<PAGE> 1
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly Report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended September 30, 1999
[ ] Transition Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the transition period from __________ To __________
Commission File Number: 0-17119
A-Fem Medical Corporation
-----------------------------------------------------------------
(exact name of small business issuer as specified in its charter)
Nevada 33-0202574
------------------------------- -----------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
10180 SW Nimbus Ave., Suite J5
Portland, OR 97223
--------------------------------------
(Address of principal executive
offices)
(503) 968-8800
--------------------------------------
(Issuer's telephone number)
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 [ ]
As of September 30, 1999, the issuer had outstanding 9,563,225 shares of its
$.01 par value Common Stock.
Transitional Small Business Disclosure Format: (Check one)
Yes [] No [X]
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PART I - FINANCIAL INFORMATION
See "Basis of Presentation."
ITEM 1. FINANCIAL STATEMENTS
A-Fem Medical Corporation
BALANCE SHEETS
<TABLE>
<CAPTION>
As of
September 30, December 31,
1999 1998
---------------------------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 494,689 $ 668,369
Accounts receivable 23,556 59,735
Inventory 71,336 70,855
Prepaids and other 154,996 257,603
------------ ------------
Total current assets 744,577 1,056,562
EQUIPMENT, FURNITURE and LEASEHOLDS, at cost 1,256,610 1,235,173
Less: accumulated depreciation (612,455) (524,484)
------------ ------------
644,155 710,689
PATENTS and LICENSES, net 55,094 59,872
LOANS RECEIVABLE - officers and directors 64,805 62,193
------------ ------------
Total assets $ 1,508,631 $ 1,889,316
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 120,676 $ 299,471
Note payable 441,836 417,345
Current portion of capital lease obligation 66,670 183,339
Accrued expenses 82,423 74,075
Accrued salaries and related liabilities 107,805 138,394
------------ ------------
Total current liabilities 819,410 1,112,624
Long-term portion of capital lease obligation 6,167 41,607
------------ ------------
Total liabilities 825,577 1,154,231
STOCKHOLDERS' EQUITY:
Series A Convertible Preferred Stock, $0.01 par value; authorized
8,200,000 shares; issued 6,710,905 and 5,773,405 shares at
September 30,1999 and December 31, 1998 67,109 57,734
Common Stock, $0.01 par value; authorized 33,000,000
shares; issued 9,563,225 and 9,471,875 shares at September
30, 1999 and December 31, 1998 95,632 94,719
Warrants issued for Series A Convertible Preferred
Stock 1,120,007 761,882
Warrants issued for common stock 76,491 76,491
Additional paid-in capital 17,653,132 16,102,543
Accumulated deficit (18,329,317) (16,358,284)
------------ ------------
Total stockholders' equity 683,054 735,085
------------ ------------
Total liabilities and stockholders' equity $ 1,508,631 $ 1,889,316
============ ============
</TABLE>
The accompanying notes are an integral part of these balance sheets.
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A-Fem Medical Corporation
STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales, net $ 13,740 $ 99,090 $ 57,278 $ 367,023
Cost of sales 76,190 150,433 204,455 379,280
------------ ------------ ------------ ------------
Gross Margin (62,450) (51,343) (147,177) (12,257)
Operating expenses:
Research and development 302,183 236,763 812,080 634,388
Marketing and selling 32,452 635,300 273,322 1,937,508
General and
administrative 223,182 270,958 715,253 705,974
------------ ------------ ------------ ------------
Total operating
expenses 557,817 1,143,021 1,800,655 3,277,870
------------ ------------ ------------ ------------
Net operating loss (620,267) (1,194,364) (1,947,832) (3,290,127)
------------ ------------ ------------ ------------
Other expense (1,405) (21,851) (23,201) (45,580)
------------ ------------ ------------ ------------
Net loss (621,672) (1,216,215) (1,971,033) (3,335,707)
============ ============ ============ ============
Basic and diluted net loss
per share $ (0.07) $ (0.10) $ (0.21) $ (0.25)
============ ============ ============ ============
Weighted average shares
outstanding 9,546,717 12,566,644 9,505,888 13,093,071
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
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A-Fem Medical Corporation
STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
(unaudited)
<TABLE>
<CAPTION>
For The Nine Months
Ended September 30,
-------------------------------
1999 1998
----------- -----------
<S> <C> <C>
Cash Flows From Operating Activities:
Net loss $(1,971,033) $(3,335,707)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 95,696 119,318
(Gain) loss on disposal of assets 4,782 (134)
Other non-cash expenses 24,491 470,833
Other non-cash income (2,612) (2,612)
Changes in working capital:
Restricted cash - 52,500
Accounts receivable 36,179 4,499
Inventory (481) 70,462
Prepaid expenses and other 102,607 (12,372)
Accounts payable (178,795) (495,654)
Accrued expenses 8,348 (44,866)
Accrued salaries and related liabilities (30,589) (80,011)
----------- -----------
