DGS-150328.1
February 8, 2000 12:41 PM
DGS-150328.1
February 8, 2000 12:41 PM
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
---
AND EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1999
_ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES ACT
OF 1934
For the transition period from to
Commission File Number 000-24541
CORGENIX MEDICAL CORPORATION
(Name of Small Business Issuer in its Charter)
Nevada 93-1223466
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
12061 Tejon Street, Westminster, Colorado 80234
(Address of principal executive offices, including zip code)
(303) 457-4345
(Issuer's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period 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 _
- -
The number of shares of Common Stock outstanding was 17,394,072, as of February
1, 2000.
Transitional Small Business Disclosure Format. Yes _ No X
-
<PAGE>
CORGENIX MEDICAL CORPORATION
December 31, 1999
TABLE OF CONTENTS
Page
Part I
Financial Information
Item 1. Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II
Other Information
Item 1. Legal Proceedings 15
Item 2. Changes in Securities and Use of Proceeds 15
Item 3. Defaults Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15
<PAGE>
CORGENIX MEDICAL CORPORATION
AND SUBSIDIARIES
Consolidated Balance Sheets
- -------------------------------------------------------------------------------
December 31, June 30,
1999 1999
--------------------------
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 35,144 15,963
Accounts receivable, less 755,747 516,182
allowance for doubtful accounts of
$6,600
Note receivable 27,425 27,425
Inventories 574,394 518,215
Prepaid expenses 61,144 954
--------------------------
Total current assets $ 1,453,854 1,078,739
Equipment:
Machinery and laboratory 318,728 302,949
equipment
Furniture, fixtures and office 264,873 255,695
equipment
--------------------------
583,601 558,644
Accumulated depreciation and (434,282) (399,109)
amortization
--------------------------
Net equipment $ 149,319 215,084
Intangible assets:
Patents, net of accumulated 434,707 470,557
amortization of $682,837 and
$646,987 at December 31 and June 30,
1999, respectively
Goodwill, net of accumulated 24,679 25,411
amortization of $36,909 and $36,177
at December 31 and June 30, 1999,
respectively
--------------------------
459,386 495,968
--------------------------
Due from officer 12,000 12,000
Other assets 14,285 14,285
--------------------------
Total assets $ 2,088,844 1,760,527
==========================
Liabilities and Stockholders'
Equity (Deficit)
Current liabilities:
Current portion of notes payable 315,389 296,954
Accounts payable 896,930 795,262
Accrued payroll and related 121,015 114,061
liabilities
Other liabilities 147,366 105,528
Current portion capital lease 4,763 3,483
obligation
Employee stock purchase plan 2,620 2,984
payable
--------------------------
Total current liabilities $ 1,488,083 1,318,272
Notes payable, excluding current 737,543 790,959
portion
Leases payable, excluding current 5,143 7,703
portion
--------------------------
Total liabilities $ 2,230,769 1,791,734
Stockholders' equity (deficit):
Preferred stock, $0.001 par - -
value. Authorized 5,000,000
shares; none issued or outstanding
Common stock, $0.001 par value. 17,614 16,852
Authorized 20,000,000 shares;
issued and outstanding 17,320,164 in
December and 16,852,116 shares in
June
Additional paid-in capital 3,967,571 3,959,806
Accumulated deficit (4,127,110) (4,233,065)
--------------------------
Total stockholders' equity (141,925) (356,407)
(deficit)
--------------------------
Total liabilities and $ 2,088,844 1,760,527
stockholders' equity (deficit)
==========================
See accompanying notes to consolidated financial statements.
<PAGE>
CORGENIX MEDICAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Operations
- -------------------------------------------------------------------------------
Three Months Ended Six Months Ended
December 31, December 31, December 31, December 31,
1999 1998 1999 1998
------------------------------------------------------------
(Unaudited) (Unaudited)
Net Sales $ 904,753 628,959 1,710,623 1,177,807
Cost of Sales 326,701 229,422 631,367 512,099
------------------------------------------------------------
Gross Profit $ 578,052 399,537 1,079,256 665,708
Operating expenses:
Selling and marketing 230,602 253,387 382,288 446,665
Research/development 60,179 96,294 159,344 194,009
General and admin. 186,574 212,666 367,684 490,947
-----------------------------------------------------------
Total Expense 477,355 562,347 909,316 1,131,621
Operating profit $100,697 (162,810) 169,949 (465,913)
(loss)
Interest expense, net 36,126 22,139 63,985 46,460
-----------------------------------------------------------
Net profit $64,571 (184,949) 105,955 (512,373)
(loss)
Net profit (loss) per $0.00 (0.01) 0.01 (0.04)
share, basic and diluted
Weighted average 17,264,795 13,524,914 17,065,570 12,839,167
shares outstanding
See accompanying notes to consolidated financial statements.
<PAGE>
CORGENIX MEDICAL CORPORATION
AND SUBSIDIARIES
Consolidated Statements of Cash Flows
- -------------------------------------------------------------------------------
Six Months Ended
December 31, December 31,
1999 1998
---------------------
(Unaudited)
Cash flows from operating activities:
Net income (loss) $ 105,955 (512,373)
Adjustments to reconcile net
income (loss) to net cash used
by operating activities:
Depreciation and amortization 71,755 77,113
Changes in operating assets and liabilities:
Accounts receivable (239,565) 85,560
Inventories (56,179) (27,276)
Prepaid expenses and other assets (60,190) 8,623
Accounts payable 101,668 238,323
Accrued payroll and related liabilities 6,954 (1,429)
Other liabilities 41,838 27,164
Employee stock purchase plan payable (364) -
---------------------
Net cash used by operating activities $ (28,128) (104,295)
---------------------
Cash flows used by investing activities -
Purchase of equipment (24,957) (17,371)
Cash flows from financing activities:
Borrowings (payments), (36,261) (42,365)
net on notes payable
Cash receipts on stock - 25,651
subscription
Cash receipts for stock 108,527 -
---------------------
Net cash provided by (used by) 72,266 (16,714)
financing activities
---------------------
Net decrease in cash and cash 19,181 (138,380)
equivalents
Cash and cash equivalents at beginning $ 15,963 216,314
of period
---------------------
Cash and cash equivalents $ 35,144 77,934
at end of period
=====================
Supplemental disclosure - $ 63,985 48,475
cash paid for interest
See accompanying notes to consolidated financial statements.
<PAGE>
CORGENIX MEDICAL CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Corgenix Medical Corporation (Corgenix or the Company) develops,
manufactures and markets diagnostic products for the serologic diagnosis of
certain vascular diseases and autoimmune disorders using proprietary technology.
The Company markets its products to hospitals and free-standing laboratories
worldwide through a network of sales representatives, distributors, and private
label (OEM) agreements. The Company's offices and manufacturing facility are
located in Westminster, Colorado.
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiary, Corgenix (UK) Limited (Corgenix UK). Corgenix
UK was established as a United Kingdom company during 1996 to market the
Company's products in international markets.
The accompanying consolidated financial statements have been prepared,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations. Although the Company believes that the disclosures are adequate to
make the information presented not misleading, it is suggested that these
consolidated financial statements be read in connection with the financial
statements and notes thereto included in the Company's annual report on Form
10-KSB for the year ended June 30, 1999.
In the opinion of the Company, the accompanying consolidated financial
statements include all adjustments, consisting of normal recurring accruals and
adjustments, required to present fairly the Company's financial position at
December 31, 1999 and June 30, 1999, and the results of their operations for
each of the three and six month periods ended December, 1999 and 1998, and the
cash flows for the six month periods then ended.
The operating results for the three months and the six months ended
December 31, 1999 are not necessarily indicative of the results that may be
expected for the year ended June 30, 2000.
2. PROFIT (LOSS) PER SHARE
Basic profit (loss) per share is presented based on the weighted average
number of common shares outstanding during the period.
3. INCOME TAXES
The Company incurred profits in the three and six months ended December
31, 1999 and losses in the three and six months ended December 31, 1998.
Although the Company has generated profit in the current fiscal year, the
Company has historically incurred losses and accordingly no tax benefit is
recognized. It is not more likely than not that tax losses will result in a
benefit to the Company.
<PAGE>
CORGENIX MEDICAL CORPORATION
Item 2. Management's Discussion and Analysis Of Financial Condition and
Results of Operations
The following discussion should be read in conjunction with the
consolidated financial statements and accompanying notes included elsewhere
herein.
General
Since the Company's inception, Corgenix has been primarily involved in the
research, development, manufacturing and marketing of diagnostic tests for sale
to clinical laboratories. Corgenix currently markets 23 products covering
autoimmune disorders, vascular diseases, bone and joint diseases and liver
disease. Corgenix's products are sold in the United States through the Company's
marketing and sales organization that includes direct sales representatives,
internationally through an extensive distributor network, and to several
significant OEM partners.
Corgenix manufactures products for inventory based upon expected sales
demand, shipping products to customers, usually within 24 hours of receipt of
orders. Accordingly, Corgenix does not operate with a backlog.
Except for the fiscal year ending June 30, 1997, the Company has
experienced revenue growth since its inception, primarily from sales of products
and contract revenues from strategic partners. Contract revenues consist of
licensing fees, milestone payments, and royalty payments from research and
development agreements with strategic partners.
Beginning in fiscal year 1996, Corgenix added third-party OEM licensed
products to its diagnostic product line. The Company currently markets products
through OEM licenses from third party manufacturers and expects to expand its
relationship with other companies in the future to gain access to additional
products.
Although Corgenix has experienced growth in revenues every year since 1990
except for 1997, there can be no assurance that, in the future, Corgenix will
sustain revenue growth or achieve consistent profitability. Corgenix's results
of operations may fluctuate significantly from period-to-period as the result of
several factors, including: (i) whether and when new products are successfully
developed and introduced, (ii) market acceptance of current or new products,
(iii) seasonal customer demand, (iv) whether and when Corgenix receives R&D
milestone payments and license fees from strategic partners, (v) changes in
reimbursement policies for the products that Corgenix sells, (vi) competitive
pressures on average selling prices for the products that Corgenix sells, and
(vii) changes in the mix of products that Corgenix sells.
