SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549



                                    FORM 10-K



                                  ANNUAL REPORT
     PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

                   FOR THE FISCAL YEAR ENDED DECEMBER 31, 1995

                         Commission file number 0-12405




                                  IMATRON INC.





                            a New Jersey Corporation
                               I.D. No. 94-2880078
              389 Oyster Point Blvd, South San Francisco, CA 94080
                            Telephone (415) 583-9964





                         Common Stock, without Par Value


Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such shorter  periods that the  Registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days.

                                    Yes X No

<PAGE>




The aggregate market value of the voting stock (which is the outstanding  Common
Stock) of the Registrant held by non-affiliates  thereof, based upon the closing
sale price of the Common Stock on March 20, 1996 on the NASDAQ  National  Market
System ($2.75 per share) was approximately $184,354,000.  For the purpose of the
foregoing  computation,  only  the  directors  and  executive  officers  of  the
Registrant were deemed to be affilliates. This determination of affiliate status
is not necessarily a conclusive determination for other purposes.

As of March 20,1996,  Registrant  had  outstanding  68,965,590  shares of Common
Stock, no par value, which is the only class of shares publicly traded.

                       DOCUMENTS INCORPORATED BY REFERENCE

Parts  of  the  Proxy  Statement  for   Registrant's   1995  Annual  Meeting  of
Shareholders,  to be filed with the  Commission  on or before 120 days after the
end of the 1995 fiscal year, are incorporated by reference into Part III hereof.

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation S-K (ss.229.405 of this chapter) is not contained herein, and will
not be contained to the best of registrant's  knowledge,  in definitive proxy or
information  statements  incorporated by reference in Part III of this Form 10-K
or any amendment to this form 10-K. [X]

<PAGE>


                                     PART I

ITEM 1 - BUSINESS

                                     GENERAL

Imatron Inc. ("Imatron" or the "Company"), a New Jersey corporation incorporated
in 1983, is a technology-based  company  principally  engaged in the business of
designing,  manufacturing and marketing a high performance  computed  tomography
(CT)  scanner.  This scanner uses Electron Beam  Tomography  ("EBT")  technology
based on a scanning  electron  beam.  The scanner is used in large and  midsized
hospitals and free-standing imaging clinics. The Company provides service, parts
and maintenance to hospitals and clinics that operate its scanners.

The Company is also engaged in performing research and development for others in
the field of CT devices and  licensing its patents and know-how in the fields of
imaging  sciences.  The Company  holds  approximately  a 1% interest in InVision
Technologies,  Inc. (formerly Imatron Industrial Products,  Inc.), a corporation
organized  in 1990 to  engage  in the  development  of an  explosives  detection
scanner and to which Imatron has licensed certain of its technology.

HeartScan  Imaging,  Inc.  ("HSI"),  incorporated  in  Delaware  in  1993,  is a
wholly-owned  subsidiary  of Imatron.  HSI operates a coronary  artery  scanning
(CAS) test facility and  corporate  demonstration  site in South San  Francisco,
California and is engaged in the business of developing a world-wide  network of
coronary artery disease risk assessment centers. In 1995 HSI opened two Coronary
Artery  Disease  Risk  Assessment  Centers in Seattle,  Washington  and Houston,
Texas.


                              PRODUCT AND SERVICES

                                 ULTRAFAST CT(R)

PRODUCT DESCRIPTION

A  conventional   CT  scanner  is  a  diagnostic   imaging  device  in  which  a
cross-sectional  (tomographic)  image of a patient's  anatomy is  acquired  from
multiple intensity readings  (samplings) taken as an x-ray source rotates around
the patient  during a scanning  cycle.  The  acquired  x-ray data are  processed
through a complex mathematical  algorithm relating tissue density differences to
variations  in the intensity of x-rays  passing  through a patient's  body.  The
acquired data are subsequently  reconstructed and displayed as images on a video
monitor,  typically with white  corresponding  to high density  matter,  such as
bone, and with black  corresponding to low density matter,  such as air. In this
manner,   the   patient's   anatomy  can  be  displayed   in  a  succession   of
cross-sectional, anatomical gray-scale representations.

The Imatron Ultrafast CT scanner design differs from conventional CT scanners in
two important ways.  First, the  mechanically  rotating x-ray tube technology of
conventional  CT scanners is replaced by a high power electron beam  accelerator
that  generates a small,  high-intensity  electron  beam which is steered  along
stationary  target  rings to  produce a rotating  fan-shaped  x-ray  beam.  This
patented electron beam technology permits significantly faster scan speeds to be
achieved.  The  Company  scanner  can  acquire  CT images at a rate of 50 to 100
milliseconds  per slice in contrast with  conventional  CT scanners that require
between 1 and 10 seconds per slice.  Second,  the Imatron  Ultrafast  CT permits
rapid scanning of multiple  contiguous  images without moving the patient.  With
these features the Ultrafast CT can perform  stop-action  or dynamic  studies of
the heart and various other organs, contributing to the scanner's usefulness for
both diagnosis and examination.

The  Ultrafast  CT  scanner  can  be  operated  in  either  of  two  modes:  the
"multi-slice" mode or the "single-slice,  high-resolution"  mode. When operating
in  the  multi-slice  mode,  8  levels  of  the  body  can  be  scanned  in  224

<PAGE>


milliseconds.  This mode was originally developed for cine,  multi-slice cardiac
imaging and gives  resolution  lower than the current  standards of conventional
CT. The single-slice,  high-resolution  mode enables the scanner to obtain still
images that the Company  believes are of superior  quality to those  produced by
most  conventional  CT  scanners  currently  on the  market.  Moreover,  the 100
millisecond  scanning speed,  higher resolution mode is faster than the scanning
speeds  of  conventional  CT  scanners,  thereby  significantly  reducing  image
degradation caused by motion.

PRODUCT DEVELOPMENT

In June 1992,  the Company  began  shipping the latest model of its Ultrafast CT
scanner,  the C-150.  This scanner is  substantially  shorter in length than its
predecessor, the C-100 XL, and incorporates several advanced capabilities. These
advanced  capabilities  include a new collimator upgrade permitting slice widths
as small as 1.5 mm,  a  helical  or  continuous  volume  scan  mode  having  the
capability of obtaining 40 consecutive high-resolution scans in 18 seconds (This
represents  an  increase  in  z-axis  speed of  scanning  by up to a factor of 4
compared to previous  modes),  and a new  workstation  link which will  transfer
image data to a number of  third-party  workstations  in real time as the images
are   reconstructed.   The  Company  has  also  developed  an  upgrade   package
(Accelerator  upgrade)  which  allows  the  advanced  capabilities  of the C-150
scanner to be added to the previously installed base of scanners.

MARKETS

The Company sells its CT scanner to the diagnostic  medical imaging market.  The
diagnostic  medical imaging market includes  several  different  medical imaging
modalities  including CT,  ultrasound,  nuclear  medicine,  digital  subtraction
angiography and magnetic resonance  imaging.  These imaging modalities are based
upon the  ability of x-rays,  sound  waves,  gamma  rays or  magnetic  fields to
penetrate human tissue and to be detected by electronic devices for presentation
of an image on a video monitor.  In some cases, these imaging modalities compete
with one another for the same type of diagnostic procedure.

All of these systems have been  evaluated in the diagnosis of cardiac  diseases,
but the extent of application  of several is limited due to distortions  arising
from the heart's motion as it beats at a rate greater than the scanning rates of
these  systems.  This is not the case for  Imatron's  Ultrafast  CT.  One of the
significant  benefits  of the fast  scanning  speed of  Imatron's  Ultrafast  CT
scanner is to allow it to image and quantify calcium in the coronary arteries, a
procedure known as the coronary artery scan ("CAS").

Cardiovascular  disease is the  number  one cause of death in the United  States
accounting for more than 930,000 deaths annually. Of these deaths coronary heart
disease  contributes to  approximately  500,000 deaths  annually.  Of particular
importance is the fact that in approximately 150,000 cases annually,  the first,
last and only symptom of coronary  heart  disease is a fatal heart  attack.  The
Company believes that this widespread incidence of coronary heart disease in the
United  States  coupled  with  the  fact  that a large  number  of  asymptomatic
individuals experience heart attacks each year indicates a clear need for a safe
and effective screening test for the earliest stages of coronary heart disease.

The correlation between calcium in the coronary arteries,  atherosclerosis,  and
myocardial  infarction  (heart  attack) has been known since the 1950's.  In the
mid-1960's  selective  coronary  angiography  was  introduced  and  soon  became
routine.  Since that time coronary  angiography which demonstrated  narrowing or
occlusion of the coronary  arteries has become the "gold  standard" for positive
identification of coronary artery disease. Abnormal results from screening tests
such as exercise  electrocardiography (ECG) and thallium stress nuclear medicine
are commonly used as an indication  for coronary  angiography.  These  screening
tests produce a significant  percentage of false  abnormal  results such that as
few as 25 percent of the coronary angiograms  conducted are normal. In addition,
statistics  indicate that some patients die suddenly after  receiving a "normal"
stress  ECG  study  and are then  found  upon  autopsy  to have had  significant
coronary artery disease.  The Company believes these  statistics  illustrate the
inadequate  predictive value of the standard noninvasive screening tests used to
indicate coronary artery disease.

<PAGE>

The  Company  believes  that  research  demonstrates  CAS has the  potential  to
accurately  identify  those  people who are  developing  early  coronary  artery
disease.  CAS can then serve as a feedback mechanism to monitor the treatment of
those with early  coronary  artery  disease,  a disease  which  recent  research
indicates that treatment may slow, stop or even cause to regress. Until now, the
only way to  directly  determine  the  effect  of  life-style  modification  and
lipid-lowering pharmacologic treatment on coronary artery disease was to perform
invasive coronary angiography.

For  those  patients  in whom CAS  detects  advanced  coronary  artery  disease,
intervention  can help prevent a crippling heart attack or sudden death. The CAS
test  also has great  potential  for  reducing  the  costs  associated  with the
unnecessary  treatment of those who have coronary risk factors, but show no sign
of  coronary  artery  disease.  Thirty to  thirty-five  percent  of people  with
elevated  cholesterol  levels do not develop coronary artery disease,  but since
there has not been a method to find those who are beginning to develop  coronary
disease,  everyone  with a high  cholesterol  reading is treated as if they will
develop  the  disease.   The  Company  believes  that  CAS  is  a  powerful  and
cost-effective  method of detecting or ruling out  coronary  artery  disease and
represents a unique market. Currently, only the Ultrafast CT scanner can provide
the  necessary  technological  capability  to address the  clinical  application
requirements.  Notwithstanding  the foregoing,  CAS to date has not been broadly
accepted  as a method of  identifying  coronary  artery  disease and there is no
assurance that a significant market will develop for this procedure.

Imatron  believes  that  possible  factors  affecting the demand for CT products
include,  among others,  potential  customers' budgetary  constraints  including
those imposed by government regulation, changes in the reimbursement policies of
the  government  and  third  party  insurers,  replacement  of older  equipment,
advancements in technology, and the introduction of new medical procedures.

SERVICE

The Company and its distributors  provide  installation,  service,  and warranty
service to their respective Ultrafast CT customers.  Imatron provides a warranty
to its  distributors  on  parts  only  during  the  12  month  period  following
installation and warrants replacement parts for 90 days.

The Company  maintains a staff of technical  support engineers who are available
on a contract basis to assist its  distributors  during  installations or during
emergencies. The Company also sells spare parts to its distributors.

CORONARY ARTERY SCANNING

In 1993,  the Company  organized  HeartScan  Imaging,  Inc.  ("HeartScan")  as a
wholly-owned subsidiary.  During that year, HeartScan opened a CAS test facility
at the  Company's  facility in South San  Francisco,  California.  The principal
purposes of the  facility  are to market test a variety of consumer  advertising
and professional  education programs, to determine the feasibility of developing
a network  of CAS  clinics,  to test  software  developments  for the  Company's
scanner  products  and to  serve  as a  corporate  demonstration  site  for  the
Company's products and services.

HeartScan is also engaged in the business of developing  coronary artery disease
risk  assessment  centers and is developing a business and financing  plan for a
nationwide  network of Company-owned  and operated CAD risk assessment  centers.
The services of such centers will be marketed to physicians, insurers, employers
and directly to the public.  As of December 31,  1995,  two CAD risk  assessment
centers were owned and operated by  HeartScan.  HeartScan's  near-term  business
strategy  involves the  development of six to nine Coronary  Artery Disease Risk
Assessment  Centers  over  the  next  eighteen  months  and  additional  centers
thereafter.  There is no assurance  that  HeartScan will be able to complete the
centers  provided for in its business plan. The success of HeartScan's  proposed
Coronary  Artery  Disease  Risk  Assessment  Centers  will depend on a number of
factors  including,  but not limited  to,  HeartScan's  ability  to:  obtain and
operate in  compliance  with  appropriate  licenses from  applicable  regulatory

<PAGE>

authorities;  develop working  relationships with local groups of cardiologists;
educate patients, referring physicians and third-party payors about the benefits
of the CAS and HeartScan's centers; and manage effectively the operations of the
centers.  HeartScan  anticipates  negative cash flow and  substantial  operating
losses during the next several years of its operations and there is no certainty
that HeartScan can operate profitably.

Imatron is currently engaged in a $10,000,000 private offering of HeartScan unit
securities  to  accredited  investors.  Imatron  anticipates  that  the  current
offering,  if fully  subscribed  and all of the net proceeds are  contributed to
HeartScan's capital, will provide sufficient funds which, together with lease or
debt financing  HeartScan believes is available from other sources,  will enable
it to open six to nine Coronary Artery Disease Risk Assessment  Centers over the
next  eighteen  months.  To satisfy  HeartScan's  future  capital and  operating
requirements  and to complete its business  plan,  additional  financing will be
required.  There is no certainty that HeartScan will, in the future,  be able to
sell its  securities  privately or in a registered  public  offering.  If future
public or private  financing is required by  HeartScan,  Imatron may  experience
dilution.  If such financing  cannot be obtained,  HeartScan will not be able to
complete its business  plan and may seek to sell some or all of its assets or to
merge with another company.

HeartScan  is  dependent  on Imatron for the scanner  used by it in its Coronary
Artery Disease Risk Assessment Centers. HeartScan does not believe there are any
other machines  which can accomplish the same tests.  In the event that Imatron,
for any reason,  should cease  manufacturing such equipment,  HeartScan would be
unable to complete its business plan.

HeartScan's  near-term  plans for  opening new  clinics  will place  significant
strain on its administrative,  operational and financial resources and increased
demands on its  systems  and  controls.  If its  management  is unable to manage
growth effectively, HeartScan's operating results could be adversely effected.


RESEARCH AND DEVELOPMENT CONTRACTS

In March 1991, the Company  entered into an agreement  with Siemens  Corporation
("Siemens")  which included a Development  Agreement.  (See  "Transactions  With
Siemens  Corporation"  below) Pursuant to the Development  Agreement the Company
and Siemens  pursued the joint  development of certain EBT  technology  products
funded  by  Siemens.  Upon  successful  conclusion  of the  development  of such
products,  Siemens had the sole right to manufacture  the products.  The Company
recognized   $1,753,000,   $5,013,000  and  $4,667,000  of  revenue  under  this
Development Agreement in 1995, 1994 and 1993, respectively.

