<PAGE> 1
As filed with the Securities and Exchange Commission on May 14, 1998
Registration No: __________
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--
JMAR INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
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<CAPTION>
DELAWARE 3845 68-0131180
<S> <C> <C>
(STATE OR OTHER JURISDICTION OF (PRIMARY STANDARD INDUSTRIAL CLASSIFICATION CODE NUMBER) (I.R.S. EMPLOYER IDENTIFICATION NUMBER)
INCORPORATION)
</TABLE>
3956 Sorrento Valley Blvd.
San Diego, California 92121
(619) 535-1706
(Address including zip code and telephone number, including area code of
Registrant's principal executive offices and principal place of business)
Dennis E. Valentine
Chief Financial Officer
3956 Sorrento Valley Blvd.
San Diego, CA 92121
(619) 535-1706
(Name, address, including zip code and telephone number, including area code, of
agent for service)
Copies to
Joseph G. Martinez, Esq.
Parker, Milliken, Clark, O'Hara & Samuelian
Professional Corporation
333 S. Hope Street, Twenty Seventh Floor
Los Angeles, California 90071-1488
(213) 683-6500
Approximate date of commencement of proposed sale to the public: As soon as
practicable 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::
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: [ ]
CALCULATION OF REGISTRATION FEE
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=============================================================================================================================
Title of each Class of
Securities to be Amount to be Proposed Maximum Proposed Maximum Amount of
Registered Registered (1) Offering Price Per Share (2) Aggregate Offering Price (2) Registration Fee
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 1,298,479 $ 2.58 $3,350,076 $ 988.27
=============================================================================================================================
</TABLE>
(1) Pursuant to Rule 416, the Registration Statement also relates to an
indeterminate number of Common Stock issuable upon the exercise of warrants held
by the Selling Shareholders pursuant to provisions which provide for a change in
the amount of the Common Stock issuable thereunder to prevent dilution resulting
from stock splits, stock dividends or similar transactions, which shares of
Common Stock are registered hereunder.
(2) Calculated solely for purposes of determining the registration fee and based
on the average of the high and low prices for the Common Stock securities on
May 7, 1998, as reported on NASDAQ.
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 thereunder become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
<PAGE> 2
PROSPECTUS
JMAR INDUSTRIES, INC.
1,298,479 Shares
of Common Stock
---------------
This Prospectus relates to the sale by certain persons (the
"Selling Stockholders") of 1,298,479 shares of common stock, $.01 par value per
share (the "Common Stock"), of JMAR Industries, Inc., a Delaware corporation
(the "Company"). See "Selling Stockholders". The Company is not offering any
shares hereunder and will not receive any of the proceeds from the sale of
shares by the Selling Stockholders. Certain of the shares offered hereby are
issuable under outstanding warrants held by the Selling Stockholders. The
Company will receive proceeds represented by the exercise price of such options
and warrants if exercised by the holders thereof. All of the securities
registered hereunder were issued in connection with a private placement. See
"Prospectus Summary -- The Offering." It is anticipated that the Selling
Stockholders will offer such shares from time to time in the over-the-counter
market at the then prevailing market prices and terms or in negotiated
transactions and without the payment of any underwriting discounts or
commissions, except for usual and customary selling commissions paid to brokers
or dealers. The Selling Stockholders also may sell such shares from time to time
pursuant to Rule 144 under the Securities Act of 1933, as amended (the "Act").
The Common Stock is traded on the National Association of Securities
Dealers Automated Quotation System National Market System ("NASDAQ - NMS") under
the symbol "JMAR". The average of the high and low prices for the Common Stock
as reported by NASDAQ was $2.58 on May 7, 1998.
THE SECURITIES OFFERED HEREBY ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK
AND SHOULD NOT BE PURCHASED BY ANYONE WHO CANNOT AFFORD THE LOSS OF HIS ENTIRE
INVESTMENT. SEE "RISK FACTORS" ON PAGES 5-7 OF THIS PROSPECTUS FOR A DESCRIPTION
OF SEVERAL RISK FACTORS.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
The Company has agreed to bear all of the expenses (other than
selling commissions and fees and expenses of counsel or other advisors to the
Selling Stockholders) in connection with the registration of the Common Stock
being offered by the Selling Stockholders. See "Selling Stockholders" and "Plan
of Distribution." The Company has also agreed to indemnify the Selling
Stockholders against certain liabilities, including liabilities under the
Securities Act of 1933. The total expenses to be paid by the Company for this
offering are estimated at $9,000.