Results of Operations
Three Months Ended December 31, 1999 and 1998
Net sales. Net sales for the three months ended December 31, 1999 were
$905,000, a 43.9% increase from $629,000 in 1998. A component of net sales,
gross product sales, increased 55.0% to $902,000 in 1999 from $582,000 in 1998,
due to product sales through the Company's expanded international distribution
network, growth in sales of new products launched in 1998, and expansion of
private labeling agreements with other diagnostic companies.
Cost of sales. Cost of sales in dollars increased to $327,000 in 1999 from
$229,000 in 1998 due to increased sales for the quarter and product mix. As a
percentage of sales, cost of sales decreased to 36.1% in 1999 from 36.4% in
1998. Gross profit increased 44.5% to $578,000 in 1999 from $400,000 in 1998.
Selling and marketing. Selling and marketing expenses decreased 8.7% to
$231,000 in 1999 from $253,000 in 1998 because of non-recurring recruitment
expenses realized in 1998. The Company expects that selling and marketing
expenses will increase in the third quarter resulting from recruitment expense
and operating expense of a direct sales force in the UK added in December 1999
and January 2000. As a percentage of sales, selling and marketing expenses
decreased to 25.5% from 40.3% due to the increase in product sales for the
quarter.
Research and development. Research and development expenses decreased
37.5% to $60,000 in 1999 from $96,000 in 1998. The decrease was due to a credit
of $43,000 in previously realized expense for outside clinical trials which were
determined to be no longer necessary for the Company and which have been
cancelled. Without the $43,000 credit, research and development expenses would
have increased 7.3% to $103,000 in 1999 from $96,000 in 1998, a percentage
increase commensurate with over all increases in operating costs.
General and administrative. General and administrative expenses decreased
12.2% to $187,000 in 1999 from $213,000 in 1998, due to lower legal and
accounting expense as seen in previous reporting periods. In addition, there was
a non-recurring expense of $23,000 during the period as part of the wrap up of
several consulting agreements.
Net profit (loss). Net profit for the second quarter increased to $65,000
in 1999 from ($185,000) in 1998 as a result of increased product sales, an
increase in percent gross profit, and decreases in all areas of operating
expenses. Without the non-recurring credit to research and development expense,
and the non-recurring consulting expense in general and administrative expense,
net profit for the reporting period would have been $45,000.
Six Months Ended December 31, 1999 and 1998
Net sales. Net sales for the six months ended December 31, 1999 were
$1,711,000, a 45.2% increase from $1,178,000 in 1998. Gross product sales
increased 50.4% to $1,705,000 in 1999 from $1,134,000 in 1998, because of
increased market share penetration of existing products, expansion of the
Company's distribution network, and the contribution of new products launched in
1998.
Cost of sales. Cost of sales increased to $631,000 in 1999 from $512,000
in 1998. As a percentage of sales, cost of sales decreased to 36.8% in 1999 from
43.5% in 1998. This reduction was mainly reflective of product mix. Gross profit
increased 62.0% to $1,079,000 in 1999 from $666,000 in 1998.
Selling and marketing. Selling and marketing expenses decreased 14.5% to
$382,000 in 1999 from $447,000 in 1998, primarily due to recruitment expenses
realized in 1998.
Research and development. Research and development expenses decreased
18.0% to $159,000 in 1999 from $194,000 in 1998, due to the credit of expense in
1999 for clinical trials that were cancelled.
General and administrative. General and administrative expenses decreased
25.1% to $368,000 in 1999 from $491,000 in 1998 due to lower legal and
accounting expense in the period in 1999.
Net profit (loss). Net profit for the first six months increased to
$106,000 in 1999 from ($512,000) in 1998 due to increased product sales, an
increase in percent gross profit, and decreases in all areas of operating
expenses.
Liquidity and Capital Resources
Since inception, Corgenix has financed its operations primarily through
private placements of common and preferred stock, raising net proceeds of
approximately $4.0 million from sales of these securities. Corgenix has also
received financing for operations from sales of diagnostic products and
agreements with strategic partners. Through December 31, 1999, Corgenix has
invested $149,000, (net of accumulated depreciation) in leasehold improvements,
laboratory and computer equipment and office furnishings and equipment to
support its development and administrative activities.
At December 31, 1999, the Company had cash of $35,000, a working capital
deficit of $34,000, and short and long-term notes and leases payable of
$1,063,000, with $320,000 due in the following twelve months and the remainder
due at varying dates through February 2006.
Management expects that cash flows from current operations will be
sufficient to fund such operations at current levels. The Company is
aggressively pursuing financing alternatives to provide funds for its current
operations and its growth plans including the new subsidiary, which financing
alternatives may involve accessing the public equity or debt markets. There can
be no assurance that the Company will be able to obtain sufficient capital from
such financings to offset its working capital deficits or to pursue its
expansion plans
Year 2000 Effect
The Company reviewed all of its software, facilities and utility service
for exposure to Year 2000 issues, including network and workstation software,
and did not believe that such software posed significant risks associated with
the Year 2000 problem. The Company primarily uses third-party software programs
written and updated by outside firms, each of whom had stated that its software
was Year 2000 compliant. The Company determined that based on industry available
information, some of the Company's older computer hardware would not correctly
process dates after December 31, 1999. The Company updated or replaced all such
equipment prior to December 31, 1999.
Prior to December 31, 1999, the Company solicited and received written
assurance that suppliers of materials considered critical were Year 2000
compliant. Prior to December 31, 1999, the Company solicited and obtained
written assurances from the Company's material customers regarding their Year
2000 compliance. Prior to December 31, 1999, the Company developed and
implemented a plan to provide electrical power to all refrigerators and freezers
in the event that electrical power was temporarily unavailable from the utility
company.
The Company attained Year 2000 compliance in a timely manner, and there
was no material impact on the Company's revenues or income. There was no loss in
electrical service to the Company, and emergency switchover to backup sources
for electrical power was not required. There were no perceived problems with
banking, telephone, mail, data transfer or other utility or general service
providers or government or private entities that had a material adverse effect
on the Company.
Forward-Looking Statements and Risk Factors
This 10-QSB includes statements that are not purely historical and are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1934, as amended, including statements regarding the Company's
expectations, beliefs, intentions or strategies regarding the future. All
statements other than historical fact contained in this 10-QSB, including,
without limitation, statements regarding future product developments,
acquisition strategies, strategic partnership expectations, technological
developments, the availability of necessary components, research and development
programs and distribution plans, are forward-looking statements. All
forward-looking statements included in this 10-QSB are based on information
available to the Company on the date hereof, and the Company assumes no
obligation to update such forward-looking statements. Although the Company
believes that the assumptions and expectations reflected in such forward-looking
statements are reasonable, it can give no assurance that such expectations will
prove to have been correct or that the Company will take any actions that may
presently be planned.
Certain factors that could cause actual results to differ materially from
those expected include the following:
Losses Incurred; Future Capital Needs; Uncertainty of Additional Funding
The Company has incurred operating losses and negative cash flow from
operations for most of its history. Losses incurred by the Company since its
inception have aggregated over $XXX million, and there can be no assurance that
the Company will be able to generate positive cash flows to fund its operations
in the future. Assuming no significant uses of cash in acquisition activities or
other significant changes, the Company believes it will have sufficient cash to
satisfy its funding needs for at least the next year. If the Company is not able
to operate profitably and generate positive cash flows, however, it may need to
raise additional capital to fund its continuing operations. If the Company needs
additional financing to meet its requirements, there can be no assurance that it
will be able to obtain such financing on terms satisfactory to it, if at all.
Alternatively, any additional equity financing may be dilutive to existing
stockholders, and debt financing, if available, may include restrictive
covenants. If adequate funds are not available, the Company might be required to
limit its research and development activities or its selling and marketing
activities, either of which could have a material adverse effect on the future
of the Company's business.
Dependence on Collaborative Relationships and Third Parties for Product
Development and Commercialization
The Company has historically entered into licensing and research and
development agreements with collaborative partners, from which it derived a
significant percentage of its revenues in past years. Pursuant to these
agreements, the Company's collaborative partners have specific responsibilities
for the costs of development, promotion, regulatory approval and/or sale of the
Company's products. The Company will continue to rely on future collaborative
partners for the development of products and technologies. There can be no
assurance that the Company will be able to negotiate such collaborative
arrangements on acceptable terms, if at all, or that current or future
collaborative arrangements will be successful. To the extent that the Company is
not able to establish such arrangements, it could experience increased capital
requirements or be forced to undertake such activities at its own expense. The
amount and timing of resources that any of these partners devotes to these
activities will generally be based on progress by the Company in its product
development efforts. Usually, collaborative arrangements may be terminated by
the partner upon prior notice without cause and there can be no assurance that
any of these partners will perform its contractual obligations or that it will
not terminate its agreement. With respect to any products manufactured by third
parties, there can be no assurance that any third-party manufacturer will
perform acceptably or that failures by third parties will not delay clinical
trials or the submission of products for regulatory approval or impair the
Company's ability to deliver products on a timely basis.
No Assurance of Successful or Timely Development of Additional Products
The Company's business strategy includes the development of additional
diagnostic products. The Company's success in developing new products will
depend on its ability to achieve scientific and technological advances and to
translate these advances into commercially competitive products on a timely
basis. Development of new products requires significant research, development
and testing efforts. The Company will have limited resources to devote to the
development of products and, consequently, a delay in the development of one
product or the use of resources for product development efforts that prove
unsuccessful may delay or jeopardize the development of other products. Any
delay in the development, introduction and marketing of future products could
result in such products being marketed at a time when their cost and performance
characteristics would not enable them to compete effectively in their respective
markets. If the Company is unable, for technological or other reasons, to
complete the development and introduction of any new product or if any new
product is not approved or cleared for marketing or does not achieve a
significant level of market acceptance, the Company's results of operation could
be materially and adversely affected.
