SECURITIES AND EXCHANGE COMMISSION
UNITED STATES
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
------- ---------
Commission File Number: 0-14210
COMPUMED, INC.
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(Exact name of registrant as specified in its charter)
Delaware 95-2860434
------------------------------ -----------------------------
State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1230 Rosecrans Avenue, Suite 110, Manhattan Beach, CA 90266
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(Address of Principal Executive Officers)
(310) 643-5106
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(Registrant's telephone number, including area code)
Not applicable
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(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Exchange Act during the preceding 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 in for the past
90 days. Yes X No
--- ---
The registrant had 11,385,414 shares of common stock, ($.01
par value) issued and outstanding an issued as of March 31, 1998.
<PAGE>
INDEX
COMPUMED, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated balance sheets -- March 31, 1998
(unaudited) and September 30, 1997.
Consolidated statements of operations -- three months
and six months ended March 31, 1998 and 1997
(unaudited).
Consolidated statements of cash flows -- six months
ended March 31, 1998 and 1997 (unaudited).
Notes to interim unaudited consolidated financial
statements.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.
PART II. OTHER INFORMATION
Item 2 Changes in Securities and Use of Proceeds
Item 6 Exhibits and Reports on Form 8K
SIGNATURES
2
<PAGE>
PART I
FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS
COMPUMED, INC. AND SUBSIDIARIES
March 31, September 30,
1998 1997
---- -------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 39,000 $ 81,000
Marketable securities 3,397,000 850,000
Accounts receivable, less allowance
of $40,000 (March 1998) and $66,000
(September 1997) 322,000 247,000
Inventories 25,000 55,000
Prepaid expenses and other current
assets 29,000 27,000
---------- ----------
TOTAL CURRENT ASSETS 3,812,000 1,260,000
PROPERTY AND EQUIPMENT
Machinery and equipment 2,999,000 2,994,000
Furniture, fixtures and leasehold
improvements 208,000 208,000
Equipment under capital leases 787,000 787,000
---------- ----------
3,994,000 3,989,000
Less allowance for depreciation and
amortization 3,685,000 3,591,000
---------- ----------
309,000 398,000
OTHER ASSETS
Required franchises, net of
accumulated amortization of
$295,000 (March 1998) and
$263,000 (September 1997) 32,000 63,000
Other assets 25,000 55,000
---------- ----------
$4,178,000 $1,776,000
========== ==========
See notes to interim unaudited consolidated condensed financial
statements
3
<PAGE>
CONSOLIDATED CONDENSED BALANCED SHEETS
COMPUMED, INC. AND SUBSIDIARIES
March 31, September 30,
1998 1997
---- -------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable $ 173,000 $ 174,000
Other accrued liabilities 479,000 501,000
Current portion of capital lease
obligations 87,000 81,000
------------ ------------
TOTAL CURRENT LIABILITIES 739,000 756,000
CAPITAL LEASE OBLIGATIONS, less
current portion 106,000 152,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Preferred stock, $.10 par value--
authorized 1,000,000 shares
Class A $3.50 cumulative
convertible voting preferred
stock, issued and outstanding
--8,400 shares 1,000 1,000
Class B $3.50 convertible
voting preferred stock,
issued and outstanding--
300 shares 1,000 1,000
Class C 7% convertible
preferred stock, issued and
outstanding--18,800 shares 1,465,000
Common Stock, $.01 par value
--authorized 50,000,000 shares,
issued and outstanding--
11,385,414 shares (March 1998)
and 9,041,857 shares (September
1997) 114,000 90,000
Additional paid in capital 29,038,000 27,169,000
Retained deficit (27,286,000) (26,393,000)
------------ ------------
STOCKHOLDERS' EQUITY 3,333,000 868,000
------------ ------------
$ 4,178,000 $ 1,776,000
============ ============
See notes to interim unaudited consolidated condensed financial
statements
<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
COMPUMED, INC. AND SUBSIDIARIES
Three Months Ended
March 31,
--------
1998 1997
---- ----
REVENUES FROM OPERATIONS