The date of this Prospectus is __________, 1998
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<PAGE> 3
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934 (the "Exchange Act") and in accordance therewith
files regular reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facilities maintained by the Commission at 450
Fifth Street, N.W., Room 1024, Washington, D.C. 20549 and at the following
regional offices: Los Angeles Regional Office, 5757 Wilshire Blvd., Suite 500
East, Los Angeles, California 90036-3648; Chicago Regional Office, Everett
McKinley Dirksen Building, 219 S. Dearborn Street, Room 1704, Chicago, Illinois
60604; New York Regional Office, 7 World Trade Center, New York, New York 10048.
Copies of such material may also be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. The Commission also maintains a Website that contains reports,
proxy statements and other information filed by the Company located at
http://www.sec.gov
The Company's Common Stock and Redeemable Common Stock Purchase
Warrants are quoted on the NASDAQ System. Any such reports, proxy statements or
other information filed by the Company can also be inspected at the offices of
the NASDAQ, 1735 K Street, N.W., Washington, D.C. 20006-1500.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents (or specified portions thereof) filed with
the Commission by the Company are incorporated by reference herein as of their
respective dates and are made a part hereof:
(a) The Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1997;
(b) The Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 1998;
(c) The description of Common Stock contained in "Description of
Securities" in the Company's Registration Statement on Form
8-A, dated April 3, 1990, as amended on a Form 8, dated April
9, 1990, filed pursuant to Section 12(b) of the Exchange Act;
(d) The Company's Form 8-K, filed May 31, 1996, pursuant to
Section 13(a) under the Securities Act of 1934 describing the
acquisition of approximately 94 percent of the outstanding
common stock of California ASIC Technical Services, Inc. and
the Company's Form 8-K/A, filed August 6, 1996 related
thereto.
(e) The Company's Form 8-K, filed March 2, 1998, pursuant to
Section 13(a) under the Securities Act of 1934 containing the
press release which announced the Company's extension until
April 20, 1998 of its warrants that trade on the NASDAQ
National Market System.
(f) The Company's Application for Withdrawal from Listing of
Securities, filed March 2, 1998, pursuant to Section 12(d) of
the Securities Act of 1934 and Rule 12d2-2(d) to request the
withdrawal from listing on the Boston Stock Exchange of the
Company's Units consisting of one share of common stock and
one warrant.
All documents filed by the Company with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
this Prospectus and prior to the termination of the offering of the securities
hereby shall be deemed to be incorporated herein by reference and shall be a
part hereof from the date of the filing of such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus to the extent that a statement contained herein
or in any other subsequently filed document which also is incorporated or deemed
to be incorporated by reference herein modifies or supersedes such statement.
Any such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus.
The Company will provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus is delivered, upon
written or oral request, a copy of any or all of the documents that have been
incorporated herein by reference, except for the exhibits to such documents
which are not
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<PAGE> 4
specifically incorporated herein by reference. Requests should be directed to
Corporate Secretary, JMAR Industries, Inc., 3956 Sorrento Valley Blvd., San
Diego, California 92121; (619) 535-1706.
PROSPECTUS SUMMARY
The following is a summary of certain information contained in this
Prospectus and is qualified in its entirety by the more detailed information
included herein and incorporated herein by reference.
JMAR Industries, Inc. (the "Company" or "JMAR") develops,
manufactures and markets precision measurement, process control and laser
manufacturing systems and provides custom semiconductor products for the
microelectronics and medical industries and is a leading developer of advanced
lithography sources for production of future higher performance semiconductors.
JMAR primarily operates through three divisions located in Southern California:
PACIFIC PRECISION LABORATORIES ("PPL"), the Company's equipment
manufacturing division is located in Chatsworth, California, northwest of Los
Angeles where JMAR's core product lines are produced. These currently include:
Measurement and Inspection Systems - non-contact systems to measure and inspect
microelectronics (primarily semiconductors and disk drives) parts for both
process control and quality assurance purposes; Positioning and Motion Control
Systems - to improve the precision of microelectronics manufacturing; and Laser
Processing Systems - which perform the highly precise welding and cutting
required by the microelectronics industry.
JMAR TECHNOLOGY CO. ("JTC"), the Company's research and development
center in San Diego where JMAR's Emerging Products are developed, including:
advanced X-ray and other lithography sources for manufacturing tomorrow's
high-performance semiconductors; ultra-precision laser machining systems; a
family of high powered handheld all solid state lasers for a variety of medical
and dental applications, including blood sampling; and other leading-edge
products based on its patented laser technology.
CALIFORNIA ASIC ("CAL ASIC"), the Company's semiconductor design and
engineering facility located south of Los Angeles in Irvine. Using advanced
design tools and established foundry relationships with semiconductor producers,
this "fab-less" supplier of semiconductors focuses on the development and
delivery of high performance custom microcircuits for a wide range of
commercial, medical and military electronics uses.