Competition in the Diagnostics Industry
Competition in the human medical diagnostics industry is, and is expected
to remain, significant. The Company's competitors range from development stage
diagnostics companies to major domestic and international pharmaceutical
companies. Many of these companies have financial, technical, marketing, sales,
manufacturing, distribution and other resources significantly greater than those
of the Company. In addition, many of these companies have name recognition,
established positions in the market and long standing relationships with
customers and distributors. Moreover, the diagnostics industry has recently
experienced a period of consolidation, during which many of the large domestic
and international pharmaceutical companies have been acquiring mid-sized
diagnostics companies, further increasing the concentration of resources. There
can be no assurance that technologies will not be introduced that could be
directly competitive with or superior to the Company's technologies.
Governmental Regulation of Diagnostics Products
The testing, manufacture and sale of the Company's products is subject to
regulation by numerous governmental authorities, principally the FDA and certain
foreign regulatory agencies. Pursuant to the Federal Food, Drug, and Cosmetic
Act, and the regulations promulgated thereunder, the FDA regulates the
preclinical and clinical testing, manufacture, labeling, distribution and
promotion of medical devices. The Company will not be able to commence marketing
or commercial sales in the United States of new products under development until
it receives clearance from the FDA. The testing for, preparation of and
subsequent FDA regulatory review of required filings can be a lengthy, expensive
and uncertain process. Noncompliance with applicable requirements can result in,
among other consequences, fines, injunctions, civil penalties, recall or seizure
of products, repair, replacement or refund of the cost of products, total or
partial suspension of production, failure of the government to grant premarket
clearance or premarket approval for devices, withdrawal of marketing clearances
or approvals, and criminal prosecution.
There can be no assurance that the Company will be able to obtain
necessary regulatory approvals or clearances for its products on a timely basis,
if at all, and delays in receipt of or failure to receive such approvals or
clearances, the loss of previously received approvals or clearances, limitations
on intended use imposed as a condition of such approvals or clearances or
failure to comply with existing or future regulatory requirements could have a
material adverse effect on the Company's business.
Dependence on Distribution Partners for Sales of Diagnostic Products in
International Markets
The Company has entered into distribution agreements with collaborative
partners in which Corgenix has granted distribution rights for certain Corgenix
products to these partners within specific international geographic areas.
Pursuant to these agreements, the Company's collaborative partners have certain
responsibilities for market development, promotion, and sales of the products.
If any of these partners fails to perform its contractual obligations or
terminates its agreement, this could have a material adverse effect on the
Company's business, financial condition and results of operation.
Governmental Regulation of Manufacturing and Other Activities
As a manufacturer of medical devices for marketing in the United States,
the Company is required to adhere to applicable regulations setting forth
detailed good manufacturing practice requirements, which include testing,
control and documentation requirements. The Company must also comply with
Medical Device Report ("MDR") requirements, which require that a manufacturer
report to the FDA any incident in which its product may have caused or
contributed to a death or serious injury, or in which its product malfunctioned
and, if the malfunction were to recur, it would be likely to cause or contribute
to a death or serious injury. The Company is also subject to routine inspection
by the FDA for compliance with QSR requirements, MDR requirements and other
applicable regulations. The FDA has recently implemented new QSR requirements,
including the addition of design controls that will likely increase the cost of
compliance. Labeling and promotional activities are subject to scrutiny by the
FDA and, in certain circumstances, by the Federal Trade Commission. The Company
may incur significant costs to comply with laws and regulations in the future,
which may have a material adverse effect upon the Company's business, financial
condition and results of operations.
Regulation Related to Foreign Markets
Distribution of diagnostic products outside the United States is subject
to extensive government regulation. These regulations, including the
requirements for approvals or clearance to market, the time required for
regulatory review and the sanctions imposed for violations, vary from country to
country. The Company may be required to incur significant costs in obtaining or
maintaining its foreign regulatory approvals. In addition, the export by the
Company of certain of its products that have not yet been cleared for domestic
commercial distribution may be subject to FDA export restrictions. Failure to
obtain necessary regulatory or the failure to comply with regulatory
requirements could have a material adverse effect on the Company's business,
financial condition and results of operations.
Uncertain Availability of Third Party Reimbursement for Diagnostic
Products
In the United States, health care providers that purchase diagnostic
products, such as hospitals and physicians, generally rely on third party
payors, principally private health insurance plans, federal Medicare and state
Medicaid, to reimburse all or part of the cost of the procedure. Third party
payors are increasingly scrutinizing and challenging the prices charged for
medical products and services and they can affect the pricing or the relative
attractiveness of the Decreases in reimbursement amounts for tests performed
using the Company's diagnostic products, failure by physicians and other users
to obtain reimbursement from third party payors, or changes in government and
private third party payors' policies regarding reimbursement of tests utilizing
diagnostic products, may affect the Company's ability to sell its diagnostic
products profitably. Market acceptance of the Company's products in
international markets is also dependent, in part, upon the availability of
reimbursement within prevailing health care payment systems.
Uncertainty of Protection of Patents, Trade Secrets and Trademarks
The Company's success depends, in part, on its ability to obtain patents
and license patent rights, to maintain trade secret protection and to operate
without infringing on the proprietary rights of others. There can be no
assurance that the Company's issued patents will afford meaningful protection
against a competitor, or that patents issued to the Company will not be
infringed upon or designed around by others, or that others will not obtain
patents that the Company would need to license or design around. The Company
could incur substantial costs in defending itself or its licensees in litigation
brought by others or prosecuting infringement claims against third parties. If
the outcome of any such litigation is unfavorable to the Company, the Company's
business could be adversely affected.
Risks Regarding Potential Future Acquisitions
The Company's growth strategy includes as a material element the desire to
acquire complementary companies, products or technologies. There is no assurance
that the Company will be able to identify appropriate companies or technologies
to be acquired, to negotiate satisfactory terms for such an acquisition, or to
obtain sufficient capital to make such acquisitions. Moreover, because of
limited cash resources, the Company will be unable to acquire any significant
companies or technologies for cash and the Company's ability to effect
acquisitions in exchange for the Company's capital stock may depend upon the
market prices for the Common Stock. If the Company does complete one or more
acquisitions, a number of risks arise, such as short-term negative effects on
the Company's reported operating results, diversion of management's attention,
unanticipated problems or legal liabilities, and difficulties in the integration
of potentially dissimilar operations. The occurrence of some or all of these
risks could have a material adverse effect on the Company's business, financial
condition and results of operations.
Dependence on Suppliers
The components of the Company's products include chemical and packaging
supplies that are generally available from several suppliers, except certain
antibodies, which the Company purchases from single suppliers. The Company
mitigates the risk of a loss of supply by maintaining a sufficient supply of
such antibodies to ensure an uninterrupted supply for at least six months.
Although the Company believes that it can substitute a new supplier with respect
to any of these components in a timely manner, there can be no assurances that
the Company will be able to substitute a new supplier in a timely manner and
failure to do so could have a material adverse effect on the Company's business,
financial condition and results of operations.
Limited Manufacturing Experience with Certain Products
Although the Company has manufactured over ten million diagnostic tests
based on its proprietary applications of ELISA technology, certain of the
Company's diagnostic products in development or in consideration for future
development, incorporate technologies with which the Company has no
manufacturing experience. Assuming successful development and receipt of
required regulatory approvals, significant work may be required to scale up
production for each new product prior to such product's commercialization. There
can be no assurance that such work can be completed in a timely manner and that
such new products can be manufactured cost-effectively, to regulatory standards
or in sufficient volume.
Seasonality of Products; Quarterly Fluctuations in Results of Operations
The Company's revenue and operating results have historically been
minimally subject to quarterly fluctuations. There can be no assurance that such
seasonality in the Company's results of operations will not have a material
adverse effect on the Company's business.
Dependence on Key Personnel
Because of the specialized nature of the Company's business, the success
of the Company will be highly dependent upon its ability to attract and retain
qualified scientific and executive personnel. In particular, the Company
believes its success will depend to a significant extent on the efforts and
abilities of Dr. Luis R. Lopez and Douglass T. Simpson, who would be difficult
to replace. There can be no assurance that the Company will be successful in
attracting and retaining such skilled personnel, who are generally in high
demand by other companies. The loss of, inability to attract, or poor
performance by key scientific and executive personnel may have a material
adverse effect on the Company's business, financial condition and results of
operations.
Product Liability Exposure and Limited Insurance
The testing, manufacturing and marketing of medical diagnostic devices
entails an inherent risk of product liability claims. To date, the Company has
experienced no product liability claims, but any such claims arising in the
future could have a material adverse effect on the Company's business, financial
condition and results of operations. The Company's product liability insurance
coverage is currently limited to $2 million. Potential product liability claims
may exceed the amount of the Company's insurance coverage or may be excluded
from coverage under the terms of the Company's policy or limited by other claims
under the Company's umbrella insurance policy. Additionally, there can be no
assurance that the Company's existing insurance can be renewed by the Company at
a cost and level of coverage comparable to that presently in effect, if at all.
In the event that the Company is held liable for a claim against which it is not
insured or for damages exceeding the limits of its insurance coverage, such
claim could have a material adverse effect on the Company's business, financial
condition and results of operations.
New Business Strategy
The Company established a new wholly owned subsidiary,
health-outfitters.com, Inc., in December 1999. This subsidiary will focus on
sales of consumer healthcare products primarily through e-commerce using the
Company's website, www.healthoutfitters.com. Neither the Company nor its current
management has any experience in managing internet businesses, and the Company
may not be able to successfully develop this new business. The demands of
attempting to grow this new business may prevent management from devoting time
and attention to the Company's traditional business, and that traditional
business may decline.
The e-commerce healthcare market is a relatively new and unproven
business. Whether the Company succeeds depends upon broad acceptance of
internet-based healthcare product purchasing.