Net cash used in operating activities (1,911,407) (3,253,744)
Cash Flows From Investing Activities:
Purchases of equipment, furniture and leaseholds (29,166) (37,175)
Other assets - 350
----------- -----------
Net cash used in investing activities (29,166) (36,825)
Cash Flows From Financing Activities:
Net repayments of lease obligations (152,109) (196,458)
Net proceeds from sale of common and preferred stock,
exercise of options and warrants, net of expenses 1,919,002 3,071,789
----------- -----------
Net cash provided by financing activities 1,766,893 2,875,331
Net Decrease in Cash and Cash Equivalents (173,680) (415,238)
Cash and Cash Equivalents, beginning of period 668,369 525,767
----------- -----------
Cash and Cash Equivalents, end of period $ 494,689 $ 110,529
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
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A-Fem Medical Corporation
NOTES TO FINANCIAL STATEMENTS
September 30, 1999
ORGANIZATION OF THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES
The Company
A-Fem Medical Corporation is a medical technology company with multiple
product platforms targeting women's unmet health needs. A-Fem has developed
three proprietary technology platforms: one based on its inSync(R) miniform
interlabial pad, another based on its Rapid-Sense(TM) diagnostic tests and the
third based on its PadKit(R) Sample Collection System. A-Fem markets the inSync
miniform as an alternative to tampons, pads or liners for light flow protection.
A-Fem is also developing point-of-care diagnostic products that provide
quantified results using its proprietary Rapid-Sense technology. The PadKit,
currently in clinical trials, utilizes a miniform as a non-invasive sample
collection method for use in testing for certain cancers and other diseases.
Basis of Presentation
The interim financial data are unaudited; however, in the opinion of
management, the interim data include all adjustments, consisting only of normal
recurring adjustments, necessary for a fair statement of the results for the
interim periods. The financial statements included herein have been prepared by
A-Fem 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 A-Fem believes that the disclosures included herein are
adequate to make the information presented not misleading. Operating results for
the periods presented are not necessarily indicative of future results. These
financial statements should be read in conjunction with the financial statements
and notes to financial statements included in A-Fem's annual report on Form
10-KSB for the year ended December 31, 1998.
Net Loss Per Share
Basic and diluted loss per share are required to be computed using the
methods prescribed by Statement of Financial Accounting Standards No. 128,
"Earnings per Share" (SFAS 128). Basic loss per share is calculated using the
weighted average number of common shares outstanding for the period and diluted
loss per share is computed using the weighted average number of common shares
and dilutive common equivalent shares outstanding. A net loss was reported in
each of the three and nine-month periods ended September 30, 1999 and 1998.
Stock options for the purchase of 3,552,489 and 3,022,550 shares at September
30, 1999 and 1998, respectively, and warrants for the purchase of
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2,428,656 and 2,520,006 shares at September 30, 1999 and 1998, respectively,
were not included in loss per share calculations, because to do so would have
been anti-dilutive. In addition, shares of A-Fem's convertible preferred stock
and warrants covering shares of A-Fem's convertible preferred stock outstanding
at September 30, 1999 were not included in loss per share calculations because
to do so would have been anti-dilutive.
Comprehensive Loss
In June 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
(SFAS 130). This statement establishes standards for reporting and displaying
comprehensive income and its components in a full set of general purpose
financial statements. The objective of SFAS 130 is to report a measure of all
changes in equity of an enterprise that result from transactions and other
economic events of the period other than transactions with owners. The Company
adopted SFAS 130 during the first quarter of 1998. Comprehensive loss did not
differ from currently reported net loss in the periods presented.
Recent Accounting Pronouncements
In June 1999, the FASB issued Statement of Financial Accounting
Standards No. 137, "Accounting for Derivative Instruments and Hedging
Activities" (SFAS 137). SFAS 137 is an amendment to SFAS133, "Accounting for
Derivative Instruments and Hedging Activities" This statement establishes
accounting and reporting standards requiring that every derivative instrument be
recorded in the balance sheet as either an asset or liability measured at its
fair value. SFAS 137 also requires that changes in the derivative instrument's
fair value be recognized currently in results of operations unless specific
hedge accounting criteria are met. SFAS 137 is effective for fiscal years
beginning after June 15, 2000. The Company expects that adoption of SFAS 137
will not have a material impact on the Company's financial condition or results
of operations.
