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As filed with the Securities and Exchange Commission on May 30, 1996
Registration No. 000-24208
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
POST-EFFECTIVE AMENDMENT NO. 1 TO FORM SB-2
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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FLUOROSCAN IMAGING SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 36-3334362
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
650-B ANTHONY TRAIL, NORTHBROOK, ILLINOIS 60062, (847) 564-5400
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
LARRY S. GROSSMAN
CHAIRMAN AND CHIEF EXECUTIVE OFFICER
FLUOROSCAN IMAGING SYSTEMS, INC.
650-B ANTHONY TRAIL, NORTHBROOK, ILLINOIS 60062, (847) 564-5400
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
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WITH COPIES TO:
JEFFREY R. PATT, ESQ.
Katten Muchin & Zavis
525 West Monroe Street
Chicago, Illinois 60661
(312) 902-5200
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From
time to time after the effective date of this Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box: / /
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box: /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering: / /_____
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering: / /____
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT
SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
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PROSPECTUS
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1,250,000 SHARES
FLUOROsCAN IMAGING SYSTEMS, INC.
COMMON STOCK
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FluoroScan Imaging Systems, Inc. (the "Company") hereby offers to sell up
to 1,250,000 shares of Common Stock, $.0001 par value (the "Common Stock") to
the holders of the Company's outstanding warrants to purchase Common Stock at
$7.00 per share (the "Warrants"). 1,150,000 Warrants were originally sold by
the Company in its initial public offering in 1994 (the "IPO") and the
Company's underwriter in the IPO, M.H. Meyerson & Co. (the "Underwriter") has
an option to purchase 100,000 Warrants (the "Option Warrants"). Under the
Registration Statement of which this Prospectus constitutes a part, the Company
is registering the Common Stock underlying all the Warrants including the
Option Warrants. The Company will not sell fractional shares.
The principal offices of the Company are located at 650-B Anthony Trail,
Northbrook, Illinois 60062, and the telephone number is (847) 564-5400.
SEE "RISK FACTORS" BEGINNING ON PAGE 4 FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
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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.
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The date of this Prospectus is May 30, 1996
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TABLE OF CONTENTS
PAGE
Available Information............................................... 2
Incorporation of Certain Documents by Reference..................... 3
Risk Factors........................................................ 4
Use of Proceeds..................................................... 10
Plan of Distribution................................................ 10
Legal Matters....................................................... 11
Experts............................................................. 11
Indemnification Matters............................................. 11
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities and Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information concerning the Company may be inspected and
copied at the public reference facilities maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the Commission's
Regional Offices at Seven World Trade Center, 13th Floor, New York, New York
10048 and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material can also be obtained upon written
request addressed to the Commission, Public Reference Section, 450 Fifth Street,
N.W., Washington, D.C. 20549, at prescribed rates. The Common Stock and the
Warrants are traded on the Nasdaq Stock Market under the Symbols FLRO and FLROW,
respectively, and reports, proxy statements and other information concerning the
Company can be inspected at the offices of The Nasdaq Stock Market, 1735 K
Street, N.W., Washington, D.C. 20006.
The Company has filed with the Commission a Post-Effective Amendment to a
Form SB-2 on Form S-3 (herein, together with all amendments and exhibits,
referred to as the "Registration Statement") under the Securities Act of 1933,
as amended (the "Securities Act"), with respect to the securities offered
hereby. This Prospectus, which constitutes a part of the Registration
Statement, does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the Commission. For further information,
reference is hereby made to the Registration Statement which may be inspected
and copied in the manner and at the sources described above. Any statements
contained herein concerning the provisions of any document filed as an Exhibit
to the Registration Statement or otherwise filed with the Commission are not
necessarily complete and, in each instance, reference is made to the copy of
such document so filed. Each such statement is qualified in its entirety by
such reference.