Competition in the e-commerce industry is, and is expected to remain,
significant. The competitors for the new business range from development stage
internet companies to divisions of larger companies. Many of these companies
have financial, marketing, sales, manufacturing, distribution and other
resources significantly greater than those of the Company. In addition, many of
these companies have name recognition, established positions in the market and
existing relationships with customers and distributors.
Limited Public Market; Possible Volatility in Stock Prices; Penny Stock
Rules
There has, to date, been no active public market for the Company's Common
Stock, and there can be no assurance that an active public market will develop
or be sustained. Although the Company's Common Stock has been traded on the OTC
Bulletin Board(R) since February 1998, the trading has been sporadic with
insignificant volume.
Moreover, the over-the-counter markets for securities of very small
companies such as the Company historically have experienced extreme price and
volume fluctuations during certain periods. These broad market fluctuations and
other factors, such as new product developments and trends in the Company's
industry and the investment markets and economic conditions generally, as well
as quarterly variation in the Company's results of operations, may adversely
affect the market price of the Company's Common Stock. In addition, the
Company's Common Stock is subject to rules adopted by the Securities and
Exchange Commission regulating broker-dealer practices in connection with
transactions in "penny stocks." As a result, many brokers are unwilling to
engage in transactions in the Company's Common Stock because of the added
disclosure requirements.
<PAGE>
CORGENIX MEDICAL CORPORATION
Part II
Other Information
Item 1. Legal Proceedings
Corgenix is not a party to any material litigation or legal proceedings.
Item 2. Changes in Securities and Use of Proceeds
On October 12, 1999, the Company issued to Transglobal Financial
Corporation ("Transglobal") two hundred seventy two thousand, seven hundred
twenty seven (272,727) restricted shares of common stock of the Company in
consideration of the termination of the Consulting Agreement as specified in the
Settlement Agreement (defined below).
On October 12, 1999, the Company issued to Transition Partners Ltd.
("TPL") one hundred twenty six thousand, four hundred sixty eight (126,468)
restricted shares of common stock of the Company in conversion of the past due
amount of $37,940.36 due TPL for past consulting services.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of the Company's security holders
during this report period.
Item 5. Other Information
On October 7, 1999, the Company and Transglobal agreed to terminate the
Consulting Agreement dated May 22, 1998 (the "Consulting Agreement") with
Transglobal and Mr. Mike Mustafoglu, a former Director of the Company ("Mr.
Mustafoglu"), the President of Transglobal, and to execute a settlement
agreement ("Settlement Agreement") and a general release ("General Release"). As
part of the Settlement Agreement, the Company executed a note in the amount of
$55,000 in favor or Transglobal in payment of unpaid consulting invoices
pursuant to the Consulting Agreement; and issued to Transglobal two hundred
seventy two thousand, seven hundred twenty seven (272,727) restricted shares of
common stock of the Company in consideration of the termination of the
Consulting Agreement as specified in the Settlement Agreement.
On October 7, 1999, the Company agreed to issue to TPL one hundred twenty
six thousand, four hundred sixty eight (126,468) restricted shares of common
stock of the Company in conversion of the past due amount of $37,940.36 due TPL
for past consulting services.
On October 7, 1999, Dr. Catherine A. Fink was elected Vice President of
the Company.
In December 1999, the Company announced the formation of
health-outfitters.com, Inc., a new wholly owned subsidiary which will focus on
sales of consumer healthcare products primarily through e-commerce. The Company
is developing a website, www.healthoutfitters.com which is expected to become
active in the third fiscal quarter of the current year.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
<PAGE>
Exhibit
Number Description of Exhibit
2.1 Agreement and Plan of Merger dated as of May 12, 1998 by
and among Gray Wolf Technologies, Inc., Gray Wolf
Acquisition Corp. and REAADS Medical Products, Inc. (filed
as Exhibit 2.1 to the Company's Registration Statement on
Form 10-SB filed June 29, 1998, and incorporated herein by
reference).
2.2 First Amendment to Agreement and Plan of Merger dated as
of May 22, 1998 by and among Gray Wolf Technologies, Inc.,
Gray Wolf Acquisition Corp. and REAADS Medical Products,
Inc. (filed as Exhibit 2.2 to the Company's Registration
Statement on Form 10-SB filed June 29, 1998, and
incorporated herein by reference).
2.3 Second Amendment to Agreement and Plan of Merger dated as of June 17,
1998 by and among the Company and TransGlobal Financial Corporation
(filed as Exhibit 2.3 to the Company's Registration Statement on Form
10-SB filed June 29, 1998, and incorporated herein by reference).
3.1 Articles of Incorporation, as amended (filed as Exhibit 3.1 to the
Company's Registration Statement on Form 10-SB filed June 29, 1998, and
incorporated herein by reference).
3.2 Bylaws (filed as Exhibit 3.2 to the Company's Registration Statement on
Form 10-SB filed June 29, 1998, and incorporated herein by reference).
3.3* Articles of Incorporation of health-outfitters.com, Inc.
dated November 16, 1999.
3.4* Bylaws of health-outfitters.com, Inc. dated November 16,
1999.
10.1 Manufacturing Agreement dated September 1, 1994 between
Chugai Pharmaceutical Co., Ltd. and REAADS Medical
Products, Inc. (filed as Exhibit 10.1 to the Company's
Registration Statement on Form 10-SB filed June 29, 1998,
and incorporated herein by reference).
10.2 Amendment to the Manufacturing Agreement dated as of
January 17, 1995 between Chugai Pharmaceutical Co., Ltd.
and REAADS Medical Products, Inc.(filed as Exhibit 10.2 to
the Company's Registration Statement on Form 10-SB filed
June 29, 1998, and incorporated herein by reference).
10.3 Amendment Agreement dated November 17, 1997 between
Chugai Diagnostic Science, Co., Ltd. and REAADS Medical
Products, Inc.(filed as Exhibit 10.3 to the Company's
Registration Statement on Form 10-SB filed June 29, 1998,
and incorporated herein by reference).
10.4 Distribution Agreement dated August 26, 1993 between
Chugai Pharmaceutical Co., Ltd. and REAADS Medical
Products, Inc.(filed as Exhibit 10.4 to the Company's
Registration Statement on Form 10-SB filed June 29, 1998,
and incorporated herein by reference).
10.5 Amendment to the Distribution Agreement dated September 7,
1994 between Chugai Pharmaceutical Co., Ltd. and REAADS
Medical Products, Inc. (filed as Exhibit 10.5 to the
Company's Registration Statement on Form 10-SB filed June
29, 1998, and incorporated herein by reference).
10.6 Distribution Agreement dated November 14, 1997 between
Chugai Diagnostics Science Co, Ltd. and REAADS Bio-Medical
Products (UK) Ltd. (filed as Exhibit 10.6 to the Company's
Registration Statement on Form 10-SB filed June 29, 1998,
and incorporated herein by reference).
10.9 Office Lease dated February 6, 1996 between Stream
Associates, Inc. And REAADS Medical Products, Inc. (filed
as Exhibit 10.9 to the Company's Registration Statement on
Form 10-SB filed June 29, 1998, and incorporated herein by
reference).
10.10 Guarantee dated November 1, 1997 between William George Fleming,
Douglass Simpson and Geoffrey Vernon Callen (filed as Exhibit 10.10 to
the Company's Registration Statement on Form 10-SB filed June 29, 1998,
and incorporated herein by reference).
10.11 Employment Agreement dated May 22, 1998 between Luis R. Lopez and the
Company (filed as Exhibit 10.11 to the Company's Registration Statement
on Form 10-SB filed June 29, 1998, and incorporated herein by
reference).
10.12 Employment Agreement dated May 22, 1998 between Douglass T. Simpson and
the Company (filed as Exhibit 10.12 to the Company's Registration
Statement on Form 10-SB filed June 29, 1998, and incorporated herein by
reference).
10.13 Employment Agreement dated May 22, 1998 between Ann L. Steinbarger and
the Company (filed as Exhibit 10.13 to the Company's Registration
Statement on Form 10-SB filed June 29, 1998, and incorporated herein by
reference).
10.14 Employment Agreement dated May 22, 1998 between Taryn G. Reynolds and
the Company (filed as Exhibit 10.14 to the Company's Registration
Statement on Form 10-SB filed June 29, 1998, and incorporated herein by
reference).
10.15 Employment Agreement dated May 22, 1998 between Catherine (O'Sullivan)
Fink and the Company (filed as Exhibit 10.15 to the Company's
Registration Statement on Form 10-SB filed June 29, 1998, and
incorporated herein by reference).
10.16 Consulting Contract dated May 22, 1998 between Wm. George
Fleming, Bond Bio-Tech, Ltd. and the Company (filed as
Exhibit 10.16 to the Company's Registration Statement on
Form 10-SB filed June 29, 1998, and incorporated herein by
reference).
10.17 Stock Purchase Agreement dated September 1, 1993 between
Chugai Pharmaceutical Co., Ltd. and REAADS Medical
Products, Inc. (filed as Exhibit 10.17 to the Company's
Registration Statement on Form 10-SB filed June 29, 1998,
and incorporated herein by reference).
10.19 Note dated January 6, 1997 between REAADS Medical Products, Inc. and
Eagle Bank (filed as Exhibit 10.19 to the Company's Registration
Statement on Form 10-SB filed June 29, 1998, and incorporated herein by
reference).
10.20 Deed of Guarantee Sterling and Currency dated May 14, 1997 by REAADS
Bio-Medical Products (UK) Limited (filed as Exhibit 10.20 to the
Company's Registration Statement on Form 10-SB filed June 29, 1998, and
incorporated herein by reference).
10.21 Option Agreement dated as of May 22, 1998 between TransGlobal Financial
Corporation and the Company (filed as Exhibit 10.21 to the Company's
Registration Statement on Form 10-SB filed June 29, 1998, and
incorporated herein by reference).
10.22 Consulting Agreement dated May 22, 1998 between TransGlobal Financial
Corporation and the Company (filed as Exhibit 10.22 to the Company's
Registration Statement on Form 10-SB filed June 29, 1998, and
incorporated herein by reference).
