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 June 30, 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 12,406,102 shares of common stock, ($.01
par value) issued and outstanding as of June 30, 1998.
<PAGE>
INDEX
COMPUMED, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements (unaudited)
Consolidated balance sheets -- June 30, 1998
(unaudited) and September 30, 1997.
Consolidated statements of operations - three months
and nine months ended June 30, 1998 and 1997
(unaudited).
Consolidated statements of cash flows -- nine months
ended June 30, 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 4 Submission of Matters to a Vote of Security Holders
Item 6 Exhibits and Reports on Form 8K
SIGNATURES
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<PAGE>
PART I
FINANCIAL INFORMATION
CONSOLIDATED CONDENSED BALANCE SHEETS
COMPUMED, INC. AND SUBSIDIARIES
June 30, September 30,
1998 1997
---- ------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 8,000 $ 81,000
Marketable securities 3,058,000 850,000
Accounts receivable, less allowance
of $57,000 303,000 247,000
(June 1998) and $66,000 (September
1997)
Inventories 60,000 55,000
Prepaid expenses and other current 32,000 27,000
assets ---------- -----------
TOTAL CURRENT ASSETS 3,461,000 1,260,000
PROPERTY AND EQUIPMENT
Machinery and equipment 3,001,000 2,994,000
Furniture, fixtures and leasehold 208,000 208,000
improvements
Equipment under capital leases 852,000 787,000
--------- ----------
4,061,000 3,989,000
Less allowance for depreciation and 3,732,000 3,591,000
amortization --------- ---------
329,000 398,000
OTHER ASSETS
41,000 118,000
---------- ----------
$3,831,000 $1,776,000
========== ==========
See notes to interim unaudited consolidated condensed financial
statements
-3-
<PAGE>
CONSOLIDATED CONDENSED BALANCED SHEETS
COMPUMED, INC. AND SUBSIDIARIES
June 30, September 30,
1998 1997
---- ---------------
(Unaudited)
LIABILITIES AND STOCKHOLDERS'
EQUITY
CURRENT LIABILITIES
Accounts payable $ 172,000 $ 174,000
Other accrued liabilities 415,000 501,000
Current portion of capital lease 116,000 81,000
obligations ---------- -----------
TOTAL CURRENT LIABILITIES 703,000 756,000
CAPITAL LEASE OBLIGATIONS, less 120,000 152,000
current portion
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 1,000 1,000
outstanding -- 8,400 shares
Class B $3.50 convertible voting
preferred stock, issued and 1,000 1,000
outstanding - 300 shares
Class C 7% convertible preferred
stock, issued and outstanding 901,000
- 11,650 shares
Common Stock, $.01 par
value--authorized 50,000,000
shares, issued and
outstanding--12,406,102 shares 124,000 90,000
(June 1998) and 9,041,857
shares (September 1997)
Additional paid in capital 29,592,000 27,169,000
Retained deficit (27,611,000) (26,393,000)
----------- ------------
STOCKHOLDERS' EQUITY 868,000
3,008,000 ------------
-----------
$ 3,831,000 $1,776,000
=========== ============
See notes to interim unaudited consolidated condensed financial
statements
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<PAGE>
CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
COMPUMED, INC. AND SUBSIDIARIES
Three Months Ended Nine Months Ended
June 30, June 30,
-------- --------
1998 1997 1998 1997
---- ---- ---- ----
REVENUES FROM OPERATIONS
ECG services $ 380,000 $ 394,000 $1,076,000 $1,096,000
ECG product and supplies
sales 99,000 35,000 242,000 108,000
Cardiac event monitoring
services - 17,000 - 198,000
OsteoGram royalties - 33,000 42,000 89,000
--------- --------- --------- ---------
479,000 479,000 1,360,000 1,491,000
COSTS AND EXPENSES
Costs of ECG services 250,000 232,000 702,000 648,000
Cost of goods sold 56,000 16,000 138,000 47,000
Costs of cardiac event
monitoring services - 74,000 - 240,000
Selling expenses 44,000 75,000 135,000 268,000
Research and development 68,000 179,000 442,000 519,000
General and administrative
expenses 344,000 333,000 991,000 1,254,000
Depreciation and
amortization 64,000 77,000 221,000 234,000
--------- --------- ---------- ---------
LOSS FROM OPERATIONS (347,000) (507,000) (1,269,000) (1,719,000)
Other income 33,000 20,000 75,000 79,000
Interest expense (11,000) (6,000) (24,000) (13,000)
--------- --------- ---------- ----------
$(325,000) $(493,000) $(1,218,000)$(1,653,000)
NET LOSS ========= ========= ========== ==========
NET LOSS PER SHARE $ (.03) $ (.06) $ (.19)$ (.18)
(Basic and diluted) ========= ========= ========== ==========
Weighted average number of
common shares outstanding 11,895,758 8,954,786 10,391,952 8,952,286
========== ========= ========== ==========
See notes to interim unaudited consolidated condensed financial statements
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<PAGE>