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INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed by the Company with the
Commission pursuant to the Exchange Act are incorporated herein by reference:
1. The Company's Annual Report on Form 10-KSB, for the fiscal year ended
December 31, 1995;
2. The Company's Quarterly Report on Form 10-QSB for the fiscal quarter
ended March 31, 1996;
3. The description of the Common Stock contained in the Company's
Registration Statement on Form SB-2 filed July 11, 1994 pursuant to Section 12
of the Exchange Act and all amendments thereto and reports filed for the
purpose of updating such description; and
4. The description of the Warrants contained in the Company's
Registration Statement on Form SB-2 filed July 11, 1994 pursuant to Section 12
of the Exchange Act and all amendments thereto and reports filed for the
purpose of updating such description.
All documents filed by the Company 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 made hereby shall be deemed to be
incorporated by reference in this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated herein by reference shall be
deemed to be modified or superseded for purposes of this prospectus to the
extent that a statement contained in any subsequently filed document which is
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 to whom a copy of
this Prospectus is delivered, on the written or oral request of such person, a
copy of any or all of the documents incorporated herein by reference (other
than exhibits thereto, unless such exhibits are specifically incorporated by
reference into the information that this Prospectus incorporates). Written or
telephone requests for such copies should be directed to the Company's
principal executive office: FluoroScan Imaging Systems, Inc., 650-B Anthony
Trail, Northbrook, Illinois 60062, Attention: Vice President Finance and
Administration (telephone: (847) 564-5400).
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RISK FACTORS
An investment in the Common Stock offered hereby entails a high degree
of risk. In addition to other information contained in this Prospectus or
incorporated by reference herein, potential purchasers should consider
carefully the following factors in evaluating the Company, its business and the
Common Stock offered hereby. Statements contained or incorporated by reference
in this Prospectus that are not historical facts are forward looking statements
that are made pursuant to the safe harbor provisions of the Private Securities
Litigation Reform Act of 1995. A number of the important factors could cause
the Company's actual results for 1996 and beyond to differ materially from
those expressed in any forward looking statements made by, or on behalf of, the
Company. These factors include, without limitation, those listed below.
PROTECTION OF TECHNOLOGY
The Company's license from NASA to use and develop certain technology
that is the subject of two patents held by NASA represents a competitive
advantage. The Company's license is exclusive in the United States. There can
be no assurance, however, that such patents and license will continue to afford
the Company commercially significant protection, that third parties will not
attempt to design around such patents without infringing on them, that the
Company and/or NASA would be successful in the prosecution of any infringement
claims related to the patented technology, that NASA would join the Company's
efforts related to any such claims or that NASA or the Company would not be
required (or in the case of NASA, inclined) to settle any such litigation by
granting a sublicense to a potential competitor. These patents expire in 2002
and all of the technology covered by these patents will be accessible to
potential competitors. Moreover, a significant portion of the Company's
products and manufacturing processes utilize proprietary know-how that has not
yet been, or cannot be, patented and may, therefore, be more susceptible to use
by competitors or potential competitors. A third patent that was held by NASA
and licensed to the Company expired February 26, 1996 and the technology
underlying that patent is now available to competitors and potential
competitors. The availability of this technology could have a material adverse
effect on the Company's business.
CIRCUMVENTION OF EXCLUSIVITY
Under the Company's license agreement with NASA, NASA retains the right
to use its technologies in connection with devices that it produces, including
devices that may be produced and marketed by NASA in direct competition with
FluoroScan. NASA also has the right to circumvent the exclusivity of the
license agreement if, in NASA's opinion, such circumvention is required to
serve the public good and the national interest of the United States, and the
Company cannot serve such functions. Moreover, the Company's license agreement
with NASA are exclusive only in the United States and its territories.
Accordingly, NASA retains the right to license its technologies to others
outside of the United States, where such technologies are patented or can be
patented. The technology covered by the NASA patents is not patented in many
foreign countries and may therefore not be protectable or may be cumbersome and
expensive to enforce in such countries. Therefore, a competitor in one of these
countries could reverse engineer the Company's products and manufacture and
sell products in direct competition with the Company outside the United States.
POTENTIAL INFRINGEMENT OF THIRD PARTY RIGHTS
The Company's operations are dependent, in part, on its ability to
avoid infringing on the proprietary rights of others. The Company has not been
notified by any third party that the Company's products or procedures infringe
any valid, enforceable claim of any patent or other technology owned by others.