JMAR was founded in 1987 and went public in 1990. Its shares of
Common Stock and Redeemable Common Stock Purchase Warrants trade on the NASDAQ
National Market System under the symbols: JMAR and JMARW, respectively. The
Company maintains its executive offices at 3956 Sorrento Valley Boulevard, San
Diego, California 92121 and its telephone number is (619) 535-1706. Unless
otherwise indicated, all references to the Company include the Company and its
subsidiaries.
RECENT DEVELOPMENTS
During April, 1998, the Company mailed its Definitive Warrant
Consent Solicitation Statement to the holders of its publicly traded redeemable
common stock purchase warrants (the "Warrants") pursuant to which the Company
will solicit the holders' consent to the following amendments to the Warrants:
(i) an extension of the term of the Warrants to May 15, 2000; (ii) an increase
in the exercise price from $4.68 per share to $5.50 per share; and (iii) an
adjustment to the existing redemption provision to provide that the Company may
redeem the Warrants if the average closing price of the Company's Common Stock
is $7.00 or more over a period of ten consecutive trading days. The failure to
receive a Consent from a registered Warrantholder by May 15, 1998 will result in
the Warrants owned by such holder expiring on that date.
On April 23, 1998, the Company announced that it received three
orders totaling approximately $1.5 million for its computer hard disk drive head
inspection workstations from a major U.S. computer and hard disk drive
manufacturer. The systems perform on-line inspection of computer disk drive
read-write heads, including advanced magnetoresistive and giant magnetoresistive
thin film magnetic heads prior to
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<PAGE> 5
their installation into the disk drive. The workstations help create digitized
images of those heads to accelerate inspection throughput, reduce inspection
cost and improve process control.
THE OFFERING
<TABLE>
<S> <C>
Securities Offered (1)................................................ 1,298,479 Shares of Common
Stock, $.01 par value.
Common Stock outstanding prior to Offering (2)........................ 18,076,019 Shares
Common Stock outstanding after the Offering assuming issuance
of all 266,160 shares underlying the options and
warrants described in footnote (1) ................................... 18,342,179 Shares
Risk Factors.......................................................... The securities offered hereby
involve a high degree of risk.
See "Risk Factors" commencing on
page 5.
</TABLE>
- -----------------------------
(1) Includes 1,032,319 shares which are currently outstanding and 266,160
shares which are not outstanding and which are issuable upon exercise of
outstanding options and warrants. Of the 266,160 shares issuable upon
exercise of options and warrants, 250,000 are exercisable at a price of
$4.40 per share and 16,160 are exercisable at a price of $4.00 per share.
(2) Does not include shares of Common Stock subject to issuance upon exercise
of outstanding options and other warrants. See "Risk Factor" number 2.
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<PAGE> 6
RISK FACTORS
THIS OFFERING INVOLVES SUBSTANTIAL INVESTMENT RISK AND SHARES SHOULD BE
PURCHASED ONLY BY PERSONS WHO CAN AFFORD THE LOSS OF THEIR ENTIRE INVESTMENT. IN
EVALUATING AN INVESTMENT IN THE COMPANY AND ITS BUSINESS, PROSPECTIVE INVESTORS
SHOULD CAREFULLY CONSIDER THE FOLLOWING RISK FACTORS AS WELL AS OTHER
INFORMATION SET FORTH ELSEWHERE IN THIS PROSPECTUS AND INCORPORATED BY REFERENCE
HEREIN.
1. SIGNIFICANT CASH REQUIREMENTS. The Company's cash requirements have
been and will continue to be significant. The Company's negative cash flow from
operations for the years ended December 31, 1995, 1996 and 1997 and the
three months ended March 31, 1998 was $1,625,119, $413,687, $1,951,488 and
$1,203,264, respectively. These negative cash flows are primarily related to
increases in current assets, primarily accounts receivable and inventories. To
the extent the Company requires additional financing for operations, in
connection with acquisitions or otherwise, there can be no assurance that such
future financings will be available to the Company on acceptable terms.
2. SHARES ELIGIBLE FOR SALE; OUTSTANDING RIGHTS TO ACQUIRE COMMON STOCK;
MARKET OVERHANG FROM OUTSTANDING RIGHTS. As of the date of this Prospectus, the
Company had outstanding 18,076,019 shares of Common Stock of which (i)
18,064,603 shares are freely transferable without restriction or further
registration under the Securities Act (including 1,032,319 covered by this
Prospectus) and (ii) 11,416 shares are "restricted securities" within the
meaning of Rule 144 under the Securities Act. Under Rule 144, if certain
conditions are met, any restricted shares owned for more than one year but less
than two years by non-affiliates and any shares owned by affiliates of the
Company may be sold within any three month period in an amount which does not
exceed the greater of one percent of the total number of shares outstanding or
the average weekly trading volume of such shares during the four calendar weeks
prior to such sale. After a two year holding period is satisfied, persons who
are not "affiliates" of the Company are permitted to sell such shares without
regard to these volume restrictions. "Affiliates" of the Company consist of all
officers and directors of the Company and all holders of ten percent (10%) or
more of the outstanding shares of Common Stock.
