effect as a result.
Government Regulation of Our Manufacturing and Products is Extensive and
Compliance Problems Could Lead to Serious Sanctions
Our business is subject to substantial regulation by the FDA and equivalent
agencies in foreign countries. Our failure to comply with applicable regulatory
requirements can result in, among other things, civil and criminal fines, orders
to repair or replace devices or to refund the device purchase price, suspensions
and withdrawals of approvals, product recalls, detentions or seizures,
injunctions and criminal prosecutions.
FDA regulations require manufacturers of medical devices to adhere to "Good
Manufacturing Practices," which include testing, quality control and
documentation procedures. Our manufacturing facilities are subject to periodic
inspection by the FDA. In March 1995, we were issued a Warning Letter by the
FDA concerning documentation and other deficiencies at our Denver facility. We
rectified these deficiencies and resolved this matter with the FDA later that
year.
Following an inspection which concluded in December 1996, the FDA issued
Inspectional Observations Form 483 (Form 483) and a Warning Letter concerning
manufacturing practices at our Denver facility. The FDA requested a written
response to the Warning Letter regarding planned corrective actions and a
favorable third-party certification of our manufacturing and quality systems.
These actions were completed.
In October 1998, following a periodic inspection, the FDA issued a Form 483
regarding possible deficiencies in manufacturing, quality and documentation
practices. We have submitted our response to the Form 483 and are instituting
corrective actions.
Our failure to satisfy FDA requirements can result in our inability to
receive awards of federal government contracts, to receive new marketing or
export clearances for products manufactured at our Denver facility or FDA
enforcement actions including, among other things, product seizure, injunction,
and/or criminal or civil proceedings being initiated by the FDA without further
notice. The issuance of another Form 483 increases the possibility that one or
more of these sanctions could be imposed in the future. Although we strive to
operate within the requirements imposed by the FDA, there can be no assurances
that these deficiencies can be corrected or that we will be able to satisfy FDA
compliance concerns in the future. Ongoing FDA compliance reviews and/or related
delays in future product clearances could have a material adverse affect on us.
-11-
<PAGE>
The FDA has post-marketing controls that include a requirement to file
medical device reports when we become aware of information suggesting that one
of our marketed products may have caused or contributed to a death, serious
injury or serious illness or has malfunctioned in a way which could lead to that
result. We must utilize field performance information, which includes any
reportable events, in our quality control system to make any changes necessary
to reduce or eliminate similar events in the future. The FDA utilizes Medical
Device Reports to determine whether it should exercise its enforcement powers,
such as mandatory product recalls, temporary suspensions of approvals or
withdrawal of 510(k) marketing clearances or premarket approvals. The filing of
Medical Device Reports indicating unexpected product hazards or the failure to
comply with medical device reporting requirements could have a material adverse
effect on us.
Each of our products is required to receive FDA clearance or approval prior
to commercialization. To date, all of our products have been classified by the
FDA as Class II medical devices and have been eligible for FDA marketing
clearance under the FDA's 510(k) premarket notification process, which is
generally less time consuming than the more involved pre-market approval process
for Class III medical devices (PMA). We believe that most of our currently
anticipated future products and substantial modifications to existing products
will be eligible for the 510(k) pre-market notification process. However, the
FDA has not yet classified full-field digital imaging mammography systems like
the SenoScan system being developed by us.
A 1996 FDA memorandum suggested that clearance for full-field digital
imaging mammography systems might be obtained through a 510(k) notification with
clinical trials involving approximately 500 subjects. More recent FDA
communications are less clear as to what clinical standards must be met and, in
late 1998, the 510(k) digital mammography submission by Trex Medical Corporation
was rejected by the FDA. We have acquired the previously suggested minimum
number of patients for our clinical trials, but we are now gathering additional
clinical data in response to the FDA's revised guidance.
Efforts toward a 510(k) submission for SenoScan are on-going. This
submission is significantly later than originally anticipated due to start-up
equipment issues, patient acquisition delays and conflicting guidance from the
FDA regarding the submission.
If the FDA were to indicate that a PMA is required for any of our new
products, that application would require extensive clinical studies,
manufacturing information and, most likely, a review by a panel of experts
outside the FDA. Clinical studies would need to be conducted in accordance with
FDA requirements. Our failure to comply with FDA requirements could result in
the FDA's refusal to accept the data or the imposition of regulatory sanctions.
FDA review of a PMA application can take significantly longer than that for a
510(k) pre-market notification and could take several years to complete. There
can be no assurance that the necessary applications, clearances or approvals for
any of our new products, including SenoScan, will be made or obtained on a
timely basis, if at all. Failure to obtain necessary regulatory approvals, the
restriction, suspension or revocation of existing approvals, or any failure to
comply with regulatory requirements could have a material adverse effect on our
business, financial condition and results of operations.
Sales of medical devices outside of the United States are subject to FDA
export and international regulatory requirements that vary from country to
country. The time required to obtain approval for sale internationally may be
longer or shorter than that required for FDA clearance or approval, and the
requirements may differ. There can be no assurance that we will obtain
regulatory approvals in such countries or that we will not incur significant
costs in obtaining or maintaining our foreign regulatory approvals.
-12-
<PAGE>
We have obtained the certifications necessary to permit the "CE" mark to be
attached to those products currently being sold in Europe. The CE mark is an
international symbol of quality that is now required for sales into the
countries which are members of the European Union. While we have approval to
sell into the European Union, there can be no assurance that we will be able to
obtain other international regulatory approvals. In addition, significant costs
and delays may be encountered in obtaining such approvals.
We are also regulated by the FDA under the Radiation Control for Health and
Safety Act of 1968 which specifically addresses radiation emitting products.
Under this law, we must submit initial reports on any new x-ray systems that
require certification. In addition, we must submit installation reports to the
FDA certifying compliance with installation instructions of the manufacturer.
Under certain circumstances, we are also required to submit Product Defect
Reports concerning our radiation emitting products to the FDA and, sometimes, to
the first purchasers of the products. Product Defect Reports describe any safety
related product defects or the failure of a product to conform to an applicable
standard of which we have become aware. Additionally, we are required to submit
Accidental Radiation Occurrence reports to the FDA whenever one of its products
accidentally releases radiation that results in an injurious or potentially
injurious exposure to any person. However, we need not file both a Medical
Device Report and an Accidental Radiation Occurrence report on the same
incident. A failure to comply with these regulations could have a material
adverse effect on us. Furthermore, discovery of unexpected product hazards or
failures to meet required standards through the reporting system could also have
a material adverse effect on us.
We are also subject to other Federal, state, local and international laws
and regulations related to worker health and safety, environmental protection
and export controls.