If any of the Company's current or future products, however, are finally
determined to infringe on the proprietary rights of others, the Company's
business could be materially adversely affected. In addition, the Company has
been unsuccessful in its efforts to register the mark "FluoroScan" with the
United States Patent and Trademark Office because a prior registration of the
mark already exists. The
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prior registrant had marketed an unrelated medical equipment product that
measured skin surface fluorescence. The Company believes the prior registrant
is no longer in business. Based upon the Company's continuous use of the mark
on its products since 1985 and in its corporate name since 1991, in each case
without objection from the prior registrant or any reported instances of actual
confusion with the owner of the prior registration, management believes that
the prior registration is not a threat to the Company's future use. The prior
registration could, however, limit the Company's ability to prosecute third
party uses of the mark.
COMPETITION; TECHNOLOGICAL CHANGE AND OBSOLESCENCE
The Company knows of only a limited number of direct competitors. Xi
Tec, Inc. has manufactured products comparable to the Company's systems
pursuant to a sublicense from the Company that expired on February 26, 1996.
Other direct competitors include OEC Medical, Inc., which manufactures a small
conventional C-arm imaging system and Lixi, Inc. which manufactures x-ray tube
version lixiscopes only for the industrial marketplace. In addition, the
Company competes indirectly with manufacturers of conventional C-arm image
intensifiers, including Philips N.V., Siemens A.G., General Electric Company,
OEC Medical, Inc., Fischer Imaging Corporation and Picker International, Inc.
These competitors have substantially greater financial and marketing resources
than the Company.
In addition, while the Company believes that the technology incorporated
into the FluoroScan products will be the method of choice in its target markets
for the foreseeable future because of such technology's clear advantages over
more conventional x-ray technologies, many companies, research institutions and
universities may be working in a number of engineering and radiology
disciplines similar to those being used and developed by the Company. As a
result, the Company's products may become subject to competition from products
using technologies other than those developed by the Company, which may render
the Company's products obsolete or less attractive to customers if the Company
cannot participate in such new technologies. The Company will have to incur
significant research and development expenditures to keep its technology and
products innovative and current.
PRODUCT DEVELOPMENT; UNCERTAINTY OF MARKET ACCEPTANCE
The Company currently sells different models of the FluoroScan units.
The veterinarian version of the FluoroScan II began selling in the third
quarter of 1994 and the Company intends to begin selling the medical version of
the FluoroScan II in the second quarter of 1996. The FluoroScan III model
began selling in the fourth quarter of 1995 with the intention of replacing the
FluoroScan I model. The Company also is in the process of developing another
FluoroScan model which will permit imaging of larger areas. It is not possible
to predict the likely demand and acceptance for newly introduced products in
the Company's target markets. The Company has not yet commenced significant
marketing activities relating to the medical version of the FluoroScan II and
currently has limited marketing resources. Achieving market acceptance for
these systems may require substantial expenditures. Development of the new
FluoroScan also will be subject to all of the risks associated with new product
development, including unanticipated delays, expenses, technical problems or
other difficulties that could result in abandonment or substantial change in
the commercialization of this product. Given the uncertainties inherent in new
product development and introduction, domestically and abroad, and the other
risks associated with foreign operations such as governmental regulation,
currency fluctuations, trade embargoes, tariffs and political and economic
instability, there is no assurance that the Company will be successful in
implementing its product development, commercialization or marketing
strategies.
LIMITED SUPPLY SOURCES
The Company purchases most of the components used in manufacturing its
products from a limited number of suppliers and subcontractors as needed to
complete and deliver such products. Although the Company believes that there
are alternative sources of supply, an interruption or delay in
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supply from the Company's vendors and subcontractors could result in
manufacturing delays for the Company's products.
PRODUCT LIABILITY
The Company may be subject to product liability claims arising out of
the use of the Company's products in the health care or other fields. In
recognition of this risk, the Company has obtained product liability insurance
to cover a total of $1 million per occurrence with an aggregate limitation of
$2 million per year. There can be no assurance that product liability claims
will not exceed the amount of such insurance coverage or that such coverage
will continue to be available to the Company on a cost-effective basis. An
underinsured or uninsured claim could have a material adverse effect on the
Company's financial condition.