As of May 7, 1998, there were 6,578,832 shares of Common Stock subject to
issuance upon exercise of outstanding options and warrants, including 266,160
shares of Common Stock offered hereby and 5,568,926 shares which are included in
currently effective registration statements or are issuable under warrants
issued pursuant to Regulation S. Included in the 6,578,832 shares are 4,571,292
shares which are either (i) not currently exercisable; (ii) exercisable at
prices in excess of the average of the high and low prices of the Company's
Common Stock on May 30, 1998 ($2.58) or (iii) are not included in currently
effective registration statements or issuable under warrants issued pursuant to
Regulation S such that these shares would not be freely tradable upon issuance.
Included in the 4,571,292 shares are 2,955,882 shares which are exercisable at
prices of $4.40 or higher. To the extent that outstanding options and warrants
are exercised prior to their expiration dates and other securities are
converted, additional equity investment funds will be paid into the Company at
the expense of dilution to the interests of the Company's stockholders.
Moreover, the terms upon which the Company will be able to obtain additional
equity capital may be adversely affected since the holders of outstanding
options and warrants and other securities can be expected to exercise or convert
them at a time when the Company would, in all likelihood, be able to obtain any
needed capital on terms more favorable to the Company than those provided in
such securities. The exercise of the Company's outstanding warrants and options,
or a substantial portion thereof, and sale of the shares issued upon exercise
could adversely affect the market price of the Common Stock.
3. GOVERNMENT REGULATION. The Company's JTC subsidiary is subject to
regulation in connection with its government R&D contract work. In addition, JTC
is subject to audit by the U.S. Government (the "Government") of its costs
incurred under Government contracts and to safety audits by various Government
agencies.
4. POSSIBLE FLUCTUATIONS IN OPERATING RESULTS. The Company's operating
results are likely to vary from period to period as a result of the Company's
sales cycle.
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<PAGE> 7
5. LIMITED PRODUCT LINE; UNCERTAINTY OF MARKET ACCEPTANCE AND MARKET
PENETRATION. The markets for certain of the Company's products may be saturated.
There can be no assurance that the Company will achieve greater penetration in
such markets. Achieving market acceptance for the Company's new and proposed
products requires substantial marketing and sales efforts and the expenditure of
significant funds to create customer awareness of and demand for the Company's
products. There can be no assurance that recent or future additions to the
Company's product lines will achieve market acceptance or result in
significantly increased levels of revenues.
6. RESEARCH AND DEVELOPMENT COSTS. The development of sophisticated laser
and microelectronics manufacturing products is a lengthy and capital intensive
process and is subject to unforeseen risks, delays, problems and costs. There
can be no assurance that the Company will be able to successfully develop any
additional products or enhance existing products, or that unanticipated
technical or other problems will not occur which would result in delays in the
Company's development program. Failure to complete development of a product on a
timely basis could result in the complete loss of the funds committed by the
Company to that product, which could be substantial.
7. PRODUCT DEFECTS. Products as complex as the Company's may contain
certain defects which from time to time become apparent subsequent to commercial
use. Remedying such defects could require significant modifications at
substantial costs to the Company.
8. DEPENDENCE ON SUPPLIERS; NO ASSURANCE OF CONTINUOUS AND TIMELY
PRODUCTION. The Company is dependent upon outside suppliers for components used
in the manufacture of its products. Failure to maintain satisfactory agreements
with suppliers could have a material adverse effect on the Company. There can be
no assurance that in the future its current or alternative sources will be able
to meet all of the Company's demands on a timely basis. Unavailability of parts
or components used in the manufacture of its products could require the Company
to re-engineer its products to accommodate available substitutions, which could
increase costs to the Company or have a material adverse effect on manufacturing
schedules, product performance and market acceptances.
9. COMPETITION; POSSIBLE TECHNOLOGICAL OBSOLESCENCE. The markets for the
Company's products are highly competitive and are characterized by rapid
technological change and evolving industry standards. Development by others of
new or improved products, processes or technologies may make the Company's
products obsolete or less competitive. The ability of the Company to compete is
dependent on the Company's ability to continually enhance and improve its
products and to successfully develop and market new products. Many of the
Company's competitors have greater financial, managerial and technical resources
than the Company. There can be no assurance that the Company will successfully
differentiate itself from its competitors, that the market will consider the
Company's products to be superior to its competitors' products or that the
Company will be able to adapt to evolving markets and technologies, develop new
products or achieve and maintain technological advantages.