Reclassifications
Certain amounts have been reclassified in the prior year financial
statement presentation to conform to the current year presentation.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF
OPERATION
A-Fem Medical Corporation is a medical technology company with multiple
product platforms targeting women's unmet health needs. A-Fem has developed
three proprietary technology platforms: one based on its inSync(R) miniform
interlabial pad, another based on its Rapid-Sense diagnostic tests and the third
based on its PadKit(R) Sample Collection System. A-Fem markets the inSync
miniform as an alternative to tampons, pads or liners for light flow protection.
A-Fem is also developing point-of-care diagnostic products that provide
quantified results using its proprietary Rapid-Sense technology. The PadKit,
currently in clinical trials, utilizes a miniform as a non-invasive sample
collection method for use in testing for certain cancers and other diseases
In the last year our corporate strategy for the inSync miniform has been
modified from aggressive introductory support of a regional roll-out, followed
by on-going advertising and promotion, to one requiring modest upfront and
on-going promotion utilizing retailers, catalog and on-line, web-based
(internet) retailers such as Transitions for Health, PlanetRx and SOMA.
InSyncminiform.com, launched in July, enables women nationally to purchase our
product. Additionally we are exploring partnering opportunities to assist in the
marketing and distribution of the product in retail outlets.
A Rapid-Sense test for the detection of Cotinine (a metabolite of
nicotine) is being evaluated for sales into the insurance testing market. A-Fem
plans to manufacture the product and plans that sales and distribution would be
handled through third parties. In addition, A-Fem continues development of a
proprietary test using A-Fem's Rapid-Sense technology for Konica, a large
Japanese industrial chemical firm. A-Fem is also developing a Rapid-Sense test
for a pharmaceutical company. A-Fem plans to continue to seek strategic partners
to fund the research and development for, and assist in the marketing and
distribution of, specific applications of its Rapid-Sense technology.
The company is conducting clinical studies to submit to the FDA for
clearance of the PadKit as an alternative to the cervical scrape as a
sample-collection system for tests that screen for cervical cancer.
OVERVIEW
A-Fem experienced significant operating losses during the year ended
December 31, 1998. Further, A-Fem has continued to incur losses in the first
nine months of 1999 and has never generated significant revenues from
operations. A-Fem expects that significant ongoing expenditures will be
necessary to successfully implement its business plan and develop, manufacture
and market its products. These circumstances raise substantial doubt about
A-Fem's ability to continue as a going concern. Execution of A-Fem's plans and
its
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ability to continue as a going concern depend upon its acquiring substantial
additional financing. Management's plans include efforts to obtain additional
capital and to seek potential partnering opportunities. A-Fem has raised
operating funds in the past by selling shares of its common and preferred stock
for consideration totaling approximately $4.7 million during 1998 and
$1.9 million through September 1999.
A-Fem may not be able to raise additional funding or enter into a
strategic alliance. If A-Fem is unable to obtain adequate additional financing,
enter into such strategic alliance or generate sufficient sales revenues,
management may be required to curtail A-Fem's product development, manufacturing
and marketing activities, and A-Fem may be forced to cease operations.
RESULTS OF OPERATIONS
Net sales for the quarter ended September 30, 1999, were approximately
$14,000, as compared to approximately $99,000 for the quarter ended September
30, 1998. For the nine-month period ended September 30, 1999, net sales were
$57,000, as compared to $367,000 for the same period in 1998. This decrease for
the quarter and nine-month period was the result of decreased levels of
promotional support for the inSync miniform as compared to the levels maintained
during the product introduction and roll-out in the prior year.
Cost of sales for the quarter ended September 30, 1999 was approximately
$76,000 as compared to approximately $150,000 for the quarter ended September
30, 1998. For the nine-month period ended September 30, 1999, cost of sales was
approximately $204,000 as compared to approximately $379,000 for the same period
in 1998. This decrease for the quarter and nine-month period primarily resulted
from decreases in the volume of products sold in 1999 as compared to 1998.
Gross margin for the quarter ended September 30, 1999 was -454.5% as
compared to -51.8% for the quarter ended September 30, 1998. For the nine-month
period ended September 30, 1999, gross margin was -257.0% as compared to -3.3%
for the same period in 1998. Because certain of A-Fem's manufacturing costs are
fixed, the decrease in manufacturing volume in 1999 as compared to 1998 created
a situation of worsening gross margin in 1999 as compared to the prior year.
Marketing and selling expense for the third quarter of 1999 was
approximately $32,000, as compared to approximately $635,000 for the quarter
ended September 30, 1999. For the nine-month period ended September 30, 1999,
marketing and selling expense was approximately $273,000, as compared to
approximately $1,938,000 for the same period in 1998. The decrease in marketing
and selling expense for the quarter and nine-month period resulted from
decreased expenditures for advertising, marketing and sales consultants in 1999
as compared to the expenditures required to support the product roll-out in
1998.