EFFECT OF TRENDS IN HEALTH CARE FIELD
Due to the growing national concern with health care costs and the
commitment of the Clinton administration to implement national health care
reform, health care providers operate in an uncertain climate with respect to
the amount of, and procedures eligible for, reimbursement by government and
third party providers. As health care providers anticipate changes in their
cost reimbursement structure, they may halt or delay the purchase of new
equipment, including the FluoroScan. Equipment leasing, as opposed to
purchasing, also may become more prominent. In addition, to the extent health
care reform leads to consolidation of individual providers into larger
networks, the Company may have fewer potential customers in the health care
field.
GOVERNMENT REGULATION
The Company is required to obtain certain variances, acceptances to
market and clearances from the Federal Food and Drug Administration, as well as
certain state regulatory agencies, to sell the FluoroScan products in health
care markets in the United States. Comparable agencies in many foreign
countries impose similar requirements on sales in those countries. To comply
with these regulatory requirements, the Company also is subject to certain
ongoing reporting and other obligations. Although management believes that the
Company has all required variances, acceptances to market and clearances with
respect to its existing products, there is no assurance that the Company will
be able to obtain required variances, acceptances to market and clearances for
future generation products or that the requirements for existing products will
not become more stringent. In addition, changes in these requirements could
increase compliance costs substantially. There is no assurance that the Company
will be able to comply with all applicable government requirements and
regulations. Loss of, delays in obtaining or inability to obtain necessary
governmental variances, acceptances to market and clearances could severely
restrict the Company's access to the health care markets, which could, in turn,
have a material adverse effect on the Company's operations.
The Company also may be subject to state disclosure and other laws that
could be interpreted to govern the relationship between the Company and its
independent sales representatives. Certain of these laws may restrict the
Company's ability to terminate its relationships with its sales representatives
without advance notice and, in some cases, without cause.
FOREIGN SALES LIMITATIONS; EXPANSION INTO NEW MARKETS
The Company's technology is governed by the International Traffic in
Arms Regulations of the Department of State. The Government may limit the
export of the FluoroScan to certain countries, and prohibit its export to
certain other countries. To promote expansion of its international business,
the Company established FluoroScan International, Inc., a wholly-owned
subsidiary in November, 1995. FluoroScan International, Inc. is based in
Paris, France. There is no assurance that this subsidiary will be profitable.
The success of the Company's expansion into new geographical markets will
depend on
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a number of factors, including general economic and business conditions
affecting the industries of the Company's customers in such markets,
competition, the identification and acquisition or leasing of suitable sales
offices and/or warehouse facilities on acceptable terms, and the ability to
attract and retain qualified personnel and operate effectively in geographic
areas in which the Company has no prior experience. Foreign sales are subject
to numerous other risks, including economic or political instability,
fluctuations in foreign currency rates and artificial ceilings placed on the
demand for the Company's products in foreign markets by the implementation of
quota requirements prohibiting or limiting the quantity of foreign-made
imports. These restrictions, regulations and risks could impair the Company's
ability to expand internationally, as planned.
CONTROL BY MANAGEMENT AND PRINCIPAL STOCKHOLDERS
The Company's officers, in the aggregate, beneficially own 53.4% of the
issued and outstanding shares of the Common Stock and related voting power and
will beneficially own 41.3% if all of the Warrants are exercised. As a result,
these stockholders, acting together, are likely to be able to control most
matters requiring approval by the stockholders, including the election of
directors. Larry Grossman, the Company's Chairman of the Board and Chief
Executive Officer, and Arlen Issette, the Company's President, have entered
into a voting agreement pursuant to which they have agreed to vote their shares
together. In addition, Mr. John Tauber, the Company's former Vice President of
Manufacturing, has granted a proxy to vote his shares to Messrs. Grossman and
Issette, and Mr. Kevin Hughes, the Company's National Sales Manager, has
granted such a proxy with respect to the shares he received in 1995 pursuant to
a warrant. Furthermore, certain provisions of the Company's Amended and
Restated Certificate of Incorporation, its Bylaws, its 1994 Amended and
Restated Stock Incentive Plan, 1995 Stock Incentive Plan and 1994 Directors
Stock Option Plan and its employment agreements with Messrs. Grossman and
Issette could have the effect of delaying, deferring or preventing a change in
control of the Company.