On March 31, 1995,  the Company and Siemens  entered into a new  agreement  (the
"Memorandum of Understanding") pursuant to which the parties agreed to terminate
the  existing   Development   Agreement  and  substitute  in  its  place  a  new
collaborative research agreement. Under the new collaborative research agreement
the parties will jointly  conduct  research  and  development  over a three year
period directed toward certain  improvements  and  enhancements to the Company's
C-150  product.   Siemens  agreed  to  fund  an  aggregate  of  $15  million  of
Imatron-managed research and development for a three year period beginning April
1, 1995,  subject  to  achieving  mutually  agreed  upon  goals and  objectives.
Pursuant  to the  funding,  Imatron  will  contribute  a portion  equal to fifty
percent  of  Siemens'  contribution  for the  sole  purpose  of  conducting  the
collaborative  agreement.  The primary  goals of the  research  and  development
program  are  to  develop  and  enhance  system  performance,  increase  product
reliability,  reduce manufacturing costs, and improve system upgradability.  The
results of the  collaborative  research will be jointly owned by the parties and
cross-licensed.   The  Company  recognized   $3,884,000  of  revenue  under  the
collaborative agreement during the 1995 fiscal year.

Imatron also  performs  contract  research for  government  agencies in computed
tomography and related X-ray  technologies.  During 1991 the Company was awarded
an extension of its research  contracts  from the National  Institutes of Health
and the U.S.  Army.  The contract  periods ranged from one to four years with an

<PAGE>

aggregate  contract  amount in excess of  $2,000,000.  Research and  development
contracts for government agencies  contributed  approximately $0, $368,000,  and
$845,000 in revenues in 1995, 1994 and 1993, respectively.


                                    MARKETING

The Company's  scanners are utilized by a variety of customers  including  large
teaching and research hospitals, medium-size hospitals and imaging clinics.

The Company  sells its Ultrafast CT product  directly and through  distributors.
The Company has, or had, the following distribution arrangements:

UNITED STATES, CANADA, AND EUROPE

In April 1995, the Company entered into an agreement with Siemens giving Siemens
the  exclusive  right to distribute  the  Company's  C-150 scanner in the United
States,  Canada,  Europe and India. (See "Transactions With Siemens Corporation"
below).

JAPAN

Beginning in 1986,  Mitsui & Co., Ltd.  ("Mitsui")  was the  distributor  of the
Company's   products  in  Japan,   either  directly  or  through  a  third-party
distributor.  On December 10, 1993  Imatron  entered  into two  agreements  with
Mitsui that became  effective in January of 1994, the  Settlement  Agreement and
the Transition  Agreement.  Pursuant to these  agreements,  Mitsui agreed to pay
Imatron $1.5 million in consideration  of Imatron's  agreement to relieve Mitsui
of its  obligation  to purchase  additional  Ultrafast CT scanners from Imatron.
Imatron agreed to purchase  certain  Ultrafast CT scanner  inventory from Mitsui
and to undertake  all service and warranty  responsibility  for the Ultrafast CT
scanners  installed in Japan.  Imatron further agreed to complete  certain sales
contracts currently in place between Mitsui and various end users in Japan.

On January 7, 1994,  Imatron  entered into a Joint Company  Agreement  with Tobu
Land System  Company  and Kino  Corporation  pursuant  to which a joint  venture
company  was  established  to  market,  sell,  install  and  service  Imatron CT
scanners.  The joint venture was designated as Imatron Japan Inc.  Imatron Japan
Inc. is owned 51% by Tobu Land System Company,  25% by Kino  Corporation and 24%
by Imatron. Imatron did not assume any financial funding requirements associated
with the  formation of Imatron  Japan Inc. The  Company's  investment in Imatron
Japan Inc.  is carried in the  accompanying  financial  statements  at no value.
Imatron is under no obligation to fund the  operations of Imatron Japan Inc. and
is prepared to abandon its interest.

On  February  3,  1994,   Imatron  and  Imatron   Japan  Inc.   entered  into  a
Distributorship  Agreement  pursuant  to  which  Imatron  Japan  Inc.  has  been
appointed as Imatron's  Distributor in Japan. Imatron has transferred its rights
and obligations under the Transition  Agreement between Imatron and Mitsui & Co.
Ltd. to Imatron Japan Inc.  Imatron Japan Inc. took delivery of six Ultrafast CT
scanner systems from Imatron in 1994.

In  1995,  Imatron  Japan  Inc.  purchased  five  CT  scanner  systems  and  two
refurbished  systems. In connection with the sales, the Company paid $130,000 in
commissions for every new Ultrafast CT scanner sold to Imatron Japan KK.

Imatron Japan Inc. has ordered five additional  Ultrafast CT scanner systems and
one refurbished system for delivery in 1996.

<PAGE>


HONG KONG AND TAIWAN

The Company has a  Distributorship  Agreement with Polly Force Co., Ltd. ("Polly
Force")  pursuant  to which  Polly  Force  has the  exclusive  right to sell and
service the Company's Ultrafast CT scanner in Hong Kong and Taiwan.
This agreement is renewable by the Company on an annual basis.

RELIANCE ON DISTRIBUTORS

A  substantial  portion of the  Company's  sales of its scanners is done through
distributors. There is no assurance that the Company's distibutors will actually
meet their contractual  minimums on a timely basis.  Failure by the distributors
to meet their obligations could adversely affect the Company.

SALES INFORMATION

The end user list price for the  Ultrafast  CT scanner  varies  depending on the
configuration  and  country to which the  scanner is  shipped.  The sales  price
includes   installation   by  field   service   personnel,   system   check  and
certification,  customer  training in the scanner's use, and a limited  12-month
parts warranty.  In addition,  local taxes and import duties may be added.  This
price, which is significantly higher than that of conventional CT scanners,  may
serve to limit sales of the  Company's  scanner to larger  hospitals and medical
imaging  clinics  that are able to  generate  a higher  than  average  volume of
patient usage to offset its higher cost.

Unit export sales for fiscal years ended December 31 are as follows:

                                        1995              1994             1993
                                        ----              ----             ----

         Total Export Sales              7                 10                2


                      TRANSACTIONS WITH SIEMENS CORPORATION

In  March  1991,  the  Company  entered  into a  Basic  Agreement  with  Siemens
Corporation  ("Siemens") which consisted of four separate sub-agreements each of
which has been subsequently modified in various respects by the parties.

On March 31,  1995,  the Company  and Siemens  entered  into an  agreement  (the
"Memorandum of  Understanding"  or "MOU") pursuant to which the  relationship of
the  parties  as   established   by  the  Basic   Agreement  was   substantially
restructured.  Pursuant to the MOU, the  sub-agreements  of the Basic  Agreement
were  terminated  and a number of new  relationships  were created.  First, a $4
million term loan was canceled in exchange for the transfer to Siemens of all of
Imatron's interest in five patents subject to a royalty-bearing  license back to
Imatron and the cancellation of the minimum  purchase  provision of the previous
distribution agreement. Second, the parties agreed to terminate, as of March 31,
1995,  the existing  Development  Agreement  and  substitute  in its place a new
collaborative  research  agreement  pursuant to which the parties  will  jointly
conduct  research  and  development  over a three year  period  directed  toward
certain  improvements and enhancements to the Company's C-150 product  described
above.  Third,  Siemens was appointed  Imatron's  exclusive  distributor for the
company's C-150 Ultrafast scanner in the United States, Canada, Europe and India
for a three year  period  effective  April 1, 1995.  Imatron  retains  exclusive
distribution  rights in the rest of the world.  Fourth,  the Company and Siemens
granted reciprocal  licenses to each other covering the electron beam technology
presently used (and to be developed)  relating to the design and  manufacture of
electron beam products.

Pursuant to the new collaborative research agreement, Siemens has agreed to fund
an aggregate of $15 million of Imatron-managed research and development over the
next three years,  subject to achieving  certain  mutually agreed upon goals and
objectives.  Pursuant to the funding, Imatron will contribute a portion equal to
fifty percent of Siemens'  contribution  for the sole purpose of conducting  the

<PAGE>

collaborative  agreement.  The primary  goals of the  research  and  development
program  are  to  develop   enhanced  system   performance,   increase   product
reliability,  reduce manufacturing costs, and improve system upgradability.  The
results of the  collaborative  research will be jointly owned by the parties and
cross-licensed.

Siemens has agreed to use its best efforts to  distribute  the  Company's  C-150
product in its exclusive  markets  subject to no minimum  purchase  obligations.
Siemens has the option to extend the term of the  Distribution  Agreement for an
additional  three year  period.  Any  extension  of the  agreement is subject to
agreement on minimum purchase commitments.  Imatron and Siemens have agreed that
Siemens  will be the  distributor  of the  Company's  C-150  units to  HeartScan
Imaging,  Inc., the Company's  wholly-owned  subsidiary,  in those markets where
Siemens has exclusive distribution rights. Siemens purchased one unit in 1995.

Pursuant to the cross licensing agreement, Siemens has granted Imatron a license
to: (a) all of the research results from the prior  development  agreement;  (b)
the patents transferred by Imatron to Siemens; and (c) Siemens' rights under the
new collaborative  research agreement.  Imatron has granted a license to Siemens
in the  field  of  medical  imaging  to:  (a)  Imatron's  rights  under  the new
collaborative  research  agreement;  and (b) Imatron's electron beam technology.
Pursuant  to the  license,  Imatron has agreed not to grant to any third party a
license in the field of  medical  imaging  during  the term of the  Distribution
Agreement  and the  collaborative  research  agreement and for a period of three
years thereafter.  Siemens may not use Imatron's technology to manufacture C-150
scanners  until Imatron has delivered to Siemens 50 such units in any year,  not
including  systems  designated  for use in  HeartScan  centers,  or in the event
Imatron is unable to perform its  obligations to Siemens under the  Distribution
Agreement.


                           INVISION TECHNOLOGIES, INC.

In 1990 the Company established a joint venture company,  InVision Technologies,
Inc. (formerly Imatron Industrial Products,  Inc.), with FI.M.A.I.  Holding S.A.
("FI.M.A.I."),  a shareholder of Imatron,  to develop,  manufacture,  market and
support  advanced CT  technology  in the  baggage,  parcel and freight  scanning
market.  Upon  organization,   Imatron  contributed  $250,000,   certain  parts,
components and material and entered into a Technology License Agreement.

The Technology  License  Agreement between the Company,  FI.M.A.I.  and InVision
Technologies,   Inc.  ("InVision")  grants  InVision  an  exclusive,  worldwide,
perpetual and fully-paid license to use the Company's technology and patents for
the development,  manufacture, use, and sale of compact medical scanner products
for military field applications,  and mail,  freight,  parcel or baggage scanner
products.  Also,  InVision  has agreed to grant  back to  Imatron an  exclusive,
worldwide,  perpetual  and  fully-paid  right  and  license  to  use  InVision's
technology and patents outside of InVision's field of use.

As of December 31, 1995,  Imatron's  interest in InVision was  approximately  1%
which is carried in the Company's consolidated financial statements at no value.
As of December 31, 1995,  InVision had an  accumulated  deficit.  The Company is
under no obligation to fund the accumulated  deficit of InVision and is prepared
to abandon its interest.



                                   COMPETITION

In  the  non-cardiac  imaging  applications  market  (comprised  principally  of
hospital radiology  departments),  the Company's  principal  competition is from
current  manufacturers of conventional CT scanners,  including  General Electric
Company,  Siemens  Corporation,  Elscint,  Picker  International,  Inc., Philips
Medical Systems and Toshiba Medical Corporation. Non-invasive diagnostic imaging
techniques  such  as  ultrasound,   radioisotope  imaging,  digital  subtraction

<PAGE>

angiography and magnetic  resonance imaging are also partially  competitive with
the Company's scanners,  particularly in the cardiac imaging market. Each of the
companies named above, as well as ATL,  Accuson and ADAC  Laboratories,  markets
equipment  using one or more of these  techniques.  All of these  companies have
greater financial resources and larger and more established staffs than those of
the Company and their  products are in most cases  substantially  less expensive
than the Ultrafast CT scanner.

The Company believes that to compete successfully against these competitors,  it
must demonstrate that the Ultrafast CT scanner is both an acceptable  substitute
for conventional CT scanners in scanning areas of the body where motion is not a
limitation and a valuable  cardiac  diagnostic tool capable of producing  useful
images of the heart.  Although the Company  believes  that the  Ultrafast CT can
produce  images of a quality  and  resolution  as good as or  superior to images
produced  by "state  of the art"  conventional  CT  scanners,  it lacks  certain
features that many competing  premium  scanners  offer.  These include lack of a
high-resolution  mode for imaging the temporal  bones and inner ear. There is no
certainty  that  potential  purchasers of the  Company's  scanner will accept it
without such features.

Also,  the Company  believes that  customers and  potential  customers  expect a
continuing  development  effort to improve the functionality and features of the
scanner.  The Company  continually  seeks to develop  product  enhancements  and
improve product reliability.  Imatron's future success may depend on its ability
to  complete  certain  product  enhancement  and  product  reliability  projects
currently  in  progress,  as well as on its  continued  ability to  develop  new
products  or  product  enhancements  in  response  to new  products  that may be
introduced by other  companies.  There can be no assurance  that Imatron will be
able to continue to improve product  reliability or introduce new product models
or product enhancements as required to remain competitive.

Other factors,  in addition to those described above, that a potential purchaser
would  consider in the  decision to replace a  conventional  CT scanner  with an
Ultrafast  CT scanner  include  purchase  price,  patient  throughput  capacity,
anticipated  operating  expenses,  estimated useful life and post-sale  customer
service and support. The Company believes that its scanner and/or the Company is
competitive with respect to each of these factors.


                                  MANUFACTURING

The  Company  manufactures  its scanner at its South San  Francisco,  California
facility.  To date, the typical manufacturing cycle has required six months from
the authorization of manufacturing to the delivery of a scanner.

Many  of the  components  and  sub-assemblies  used  in the  scanner  have  been
developed  and  designed  by  Imatron  to  its  custom  specifications  and  are
obtainable  from limited or single sources of supply.  In view of the customized
nature of many of these  components  and  sub-assemblies,  there may be extended
delays between their order and delivery. Delays in such delivery could adversely
affect Imatron's present and future production  schedules.  The Company has made
and continues to make inventory investments to acquire long lead time components
and  sub-assemblies  to minimize the impact of such delays. In recent years, the
Company has developed  alternative sources for many of its scanner subcomponents
and continues its programs to qualify vendors for the remaining critical parts.

Also,  certain  vendors  currently  require  cash-on-delivery  or prepay payment
terms. There can be no assurance that such actions will not adversely affect the
Company's  production  schedule and its ability to deliver  products in a timely
manner. As a result of certain vendors currently  requiring  cash-on-delivery or
prepay terms,  the Company must maintain higher levels of cash and other sources
of credit to fund material purchases than otherwise would be required.

<PAGE>



                              GOVERNMENT REGULATION

Amendments to the Federal Food, Drug, and Cosmetic Act ("Amendments") enacted in
1976, and regulations issued or authorized thereunder, provide for regulation by
the Federal Food and Drug Administration ("FDA") of the marketing,  manufacture,
labeling,  packaging,  sale and distribution of "medical devices," including the
Company's scanner.  Among these regulations are requirements that medical device
manufacturers register their manufacturing facilities with the FDA, list devices
manufactured  by them,  file  various  reports  and comply with  specified  Good
Manufacturing   Practice  (GMP)   regulations.   The  FDA  enforces   additional
regulations  regarding the safety of equipment  utilizing  x-rays,  including CT
scanners. Various states also impose similar regulations.

