SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES ACT OF 1934
(AMENDMENT NO.______)
Filed by the Registrant [x]
Filed by a party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary proxy statement
[x] Definitive proxy statement
[ ] Definitive additional materials
[ ] Soliciting materials pursuant to Sec. 240.14a-11(c) or Sec. 240.14a-12
IMAGING DIAGNOSTIC SYSTEMS, INC.
(Name of Registrant as Specified in its Charter)
Payment of Filing Fee (Check the Appropriate Box):
[x] $125 per Exchange Act Rules 0-11(c)(1)(ii), 14a-6(i)(1), or 14a-6(j)(2).
[ ] $500 per each party to the controversy pursuant to Exchange Act Rule
14a-6(i)(3).
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
paid previously. Identify the previous filing by registration statement
number, or the Form or Schedule and the date of its filing.
(1) Amount previously paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE>
IMAGING DIAGNOSTIC SYSTEMS, INC.
6531 NW 18th Court
Plantation, Florida 33313
----------------------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 23, 1996
----------------------------------------
TO THE STOCKHOLDERS OF IMAGING DIAGNOSTIC SYSTEMS, INC.
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of Imaging
Diagnostic Systems, Inc., a Florida Corporation (the "Company"), will be held
on Wednesday, October 23, 1996, at 9:00 a.m. at the Sheraton Suites, located
at 311 N. University Dr., Plantation, Florida, for the following purposes:
1. To elect three (3) directors to serve a one year term expiring upon the
1997 Annual Meeting of Stockholders or until his successor is duly
elected and qualified.
2. To ratify the selection of Margolies and Fink as independent auditors
for the Company for the fiscal year ending June 30, 1997.
3. To transact such other business as may properly come before the meeting
or any adjournment thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on Friday,
September 20, 1996, as the record date for the determination of stockholders
entitled to notice of and to vote at this Annual Meeting and at any
adjournment or postponement thereof.
By Order of the Board of Directors
ALLAN L. SCHWARTZ
Secretary
Plantation, Florida
September 11, 1996
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
HOWEVER, TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO MARK,
SIGN, DATE AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE
POSTAGE PREPAID ENVELOPE ENCLOSED FOR THAT PURPOSE. ANY STOCKHOLDER ATTENDING
THE MEETING MAY VOTE IN PERSON EVEN IF HE OR SHE RETURNED A PROXY. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR
OTHER NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST OBTAIN FROM THE
RECORD HOLDER A PROXY ISSUED IN YOUR NAME.
<PAGE>
IMAGING DIAGNOSTIC SYSTEMS, INC.
6531 NW 18th Court
Plantation, Florida 33313
---------------
PROXY STATEMENT
---------------
INFORMATION CONCERNING SOLICITATION AND VOTING
This Proxy Statement is furnished in connection with the solicitation of
proxies by the Board of Directors (the "Board") of Imaging Diagnostic
Systems, Inc. (the "Company") to be held on Wednesday, October 23, 1996, at
9:00 a.m. at the Sheraton Suites, located at 311 N. University Dr.,
Plantation, Florida, or any adjournment or adjournments thereof, for the
purposes set forth herein and in the accompanying Notice of Annual Meeting.
The Company intends to mail this Proxy Statement and the accompanying proxy
card on or about September 21, 1996, to all shareholders entitled to vote at
the Annual Meeting.
RECORD DATE; OUTSTANDING SHARES
Only stockholders of record at the close of business on Friday, September
20, 1996 (the "Record Date"), are entitled to receive notice of and to vote
at the meeting. On the Record Date, there were outstanding 23,021,789 shares
of Common Stock.
REVOCABILITY OF PROXIES
If a person who has executed and returned a proxy is present at the
meeting and wishes to vote in person, he or she may elect to do so and
thereby suspend the power of the proxy holders to vote his or her proxy. A
proxy also may be revoked before it is exercised by filing with the Secretary
of the Company a duly signed revocation of proxy bearing a later date.
VOTING AND SOLICITATION
Each share of Common Stock issued and outstanding on the record date shall
have one vote on the matters presented herein, except that with respect to
the election of directors, each share of Common Stock is entitled to one vote
for a nominee for each director position. Stockholders do not have the right
to cumulate votes in the election of directors.