DEPENDENCE ON KEY PERSONNEL
The future success of the Company is dependent to a significant degree
on the experience and efforts of Larry S. Grossman and Arlen L. Issette, the
Company's Chairman and President, respectively. Loss of the services of one or
both of these officers could have a material adverse effect on the Company's
business. Each of Messrs. Grossman and Issette has entered into an employment
agreement that provides for his employment with the Company through February
1999. The agreements also contain certain noncompetition, confidentiality,
severance and change in control provisions. Although the Company maintains $1
million of key-man life insurance with respect to each of Messrs. Grossman and
Issette, there is no assurance that the benefits payable under these policies
would be sufficient to replace the loss of Mr. Grossman's or Mr. Issette's
services to the Company. The Company's continued growth also depends on its
ability to attract and retain skilled technical, marketing and sales personnel,
and there can be no assurance that the Company will be successful in continuing
to do so.
NO ASSURANCE AS TO FUTURE PROFITABILITY
In the fiscal years ended December 31, 1995 and 1994, the Company had
revenues of approximately $13,150,000 and $9,170,000, respectively, and net
income of approximately $1,480,000 and $1,770,000, respectively. The Company
historically has had, and following this offering will continue to have, a high
level of operating expenses, and the Company anticipates that it will make
substantially increased commitments of capital to the research, development and
marketing of its products. In light of the Company's anticipated increase in
these expenses and the inability to predict the returns, if any, resulting from
such expenditures, there can be no assurance that the Company's current rate of
revenue growth will continue or that the Company's future operations will be
profitable.
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REDEMPTION OF WARRANTS
The Warrants offered hereby are redeemable at a price of $.01 per
Warrant, commencing July 11, 1996 and for a period of three years thereafter
until their expiration, in the event that (i) not less than 30 days' prior
written notice of such redemption is given to the holders of the Warrants and
(ii) the closing bid price of the Common Stock on the Nasdaq Stock Market (or,
if not then so listed, as otherwise provided in the Warrant Agreement) equals
or exceeds $9.00 per share for 10 consecutive trading days ending on the third
day prior to the date on which the notice of redemption is given. Holders of
the Warrants may exercise their Warrants until the close of the business day
immediately preceding the date fixed for redemption. Notice of redemption of
the Warrants could force holders to exercise the Warrants and pay the exercise
price therefore at a time when it may be disadvantageous for them to do so,
sell the Warrants at the current market price when they might otherwise wish to
hold the Warrants or accept the redemption price which is likely to be
substantially less than the market value of the Warrants at the time of
redemption.
CURRENT PROSPECTUS AND STATE BLUE SKY REGISTRATION REQUIRED TO EXERCISE
WARRANTS
Holders of the Warrants will be able to sell the shares of Common Stock
issuable upon exercise of the Warrants only if a current registration statement
relating to such shares is then in effect and only if the shares are qualified
for sale under the securities laws of the applicable state or states. The
Company has undertaken and intends to file and keep current a registration
statement covering the shares of Common Stock issuable upon exercise of the
Warrants, but there can be no assurance that the Company will be able to do so.
Although the Company intends to seek to qualify such shares of Common Stock for
sale in those states where the Common Stock is to be offered, there is no
assurance that such qualification will occur. The Warrants may be deprived of
any value if a current registration statement covering the shares underlying
the Warrants is not effective and available or if such underlying shares are
not or cannot be registered in the applicable states.
SHARES ELIGIBLE FOR FUTURE SALE; OUTSTANDING OPTIONS; WARRANTS
Stockholders who own an aggregate of 2,220,548 shares of Common Stock
have agreed not to sell or otherwise dispose of any of their shares of Common
Stock until July 11, 1996, without the prior written consent of the
Underwriter. Notwithstanding the foregoing, each of Larry Grossman, Chairman
and Chief Executive Officer of the Company, and Arlen Issette, President of the
Company, may, at any time, sell publicly under Rule 144 such number of shares
of Common Stock held by them as will generate no more than $1.5 million of
gross sales proceeds. No prediction can be made as to the effect, if any, that
sales of shares of Common Stock or the availability of such shares for sale
will have on the market price of the Common Stock from time to time.