Healthcare Reform; Uncertainty of Patient Reimbursement Could Limit Our Business
The Federal government and state, local and foreign governments have
considered or adopted, and may in the future consider or adopt, healthcare
policies intended to curb rising healthcare costs. Such policies include
rationing of government-funded reimbursement for healthcare services and
imposing price controls upon providers of medical products and services. In the
past, healthcare reform has adversely affected us by limiting hospital budgets
for the purchase of medical equipment, including our products.
Consolidation in the healthcare industry has reduced the number of
hospitals in the United States and, in some cases, reduced the demand for
medical imaging equipment. In addition, healthcare cost containment pressures
have lead to the formation of purchasing and shared facility arrangements among
hospital chains and large medical equipment manufacturers, thereby reducing the
demand for medical equipment and increasing centralization of decision-making
regarding equipment purchases. We cannot predict what healthcare reform
legislation or regulation, if any, will be enacted in the United States or
elsewhere.
Significant changes in healthcare reimbursement systems in the United
States or elsewhere could have a material adverse effect on us. The Federal
government also regulates the reimbursement of fees related to certain
diagnostic procedures or medical conditions and capital equipment acquisition
costs connected with services to Medicare beneficiaries. Recent legislation has
limited Medicare reimbursement of these fees, which may have the effect of
limiting the availability of reimbursement for procedures or conditions, and as
a result may inhibit or reduce demand by healthcare providers for our products.
Other legislation has limited Medicare reimbursement of these fees, which
has the effect of limiting the availability of reimbursement for procedures or
conditions and, as a result, may inhibit or
-13-
<PAGE>
reduce demand by healthcare providers for our products. For example, the
Balanced Budget Act of 1997, reduces capital expenditure payments to hospitals
by some two percent for the period October 1, 1997 through September 30, 2002.
Additionally, hospitals may continue to face other capital constraints which
prevent them from investing in such equipment. In addition, widespread use of
procedures utilizing our SenoScan digital or breast magnetic resonance imaging
mammography systems would likely require reimbursement in excess of those
currently permitted under Medicare guidelines.
As a result, the demand for these systems may be limited. While we cannot
predict what effect the polices of government entities and other third party
payors will have on future sales of our products, there can be no assurance that
such policies would not have a material adverse effect on our business.
Market Withdrawal or Product Recall Could Adversely Affect Us
Complex medical devices, such as our products, can experience performance
problems in the field that require review and possible corrective action by the
manufacturer. We periodically receive reports from users of our products
relating to performance difficulties they have encountered. These or future
product problems could result in market withdrawals or recalls of products,
which could have a material adverse effect on our business, financial condition
and results of operations.
We Face Payment and Other Risks in Our International Operations
Revenues from customers based outside the United States accounted for
15.6%, 18.7% and 21.2% of our total revenues in 1998, 1997 and 1996,
respectively. These revenues included sales to foreign OEM customers of 11.5%,
6.8% and 11.7% of our 1998, 1997 and 1996 total revenues, respectively. In
addition, we have OEM contracts with several foreign and multinational companies
that distribute our products internationally and within the United States.
Risks of doing business outside the United States include the expense and
difficulty of establishing, expanding and managing international operations; the
uncertainty of market acceptance of our products; the difficulty of enforcing
agreements, collecting receivables and protecting intellectual property in
foreign countries; the potential imposition by foreign countries of additional
withholding taxes, income taxes, tariffs or other restrictions on foreign trade;
and potential difficulties in obtaining United States export licenses.
In 1998 and 1997, we experienced reductions in our international business.
There can be no assurance that our international business will improve or that
any of the foregoing risks will not have a material adverse effect on us.
The Loss of Our Chairman of Other Key Personnel Could Jeopardize Our Business
Our future performance is partially dependent on the services of Morgan W.
Nields, our Chairman, Chief Executive Officer and largest common stockholder.
We have no employment agreement with Mr. Nields nor, typically, with other
executives. We carry $5,000,000 of key -man life insurance on Mr. Nields.
In addition, our continued success will depend heavily on our ability to
attract and retain highly qualified engineering, management, manufacturing,
marketing and sales personnel. There can be no assurance that we will be able to
continue to attract and retain such people. Failure to hire and retain such
personnel could have a material adverse effect on us.
-14-
<PAGE>
We Face Potential Product Liability
Our business exposes us to potential product liability claims which are
inherent in the manufacture and sale of medical devices, and, as such, we may
face substantial liability to patients for damages resulting from the faulty
design or manufacture of products. We have been a defendant from time to time
in product liability actions. We maintain product liability insurance with
coverage limits of $5,000,000 per occurrence and per year in the aggregate.
There can be no assurance that product liability claims will not exceed coverage
limits or that such insurance will continue to be available at commercially
reasonable rates, if at all. Consequently, a product liability claim or other
claim in excess of insured liabilities or with respect to uninsured liabilities
could have a material adverse effect on our business and financial condition.
Complex medical devices, such as our products, can experience performance
problems in the field that require review and possible corrective action by the
manufacturer. We periodically receive reports from users of our products
relating to performance difficulties they have encountered. These or future
product problems could result in market withdrawals or product recalls, which
could have a material adverse effect on our business, financial condition and
results of operations.
Our Management Owns a Significant Portion of Our Stock and is Able to Exercise
Significant Influence Over Our Affairs
Our officers and directors beneficially own, in the aggregate,
approximately [1,664,405] shares, or 22.5%, of our common stock as of September
30, 1999. As a result, the officers and directors are able to exercise
significant influence on the election of our Board of Directors, and thereby
direct our policies.
Our Common Stock Price May be Volatile
The market price of our common stock could be subject to significant
fluctuations in response to variations in quarterly operating results and other
factors. In addition, the securities markets have experienced significant price
and volume fluctuations from time to time in recent years that have often been
unrelated or disproportionate to the operating performance of particular
companies. These broad fluctuations may adversely affect the market price of our
common stock.
We have experienced fluctuations in our quarterly operating results and
anticipate that such fluctuations will continue and could intensify.
Fluctuations in operating results may result in volatility in the price of our
common stock. Although we have taken significant steps to return to
profitability, there can be no assurance that profitability will be achieved or,
if achieved, that levels of profitability will not vary significantly between
quarters. Based on the foregoing, we believe that future revenues, expenses and
operating results are likely to vary significantly from quarter to quarter. As
a result, quarter-to-quarter comparisons of operating results are not
necessarily meaningful or indicative of future performance.
Further, it is likely that, from time to time, our future quarterly
operating results will be below the expectations of public market analysts or
investors. In such event, or in the event that adverse medical device market
conditions prevail, or are perceived to prevail, with respect to our business or
generally, the market price of our common stock would likely be materially
adversely affected.