10.24 Form of Indemnification Agreement between the Company and its directors
and officers (filed as Exhibit 10.24 to the Company's Registration
Statement on Form 10-SB/A-1 filed September 24, 1998, and incorporated
herein by reference)
10.25* Settlement Agreement and General Release dated September
21, 1999 with Transglobal Financial Corporation and the Company.
10.26* Promissory note dated September 21, 1999 with Transglobal Financial
Corporation and the Company.
21.1* Amended Subsidiaries of the Registrant (filed as Exhibit 21.1 to the
Company's Registration Statement on Form 10-SB filed June 29, 1998).
27* Financial Data Schedule
* Filed herewith.
- ----------------------------------------
(b) Reports on Form 8-K.
None
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CORGENIX MEDICAL CORPORATION
February 9, 2000 By: /s/ Luis R. Lopez
Luis R. Lopez, M.D.
Chairman and Chief Executive Officer
Exhibit 3.3
ARTICLES OF INCORPORATION
OF
HEALTH-OUTFITTERS.COM, INC.
The undersigned (who, if a natural person, is eighteen years of age or
older), acting as the incorporator of a corporation to be incorporated under
the laws of the State of Colorado, adopts these articles of incorporation.
ARTICLE I
NAME
The name of the Corporation is Health-Outfitters.com, Inc.
ARTICLE II
OFFICES
The street address of the initial registered office of the Corporation is
12061 Tejon Street, Westminster, Colorado 80234, and the name of the initial
registered agent at that address is Douglass T. Simpson. The written consent of
the initial registered agent to the appointment as such is stated below.
The address of the Corporation's initial principal office is 12061 Tejon
Street, Westminster, Colorado 80234.
ARTICLE III
INCORPORATOR
The name and address of the incorporator is Steven A. Erickson, 1215
Spruce Street, Suite 100, Boulder, Colorado 80302.
ARTICLE IV
PURPOSE
The purpose for which the Corporation is organized is to engage in the
transaction of all lawful business for which corporations may be incorporated
pursuant to the Colorado Business Corporation Act.
ARTICLE V
AUTHORIZED CAPITAL
The aggregate number of shares which the corporation is authorized to
issue is One Hundred Thousand (100,000) shares of common stock, $.001 par
value. All common stock will be of the same class and it shall have full
voting power and be fully paid and non-assessable.
ARTICLE VI
PREEMPTIVE RIGHTS
The shareholders shall not have preemptive rights.
ARTICLE VII
CUMULATIVE VOTING
Cumulative voting shall not be permitted in the election of directors.
ARTICLE VIII
QUORUM FOR SHAREHOLDERS' MEETINGS
A majority of the outstanding shares shall constitute a quorum at any
meeting of shareholders. Except as is otherwise provided by the Colorado
Business Corporation Act with respect to action on amendment to these articles
of incorporation, on a plan of merger or share exchange, on the disposition of
substantially all of the property of the Corporation, on the granting of consent
to the disposition of property by an entity controlled by the Corporation, and
on the dissolution of the Corporation, action on a matter other than the
election of directors is approved if a quorum exists and if the votes cast
favoring the action exceed the votes cast opposing the action.
ARTICLE IX
BOARD OF DIRECTORS
The corporate powers shall be exercised by or under the authority of, and
the business and affairs of the Corporation shall be managed under the direction
of, a board of directors.
The name and address of the initial member of the initial board of
directors is as follows:
NAME ADDRESS
Douglass T. Simpson 12061 Tejon Street
Boulder, Colorado 80234
The directors shall be elected at each annual meeting of the shareholders,
provided that vacancies may be filled by election by the remaining directors,
though less than a quorum, or by the shareholders at a special meeting called
for that purpose. Despite the expiration of his or her term, a director
continues to serve until his or her successor is elected and qualifies.
ARTICLE X
LIMITATION ON DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or to its shareholders for monetary damages for breach of fiduciary
duty as a director; except that this provision shall not eliminate or limit the
liability of a director to the Corporation or to its shareholders for monetary
damages otherwise existing for (i) any breach of the director's duty of loyalty
to the Corporation or to its shareholders; (ii) acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law;
(iii) acts specified in Section 7-108-403 of the Colorado Business Corporation
Act; or (iv) any transaction from which the director directly or indirectly
derived any improper personal benefit. If the Colorado Business Corporation Act
is hereafter amended to eliminate or limit further the liability of a director,
then, in addition to the elimination and limitation of liability provided by the
preceding sentence, the liability of each director shall be eliminated or
limited to the fullest extent permitted by the Colorado Business Corporation Act
as so amended. Any repeal or modification of this Article X shall not adversely
affect any right or protection of a director of the Corporation under this
Article X, as in effect immediately prior to such repeal or modification, with
respect to any liability that would have accrued, but for this Article X, prior
to such repeal or modification.
ARTICLE XI
INDEMNIFICATION
The Corporation shall indemnify, to the fullest extent permitted by
applicable law in effect from time to time, any person, and the estate and
personal representative of any such person, against all liability and expense
(including attorney's fees) incurred by reason of the fact that he is or was a
director or officer of the Corporation or, while serving as a director or
officer of the Corporation, he is or was serving at the request of the
Corporation as a director, officer, partner, trustee, employee, fiduciary, or
agent of, or in any similar managerial or fiduciary position of, another
domestic or foreign corporation or other individual or entity or of an employee
benefit plan. The Corporation shall also indemnify any person who is serving or
has served the Corporation as director, officer, employee, fiduciary, or agent,
and that person's estate and personal representative, to the extent and in the
manner provided in any bylaw, resolution of the shareholders or directors,
contract, or otherwise, so long as such provision is legally permissible.
s/Steven A. Erickson
------------------------------------
Steven A. Erickson
Incorporator
The undersigned consents to the appointment as the initial
registered agent of Health-Outfitters.com, Inc.
s/Douglass T. Simpson
------------------------------------
Douglass T. Simpson
Initial Registered Agent
<PAGE>
Exhibit 3.4
BYLAWS
OF
HEALTH-OUTFITTERS.COM, INC.
ARTICLE I
Offices
Principal Office. The principal office and place of business of the corporation
shall be at such location as the Board of Directors may from time to time
determine. Additional offices and places of business may be established from
time to time by resolution of the Board of Directors both within and without the
State of Colorado.
Registered Office. The registered office of the corporation, required by the
Colorado Business Corporation Act to be maintained in the State of Colorado, may
be, but need not be identical to the principal office of the corporation in the
State of Colorado, and the address of the registered office may be changed from
time to time by the Board of Directors.
Shareholders
Place of Meetings. All meetings of the shareholders of the corporation shall be
held at the principal office of the corporation or at such other place as may be
designated in the notice of meeting.
Annual Meeting. In the absence of a resolution of the Board of Directors
providing otherwise, the regular annual meeting of the shareholders shall be
held on the first Tuesday in April of each year at the hour of 10:00 a.m. If the
day fixed for the annual meeting is a legal holiday, such meeting shall be held
on the next succeeding business day. At such meeting, the shareholders shall
elect, by a majority vote of the shareholders present at such meeting, a Board
of Directors, and shall transact such other business as may properly be brought
before the meeting. If the election of directors shall not be held on the date
designated herein for the annual meeting, the Board of Directors shall cause the
election to be held as soon thereafter as conveniently possible. At any such
meeting the shareholders may elect the Directors and transact other business
with the same force and effect as if an annual meeting was duly called and held.
Failure to hold the annual meeting at the designated time shall not work a
forfeiture or dissolution of the corporation. Any Director elected at an annual
meeting shall continue to serve until his or her successor has been elected by
the procedure aforementioned, subject, however, to the provisions of Error!
Reference source not found. and Error! Reference source not found. of these
Bylaws.
Special Meetings. Special meetings of shareholders may be called by the
President, the Board of Directors, or the holders of not less than one-tenth
(1/10th) of all shares entitled to vote on the subject matter for which the
meeting is called.
Notice of Meetings. Written notice stating the place, day and hour of the
meeting of shareholders and, in case of a special meeting, the purpose or
purposes for which the meeting is called, shall, unless otherwise prescribed by
statute, be delivered not less than ten nor more than sixty (60) days before
the date of the meeting, either personally or by mail, by or at the direction
of the President, Secretary, or the officer or other persons calling the
meeting, to each shareholder of record entitled to vote at such meeting; except
that if the Articles of Incorporation of the corporation are to be amended to
increase the number of authorized shares, at least thirty days' notice shall
be given.
No notice of a meeting need be given to any shareholder who shall in writing
waive such notice, whether before, at, or after the stated time of any such
meeting; and the attendance of a shareholder or such shareholder's signing of
the minutes of any meeting shall be deemed a waiver of, and equivalent to,
formal notice of such meeting.
Any written notice required to be given by law, the Articles of Incorporation,
or these Bylaws, if mailed, shall be deemed given when deposited in the United
States mail, with postage prepaid, addressed to the shareholder at the address
appearing on the stock transfer books of the corporation. However, if three
successive letters mailed to the last-known address of any shareholder of record
are returned as undeliverable, no further notices to such shareholder shall be
required, until another address for such shareholder is made known to the
corporation. Failure to deliver notice of a meeting or obtain a waiver thereof
shall not cause the meeting to be lost, but it shall be adjourned by the
shareholders present for a period not to exceed sixty (60) days until any
deficiency in notice or waiver shall be supplied.
Record Date for Determination of Shareholders.
In order to make a determination of shareholders (1) entitled to notice of or to
vote at any shareholders' meeting or at any adjournment of a shareholders'
meeting, (2) entitled to demand a special shareholders' meeting, (3) entitled to
take any other action, (4) entitled to receive payment of a share dividend or a
distribution, or (5) for any other purpose, the board of directors may fix a
future date as the record date for such determination of shareholders. The
record date may be fixed not more than seventy days before the date of the
proposed action.
Unless otherwise specified when the record date is fixed, the time of day for
determination of shareholders shall be as of the Corporation's close of business
on the record date.