Nevertheless, the possibility that substantial amounts of Common Stock may be
sold in the public market may adversely affect prevailing market prices for the
Common Stock and could impair the Company's ability to raise capital through
the future sale of its equity securities.
In addition, the exercise of the Warrants and any options issued under the
Company's various stock option plans (the "Stock Options") will dilute the
percentage ownership of the Company's stockholders, and any sales in the public
market of shares underlying the Warrants and the Stock Options may adversely
affect prevailing market prices. Moreover, the terms upon which the Company
will be able to obtain additional equity capital may be adversely affected
since the holders of the Warrants and the Stock Options can be expected to
exercise 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 the Warrants and the Stock Options.
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ISSUANCE OF PREFERRED STOCK
The Board of Directors of the Company is authorized to issue preferred
stock in one or more series, and to determine the preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, and terms or conditions of redemption of each series without
any vote or action of the stockholders of the Company. The issuance of
preferred stock in certain circumstances may have the effect of delaying or
preventing a change in control of the Company. The issuance of preferred stock
with voting and conversion rights may adversely affect the voting power of the
holders of Common Stock. The Company has no present plans to issue any shares
of preferred stock.
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USE OF PROCEEDS
If all of the Warrants are exercised (including the 100,000 Warrants
that the Underwriter has an option to purchase), the Company will receive
$8,750,000. Such amount is intended to be used by the Company for working
capital and other general corporate purposes, including funding of its product
development, manufacturing and marketing activities.
PLAN OF DISTRIBUTION
Pursuant to the Registration Statement, of which this Prospectus is a
part, the Company has registered under the Securities Act the Common Stock
which is issuable upon conversion of the Warrants. This Prospectus will be
used by the Company in connection with the offer and sale by the Company of the
shares of Common Stock issuable upon the exercise of the Warrants.
WARRANTS
Each Warrant was issued pursuant to a Warrant Agreement between the
Company and American Stock Transfer & Trust Company, as warrant agent. The
following statements are subject to the detailed provisions of the Warrant
Agreement and are qualified in their entirety by reference to the Warrant
Agreement, a copy of which has been filed as an Exhibit to the Registration
Statement of which this Prospectus is a part.
During the four-year period commencing July 11, 1995, each Warrant will
entitle the registered holder to purchase one share of Common Stock at an
exercise price of $7.00 per share. The Company has the right, in its sole
discretion, to decrease the exercise price of the Warrants on not less than 30
days' prior written notice to the holder. Warrants may be exercised by
surrendering the Warrants to the warrant agent and paying the exercise price.
No fractional shares of Common Stock will be issued in connection with the
exercise of Warrants. Upon exercise, the Company will pay to the holder the
value of any such fractional shares based upon the market value of the Common
Stock at such time. The Company is required to keep available a sufficient
number of authorized shares of Common Stock for issuance to permit exercise of
the Warrants.
The Company may redeem the Warrants at a price of $.01 per Warrant at any
time after July 11, 1996 and prior to their expiration by giving not less than
30 days' written notice mailed to the record holders if the closing bid price
of the Common Stock has been at least $9.00 on each of the 10 consecutive
trading days ending on the third day prior to the date on which the notice of
redemption is given. Warrants may be exercised anytime prior to the date fixed
for redemption or the expiration date.
The Warrants will expire at 5:00 p.m., New York time, on July 11, 1999.
In the event a holder of Warrants fails to exercise the Warrants prior to their
expiration, the Warrants will expire and the holder thereof will have no
further rights with respect thereto. A holder of Warrants as such will not have
any rights, privileges or liabilities as a stockholder of the Company. In the
event of the liquidation, dissolution or winding up of the Company, holders of
the Warrants as such are not entitled to participate in the distribution of the
Company's assets.
The exercise price of the Warrants and the number of shares issuable upon
exercise of the Warrants will be subject to adjustment to protect against
dilution in the event of stock dividends, stock splits, combinations,
subdivisions and reclassifications. No assurance can be given that the market
price of the Common Stock will exceed the exercise price of the Warrants at any
time during the exercise period.