ECG services $ 351,000 $ 366,000
ECG product and supplies sales 97,000 21,000
Cardiac event monitoring services 0 46,000
OsteoGram royalties 17,000 27,000
------------ -----------
465,000 460,000
COSTS AND EXPENSES
Costs of ECG services 216,000 227,000
Cost of goods sold 52,000 10,000
Costs of cardiac event monitoring 0 76,000
Services
Selling expenses 46,000 81,000
Research and development 210,000 167,000
General and administrative expenses 283,000 485,000
Depreciation and amortization 91,000 76,000
------------ -----------
LOSS FROM OPERATIONS (433,000) (662,000)
Other income 28,000 29,000
Interest expense (9,000) (3,000)
------------ -----------
NET LOSS $ (414,000) $ (636,000)
============ ===========
NET LOSS PER SHARE $ (.12) $ (.07)
(Basic and diluted) ============ ===========
Weighted average number of
common shares outstanding 10,225,939 8,954,786
============ ===========
Six Months Ended
March 31,
---------
1998 1997
---- ----
REVENUES FROM OPERATIONS
ECG services $695,000 $718,000
ECG product and supplies sales 143,000 58,000
Cardiac event monitoring services 0 180,000
OsteoGram royalties 42,000 56,000
----------- -----------
880,000 1,012,000
COSTS AND EXPENSES
Costs of ECG services 451,000 430,000
Cost of goods sold 81,000 18,000
Costs of cardiac event monitoring 0 167,000
Services
Selling expenses 91,000 193,000
Research and development 374,000 340,000
General and administrative expenses 647,000 921,000
Depreciation and amortization 158,000 156,000
----------- -----------
LOSS FROM OPERATIONS (922,000) (1,213,000)
Other income 42,000 60,000
Interest expense (13,000) (7,000)
----------- -----------
NET LOSS $(893,000) $(1,160,000)
=========== ===========
NET LOSS PER SHARE $ (.17) $ (.13)
(Basic and diluted) =========== ===========
Weighted average number of
common shares outstanding 9,640,049 8,953,536
=========== ===========
See notes to interim unaudited consolidated condensed financial
statements
5
<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
COMPUMED, INC. AND SUBSIDIARIES
Six Months Ended
March 31, March 31,
1998 1987
---- ----
OPERATING ACTIVITIES:
Net loss $ (893,000) $(1,160,000)
Adjustment to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 155,000 156,000
Changes in operating assets and
liabilities:
Accounts receivable (75,000) 33,000
Inventories, prepaid expenses 28,000 40,000
and other assets
Accounts payable and other (23,000) 7,000
liabilities ---------- -----------
NET CASH USED IN OPERATING ACTIVITIES (808,000) (924,000)
INVESTING ACTIVITIES:
Purchases of marketable securities (2,547,000)
Sale of marketable securities 916,000
Purchases of property, plant and
equipment (5,000) (44,000)
---------- -----------
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES (2,552,000) 872,000
FINANCING ACTIVITIES:
Sale of Class C 7% convertible
preferred stock, net of offering
costs 3,290,000
Dividends on Class A preferred stock (1,000) (2,000)
Principal payments on capital lease
obligations (40,000) (15,000)
Exercise of stock options and
warrants 69,000
---------- -----------
NET CASH PROVIDED BY(USED IN)
FINANCING
ACTIVITIES 3,318,000 (17,000)
---------- -----------
DECREASE IN CASH (42,000) (69,000)
Cash at beginning period 81,000 155,000
---------- -----------
CASH AT END OF PERIOD $ 39,000 $ 86,000
========== ===========
Cash paid for interest: $ 13,000 $ 7,000
========== ===========
See notes to interim unaudited consolidated condensed financial
statements
6
<PAGE>
NOTES TO INTERIM UNAUDITED CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
COMPUMED, INC. AND SUBSIDIARIES
NOTE A--BASIS OF PREPARATION
The balance sheet at September 30, 1997 has been derived from the
Company's year-end audited financial statements.
The accompanying interim unaudited consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial information
and pursuant to the rules and regulations of the Securities and
Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the period ended March
31, 1998 are not necessarily indicative of the results that may
be expected for the year ending September 30, 1998. For further
information, refer to the consolidated financial statements for
the year ended September 30, 1997 and the notes thereto included
in the Company's Annual Report on Form 10-KSB.