A determination of shareholders entitled to be given notice of or to vote at a
shareholders' meeting is effective for any adjournment of the meeting unless the
board of directors fixes a new record date, which the board shall do if the
meeting is adjourned to a date more than one hundred twenty days after the date
fixed for the original meeting.
If no record date is otherwise fixed, the record date for determining
shareholders entitled to be given notice of and to vote at an annual or special
shareholders' meeting is the day before the first notice is given to
shareholders.
The record date for determining shareholders entitled to take action without
a meeting pursuant to Error! Reference source not found. and Error! Reference
source not found. is the date a writing upon which the action is taken is
first received by the Corporation.
Voting List. After a record date is fixed for a shareholders' meeting, the
secretary shall prepare a list of the names of all its shareholders who are
entitled to be given notice of the meeting. The list shall be arranged by voting
groups and within each voting group by class or series of shares, shall be
alphabetical within each class or series, and shall show the address of, and the
number of shares of each such class and series that are held by, each
shareholder.
The shareholders' list shall be available for inspection by any shareholder,
beginning the earlier of ten days before the meeting for which the list was
prepared to two business days after notice of the meeting is given and
continuing through the meeting, and any adjournment thereof, at the
Corporation's principal office or at a place identified in the notice of the
meeting in the city where the meeting will be held.
The secretary shall make the shareholders' list available at the meeting, and
any shareholder or agent or attorney of a shareholder is entitled to inspect the
list at any time during the meeting or adjournment.
Quorum. A quorum, for purposes of a shareholders' meeting, will consist of a
majority of the shares entitled to vote at such meeting, represented in person
or by proxy, unless otherwise provided by law or the Articles of Incorporation
or by order of a court. If a quorum is not represented at any meeting of the
shareholders, such meeting may be adjourned for a period not to exceed one
hundred twenty (120) days at any one adjournment.
Voting Requirements. If a quorum is present, the affirmative vote of a majority
of the shares outstanding which are entitled to vote on the subject matter shall
be the act of the shareholders, unless the vote of a greater proportion or
number or voting by classes is otherwise required by statute or by the Articles
of Incorporation or these Bylaws.
Voting Rights. Unless otherwise provided by the Articles of Incorporation, each
outstanding share entitled to vote shall be entitled to one vote upon each
matter submitted to a vote at a meeting of shareholders, and each fractional
share shall be entitled to a corresponding fractional vote on each such matter.
Registered shareholders only shall be entitled to be treated by the corporation
as holders in fact of the stock outstanding in their respective names; and the
corporation shall not be bound to recognize any equitable or other claim to or
interest in any share on the part of any other person, firm or corporation,
whether or not it shall have express or other notice thereof, except as
expressly provided by the laws of the State of Colorado.
Proxies. Unless otherwise provided by resolution, a shareholder may vote either
in person or by proxy executed in writing by the shareholder, or by such
shareholder's duly authorized attorney in fact. No proxy shall be valid after
eleven (11) months from the date of its execution, unless otherwise provided in
the proxy.
Action by Shareholders Without a Meeting. Any action required or permitted to be
taken at a meeting of the shareholders may be taken without a meeting if a
consent in writing, setting forth the action so taken, shall be signed by all of
the shareholders entitled to vote with respect to the subject matter thereof.
Meetings By Telecommunications. Any or all of the shareholders may participate
in an annual or special shareholders' meeting by, or the meeting may be
conducted through the use of, any means of communication by which all persons
participating in the meeting may hear each other during the meeting. A
shareholder participating in a meeting by this means is deemed to be present in
person at the meeting.
Board of Directors
Powers. The property and business of the corporation shall be managed by the
Board of Directors, who need not be shareholders of the corporation or residents
of this state. The Board of Directors may exercise all such powers and do all
such lawful acts and things as are not prohibited by statute, or by the Articles
of Incorporation, or these Bylaws. The Directors may receive such fees as may be
determined by appropriate resolution of the Board of Directors.
Number, Election, Tenure and Qualification. The number of directors who shall
constitute the whole Board of Directors shall be fixed from time to time by
resolution of the Board of Directors and in accordance with the Articles of
Incorporation. The number of Directors may be decreased at any time and from
time to time by a vote of a majority of the Directors then in office, but no
decrease shall have the effect of shortening the term of any incumbent Director.
Each director shall be elected at the annual meeting of the shareholders, or
some adjournment thereof, and shall hold office until the next annual meeting of
shareholders and until the director's successor is elected and qualified.
Directors need not be residents of the State of Colorado or shareholders of the
corporation.
Vacancies. Any vacancy occurring on the Board of Directors (including a vacancy
resulting from an enlargement of the Board) may be filled by the affirmative
vote of the majority of the remaining Directors, even though such remaining
directors constitute less than a quorum of the Board of Directors. A Director
elected to fill a vacancy shall be elected for the unexpired term of his or her
predecessor in office, and a Director elected to fill a position resulting from
an increase in the number of Directors shall hold office until the next annual
meeting of shareholders and until his or her successor is elected and qualified,
or until his or her earlier death, resignation or removal.
Resignation. Any director of the corporation may resign at any time by giving
written notice to the president or the secretary of the corporation. The
resignation of any director shall take effect upon receipt of notice thereof or
at such later time as shall be specified in such notice; and, unless otherwise
specified therein, the acceptance of such resignation shall not be necessary to
make it effective.
Removal. The shareholders may, at a meeting called for the express purpose of
removing Directors, by a majority vote of the shares entitled to vote at an
election of Directors, remove the entire Board of Directors or any lesser
number, with or without cause. If less than the entire Board is to be removed,
and if cumulative voting is permitted by the Articles of Incorporation, no one
of the Directors may be removed if the votes cast against such Director's
removal would be sufficient to elect such Director if then cumulatively voted at
an election of the entire Board of Directors.
Annual Meeting. The annual meeting of the Board of Directors shall be held
following the annual meeting of shareholders in each year. Such meetings may be
held within or without the State of Colorado and may be held without previous
notice if a Director entitled to notice attends the meeting or upon execution of
waiver of notice, in the minutes or otherwise, by Directors so waiving the
notice.
Regular Meetings. The Board of Directors may provide, by resolution, the time
and place, either within or without the State of Colorado, for the holding of
additional regular meetings without other notice than such resolution.
Special Meetings. Special meetings of the Board of Directors may be called at
any time by the President, by any Director, or by the Secretary upon one (1)
day's oral or written notice. Such meetings may be held within or without the
State of Colorado and may be held without previous notice if a Director entitled
to notice attends the meeting or upon execution of waiver of notice, in the
minutes or otherwise, by Directors so waiving the notice, unless a director
attends a meeting for the express purpose of objecting to the transaction of any
business because the meeting is not lawfully called or convened.
Quorum. A majority of the Board shall constitute a quorum of the Board. Except
as otherwise required by the Articles of Incorporation, the act of the majority
of the Directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors, unless the act of a greater number is required by
law, the Articles of Incorporation, or these Bylaws.
Action of Directors by Written Consent. Any action required or permitted to be
taken by the Board of Directors or by a committee thereof at a meeting may be
taken without a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the directors or all of the committee members
entitled to vote with respect to the subject matter thereof.
Action by Electronic Means. Members of the Board of Directors may participate in
any meeting of the Board of Directors by means of conference telephone or
similar communications equipment by which all persons participating in the
meeting can hear each other at the same time. Notice of any such meeting to be
conducted by conference telephone or similar equipment shall be given to a
Director in person or by telephone at least one (1) hour prior to the time fixed
for the meeting. Such participation in the meeting shall constitute presence in
person at the meeting.
Committees. The Board of Directors may designate from among its members, by
resolution adopted by a majority of the Directors, an executive committee and
one or more other committees each of which shall have and may exercise such
authority in the management of the corporation as shall be provided in such
resolution or in these Bylaws, subject to the limitations prescribed by the
Colorado Business Corporation Act.
Officers
Officers. The officers of the corporation shall consist of a President, Vice
President, Secretary, and Treasurer, each of whom shall be appointed by the
Board of Directors. The Board of Directors or the President, acting singly, may
appoint such other officers and assistant officers as are deemed necessary. Any
two (2) or more offices may be held by the same persons. All officers of the
corporation shall be natural persons of the age of 18 years or more.
Term of Office. The officers shall hold office until their successors are
appointed.
Removal. Any officer or agent may be removed at any time by the Board of
Directors, but such removal shall be without prejudice to the contract rights,
if any, of the person so removed. Appointment of an officer or agent shall not,
of itself, create contract rights.
Vacancies. Whenever any vacancy shall occur in any office by death, resignation,
increase in number of officers of the corporation or otherwise, the same shall
be filled by the Board of Directors and the officer so appointed shall hold
office until his or her successor is chosen.
President. The President shall be the chief executive officer of the corporation
and shall, subject to the control of the Board of Directors, have general
supervision, direction, and control of the business and officers of the
corporation. Unless some other person is specifically authorized by the Board of
Directors, the President shall preside at all meetings of the shareholders and
of the Board of Directors. The President shall perform all the duties commonly
incident to the office of President and such other duties as the Board of
Directors shall designate, including, but not limited to serving on committees
of the Board of Directors.
Vice President. In the absence or disability of the President, the Vice
President or Vice Presidents, in order of their rank as fixed by the Board of
Directors, and if not ranked, the Vice Presidents in the order designated by the
Board of Directors, shall perform all the duties of the President, and when so
acting shall have all the powers of, and be subject to all the restrictions of
the President. Each Vice President shall have such other powers and perform such
other duties as may from time to time be assigned to such Vice President by the
President.
Secretary. The Secretary shall keep accurate minutes of all meetings of the
shareholders and the Board of Directors. The Secretary shall keep, or cause to
be kept, a register of the shareholders of the corporation and shall be
responsible for the giving of notice of meetings of the shareholders or of the
Board of Directors. The Secretary shall be custodian of the records and of the
seal of the corporation and shall attest the affixing of the seal of the
corporation when so authorized. The Secretary shall perform all duties commonly
incident to the office of Secretary and such other duties as may from time to
time be assigned to him or her by the President.