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Purchasers of the Warrants will have the right to exercise the Warrants to
purchase shares of Common Stock only if a current registration statement
relating to such shares is then in effect and only if the shares are qualified
for sale under the securities laws of the jurisdictions in which the various
holders of the Warrants reside. The Company has undertaken to maintain the
effectiveness of the Registration Statement of which this Prospectus is a part
or to file and maintain the effectiveness of another registration statement so
as to permit the purchase of the Common Stock underlying the Warrants, but
there can be no assurance that the Company will be able to do so. The Warrants
may be deprived of any value if this Registration Statement or another
registration statement covering the shares issuable upon the exercise thereof
is not kept effective or if such Common Stock is not qualified or exempt from
qualification in the jurisdictions in which the holders of the Warrants reside.
For the life of the Warrants, a holder thereof is given the opportunity to
profit from a rise in the market price of the Common Stock. In addition, the
Company may find it more difficult to raise equity capital if it should be
needed for the business of the Company while the Warrants are outstanding. At
any time when the holders of Warrants might be expected to exercise them, the
Company would, in all likelihood, be able to obtain additional equity capital
on terms more favorable than those provided in the Warrants.
LEGAL MATTERS
Certain legal matters with respect to the validity of the Common Stock
will be passed upon for the Company by Katten Muchin & Zavis, a partnership
including professional corporations, Chicago, Illinois.
EXPERTS
The financial statements incorporated by reference in this Prospectus
have been audited by BDO Seidman, LLP, independent certified public
accountants, to the extent and for the periods set forth in their report
incorporated herein by reference, and are incorporated herein in reliance upon
such report given upon the authority of said firm as experts in auditing and
accounting.
INDEMNIFICATION MATTERS
The Company's Amended and Restated Certificate of Incorporation
provides that the Board of Directors shall indemnify the directors and officers
of the Company and may indemnify employees and other persons serving at the
request of the Company in any other capacity for or on behalf of the Company,
to the maximum extent permitted by Delaware law or any other applicable laws.
Insofar as indemnification for liabilities arising under the Securities
Act 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 and
may, therefore, be unenforceable.
At present, the Company is not aware of any pending or threatened
litigation or proceeding involving a director or officer of the Company in
which indemnification would be required or permitted. The Company believes that
its charter provisions are necessary to attract and retain qualified persons as
directors and officers.
11
<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14.OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Set forth below is an estimate of the approximate amount of fees and
expenses payable by the Company in connection with the issuance and
distribution of the Common Stock pursuant to the Prospectus contained in this
Registration Statement. The Company will pay all of these expenses.
<TABLE>
<CAPTION>
Approximate
Amount
-----------
<S> <C>
Accountants fees and expenses $1,000
Legal fees and expenses 6,000
Miscellaneous expenses 1,000
-----------
Total $8,000
===========
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The undersigned small business issuer's Amended and Restated
Certificate of Incorporation provides that the undersigned small business
issuer shall indemnify its directors and officers and may indemnify its
employees, as well as persons serving at the request of the small business
issuer in any other capacity for or on behalf of the small business issuer, to
the full extent permitted by the Delaware General Corporation Law or any other
applicable laws. These provisions may require the undersigned small business
issuer, among other things, to indemnify such officers and directors against
certain liabilities that may arise by reason of their status or service as
directors or officers, to advance expenses to them as they are incurred,
provided that they undertake to repay the amount advanced if it is ultimately
determined by a court that they are not entitled to indemnification, and to
obtain directors' and officers' liability insurance if available on reasonable
terms.
Reference is made to Section 145 of the General Corporation Law of the
State of Delaware which provides for indemnification of directors and officers
in certain circumstances.
The Company has obtained a directors' and officers' liability insurance
policy which entitles the Company to be reimbursed for certain indemnity
payments it is required or permitted to make to its directors and officers.
ITEM 16. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
4.1* Amended and Restated Certificate of Incorporation of the Company.
4.2* Second Amended and Restated Bylaws of the Company.
4.3* Form of Warrant.
4.4* Warrant Agreement.
4.5* Specimen Stock Certificate representing Common Stock.