NOTE B--PER SHARE DATA
Basic loss per share is calculated using the net loss, less
preferred stock dividends and the value of beneficial conversion
features that have become exercisable, divided by the weighted
average common shares outstanding. Shares from the assumed
conversion of outstanding warrants, options and effect of the
conversion of the Class A Preferred Stock, Class B Preferred
Stock and Class C Preferred Stock are omitted from the
computations of diluted loss per share because the effect would
be antidilutive.
The sales of Class C convertible preferred stock involved a
beneficial conversion feature whereby the securities may be
converted into Common Stock at a fixed discount to the market
price of the Common Stock at the date of conversion. The Series
1 Class C Preferred Stock provides for a discount of 25% and the
Series 2 Class C Preferred Stock provides for a discount of 20%
(or 22.5% if the Company received full payment for such shares
prior to December 31, 1998). The total value of the beneficial
conversion feature in the amount of $794,000 has been added to
the net loss in determining loss per share during the three and
six months ended March 31, 1998. The value of the beneficial
7
<PAGE>
conversion feature is measured by the difference between the
conversion price and the market value of the Common Stock on the
date of issue multiplied by the number of shares into which the
Preferred Stock may be converted.
NOTE C--COMMITMENTS AND CONTENGENCIES
On August 5, 1996 the Company entered into a Memorandum of
Understanding to confirm the material terms of an agreement in
principle to settle the securities class action and derivative
litigation filed in the United States District Court for the
Central District of California (the "Court") on behalf of persons
who purchased Common Stock during various time periods spanning
from August 11, 1995 to October 17, 1995, inclusive and
derivatively on behalf of the Company. On January 26, 1998, the
United States District Court for the Central District of
California approved the settlement of the class action and
derivative lawsuits on the terms agreed to by the parties in the
Memorandum of Understanding. See Item 1 of Part II of this
report.
NOTE D - IMPACT OF RECENTLY ADOPTED ACCOUNTING STANDARDS
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be
adopted for periods ending after December 15, 1997. Under the
new requirements basic earnings per share includes no dilution
and is computed by dividing income available to common
stockholders by the weighted average number of common shares
outstanding. Diluted earnings per share reflect the potential
dilution of securities that could share in the earnings of an
entity. The Company adopted Statement 128 in the quarter ended
December 31, although such adoption did not change amounts
previously provided.
NOTE E -- PRIVATE PLACEMENT OF CLASS C CONVERTIBLE PREFERRED
STOCK
On December 24, 1997, the Company closed the placement of 17,500
shares of Series 1 Class C 7% Convertible Preferred Stock (the
"Series C-1 Preferred Stock") at a price of $100 per share, or an
aggregate purchase price of $1,750,000 pursuant to Securities
Purchase Agreements. The Series C-1 Preferred Stock is
immediately convertible into shares of the Company's Common Stock
at a conversion ratio equal to $100 divided by the lesser of (i)
$1.51or (ii) 75% of the average closing bid price for the ten
consecutive trading days prior to the notice of conversion. In
the event that the closing bid price of the Common Stock is less
than $1.00 per share on the trading day immediately preceding the
receipt of a conversion notice, the holder requesting conversion
would be limited to converting not more than 5% of the shares he
initially purchased, which limitation would continue for a period
of 30 days. The Company has the right to force conversion of any
or all outstanding Series C-1 Preferred Stock on November 30,
1999 at the conversion ratio on that date. There is no minimum
conversion price. Should the value of the Common Stock fall
substantially prior to conversion, the holders of the Preferred
Stock could obtain a significant share of the Common Stock upon
8
<PAGE>
their conversions. Upon conversion of the Series C-1 Preferred
Stock, the holder would receive warrants (the "Warrants") to
purchase the same number of shares of Common Stock as being
issued on the conversion, at an exercise price equal to the
conversion price and exercisable for three years from issuance.
The Securities Purchase Agreements also provide for the issuance
of 17,500 shares of Series 2 Class C 7% Convertible Preferred
Stock (the "Series C-2 Preferred Stock" and together with the
Series C-1 Preferred Stock, the "Class C Preferred Stock"). The
Series C-2 Preferred Stock is identical to the Series C-1
Preferred Stock except that the conversion ratio is equal to $100
divided by the lessor of (i) $1.34 or (ii) 80% of the average
closing bid price for the ten consecutive trading days prior to
the notice of conversion (or 77.5% if the Company received full
payment for such shares prior to December 31, 1998). In
addition, the Company has the right to force conversion on
December 31, 1999. On January 22, 1998, the Company sold 8,750
shares of such Series C-2 Preferred Stock for $875,000 and, on
March 31, 1998, the Company sold 8,750 shares of such Series C-2
for $875,000.