We Do Not Expect to Pay Dividends on Common Stock
For the foreseeable future, we anticipate that all earnings, if any, will
be retained for the operation and expansion of our business and that we will not
pay cash dividends.
-15-
<PAGE>
Our Charter, Bylaws and Anti-takeover Protections Could Delay or Prevent a Sale
of Fischer
Our certificate of incorporation and bylaws include provisions that may be
deemed to have anti-takeover effects and may delay, defer or prevent a takeover
attempt that stockholders might consider in their best interests. These
provisions include the ability of our Board of Directors to issue shares of
preferred stock in one or more series with such rights, obligations and
preferences as it may provide, a "fair price" provision, a provision that
requires stockholder action to be taken at meetings and not by written consent,
a provision under which only our Board of Directors may call meetings of
stockholders, certain advance notice procedures for nominating candidates for
election to the Board of Directors and staggered terms for our Board of
Directors.
In November 1994, our Board of Directors adopted a stockholder rights plan
and, pursuant thereto, issued preferred stock purchase rights (Rights) to the
holders of our common stock. The Rights have certain anti-takeover effects. If
triggered, the Rights would cause substantial dilution to a person or group of
persons (other than certain exempt persons, including Morgan W. Nields, one of
our founders and our Chairman of the Board and Chief Executive Officer, Kinney
L. Johnson, one of our founders, and GE Medical Systems) who acquires more than
15% of our common stock on terms not approved by the Board of Directors.
Additionally, GE Medical Systems owns 506,667 shares of our Series D
Convertible Preferred Stock which, if converted, would constitute approximately
6.72% of our outstanding stock.
In any event, the Rights, and the shares of our Series D Convertible
Preferred Stock owned by GE Medical Systems, could discourage or make more
difficult a tender offer, acquisition, merger or other similar transaction, even
if favorable to our stockholders. See "Description of Fischer Capital Stock."
The Large Number of Shares Eligible for Future Sale Could Adversely Affect Our
Stock Price
Sales of a substantial number of shares of our common stock after this
offering, or the perception that such sales could occur, could have a material
adverse effect on the market price of our common stock and could impair our
ability to raise capital through the sale of equity securities. Future sales of
our common stock under Rule 144 of the Securities Act of 1933 by existing
stockholders or through the issuance of common stock upon the exercise of
options or otherwise could have an adverse effect on the price of our common
stock.
Significant Problems Relating to Year 2000 Issues Could Adversely Affect Our
Business
We use software and related technologies in our products and in product
development and manufacturing that may be impacted by the Year 2000.
The Year 2000 issue exists because many computer systems and applications
use two-digit date fields to designate a year. As a result, date-sensitive
systems may recognize the Year 2000 as 1900, or not at all. This factor could
cause systems to incorrectly process critical financial and operational
information.
We are evaluating our products, computer hardware and operating software,
and third party suppliers for possible Year 2000 problems. At this time, we
have not formulated contingency plans in the event that systems are not Year
2000 compliant. The need to develop such plans will be assessed following the
completion of testing of our primary business software and upon receipt of
information from critical third party suppliers regarding their Year 2000
compliance.
-16-
<PAGE>
The cost to be incurred in conjunction with our Year 2000 project is
expected to be less than $200,000 for anticipated upgrades to existing desk-top
personal computers and for the assistance of outside consultants in upgrading
our primary business system. We do not consider this amount material to our
financial position. Unanticipated problems could cause this amount to be
exceeded, however, and we can give no assurance that, under such circumstances,
the amount would not be material.
Most Year 2000 project activities are being performed with internal
resources. Consequently, Year 2000 activities may delay new information systems
development and other projects. Such delays are not, however, expected to
materially impact our results of operations.
The failure to correct a material Year 2000 problem could result in
interruption or failure of normal business activities. The Year 2000 problem
involves inherent uncertainty, in part because of uncertainty regarding the Year
2000 readiness of third-party suppliers and customers. Therefore, we cannot
state with certainty whether the consequences of Year 2000 failures will have a
material impact on our results of operations, liquidity or financial condition.
Our Year 2000 project is expected to significantly reduce our level of
uncertainty about the Year 2000 problem, particularly with respect to the Year
2000 readiness of our third-party suppliers. We believe that the possibility of
significant interruptions of normal operations should be significantly reduced
by the implementation of upgraded business systems and the completion of the
Year 2000 project as scheduled.
Based on our assessment to date, we believe that few of our current
products will be affected by the Year 2000 problem. Of those that may be
affected, the only significant risk appears to be the possible inaccurate dating
of patient records. The remedial actions to correct dating problems that may
occur appear to be either the customer being able to reset the date (on a one-
time basis) to prevent future occurrences, or the implementation of
modifications, made by us or third-party suppliers, that are currently
available.
We have completed our evaluation of earlier versions of current products
and have not identified any issues that cannot be easily addressed. If we
identify such problems at a later date, however, disruption of customers'
operations could conceivably occur, potentially resulting in legal actions being
taken against us, even though Year 2000 problems are not expressly covered by
product warranties.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
We have made certain forward-looking statements in this document and in the
documents referred to in this document that are subject to risks and
uncertainties. These statements are based on the beliefs and assumptions of our
management and on the information currently available to our management.
Forward-looking statements include information concerning our possible or
assumed future results. These statements may be preceded by, followed by or
otherwise include the words "believes," "expects," "anticipates," "intends,"
"plans," "estimates" or similar expressions.
Forward-looking statements are not guarantees of performance. They involve
risks, uncertainties and assumptions. Our future results and stockholder values
may differ materially from those expressed in these forward-looking statements.
Many of the factors that will determine these results and values are beyond our
ability to control or predict. Investors are cautioned not to put undue
reliance on any forward-looking statements. Except for any ongoing obligation
to disclose material information as required by the Federal securities laws, we
do not have any intention or obligation to update forward-looking statements
after the distribution of this prospectus, even if new information, future
events or other circumstances have
-17-
<PAGE>
made them incorrect or misleading. For those statements, we claim the protection
of the safe harbor for forward-looking statements contained in the Private
Securities Litigation Reform Act of 1995.
You should understand that various factors, in addition to those discussed
elsewhere in this document and in the documents referred to in this document,
could affect our future results and could cause results to differ materially
from those expressed in such forward-looking statements. For a discussion of
certain of these important factors, see "Risk Factors."
USE OF PROCEEDS
We will not receive any of the proceeds from the sale of our common stock
by the selling stockholder.
DESCRIPTION OF FISCHER CAPITAL STOCK
The following is a summary description of our capital stock. Investors are
urged to review our certificate of incorporation, as amended to date, which has
been filed as an exhibit to a registration statement filed with the Securities
and Exchange Commission.