<PAGE>
SOLICITATION
The Company will bear the entire cost of the solicitation of proxies
including preparation, assembly, printing and mailing of this proxy
statement, the proxy and any additional information furnished to
stockholders. Copies of solicitation materials will be furnished to banks,
brokerage houses, fiduciaries and custodians holding in their names shares of
Common Stock beneficially owned by others to forward such beneficial owners.
Original solicitation of proxies by mail may be supplemented by telephone,
facsimile, telegram or personal solicitation by directors, officers, or other
regular employees of the Company. No additional compensation will be paid to
directors, officers or other regular employees for such services, but Jersey
Transfer & Trust Co. will be paid its customary fee, estimated to be about
$5,000 if it renders solicitation services.
DEADLINE FOR RECEIPT OF STOCKHOLDER PROPOSALS
Proposals of stockholders of the Company that are intended to be presented
by such stockholders at the Company's Annual Meeting of Stockholders to held
in 1997 must be received by the Company no later than March 31, 1997 in order
that they may be included in the proxy statement and form of proxy relating
to the meeting.
2
<PAGE>
SHARE OWNERSHIP BY PRINICPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
the Company as of August 23, 1996, as to (a) each person known to the Company
who beneficially owns more than 5% of the outstanding shares of its Common
Stock; (b) each current director, nominee for director and named executive
officer; and (c) all executive officers and directors of the Company as a
group.
<TABLE>
<CAPTION>
NAME AND ADDRESS NUMBER OF SHARES OWNED % OF OUTSTANDING
OF BENEFICIAL OWNER BENEFICIALLY(1)(2) SHARES OF COMMON STOCK
- ------------------- ---------------------- ----------------------
<S> <C> <C>
Richard J. Grable ................................ 9,529,567(3) 41%
Chief Executive Officer and Director
c/o 10281 NW 46th Street
Sunrise, FL 33351
Linda B. Grable .................................. 9,529,567(4) 41%
President and Director
c/o 10281 NW 46th Street
Sunrise, FL 33351
Allan L. Schwartz ................................ 3,767,507(5) 16%
Chief Financial Officer, Executive Vice President
and Director
c/o 10281 NW 46th Street
Sunrise, FL 33351
Peter S. Knezevich ............................... 220,447(6) 1%
Vice President and General Counsel
c/o 10281 NW 46th Street
Sunrise, FL 33351
Malcolm Kanan .................................... 1,211,000 5.2%
153 Harvest Lane
Lincoln Park, NJ
All officers and directors
as a group (4 persons) .......................... 13,517,521 59%
</TABLE>
- ------------
(1) Except as indicate in the footnotes to this table, based on information
provided by such persons, the persons named in the table above have sole
voting power and investment power with respect to all shares of Common
Stock shown beneficially owned by them.
(2) Percentage of ownership is based on 23,021,789 shares of Common Stock
outstanding as of August 30, 1996. Shares of Common Stock subject to
stock options that are exercisable within 60 days as of August 30, 1996
are deemed outstanding for computing the percentage of any other person
or group.
(3) Includes 107,527 shares subject to options and 4,422,000 shares owned by
the wife of Richard J. Grable, Linda B. Grable, of which he disclaims
beneficial ownership.
(4) Includes 107,527 shares subject to options and 5,000,040 shares owned by
the husband of Linda B. Grable, Richard J. Grable, of which she disclaims
beneficial ownership.
(5) Includes 107,527 shares subject to options and 5,000 shares owned by the
wife of Allan L. Schwartz, Carolyn Schwartz, of which he disclaims
beneficial ownership.
(6) Includes 119,047 shares subject to options.
3
<PAGE>
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") requires that the Company's directors and executive officers,
and persons who own more than 10% of a registered class of the Company's
equity securities, to file with the SEC initial reports of ownership and
reports of changes in ownership of Common Stock and other equity securities
of the Company. Officers, directors and greater than 10% beneficial owners
are required by SEC regulation to furnish the Company with copies of all
Section 16(a) forms they file.
To the Company's knowledge, based solely on a review of the copies of such
reports furnished to the Company and written representations that no other
reports were required, during the fiscal year ended June 30, 1996, its
officers, directors and greater than 10% beneficial owners complied with all
applicable Section 16(a) filing requirements.
PROPOSAL 1
ELECTION OF DIRECTORS
Three directors are to be elected at the meeting. All three directors are
to be elected for the term expiring in 1997. Information on the nominees
follows.