4.6* 1994 Amended and Restated Stock Incentive Plan.
4.7** 1995 Stock Incentive Plan.
4.8** 1994 Directors Stock Option Plan.
5* Opinion of Katten Muchin & Zavis as to the legality of the securities
being registered (including consent).
23.1 Consent of BDO Seidman, LLP.
23.2* Consent of Katten Muchin & Zavis (contained in its opinion filed as
Exhibit 5 hereto).
24 Power of Attorney (included on the signature page hereto).
- -----------
* Incorporated by reference from the Company's Registration Statement on
Form SB-2 dated July 11, 1994, Reg. No. 33-78980C.
** Incorporated by reference from the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1995.
II-1
<PAGE> 14
ITEM 17. UNDERTAKINGS
The undersigned registrant hereby undertakes:
(a) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement to include
any material information with respect to the plan of distribution not
previously disclosed in the Registration Statement or any material change
to such information in the Registration Statement.
(b) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment that contains a form of
prospectus 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.
(c) 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.
II-2
<PAGE> 15
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Company
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 Chicago, State of Illinois on the 30th day of May,
1996.
FLUOROSCAN IMAGING SYSTEMS, INC.
By: /s/ LARRY S. GROSSMAN
---------------------------------------
Larry S. Grossman,
Chairman and Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and
appoints Larry S. Grossman and Arlen L. Issette and each of them his true and
lawful attorney-in-fact and agent, with full power of substitution, to sign on
his behalf, individually and in each capacity stated below, all amendments and
post-effective amendments to this Registration Statement on Form S-3 and to
file the same, with all exhibits thereto and any other documents in connection
therewith, with the Securities and Exchange Commission under the Securities Act
of 1933, granting unto said attorneys-in-fact and agents full power and
authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully and to all intents and
purposes as each might or could do in person, hereby ratifying and confirming
each act that said attorneys-in-fact and agents may lawfully do or cause to be
done by virtue thereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities indicated on this 30th day of May, 1996.
Signature Title
- --------------------- --------------------------------------------------------
/s/ LARRY S. GROSSMAN Chairman of the Board, Chief Executive Officer,
- --------------------- Secretary, (Principal Executive Officer) and Director
Larry S. Grossman
/s/ ARLEN L. ISSETTE President, Treasurer and Director
- ---------------------
Arlen L. Issette
/s/ BERNARD M. KLOS Vice President of Finance and Administration (Principal
- --------------------- Financial and Accounting Officer)
Bernard M. Klos
/s/ LARRY BIER Director
- ---------------------
Larry Bier
II-3
<PAGE> 16
INDEX TO EXHIBITS
4.1* Amended and Restated Certificate of Incorporation of the Company.
4.2* Second Amended and Restated Bylaws of the Company.
4.3* Form of Warrant.
4.4* Warrant Agreement.
4.5* Specimen Stock Certificate representing Common Stock.
4.6* 1994 Amended and Restated Stock Incentive Plan.
4.7** 1995 Stock Incentive Plan.
4.8** 1994 Directors Stock Option Plan.
5* Opinion of Katten Muchin & Zavis as to the legality of the securities
being registered (including consent).
23.1 Consent of BDO Seidman, LLP.
23.2* Consent of Katten Muchin & Zavis (contained in its opinion filed as
Exhibit 5 hereto).
24 Power of Attorney (included on the signature page hereto).
- -------------
* Incorporated by reference from the Company's Registration Statement on
Form SB-2 dated July 11, 1994, Reg. No. 33-78980C.
** Incorporated by reference from the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1995.
<PAGE> 1
EXHIBIT 23.1
CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
FluoroScan Imaging Systems, Inc.
Northbrook, Illinois
We hereby consent to the incorporation by reference in the Prospectus
constituting a part of this Registration Statement on Form S-3 of our report
dated February 23, 1996, relating to the financial statements of FluoroScan
Imaging Systems, Inc. appearing in the Company's Annual Report on Form 10-KSB
for the year ended December 31, 1995.
We also consent to the reference to us under the caption "Experts" in the
Prospectus.
/s/ BDO Seidman, LLP
BDO Seidman, LLP
Chicago, Illinois
May 30, 1996