General
Our authorized capital stock consists of (i) 25,000,000 shares of common
stock, $.01 par value, of which approximately 7,535,522 shares will be
outstanding if all of the shares offered are sold in this offering, and (ii)
5,000,000 shares of preferred stock, $.01 par value, issuable in series, of
which 500,000 shares have been designated as "Series C Junior Participating
Preferred Stock" (Series C Preferred), none of which are outstanding, and
1,333,333 shares have been designated as "Series D Convertible Preferred Stock"
(Series D Preferred), 506,667 of which are outstanding, none of which shall be
outstanding if all of the shares are converted and sold in this offering.
The following description of our capital stock and certain provisions of
our certificate of incorporation and bylaws are qualified in their entirety by
reference to such documents, copies of which have been previously filed with the
Securities and Exchange Commission. As of September 30, 1999, our common stock
was held of record by 230 stockholders and our Series D Preferred was held of
record by one stockholder, GEMS, the selling stockholder in this offering.
Common Stock
Holders of our common stock are entitled to one vote for each share held on
all matters submitted to a vote of the stockholders, including the election of
directors. Accordingly, holders of a majority of the shares of our common stock
entitled to vote in any election of directors may elect all of the directors
standing for election if they choose to do so. Our certificate of incorporation
does not provide for cumulative voting for the election of directors. Subject to
the dividend rights of any outstanding preferred stock, holders of our common
stock are entitled to receive ratably such dividends, if any, as may be declared
from time to time by the Board of Directors out of funds legally available
therefor, and, subject to the liquidation preferences of any outstanding
preferred stock, are entitled to receive, pro rata, all of our assets that are
available for distribution to such holders upon liquidation. Holders of our
common stock have no preemptive, subscription or redemption rights. The transfer
agent and registrar for our common stock is American Securities Transfer Inc.,
Denver, Colorado.
-18-
<PAGE>
Preferred Stock
Pursuant to our certificate of incorporation, we are authorized to issue
5,000,000 shares of preferred stock, which may be issued from time to time in
one or more series upon authorization by our Board of Directors. The Board of
Directors, without further approval of the stockholders, are authorized to fix
the dividend rights and terms, conversion rights, voting rights, redemption
rights and terms, liquidation preferences and any other rights, preferences,
privileges and restrictions applicable to each series of the preferred stock.
The issuance of preferred stock, while providing flexibility in connection with
possible acquisitions and other corporate purposes could, among other things,
(i) adversely affect the voting power of the holders of our common stock, (ii)
make it more difficult for a third party to gain control of us, (iii) discourage
bids for our common stock at a premium, or (iv) otherwise adversely affect the
market price of our common stock.
In connection with the issuance of the Rights (described below) in November
1994, we designated 500,000 shares of preferred stock as Series C Preferred.
Shares of the Series C Preferred could become issuable under certain
circumstances if the Rights become exercisable and are exercised.
In June 1995, we completed a private sale of 1,333,333 shares of our Series
D Preferred to GEMS for $10,000,000. The 826,666 shares of our Series D Stock
surrendered by GEMS pursuant to its agreement with us effective March 24, 1999
have been canceled and retired and may not be reissued by us to any party.
Series D Convertible Preferred Stock
The Series D Preferred is entirely owned by the Selling Stockholder. It
has no voting rights, except as otherwise required by law. The Series D
Preferred ranks senior to all of our other equity securities. The Series D
Preferred is convertible, at the option of the holder, at any time into an equal
number of shares of our common stock, subject to certain adjustments. The
Series D Preferred bears no stated dividend but its holders are entitled to
receive equivalent dividends to those paid on any of our other equity
securities. The Series D Preferred is not redeemable. The Series D Preferred
has a liquidation preference of $7.50 per share, plus any declared but unpaid
dividends, upon the happening of certain events, including certain changes of
control. This liquidation preference is payable prior and in preference to any
distributions on any of our other equity securities. In the event of a change
of control in which any of several companies acquire control of us, GEMS has the
following rights: First, if a change in control transaction occurs or we come
to an agreement to effect a change of control transaction prior to March 24,
2000 with these specified companies, then GEMS will be entitled to $7.50 per
share less the average closing price of a share of our common stock for the 20
trading days preceding March 24, 2000, on each of the 826,666 shares surrendered
pursuant to the agreement. Second, as to the remaining 506,667 outstanding
shares of Series D Preferred, the change of control rights will expire on March
24, 2002. Also, the Series D Preferred is protected by customary anti-dilution
provisions. See "Selling Stockholder."
Stockholders Rights Plan; Series C Junior Participating Preferred Stock
In November 1994, our Board of Directors declared a dividend, on each share
of our common stock outstanding at the close of business on November 14, 1994,
of one right to purchase, in certain circumstances, one one-hundredth of a newly
issued share of Series C Preferred at the initial purchase price of $25.00 per
share (a Right). Each share of subsequently issued common stock, including each
share of common stock offered hereby, will also incorporate one Right. The
Rights will expire on November 3, 2004.
-19-
<PAGE>
The Rights will be exercisable and transferable apart from our common stock
only if a person or group (other than certain exempt persons, including Morgan
W. Nields, one of our founders and our Chairman of the Board and Chief Executive
Officer, Kinney L. Johnson, one of our founders, and GEMS) acquires beneficial
ownership of 15% or more of our common stock, or commences a tender or exchange
offer upon the consummation of which such person or group would beneficially own
15% or more of our common stock. We will generally be entitled to redeem the
Rights at $.001 per Right at any time until a person or group (other than the
exempt persons) has become the beneficial owner of 15% or more of our common
stock.
Under the Rights "flip-in" feature, if any such person or group becomes the
beneficial owner of 15% or more of our common stock, then each Right not owned
by such person or group or certain related parties will entitle its holder to
purchase, at the Right's then current purchase price, shares of our common stock
(or in certain circumstances as determined by the Board of Directors, cash,
other property or other securities) having a value of twice the Right's purchase
price.
Under the Rights "flip-over" provision, if, after any other person or group
(other than the exempt persons) becomes the beneficial owner of 15% or more of
our common stock, we are involved in a merger or other business combination
transaction with another person, or we sell 50% or more of our assets or earning
power in one or more transactions, each Right will entitle its holder to
purchase, at the Right's then current purchase price, shares of the common stock
of such other person having a value of twice the Right's purchase price.
The Series C Preferred is not redeemable and, unless otherwise provided in
connection with the creation of a subsequent series of preferred stock, is
subordinate to all other series of our preferred stock. Each share of Series C
Preferred represents the right to receive, when and if declared, a quarterly
dividend at an annual rate equal to the greater of $1.00 per share or 100 times
the quarterly per share cash dividends declared on our common stock during the
immediately preceding fiscal year. In addition, each share of Series C Preferred
represents the right to receive 100 times any noncash dividends (other than
dividends payable in common stock) declared on our common stock, in like kind.