The Amendments also impose certain  requirements  which must be met prior to the
initial  marketing of medical  devices  introduced  into commerce  after May 28,
1976.  Other  requirements  imposed on medical  device  manufacturers  include a
pre-market  notification  process  commonly  known as the 510(k)  application to
market a new or modified  medical  device.  Additionally,  and  specifically  if
required by the FDA, a pre-market  approval (PMA) may be required.  This process
is  potentially  expensive  and time  consuming  and must be completed  prior to
marketing a new medical device. The Company has received appropriate  clearances
from the FDA to  market  both the  C-100 and C-150  Ultrafast  CT  scanner.  The
Company  believes that it is presently in  substantial  compliance  with the GMP
requirements and other regulatory issues promulgated by the FDA.

The FDA also regulates the safety and efficacy of radiological devices. Although
the Company believes it is in compliance with all applicable radiological health
regulations promulgated by the FDA, there can be no assurance that the Ultrafast
CT scanner will continue to comply with all such standards and regulations  that
may be promulgated.  In any event,  compliance with all such requirements can be
costly and time consuming,  with a resultant  materially adverse effect upon the
development of the Company's business and its future profitability.

FDA clearance to market does not guarantee or imply reimbursement by third-party
payers such as Medicare,  Medicaid,  Blue  Cross/Blue  Shield or private  health
insurers.  Medicare and Medicaid  reimburse  for  procedures  that are generally
accepted or that have been proven safe and effective.  The Health Care Financing
Administration  ("HCFA"), which oversees Medicare and Medicaid payment policies,
will  not  authorize   payment  for  procedures   which  are  considered  to  be
experimental.  HCFA has determined that diagnostic  examinations of the head and
other parts of the body  performed by CT scanners are covered if the  contractor
who  administers  the local  Medicare  program finds that medical and scientific
literature  and opinion  support the effective use of a scan for the  particular
condition.

The Federal government and certain states have enacted cost-containment measures
such as the  establishment  of maximum fee  standards in an attempt to limit the
extent and cost of  governmental  reimbursement  of allowable  medical  expenses
under Medicare,  Medicaid and similar governmental  programs. A number of states
have  adopted  or  are  considering  the  adoption  of  similar  measures.  Such
limitations  have led to a reduction in, and may further  limit funds  available
for, the purchase of diagnostic  equipment such as the Company's  scanner and in
the number of  diagnostic  imaging  procedures  performed in hospitals and other
medical institutions such as imaging clinics.

Certain  states have adopted  requirements  that hospitals and other health care
facilities,  such as imaging  clinics,  obtain a Certificate of Need ("CON") for
major  capital  expenditures,  in the  absence  of  which  they  will be  denied
reimbursement for services and funding relating to such capital expenditures.  A
number of states have enacted more stringent CON  legislation  such as requiring
private physicians to obtain a CON for any CT scanner, regardless of cost. There
can be no assurance  that Imatron's  potential  customers will be able to secure
CON's or will be willing to pursue the application procedure.

The Company's primary customers operate in the helathcare  industry.  The health
care  industry  is highly  regulated.  Both  existing  and  future  governmental
regulations  could  adversely  impact the market for the Company's  Ultrafast CT
scanner and the Company's business. The Company's operations are also subject to

<PAGE>

regulation by other federal,  state and local governmental entities empowered to
enforce  pertinent  statutes  and  regulations,  such as those  enforced  by the
Occupational  Safety and Health Agency and the Environmental  Protection Agency.
In some  cases,  state or local  regulations  may be stricter  than  regulations
imposed by the federal  government.  The Company was most recently  inspected by
the  State  of  California,   Department  of  Occupational   Safety  and  Health
Administration  in November,  1993. Minor violations were issued by Cal/OSHA and
were immediately  corrected by the Company.  The subsequent follow up inspection
in  December  1993 by the same  regulatory  body  yielded  satisfactory  results
without the issuance of further notice of violation.  The Company  believes that
it is in substantial  compliance with California  regulations  applicable to its
business.



                              PATENTS AND LICENSES

Imatron relies heavily on  proprietary  technology  which it attempts to protect
through patents and trade secrets.

In February  1981,  the Company was granted the exclusive use for five years and
non-exclusive use thereafter of certain technology and a patent pending owned by
the University of California (UC) under the terms of a license agreement between
UC and Emersub, a wholly-owned  subsidiary of a former principal  shareholder of
the Company,  and a sublicense  agreement between Emersub and Imatron Associates
(the  predecessor to the Company),  respectively.  In June 1986, the license and
sublicense  agreements were amended to extend the Company's exclusive use of the
technology  through the  remaining  9-year  life of the patent in  exchange  for
modified minimum annual royalty  payments.  Under the terms of Emersub's license
with UC, Emersub was obligated to make certain additional payments in connection
with the license.  In October  1990,  pursuant to  subsequent  amendments of the
license and  sublicense  agreements  the Company  issued an aggregate of 132,813
shares of Series A  Preferred  Stock to UC and Emersub in  satisfaction  of this
obligation.  The  University of  California  converted  their  125,000  Series A
Preferred  Stock into 625,000  common stock  shares in 1993.  Emersub  converted
their  7,813  Series A  Preferred  Stock  into  39,065  common  stock  shares in
September 1995.

In addition, the sublicense agreement,  as amended,  requires the Company to pay
annual  royalties  to  Emersub  equal to 2.125% of net sales of  certain  of the
Company's  products.  The Company's  Chairman of the Board, Dr. Douglas P. Boyd,
receives  6% of all of the  royalties  paid by Emersub to UC. Loss by Imatron of
its rights under the patent as a result of termination  of its  sublicense  from
Emersub,  or the underlying  license,  could have a material adverse effect upon
Imatron's  business and future  prospects.  There are no present  disputes  with
either UC or Emersub.

Development  of  portions  of  the  technology  covered  by the  UC  patent  and
sublicensed  to Imatron has been funded in  substantial  part  through  research
financing made available to UC by the National Institutes of Health. As a result
of such  financing,  it is possible that the U.S.  Government may assert certain
claims in such UC patents,  including  the right to a  royalty-free  license for
governmental use.

In addition,  Imatron holds  twenty-seven  U.S.  Patents of its own (each with a
remaining  life  in  excess  of  3  years)  and  has  filed  three  U.S.  patent
applications  covering  various  integral  components of the scanner  including,
among others,  its electron  beam assembly and its x-ray  detector and has filed
applications  corresponding  to several of these  patents  and  applications  in
various European Patent Convention countries,  Canada and Japan. There can be no
assurance that any such  applications will result in the issuance of a patent to
the Company.  Imatron's patents and patent  applications have not been tested in
litigation and no assurance can be given that patent  protection  will be upheld
or will be as extensive as claimed. Furthermore, no assurance can be given as to
the Company's ability to finance  litigation  against parties which may infringe
upon  such  patents  or  parties  which  may claim  that the  Company's  scanner
infringes upon their patents.  However,  the agreement signed by the Company and
Siemens Corporation in March 1991 allows Siemens Corporation to enter litigation
in favor of Imatron.


<PAGE>

On March 31, 1995, the Company and Siemens Corporation (Siemens) entered into an
agreement (the "Memorandum of Understanding") relating in part to certain of the
Company's patents (See  "Transactions  With Siemens  Corporation" ). Pursuant to
the agreement,  the Company  transferred  to Siemens five patents,  two of which
cover  features  of  the  Company's  C-150  scanner,  in  consideration  of  the
cancellation by Siemens of a $4 million term loan to the Company. As part of the
agreement Siemens granted to the Company a non-exclusive, irrevocable, perpetual
license to the five patents.  The license is subject to a royalty of $20,000 for
each new C-150 unit  produced by the  Company  beginning  with the  twenty-first
C-150 unit produced in any year.

Siemens has recently asserted a claim against the Company regarding the lapse of
certain foreign  registrations  of one of the patents assigned to Siemens by the
Company in connection  with the March 31, 1995 agreement  between the companies.
The  technology  involved  in the  patent  is not used  presently  in any of the
Company's  products.  The Company  believes  that it can provide a new patent to
Siemens to replace the lapsed  patent.  While an  unfavorable  resolution of the
claim is not  expected  to have a  material  effect on the  Company's  financial
position,  it could however, have a material effect on the results of operations
of a particular future period.

In the event some or all of the Company's patent  applications are denied and/or
some or all of its patents held  invalid,  the Company  would be prevented  from
precluding its competitors from using the protected technology set forth in such
patent   applications  or  patents.   Because  the  Company's  products  involve
confidential  proprietary  technology and know-how, the Company does not believe
such a loss of patent  rights  would have a  material  adverse  effect  upon the
Company.

The Company also believes that many of its proprietary  technologies  are better
protected as trade secrets or  copyrights  than by patents.  Moreover,  although
protection  of the Company's  existing  proprietary  technologies  is important,
other  factors  such as product  development,  customer  support  and  marketing
ability are equally important to the development of the Company's business.


                                    EMPLOYEES

As of March 1, 1996,  the Company had 190  employees,  including 30 employees in
service,  8 in  sales/marketing,  61  scientists  and  engineers in research and
development,  53  employees  in  manufacturing,  17  employees  in  finance  and
administration  and  21 in  HeartScan.  None  of  the  Company's  employees  are
represented by a labor union and no work stoppages or strikes have occurred. The
Company believes that it has good labor relations with its employees.


                                 CERTAIN FACTORS

In evaluating  the Company and its business,  the  following  factors  should be
given careful consideration,  in addition to the information mentioned elsewhere
in this Form 10-K:

OPERATING HISTORY

Imatron  was  incorporated  in  February,  1983 and in March,  1983  became  the
successor to Imatron Associates,  a limited partnership established in February,
1981. Imatron operated as a  development-stage  company until the fourth quarter
of 1984,  at which  time it  recognized  its  initial  sale of an  ULTRAFAST  CT
scanner.  Imatron incurred losses each quarter from inception in February,  1981
through December 31, 1990. Its first recorded profitable year was the year ended
December  31, 1991  during  which a  $4,000,000  payment  for the  licensing  of
technology to Siemens Corporation was received.  The Company incurred net losses
of  $2,871,000  and  $6,523,000  in the years ended  December 31, 1993 and 1992,
respectively.  1994 was the Company's first year of income from  operations.  In
1995, the Company incurred a net loss of $2,449,000.  There is no assurance that

<PAGE>

Imatron can return to profitable  operations in the future. In the past, Imatron
has funded  its losses  primarily  though the sale of  securities  in two public
offerings  and a number of private  placements,  through the exercise of options
and  warrants,  through the 1991 license for medical  uses of its  electron-beam
technology to Siemens  Corporation,  and through  revolving lines of credit.  In
1995, the Company raised  $9,882,000 (net of offering costs) in two offerings of
Common Stock to certain institutional  investors. The Company has an accumulated
deficit of $57,557,000 at December 31, 1995.

Management  believes that cash,  cash  equivalents  and  short-term  investments
existing at December 31, 1995 and the  estimated  proceeds from ongoing sales of
products and services in 1996 will provide the Company with  sufficient cash for
operating activities and capital requirements through December 31, 1996.

NEED FOR ADDITIONAL FINANCING

To satisfy the Company's future capital and operating  requirements,  profitable
operations or additonal public or private financing will be required.  If future
public or private financing is required by the Company, holders of the Company's
securities may experience  dilution.  If such financing cannot be obtained,  the
Company may seek to sell or license  additional  portions of its technology,  to
sell  some or all of its other  assets  or to merge  with  another  company.  In
addition,  HeartScan will need substantial additional financing to fund its plan
to own and operate CAS centers. To date, HeartScan has been unable to raise such
funds and has relied  upon the  Company for  financing.  In the event  HeartScan
cannot raise such funds it will have to curtail its expansion activities.

MATERIAL DEPENDENCE UPON KEY PERSONNEL

The Company has been,  and will continue to be,  materially  dependent  upon the
technical  expertise  of its  engineering  management  personnel.  The loss of a
significant number of such personnel would have a materially adverse effect upon
the  Company's  business  and future  prospects.  The Company  does not maintain
key-man life insurance.

HIGH COST OF SCANNER

The distributor  list price of Imatron's  Ultrafast CT scanner is  significantly
higher than that of commercially available conventional CT scanners and slightly
higher than the price of "top-of-the-line"  scanners. Such pricing may limit the
market  for  Imatron's  product.  Potential  customers'  budgetary  limitations,
including those imposed by government regulation,  may often compel the purchase
of lower cost, conventional CT scanners.

LIMITED CLINICAL DEMONSTRATION OF CERTAIN ADVANTAGES OF THE COMPANY'S SCANNER

The Company's  scanner has been used in a clinical  environment  on humans since
April 1983.  Clinical use of the C-100 XL scanner  model began in February  1989
and twenty-seven  C-150 scanners are currently  installed in a clinical setting.
The  Company  believes  that  market  acceptance  of the  Ultrafast  CT  scanner
continues  to depend in  substantial  part upon the  clinical  demonstration  of
certain asserted technological advantages and diagnostic capabilities.  There is
no  assurance  that  these  asserted  technological  advantages  and  diagnostic
capabilities  will result in the  development  of a  significant  market for the
Ultrafast CT that will allow the Company to operate profitably.

PRODUCT LIABILITY RISKS

As a manufacturer and marketer of medical diagnostic  equipment,  the Company is
subject to potential  product  liability  claims.  For example,  the exposure of
normal human  tissue to x-rays,  which is inherent in the use of CT scanners for
diagnostic  imaging,  may result in potential injury to patients  subjecting the
Company to possible  liability claims.  The Company presently  maintains primary
and excess product liability insurance with aggregate limits of $5.0 million per

<PAGE>

occurrence.  No  assurance  can be given that the  Company's  product  liability
insurance  coverage will continue to be available or, if available,  that it can
be obtained in sufficient  amounts or at  reasonable  cost or that it will prove
sufficient to pay any claims that may arise.

VOLATILITY OF STOCK PRICE

The  market  prices  for  securities  of  advanced  technology   companies  have
historically  been highly volatile,  including the market price of shares of the
Company's Common Stock. Future  announcements by the Company or its competitors,
including announcements concerning  technological  innovations or new commercial
products,  results  of  clinical  testing,  changes in  government  regulations,
regulatory  actions,  health care reform,  proprietary  rights,  litigation  and
public  concerns  as to the  safety  of  the  Company's  or  its  collaborators'
products, as well as period-to-period variances in financial results could cause
the market price of the Common Stock to  fluctuate  substantially.  In addition,
the stock market has experienced extreme price and volume fluctuations that have
particularly  affected the market price for many advanced  technology  companies
that have often been unrelated to the operating  performance of these companies.
These broad market  fluctuations  may  adversely  affect the market price of the
Common Stock.

NO DIVIDENDS ON PREFERRED AND COMMON STOCK

The Company has not paid any  dividends  on its  Preferred or Common Stock since
inception.   Even  if  its  future   operations   result  in   revenues   and/or
profitability,  as to which  there  can be no  assurance,  there  is no  present
anticipation that dividends will be paid.  Rather,  the Company expects that any
future earnings will be applied toward the further  development of the Company's
business.