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Research and development expense for the quarter ended September 30,
1999, was approximately $302,000, as compared to approximately $237,000 for the
same quarter of the prior year. For the nine-month period ended September 30,
1999, research and development expense was approximately $812,000, as compared
to approximately $634,000 for the same period in 1998. Research and development
expense increased as the result of additional clinical studies in support of the
PadKit.
General and administrative expense was approximately $223,000 for the
quarter ended September 30, 1999, as compared to approximately $271,000 for the
same period in the prior year. This decrease was primarily the result of the
elimination of two temporary clerical positions and a reduction in A-Fem's
insurance premiums. For the nine-month period ended September 30, 1999, general
and administrative expense was approximately $715,000, as compared to $706,000
for the same period in 1998.
A-Fem's operating loss for the quarter ended September 30, 1999, was
approximately $620,000, as compared to approximately $1,194,000 for the same
quarter of the prior year. For the nine-month period ended September 30, 1999,
the operating loss was approximately $1,948,000, as compared to an operating
loss of approximately $3,290,000 for the same period in 1998. This decrease
resulted primarily from lower marketing expenses in 1999 as compared to the
expenses associated with the rollout of the inSync miniform in 1998.
A-Fem's net loss for the quarter ended September 30, 1999, was
approximately $622,000, as compared to approximately $1,216,000 for the same
period in the prior year. For the nine-month period ended September 30, 1999,
the Company's net loss was approximately $1,971,000, as compared to a net loss
of $3,336,000 for the same period in the prior year. This decrease reflects the
higher levels of expenses incurred in 1998 to support the roll-out of A-Fem's
inSync miniform, partially offset by research and development expense increases
in 1999 to support additional PadKit clinical studies.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1999, A-Fem had cash and cash equivalents of
$494,689. A-Fem's net cash position was reduced by $173,680 between December 31,
1998 and September 30, 1999, as a result of normal operating expenses.
A-Fem expects to continue to incur losses through 1999 and into 2000,
because the costs of research and development are expected to continue to exceed
income from product sales. A-Fem incurs approximately $200,000 per month of
operating expenses. In order to carry out its development plans for Rapid-Sense
products and the PadKit, A-Fem will need to raise approximately $3 million in
addition to the funds needed for its monthly operating expenses A-Fem does not
expect significant amounts of debt financing to be available to it in the near
term, and that it will have to issue additional equity. A-Fem cannot predict on
what terms any such financing might be available, but any such financing could
involve
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issuance of equity below current market prices and result in significant
dilution of existing stockholders.
FACTORS AFFECTING FORWARD-LOOKING STATEMENTS
The statements contained in this report that are not statements of
historical fact may include forward-looking statements (as defined in Section
27A of the Securities Act of 1933, as amended) that involve a number of risks
and uncertainties. Moreover, from time to time A-Fem may issue other
forward-looking statements. The following factors are among those that could
cause actual results to differ materially from the forward-looking statements
and should be considered in evaluating any forward-looking statements: need for
additional financing; uncertainty associated with need for regulatory approvals;
continuing operating losses; results of financing efforts; lack of revenues from
products; market acceptance risks; uncertainty associated with product
development; the impact of competitive products and pricing; the effect of
economic conditions generally and within the medical technology industry; and
the additional factors listed from time to time in the Company's SEC reports,
including but not limited to, the Company's report on Form 10-KSB for the fiscal
year ended December 31, 1998, as amended.
YEAR 2000
A-Fem has conducted a review of its computer systems' devices,
applications and manufacturing equipment to identify those areas that could be
affected by Year 2000 noncompliance. All of the computer hardware and software
currently used by A-Fem, including embedded technology that we use in our
manufacturing processes, is Year 2000 compliant. A-Fem believes that a material
failure by one or more of its vendors or customers to comply with Year 2000
requirements in a timely fashion will not have a material effect on A-Fem's
operations.
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PART II - OTHER INFORMATION
ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES
On August 19, 1999, the Company issued 104,170 shares of Series A
Preferred Stock and warrants to purchase an additional 20,834 shares of Series A
Preferred Stock, at an exercise price of $.01 per share, to one entity, Capital
Consultants, LLC (formerly Capital Consultants, Inc.), acting as agent for
individual investors, for cash consideration of $200,006.40. On September 22,
1999 the Company issued 260,400 shares of Series A Preferred Stock and warrants
to purchase an additional 52,080 shares of Series A Preferred Stock at an
exercise price of $.01 per share to one entity, Capital Consultants, LLC, acting
as agent for individual investors, for cash consideration of $499,968.00. The
warrants expire 10 years from their respective dates of issue. Shares of Series
A Preferred Stock are convertible into shares of the Company's Common Stock on a
one-for-one basis, subject to adjustment under certain circumstances to prevent
dilution. Capital Consultants, LLC, represented that such entity and each
individual represented by such entity was an "accredited investor" within the
meaning of Rule 501(a) of the Securities Act. In issuing these securities, the
Company relied upon an exemption from registration pursuant to Section 4(2) of
the Securities Act.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a) Exhibits
3.1 Articles of Incorporation, as amended
3.2 Amended and Restated Bylaws(1)
11.1 Statement re: computation of per share earnings
27.1 Financial Data Schedule
- -------------------------
(1) Incorporated by reference to the exhibits to A-Fem's annual report on
Form 10-KSB for the year ended December 31, 1998, as amended.