10. PATENTS AND PROPRIETARY RIGHTS. The Company relies, to a significant
extent, on patents, trade secrets and confidentiality agreements to protect its
proprietary technology. There can be no assurance as to the breadth or degree of
protection which existing or future patents, if any, may afford the Company, or
that patents will not be circumvented or invalidated, or that the Company's
products do not and will not infringe on patents or violate proprietary rights
of others. In the event a patent infringement claim is asserted against the
Company, or the Company is required to enforce its rights under an issued
patent, the cost of such actions may be very high, whether or not the Company is
successful. While the Company is unable to predict what such costs, if any, will
be if the Company is obligated to pursue patent litigation, its ability to fund
its operations and to pursue its business goals may be substantially impaired.
11. RELIANCE ON FOREIGN SALES. The Company derives a portion of its
revenues from shipments to foreign markets and expects to continue to be
dependent upon such markets. Revenues from shipments to foreign markets were
$1,801,440, $3,405,448 and $8,938,375 for the years ended December 31, 1995,
1996 and 1997, respectively. Included in those amounts are Asian shipments of
$1,684,083, $1,420,767 and $4,225,013 for the years ended December 31, 1995,
1996 and 1997, respectively. The majority of the shipments to Asia in 1997 were
to foreign facilities of U.S. based companies. Although the Company denominates
its foreign shipments in U.S. dollars, it is subject to various risks inherent
in foreign trade, including economic or political instability, shipping delays,
fluctuations in foreign currency rates, custom duties and import quotas and
other trade restrictions, all of which could have a significant impact on the
Company's ability to deliver its products on a timely and competitive basis.
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12. GOVERNMENT BUDGET CONSTRAINTS. Certain of the Company's research and
development activities are partially dependent on Government sponsorship,
particularly by the U.S. Department of Defense ("DOD"). The DOD's overall budget
is undergoing intense scrutiny and is subject to significant reduction as a
result of current world events. This may result in fewer funds available for the
contracts the Company is seeking from the DOD and could adversely affect the
Company's ability to maintain a profitable R&D contract business.
13. PRODUCT LIABILITY. The Company may be exposed to potential product
liability claims arising out of the use of the Company's products. Although the
Company currently maintains product liability insurance, there can be no
assurance that such insurance will be sufficient to cover potential claims or
that the present level of coverage will be available in the future at a
reasonable cost. A partially or completely uninsured successful claim against
the Company could have a material adverse affect on the Company.
14. RELIANCE UPON KEY EMPLOYEES. The success of the Company is
substantially dependent on the efforts of certain key personnel of the Company.
The loss of such key personnel could adversely affect the Company's business and
prospects. In such event, there can be no assurance that the Company would be
able to employ qualified persons on terms favorable to the Company. In seeking
qualified personnel, the Company will be required to compete with companies
having greater financial and other resources than the Company. Since the future
success of the Company is, in part, dependent upon its ability to retain or
attract qualified personnel, the Company's failure to do so could have a
materially adverse impact on the business of the Company.
15. NO DIVIDENDS. The Company has never paid cash dividends and intends,
for the foreseeable future, to retain its earnings, if any, to finance its
business. Future dividend policy will depend on the Company's earnings, capital
requirements, financial condition, debt covenants and other factors considered
relevant by the Company's Board of Directors.
16. UTILIZATION OF NET OPERATING LOSS CARRYFORWARD. Realization of future
tax benefits from utilization of the Company's net operating loss carryforwards
for income tax purposes is limited by changes in ownership in 1990, 1992 and
1993. In addition, the net operating losses of acquired companies are also
subject to separate change of ownership limitations.
17. AUTHORIZATION AND ISSUANCE OF PREFERRED STOCK. The Company's Board of
Directors is authorized to issue up to 5,000,000 shares of Preferred Stock, of
which no shares are currently outstanding. The Board of Directors has the power
to establish the dividend rates, liquidation preferences, voting rights,
redemption and conversion terms and privileges with respect to any series of
Preferred Stock. The issuance of any shares of Preferred Stock having rights
superior to those of the Common Stock may result in a decrease in the value or
market price of the Common Stock. Holders of Preferred Stock may have the right
to receive dividends, certain preferences in liquidation and conversion rights.
The issuance of Preferred Stock could, under certain circumstances, have the
effect of delaying, deferring or preventing a change in control of the Company
without further vote or action by the stockholders and may adversely affect the
voting and other rights of the holders of Common Stock.