ITEM 2 - PROPERTIES

The   Company's   manufacturing,   research  and   development,   marketing  and
administrative  operations  occupy  approximately  70,000  square feet of leased
space in modern  buildings  located  in South San  Francisco,  California  under
leases expiring in October, 2001. Under certain future conditions the facilities
could be expanded to  approximately  75,000 square feet.  The HeartScan  clinics
located in Seattle,  WA, and  Houston,  TX, are  occupying  approximately  3,000
square feet each of leased space in medical  buildings  close to hospitals.  The
leases are renewable in July 1998, and May 2000, respectively.

The Company  believes its facilities are adequate for its current needs and that
suitable  additional  or  substitute  space  will  be  available  as  needed  to
accommodate any future expansion of the Company's operations.


ITEM 3 - LEGAL PROCEEDINGS

None.


ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

There were no matters submitted to a vote of Imatron's  shareholders  during the
quarter ended December 31, 1995.

<PAGE>

             SUPPLEMENTAL ITEM: EXECUTIVE OFFICERS OF THE REGISTRANT

The  executive  officers of the Company  and their ages and  positions  with the
Company are set forth below. Unless otherwise indicated,  officers are full-time
employees and serve at the discretion of the Board of Directors.

Name                                Age         Position

Dr. Douglas P. Boyd                 54          Chairman of the Board
                                                Chief Technology  Officer

S. Lewis Meyer                      51          President
                                                Chief Executive Officer

Dale E. Grant                       50          Executive Vice President, 
                                                Sales and Marketing President, 
                                                HeartScan Imaging, Inc.

Gary H. Brooks                      47          Vice President, Finance and 
                                                Administration, Chief Financial
                                                Officer, Secretary

Dr. Boyd is a founder of Imatron,  Inc.  and has served as Chairman of the Board
of Directors since inception. Dr. Boyd currently also serves as Chief Technology
Officer and has served in a variety of executive positions in the past. Prior to
Imatron's formation he was Professor of Radiology (Physics) at the University of
California,  San  Francisco,  and  prior  thereto  served  in  various  research
positions at Stanford  University and Bell Telephone  laboratories.  Dr. Boyd is
internationally  recognized  for  his  pioneering  work  in the  development  of
fan-beam CT scanners,  Xenon detector arrays, and Electron-Beam CT, for which he
has been awarded ten U.S.  patents.  He has published  more than 100  scientific
papers and is a frequent  speaker at  university  seminars and other  scientific
symposia.  He has received several awards for his  contributions,  including the
prestigious Conway Safe Sky's Award which was presented in Singapore in 1993 for
contributions  to  airline  travel  safety  related to the  development  of a CT
baggage explosives detection system.

Dr. Boyd  received his B.S. in Physics from the  University of Rochester in 1963
and a Ph.D. in Physics from Rutgers University in 1968.


S. Lewis Meyer was appointed President,  Chief Executive Officer and Director of
Imatron in June 1993.  From April,  1991 to the time he joined  Imatron,  he was
Vice President,  Operations of Otsuka  Electronics  (U.S.A.) Inc., Fort Collins,
Colorado,   a   manufacturer   of  clinical  MR  systems  and   analytical   NMR
spectrometers.  From  August 1990 to April  1991,  he was a founding  partner of
Medical  Capital  Management,  a company which provided  consulting  services to
medical equipment manufacturers,  imaging services providers and related medical
professionals.  Prior  thereto,  he was employed as President,  Chief  Executive
Officer and Chairman of the Board of American  Health Services Corp., a publicly
held, nationwide developer and operator of diagnostic imaging treatment centers.

Before his  participation in the founding of American Health Services Corp., Mr.
Meyer held various general management and marketing  management positions at EMI
Medical Inc., the pioneer  developer and  manufacturer of CT scanners and Varian
Associates, the world's leading manufacturer of medical linear accelerators.

Mr. Meyer is a Director of BSD Medical  Corporation,  a publicly held company in
the business of designing and manufacturing medical hyperthermia equipment.
<PAGE>

Mr. Meyer received his B.S. degree in Physics in 1966 from the University of the
Pacific, Stockton,  California, a M.S. in Physics in 1968 from Purdue University
and Ph.D. in Physics from Purdue University in 1971.

Mr. Grant was appointed  Executive  Vice  President of the Company on January 3,
1994. Mr. Grant's  primary  responsibilities  include direct  supervision of the
Company's Sales, Service and Marketing programs.  Mr. Grant is also President of
HeartScan Imaging, Inc. and will be responsible for developing the HSI business.
From  September,  1990 to the time he joined  the  Company,  Mr.  Grant was Vice
President, Sales and Marketing for Otsuka Electronics (U.S.A.) Inc. Prior to Mr.
Grant's employment with Otsuka  Electronics,  he served for five years as a Vice
President of American Health Services Corporation.

Prior to joining  AHSC,  Mr.  Grant served as both  Regional and National  Sales
Manager for EMI Medical. Mr. Grant has provided consulting services to hospitals
and physician groups  throughout the U.S.  assisting in the development of joint
venture imaging centers.

Mr.  Brooks was  appointed  Vice-President,  Finance and  Administration,  Chief
Financial Officer and Secretary of Imatron in December of 1993. Prior to joining
Imatron,  Mr.  Brooks was Chief  Financial  Officer for five years at Avocet,  a
privately  held,  sports  electronics   manufacturer.   Prior  thereto,  he  had
progressively  more  responsible  positions in accounting and finance at several
Fortune 500 corporations including Ford, Rockwell, Bendix and ITT.

Mr.  Brooks  received  his B.A.  in Zoology,  1971,  University  of  California,
Berkeley and a M.B.A. in Finance and Accounting, 1973, University of California,
Los Angeles.

<PAGE>


                                     PART II

ITEM 5 - MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED 
         STOCKHOLDER MATTERS

Since April 1985, the Company's  Common Stock has traded on the NASDAQ  National
Market System under the NASDAQ symbol "IMAT".

The following table sets forth, for the periods indicated, the range of high and
low sales prices, all as reported by NASDAQ.  These prices reflect  inter-dealer
prices, without retail mark-up,  mark-down or commission and may not necessarily
represent actual transactions.

                              1995                              1994
Quarter:               High          Low                High            Low
                  --------------  -----------      ------------     -----------
First              $ 1.31         $ .97             $ 2.06           $ .50
Second               1.22           .81               1.88             .81
Third                3.63           .75               1.41             .88
Fourth               2.97          1.47               1.56             .88
                                                                              

As of March 20,  1996 there were  approximately  6,570  holders of record of the
Company's  common  stock.  On March 20, 1996 the closing  price of the Company's
common stock on NASDAQ was $ 2.75. 

                              DIVIDEND INFORMATION

The Company has paid no cash  dividends on its Common Stock since  incorporation
and anticipates that for the foreseeable  future it will retain any earnings for
use in its business.

ITEM 6 - SELECTED FINANCIAL DATA

                                  IMATRON INC.
                         SELECTED FINANCIAL INFORMATION
                    (In thousands, except per share amounts)

                              OPERATING INFORMATION

Year Ended December 31        1995       1994        1993       1992      1991
----------------------      -------     -------     ------     ------     -----

Total revenues              $26,700    $33,571     $25,111   $14,263    $22,933
Net income(loss)            $(2,449)   $ 2,310     $(2,871)  $(6,523)   $ 1,010
Net income(loss)per share   $ (0.04)   $  0.04     $ (0.06)  $ (0.15)   $  0.02
Number of shares used
  in per share calculations  57,598     62,102      47,865    43,294     51,889



                            BALANCE SHEET INFORMATION

At December 31               1995        1994        1993       1992      1991
----------------------      -------     ------      ------     ------    ------

Working capital            $14,252     $ 8,741     $ 5,536    $ 6,971   $ 4,471
Total assets               $30,876     $21,173     $15,903    $18,602   $19,399
Long-term debt             $    -      $ 4,992     $ 4,992    $ 4,992   $ 2,667
Total liabilities          $14,651     $14,303     $12,265    $12,332   $11,010
Shareholders' equity       $16,225     $ 6,870     $ 3,638    $ 6,270   $ 8,389

<PAGE>

The Company did not pay any cash dividends on its Common Stock during any of the
periods presented above.

ITEM 7 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
              CONDITION AND RESULTS OF OPERATIONS

                         LIQUIDITY AND CAPITAL RESOURCES

At December 31, 1995, the Company had working capital of $14.3 million which was
a 64% increase compared to working capital of $8.7 million at December 31, 1994.
The current ratio increased to 2.4:1 from 1.9:1 at December 31, 1994.

The  Company's  assets  increased  in 1995 by 46% to $30.9  million  compared to
December  31,  1994 total  assets of $21.2  million  primarily  due to  proceeds
realized  of  $9,882,000  (net  of  offering  costs)  from a  private  placement
offering.  In addition,  net property and  equipment  increased  $4.4 million of
which approximately $4.2 million is related to capitalized leases. Capital lease
obligations  of $4.2 million were  entered into in 1995  principally  due to the
establishment of two new HeartScan clinic scanners.  The deferred income of $1.3
million is related to sales of scanners subject to sale-leaseback arrangements.

In connection with the March 1995 Memorandum of Understanding with Siemens,  the
$4 million  note  payable to Siemens was  cancelled in exchange for five patents
and  termination  of  the  minimum  puchase  obligation.  (See  Note  5  to  the
Consolidated Financial Statements.)

Management  believes that cash,  cash  equivalents  and  short-term  investments
existing at December 31, 1995 and the  estimated  proceeds from ongoing sales of
products and services in 1996 will provide the Company with  sufficient cash for
operating activities and capital requirements through December 31, 1996.

The Company  anticipates that 1996 capital equipment  acquisitions will increase
from 1995 due to the expansion of HeartScan clinics.

To satisfy  the  Company's  capital  and  operating  requirements  beyond  1996,
profitable  operations,  additional  public  and/or  private  financing  or  the
incurrence  of debt may be required.  If future  public or private  financing is
required by the Company,  holders of the  Company's  securities  may  experience
dilution.  There can be no assurance  that equity or debt sources,  if required,
will be available or, if available, will be on terms favorable to the Company or
its shareholders.

The Company does not believe  that  inflation  has had a material  effect on its
revenues or results of operations.

                              RESULTS OF OPERATIONS

1995 vs. 1994

Overall  revenues  decreased  20% from $33.6 million in 1994 to $26.7 million in
1995.   Product  sales,   including   $1.8  million  under  the   sale-leaseback
arrangements,  decreased  35%  due to  decreased  scanner  shipments  which  was
partially offset by higher  option/upgrade  revenues.  Scanner shipments in 1995
were 10 units versus 16 units in 1994.  Service revenues increased 16% from $4.8
million in 1994 to $5.5  million in 1995  primarily  due to higher  spare  parts
shipment.  Research  and  development  contract  revenues  went up by 5% to $5.6
million compared to $5.4 million in 1994.  Clinic revenues  increased by 99% due
to an  increase  in number of  patient  scans  attributed  to  increased  clinic
advertisements.

Product  costs as a  percentage  of revenues was 89% in 1995 versus 71% in 1994.
This  increase is the result of lower  realized  per unit  revenue and  overhead
expenses  being  allocated  to a smaller  number of units.  The cost of  service

<PAGE>

revenues  as a  percentage  of revenues  decreased  to 71% in 1995 versus 85% in
1994. This decrease is the result of lower scanner  maintenance  costs.  Cost of
clinic  revenues as a percentage of revenues went up to 293% as compared to 226%
in 1994  because  of  start-up  expenses  related  to the  establishment  of new
HeartScan clinics.

The cost of development  contracts as a percent of development contract revenues
decreased to 88% in 1995 versus 97% in 1994. The continued high level of cost is
due primarily to head count and associated costs required to continue activities
under the Siemens Collaborative Agreement.

Operating  expenses for 1995 increased by 38% as compared to 1994.  Research and
development  expenses are 63% higher in 1995  primarily due to the increased use
of   consultants   and  prototype   materials   necessary   under  the  Siemens'
Collaborative Agreement. Marketing and sales expenses were up 51% in 1995 versus
1994 primarily because of commissions paid for scanners sold to Imatron Japan KK
and  increased  marketing  costs for  HeartScan,  a  wholly-owned  subsidiary of
Imatron. General and administrative expenses increased 6% in 1995 as compared to
1994.

The increase in other income in 1995 is a result of the  elimination of the $4.0
million  term loan with Siemens in exchange for the transfer of five Imatron EBT
patents and the cancellation of Siemens'  existing minimum purchase  obligations
under the previous distribution agreement.

Interest  expense  decreased  44%  as  compared  to  1994  primarily  due to the
elimination of the $4.0 million term loan with Siemens.


1994 vs. 1993

Overall  revenues  increased  34% from $25.1 million in 1993 to $33.6 million in
1994.  Product sales increased 56% due to increased scanner shipments and higher
option/upgrade revenue.  Scanner shipments in 1994 were 16 units versus 12 units
in 1993. Service and Research and Development  contract revenues in 1994 of $4.7
million and $5.4  million,  respectively,  remained  essentially  flat with 1993
levels.

The cost of revenues as a  percentage  of revenues  improved to 78% in 1994 from
94% in 1993.

Product  cost as a  percentage  of revenues  was 71% in 1994 versus 88% in 1993.
This decrease is due partially to higher average unit revenue and lower overhead
expenses.  The cost of service  revenues  decreased to $4.0 million in 1994 from
$4.9  million in 1993 due to reduced site costs  related to servicing  installed
scanners.

The cost of development  contracts as a percent of development contract revenues
of 97% in 1994 remained  consistent  with 1993. The continued high level of cost
is due  primarily  to head  count  and  associated  costs  required  to meet the
remaining milestones of the Siemens development contract.

Operating  expenses for 1994 increased by 41% as compared to 1993.  Research and
development  expenses were 28% higher in 1994 primarily due to the increased use
of consultants and prototype materials. Marketing and sales expenses were up 74%
in 1994 versus 1993 largely  because of increased  sales expense  related to the
higher level of scanner shipments, support of the distributor agreements in Asia
and  increased  marketing  costs for  HeartScan,  a  wholly-owned  subsidiary of
Imatron.  General and administrative  expenses increased 31% in 1994 as compared
to 1993 due to  increased  salaries  and  benefit  expenses,  higher  costs  for
shareholder and investor relations, and increased HeartScan costs.

The  increase in other  income in 1994 is a result of the $1.5  million  payment
received for the termination of Imatron's  exclusive  distributorship  agreement
with  Mitsui  & Co.,  Ltd.  of Japan  and the  extinguishment  of a $.8  million
contingency with Siemens AG.


<PAGE>

Other 1994  expenses  were 30% higher  compared to 1993  primarily due to higher
interest rates on Imatron's debt obligations.



ITEM 8 - CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY
         DATA

See  Consolidated  Financial  Statements and  Consolidated  Financial  Statement
Schedules listed in Item 14 (a) 1 and 2.

ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
         ACCOUNTING AND FINANCIAL DISCLOSURE

None.


                                    PART III

The  information  required  by items 10, 11, 12 and 13 will be  included  in the
definitive Proxy Statement for Registrant's  1995 Annual Meeting of Shareholders
or in an  amendment  to the Form  10-K  under  cover of Form 8. The  information
required  in this  Part III  will be filed  with  the  Securities  and  Exchange
Commission not later than 120 days after the end of the 1995 fiscal year.


                                     PART IV

ITEM 14 - EXHIBITS, CONSOLIDATED FINANCIAL STATEMENT SCHEDULES, AND
          REPORTS ON FORM 8-K

(a)      1. Consolidated Financial Statements  See "Index to Consolidated 
            Financial Statements" attached here to and made a part hereof.