In the event of our liquidation, dissolution or winding up, each share of
Series C Preferred will represent the right to receive a liquidation payment in
an amount equal to the greater of $1.00 per share or 100 times the liquidation
payment made on each share of our common stock.
Each share of Series C Preferred has 100 votes, voting together with our
common stock. In the event of any merger, consolidation or other transaction in
which our common stock is exchanged, each share of Series C Preferred represents
the right to receive 100 times the amount received per share of common stock.
The rights of the Series C Preferred as to dividends, liquidation, voting rights
and merger participation are protected by customary anti-dilution provisions.
Change in Control Provisions in the Certificate of Incorporation or Bylaws
In addition to the Stockholders Rights Plan and certain aspects of the
preferred stock (described above), our certificate of incorporation also
contains certain provisions which may have the effect of delaying, deferring or
preventing a change of control.
Our certificate of incorporation provides that our Board of Directors shall
consist of three classes of directors, each serving for a three-year term ending
in a successive year. Each class currently consists of two directors. This
provision may make it more difficult to effect a takeover because it would
generally take two annual meetings of our stockholders for an acquiring party to
elect a majority of the Board of Directors. As a result, a classified Board of
-20-
<PAGE>
Directors may discourage proxy contests for the election of directors or
purchases of a substantial block of our stock because it could operate to
prevent a potential acquiror from obtaining control of our Board of Directors in
a relatively short period of time.
Our certificate of incorporation also includes a "fair price" provision
that requires the affirmative vote of two-thirds of the outstanding shares of
our capital stock entitled to vote generally in the election of directors (in
lieu of the majority vote otherwise required by the Delaware General Corporation
Law) to approve certain business combinations, including certain mergers,
security issuances, recapitalizations, liquidations and the sale, lease or
transfer of a substantial part of our assets, involving us or a subsidiary and
an owner of 5% or more of our outstanding common stock (an interested
stockholder), unless such business combination is approved by a majority of the
directors unaffiliated with the interested stockholder or the stockholders
receive a "fair price" for their holdings and other procedural requirements are
met. A "fair price" is an amount at least equal to the greater of (i) the
highest price per share paid by the interested stockholder for any shares
acquired by it when it became such a stockholder or within two years prior to
the announcement of the proposed business combination, or (ii) the highest
market value or liquidation value per share on the date of such announcement or
the date the person became an interested stockholder.
In addition, our certificate of incorporation provides that stockholders
may take action only at a duly called and held meeting and may not take action
by written consent. This provision may make it more difficult to effect a
takeover by means of certain transactions, such as a merger or sale of assets,
by requiring a potential acquiror to hold a stockholders' meeting before such a
transaction could be consummated.
Our certificate of incorporation also provides that the "fair price"
provision, the "staggered board" provision and the provisions concerning voting
rights of stockholders may be amended only by a vote of two-thirds of the
outstanding shares of our capital stock entitled to vote generally in the
election of directors, voting as a single class.
Finally, we are subject to Section 203 of the Delaware General Corporation
Law, which imposes restrictions on certain business combinations with interested
persons. That section defines an "interested person" as any person who acquires
15% or more of our outstanding voting stock. In general, we are prohibited from
engaging in business combinations with an interested person for a period of
three years from the date that person becomes an interested person, subject to
certain exceptions. By restricting our ability to engage in business
combinations with an interested person, the application of Section 203 may
provide a barrier to takeovers not approved in advance by our Board of
Directors.
MARKET PRICE OF FISCHER COMMON STOCK
Our common stock is quoted on the Nasdaq National Market under the symbol
"FIMG." The range of high and low bid quotations for our common stock as quoted
(without retail markup or markdown and without commissions) on the Nasdaq
National Market for the past fiscal year and the first and second quarters of
the current fiscal year are provided below. The figures shown below do not
necessarily represent actual transactions:
-21-
<PAGE>
High Low
Bid Bid
-------- --------
1999
Fourth quarter (through December 2) $2.87 $0.81
Third Quarter 1.93 1.25
Second Quarter 2.44 1.50
First Quarter 3.12 1.87
1998
Fourth Quarter $3.13 $1.91
Third Quarter 4.44 2.25
Second Quarter 5.00 3.31
First Quarter 5.63 3.63
1997
Fourth Quarter $6.25 $4.81
Third Quarter 8.00 5.63
Second Quarter 7.88 3.25
First Quarter 7.75 5.00
At September 30, 1999 there were approximately 230 record holders of our
common stock.
Dividends
We have not paid any cash dividends on our common stock and intend to
retain future earnings to finance our business. We are subject to restrictions
on paying dividends under state law and our revolving credit agreement.
-22-
<PAGE>
SELLING STOCKHOLDER
The following table sets forth certain information regarding the selling
stockholder's beneficial ownership of our common stock as of September 30, 1999.
<TABLE>
<CAPTION>
Shares Shares
Beneficially Beneficially
Owned Prior to Owned After
This Offering This Offering
--------------------- -----------------------
<S> <C> <C> <C> <C> <C>
Shares
Percent Offered Percent
of in This Offering of
Name and Address Number Outstanding Number Outstanding(1)
GE Medical Systems, a division of 506,667(2) 6.72% 506,667(2) 0 0%
General Electric Company
PO Box 414 Milwaukee,
Wisconsin 53021
</TABLE>
(1) For purposes of calculating the number of shares of common stock
beneficially owned by the selling stockholder after this offering, we are
assuming that all shares of common stock offered hereunder that the selling
stockholder may acquire from us upon its conversion of the Series D
Convertible Preferred Stock held by it have been sold pursuant to this
offering.
(2) Represents the 506,667 shares of our common stock that the selling
stockholder may acquire from us upon its conversion of the 506,667 shares of
our Series D Convertible Preferred Stock currently held by it.
Relationship Between Fischer and the Selling Stockholder
On June 20, 1995, GE Medical Systems (GEMS) acquired 1,333,333 shares of
our Series D Convertible Preferred Stock, $.01 par value, and entered into an
original equipment manufacturer (OEM) agreement with us relating to our Tilt-C
system. For a description of the terms of the Series D Convertible Preferred
Stock, see "Description of Fischer Capital Stock--Series D Convertible Preferred
Stock." In 1998, our sales to GEMS under the OEM agreement accounted for
$3,400,000, or 5.9%, of our total revenues.