Assistant Secretary. An Assistant Secretary may, at the request of the
Secretary, or in the absence or disability of the Secretary, perform all of
the duties as may be assigned to him or her by the President or by the
Secretary.
Treasurer. The Treasurer, subject to the order of the Board of Directors, shall
have the care and custody of the money, funds, valuable papers and documents of
the corporation. The Treasurer shall keep accurate books of accounts of the
corporation's transactions, which shall be the property of the corporation, and
shall render financial reports and statements of condition of the corporation
when so requested by the Board of Directors or the President. The Treasurer
shall perform all duties commonly incident to the office of Treasurer and such
other duties as may from time to time be assigned to him or her by the
President.
Assistant Treasurer. An Assistant Treasurer may, at the request of the
Treasurer, or in the absence or disability of the Treasurer, perform all of
the duties as may be assigned to him or her by the President or by the
Treasurer.
Compensation. The salaries of the officers shall be fixed from time to time by
the Board of Directors and no officer shall be prevented from receiving such
salary by reason of the fact that such officer is also a director of the
corporation.
Indemnification of Directors, Officers,
Employees and Agents
The corporation shall indemnify its directors, officers, employees and
agents against liabilities and expenses arising out of legal proceedings brought
against them by reason of their status or service as a director, officer,
employee, or agent to the fullest extent permitted under the provisions of the
Colorado Business Corporation Act, as it may be amended from time to time.
Shares, Certificates for Shares,
and Transfer of Shares
Certificate of Shares. Each certificate for shares of the corporation's capital
stock shall be numbered, bear the signature of the President or Vice President,
and Secretary or Assistant Secretary, and be issued in numerical order from the
stock certificate book. The signatures of the President or Vice President and
the Secretary or Assistant Secretary upon a certificate may be facsimiles if the
certificate is countersigned by a transfer agent, or registered by a registrar,
other than the corporation itself or an employee of the corporation. If any
officer who has signed a certificate shall have ceased to be such officer before
such certificate is issued, the certificate may be issued by the corporation
with the same effect as if such person were such officer at the date of issue.
Transfer of Stock. Transfer of stock shall be made upon the proper stock books
of the corporation and shall be accompanied by the surrender of the duly
endorsed certificate or certificates representing the transferred stock.
Surrendered certificates shall be cancelled and attached to the corresponding
stubs in the stock certificate book, and new certificates issued to the persons
entitled thereto.
Regulations of Transfers. The Board of Directors shall have power and authority
to make all such further rules and regulations as they may deem expedient to
govern the issue, transfer, and registration of stock certificates not
inconsistent with the laws of the State of Colorado.
Lost Certificates. The Board of Directors may order a new certificate or
certificates of stock to be in place of any certificate or certificates of the
corporation alleged to have been lost or destroyed, by appropriate resolution
directing the issuance of said replacement shares, upon satisfactory proof of
such loss or destruction, and, at the discretion of the Board of Directors, upon
giving to the corporation a satisfactory bond of indemnity issued by one (1) or
more responsible sureties on such terms and in such amounts as the Board of
Directors may determine; but the Board of Directors may, in its discretion,
refuse to issue certificates save upon the order of some court having
jurisdiction in such matter.
Corporate Seal
The corporate seal shall consist of a circle containing the corporate name
around the upper border and at the bottom the word "Colorado" and in the center
of the circle the word "Seal."
Fiscal Year
The fiscal year of the corporation shall be as established by the Board of
Directors.
Amendment of Bylaws
These Bylaws may be altered, amended, or repealed at any regular meeting
of the Board of Directors or at a special meeting of the Board of Directors
called for that purpose. Nothing herein contained shall be construed to prevent
the amendment of these Bylaws by a majority vote of the shareholders present at
any regular or special meeting of shareholders properly called and held;
provided, however, that previous notice of such proposed amendment shall have
been given in the call for such special meeting.
CERTIFICATE
The foregoing Bylaws were adopted as the initial Bylaws of
Health-Outfitters.com, Inc., by the consent of the directors, effective
November 16, 1999.
S/ Taryn G. Reynolds
--------------------
Taryn G. Reynolds, Corporate Secretary
<PAGE>
Exhibit 10.25
SETTLEMENT AGREEMENT
THIS SETTLEMENT AGREEMENT ("Agreement") made effective as of September 21,
1999 by and between TransGlobal Financial Corporation ("TGF"), a Florida
corporation having its principal place of business at 1800 Century Park East,
Suite 600, Los Angeles, CA 90067, and Corgenix Medical Corporation ("COGX"), a
Nevada corporation having its principal place of business at 12061 Tejon Street,
Westminster, CO 80234.
RECITALS
A. TGF and COGX executed a Consulting Agreement dated May 22, 1998
("Consulting Agreement").
B. COGX has not paid the monthly retainer to TGF, as provided in the
Consulting Agreement, since August 1998.
C. TGF and COGX desire to: (i) settle and amicably resolve all claims
made and which could be made by and against the other; and (ii) terminate the
Consulting Agreement and any and all other agreements now existing between
the parties.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth in this Settlement Agreement, COGX and TGF hereby agree as follows:
1. Consulting Agreement. The Consulting Agreement is hereby terminated in
all respects effective the date of this Agreement. In consideration
of TGF agreeing to termination of the Consulting Agreement, COGX
agrees to issue to TGF 272,727 shares of COGX Common Stock (the
"Settlement Shares") (calculated as $60,000.00 divided by $0.22,
which is the average of the closing prices of COGX Common Stock for
the 30 trading days preceding September 1, 1999). TGF acknowledges
that the Settlement Shares have not been registered and are thus
restricted securities, as such term is defined in the Securities Act
of 1933, as amended (the "Act"), and therefore may not be sold or
otherwise transferred except pursuant to a registration statement
under the Act or in a transaction qualifying for an exemption from
registration under the Act.
2. Releases. COGX and TGF have executed and delivered General Releases of
even date herewith (copies attached) releasing each other from all
claims as described in the Releases.
3. Resignation of Alev Lewis. COGX and TGF agree that simultaneously with
the execution of this Agreement, Alev Lewis will resign from the
Board of Directors of COGX.
4. Past Due Consulting Fees, Promissory Note. COGX agrees to pay all of
the past due consulting fees to TGF in the form of a Promissory Note
("Note") attached to this Agreement. The Note shall have a face
amount of $55,000 and bear interest at the prime interest rate plus
two percent (2%). The principal and interest shall be paid to TGF by
COGX in 12 monthly installments, with the first payment to be made at
the execution of this Agreement by both parties.
5. Short Swing Profits, Expense Reimbursement. At the execution of this
Agreement, the Short Swing Profits realized by TGF from the sale of
COGX common stock owned by TGF is considered paid in exchange for TGF
waiving reimbursement of business expenses previously incurred by TGF
in performing its duties under the Consulting Agreement on behalf of
the Company plus waiver by TGF of all interest due on unpaid
consulting fees.
6. Execution. Each of TGF and COGX acknowledge, agree and represent to
each other that: (i) this Agreement, the General Releases, the
Settlement Shares, the Note, the resignation of Alev Lewis, and the
other amounts due under this Agreement (collectively the
"Settlement Documents") are not and shall not be deemed or
construed to be an admission of liability or that either TGF and
COGX has rights against the other or any entity referred to in this
Agreement; (ii) it has thoroughly discussed all aspects of the
Settlement Documents with counsel of its choice; (iii) it has
carefully read and fully understands all of the provisions of the
Settlement Documents; (iv) it is voluntarily entering into the
Settlement Documents; (v) in executing the Settlement Documents, it
does not rely and has not relied upon any representation or
warranty or statement made by the other or any of his or its
agents, representatives or attorneys with regard to the subject
matter, basis or affect of the Settlement Documents or otherwise,
not set forth in the Settlement Documents; and (vi) none of the
claims intended to be covered by the General Releases have been
previously assigned, sold, transferred or hypothecated.
7. Confidentiality. COGX and TGF agree that the terms and conditions of
this Agreement shall remain confidential and shall not be disclosed
to any other person except as required by law or as required in
connection with enforcement of the provisions of this Settlement
Agreement.
8. General.
a. Notices. All notices or other communications required or permitted to
be given pursuant to this Agreement shall be in writing and
shall be considered as properly given or made if hand
delivered, mailed from within the United States by certified
or registered mail, or sent by prepaid telegram to the
applicable address(es) appearing in the preamble to this
Agreement, or to such other address as a party may have
designated by like notice forwarded to the other parties
hereto. All notices, except notices of change of address,
shall be deemed given when mailed or hand delivered and
notices of change of address shall be deemed given when
received.
b. Binding Agreement; Non-Assignability. Each of the provisions and
agreements contained in this Agreement shall be binding upon and
inure to the benefit of the personal representatives, heirs,
devisees, successors and assigns of the respective parties
hereto; but none of the rights or obligations attaching to any
party shall be assignable.
c. Entire Agreement. This Agreement, and the other documents referenced
herein, constitute the entire understanding of the parties
hereto with respect to the subject matter hereof, and
supersedes any prior understandings or agreements, oral or
written, and no amendment, modification or alteration of the
terms hereof shall be binding unless the same be in writing,
dated subsequent to the date hereof and duly approved and
executed by each of the parties hereto.
d. Headings. The headings of this Agreement are inserted for convenience
and identification only, and are in no way intended to
describe, interpret, define or limit the scope, extent or
intent hereof.
e. Application of Colorado Law. This Agreement, and the application or
interpretation thereof, shall be governed exclusively by its
terms and by the laws of Colorado.
f. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but
all of which together shall constitute one and the same
instrument. An executed facsimile maybe deemed an original.
g. Costs of Collection and Legal Fees. Each of TGF and COGX shall
be liable to the other and shall pay the other immediately on
demand as part of his or its obligations under this Agreement
all costs and expenses of the other, including all reasonable
fees and disbursements of counsel incurred in the collection or
enforcement of each of his or its rights under this Agreement,
through trial and all appeals.