b) Reports on Form 8-K
None
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SIGNATURES
In accordance with the requirements of the Exchange Act, the Company caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
A-FEM MEDICAL CORPORATION
Date: November 12, 1999
/s/ Steven T. Frankel
-------------------------------
Steven T. Frankel
President and Chief Executive Officer
/s/ Martin Harvey
-------------------------------
Martin Harvey
Controller
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EXHIBIT 3.1
AMENDED AND RESTATED
ARTICLES OF INCORPORATION
OF
A-FEM MEDICAL CORPORATION
ARTICLE 1. NAME
The name of the Corporation is A-FEM MEDICAL CORPORATION.
ARTICLE 2. PRINCIPAL OFFICE AND REGISTERED AGENT
Its principal office in the State of Nevada is located at One East First
Street, Reno, Washoe County, Nevada 89501. The name and address of its resident
agent is The Corporation Trust Company of Nevada, One East First Street, Reno,
Nevada 89501.
ARTICLE 3. PURPOSE
The nature of the business, or objects or purposes to be transacted,
promoted or carried on by the corporation are:
To engage in any lawful activity and to manufacture, purchase or
otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer
or otherwise dispose of, trade, deal in and deal with goods, wares and
merchandise and personal property of every class and description.
To perform research and development services and to manufacture and
market health case devices, products and services.
To hold, purchase and convey real and personal estate and to mortgage or
lease any such real or personal estate with its franchises and to take the same
by devise or bequest.
To acquire, and pay for in cash, stock or bonds of this corporation or
otherwise, the goodwill, rights, assets and property, and to undertake or assume
the whole or any part of the obligations or liabilities of any person, firm,
association or corporation.
To acquire, hold, use, sell, assign, lease, grant licenses in respect
of, mortgage, or otherwise dispose of letters patent of the United States or any
foreign country, patent rights, licenses and privileges, inventions,
improvements and processes, copyrights, trademarks and trade names, relating to
or useful in connection with any business of this corporation.
To guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge
or otherwise dispose of the shares of the capital stock of or any bonds,
securities or evidences of the indebtedness
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created by any other corporation or corporations of this state, or any other
state or government, and, while owner of such stock, bonds, securities or
evidence of indebtedness, to exercise all the rights, powers and privileges of
ownership, including the right to vote, if any.
To borrow money and contract debts when necessary for the transaction of
its business, or for the exercise of its corporate rights, privileges or
franchises, or for any other lawful purpose of its incorporation; to issue
bonds, promissory notes, bills of exchange, debentures, and other obligations
and evidences of indebtedness, payable at specified time or times, or payable
upon the happening of a specified event or events, whether secured by mortgage,
pledge or otherwise, or unsecured, for money borrowed, or in payment for
property purchased, or acquired, or for any other lawful objects.
To purchase, hold, sell and transfer shares of its own capital stock,
and use therefor its capital, capital surplus, surplus, or other property or
funds; provided it shall not use its funds or property for the purchase of its
own shares of capital stock when such use would cause any impairment of its
capital; and provided further, that shares of its own capital stock belonging to
it shall not be voted upon, directly or indirectly, nor counted as outstanding,
for the purpose of computing any stockholders' quorum or vote.
To conduct business, have one or more offices, and hold, purchase,
mortgage and convey real and personal property in this state, and in any of the
several states, territories, possessions and dependencies of the United States,
the District of Columbia, and in any foreign countries.
To do all and everything necessary and proper for the accomplishment of
the objects hereinbefore enumerated or necessary or incidental to the protection
and benefit of the corporation, and, in general, to carry on any lawful business
necessary or incidental to the attainment of the objects of the corporation,
whether or not such business is similar in nature to the objects hereinbefore
set forth.
The objects and purposes specified in the foregoing clauses will, except
where otherwise expressed, be in nowise limited or restricted by reference to,
or inference from, the terms of any other clause in these articles of
incorporation, but the objects and purposes specified in each of the foregoing
clauses of this article shall be regarded as independent objects and purposes.