Richard J. Grable: Mr. Grable is Chief Executive Officer of the Company
and is the inventor of the CTLM/trademark/ device. He has been in the medical
imaging field since 1973. Mr. Grable has been a Director and Officer of the
Company since its inception.
Linda B. Grable: Mrs. Grable is President of the Company and Chairman of
the Board of Directors. She has 15 years experience in the marketing and
sales of imaging equipment. Mrs. Grable has been a Director and Officer of
the Company since its inception.
Allan L. Schwartz: Mr. Schwartz is Executive Vice-President of the Company
and is responsible for its financial affairs. He is an operationally oriented
executive with a wide range of management, marketing, field engineering,
construction, investment banking, and business development experience. Mr.
Schwartz has been a Director and Officer of the Company since its inception.
COMPENSATION OF DIRECTORS
Each director who is not an employee of the Company receives an annual
retainer of $500 plus a fee of $100 for each Board meeting attended. Under a
deferred compensation plan, directors may elect to defer with interest all or
part of such compensation for varying periods of time.
FAMILY RELATIONSHIPS
Mr. Richard J. Grable and Mrs. Linda B. Grable are husband and wife.
Further, Richard J. Grable and Linda B. Grable are each "Control Persons" as
a result of their control of a majority voting power of the Company's
outstanding stock. Both parties disclaim, however, any beneficial interest or
ownership in the shares owned by the other party.
4
<PAGE>
BOARD MEETINGS AND COMMITTEES
The Board of Directors met 25 times during the fiscal year ended June 30,
1996. The Company has no standing Committees.
REQUIRED VOTE
Each nominee receiving a majority of the number of affirmative votes of
the shares of the Company's Common Stock present and entitled to vote at the
Annual Meeting on this matter shall be elected as the Directors.
The Board of Directors of the Company recommends a vote FOR the election
of the nominees named above. Proxies solicited by the Board of Directors
will be voted FOR the named nominee unless instructions are given to the
contrary.
MANAGEMENT
DIRECTORS AND EXECUTIVE OFFICERS
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
ANNUAL COMPENSATION COMPENSATION
--------------------- ----------------
RESTRICTED STOCK SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION AGE YEAR SALARY($) AWARDS($) OPTIONS/SAR'S(#)
- --------------------------- --- ---- ---------- ---------------- ---------------------
<S> <C> <C> <C> <C> <C>
Richard J. Grable 53 1995 $100,000 357,527
CEO and Director 1996 $183,333(1)
Linda B. Grable 58 1995 $ 65,000 357,527
President and Director 1996 $ 91,000(1)
Allan L. Schwartz 53 1995 $ 84,000 357,527
CFO, Exec. V.P. 1996 $124,000(1)
and Director
Peter S. Knezevich 40 1995 $ 12,500 315,447
General Counsel 1996 $ 56,000
Vice President
</TABLE>
- ------------
(1) Salary includes the following amounts which had accrued as of fiscal year
end 1995 and which were paid in fiscal year 1996: $20,000, Richard J.
Grable; $20,000, Allan L. Schwartz; and, $13,000, Linda B. Grable.
5
<PAGE>
OPTION GRANTS. The following table sets forth certain information
concerning grants of options to purchase Common Stock to the Named Executive
Officers during the fiscal year ended June 30, 1996.
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT
INDIVIDUAL GRANTS ANNUAL RATES OF
-------------------------------------------------------------------------- STOCK PRICE APPRECIATION
NUMBER OF SECURITIES PERCENT OF TOTAL OPTIONS EXERCISE OR FOR OPTION TERM(1)
UNDERLYING OPTIONS GRANTED TO EMPLOYEES BASE PRICE EXPIRATION ------------------------------
NAME GRANTED IN FISCAL YEAR ($/SHARE) DATE 0% 5% 10%
- ---- -------------------- ------------------------ ----------- ---------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard J. Grable 250,000(2) 23% 35% OF FMV 7/4/99 $265,000 $330,200 $399,882
107,527(2) $.93 9/1/99 -- $ 4,560 $ 20,219
Linda B. Grable 250,000(3) 23% 35% OF FMV 7/4/99 $265,000 $330,200 $399,882
107,527(3) $.93 9/1/99 -- $ 4,560 $ 20,219
Allan L. Schwartz 250,000(4) 23% 35% OF FMV 7/4/99 $265,000 $330,200 $399,882
107,527(4) $.93 9/1/99 -- $ 4,560 $ 20,219
Peter S. Knezevich 199,640(5) 21% 35% OF FMV 7/4/00 $211,618 $283,209 $362,642
119,047(5) $.84 9/1/00 -- $ 21,550 $ 46,409
</TABLE>
- ------------
(1) Potential realizable values are based n the fair market value per share as
determined by the Company for financial statement purposes and represents
hypothetical gains that could be achieved for the respective options if
exercised at the date of the grant. The dollar amounts set forth in these
columns are the result of calculations at the zero percent, five percent and
ten percent rates set by the Securities and Exchange Commission and are not
intended to forecast possible future appreciation, if any, of the Common
Stock price. There can be no assurance that such potential realizable values
will not be more or less than indicated in the table above.