         2. Consolidated Financial Statement Schedules  Schedules are omitted
            because of the absence of conditions under which they are required.

         3. Exhibits  The exhibits listed on the accompanying "Index to 
            Exhibits" are filed as part hereof and are incorporated herein by 
            reference.

(b)      Reports on Form 8-K

         None filed during the Company's fourth quarter ended December 31,1995.


<PAGE>
                                   SIGNATURES

Pursuant to the requirements of Section 13 or 15 (d) 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.

Dated:  March 29, 1996                     IMATRON INC.



                                       By  S. Lewis Meyer
                                           S. Lewis Meyer
                                           President, Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following  persons on behalf of the  Registrant and
in the capacities and on the dates indicated.

  SIGNATURE                        TITLE                               DATE
----------------           --------------------                   -------------


Douglas P. Boyd            Director,                             March 28, 1996
----------------           Chairman of the Board 
Douglas P. Boyd            


John L. Couch              Director                              March 28, 1996
---------------
John L. Couch


Giovanni Lanzara           Director                              March 28, 1996
----------------
Giovanni Lanzara


S. Lewis Meyer             Director,                             March 28, 1996
--------------             President and Chief Executive 
S. Lewis Meyer             Officer


Terry Ross                 Director                              March 28, 1996
-----------
Terry Ross


Aldo J. Test               Director                              March 28, 1996
-------------
Aldo J. Test


Gary H. Brooks             Chief Financial Officer,              March 28, 1996
--------------             Chief Accounting Officer,
Gary H. Brooks             Vice President, Finance and
                           Administration, Secretary


<PAGE>
                                  IMATRON INC.
                   Index to Consolidated Financial Statements


STATEMENT                                                                 PAGE


Report of Independent Auditors                                               25

Consolidated Balance Sheets at December 31, 1995 and 1994                    26

Consolidated Statements of Operations for the years ended
December 31, 1995, 1994 and 1993                                             27

Consolidated Statements of Shareholders' Equity for the years ended
December 31, 1995, 1994 and 1993                                             28

Consolidated Statements of Cash Flows for the years ended
December 31, 1995, 1994 and 1993                                             29

Notes to Consolidated Financial Statements                                   30


<PAGE>



                         Report of Independent Auditors


Board of Directors and Shareholders
Imatron Inc.

We have audited the accompanying  consolidated balance sheets of Imatron Inc. as
of  December  31,  1995 and 1994,  and the related  consolidated  statements  of
operations,  shareholders' equity, and cash flows for each of the three years in
the period ended December 31, 1995. These consolidated  financial statements are
the responsibility of the Company's management. Our responsibility is to express
an opinion on these financial statements based on our audits.

We  conducted  our  audits  in  accordance  with  generally   accepted  auditing
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the  accounting  principles  used and  significant  estimates  made by
management,  as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the consolidated financial position of Imatron
Inc.  at  December  31,  1995 and  1994,  and the  consolidated  results  of its
operations  and its cash flows for each of the three  years in the period  ended
December 31, 1995, in conformity with generally accepted accounting principles.


                                                    ERNST & YOUNG LLP

San Francisco, California
February 9, 1996


<PAGE>


                                  IMATRON INC.
                           Consolidated Balance Sheets
                             (Amounts in thousands)
                                                              December 31,
ASSETS                                                   1995            1994
------                                                 --------        --------
                                                     

Current Assets
  Cash and cash equivalents                          $  7,269          $  1,694
  Short-term investments                                1,266                 -
  Accounts receivable                                   3,083             6,066
  Accounts receivable from affiliate                    2,957               780
  Notes receivable                                        250               660
  Inventories                                           8,937             8,236
  Prepaid expenses                                        563               616
                                                       --------          ------

    Total current assets                               24,325            18,052

Property and equipment, net                             6,260             1,893
Capitalized software, net                                  12               143
Development machinery, net                                  -               566
Other assets                                              279               519
                                                       --------         -------

    Total assets                                     $ 30,876          $ 21,173
                                                      =========         =======
LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities
  Borrowings under line of credit                    $    992          $      -
  Accounts payable                                      2,785             4,242
  Other accrued liabilities                             5,607             5,069
  Captial lease obligations - due within one year         689                 -
                                                     ----------        --------

    Total current liabilities                          10,073             9,311

Long term debt                                              -             4,992
Deferred income on sale leaseback transactions          1,267                 -
Capital lease obligations                               3,311                 -
                                                    -----------         -------
    Total Liabilities                                  14,651            14,303

Commitments and contingencies - Note 3 & 6

Shareholders' Equity
  Convertible preferred stock, authorized-10,000 
   shares;issued and outstanding-0 shares in 1995        
   and 1,308 in 1994                                        -             2,602
  Common stock, no par value;authorized-100,000 
   shares;issued and outstanding-68,835 shares                       
   in 1995 and 53,631 in 1994                          72,282            57,876
  Additional paid-in capital                            1,500             1,500
  Accumulated deficit                                 (57,557)          (55,108)
                                                      ---------       ---------

  Total Shareholders' Equity                           16,225             6,870
                                                     ----------       ---------

    Total Liabilities and Shareholders' Equity       $ 30,876         $  21,173
                                                     ==========       =========

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.

<PAGE>

<TABLE>

                                  IMATRON INC.
                      Consolidated Statements of Operations
                (Amounts in thousands, except per share amounts)
<CAPTION>
                                                                                     Year ended December 31,
                                                                           1995               1994               1993
                                                                       ---------------    ---------------    --------------
<S>                                                                    <C>                 <C>               <C>   
Revenues
     Product sales                                                     $       13,254      $      23,210     $      14,902
     Product sale-leaseback arrangements                                        1,820                  -                 -
     Service                                                                    5,529              4,750             4,553
     Development contracts                                                      5,637              5,380             5,513
     Clinics                                                                      460                231               143
                                                                       ---------------    ---------------    --------------

                       Total revenues                                          26,700             33,571            25,111
                                                                       ---------------    ---------------    --------------


Cost of revenues
     Product sales                                                             11,533             16,556            13,169
     Product sale-leaseback arrangements                                        1,820                  -                 -
     Service                                                                    3,952              4,021             4,859
     Development contracts                                                      4,978              5,227             5,332
     Clinics                                                                    1,350                521               309
                                                                       ---------------    ---------------    --------------

                       Total cost of revenues                                  23,633             26,325            23,669
                                                                       ---------------    ---------------    --------------

Gross profit                                                                    3,067              7,246             1,442


Operating expenses
     Research and Development                                                   3,430              2,101             1,646
     Marketing and Sales                                                        3,137              2,077             1,190
     General and Administrative                                                 2,658              2,519              1,925
                                                                       ---------------    ---------------    --------------

                       Total operating expenses                                 9,225              6,697             4,761
                                                                       ---------------    ---------------    --------------

Operating income (loss)                                                       (6,158)                549           (3,319)

Other income                                                                    4,021              2,342               912
Interest expense                                                                (312)              (558)              (464)
                                                                       ---------------    ---------------    --------------

Income (loss) before provision for income taxes                               (2,449)              2,333            (2,871)
                                                                       ---------------    ---------------    --------------

Provision for income taxes                                                          -               (23)                  -
                                                                       ---------------    ---------------    --------------

Net income (loss)                                                       $     (2,449)     $        2,310     $      (2,871)
                                                                       ===============    ===============    ==============
Net income (loss) per common share                                      $      (.04 )           $    .04     $        (.06)
                                                                       ===============    ===============    ==============

Number of shares used in per share calculations                                57,598             62,102            47,865
                                                                       ===============    ===============    ==============
<FN>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>

<PAGE>

<TABLE>

                                  IMATRON INC.
                 Consolidated Statements of Shareholders' Equity
                             (Amounts in thousands)
<CAPTION>

                                             Convertible 
                                           Preferred Stock         Common Stock           Additional      Accum- 
                                                                                           Paid-in        ulated     
                                         Shares     Amount      Shares      Amount         Capital        Deficit        Total 
                                        --------   --------     -------     --------       --------       -------        ------
<S>                                      <C>       <C>          <C>         <C>            <C>            <C>            <C>

Balances at December 31, 1992            2,133     $4,247       47,267      $55,070        $1,500         $(54,547)      $6,270   

Preferred stock converted to
  common stock                            (125)     (250)          625          250             -                -            - 
Common stock issued for employee
  stock bonus and purchase plans,
  and exercise of employee stock
  options                                    -         -           262          139             -                -          139
Warrants exercised                           -         -           200          100             -                -          100
Net loss                                     -         -             -            -             -            (2,871)     (2,871)
                                        --------   --------      -------    --------       ---------      ---------      ----------
Balances at December 31, 1993            2,088      3,997       48,354        55,559         1,500          (57,418)       3,638  
Preferred stock converted to
  common stock                            (700)    (1,395)       3,500         1,395             -                -            -
Common stock issued for employee
  stock bonus and purchase plans,
  and exercise of employee stock
  options                                    -          -        1,650           837             -                -           837
Common stock issued for services             -          -          127            85             -                -            85
Net Income                                   -          -            -             -             -             2,310        2,310
                                        --------   --------      -------    --------       ---------       ---------        -------

Balances at December 31, 1994            (1,308)     2,602      53,631        57,876         1,500          (55,108)        6,870
 
Preferred stock converted to
  common stock                            1,308     (2,602)      6,539         2,602             -                -             -   
Common stock sold in a private
  placement, net of offering costs            -          -       6,459         9,882             -                -         9,882 

Common stock issued for employee
  stock purchase plans and
  exercise of employee stock
  options                                     -          -       1,656         1,147             -                -         1,147
Warrants exercised                            -          -         550           775             -                -           775
Net loss                                      -          -           -             -             -           (2,449)        (2,449)
                                        --------    --------     -------     --------      --------        ----------       -------

Balances at December 31, 1995                 -          -      68,835      $ 72,282         $1,500        $ (57,557)      $ 16,225
                                        ==========  ========   ==========   =========      =========       ===========      =======
<FN>

The accompanying notes are an integral part of these financial statements.
</FN>
</TABLE>

<PAGE>

<TABLE>

                                  IMATRON INC.
                      Consolidated Statements of Cash Flows
                             (Amounts in thousands)

<CAPTION>
                                                                                Year Ended December 31,

                                                                       1995               1994              1993
                                                                  --------------    --------------     --------------
<S>                                                                <C>                <C>               <C>        
Cash flows from operating activities:
  Net income (loss)                                                $ (2,449)          $  2,310          $ (2,871)
  Adjustments to reconcile  net income(loss to net
  cash provided by (used in) operating activities:
     Depreciation and amortization                                    1,709              1,786             2,332
     Other income                                                    (4,000)                 -                 -
  Changes in:     
     Accounts and notes receivable                                    1,216             (2,945)           (2,435)
     Unbilled receivables                                                 -                 -                151
     Inventories                                                       (701)            (3,343)            3,049
     Prepaid expenses                                                    53               (252)               51
     Other assets                                                       (26)              (414)               (5) 
     Accounts payable                                                (1,457)             2,232               652
     Other accrued liabilities                                          538                584               487
     Deferred income                                                  1,267               (778)             (868)
                                                                  --------------    --------------     --------------

Net cash provided by (used in) operating activities                  (3,850)              (820)              543
                                                                  --------------    --------------     --------------


Cash flows from investing activities:
  Capital expenditures                                               (1,132)              (621)             (658) 
  Purchases of short-term investments                                (1,000)                 -                 -
                                                                  --------------    --------------     --------------

Net cash used in investing activities                                (2,132)              (621)             (658)
                                                                  --------------    --------------     --------------

Cash flows from financing activities:
  Payments of obligations under capital leases                         (247)                 -                 -  
  Repayment of borrowings                                                 -                  -              (338)
  Proceeeds from issuance of common stock                            11,804                922               239
                                                                  --------------    --------------     --------------

Net cash  used in financing activities                               11,557                922               (99)  
                                                                  --------------    --------------     --------------

Net increase(decrease) in cash and cash equivalents                   5,575               (519)             (214)        
                                                                                                                     
Cash and cash equivalents,at beginning of year                        1,694              2,213             2,427
                                                                  --------------    --------------     --------------

Cash and cash equivalents, at end of year                         $   7,269          $   1,694          $  2,213
                                                                  ==============    ==============     ==============



Supplemental Disclosure of Noncash Investing Activities:
   Preferred stock converted to common stock                      $   2,602          $   1,395          $    250
                                                                  ==============    ===============    ===============

   Equipment acquired under capital leases                        $  (4,247)         $       -          $       -
                                                                  ==============    ===============    ===============
<FN>

The  accompanying  notes are an integral  part of these  consolidated  financial
statements.
</FN>
</TABLE>

<PAGE>


                                  IMATRON INC.
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                                December 31, 1995

Note 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

DESCRIPTION OF COMPANY

Imatron Inc., (the "Company"), a New Jersey corporation incorporated in 1983, is
a  technology-based  company  principally  engaged in the business of designing,
manufacturing, and marketing a high performance computed tomography scanner. The
scanner  is used in large and  mid-sized  hospitals  and free  standing  imaging
clinics.  The Company provides  service,  parts and maintenance to hospitals and
clinics that operate its scanners.

HeartScan   Imaging,   Inc.(HSI),   incorporated  in  Delaware  in  1993,  is  a
wholly-owned  subsidiary of Imatron.  HSI operates coronary artery scanning test
facilities in the United States.

PRINCIPLES OF CONSOLIDATION

The consolidated  financial  statements include the accounts of Imatron Inc. and
its wholly-owned  subsidiary HeartScan Imaging,  Inc. All intercompany  accounts
and transactions have been eliminated in consolidation.

USE OF ESTIMATES

The preparation of financial  statements in conformity  with generally  accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates.

CASH EQUIVALENTS

Cash equivalents consist of liquid instruments purchased with a maturity date of
three months or less and money market  funds.  In accordance  with  Statement of
Financial  Accounting  Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities," the Company has classified its investments in money
market funds as available-for-sale. Available-for-sale securities are carried at
amounts which  approximate fair value, with unrealized gains and losses reported
in a separate  component of shareholders'  equity when material.  Realized gains
and  losses  and  declines  in  value  judged  to be  other  than  temporary  on
available-for-sale securities are included in interest income and expense.

SHORT-TERM INVESTMENTS

Short-term  investments at December 31, 1995 consist of  certificates of deposit
and debt securities (U.S. Treasury Bills). Management determines the appropriate
classification  of debt securities at the time of purchase and reevaluates  such
designation  as of each balance sheet date.  Debt  securities  are classified as
held-to-maturity  when the Company has the  positive  intent and ability to hold
the securities to maturity.  Held-to-maturity securities are stated at amortized
cost.

The amortized cost of debt securities classified as held-to-maturity is adjusted
for  amortization  of premiums and  accretion  of  discounts  to maturity.  Such
amortization  is included in interest  income  from  investments.  Interest  and
dividends are included in interest income from  investments.  Realized gains and
losses, and declines in value judged to be other-than-temporary  are included in
net  securities  gains  (losses).  The cost of  securities  sold is based on the
specific identification method.
<PAGE>

The Company has classified all its short-term  investments as  held-to-maturity,
at December 31, 1995.