ARTICLE 4. SHARES
4.1 AUTHORIZED CAPITAL
The corporation is authorized to issue two classes of stock to be
designated, respectively, "Common Stock" and "Preferred Stock." The total number
of shares of stock that the corporation shall have authority to issue shall be
43,000,000, consisting of 33,000,000 shares of Common Stock with a par value of
$.01 per share, and 10,000,000 shares of Preferred Stock with a par value of
$.01 per share.
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4.2 COMMON STOCK
Subject to any preferential or other rights granted to any series of
Preferred Stock, the holders of shares of the Common Stock shall be entitled to
receive dividends out of funds of the corporation legally available therefor, at
the rate and at the time or times as may be provided by the Board of Directors
and shall be entitled to receive distributions legally payable to stockholders
on the liquidation of the corporation. The holders of shares of Common Stock, on
the basis of one vote per share, shall have the right to vote for the election
of members of the Board of Directors of the corporation and the right to vote on
all other matters, except where a separate class or series of the corporation's
stockholders vote by class or series. Holders of Common Stock shall not be
entitled to cumulate their votes for the election of directors.
4.3 PREFERRED STOCK
Shares of Preferred Stock may be issued from time to time in one or more
series, in any manner permitted by law, as determined from time to time by the
Board of Directors and stated in the resolution or resolutions providing the
issuance thereof, prior to the issuance of any shares thereof. The Board of
Directors shall have the authority to fix and determine the rights and
preferences of the shares of any series so establish.
4.4 NO PREEMPTIVE RIGHTS
Stockholders of the corporation do not have preemptive rights.
ARTICLE 5. BOARD OF DIRECTORS
The governing board of the corporation will be known as directors, and
the number of directors may from time to time be increased or decreased in such
manner as shall be provided by the bylaws of the corporation, provided that the
number of directors will not be reduced to less than three (3), except that in
cases where all the shares of the corporation are owned beneficially and of
record by either one or two stockholders, the number of directors may be less
than three (3) but not less than the number of stockholders.
ARTICLE 6. STOCKHOLDER LIABILITY
The capital stock, after the amount of the subscription price or par
value has been paid in, will not be subject to assessment to pay the debts of
the corporation.
ARTICLE 7. INCORPORATORS
(Omitted pursuant to NRS 78.403).
ARTICLE 8. DURATION
The corporation is to have perpetual existence.
Page 15
<PAGE> 4
ARTICLE 9. AUTHORITY OF THE BOARD OF DIRECTORS
In furtherance, and not in limitation of the powers conferred by
statute, the board of directors is expressly authorized:
Subject to the bylaws, if any adopted by the stockholders, to make,
alter, or amend the bylaws of the corporation.
To fix the amount to be reserved as working capital over and above its
capital stock paid in, to authorize and cause to be executed mortgages and liens
upon the real and personal property of the corporation.
By resolution passed by a majority of the whole board, to designate one
(1) or more committees, each committee to consist of one (1) or more of the
directors of the corporation, which, to the extent provided in the resolution or
in the bylaws of the corporation, will have and may exercise the powers of the
board of directors in the management of the business and affairs of the
corporation, and may authorized the seal of the corporation to be affixed to all
papers that may require it. Such committee or committees will have such name or
names as may be stated in the bylaws of the corporation or as may be determined
from time to time by resolution adopted by the board of directors.
When and as authorized by the affirmative vote of stockholders holding
stock entitling them to exercise at lease a majority of the voting power given
at a stockholders' meeting called for that purpose, or when authorized by the
written consent of the holders of at least a majority of the voting stock issued
and outstanding, the board of directors will have power and authority at any
meeting to sell, lease, or exchange all of the property and assets of the
corporation, including its good will and its corporate franchises, upon such
terms and conditions as its board of directors deem expedient and for the best
interests of the corporation.
ARTICLE 10. LOCATION OF MEETINGS AND BOOKS
Meetings of the stockholders may be held outside the State of Nevada, if
the bylaws so provide. The books of the corporation may be kept (subject to any
provision contained in the statutes) outside the State of Nevada at such place
or places as may be designated from time to time by the board of directors or in
the bylaws of the corporation.
ARTICLE 11. AMENDMENTS
The corporation reserves the right to amend, alter, change, or repeal
any provision contained in these articles of incorporation, in the manner now or
hereafter prescribed by statute, or by these articles of incorporation, and all
rights conferred upon stockholders herein are granted subject to this
reservation.
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<PAGE> 5
ARTICLE 12. INDEMNIFICATION
The Bylaws of the corporation shall provide for the indemnification of
the corporation's directors, officers, employees and agents for expenses
incurred in connection with the defense of actions, suits or proceedings to the
fullest extent permitted by Nevada law.