By an agreement effective March 24, 1999, GEMS surrendered 826,666, or 62%,
of these shares in exchange for a non-exclusive right to manufacture the Tilt-C
system. We have manufactured this system for GEMS since 1994. See "Risk
Factors." This transaction modified our previous arrangement with GEMS, under
which GEMS would receive the right to manufacture the Tilt-C system under
certain circumstances in exchange for all of the Series D Convertible Preferred
Stock held by it. Pursuant to the agreement, we will have continuing
manufacturing, licensing and training obligations to GEMS with respect to the
Tilt-C system.
Moreover, in addition to its other terms, the agreement amends certain
terms of the Series D Convertible Preferred Stock. Namely, the rights of GEMS
in the event of a "Change of Control" were modified. First, if a Change of
Control occurs, or we come to an agreement with a party to effect a Change of
Control, prior to March 24, 2000, we are required to pay to GEMS upon the
occurrence of such Change of Control an amount in cash or marketable securities
with an aggregate value no less than $7.50 per each of the 826,666 shares
surrendered by GEMS pursuant to the agreement. Second, as to GEMS' remaining
506,667 shares, the Change of Control rights delineated in our certificate of
incorporation will expire on March 24, 2002.
For these purposes, a "Change of Control" generally includes any
transaction involving a transfer of more than 50% of the combined voting power
of our capital stock or our sale of all or substantially all of our
-23-
<PAGE>
assets to any one or more of Picker International, Inc., Siemens Medical
Systems, Toshiba America Medical Systems, Inc. or Philips Medical Systems, or
any of their affiliates.
Except for these modifications to the Change of Control rights, GEMS'
rights under our certificate of incorporation as a holder of its remaining
506,667 shares of our Series D Convertible Preferred Stock were not changed.
See "Description of Capital Stock--Series D Preferred Stock."
GEMS also has registration rights covering the common stock that may be
acquired from us by it upon its conversion of the Series D Convertible Preferred
Stock held by it. This prospectus covers all of the common stock that may be
acquired by GEMS on conversion of the Series D Convertible Preferred Stock.
GEMS is a significant customer and accounted for approximately 5.9% of our
1998 total revenues. GEMS has purchased Tilt-C units from us since 1994 under
the terms of our OEM contract. The Tilt-C unit is a multi-purpose 90 degree
tilting table with a cantilevered table top and sophisticated positioner
controls. These are used in biopsies and other interventional procedures, as
well as in general imaging studies. We expect to continue our manufacturing
activity for GEMS through at least December 1999, the original expiration of our
OEM contract.
In December 1997, we filed a lawsuit seeking the determination of a
reasonable price for The Tilt-C units that we had contracted to deliver to GEMS
under the extension of a purchase and sale agreement. However, the contract did
not contain a price for the Tilt-C units produced during the extended term. The
trial court, through an advisory jury, rendered a verdict finding the reasonable
price per Tilt-C unit to be $157,400. The court rendered its own finding that
the reasonable price per Tilt-C unit should be $124,000, and entered judgement
to that effect. GEMS has been paying the price set by the court on the
approximately 75 units that have been produced under the extended term.
We appealed the court's judgement to the Tenth Circuit Court of Appeals,
which found that the issue should have been tried to a jury (rather than an
advisory jury) and remanded the case for a new jury trial. The case will
probably be tried during the summer of 2000.
PLAN OF DISTRIBUTION
We are registering these shares of our common stock on behalf of the
selling stockholder. The common stock covered by this prospectus may be offered
and sold by the selling stockholder, or by purchasers, transferees, donees,
pledgees or other successors in interest of the selling stockholder, directly or
through brokers, dealers, agents or underwriters who may receive compensation in
the form of discounts, commissions or similar selling expenses paid by the
selling stockholder or by a purchaser of these shares on whose behalf such party
may act as agent. Sales and transfers of these shares may be effected from time
to time in one or more transactions, in private or public transactions, on the
Nasdaq National Market, in the over-the-counter market, in negotiated
transactions or otherwise, at a fixed price or prices that may be changed, at
market prices prevailing at the time of sale, at negotiated prices, without
consideration or by any other legally available means. Any or all of these
shares may be sold from time to time by means of:
. a block trade, in which a broker or dealer attempts to sell these shares
as agent but may position and resell a portion of these shares as
principal to facilitate the transaction;
. purchases by a broker or dealer as principal and the subsequent sale by
such broker or dealer for its account pursuant to this prospectus;
-24-
<PAGE>
. ordinary brokerage transactions (which may include long or short sales)
and transactions in which the broker solicits purchasers;
. the writing (sale) of put or call options on these shares;
. the pledging of shares as collateral to secure loans, credit or other
financing arrangements and, upon any subsequent foreclosure, the
disposition of shares by the lender thereunder; and
. any other legally available means.
To the extent required with respect to a particular offer or sale of these
shares, a prospectus supplement will be filed and will accompany this
prospectus, to disclose (i) the number of shares to be sold, (ii) the purchase
price, (iii) the name of any broker, dealer or agent effecting the sale or
transfer and the amount of any applicable discounts, commissions or similar
selling expenses, and (iv) any other relevant information.
The selling stockholder may transfer these shares by means of gifts,
donations and contributions. This prospectus may be used by the recipients of
such gifts, donations and contributions to offer and sell the shares received by
them, directly or through brokers, dealers or agents and in private or public
transactions. If, however, sales pursuant to this prospectus by any such
recipient could exceed 500 shares, a prospectus supplement would be required to
be filed to identify the recipient as the selling stockholder and disclose any
other relevant information. Such prospectus supplement would be required to be
delivered, together with this prospectus, to any purchaser of such shares.
In connection with distributions of these shares or otherwise, the selling
stockholder may enter into hedging transactions with brokers, dealers or other
financial institutions. In connection with such transactions, brokers, dealers
or other financial institutions may engage in short sales of our common stock in
the course of hedging the positions they assume with the selling stockholder.
To the extent permitted by applicable law, the selling stockholder also may sell
these shares short and redeliver the shares to close out such short positions.
The selling stockholder and any broker-dealers who participate in the
distribution of the shares may be deemed to be "underwriters" under the
Securities Act of 1933 and any discounts, commissions or similar selling
expenses they receive and any profit on the resale of the shares purchased by
them may be deemed to be underwriting commissions or discounts. The selling
stockholder may agree to indemnify any broker, dealer or agent that participates
in transactions involving the sale of these shares against certain liabilities,
including liabilities arising under the Securities Act of 1933. The aggregate
net proceeds to the selling stockholder from the sale of these shares will be
the purchase price of the shares less any discounts, concessions or commissions.
The selling stockholder is acting independently of us in making decisions
with respect to the timing, price, manner and size of each sale. We have not
engaged any broker, dealer or agent in connection with the distribution of
these shares. There is no assurance, therefore, that the selling stockholder
will sell any or all of the shares. In connection with the offer and sale of
the shares, we have agreed to make available to the selling stockholder copies
of this prospectus and any applicable prospectus supplement and have informed
the selling stockholder of the need to deliver copies of this prospectus and any
applicable prospectus supplement to purchasers at or prior to the time of any
sale of the shares covered by this prospectus.