IN WITNESS WHEREOF, the parties have executed this Agreement on the date
set forth above.
CORGENIX MEDICAL CORPORATION
By: s/ Douglass T. Simpson
Douglass T. Simpson, President
TRANSGLOBAL FINANCIAL CORPORATION
By: s/Mike M. Mustafoglu
Mike M. Mustafoglu, President
STATE OF COLORADO)
COUNTY OF ________) SS.:
On this ____ day of August, 1999, before me personally came Douglass T. Simpson,
to me personally known, who being by me duly sworn, did depose and say that he
is the President of Corgenix Medical Corporation, the corporation described in,
and which executed the within Instrument; and that he signed his name thereto by
order of the board of directors of said corporation.
---------------------------------
Notary Public
STATE OF CALIFORNIA)
COUNTY OF ________) SS.:
On this ____ day of August, 1999, before me personally came Mike M. Mustafoglu
to me personally known, who being by me duly sworn, did depose and say that he
is the President of TransGlobal Financial Corporation, the corporation described
in, and which executed the within Instrument; and that he signed his name
thereto by order of the board of directors of said corporation.
---------------------------------
Notary Public
<PAGE>
GENERAL RELEASE
KNOW ALL MEN BY THESE PRESENTS:
That TransGlobal Financial Corporation ("First Party") for and in
consideration of the sum of Ten and no/100 Dollars ($10.00) and other
valuable considerations, received from or on behalf of Corgenix
Medical Corporation, a Nevada corporation, and any present or former
officers, directors, shareholders, employees, partners, agents,
consultants and attorneys of said party (collectively "Second
Party"), the receipt whereof is hereby acknowledged;
(Wherever used herein the terms "First Party" and "Second Party"
shall include singular and plural, heirs, legal representatives, and
assigns of individuals, and the successors and assigns of
individuals, and the successors and assigns of corporations.)
HEREBY remises, releases, acquits, satisfies and forever discharges the said
Second Party, of and from all, and all manner of action and actions, cause and
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgements, executions, claims and
demands whatsoever, in law or in equity, which said First Party ever had,
hereafter can, shall or may have, against said Second Party, for, upon or by
reason of any matter, cause or thing whatsoever, from the beginning of the world
to the day of these presents, including, but not limited to, any claims and
causes of action raised or which could have been raised in connection with the
matters contained in the Letter of Intent dated March 6, 1998 and the Consulting
Agreement dated May 22, 1998 between the First Party and the Second Party.
This release shall be deemed executed in and construed according to the
laws of the State of Colorado.
IN WITNESS WHEREOF, I have set my hand and seal this 21st day of
September, 1999.
TRANSGLOBAL FINANCIAL CORPORATION
By: s/Mike M. Mustafoglu
Mike M. Mustafoglu, President
<PAGE>
GENERAL RELEASE
KNOW ALL MEN BY THESE PRESENTS:
That Corgenix Medical Corporation ("First Party") for and in
consideration of the sum of Ten and no/100 Dollars ($10.00) and other
valuable considerations, received from or on behalf of TransGlobal
Financial Corporation, a Nevada corporation, and any present or
former officers, directors, shareholders, employees, partners,
agents, consultants and attorneys of said party (collectively "Second
Party"), the receipt whereof is hereby acknowledged;
(Wherever used herein the terms "First Party" and "Second Party"
shall include singular and plural, heirs, legal representatives, and
assigns of individuals, and the successors and assigns of
individuals, and the successors and assigns of corporations.)
HEREBY remises, releases, acquits, satisfies and forever discharges the said
Second Party, of and from all, and all manner of action and actions, cause and
causes of action, suits, debts, dues, sums of money, accounts, reckonings,
bonds, bills, specialties, covenants, contracts, controversies, agreements,
promises, variances, trespasses, damages, judgements, executions, claims and
demands whatsoever, in law or in equity, which said First Party ever had,
hereafter can, shall or may have, against said Second Party, for, upon or by
reason of any matter, cause or thing whatsoever, from the beginning of the world
to the day of these presents, including, but not limited to, any claims and
causes of action raised or which could have been raised in connection with the
matters contained in the Letter of Intent dated March 6, 1998 and the Consulting
Agreement dated May 22, 1998 between the First Party and the Second Party.
This release shall be deemed executed in and construed according to the
laws of the State of Colorado.
IN WITNESS WHEREOF, I have set my hand and seal this 20th day of October,
1999.
CORGENIX MEDICAL CORPORATION
By: s/Douglass T.Simpson
Douglass T. Simpson, President
Exhibit 10.26
PROMISSORY NOTE
Place: Westminster, CO
The Sum of $55,000.00 Date: September 21, 1999
FOR VALUE RECEIVED, Corgenix Medical Corporation (hereinafter, "CORGENIX" or the
"Company") promises to pay to the order of Transglobal Financial Corporation
(hereinafter "TGF") at 1800 Century Park East, Suite 600, Los Angeles, CA 90067
or at such other place as the holder of this Note may from time to time
designate, in lawful money of the United States of America, the principal sum of
fifty five thousand and 00/100 dollars ($55,000.00). The following terms shall
apply to this Note.
1. Repayment. Payment of principal and interest shall be made in twelve
monthly installments with the first payment to be made at the execution of
the Note by both parties.
2. Interest Rate. Interest shall accrue on the principal balance at the
rate of 10.25% (ten and one quarter percent) per annum, computed on a daily
basis.
3. Optional Prepayment. The Company may prepay this Note in whole or in
part at any time or from time to time without penalty or additional interest.
4. Event of Default. As used herein the term "Event of Default" shall mean
(a) a failure to make any payment of any amount required to be paid pursuant
to this Note on the date such payment is due under this Note; (b) failure of the
Company after request by TGF to permit the inspection of the Company's
Records; (c) issuance of any injunction or of an attachment or judgment
against any property of the Company which is not discharged within thirty (30)
days after issuance; (d) the insolvency of the Company, or the filing
of any bankruptcy, reorganization, debt arrangement or other proceeding or
case against the Company under any bankruptcy or insolvency law or
commencement of any dissolution or liquidation proceeding against the
Company, any of which is either consented toor acquiesced in by the Company or
remains undismissed for sixty (60) days after the date of entry or the
commencement by the Company of a voluntary case under the federal bankruptcy
laws or any state insolvency or similar laws, or the consent by the Company
to the appointment of a receiver, liquidator, assignee, trustee, custodian or
similar official for the Company or any of its, his or her property, as the
case may be, or the Company's making any assignment for the benefit of
creditors or the failure by the Company generally to pay the Company's
debts as they become due; or (e) default in the performance of any
obligation, covenant or agreement contained or referred to herein or in the
Note.
5. Acceleration Upon Event of Default. Upon the occurrence of an Event of
Default, TGF may, at its option, in its sole and absolute discretion and without
notice or demand, declare the entire unpaid balance of principal plus accrued
interest immediately due and payable.
6. Expenses of Collection. Should this Note be referred to an attorney for
collection, whether or not judgment has been confessed or suit has been
filed, the Company shall pay all of TGF's actual costs, fees (including
reasonable attorneys' fees) and expenses resulting from such referral.
7. Waiver of Protest. The Company hereby waives presentment, notice of
dishonor and protest.
8. Waiver. No failure or delay by the holder hereof to insist upon the strict
performance of any term, provision, or agreement of this Note, or to exercise
any right, power or remedy consequent upon a breach thereof shall constitute
a waiver of any such term, provision or agreement or of any such breach, or
preclude the holder hereof from exercising any such right, power or remedy at
any later time or times. By accepting payment after the due date of any
amount payable under this Note, the holder hereof shall not be deemed to have
waived the right either to require prompt payment when due of all other
amounts due under this Note, or to declare a default hereunder.
9. Headings. The section headings in this Note are for reference only, and
shall not limit or otherwise affect any of the terms hereof.
10.Choice of Law. This Note is executed in and shall be governed,
construed and enforced in accordance with the laws of the State of Colorado.
11.Binding Effect. This Note shall be binding upon the Company and its
successors and assigns.
IN WITNESS WHEREOF, the undersigned has executed this Note under seal, with the
intention that it be a sealed instrument on the day and year first above
written.
CORGENIX MEDICAL PRODUCTS, INC.
By: _s/Douglass T. Simpson
Douglass T. Simpson, President
Transglobal Financial Corporation:
__s/Mike M. Mustafoglu
Mike M. Mustafoglu, President
<PAGE>
EXHIBIT 21.1
SUBSIDIARIES OF THE REGISTRANT
SUBSIDIARY JURISDICTION OF ORGANIZATION BUSINESS NAMES
Corgenix, Inc. Delaware Corgenix. Inc.
Corgenix (UK) Ltd. United Kingdom Corgenix (UK) Ltd.
health-outfitters.com, Inc. Colorado health-outfitters.com
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-2000
<PERIOD-START> JUL-1-1999
<PERIOD-END> DEC-31-1999
<EXCHANGE-RATE> 1
<CASH> 35
<SECURITIES> 0
<RECEIVABLES> 750
<ALLOWANCES> 7
<INVENTORY> 575
<CURRENT-ASSETS> 1,454
<PP&E> 584
<DEPRECIATION> 434
<TOTAL-ASSETS> 2,089
<CURRENT-LIABILITIES> 1,488
<BONDS> 0
0
0
<COMMON> 18
<OTHER-SE> (160)
<TOTAL-LIABILITY-AND-EQUITY> 2,089
<SALES> 1,705
<TOTAL-REVENUES> 1,710
<CGS> 631
<TOTAL-COSTS> 1,540
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 64
<INCOME-PRETAX> 106
<INCOME-TAX> 0
<INCOME-CONTINUING> 106
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 106
<EPS-BASIC> 0.01
<EPS-DILUTED> 0.01
</TABLE>