(2) Pursuant to an employment agreement dated July 4, 1994, Mr. Grable was
granted an option to purchase 250,000 Common Shares pursuant to the
Company's non-qualified stock option plan vesting one year from the grant
date. Additionally, on September 1, 1996, Mr. Grable was granted an
option to purchase 107,527 shares of Common Stock pursuant to the
Company's incentive stock option plan.
(3) Pursuant to an employment agreement dated July 4, 1994, Mrs. Grable was
granted an option to purchase 250,000 Common Shares pursuant to the
Company's non-qualified stock option plan vesting one year from the grant
date. Additionally, on September 1, 1996, Mrs. Grable was granted an
option to purchase 107,527 shares of Common Stock pursuant to the
Company's incentive stock option plan.
(4) Pursuant to an employment agreement dated July 4, 1994, Mr. Schwartz was
granted an option to purchase 250,000 Common Shares pursuant to the
Company's non-qualified stock option plan vesting one year from the grant
date. Additionally, on September 1, 1996, Mr. Schwartz was granted an
option to purchase 107,527 shares of Common Stock pursuant to the
Company's incentive stock option plan.
(5) Pursuant to an option agreement dated June 8, 1994, Mr. Knezevich was
granted an option to purchase 150,000 Common Shares pursuant to the
Company's non-qualified stock option plan vesting one year from the grant
date. Additionally, on September 1, 1996, Mr. Knezevich was granted an
option to purchase 119,047 shares of Common Stock pursuant to the
Company's incentive stock option plan.
6
<PAGE>
FISCAL YEAR-END OPTION VALUES.
The following table sets forth certain information concerning the number
and value of securities underlying exercisable and unexercisable stock
options as of the fiscal year ended June 30, 1996 by the Name Executive
Officers.
FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS AT OPTIONS AT
FISCAL YEAR END(#) FISCAL YEAR END($)
---------------------- --------------------
NUMBER OF SECURITIES
UNDERLYING OPTIONS/SARS VALUE EXERCISABLE/ EXERCISABLE/
NAME EXERCISED(#) REALIZED($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------------------- ----------- ------------- -------------
<S> <C> <C> <C> <C>
Richard J. Grable 250,000 $243,750 357,527/- $971,694/-
Linda B. Grable 250,000 $243,750 357,527/- $971,694/-
Allan L. Schwartz 250,000 $243,750 357,527/- $971,694/-
Peter S. Knezevich 199,600 $333,132 245,447/82,225 $698,729/$180,600
</TABLE>
EMPLOYMENT AGREEMENTS
The Company entered into five year employment agreements with each of
Messrs. Richard J. Grable and Allan L. Schwartz and Mrs. Linda B. Grable
beginning July 6, 1994. Pursuant to the terms of the employment agreements,
the annual salaries during the Company's development stage are as follows:
Richard J. Grable: $250,000; Linda B. Grable: $78,000; and, Allan L.
Schwartz: $104,000. During the Company's operational stage the salaries will
be: Richard J. Grable: $250,000; Linda B. Grable: $78,000, plus 3% of gross
sales; and, Allan L. Schwartz: $156,000. In addition, each employment
agreement provides for bonuses, health insurance, car allowance, and related
benefits. The bonuses are 5% of the adjusted consolidated net earnings of the
Company; no bonuses have been paid. Richard J. Grable receives a royalty
bonus based on sales of the CTLM device. The Company entered into a two year
employment agreement with Peter S. Knezevich on April 1, 1995, who was made a
Vice President of the Company on September 18, 1995. The agreement currently
provides for a salary of $85,000 per year plus the right to participate in
the Company's incentive stock option plan and non-qualified stock option
plan.