ARTICLE 13. LIMITATION OF DIRECTOR AND OFFICER LIABILITY
No director or officer of the corporation shall be liable to the
corporation or to the stockholders for damages for any breach of fiduciary duty;
provided, however, that a director or officer shall be liable for damages that
result from any of the following:
(a) Acts or omissions that involve intentional misconduct, fraud or a
knowing violation of law;
(b) The willful or grossly negligent payment of any improper dividend or
distribution; or
(c) Acts or omissions that occurred prior to March 18, 1987.
These Amended and Restated Articles of Incorporation were adopted by the
Board of Directors on June 13, 1997 and by the stockholders on December 12,
1997.
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<PAGE> 6
IN WITNESS WHEREOF, A-Fem Medical Corporation has caused these Amended
and Restated Articles of Incorporation to be signed by its President and
Secretary this 19th day of August, 1998.
A-FEM MEDICAL CORPORATION
By /s/ J. Peter Burke
-------------------------------
J. Peter Burke, President
By /s/ William H. Fleming
-------------------------------
William H. Fleming, Secretary
STATE OF OREGON )
) ss:
COUNTY OF WASHINGTON )
The foregoing instrument was acknowledged before me, a Notary Public, on
this 19th day of August, 1998, by J. Peter Burke, President, and William H.
Fleming, Secretary, of A-Fem Medical Corporation.
/s/ Steve Fleming
Notary Public for Oregon
My commission expires October 1, 2000
[Notary Stamp or Seal]
/Seal/
Page 18
<PAGE> 7
CERTIFICATE OF DESIGNATION
OF
PREFERENCES OF PREFERRED STOCK
OF
A-FEM MEDICAL CORPORATION
A NEVADA CORPORATION
1. The undersigned, J. Peter Burke and William H. Fleming, hereby
certify that:
2. They are the duly elected and acting President and Secretary,
respectively, of A-Fem Medical Corporation, a Nevada corporation (the
"Corporation").
Pursuant to authority given by the Corporation's Articles of
Incorporation, the Board of Directors of the Corporation has duly adopted the
following recitals and resolutions:
WHEREAS, the Board of Directors of the Corporation is authorized to
determine or alter the rights, preferences, privileges and restrictions granted
to or imposed upon any wholly unissued series of Preferred Stock, to fix the
number of shares constituting any such series and to determine the designation
thereof, or any of them, and
WHEREAS, the Corporation has not issued any shares of such Preferred
Stock and the Board of Directors of the Corporation desires, pursuant to its
authority as aforesaid, to determine and fix the rights, preferences, privileges
and restrictions relating to the initial series of said Preferred Stock and the
number of shares constituting and the designation of said series;
NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes
and determines the designation of, the number of shares constituting, and the
rights, preferences, privileges and restrictions relating to, said initial
series of Preferred Stock as follows:
SECTION 1. DESIGNATION AND NUMBER OF SHARES
1.1 DESIGNATION
The initial series of Preferred Stock shall be designated "Series A
Convertible Preferred Stock." The term "Series A Stock" as used herein refers to
the Series A Convertible Preferred Stock.
1.2 NUMBER OF SHARES
The number of shares constituting the Series A Stock shall be 4,500,000
shares.
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<PAGE> 8
SECTION 2. DIVIDENDS AND DISTRIBUTIONS; LIQUIDATION RIGHTS
2.1 DIVIDENDS
The holders of shares of Common Stock and Series A Stock shall be
entitled to receive dividends, when, as and if declared by the Board of
Directors of the corporation, out of any assets legally available therefor;
provided, however, that no such dividend or distribution may be declared or paid
on any shares of Common Stock unless at the same time an equivalent dividend or
distribution is declared or paid on all outstanding shares of Series A Stock.
The dividend or distribution on shares of Series A Stock shall be payable based
upon the number of shares of Common Stock that the holder of shares of Series A
Stock would have held if such holder had converted such shares of Series A Stock
into Common Stock immediately prior to the record date of such dividend or
distribution.
2.2 LIQUIDATION PREFERENCE
In the event of any liquidation, dissolution or winding up of the
Corporation, either voluntary or involuntary, the holders of the Series A Stock
shall be entitled to receive, prior and in preference to any distribution of any
of the assets of the Corporation to the holders of the Common Stock, an amount
per share equal to $4.00, plus a further amount equal to any declared but unpaid
dividends thereon before any payment shall be made or any assets distributed to
the holders of Common Stock. If upon such liquidation, dissolution or winding up
of the Corporation, the assets thus distributed among the holders of the Series
A Stock shall be insufficient to permit the payment in full of the aforesaid
preferential amounts, the entire assets of the Corporation to be distributed
shall be distributed among the holders of the Series A Stock so that the holder
of each share of Series A Stock shall receive the same percentage of the stated
liquidation preferences of such share as is received by every other holder of
Series A Stock.