As a condition to the initial closing of the placement, the
Company entered into a Registration Rights Agreement with each
purchaser whereby the Company agreed to file a registration
statement under the Securities Act of 1933, as amended, with the
Securities and Exchange Commission registering for offer and sale
the Common Stock underlying his Class C Preferred Stock and
Warrants. The registration statement became effective on
February 6, 1998.
The net proceeds from the placement of the Series C Preferred
Stock were approximately $3,300,000 (after payment of a 4% fee to
the distributor and other placement expenses).
On December 24, 1997, the Company also issued warrants (the "1995
Warrants") exercisable for the purchase of 200,000 shares of its
Common Stock at an exercise price of $1.10 per share to the
distributor of certain placements effected by the Company in 1995
and 1996. The shares of Common Stock underlying the 1995 Warrants
were also included in the registration statement filed pursuant
to the Registration Rights Agreement.
During the fiscal quarter ended March 31, 1998, Class C
shareholders converted 16,200 shares of Class C preferred stock
into 2,273,494 shares of Common Stock. Class C Series 1 shares,
in the amount of 9,700, were converted into 1,384,524 shares of
Common Stock and Class C Series 2 shares, in the amount of 6,500,
were converted into 888,970 shares of Common Stock.
9
<PAGE>
NOTE F -- TERMINATION OF ROYALTY REVENUES
On January 7, 1998, the Company was notified of a termination of
a license agreement under which the Company had earned royalty
revenues for the processing of its OsteoGram(R) bone density test.
Revenues earned under this license agreement terminated after
March 1998. During the three-month and the six-month periods
ended March 31, 1998 royalty revenues were $17,000 and $42,000
respectively. The rights to the OsteoGram technology reverted
back to the Company on March 31, 1998. The Company is seeking
new licensing agreements to enter into with this technology.
10
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
This Form 10-QSB contains forward-looking statements as defined
by the Private Securities Litigation Reform Act of 1995.
Forward-looking statements include statements concerning plans,
objectives, goals, strategies, future events or performance and
underlying assumptions and other statements that are other than
statements of historical facts. These statements are subject to
uncertainties and risks including, but not limited to, product
and service demand and acceptance, changes in technology, the
availability of appropriate acquisition candidates and/or
business partnerships, economic conditions, the impact of
competition and pricing, capacity and supply constraints or
difficulties, government regulation and other risks defined in
this document. All such forward-looking statements, whether
written or oral, and whether made by or on behalf of the Company
are expressly qualified by these cautionary statements and any
other cautionary statements which may accompany the forward-
looking statements. In addition, the Company disclaims any
obligation to update any forward-looking statements to reflect
events or circumstances after the date hereof.
RESULTS OF OPERATIONS
---------------------
Total revenues from for the three months ended March 31, 1998
(the "Second Quarter 1998") were $465,000, as compared to
$460,000 for the same period in 1997. Revenues from ECG product
and supplies sales increased to $97,000, from $21,000 during the
prior year, due to sales of electrocardiograph units and related
supplies. During the prior fiscal year, the Company provided
electrocardiographs on a rental-only basis. Revenues from the
Company's ongoing transtelephonic ECG services were at
approximately the same level as the prior year period. Since
cardiac event monitoring services were eliminated in fiscal 1997,
no revenue was recorded during the Second Quarter 1998 compared
to $46,000 recorded during the prior year. Royalty income was
$17,000 for the Second Quarter 1998 from OsteoGram(R) operations
being managed by a subsidiary of Merck & Co., Inc. as compared to
$27,000 during the same period in fiscal 1997; however the
license agreement was terminated in January 1998, so royalties
will cease as of the Third Quarter 1998. See Note F to Notes to
Interim Unaudited Consolidated Condensed Financial Statements.