CONCENTRATIONS OF RISK

The  Company's  primary  customers  operate  in  the  healthcare  industry.  The
healthcare  industry is highly regulated.  Both existing and future governmental
regulations  could  adversely  impact the market for the Company's  Ultrafast CT
scanner and the Company's business. The Company's operations are also subject to
regulation by other federal,  state and local governmental entities empowered to
enforce  pertinent  statutes  and  regulations,  such as those  enforced  by the
Occupational Safety and Health Agency and the Environmental Protection Agency.

The Company sells its products primarily through exclusive  distributors such as
Siemens  in the  United  States,  Europe,  Canada  and  India,  as well as other
distributors  in the Pacific rim. The Company  usually  requires  cash  deposits
based on a percentage of the sales price and maintains  allowances for potential
credit losses. Such losses have been within management's expectations.

The Company  invests its excess cash in money market  funds and  treasury  bills
with major  banks.  These  funds have  virtually  no  principal  risk and have a
variable  interest rate. The Company has not experienced any losses on its money
market funds.

The Company revenues are principally derived from the Ultrafast CT scanner. Many
of the components and sub-assemblies used in the scanner have been developed and
designed by Imatron to its custom specifications and are obtainable from limited
or single sources of supply.  In view of the customized  nature of many of these
components and sub-assemblies,  there may be extended delays between their order
and delivery.  Delays in such delivery could adversely affect Imatron's  present
and future  production  schedules.  The Company has made and  continues  to make
inventory investments to acquire long lead time components and sub-assemblies to
minimize the impact of such delays.  In recent years,  the Company has developed
alternative  sources for many of its scanner  subcomponents  and  continues  its
programs to qualify vendors for the remaining critical parts.

INVENTORIES

Inventories are stated at the lower of standard cost (which approximates cost on
a first-in,  first-out basis) or market.  Provisions are made in each period for
the  estimated  effects of excess and obsolete  inventories.  Actual  excess and
obsolete   inventories  may  differ  from  the  Company's   estimates  and  such
differences could be material to the consolidated financial statements.

PROPERTY AND EQUIPMENT

Major additions and betterments are capitalized at cost,  while  maintenance and
repairs  which do not  improve or extend the life of the  respective  assets are
expensed currently.  When assets are retired or otherwise disposed of, the costs
and related accumulated depreciation are removed from the accounts, and any gain
or loss on disposal is included in the  statements of  operations.  Property and
equipment, other than leasehold improvements, are depreciated on a straight-line
method over their  estimated  useful lives (3-5 years).  Equipment under capital
leases and leasehold  improvements are amortized on a straight-line  method over
the lesser of their estimated  useful lives or the remaining term of the related
leases.

CAPITALIZED SOFTWARE

Costs related to the conceptual  formulation and design of software products are
expensed as product  development.  Costs incurred subsequent to establishing the
technological  feasibility  of software  products are  capitalized.  Capitalized
software costs are amortized  using the  straight-line  method over the expected
product lives, generally estimated to be five years. Since 1992, the Company has
<PAGE>

not  capitalized  any software  development  costs.  Amortization of capitalized
software  costs for 1995,  1994 and 1993 was  $131,000,  $203,000 and  $275,000,
respectively.  Amortization  of these costs has been  charged to cost of product
revenues.

RESTRICTED CASH

In connection  with a sales agreement in 1994, the Company has issued letters of
credits to a purchasor related to performance bond requirements.  The letters of
credit are  collaterized  by  Certificates  of Deposit  totalling  approximately
$155,000 and $404,000 at December  31,1995 and 1994  respectively.  Accordingly,
this restricted cash amount has been classified as a non-current asset (included
in other assets).

JOINT VENTURES

In 1994,  the  Company  formed  a joint  venture,  Imatron  Japan  Inc.  ("Joint
Venture") with two unrelated parties.  Imatron holds a 24% interest in the Joint
Venture,  which is carried at no value in the accompanying  consolidated balance
sheets.  Imatron has no  financial  commitments,  and is prepared to abandon its
interest to the Joint Venture,  which is being funded by the other joint venture
partners.

The Company  recognized  revenues of $9,213,000 and $8,240,000 in 1995 and 1994,
respectively, from sales to the Joint Venture and has $2,957,000 and $780,000 in
accounts  receivable  from the Joint  Venture  at  December  31,  1995 and 1994,
respectively.

The Joint  Venture  assumed  maintenance  and  service  obligations  of a former
distributor and has a commitment to purchase five additional  scanner units both
in 1995 and 1996.

In exchange for permitting the former  distributor to terminate its  maintenance
and service  agreement with the Company,  Imatron  received  $1,500,000 in 1994.
This amount is  classified  as other  income in the  consolidated  statement  of
operations in 1994.

REVENUE RECOGNITION

Revenues  related to product sales are recognized  upon shipment to the customer
or to a customer designated location,  at which time title and risk of ownership
passes. The Company accrues for estimated installation and warranty costs at the
time of sale.  Revenues  related  to service  are  recognized  ratably  over the
relevant  contractual  period or as the service is  performed.  Service  revenue
billed but  unearned  is included on the  consolidated  balance  sheets as other
accrued  liabilities.  Revenues related to development  contracts are recognized
ratably over the contract.  Revenues from clinics are  recognized  when services
are performed for the clinic customer.

RESEARCH AND DEVELOPMENT

Research and development expenditures are charged to operations as incurred.

STOCK-BASED COMPENSATION

In October 1995, the Financial  Accounting  Standards Board issued Statement No.
123,  "Accounting for Stock-Based  Compensation." The statement is effective for
fiscal  years  beginning  after  December  15, 1995.  Under  Statement  No. 123,
stock-based  compensation  expense is measured using either the  intrinsic-value
method  as  prescribed  by  Accounting  Principle  Board  Opinion  No. 25 or the
fair-value  method  described  in  Statement  No. 123.  Companies  choosing  the
intrinsic-value  method will be required to disclose the pro forma impact of the
fair-value  method on net income and earnings per share.  Imatron Inc.  plans to
continue   using  the   intrinsic-value   method  to  account  for   stock-based
compensation;  there will be no effect of adopting the standard on the Company's
financial position and results of operations.
<PAGE>

NET INCOME / (LOSS) PER SHARE

Net loss per common share in 1995 and 1993 has been computed  using the weighted
average number of common shares outstanding. Net income per common share in 1994
has been computed using the weighted average number of common shares outstanding
after considering the dilutive effect of convertible preferred shares (using the
"as if"  converted  method) and,  common stock  options and warrants  (using the
"treasury stock" method).

Note 2 - SHORT-TERM INVESTMENTS

The  following is a summary of  Held-to-Maturity  Securities  as of December 31,
1995 (in thousands):

                     U.S. Treasury Bills                    $1,000

                     Certificates of deposit                   266
                                                        ============
                     Total                                  $1,266
                                                        ============

These short-term  investments are recorded at cost and approximate fair value at
December 31, 1995.

Note 3  -  TRANSACTIONS WITH SIEMENS CORPORATION

In March of 1991, the Company  entered into a multi-part  agreement with Siemens
Corporation  ("Siemens").  The Agreement  contains four  principal  segments:  a
Distribution  Agreement, a Development Agreement, a License Agreement and a Loan
Agreement.

Pursuant to the Distribution  Agreement,  beginning in July 1992 and expiring on
the earlier of (i) December 31, 1995, (ii) the date on which the parties develop
a successor product, or (iii) termination of the Development Agreement,  Siemens
had exclusive  rights to distribute the C-150 Ultrafast CT worldwide  (excluding
Japan,  Hong Kong,  the People's  Republic of China,  and  Taiwan).  Siemens had
minimum  annual  purchase  requirements  at fixed prices  under this  agreement.
Pursuant to this, the Company recognized product sales of $1,751,000, $7,161,000
and  $8,309,000  in  1995,  1994  and  1993   respectively.   Siemens  also  had
manufacturing  rights  for the C-150  should  the  Company  be unable to deliver
sufficient quantities.

Pursuant to the  Development  Agreement,  the Company and Siemens  agreed to the
joint  development  of other  medical  scanner  products.  Siemens  provided the
funding to the  Company of  $1,753,000,  $5,013,000  and  $4,667,000  under this
agreement in 1995, 1994 and 1993, respectively.

Under an  amendment  to the  Agreement in November  1992,  the minimum  purchase
obligation  was  reduced  by 50% and the  Company  granted  Siemens  a right  to
terminate  the  Agreement  without  cause or  liability.  In December  1993 this
agreement was further  amended to provide for an extension of Siemens'  right to
terminate  the  agreement  through  August 31, 1994 in exchange for a $1 million
reduction in the  aggregate  termination  payments.  In 1994 an Amendment to the
Agreement  was executed  that stated the Company has the right but no obligation
to purchase the developed  technology  should  Siemens  terminate the Agreement.
Siemens'  right to terminate  the Agreement  was extended  through  February 28,
1995. With the progressive  extinguishment  of the  termination  agreement,  the
Company  reduced the  recorded  liability  by $778,000  and $868,000 in 1994 and
1993, respectively, recognizing this reduction as other income.

In  March  1995,   the  Company  and  Siemens   entered  into  a  Memorandum  of
Understanding.  Under the terms of the Memorandum, Siemens agreed to provide $15
million to the  Company's  C-150  Evolution  Ultrafast  CT scanner  research and
development  program  over the next three  years in order to improve and enhance
the  scanner.  The  previous  agreement  was  discontinued.  Imatron will fund a
<PAGE>

portion equal to fifty percent of Siemens'  contribution for the sole purpose of
conducting  the  collaborative  agreement.  In  connection  with this  revision,
Siemens  retains  exclusive  distribution  rights,  through  March 31, 1998,  in
certain  geographical  regions  for sales of the  C-150/Evolution  scanner.  The
Company has recognized $3,884,000 of revenue under the collaborative development
agreement in 1995.

In conjunction with this Memorandum of  Understanding,  Imatron  transferred the
ownership  of five  Imatron  EBT patents to Siemens  and  cancelled  the minimum
purchase  provision of the previous  distribution  agreement in  satisfaction of
Imatron's $4 million note payable to Siemens.  Imatron has classified the entire
$4 million as other income in 1995.

Siemens has recently asserted a claim against the Company regarding the lapse of
certain foreign  registrations  of one of the patents assigned to Siemens by the
Company in connection  with the March 31, 1995 agreement  between the companies.
The  technology  involved  in the  patent  is not used  presently  in any of the
Company's  products.  The Company  believes  that it can provide a new patent to
Siemens to replace the lapsed  patent.  While the resolution of the claim is not
expected to have a material effect on the Company's financial position, it could
however,  have a material  effect on the results of  operations  of a particular
future period if resolved unfavorably.

The Company's Loan Agreement with Siemens is discussed in Note 5.
<TABLE>

Note 4  -  BALANCE SHEET DETAIL:
              (Amounts in thousands)
<CAPTION>

                                                                                         December 31,
                                                                                    1995              1994
                                                                              -------------     ---------------
<S>                                                                           <C>                 <C>   
Inventories consist of:

Purchased parts and sub-assemblies                                            $      2,594        $      3,899
Service parts                                                                        1,079                 808
Work-in-process                                                                      2,403               3,529
Finished goods                                                                       2,861                   -
                                                                              -------------     ---------------

       Net Inventories                                                        $      8,937        $      8,236
                                                                              =============     ===============

Property and equipment, at cost consist of:

Machinery and equipment                                                       $      9,266      $        5,614
Furniture and fixtures                                                               1,444               1,000
Leasehold improvements                                                               2,380               1,632
                                                                              -------------     ---------------
                                                                                    13,090               8,246

Less accumulated depreciation                                                      (6,830)             (6,353)
                                                                              -------------     ---------------

Net property and equipment                                                    $      6,260      $        1,893
                                                                              =============     ===============

Other accrued liabilities consist of:

Warranty and product upgrades                                                 $      1,740      $        2,052
Customer deposits                                                                    2,331                 903
Employee compensation                                                                  628                 711
Deferred service revenues                                                              265                 400
Other                                                                                  643               1,003
                                                                              -------------     ---------------

Net other accrued liabilities                                                 $      5,607      $        5,069
                                                                              =============     ===============
</TABLE>
<PAGE>

<TABLE>
Note 5  -  LONG-TERM DEBT
<CAPTION>

                                                                                                   December 31,
Long-term debt consists of (in thousands):
                                                                                              1995            1994
                                                                                          ------------     ------------
<S>                                                                                        <C>             <C> 
Secured note payable to Siemens, cancelled in exchange for
transfer of five patents to Siemens  and cancellation of the
Siemens minimum purchase obligation in March 1995                                          $       -       $    4,000
                                                                                                    

Borrowings under the line of credit, due March 1996,  interest at
prime rate plus one percent (9.5% at December 31, 1995)                                          992              992
                                                                                          ------------     ------------

             Total long term debt                                                                992            4,992

             Less amount due within one year                                                    (992)               -
                                                                                          ------------     ------------
                                                                                           $       -        $   4,992
                                                                                          ============     ============
</TABLE>

In connection with the March 1995 Memorandum of Understanding with Siemens,  the
$4 million note payable to Siemens was cancelled in exchange for the transfer of
five patents to Siemens and the  cancellation  of the Siemens  minimum  purchase
obligation under the previous Distribution Agreement.

The  line  of  credit  described  above  is  guaranteed  through  March  1996 by
FI.M.A.I.,  a  shareholder.  The Company has pledged  650,000 shares of InVision
Preferred A Stock (Note 1) as collateral for the guarantee.

Interest  paid was  $386,000,  $479,000  and  $446,000  in 1995,  1994 and 1993,
respectively.

Note 6  -  COMMITMENTS, CONTINGENCIES AND OTHER

OPERATING LEASES

The Company leases its present  facilities  under four operating leases expiring
between  December 31, 1996 and October 30, 2001.  Future minimum rental payments
under the leases as of December 31, 1995 are as follows (in thousands):

                                 1996                         $    952
                                 1997                              829
                                 1998                              796
                                 1999                              751
                                 2000                              751
                                 Thereafter                        567
                                                            ===========
                                 Total remaining                $4,646
                                                            ===========

Rent  expense for all leases  totaled  $921,000,  $855,000 and $804,000 in 1995,
1994 and 1993 respectively.

CAPITAL LEASE OBLIGATIONS

The Company leases certain  equipment,  including two HeartScan  clinic scanners
under  noncancelable  lease agreements that are accounted for as capital leases.
As of December 31, 1995,  equipment  under the capital  lease  arrangements  and
included  in  property  and  equipment,   aggregated   $4,247,000.   Accumulated
<PAGE>

amortization  totalled  $113,000 at December 31, 1995.  Amortization  expense is
included in depreciation and amortization.

Future minimum lease  payments  under capital lease  obligations at December 31,
1995 are as follows (in thousands):



             1996                               $       1,056
             1997                                       1,056
             1998                                       1,044
             1999                                       1,041
             2000                                         760
             Thereafter                                    73
                                              -------------------
             Total minimum payments                     5,030

             Less amounts representing interest         1,030
                                              -------------------
                                                        4,000

             Less portion due within one year             689
                                              ===================
                                                $      3 ,311
                                              ===================

In 1995,  the Company sold two  scanners to leasing  finance  institutions  with
their wholly-owned  subsidiary,  HeartScan,  immediately  leasing them back. The
sales were accounted for as sales-leaseback transactions resulting in $1,267,000
in deferred income on the sale-leaseback transactions at December 31, 1995.

Imatron Inc. is the guarantor of the HeartScan capital lease obligations.