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
COMPUMED, INC. AND SUBSIDIARIES
Nine Months Ended
June 30, June 30,
1998 1997
---- ----
OPERATING ACTIVITIES:
Net loss $ (998,000) $(1,653,000)
Adjustment to reconcile net loss to
net cash used in operating
activities:
Depreciation and amortization 188,000 234,000
Changes in operating assets and
liabilities:
Accounts receivable (56,000) 111,000
Inventories, prepaid expenses
and other assets 20,000 49,000
Accounts payable and other
liabilities (308,000) (48,000)
---------- ----------
NET CASH USED IN OPERATING ACTIVITIES (1,154,000) (1,307,000)
INVESTING ACTIVITIES:
Purchases of marketable securities (2,208,000) -
Sale of marketable securities 1,474,000
Purchases of property, plant and
equipment (2,000) (47,000)
----------- -----------
NET CASH (USED IN) PROVIDED BY
INVESTING ACTIVITIES (2,210,000) 1,427,000
FINANCING ACTIVITIES:
Proceeds from the 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 (67,000) (29,000)
Exercise of stock options and
warrants 69,000 -
--------- ----------
NET CASH PROVIDED BY (USED IN)
FINANCING ACTIVITIES 3,291,000 (31,000)
----------- ----------
DECREASE IN CASH (73,000) (89,000)
Cash at beginning period 81,000 155,000
------------ ----------
CASH AT END OF PERIOD $ 8,000 $ 244,000
=========== ==========
Cash paid for interest: $ 24,000 $ 13,000
=========== ===========
See notes to interim unaudited consolidated condensed financial
statements
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<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 June
30, 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 nine months
ended June 30, 1998. The value of the beneficial conversion
feature is measured by the difference between the conversion
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<PAGE>
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. The final settlement is anticipated
to be completed by December 31, 1998 and will involve the
issuance of 770,000 shares of Common Stock and the issuance of
1,870,000 warrants for the purchase of Common Stock at a price of
$3.00. The effect of these issuances was recorded during the
fiscal year ended September 30, 1997.
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, 1997, 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)
$1.51 or (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,
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<PAGE>
1999 at the conversion ratio on that date. There is no minimum
conversion price. 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.
Should the value of the Common Stock fall substantially prior to
conversion, the holders of the Class C Preferred Stock could
obtain a significant share of the Common Stock upon their
conversions.
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 lesser 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 June 30, 1998, Class C
shareholders converted 7,150 shares of Class C preferred stock
into 1,020,688 shares of Common Stock. At June 30, 1998, there
were 11,650 shares of Class C Preferred Stock remaining,
including 6,100 shares of Series 1 and 5,550 shares of Series 2.
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<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(Registered
Trademark) bone density test. Revenues earned under this license
agreement terminated after March 1998. During the nine-month
period ended June 30, 1998 royalty revenues were $42,000. The
rights to the OsteoGram technology reverted back to the Company
on March 31, 1998. The Company is currently incorporating this
technology into a software product and is seeking distribution
and licensing agreements for this test.
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<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 June 30, 1998 (the
"Third Quarter 1998") were $479,000, as compared to $479,000 for
the same period in 1997. Revenues from ECG product and supplies
sales increased to $99,000, from $35,000 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 declined by
approximately 4% from prior year period. Since cardiac event
monitoring services were eliminated in fiscal 1997, no revenue
was recorded during the Second Quarter 1998 compared to $17,000
recorded during the prior year. There was no royalty income
earned during the Second Quarter 1998 from OsteoGram(Registered
Trademark) operations being managed by a subsidiary of Merck &
Co., Inc. as compared to $33,000 during the same period in fiscal
1997. The license agreement was terminated in January 1998, so
royalties have ceased. See Note F to Notes to Interim Unaudited
Consolidated Condensed Financial Statements.