18. NASDAQ-NMS MAINTENANCE REQUIREMENTS; POSSIBLE DELISTING OF SECURITIES
FROM NASDAQ-NMS SYSTEM. The Board of Governors of the National Association of
Securities Dealers, Inc. has established certain standards for the continued
listing of a security on the NASDAQ National Market System ("NASDAQ-NMS"). The
current maintenance standards for continued listing of the Company's Common
Stock on the NASDAQ-NMS require, among other things, that an issuer have (i) net
tangible assets of at least $4 million; and (ii) a minimum bid price of $1. As
of March 31, 1998, the Company's net tangible assets were $12,184,344. There can
be no assurance, however, that the Company will satisfy the requirements for
maintaining a NASDAQ-NMS listing in the future. If the Company's securities were
excluded from NASDAQ-NMS, it could adversely affect the prices of such
securities and the ability of holders to sell them.
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USE OF PROCEEDS
The Company will not receive any proceeds from the sale of Common Stock by
the Selling Stockholders.
SELLING STOCKHOLDERS
The following table sets forth as of May 7, 1998 certain
information regarding the beneficial ownership of the Company's Common Stock by
the Selling Stockholders. The entities shown in the table have sole voting and
investment power with respect to the shares. Neither the Selling Stockholders
nor any of their affiliates hold any position or office with the Company or have
any other material relationship with the Company other than as a holder of the
securities listed below.
<TABLE>
<CAPTION>
Number of Number of Percent of
Shares of Percent of Shares Shares
Common Shares of Number of Remaining if Outstanding
Stock Common Shares All Shares if All Shares
Beneficially Stock Being Registered Registered
Name and Address Owned Outstanding Registered Are Sold Are Sold
- ------------------- ----- ----------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
Kernco Trust SA (1)
2 rue Jargonnaut
CH-1211 Geneva 6
Switzerland 1,250,000 6.82% 1,250,000 0 0.00%
Baytree Associates,
Inc.(2)
40 Wall Street,
58th Floor
New York, NY 10005 409,979 2.22% 48,479 361,500 1.96%
</TABLE>
(1) Includes 250,000 shares which are issuable upon exercise of currently
exercisable warrants.
(2) Includes 377,660 shares which are issuable upon exercise of currently
exercisable options and warrants.
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<PAGE> 10
PLAN OF DISTRIBUTION
Following the date of this Prospectus, the Selling Stockholders will
be able to sell shares covered hereunder from time to time in one or more
transactions in the over-the-counter market at prices and on terms prevailing on
the date of the sale or in negotiated transactions or otherwise. The shares
beneficially owned by Kernco Trust SA are subject to the following limitation on
the number of shares which may be sold: (i) 250,000 shares may be sold at any
time; (ii) an additional 250,000 shares may be sold commencing on May 20, 1998;
(iii) an additional 250,000 shares may be sold commencing on August 20, 1998;
and (iv) the remaining 250,000 shares may be sold commencing on November 20,
1998. The shares issuable under the Warrants beneficially owned by Kernco Trust
SA and registered herein may only be sold in the same prorata basis in
accordance with the same schedule. The Company has not been advised when, or
even whether, the Selling Stockholders intend to sell such shares.
The Selling Stockholders may pay customary brokerage commissions on
the sale transactions. The Selling Stockholders and the brokers and dealers
through whom sales of the shares are made may be deemed "underwriters" within
the meaning of the Act and any and all payments to brokers/dealers associated
with a distribution may be considered to be underwriting compensation. The
Company has agreed to indemnify the Selling Stockholders against certain
liabilities, including those arising under the Securities Act of 1933. If the
Selling Stockholders should, collectively, engage a broker or dealer to sell a
material portion of the Common Stock offered hereby, the Company may be required
to file a post-effective amendment to this Registration Statement to show a
change in the plan of distribution. The shares of Common Stock will be offered
on a delayed or continuous basis pursuant to Rule 415 under the Act.
EXPERTS
The consolidated financial statements and schedules of the Company
dated December 31, 1997 and 1996 and for the three years ended December 31, 1997
incorporated by reference in this Prospectus and elsewhere in the registration
statement have been audited by Arthur Andersen LLP, independent public
accountants, to the extent and for the periods indicated in their reports with
respect thereto, and are incorporated by reference herein in reliance upon the
authority of said firm as experts in accounting and auditing in giving said
reports.
LEGAL MATTERS
The legality of the Securities offered hereby is being passed upon
for the Company by Parker, Milliken, Clark, O'Hara & Samuelian, Professional
Corporation, Los Angeles, California.
ADDITIONAL INFORMATION
The Company has filed with the Securities and Exchange Commission
(the "Commission") in Washington, D.C., a Registration Statement on Form S-3
under the Securities Act of 1933 with respect to the securities offered hereby.
This Prospectus, filed as a part of the Registration Statement, does
not contain all of the information set forth in the Registration Statement,
certain portions of which have been omitted as permitted by the rules and
regulations of the Commission. For further information pertaining to the shares
of Common Stock offered hereby and to the Company, reference is made to the
Registration Statement, including the exhibits filed as a part thereof and the
documents containing the information which is incorporated by reference herein.