The shares covered by this prospectus may qualify for sale pursuant to
Section 4(1) of the Securities Act of 1933 or Rule 144 promulgated thereunder,
and may be sold pursuant to such provisions rather than pursuant to this
prospectus.
-25-
<PAGE>
We have agreed to pay all of the expenses incident to the registration of
the shares, other than discounts and selling concessions or commissions, if any.
We have agreed to indemnify the selling stockholder against certain liabilities,
including liabilities arising under the Securities Act of 1933.
EXPERTS
The financial statements and schedules incorporated by reference in this
prospectus have been audited by Arthur Andersen LLP, independent public
accountants, as indicated in their reports with respect thereto, and are
incorporated by reference herein in reliance upon the authority of said firm as
experts in giving said reports.
LEGAL MATTERS
Certain legal matters with respect to the shares of common stock being
registered hereunder will be passed upon by Brobeck, Phleger & Harrison LLP,
Broomfield, Colorado.
-26-
<PAGE>
PART II
INFORMATION NOT REQUIRED
IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution
The following table sets forth the costs and expenses payable by us in
connection with the sale of the common stock being registered (all amounts are
estimated except the Commission Registration Fee).
<TABLE>
<S> <C>
Commission Registration Fee........................................... $ 141
Blue Sky Qualification Fees and Expenses (including legal fees)
(estimated)........................................................... $ 6,000
Printing Expenses (estimated)......................................... $ 1,000
Legal Fees and Expenses (estimated)................................... $15,000
Accountants' Fees and Expenses (estimated)............................ $ 2,000
Miscellaneous Expenses (estimated).................................... $ 859
=============
Total $25,000
</TABLE>
Item 15. Indemnification of Directors and Officers
Our certificate of incorporation and bylaws provide that we shall, to the
fullest extent permitted by the Delaware General Corporation Law, as amended
from time to time, indemnify all of our directors and officers.
Section 145 of the Delaware General Corporation Law provides in part that a
corporation shall have the power to indemnify any person who was or is a party
or is threatened to be made a party to any threatened, pending or completed
action, suit or proceeding (other than an action by or in the right of the
corporation) by reason of the fact that such person is or was a director,
officer, employee or agent of the corporation or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation or other enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by him or her in connection with such action, suit or proceeding if he or she
acted in good faith and in a manner he or she reasonably believed to be in or
not opposed to the best interests of the corporation, and with respect to any
criminal action or proceeding, had no reasonable cause to believe his or her
conduct was unlawful.
Similar indemnity is authorized for such persons against expenses
(including attorneys' fees) actually and reasonably incurred in defense or
settlement of any threatened, pending or completed action or suit by or in the
right of the corporation, if such person acted in good faith and in a manner he
or she reasonably believed to be in or not opposed to the best interests of the
corporation, and provided further that (unless a court of competent jurisdiction
otherwise provides) such person shall not have been adjudged liable to the
corporation.
Any such indemnification may be made only as authorized in each specific
case upon a determination by the stockholders or disinterested directors that
indemnification is proper because the
II-1
<PAGE>
indemnitee has met the applicable standard of conduct. Where an officer or a
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him or her against the
expenses which such officer or director actually or reasonably incurred.
Additionally, our certificate of incorporation and bylaws provide for
mandatory indemnification of directors to the fullest extent permitted by the
Delaware General Corporation Law. This provision does not eliminate the
liability of a director (i) for a breach of the director's duty of loyalty to us
or our stockholders; (ii) for acts or omissions by the director not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) for liability arising under Section 174 of the Delaware General
Corporation Law (relating to the declaration of dividends and purchase or
redemption of shares in violation of the Delaware General Corporation Law); or
(iv) for any transaction from which the director derived an improper personal
benefit.
We have a directors and officers insurance policy with a $5,000,000
coverage limit per occurrence and in the aggregate per year.
Section 2.9 of the Registration Rights Agreement between GE Medical Systems
and us provides that we will indemnify and hold harmless GE Medical Systems and
its officers, directors, underwriters and controlling persons against any
losses, claims, damages or liabilities (joint or several) to which they may
become subject that arise from any untrue statement of a material fact made by
us in this registration statement or prospectus, or our omission to state herein
or therein a material fact, or our violation of the Securities Act of 1933 or
the Securities Exchange Act of 1934. The agreement also provides that GE
Medical Systems will indemnify and hold harmless us and our officers, directors,
underwriters and controlling persons against any losses, claims, damages or
liabilities (joint or several) to which we may become subject that arise from
any untrue statement of a material fact made by it in written information
furnished by it to us for use in connection with this registration statement or
prospectus, or its omission to state therein a material fact, or its violation
of the Securities Act of 1933 or the Securities Exchange Act of 1934.
Item 16. Exhibits
Exhibit Number Description of Exhibits
4.1 Certificate of Amendment to the Certificate of Designation for
the Series D Convertible Preferred Stock, as amended*
5.1 Opinion and Consent of Brobeck, Phleger & Harrison LLP*
23.1 Consent of Arthur Andersen LLP**
23.2 Consent of Brobeck, Phleger & Harrison LLP (included on Exhibit
5.1)*
24.1 Power of Attorney (included on page II-5)**
* Filed Herewith
** Previously filed.
II-2
<PAGE>
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:
(a) to include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(b) 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. Notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes
in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
(c) 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;
Provided, however, that paragraphs 1(a) and 1(b) do not apply if the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by the registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference 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 a post-effective amendment any of
the securities being registered which remain unsold at the termination of
the offering.
The undersigned registrant hereby undertakes 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 section 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 this
registration statement shall be deemed to be a new registration statement
relating to the securities offered herein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
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
II-3
<PAGE>
indemnification is against public policy as expressed in the Securities Act
of 1933 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 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 amendment to the
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Denver, State of Colorado, on December 29, 1999.
FISCHER IMAGING CORPORATION
By: /s/Morgan W. Nields
-----------------------
Name: Morgan W. Nields
Title: Chairman of the Board,
Chief: Executive Officer and Director
Pursuant to the requirements of the Securities Act of 1933, this amendment
to the registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
<S> <C> <C>
/s/Louis Rivelli* Principal Accounting and December 28, 1999
- --------------------------
Louis Rivelli Financial Officer
/s/David G. Bragg, M.D.* Director December 28, 1999
- --------------------------
David G. Bragg, M.D.
