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 15, 1997
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 15, 1997, 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
1998 Annual Meeting of Stockholders or until his/her successor is duly
elected and qualified.
2. To ratify the selection of Margolies, Fink and Wichrowski, CPA as
independent auditors for the Company for the fiscal year ending June 30,
1998.
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, August
15, 1997, 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
/s/ Allan L. Schwartz
------------------------
Allan L. Schwartz
Secretary
Plantation, Florida
September 7, 1997
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
A BROKER HOLDS YOUR SHARES OF RECORD, OR 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.
2
<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 15, 1997, 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 7, 1997 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, August 15,
1997 (the "Record Date"), are entitled to receive notice of and to vote at the
meeting. On the Record Date, there were outstanding 24,782,584 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.
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 a fee,
estimated to be about $2,000 if it renders solicitation services.
3
<PAGE>
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
1998 must be received by the Company no later than March 31, 1998 in order that
they may be included in the proxy statement and form of proxy relating to the
meeting.
SHARE OWNERSHIP BY PRINICPAL STOCKHOLDERS AND MANAGEMENT
The following table sets forth the beneficial ownership of Common Stock of
the Company as of June 30, 1997, 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 9,419,496(3) 38%
Chief Executive Officer
and Director
c/o 6351 NW 18th Court
Plantation, FL 33313
Linda B. Grable 9,419,496(4) 38%
President and Director
c/o 6351 NW 18th Court
Plantation, FL 33313
Allan L. Schwartz 3,928,113(5) 16%
Executive Vice President,
Chief Financial Officer
and Director
c/o 6351 NW 18th Court
Plantation, FL 33313
Peter S. Knezevich 263,657(6) 1%
Vice President and
General Counsel
c/o 6351 NW 18th Court
Plantation, FL 33313
All officers and directors 13,539,700 55%
as a group (4 persons)
</TABLE>
(1) Except as indicated 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 24,685,084 shares of Common Stock
outstanding as of June 30, 1997. Shares of Common Stock subject to stock
options that are exercisable within 60 days as of June 30, 1997 are deemed
outstanding for computing the percentage of any other person or group.
(3) Includes 56,666 shares subject to options and 4,320,315 shares owned by
the wife of Richard J. Grable, Linda B. Grable, of which he disclaims
beneficial ownership.
(4) Includes 56,666 shares subject to options and 5,042,515 shares owned by
the husband of Linda B. Grable, Richard J. Grable, of which she disclaims
beneficial ownership.
(5) Includes 164,133 shares subject to options and 9,000 shares owned by the
wife of Allan L. Schwartz, Carolyn Schwartz, of which he disclaims
beneficial ownership.
(6) Includes 12,225 shares subject to options.
4
<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, 1997, 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 1998. Information on the nominees
follows.
Richard J. Grable: Mr. Grable is Chief Executive Officer of the Company
and is the inventor of the CTLM(tm) 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 $100 for each Board meeting attended. Under a
deferred compensation plan, directors may elect to defer with interest all or
part of such compensation for varying periods of time.
Family Relationships
Mr. Richard J. Grable and Mrs. Linda B. Grable are husband and wife.
Further, Richard J. Grable and Linda B. Grable are each "Control Persons" as a
result of their control of a majority voting power of the Company's outstanding
stock. Both parties disclaim, however, any beneficial interest or ownership in
the shares owned by the other party.
Board Meetings and Committees
The Board of Directors met 9 times during the fiscal year ended June 30,
1997. The Company has no standing Committees.
5
<PAGE>
Required Vote
Each nominee receiving a majority of the number of affirmative votes of
the shares of the Company's Common Stock present and entitled to vote at the
Annual Meeting on this matter shall be elected as the Directors.
The Board of Directors of the Company recommends a vote FOR the election
of the nominees named above. Proxies solicited by the Board of Directors will be
voted FOR the named nominee unless instructions are given to the contrary.
Management
Directors and Executive Officers
Summary Compensation Table
<TABLE>
<CAPTION>
Annual Compensation Long-Term Compensation
------------------- ----------------------
Other Securities
Name and Annual Restricted Underlying
Principal Compen- Stock Options/
Position Age Year Salary ($) sation Awards($)(2) SAR's(#)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Richard J. Grable 55 1995 $100,000
CEO and Director 1996 $183,333(1)
1997 $289,779 $115,000 $268,000 22,883
Linda B. Grable 60 1995 $65,000
President and 1996 $91,000(1)
Director 1997 $97,451 $115,000 $268,000 22,883
Allan L. Schwartz 55 1995 $84,000
Exec. V.P., CFO and 1996 $124,000(1)
Director 1997 $111,534 $115,000 $268,000 130,410
Peter S. Knezevich 41 1995 $12,500
General Counsel 1996 $56,000
Vice President 1997 $87,500 0 $134,000 12,225
</TABLE>
6
<PAGE>
(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.
(2) Mr. Grable and Mr. Schwartz and Mrs. Grable were granted a restricted
stock bonus of 100,000 shares; Mr. Knezevich was granted a restricted
stock bonus of 50,000 shares. On the date of grant the bid price was $2.68
a shares.