STOCK OPTION PLANS
The Company has established a non-qualified stock option plan for
executives to receive shares of common stock of the Company. The exercise
price for the shares is 35% of the fair market value of the shares on the
date exercised. Each executive may exercise at least 250,000 shares per year
during the term of their employment. At the sole discretion of the Board, the
total number of shares subject to the option may be increased. During the
fiscal year ended June 30, 1996, each of the three executive officers
exercised options and received 250,000 shares.
The Company has established an incentive stock option plan, as defined by
Section 422, Internal Revenue Code of 1986. For the fiscal year ended June
30, 1996, all of the executive officers are participants in this plan.
7
<PAGE>
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Margolies and Fink P.A., CPA as
independent public accountants of the Company with respect to its operations
for the fiscal year 1997, subject to ratification by the holders of Common
Stock of the Company. Margolies and Fink P.A., C.P.A. has audited the
Company's financial statements since 1994. Representatives of Margolies and
Fink are expected to be present at the Annual Meeting, will have an
opportunity to make a statement if they so desire and will be available to
respond to appropriate questions.
There will be presented at the Annual Meeting a proposal for the
ratification of this appointment, which the Board of Directors believes is
advisable and in the best interests of the stockholders. If the appointment
of Margolies and Fink, CPA is not ratified, the matter of appointment of
independent public accountants will be considered by the Board of Directors.
The Board of Directors of the Company recommends a vote FOR the
appointment of Margolies and Fink P.A., CPA as the Company's independent
accountants for the fiscal year ending June 30, 1997.
OTHER MATTERS
The Board of Directors knows of no other matters that will be presented
for consideration at the Annual Meeting. If any other matters are properly
brought before the meeting, it is the intention of the persons named in the
accompanying proxy to vote on such matters in accordance with their best
judgment.
By Order of the Board of Directors
ALLAN L. SCHWARTZ
Secretary
8
<PAGE>
IMAGING DIAGNOSTIC SYSTEMS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS TO BE HELD ON OCTOBER 23, 1996
The undersigned hereby appoints Richard J. Grable and Allan L. Schwartz
and each of them, as attorneys and proxies of the undersigned, with full
power of substitution, to vote all of the shares of stock of Imaging
Diagnostic Systems, Inc. which the undersigned may be entitled to vote at the
Annual Meeting of Stockholders of Imaging Diagnostic Systems, Inc. to be held
at Sheraton Suites, located at 311 N. University Dr., Plantation, Florida, on
October 23, 1996, at 9:00 a.m., local time, and at any and all continuations
and adjournments thereof, with all powers that the undersigned would possess
if personally sent, upon and in respect of the following matters and in
accordance with the following instructions, with discretionary authority as
to any and all other matters that may properly come before the meeting.
Please mark your votes as this [X]
UNLESS A CONTRARY DIRECTION IS INDICATED, THIS PROXY WILL BE VOTED FOR THE
NOMINEES LISTED IN PROPOSAL 1 AND FOR PROPOSAL 2 AS MORE SPECIFICALLY
DESCRIBED IN THE PROXY STATEMENT. IF SPECIFIC INSTRUCTIONS ARE INDICATED,
THIS PROXY WILL BE VOTED IN ACCORDANCE THEREWITH.
PROPOSAL 1: To elect three (3) directors to hold office until the 1997 Annual
Meeting of Stockholders. [ ] FOR [ ] WITHOLDER FOR
NOMINEES: Richard J. Grable, Linda B. Grable, and Allan L. Schwartz
INSTRUCTION: To withhold authority to vote for any nominee, write
the nominee's name in the space provided below.
_____________________________________________________________________________
PROPOSAL 2: To ratify selection of Margolies and Fink P.A., CPA as
independent public accountants of the Company for its fiscal year ending June
30, 1997.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
(CONTINUED, AND TO BE SIGNED ON THE OTHER SIDE)
<PAGE>
I PLAN TO ATTEND THE MEETING [ ]
Date ___________________________________, 1996
Signature(s)__________________________________
______________________________________________
______________________________________________
Please sign exactly as your name appears
hereon. If the stock is registered in the names
of two or more persons, each should sign.
Executors, administrators, trustees, guardians
and attorney-in-fact should add their titles.
If signer is a corporation, please give full
corporate name and have a duly authorized
officer, stating title. If signer is a
partnership, please sign in partnership name by
authorized person.
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