Copies of the Registration Statement and the exhibits thereto may be obtained as
set forth on page 2 of this Prospectus.
No dealer, salesman or other person has been authorized to give any
information or to make any representations other than those contained in this
Prospectus, and 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 or solicitation to any person in any jurisdiction where
such offer or solicitation would be unlawful. This Prospectus does not
constitute an offer to sell or a solicitation of an offer to buy any securities
other than the registered securities to which it relates. Neither delivery of
this Prospectus nor any sales hereunder shall, under any circumstances, create
an implication that there has been no change in the facts herein set forth since
the date hereof.
9
<PAGE> 11
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following is an itemized statement of expenses of the Company in
connection with the issuance and sale of the securities being registered:
<TABLE>
<S> <C>
Securities and Exchange Commission registration fee .............. $ 988
Printing expenses ................................................ 1,000
Accounting fees and expenses ..................................... 1,000
Legal fees and expenses .......................................... 5,000
Miscellaneous expenses ........................................... 1,012
------
Total ............................................... $9,000
======
</TABLE>
The amounts are estimated except for the registration fee. The
Company has agreed to pay the above expenses of the Selling Stockholder in
connection with the Offering.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Article V of the Bylaws of the Company provides that directors,
officers, employees and agents of the Company or a subsidiary of the Company
shall be indemnified against liabilities incurred by them while acting in such
capacities, including liabilities arising under the Securities Act, except to
the extent prohibited by then applicable law. Article V also provides for the
advance of expenses incurred in defending any proceeding prior to the final
disposition thereof, except to the extent prohibited by then applicable law. The
right of indemnification provided shall not be exclusive of any right the party
may have by law, or under any agreement, insurance policy, vote of the Board of
Directors or Stockholders or otherwise. The Company shall have the power to
purchase and maintain insurance on behalf of any indemnifiable party against any
liability asserted against or incurred by the indemnifiable party in such
capacity.
Section 145 of the Delaware General Corporation Law generally
provides that indemnification will only be available where an officer or
director can establish that he acted in good faith and in a manner he reasonably
believed to be in or not opposed to the best interests of the Company.
The Company maintains a director's and officer's liability insurance
policy which indemnifies directors and officers for certain losses arising from
a claim by reason of a wrongful act, as defined, under certain circumstances, in
his capacity as a director or officer of the Company or any of its subsidiaries.
See the last paragraph of Item 17, "Undertakings" which is
incorporated by reference in response to this Item 15.
II-1
<PAGE> 12
ITEM 16. EXHIBITS
EXHIBIT
NO. DESCRIPTION
- ------- -----------------------------------------------------------
4.1(1) Form of Common Stock Certificate.
5.1 Opinion of Parker, Milliken, Clark, O'Hara & Samuelian,
Professional Corporation.
23.1 Consent of Parker, Milliken, Clark, O'Hara & Samuelian,
Professional Corporation is included in Exhibit 5.1 hereto.
23.2 Consent of Arthur Andersen LLP.
24.1 Power of Attorney (see signature page in Part II of this
Registration Statement).
- ------------------------
(1) Incorporated by reference to the exhibit filed with the Company's
Registration Statement on Form S-1 (No. 33-47390) filed on April 22, 1992
and amended November 23, 1992, January 11, 1993, January 27, 1993,
February 9, 1993, February 11, 1993, February 12, 1993 and declared
effective on February 16, 1993.
II-2
<PAGE> 13
ITEM 17. UNDERTAKINGS
The undersigned Company hereby undertakes:
1. To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or
events arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the
registration statement; and
(iii) To include any material information with
respect to the plan of distribution not previously disclosed
in the registration statement or any material change to such
information in the registration statement. 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
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 Company 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 the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
Insofar as indemnification of liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Company pursuant to the foregoing provisions, or otherwise, the
Company has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the
Securities Act of 1933 and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Company of expenses incurred or paid by a director, officer or controlling
person of the Company in the successful defense of any action, suit or
proceeding) if asserted by such director, officer or controlling person in
connection with the securities being registered, the Company 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-3
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of San Diego, State of California, on the 7th day of
May, 1998.
JMAR INDUSTRIES, INC.
By: /s/ Dennis E. Valentine
-----------------------------
Dennis E. Valentine,
Chief Financial Officer
POWER OF ATTORNEY
We, the undersigned directors of JMAR Industries, Inc. and each of us, do hereby
constitute and appoint John S. Martinez and Dennis E. Valentine, or any one of
them, our true and lawful attorneys and agents, each with power of substitution,
to do any and all acts and things in our names and on our behalf in our
capacities as directors and to execute any and all instruments for us and in our
names in the capacities indicated above, which said attorneys and agents, or any
one of them may deem necessary or advisable to enable said corporation to comply
with the Securities Act of 1933, as amended, and any rules, regulations and
requirements of the Securities and Exchange Commission, in connection with this
Registration Statement, including specifically, but without limitation, power
and authority to sign for us or any of us in our names in the capacities
indicated below, any and all amendments (including post-effective amendments)
hereto; and we do hereby ratify and confirm all that the said attorneys and
agents, or their substitute or substitutes, or any one of them, shall do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons on May 7, 1998, in
the capacities indicated.
