SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported) May 21, 2004
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POSITRON CORPORATION
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(Exact Name of Registrant as Specified in Its Charter)
Texas 000-24092 76-0083622
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(State or Other Jurisdiction (Commission File Number) (I.R.S. Employer
of Incorporation) Identification No.)
1304 Langham Creek Drive, Suite 300, Houston, Texas 77084
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(Address of Principal Executive Offices) (Zip Code)
(281) 492-7100
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(Registrant's Telephone Number, Including Area Code)
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(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS AND REQUIRED FD DISCLOSURE.
On May 27, 2004, Positron Corporation ("Positron") issued a press release
announcing that it had entered into a series of agreements with IMAGIN
Diagnostic Centres, Inc. ("IMAGIN") pursuant to which IMAGIN has agreed to
provide over the next seven months an aggregate financing to Positron of $2
million. When the financing is completed and if all conversion rights are
exercised, IMAGIN will control approximately one-half of Positron's common
stock. In the first stage of the financing, IMAGIN has agreed to purchase an
aggregate of $700,000 face amount of Positron's 10% convertible secured notes,
$400,000 of which were purchased on May 27, 2004. The notes are due May 21,
2006.
Pursuant to the terms of the agreements, Positron has granted to IMAGIN a
security interest in all of its assets to secure the payment of the notes. The
notes are initially convertible into a new Series C Preferred Stock that in turn
is convertible into an aggregate of 35,000,000 million shares of Positron's
common stock.
IMAGIN also agreed, in a second stage of the financing, to purchase an aggregate
of $1.3 million of Positron's 10% secured convertible notes. IMAGIN has agreed
to purchase the notes over a six and a half month period, commencing July 15,
2004. The notes are initially convertible into a new Series D Preferred Stock
that, in turn, is convertible into 55,000,000 shares of the company's common
stock.
Full convertibility of the Series C and Series D Preferred shares into
Positron's common stock will require an amendment to Positron's Articles of
Incorporation which must be approved by Positron's shareholders. Positron has
agreed to promptly seek such approval.
In connection with the financing, IMAGIN has entered into an additional
agreement to purchase an aggregate of 10 PET scanners at a purchase price of
$1.3 million each. IMAGIN's obligations to purchase these scanners are subject
to obtaining all necessary Canadian regulatory approvals for the importation
into and use of the equipment in Canada. The purchase is also subject to IMAGIN
obtaining the necessary financing. There is no certainty that the necessary
regulatory approvals can or will be obtained or that IMAGIN will be able to
obtain the necessary financing.
Also in connection with the transaction, Patrick G. Rooney, Chairman and CEO of
Cipher Holding Corporation and Jack McConnaughy, Chairman and CEO of JEMC
Corporation, a private investment firm and former Chairman and CEO of Peabody
International Corporation, will be joining Positron's board of directors.
Positron has agreed to pay a $200,000 fee to IMAGIN upon completion of the
financing.
Safe Harbor Statement
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Statements contained in the exhibits to this report that state Positron's or its
management's expectations or predictions of the future are forward-looking
statements intended to be covered by the safe harbor provisions of the
Securities Act of 1933 and the Exchange Act. The Company's actual results could
differ materially from those projected in such forward-looking statements.
Factors that could affect those results include those mentioned in the documents
that the Company has filed with the Securities and Exchange Commission.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibits
Exhibit 4.1 Statement of Designation Establishing Series C Preferred Stock
of Positron Corporation dated May 21, 2004
Exhibit 4.2 Statement of Designation Establishing Series D Preferred Stock
of Positron Corporation dated May 21, 2004
Exhibit 10.1 Note Purchase Agreement dated May 21, 2004 between Positron
and IMAGIN Diagnostic Centres, Inc.
Exhibit 10.2 Secured Convertible Promissory Note dated May 21, 2004 in the
principal amount of $400,000
Exhibit 10.3 Form Secured Convertible Promissory Note in the principal
amount of $300,000
Security Agreement dated May 21, 2004 between Positron and
Exhibit 10.4 IMAGIN Diagnostic Centres, Inc. (entered into in connection
with Note Purchase Agreement)
Exhibit 10.5 Loan Agreement dated May 21, 2004 between Positron and
IMAGIN Diagnostic Centres, Inc.
Exhibit 10.6 Form Secured Convertible Promissory Note
Exhibit 10.7 Security Agreement dated May 21, 2004 between Positron and
IMAGIN Diagnostic Centres, Inc. (entered into in connection
with Loan Agreement)
Exhibit 10.8 Voting Agreement dated May 21, 2004 between Positron and
IMAGIN Diagnostic Centres, Inc.
Exhibit 10.9 Registration Rights Agreement dated May 21, 2004 between
Positron and IMAGIN Diagnostic Centres, Inc.
Exhibit 10.10 Equipment Purchase Agreement dated May 21, 2004 between
Positron and IMAGIN Diagnostic Centres, Inc.
Exhibit 99.1 Press Release dated May 27, 2004, entitled "Positron
Corporation Completes Phase I of a Financing and Strategic
Alliance with IMAGIN Diagnostic Centres, Inc. of Canada."
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SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
REGISTRANT HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
POSITRON CORPORATION
Date: June 3, 2004 By:/s/ Gary H. Brooks
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Gary H. Brooks
Chairman, CEO and CFO
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EXHIBIT INDEX
Exhibit No. Description Page No.
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4.1 Statement of Designation Establishing Series C Preferred Stock of 4.1-1
Positron Corporation dated May 21, 2004
4.2 Statement of Designation Establishing Series D Preferred Stock of 4.2-1
Positron Corporation dated May 21, 2004
10.1 Note Purchase Agreement dated May 21, 2004 between Positron 10.1-1
and IMAGIN Diagnostic Centres, Inc.
10.2 Secured Convertible Promissory Note dated May 21, 2004 in the 10.2-1
principal amount of $400,000
10.3 Form Secured Convertible Promissory Note in the principal 10.3-1
amount of $300,000
10.4 Security Agreement dated May 21, 2004 between Positron and
IMAGIN Diagnostic Centres, Inc. (entered into in connection with 10.4-1
Note Purchase Agreement)
10.5 Loan Agreement dated May 21, 2004 between Positron and 10.5-1
IMAGIN Diagnostic Centres, Inc.
10.6 Form Secured Convertible Promissory Note 10.6-1
10.7 Security Agreement dated May 21, 2004 between Positron and 10.7-1
IMAGIN Diagnostic Centres, Inc. (entered into in connection with
Loan Agreement)
10.8 Voting Agreement dated May 21, 2004 between Positron and 10.8-1
IMAGIN Diagnostic Centres, Inc.
10.9 Registration Rights Agreement dated May 21, 2004 between 10.9-1
Positron and IMAGIN Diagnostic Centres, Inc.
10.10 Equipment Purchase Agreement dated May 21, 2004 between 10.10-1
Positron and IMAGIN Diagnostic Centres, Inc.
99.1 Press Release dated May 27, 2004, entitled "Positron Corporation 99.1-1
Completes Phase I of a Financing and Strategic Alliance with
IMAGIN Diagnostic Centres, Inc. of Canada."