Operating costs decreased by 16% during the Third Quarter 1998 to
$826,000, as compared to the prior year. The combined costs of
services ($250,000) and selling expenses ($44,000) during the
Third Quarter 1998 decreased by $18,000, 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 transtelephonic ECG
services. General and administrative expenses increased by 3%
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<PAGE>
during the Second Quarter 1998 to $344,000, as compared to 1997,
primarily due to a settlement amount paid to a former executive
in the amount of approximately $75,000. Exclusive of the
settlement, general and administrative expenses during the Third
Quarter 1998 decreased by approximately $64,000, or 19%, from the
prior year, due to reductions in executive and administrative
staff and to reductions in insurance costs, professional fees and
consulting expenses. Research and development costs decreased by
62% to $68,000 during the Third 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(Registered Trademark) bone densitometer and it's
automated OsteoGram(Registered Trademark) software.
The Company recorded other income during the quarter of $33,000,
which is comprised of investment income.
Net loss for the Third Quarter 1998 was $325,000 compared to a
loss of $493,000 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
general cost reductions enacted by the Company.
Revenues for the nine months ended June 30, 1998 were $1,360,000,
as compared to $1,491,000 for the same period in 1997. Revenues
from ECG product and supplies sales increased to $242,000, from
$108,000 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
$198,000 recorded during the prior year. Royalty income was
$42,000 during the 1998 period as compared to $89,000 during the
same period in fiscal 1997; however the license agreement was
terminated in January 1998, so royalties have ceased as of the
Third Quarter 1998 (See Note F to Notes to Interim Unaudited
Consolidated Condensed Financial Statements).
Operating costs decreased by 18% during the nine months ended
June 30, 1998 to $2,629,000, 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 21% to $991,000,
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 decreased by 15% to $442,000, as compared to
the prior year, and such costs are primarily salaries and direct
costs relating to the Company's development of the
OsteoView(Registered Trademark) bone densitometer and its
automated OsteoGram(Registered Trademark) software.
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<PAGE>
Other income increased to $295,000, from $79,000 during the same
period in 1997 due to the revised income tax accrual of $220,000
mentioned above.
Net loss for the nine months ended June 30, 1998 was $1,218,000
compared to a loss of $1,653,000 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 general cost reductions enacted by the Company.
FINANCIAL CONDITION AND LIQUIDITY
---------------------------------
As of June 30, 1998 the Company had $2,978,000 of working
capital, an increase of $2,474,000 from September 30, 1997. This
increase in working capital is primarily a result of the sale of
the Company's Class C 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 June 30, 1998
consist primarily of costs associated with the development of its
bone densitometry technology. During the nine months ended June
30, 1998, total research and development expenses were $442,000.
Expenditures during future periods may meet or exceed this level.
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.
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<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. During the fiscal quarter ended June
30, 1998, 7,150 shares of Class C Preferred Stock were converted
into an aggregate of 1,020,688 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 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) On May 1, 1998, the Company held its 1998 Annual
Meeting of Stockholders (the "Meeting").
(b) The following persons were elected at the Meeting:
Robert Goldberg, Herbert S. Lightstone, John Minnick,
John Romm and Robert Stuckelman.
(c) At the Meeting, the following matters voted upon were:
Broker
For Against Abstain Nonvotes
--- ------- ------- --------
Election of Directors 9,251,232 0 327,471 0
Amendment to Option Plan 8,779,607 709,701 40,426 48,969
Ratification of auditors 9,422,915 135,488 20,300 0
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<PAGE>
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - None
(b) Form 8-K - During the fiscal quarter ended June 30,
1998, the Company did not file a report on Form 8-K.
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<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
President and Chief Financial
Officer
Date: August 14, 1998
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> JUN-30-1998
<CASH> 8,000
<SECURITIES> 3,058,000
<RECEIVABLES> 303,000
<ALLOWANCES> 57,000
<INVENTORY> 60,000
<CURRENT-ASSETS> 3,461,000
<PP&E> 4,061,000
<DEPRECIATION> 3,732,000
<TOTAL-ASSETS> 3,831,000
<CURRENT-LIABILITIES> 703,000
<BONDS> 0
0
903,000
<COMMON> 126,000
<OTHER-SE> 1,979,000
<TOTAL-LIABILITY-AND-EQUITY> 3,008,000
<SALES> 1,360,000
<TOTAL-REVENUES> 1,360,000
<CGS> 138,000
<TOTAL-COSTS> 1,269,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 24,000
<INCOME-PRETAX> (1,218,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,218,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,218,000)
<EPS-PRIMARY> (0.19)
<EPS-DILUTED> (0.19)
</TABLE>