/s/Fred Burbank* Director December 28, 1999
- --------------------------
Fred Burbank
/s/Thomas J. Cable* Director December 28, 1999
- --------------------------
Thomas J. Cable
/s/Kathryn A. Paul* Director December 28, 1999
- --------------------------
Kathryn A. Paul
/s/Louis Rivelli* Director, President and December 28, 1999
- --------------------------
Louis Rivelli Chief Operating Officer
</TABLE>
*By Morgan Nields as power of attorney.
II-5
<PAGE>
CERTIFICATE OF
AMENDMENT TO
CERTIFICATE OF DESIGNATIONS,
POWERS, PREFERENCES AND RIGHTS
OF THE
SERIES D CONVERTIBLE PREFERRED STOCK
(par value $.01)
of
FISCHER IMAGING CORPORATION
Pursuant to Section 242 of the General Corporation Law
of the State of Delaware
Fischer Imaging Corporation, a corporation organized and existing under and
by virtue of the General Corporation Law of the State of Delaware (the
"Corporation"), DOES HEREBY CERTIFY AS FOLLOWS:
FIRST: The name of the corporation is Fischer Imaging Corporation.
SECOND: The date on which the Certificate of Incorporation of the Corporation
was filed with the Secretary of State of Delaware is June 26, 1991.
THIRD: Subparagraph c of Section 3 of the Certificate of Designations,
Powers, Preferences and Rights of the Series D Convertible Preferred
Stock of the Corporation (the "Certificate of Designation") shall be
amended and restated in its entirety to read as follows:
"(c) For purposes of this Section 3, a liquidation, dissolution
or winding up of the Corporation, other than a liquidation,
dissolution or winding up of the Corporation as a result of which
the holders of the Series D Preferred Stock are entitled to receive
at least the Minimum Consideration, shall be deemed to be occasioned
by, or to include, a Change of Control, as defined below, if the
holders of at least a majority of the outstanding shares of Series D
Preferred Stock so elect by written notice to the Corporation (a
"Holder Notice") prior to twenty (20) days after the receipt by such
holders of a Change of Control Notice (as defined herein) which is
accurate in all material respects (a) at the time it is received by
the holders, (b) at the time the Holder Notice is given to the
Corporation and (c) if the Holder Notice is given prior to
consummation of the Change of Control, at the time of consummation
of the Change of Control, it being understood that if the Change of
Control Notice does not comply with each of the foregoing clauses
(a), (b) and (c), the Corporation shall provide to the holders a
revised Change of Control Notice which does so comply, whereupon the
holders shall again have the above-described twenty (20) days to
provide a Holder Notice to the Corporation. Unless the Corporation
is required to provide a revised Change of Control Notice in
accordance with the preceding sentence, a Holder Notice shall be
<PAGE>
irrevocable for 90 days after the date it is given to the
Corporation. In the event of such an election, each holder of Series
D Preferred Stock who so elects shall receive thirty (30) days after
the consummation of the Change of Control, the Series D Liquidation
Preference for each share of Series D Preferred Stock surrendered."
FOURTH: Section 5 of the Certificate of Designation shall be amended and
restated in its entirety to read as follows:
"5. Intentionally Omitted."
FIFTH: The third paragraph of Section 12 of the Certificate of Designation
shall be amended and rested in its entirety to read as follows:
""Change of Control" shall mean any of the following transactions
-----------------
which occurs on or before March 24, 2002: (i) a consolidation,
merger or other transaction or series of related transactions in
which the shareholders of the Company shall receive cash, property
or securities of another corporation or entity in exchange for their
shares of the Corporation's capital stock and, following the
transaction, own less than fifty percent (50%) of the combined
voting power of all outstanding capital stock or other securities of
the surviving or resulting corporation or entity, (ii) the
acquisition of beneficial ownership (as such term is defined in Rule
13d-3 under the Securities Exchange Act of 1934, as amended) of or
the right to acquire more than fifty percent (50%) of the voting
power of the Company's outstanding voting securities (assuming
exercise of all then-exercisable, in-the-money outstanding options
and conversion of all then-convertible, in-the-money convertible
securities) or (iii) any transaction in which all or substantially
all of the assets of the Company are sold."
SIXTH: The foregoing amendment to the Certificate of Designation has been
duly adopted by the directors and stockholders of the Corporation in
accordance with the provisions of Sections 141(f) and 242 of the
General Corporation Law of the State of Delaware.
2
<PAGE>
IN WITNESS WHEREOF, we have executed and subscribed this Certificate of
Amendment to Certificate of Designations, Powers, Preferences and Rights of the
Series D Convertible Preferred Stock of the Corporation as of this 23/rd/ day of
December, 1999.
FISCHER IMAGING CORPORATION
By: /s/ Morgan W. Nields
----------------------
Morgan W. Nields
Chairman of the Board and
Chief Executive Officer
Attest:
/s/ Vicky Lynn Lyon
- ------------------------------------
Vicky Lynn Lyon, Executive Assistant
3
<PAGE>
EXHIBIT 5.1
December 28, 1999
Fischer Imaging Corporation
12300 N. Grant Street
Denver, CO 80241
Re: Fischer Registration Statement on Form S-3
Ladies and Gentlemen:
We have acted as counsel to Fischer Imaging Corporation, a Delaware
corporation (the "Company"), in connection with the registration by the Company
of 506,667 shares of the Company's common stock (the "Shares") pursuant to the
Company's Registration Statement No. 333-89649 on Form S-3 (the "Registration
Statement") filed with the Securities and Exchange Commission under the
Securities Act of 1933, as amended (the "Act").
This opinion is being furnished in accordance with the requirements of
Item 16 of Form S-3 and Item 601(b)(5)(i) of Regulation S-K.
We have reviewed the Company's charter documents and the corporate
proceedings taken by the Company in connection with the registration of the
Shares. Based on such review, we are of the opinion that the Shares have been
duly authorized and are legally issued, fully paid and nonassessable.
We consent to the filing of this opinion letter as Exhibit 5.1 to the
Registration Statement and to the reference to this firm under the caption
"Legal Matters" in the prospectus which is part of the Registration Statement.
In giving this consent, we do not thereby admit that we are within the category
of persons whose consent is required under Section 7 of the Act, the rules and
regulations of the Securities and Exchange Commission promulgated thereunder, or
Item 509 of Regulation S-K.
This opinion letter is rendered as of the date first written above and
we disclaim any obligation to advise you of facts, circumstances, events or
developments which hereafter may be brought to our attention and which may
alter, affect or modify the opinion expressed herein. Our opinion is expressly
limited to the matters set forth above and we render no opinion, whether by
implication or otherwise, as to any other matters relating to the Company or the
Shares.
Very truly yours,
/s/ Brobeck, Phleger & Harrison LLP
BROBECK, PHLEGER & HARRISON LLP