Signature Title
--------- -----
/s/ JOHN S. MARTINEZ Chairman of the Board,
- ----------------------------------- Chief Executive Officer and Director
John S. Martinez
/s/ DENNIS E. VALENTINE Chief Financial Officer and Principal
- ----------------------------------- Accounting Officer
Dennis E. Valentine
/s/ BARRY RESSLER Director
- -----------------------------------
Barry Ressler
/s/ C. NEIL BEER Director
- -----------------------------------
C. Neil Beer
/s/ JAMES H. BANISTER, JR. Director
- -----------------------------------
James H. Banister, Jr.
/s/ VERNON H. BLACKMAN Director
- -----------------------------------
Vernon H. Blackman
II-4
<PAGE> 1
EXHIBIT 5.1
<TABLE>
<S> <C> <C>
PARKER, MILLIKEN, CLARK, O'HARA & SAMUELIAN
A PROFESSIONAL CORPORATION
ATTORNEYS AT LAW CLAUDE I. PARKER (1871-1952)
333 SOUTH HOPE STREET, 27TH FLOOR JOHN B. MILLIKEN (1893-1981)
JOSEPH G. MARTINEZ LOS ANGELES, CALIFORNIA 90071-1488 RALPH KOHLMEIER (1900-1976)
TELEPHONE (213) 683-6500
FACSIMILE (213) 683-6669
________
WRITER'S DIRECT DIAL NUMBER:
(213) 683-6583
[email protected]
</TABLE>
May 8, 1998
JMAR Industries, Inc.
3956 Sorrento Valley Boulevard
San Diego, California 92121
Gentlemen:
We are acting as your counsel in connection with the
registration by you under the Securities Act of 1933 (the "1933 Act")
of (i) 1,032,319 shares of Common Stock of JMAR Industries, Inc. (the
"Company") which are currently issued and outstanding, and (ii) 266,160
shares of Common Stock authorized for issuance upon the exercise of
warrants ("Warrants"), all of which shares are to be sold by selling
shareholders (the "Selling Shareholders' Shares"). We are familiar with
the Form S-3 Registration Statement which you have filed with the
Securities and Exchange Commission to register such securities under
the 1933 Act.
In rendering this opinion, we have examined and relied
upon, among other things, originals or copies, identified to our
satisfaction as being true copies, of the following: Certificate of
Incorporation of the Company, as amended to date; Bylaws of the
Company, as amended to date; and corporate records and other
instruments and documents as were deemed necessary or appropriate for
purposes of this opinion. As to questions of fact material to this
opinion, we have, when the relevant facts were not independently
established by us, relied upon the documents we have examined or upon
certificates of officers of the Company. In our examination of the
documents referred to above, we have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as
originals and the conformity with the originals of all documents
submitted to us as copies.
We have investigated such questions of law for the
purpose of rendering this opinion as we have deemed necessary. We are
attorneys duly admitted and qualified to practice
<PAGE> 2
in the State of California and we express no opinion as to the laws of
any other jurisdiction except United States federal law.
Based on the foregoing, and in reliance thereon, we are
of the opinion that (i) all of the Selling Shareholders' Shares have
been duly authorized, (ii) that the shares of Common Stock issuable
upon exercise of the Warrants have been validly reserved for issuance
upon exercise thereof, (iii) the shares of the Common Stock which are
outstanding and part of the Selling Shareholders' Shares are validly
issued, fully paid and nonassessable and (iv) upon receipt by the
Company of full payment of the exercise price for the Warrants and
delivery of certificates representing the shares issuable upon said
exercise, the shares issuable upon said exercise will be validly
issued, fully paid and nonassessable.
We consent to the use of this opinion as an Exhibit to
the said S-3 Registration Statement and to the reference to our firm
under the heading "Legal Matters" in the Prospectus which forms a part
thereof.
Very truly yours,
/s/ PARKER, MILLIKEN, CLARK, O'HARA
& SAMUELIAN, P.C.
other\154jgm
<PAGE> 1
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report dated March
27, 1998 included in JMAR Industries, Inc.'s Form 10-K for the year ended
December 31, 1997 and to all references to our firm included in this
registration statement.
/s/ Arthur Andersen LLP
ARTHUR ANDERSEN LLP
San Diego, California
May 8, 1998