Option Grants. The following table sets forth certain information
concerning grants of options to purchase Common Stock to the Named Executive
Officers during the fiscal year ended June 30, 1997.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
----------------- Potential Realizable
Value at Annual Rates
Number of Percent of of Stock Price
Securities Total Options Appreciation for Option
Underlying Granted to Exercise or Term (1)
Options Employees in Base Price Expiration
Name Granted Fiscal Year ($/Share) Date 5% 10%
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Richard J. Grable(2) 22,883 4% $4.37 7/4/01 $34,009 $76,999
Linda B. Grable(3) 22,883 4% $4.37 7/4/01 $34,009 $76,999
Allan L. Schwartz(4) 22,883 4% $4.37 7/4/01 $34,009 $76,999
</TABLE>
6
<PAGE>
(1) Potential realizable values are based on the fair market value per share
as determined by the Company for financial statement purposes and
represents hypothetical gains that could be achieved for the respective
options if exercised at the date of the grant. The dollar amounts set
forth in these columns are the result of calculations at the zero percent,
five percent and ten percent rates set by the Securities and Exchange
Commission and are not intended to forecast possible future appreciation,
if any, of the Common Stock price. There can be no assurance that such
potential realizable values will not be more or less than indicated in the
table above.
(2) On July 4, 1996, Mr. Grable was granted an option to purchase 22,883
shares of common stock pursuant to the Company's incentive stock option
plan.
(3) On July 4, 1996, Mrs. Grable was granted an option to purchase 22,883
shares of common stock pursuant to the Company's incentive stock option
plan.
(4) On July 4, 1996, Mr. Schwartz was granted an option to purchase 22,883
shares of common stock pursuant to the Company's incentive stock option
plan.
Fiscal Year-End Option Values. The following table sets forth certain
information concerning the number and value of securities underlying exercisable
and unexercisable stock options as of the fiscal year ended June 30, 1997 by the
Name Executive Officers.
Fiscal Year End Option Values
<TABLE>
<CAPTION>
Number of Value of
Securities Unexercised
Underlying In-The-Money
Unexercised Options
Number of Options at at Fiscal
Securities Fiscal Year End(#) Year End($)
Underlying
Options/SARs Value
Exercised Realized Exercisable/ Exercisable/
Name (#) ($) Unexercisable Unexercisable
- --------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Richard J. Grable 82,515 $216,549 22,883/0 0
Linda B. Grable 82,515 $216,549 22,883/0 0
Allan L. Schwartz 0 0 130,410/0 $189,032
Peter S. Knezevich 95,669 $257,810 12,225/0 0
</TABLE>
Employment Agreements
The Company entered into five-year employment agreements with each of Mr.
Richard J. Grable and Mr. 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; on January 15, 1997, Ms. Grable's
salary was increased to $104,000; and, Allan L. Schwartz: $104,000. During the
Company's operational stage the salary of Allan L. Schwartz will increase to
$156,000. In addition, each employment agreement provides for bonuses, health
insurance, car allowance, and related benefits, and a cost of living adjustment
of 7% per year. 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 an employment
agreement with Peter S. Knezevich on June 16, 1997, for a salary of $95,000 per
year.
7
<PAGE>
Stock Option Plans
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,
1997, all of the executive officers were participants in this plan, except for
Mr. Knezevich.
PROPOSAL 2
RATIFICATION OF APPOINTMENT OF INDEPENDENT AUDITORS
The Board of Directors has appointed Margolies, Fink and Wichrowski CPA as
independent public accountants of the Company with respect to its operations for
the fiscal year 1998, subject to ratification by the holders of Common Stock of
the Company. The firm has audited the Company's financial statements since 1994.
Representatives of the firm 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, Fink and Wichrowski, 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, Fink and Wichrowski, CPA as the Company's independent
accountants for the fiscal year ending June 30, 1998.
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
/s/ Allan L. Schwartz
------------------------------
Allan L. Schwartz
Secretary
8
<PAGE>
APPENDIX A
IMAGING DIAGNOSTIC SYSTEMS, INC.
PROXY SOLICITED BY THE BOARD OF DIRECTORS
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 15, 1997
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 15, 1997, 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.
(Continued, and to be signed on the other side)
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.
FOR WITHHOLDER FOR
PROPOSAL 1: To elect three (3) directors [ ] [ ]
to hold office until the 1998 Annual
Meeting of Stockholders.
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 FOR AGAINST ABSTAIN
Margolies, Fink and Wichrowski CPA, [ ] [ ] [ ]
as independent public accountants
of the Company for its fiscal
year ending June 30, 1998.
I PLAN TO ATTEND THE MEETING [ ]
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.
Signature____________________________________ Date________________
PLEASE VOTE, DATE AND PROMPTLY RETURN THIS PROXY IN THE ENCLOSED RETURN ENVELOPE
WHICH IS POSTAGE PREPAID IF MAILED IN THE UNITED STATES.
9
<PAGE>