Operating costs decreased by 20% during the Second Quarter 1998
to $898,000, as compared to the prior year. The combined costs
of services ($216,000) and selling expenses ($46,000) during the
Second Quarter 1998 decreased by $122,000, as compared to the
same prior year. These decreases in operating costs were
primarily due to the elimination of costs associated with the
cardiac event monitoring services, as mentioned above, and to
operating cost reductions relating to the Company's ongoing
11
<PAGE>
transtelephonic ECG services. General and administrative
expenses decreased by 42% during the Second Quarter 1998 to
$283,000, as compared to 1997, primarily due to a reduction in
executive and administrative staff and to reductions in insurance
costs, professional fees and consulting expenses. Research and
development costs increased by 26% to $210,000 during the Second
Quarter 1998, as compared to the prior year, and such costs are
primarily salaries and direct costs relating to the Company's
development of the OsteoView(R) bone densitometer.
Net loss for the Second Quarter 1998 was $414,000 compared to a
loss of $636,000 for the same period in fiscal 1997. The
decreased loss is due to the elimination of certain unprofitable
cardiac event monitoring services, and the costs thereof, and to
general cost reductions enacted by the Company.
Revenues for the six months ended March 31, 1998 were $880,000,
as compared to $1,012,000 for the same period in 1997. Revenues
from ECG product and supplies sales increased to $143,000, from
$58,000 during the prior year, due to sales of electrocardiograph
units and related supplies. Revenues from the Company's ongoing
transtelephonic ECG services were at approximately the same level
as the prior year period. Since cardiac event monitoring
services were eliminated in fiscal 1997, no revenue was recorded
during the 1998 period, compared to $180,000 recorded during the
prior year. Royalty income was $42,000 during the1998 period as
compared to $56,000 during the same period in fiscal 1997;
however the license agreement was terminated in January 1998, so
royalties will cease as of the Third Quarter 1998 (See Note F to
Notes to Interim Unaudited Consolidated Condensed Financial
Statements).
Operating costs decreased by 19% during the six months ended
March 31, 1998 to $1,802,000, as compared to the prior year.
These decreases in operating costs were primarily due to the
elimination of costs associated with the cardiac event monitoring
services, as mentioned above, and to operating cost reductions
relating to the Company's ongoing transtelephonic ECG services.
General and administrative expenses decreased by 30% to $647,000,
as compared to 1997, primarily due to a reduction in executive
and administrative staff and to reductions in insurance costs,
professional fees and consulting expenses. Research and
development costs increased by 10% to $374,000, as compared to
the prior year, and such costs are primarily salaries and direct
costs relating to the Company's development of the OsteoView (R)
bone densitometer. Other income decreased to $42,000, from
$60,000 during the same period in 1997 due to liquidations of
marketable securities, although other income may increase to as a
result of the net proceeds from the Series C Preferred Stock
placements, subject to the use of such funds for research and
development and other company expenses and to changes in the
current yields of such investments. Marketable securities
consist of money market accounts and short-term investments in
Treasury bills.
12
<PAGE>
Net loss for the six months ended March 31, 1998 was $893,000
compared to a loss of $1,160,000 for the same period in fiscal
1997. The decreased loss is due to the elimination of certain
unprofitable cardiac event monitoring services, and the costs
thereof, and to general cost reductions enacted by the Company.
FINANCIAL CONDITION AND LIQUIDITY
---------------------------------
As of March 31, 1998 the Company had $3,073,000 of working
capital, an increase of $2,569,000 from September 30, 1997. This
increase in working capital is primarily a result of the sale of
the Company's Preferred Stock, generating net proceeds of
approximately $3,300,000, which was offset by losses from
operations, including product development costs, adjusted for
depreciation expense.
The Company's capital resource commitments at March 31, 1998
consist primarily of costs associated with the development of its
bone densitometry technology. During the six months ended March
31, 1998, total research and development expenses were $374,000.
Expenditures during future periods may meet or exceed this level.
The Varian agreement requires a payment in the amount of $70,000
during the next fiscal quarter to cover testing equipment
relating to the amorphous silicon panel, which is anticipated to
be funded by lease financing.
The University of Georgia sponsored Detoxahol research agreement
has been suspended and the Company is only supporting patent-
related costs at this time. Due to the long-term nature of this
project, the Company has been seeking a strategic partner to
participate in future development.