LICENSE AGREEMENTS

In February  1981,  the Company was granted the exclusive use for five years and
nonexclusive use thereafter of certain  technology and a patent pending owned by
the  University  of  California  (UC) under the terms of license and  sublicense
agreements  between  UC and  Emersub  Incorporated  (Emersub),  a  wholly  owned
subsidiary  of Emerson  Radio Corp.,  and Emersub and Imatron  Associates,  (the
predecessor  to the  Company),  respectively.  In June  1986,  the  license  and
sublicense  agreements were amended to extend the Company's exclusive use of the
technology  through the  remaining  life of the patent in exchange  for modified
annual royalty  payments.  The sublicense  agreement,  as amended,  requires the
Company to pay annual  royalties to Emersub  equal to 2.125% of the net sales of
products utilizing the licensed technology. Charges to operations for the fiscal
years  ended  December  31,  1995,  1994 and 1993  were  $91,470,  $151,980  and
$140,582, respectively.

Note 7  -  CAPITAL STOCK

PREFERRED STOCK

The Company is authorized to issue 10,000,000 shares for all series of preferred
stock.  There are no outstanding shares of preferred stock at December 31, 1995.
The holders of  outstanding  shares of Series A Preferred  Stock are entitled to
receive dividends in preference to the payment of any dividends on common stock.
Before  any  dividend  may be paid on the common  stock a dividend  in an amount
equal to or greater than the dividend  proposed to be paid on the common  shares
must be paid on the Series A Preferred Stock.
<PAGE>

Each share of Series A Preferred  stock is entitled to five votes,  a preference
in liquidation of $2.00 per share, and is convertible into five shares of common
stock, which could be increased if the Company issues common stock under certain
circumstances for less than $0.40 per share.

Each share of Series B Preferred  stock if and when issued  would be entitled to
five  votes,  a  preference  in  liquidation  of $5.00 per  share,  and would be
convertible  into five shares of common  stock,  which would be increased if the
Company issues common shares under certain circumstances for less than $0.75 per
share.

In 1993, the Regents of the University of California converted 125,000 shares of
Series A Preferred stock to 625,000 shares of common stock.

In 1994, FI.M.A.I. Holding S.A., an affiliate of Italimprese,  converted 500,000
shares of Series A Preferred Stock to 2,500,000 shares of Common Stock.  SIECIT,
the Company's largest shareholder converted 200,000 shares of Series A Preferred
stock to 1,000,000 shares of Common Stock.

In 1995,  FI.M.A.I.  and  SIECIT  each  converted  650,000  shares  of  Series A
Preferred Stock to 6,500,000  shares of Common Stock.  Regents of the University
of  California  converted  7,813  Series A Preferred  Stock to 39,065  shares of
Common Stock.

COMMON STOCK

On October 20, 1995, the Company closed a private placement of its common stock.
The private  placement  realized  proceeds of $9,882,000 (net of offering costs)
through the sale of 1,200,000  units.  A unit consists of five shares of Imatron
Inc. Common Stock and one five-year  Imatron Inc. Common Stock purchase warrant.
In  connection  with the private  placements,  the Company  issued an additional
91,819  units as a result  of the  adjustment  on the stock  price  based on the
60-day  average  price as stated in the Common  Stock  purchase  agreement.  The
adjusted price per unit was $8.25 or $1.65 per share of Common Stock.

<TABLE>
WARRANTS
<CAPTION>

At December 31, 1995,  outstanding  warrants to purchase shares of the Company's
common  stock  were  as  follows:                                                             Shares  reserved  for  
                                                                                              exercise  of  warrants
                                                                                            ------------------------
<S>                                                                                                   <C> 
Warrants, expiring in 1996, to purchase shares of common stock at $1.50 per                           875,000
        share issued under the July 1992 private placement
Warrants, expiring in 1997, to purchase shares of common stock at $0.40 per                         1,000,000
       share issued to FI.M.A.I. for bank credit line guarantee
Warrants, expiring in 2000, to purchase shares of common stock at $0.75 per                           400,000
       share issued to the Company's president
Warrants, expiring in 2000, to purchase shares of common stock at $2.31 per
       share issued under the October 1995 private placement                                        1,291,820
                                                                                             ------------------------

Total at December 31, 1995                                                                          3,566,820
                                                                                             ========================
<FN>

In 1993, warrants were  exercised to purchase  200,000  shares of common stock at
$0.50 per share.

In 1995, warrants were exercised to purchase a total of 550,000 shares of common
stock at $1.50 and $1.00 per share,
respectively.
</FN>
</TABLE>

<PAGE>

Note 8 -  STOCK BONUS PLAN AND STOCK OPTION PLAN

STOCK BONUS PLAN

In  February  1987,  the  Company  adopted  the 1987 Stock  Bonus Plan which was
approved by the shareholders.  The stock bonus plan was adopted to reward and to
provide  incentive  to  participants  for  services.  The total number of common
shares  that may be  granted  is  1,200,000,  with no more than  400,000  shares
awarded in any fiscal  year.  The  Company  has  granted no shares  since  1993,
leaving 590,894 common shares reserved for future grants.

DIRECTOR STOCK OPTION PLAN

In June 1991, the Company  adopted a non-employee  Directors'  Stock Option Plan
for the  directors of Imatron.  The  Directors  Plan  provides for the automatic
grant of  non-statutory  options to non-employee  directors.  The Directors Plan
covers 250,000 shares of the Company's  common stock.  In June 1993 an amendment
to the non-employee  Directors Plan was approved increasing the number of shares
to 550,000.  Under the plan,  options for  350,000  shares have been  granted to
non-employee Directors.

EMPLOYEE STOCK OPTION PLAN

In March 1983,  the Company  adopted a stock option plan which  provides for the
granting of incentive stock options to employees and nonstatutory  stock options
to employees,  nonemployee directors, and certain consultants.  The shareholders
approved the plan,  as amended,  in March 1984.  In 1993 the original plan (1983
Plan) terminated and a new plan (1993 Plan) was approved.  The terms of the 1993
Plan are consistent with the terms of the 1983 Plan.

All incentive  stock options are granted at the common stock's fair market value
at the grant date and  nonstatutory  stock  options are granted at not less than
85% of the common stock's fair market value at the grant date.  Options  granted
under the plan  generally  vest evenly over four years  following the grant date
and expire five years from the grant date.

<PAGE>

<TABLE>

A summary of the activity under the stock option plans is as follows:
<CAPTION>

                                                      Reserved                 Optioned Shares
                                                         but             Number             Price per    
                                                 unoptioned shares      of shares             share
                                                                                  
                       
<S>                                                  <C>                 <C>                  <C>   
Balances at January 1, 1993                          515,788             3,431,243            $0.51 - $1.83

   Shares reserved - 1993 Plan                      3,000,000                 -
   Shares reserved - 1991 Plan                        300,000                 -
   Options granted                                 (1,083,000)           1,083,000            $0.48 - $0.56
   Options exercised                                        -             (103,000)           $0.51 - $0.60
   Options cancelled                                  666,027             (666,027)           $0.51 - $1.83
   1983 option plan termination                    (1,006,815)                   -            $0.51 - $1.83
                                                 ------------------    -------------------                                       

Balances at December 31, 1993                       2,392,000            3,745,216            $0.48 - $0.56

   Options granted                                 (2,230,808)           2,230,808            $0.43 - $1.22
   Options exercised                                        -           (1,147,002)           $0.48 - $0.61
   Options cancelled                                  236,263             (236,263)           $0.48 - $1.22
   1983 option plan termination                       (28,563)                   -            $0.51 - $0.56
                                                 ------------------    -------------------

Balances at December 31, 1994                         368,892            4,592,759            $0.43 - $1.22

   Shares reserved - 1993 Plan                      2,500,000                    -
   1983 option plan termination                       (83,950)                   -            $0.51 - $0.56
   Options granted                                   (413,800)             413,800                    $1.03
   Options exercised                                        -           (1,320,377)           $0.51 - $1.22
   Options cancelled                                  301,125             (301,125)           $0.56 - $1.22
                                                 ------------------    -------------------

Balances at December 31, 1995                       2,672,267            3,385,057
                                                 ==================    ===================
</TABLE>
<PAGE>

At the June 23, 1993 annual meeting,  the  shareholders  approved an increase in
the  number  of shares  reserved  for  option  awards  by  300,000  for the 1991
Directors Plan. The 1993 Option Plan was approved and 3,000,000 shares of common
stock were  reserved  under the plan.  At the June 2, 1995 annual  meeting,  the
shareholders  approved an increase in the number of shares reserved for the 1993
Option Plan from 3,000,000 to 5,500,000.

Options for  1,406,997  shares of the Company's  common stock at prices  ranging
from $0.51 to $1.50 per share were  exercisable  under the plans at December 31,
1995.

The Board of Directors,  on August 25, 1993, approved the repricing of all stock
options to their then current market value of $0.56.

Note 9  -  STOCK PURCHASE PLAN AND RETIREMENT SAVINGS PLAN

In March 1984, the Company adopted an employee stock purchase plan covering most
employees.  Under  the  plan,  employees  may  contribute  up to  10%  of  their
compensation to purchase  shares of the Company's  common stock at the lesser of
85% of the stock's fair market value at the  beginning or end of each  six-month
offering  period.  This plan terminated on January 18, 1994. In order to replace
this Plan,  the Board of Directors and  shareholders  approved the 1994 Employee
Stock Purchase Plan to provide  eligible  employees with an opportunity  through
regular payroll deductions to purchase common stock of Imatron Inc. so that they
may increase their proprietary  interest in the Company. The Plan is intended to
qualify as an "ESPP" under Section 423 of the Internal  Revenue Code.  This plan
contains pricing and vesting  provisions that are consistent with the 1984 Plan.
The  maximum  number of shares  offered  under the Plan is  1,000,000  shares of
common stock.  At December 31, 1995,  161,783 shares were reserved and available
for future  issuance  under the plan.  A total of  334,975,  503,243 and 162,220
shares were issued at an average price of $0.75,  $0.75,  and $0.54 per share in
1995, 1994 and 1993, respectively.

In 1987,  the  Company  established  a  qualified  retirement  plan,  under  the
provisions of section  401(K) of the Internal  Revenue  Code, in which  eligible
employees may participate.  Substantially all participants in this plan are able
to defer  compensation  up to the  annual  maximum  amount  allowable  under the
Internal  Revenue Service  regulations.  The Plan was amended in 1994 to provide
for   employer   contributions   equal  to  50%  of  every  dollar  of  employee
contribution,  with a maximum of 6% of employee wages.  The Company  contributed
approximately $169,000 in 1995, and $76,000 in 1994.

Note 10  -  INCOME TAXES

Effective  January 1, 1993 the  Company  changed  its method of  accounting  for
income taxes from the deferred  method to the liability  method required by FASB
Statement No. 109,  "Accounting  for Income Taxes".  As permitted  under the new
rules,  prior years' financial  statements have not been restated.  There was no
cumulative effect of adopting SFAS No. 109 at January 1, 1993.

Deferred  income  taxes  reflect  the net tax effects of  temporary  differences
between the carrying  amounts of assets and liabilities for financial  reporting
purposes and the amounts used for income tax purposes.
<PAGE>
<TABLE>

Significant  components of the Company's  deferred tax assets and liabilities as
of December 31, are as follows (in thousands):

<CAPTION>
                                                                        1995              1994             1993
                                                                   ---------------    -------------     --------------
<S>                                                                   <C>              <C>               <C>  
Deferred tax assets:
     Net operating loss carryforwards                                 $    19,733      $   18,626        $    19,431
     Federal credit carryforwards                                             880             858                821
     Expenses not currently deductible for tax purposes                     2,807           2,829              3,434
     Other                                                                      -              26                893
                                                                   ---------------    -------------     --------------
             Deferred tax assets                                           23,420          22,339             24,579

Valuation allowance                                                       (22,407)        (21,482)           (23,274)
                                                                   ---------------    -------------     --------------

     Net deferred tax assets                                                1,013             857              1,305

Deferred tax liabilities:
      Capitalized development costs                                            42             339                638
      State income taxes                                                      504             429                565
      Other                                                                   467              89                102
                                                                   ---------------    -------------     --------------
             Deferred tax liabilities                                       1,013             857              1,305

      Net deferred taxes                                              $         -      $        -        $         - 
                                                                   ===============    =============     ==============
</TABLE>


The net  change in the  valuation  allowance  was  $925,000,  ($1,792,000),  and
$874,000 for the years ended  December 31,  1995,  1994 and 1993,  respectively,
principally resulting from net operating loss carryforwards.

The reconciliation of income tax attributable to continuing  operations compared
at the U.S. federal statutory rates to income tax expense is as follows:

                                           1995           1994           1993
                                       -----------      ----------    ---------
Federal statutory rate                    (34%)             34%          (34%)
Net operating loss carry forwards           -              (33%)           -
Valuation Allowance                        34%               -            34%
                                       ----------       ----------    ---------
Effective tax rate                          0%               1%            0%
                                       ===========     ===========     =========

At  December  31,  1995 the Company has net  operating  loss  carryforwards  for
federal  and  state  income  tax  purposes  of  approximately   $55,200,000  and
$9,400,000 respectively. Additionally, the Company has research and development
and alternative minimum tax credit  carry-forwards of approximately  $821,000 at
December 31, 1995. The net operating loss and the research and  development  tax
credit carryforwards expire in various years from 1998 through 2008.

Pursuant to the Tax Reform Act of 1986, annual  utilization of the Company's net
operating  loss and tax credit  carryforwards  may be  limited  if a  cumulative
change in ownership  of more than 50% is deemed to occur  within any  three-year
period.

Note 11  -  SEGMENT INFORMATION AND FOREIGN SALES

The Company operates in one industry  segment in which it designs,  manufactures
and markets a computed  tomography  scanner.  The Company has distributors  that
sell and service its  scanner  throughout  the world  (except  China).  Sales of
products to end-users  outside the United States were  $13,254,000,  $14,990,000
and $2,583,000 in 1995, 1994 and 1993, respectively.

<PAGE>

                                  IMATRON INC.
                                Index of Exhibits

Exhibit                                                                  SEC
Number                Description                                      Page No.
 
(See Footnotes)

3.1             (1)    Certificate of Incorporation of the Company as
                       amended as of March 31, 1983

3.2             (2)    Certificate of Amendment of Certificate of
                       Incorporation filed with the New Jersey Secretary
                       of State on June 7, 1988

3.3             (2)    Certificate of Amendment of Certificate of
                       Incorporation filed with the New Jersey Secretary
                       of State on June 17, 1988

3.4             (2)    Certificate of Amendment of Certificate of
                       Incorporation filed with the New Jersey Secretary
                       of state on  July 26, 1988

3.5             (9)    Certificate of Correction of Certificate of
                       Amendment of Certificate of Incorporation filed
                       with the New Jersey Secretary of State on
                       February 7, 1989

3.6            (10)    Certificate of Amendment of Certificate of
                       Incorporation filed with the New Jersey Secretary
                       of State on March 29, 1990

3.7            (11)    Certificate of Amendment of Certificate of
                       Incorporation filed with the New Jersey Secretary
                       of State on December 7, 1990

3.8            (12)    Bylaws, as amended April 30, 1992

1               (4)    Form of certificate evidencing Class 1991 Warrant

4.2             (4)    Amendment of Warrant Agency Agreement relating
                       to the Class 1991 Warrants

4.4             (5)    Form of Warrant Agency Agreement relating to the
                       Class 1991 Warrants

4.5            (15)    Warrant dated July 28, 1992 issued to Arthur P.
                       Gould & Co., Inc. in connection with Release
                       and Settlement Agreement dated July 27, 1992

4.6            (13)    Warrant issued to FI.M.A.I. Holding, S.A. in
                       conjunction with bank credit line guarantee.