The Company intends to pursue additional research and/or sub-
contractor agreements relating to its development projects.
Additionally, the Company is actively seeking partners and
acquisition candidates of businesses that are complementary to
its own. Such investments would be financed by the Company's
working capital, through issuance of Company securities or a
combination thereof. No assurance can be given that any
acquisition would not be dilutive to stockholders.
Depending on the extent of development activities borne by the
Company, the Company probably will continue to incur losses from
operations until sales of products currently under development
will commence. Current working capital levels are considered
adequate for the Company's business activities during the 12
months.
13
<PAGE>
PART II
OTHER INFORMATION
Item 2 CHANGES IN SECURITIES AND USE OF PROCEEDS
(c) On December 24, 1997, the Company closed the placement
of 17,500 shares of Series 1 Class C 7% Convertible Preferred
Stock. On January 22, 1998 the Company closed the placement of
8,750 shares of Series 2 Class C 7% Convertible Preferred Stock
and on March 31, 1998 the Company closed the placement of 8,750
shares of Series 2 Class C 7% Convertible Preferred Stock. These
placements were claimed to be exempt from the registration
requirements of the Securities Act of 1933, as amended (the
"Securities Act"), by reason of Section 4(2) thereof and
Regulation D thereunder. As of March 31, 1998, 16,200 shares of
Class C Preferred Stock were converted into an aggregate of
2,273,494 shares of Common Stock. These conversions were exempt
from registration under the Securities Act by reason of Section
3(a)9 thereof. For further information about these placements,
see Note E -- Private Placement of Class C Convertible Preferred
Stock to the Notes to Interim Unaudited Consolidated Condensed
Financial Statement included in the financial statements in this
Report and the Company's Form 8-K for an event of December 24,
1997.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Certificate of Designation for the Class C 7%
Convertible Preferred Stock, filed on December 11, 1997
[Incorporated by reference to Exhibit 3.1 to the
Company's Form 8-K for an event of December 24, 1997]
3.2 Certificate of Correction for the Class C 7%
Convertible Preferred Stock, filed on December 24, 1997
[Incorporated by reference to Exhibit 3.2 to the
Company's Form 8-K for an event of December 24, 1997]
10.1 Form of Securities Purchase Agreement for the sale of
Class C 7% Convertible Preferred Stock (without
annexes) [Incorporated by reference to Exhibit 10.1 to
the Company's Form 8-K for an event of December 24,
1997]
10.2 Form of Warrant Agreement [Incorporated by reference to
Exhibit 10.2 to the Company's Form 8-K for an event of
December 24, 1997]
14
<PAGE>
10.3 Form of Registration Rights Agreement [Incorporated by
reference to Exhibit 10.3 to the Company's Form 8-K for
an event of December 24, 1997]
(b) Form 8-K:
The Company filed a Form 8-K for an event of January 30,
1998 to report on Item 5, certain pro-forma information
as required by the Nasdaq Stock Market, Inc.
The Company filed a Form 8-K for an event of March 31, 1998
to report on Item 5, the closing of the last placement
of the Class C Series 2 7% Convertible Preferred
Stock.
15
<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.
COMPUMED, INC.
--------------
(Registrant)
By: /s/ James Linesch
-------------------------------------
James Linesch
Presidentand ChiefFinancial Officer
Date: May 11, 1998
16
<PAGE>
EXHIBIT INDEX
Exhibit Description
------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
COMPUMED, INC. FORM 10-QSB FOR THE PERIOD ENDED MARCH 31, 1998,
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> MAR-31-1997
<CASH> 39,000
<SECURITIES> 3,397,000
<RECEIVABLES> 322,000
<ALLOWANCES> 40,000
<INVENTORY> 25,000
<CURRENT-ASSETS> 3,812,000
<PP&E> 3,994,000
<DEPRECIATION> 3,685,000
<TOTAL-ASSETS> 4,178,000
<CURRENT-LIABILITIES> 739,000
<BONDS> 0
0
1,467,000
<COMMON> 114,000
<OTHER-SE> 1,752,000
<TOTAL-LIABILITY-AND-EQUITY> 4,178,000
<SALES> 880,000
<TOTAL-REVENUES> 880,000
<CGS> 81,000
<TOTAL-COSTS> 1,802,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,000
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