<PAGE>
Exhibit                                                                   SEC
Number            Description                                          Page No.

(See Footnotes)

4.7                    Form of Warrant issued to investors in Private
                       Offering concluded September 15, 1992

10.1            (1)    Sublicense Agreement between the Company and
                       Emersub Incorporated dated February 1, 1981

10.2            (6)    Amendment to Sublicense Agreement between
                       Registrant and Emersub Incorporated dated
                       June 30, 1986

10.4           (14)    1983 Stock Option Plan, as amended to date

10.5            (9)    1984 Employee Stock Participation Plan, as
                       amended to date

10.6            (7)    Lease Agreement between the Company and Diodati
                       Trust and Patrician Association, Inc. for the
                       premises located at 389 Oyster Point Boulevard,
                       South San Francisco, California

10.7            (3)    Common Stock Purchase Agreement dated February
                       26, 1987 between the Company and Mitsui & Co.
                       (U.S.A.), Inc.

10.8            (9)    Common Stock Purchase Agreement dated February
                       26, 1988 between the Company and Pacific
                       Scientific Commerce Ltd.

10.9           (10)    License Agreement dated as of September 13, 1988
                       between the Company and EMI Limited

10.10           (8)    Series A Preferred Stock Purchase Agreement,
                       dated as of July 20, 1988, by and among the
                       Company, FI.M.A.I. Holding S.A. and Compagnie
                       Financiere Espirito Santo, S.A.

10.11           (9)    Convertible Debenture between the Company and
                       Analogic Corporation

10.12           (9)    1987 Stock Bonus Incentive Plan

10.14           (9)    Security Agreement dated December 15, 1988
                       between the Company and John Hancock Leasing
                       Corporation and Promissory Note dated December
                       30, 1988 from the Company to John Hancock Leasing
                       Corporation

10.15           (9)    Agreement to Issue Warrant dated January 19, 1989
                       between the Company and John Hancock Leasing Corporation
<PAGE>

Exhibit                                                                  SEC
Number                 Description                                     Page No.
 
(See Footnotes)

10.16           (9)    Amendment dated July 20, 1987 to Lease dated
                       August 23, 1983 by and between the Company and
                       Diodati Property Trust and Patrician Associates, Inc.

10.17          (10)    Series B Preferred Stock Purchase Agreement and
                       Option to Form Joint Venture dated March 26, 1990
                       between the Company and FI.M.A.I. Holding, S.A.,
                       and the exhibits thereto
 

10.18          (10)    Letter Agreement dated March 26, 1990 between
                       the Company and FI.M.A.I. Holding, S.A.

10.19          (10)    Second Amendment to Sublicense Agreement between
                       Company and Emersub Incorporated dated
                       October 10, 1990

10.20          (12)    Polly Force Distribution Agreement

10.21          (13) *  Basic Agreement between the Company and Siemens
                       Corporation dated March 14, 1991

10.22          (13)    Loan Agreement between the Company and Siemens
                       Corporation dated March 14, 1991

10.23          (12)    Revolving Line of Credit Agreement between the
                       Company and Instituto Bancario San Paolo di
                       Torino dated November 9, 1990

10.24          (13)    Registration Rights Agreements dated November 6,
                       1990 among the Company, FI.M.A.I. Holding, S.A.
                       and Societe d'Investissments dans des
                       Entreprises Commerciales, Industrielles et
                       Technologiques S.A.
 
10.25          (13)    Stockholders Agreement dated August 13, 1990
                       between the Company and FI.M.A.I. Holding, S.A.

10.26          (13)    Sales and Distribution Agreement dated July 20,
                       1988 between the Company and FI.M.A.I. Holding,
                       S.A.

10.27          (13) *  Exclusive Importer Agreement dated November 12,
                       1990 between the Company and Mitsui & Co., Ltd.

10.28          (13) *      Distributorship Agreement dated November 12, 1990
                           among the Company, Mitsui & Co., Ltd. and PASCO
                           Corporation
<PAGE>

Exhibit                                                                SEC
Number          Description                                         Page No.
 
(See Footnotes)

10.29          (13)    Common Stock Purchase Agreement dated October 15,
                       1990 between the Company and PASCO Corporation

10.30          (14)    Revolving Line of credit Agreement between the
                       Company and Istituto Bancario San Paolo di Torini
                       dated March 4, 1992

10.31          (14)    Reimbursement and Security Agreement between the
                       Company and FIMAI Holding, S.A. dated February
                       22, 1992

10.32          (14)    Stock Pledge Agreement between the Company and
                       FI.M.A.I. Holding, S.A. dated February 22, 1992

10.33          (14)    Promissory Note dated February 22, 1992 granted
                       to Italimprese S.p.A.

10.34          (14)    Sales Agreement between the Company and Picker
                       International, Inc. dated March 11, 1992

10.35          (14)    1991 Non-Employee Director's Stock Option Plan

10.36          (14)    Agreement dated December 12, 1991 between the
                       Company and Mitsui & Co. Ltd.

10.37          (14)    Letter Agreement dated April 2, 1992 from
                       FI.M.A.I. Holding S.A.

10.38          (15)    Lease Agreement between the Company and J. Grant
                       Monahon, James S. Keagy and Jeffrey H.
                       Stevenson, as Trustees of AEW #79 Trust for the
                       premises located at 389 Oyster Point Boulevard,
                       South San Francisco, California, dated November
                       1, 1991

10.39          (15)    Amendment No. 1 to Lease Agreement between the
                       Company and J. Grant Monahon, James S. Keagy
                       and Jeffrey H. Stevenson, as Trustees of AEW #79
                       Trust for the premises located at 389 Oyster
                       Point Boulevard, California, dated June 15, 1992

10.40          (15)    Second amendment to Sublicense Agreement between
                       the Company and Emersub Incorporated dated
                       October 1, 1990

10.41          (15)    Agreement dated October 31, 1991, to terminate
                       Lease Agreement dated August 23, 1983
<PAGE>

Exhibit                                                                  SEC
Number         Description                                             Page No.
 
(See Footnotes)

10.42          (15)    Release and Settlement Agreement between the
                       Company and Arthur P. Gould & Co. dated July 27,
                       1992

10.43          (16)    Revolving line of credit agreement between the
                       Company and Instituto Bancario San Paolo di
                       Torini dated September 15, 1992

10.44          (16)    First Amendment to Agreement for revolving line
                       of credit between the Company and Instituto
                       Bancario San Paolo di Torini dated February
                       2, 1993

10.45          (16)    Right of first refusal and option agreement
                       between the Company and FI.M.A.I. Holding, S.A.
                       dated January 22, 1993

10.46          (16) *  Amendment No.1 to Basic Agreement between the
                       Company and Siemens Corporation dated
                       September 30, 1992

10.47          (16)    Amendment No.1 to loan agreement between the
                       Company and Siemens Corporation dated
                       December 31, 1992

10.48          (16)    Amendment No.2 to loan agreement between the
                       Company and Siemens Corporation dated March 12,
                       1993

10.49          (16)    Mortgage and Security Agreement dated as of March 12,
                       1993 between Imatron Inc. and Siemens Corporation

10.50          (16) *  Patent License Agreement dated as of March 12, 1993
                       between Imatron Inc. and Severson & Werson, A
                       Professional Corporation

10.51          (16)    Escrow Holder Agreement dated as of March 12, 1993
                       by and among Imatron Inc., Siemens Corporation and
                       Severson & Werson, A Professional Corporation

10.52          (16) *  Sole License Agreement dated as of March 12, 1993
                       between Imatron Inc. and Siemens Corporation

10.53          (16)    C-150 License Agreement dated as of March 12, 1993
                       between Imatron Inc. and Siemens Corporation

10.54          (16) *  License Agreement dated as of March 12, 1993
                       between Imatron Inc. and Siemens Corporation
<PAGE>

Exhibit                                                                   SEC
Number          Description                                            Page No.
 
(See Footnotes)

10.55          (16)    Amendment No. 2 to Lease Agreement between the
                       Company and J. Grant Monahon, James S. Keagy
                       and Jeffrey H. Stevenson, as Trustees of AEW #79
                       Trust for the premises located at 389 Oyster
                       Point Boulevard, California dated December 31, 1992

10.56          (16)    Termination Agreement dated December 9, 1992,
                       terminating Stockholders Agreement dated August
                       13,1990, between the Company and FI.M.A.I.
                       Holding, S.A.

10.57          (16)    Amendment No.1 dated February 23, 1993, to
                       Release & Settlement Agreement

10.58          (16)    Form of Registration Rights Agreement between the
                       Company and investors in Private Offering
                       concluded September 15, 1992

10.59          (17)    1993 Stock Option Plan

10.60          (18)    1994 Employee Stock Purchase Plan

10.61          (19)    Settlement Agreement dated December 10, 1993
                       between the Company and Mitsui & Co., ltd.

10.62          (19)    Transition Agreement dated December 10, 1993
                       between the Company and Mitsui & Co., Ltd.

10.63          (20)    Amendment No. 2 to Basic Agreement dated
                       December 14, 1993 between the Company and
                       Siemens Corporation.

10.64          (20)    Amendment to Loan Agreement and Waiver dated
                       December 14, 1993 between the Company and
                       Siemens Corporation.

10.65          (21)    Executive Employment Agreement dated as of June
                       11, 1993 between the Company and S. Lewis Meyer.

10.66          (21)    Warrant Agreement dated June 7, 1993 between the
                       Company and S. Lewis Meyer.

10.67          (21)    Employment Agreement dated December 15, 1993
                       between the Company and Gary H. Brooks.

10.68          (21)    Employment Agreement dated October 1, 1993
                       between the Company and Dale Grant.
<PAGE>

Exhibit                                                                  SEC
Number         Description                                             Page No.
 
(See Footnotes)

10.69          (21)    Agreement and Joint Company Agreement between
                       the Company, Tobu Land System Company and
                       Kino Corporation dated January 7, 1994

10.70          (21)    Distributorship Agreement between the Company and
                       Imatron Japan K. K. dated February 3, 1994.

10.71          (21)    First Amendment to Distributorship Agreement between
                       the Company and Imatron Japan K. K. dated February
                       8, 1994.

10.72          (21)    Memorandum of Understanding dated February 2,
                       1994 between the Company and Siemens AG,
                       Medical Engineering Group.

10.73          (21)    Memorandum of Understanding dated February 2,
                       1994 between Company and Siemens AG,
                       Medical Engineering Group (Evolution Upgrade project
                       and distribution agreement).

10.74          (21)    Letter Agreement dated March 7, 1994 from FI.M.A.I.
                       Holding S. A.

10.75          (22) *  Amendment No. 3 to Basic Agreement dated March 1,
                       1994 between the Company and Siemens Corporation.

10.76          (22) *  Amendment No. 4 to Basic Agreement dated as of
                       October 20, 1994 between the Company and Siemens
                       Corporation.

10.77          (22) *  Amendment No. 5 to Basic Agreement dated as of
                       November 17, 1994 between the Company and Siemens
                       Corporation.

10.78          (22) *  Amendment No. 6 to Basic Agreement dated as of
                       December 28, 1994 between the Company and Siemens
                       Corporation and related Letter Agreement dated
                       December 29, 1994.
<PAGE>

10.79          (22) *  Amendment No. 7 to Basic Agreement dated as of
                       February 28, 1995 between the Company and Siemens
                       Corporation.

10.80          (22) *  Memorandum of Understanding dated March 31, 1995
                       between the Company and Siemens Corporation.

                                                                          SEC
                                                                       Page No.

11.0           Computation of Per Share Earnings.                         52
               Consent of Independent Auditors.                           25


_______________          
                Confidential Treatment Request granted by the Securities
                and Exchange  Commission.

 
<PAGE>

(1)       Filed as an exhibit to the Company's Registration Statement on Form
          S-1 filed with the  Commission on June 1, 1983 (File No. 2-84146)
          and incorporated herein by reference.

(2)       Filed as an exhibit to the Company's Registration Statement on Form
          S-8 filed with the  Comission on February 3, 1989 (File No. 33-26833)
          and incorporated herein by reference.

(3)       Filed as an exhibit to the Company's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1986 and incorporated herein by
          reference.

(4)       Filed as an exhibit to Amendment No. 2 to the Company's Registration
          Statement on Form S-1 filed with the Commission on November 12, 1986
          (File No. 33-8668) and incorporated herein by reference.

(5)       Filed as an exhibit to Amendment No. 1 to the Company's
          Registration Statement on Form S-1 filed with the Commission on
          November 5, 1986 (File No. 33-8668) and incorporated herein by
          reference.

(6)       Filed as an exhibit to the Company's Registration Statement on Form
          S-1 filed with the Commission on September 11, 1986 (File No. 33-
          8668) and incorporated herein by reference.

(7)       Filed as an exhibit to the Company's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1983 and incorporated herein by
          reference.

(8)       Filed as an exhibit to the Company's Current Report on Form 8-K filed
          with the Commission on September 16, 1988.

(9)       Filed as an exhibit to the Form 8 Amendment Number 1 to the
          Company's Annual Report on Form 10-K for the fiscal year ended
          December 31, 1988 and incorporated herein by reference.

(10)      Filed as an exhibit to the Company's Annual Report Form 10-K for the
          Fiscal year ended December 31, 1989 and incorporated herein by
          reference.

(11)      Filed as an exhibit to the Company's Registration Statement Form S-3
          filed on January 24, 1991 (File No. 33-38676) and incorporated
          herein by reference.

(12)      Filed as an exhibit to Post-Effective Amendment Number 1 to the
          Company's Registration Statement Form S-3 filed with the
          Commission on May 5, 1992 (File No. 33-32218) and incorporated
          herein by reference.

 (13)     Filed as an exhibit to the Company's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1990 and incorporated herein by
          reference.

<PAGE>

(14)      Filed as an exhibit to the Company's Annual Report on Form 10-K for
          the fiscal year ended December 31, 1991 and incorporated herein by
          reference.

(15)      Filed as an exhibit to the Company's Amendment No.1 to Post-
          Effective Amendment No.1  to Form S-3 (file No. 33-32218) filed with
          the Commission on August 7, 1992 and   incorporated herein by
          reference.

(16)      Filed as an exhibit to the Company's Annual Report on Form 10-K for 
          the fiscal year ended December, 1992 and incorporated herein by 
          reference.

(17)      Filed as an exhibit to the Company's Registration Statement on Form
          S-8 filed on August 3, 1993 (Registration No. 33-66992).

(18)      Filed as an exhibit to the Company's Registration Statement on Form
          S-8 filed on November 16, 1993 (Registration No. 33-71786).

(19)      Filed as an Exhibit to the Company's Current Report on Form 8-K
          filed on January 26, 1994.

(20)      Filed as an Exhibit to the Company's Current Report on Form 8-K
          filed on February 4, 1994

(21)      Filed as an Exhibit to the Company's Annual Report on Form 10-K
          for the fiscal year ended December 31 1993, and incorporated herein by
          reference.

(22)      Filed as an Exhibit to the Company's Annual Report on Form 10-K
          for the fiscal year ended December 31,1994 and incorporated herein by
          reference.

<PAGE>