Following the completion of the distribution of the stated liquidation
preferences to be paid to the holders of the Series A Stock, any remaining
assets shall be distributed to the holders of the Common Stock of the
Corporation; provided, however, if no shares of Common Stock are outstanding at
the time of such distribution, the holders of the Series A Stock shall be
entitled to receive, ratably (assuming conversion of all shares of Series A
Stock to Common Stock), all assets of the Corporation remaining after the
payment of the stated liquidation preferences of the Series A Stock as set forth
herein.
SECTION 3. CONVERSION
3.1 CONVERSION RIGHTS
A holder of shares of Series A Stock shall be entitled, at any time, to
cause any or all of such shares to be converted into shares of Common Stock.
Page 20
<PAGE> 9
3.1.1 CONVERSION RATE
The conversion rate for Series A Stock in effect at any time (the
"Conversion Rate") shall equal $3.84 divided by the Conversion Price, calculated
as provided in Section 3.1.2.
3.1.2 CONVERSION PRICE
The conversion price for the Series A Stock in effect from time to time,
except as adjusted in accordance with Section 3.2.2, shall be $3.84 (the
"Conversion Price").
3.2 CONVERSION PROCEDURE; ANTI-DILUTION ADJUSTMENTS
3.2.1 CONVERSION PROCEDURE
Before a holder of the Series A Stock shall be entitled to convert the
same into shares of Common Stock, such holder shall surrender the certificate or
certificates therefor, duly endorsed in blank or accompanied by proper
instruments of transfer, at the office of the Corporation or of any transfer
agent for the shares of the Series A Stock, and shall give written notice to the
Corporation at such office that such holder elects to convert the same and shall
state in writing therein the name or names in which such holder wishes the
certificate or certificates for shares of Common Stock to be issued. The
Corporation shall, as soon as practicable thereafter, issue and deliver at the
address of the holder of the Series A Stock, or to the holder's nominee or
nominees, certificates for the number of full shares of Common Stock to which
the holder shall be entitled, as aforesaid, together with cash in lieu of any
fraction of a share as hereinafter provided in this Section 3.2. Such conversion
shall be deemed to have been made as of the date of such surrender of the shares
of the Series A Stock to be converted, and the person or persons entitled to
receive the shares of Common Stock issuable upon such conversion shall be
treated for all purposes as the record holder or holders of such shares of
Common Stock on said date.
3.2.2 ADJUSTMENTS TO APPLICABLE CONVERSION PRICE
(a) Extraordinary Common Stock Event. Upon the happening of an
Extraordinary Common Stock Event (as defined below) after the date of the
initial issuance of any shares of Series A Stock, the Conversion Price shall,
simultaneously with the happening of such Extraordinary Common Stock Event, be
adjusted by multiplying the then effective Conversion Price, by a fraction, the
numerator of which shall be the number of shares of Common Stock outstanding
immediately prior to such Extraordinary Common Stock Event and the denominator
of which shall be the number of shares of Common Stock outstanding immediately
after such Extraordinary Common Stock Event (with the number of shares issuable
with respect to Common Stock Equivalents (as defined below) determined in the
manner provided for deemed issuances in Section 3.2.2(b)(v)), and the product so
obtained shall thereafter be the Conversion Price. The Conversion Price, as so
adjusted, shall be readjusted in the same manner upon the happening of any
successive Extraordinary Common Stock Event or Events.
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<PAGE> 10
"Extraordinary Common Stock Event" shall mean (i) the issuance of
additional shares of Common Stock, as a dividend or other distribution on
outstanding Common Stock of the corporation, or other securities or rights
convertible into, or entitling the holder thereof to receive directly or
indirectly, additional shares of Common Stock ("Common Stock Equivalents"), (ii)
a split or subdivision of outstanding shares of Common Stock into a greater
number of shares of Common Stock, or (iii) a combination of outstanding shares
of Common Stock into a smaller number of shares of Common Stock.
(b) Sale of Shares Below Applicable Conversion Price.
(i) If the corporation shall issue any Additional Stock
(as defined below) without consideration or for a consideration per share less
than the Conversion Price in effect immediately prior to the issuance of such
Additional Stock, the Conversion Price in effect immediately prior to issuance
of such Additional Stock (except as otherwise provided in this Section 3.2.2(b))
shall be adjusted down to a price equal to the quotient obtained by dividing the
total computed under clause (A) below by the total computed under clause (B)
below as follows:
(A) an amount equal to the sum of (1) the result obtained
by multiplying the number of shares of Common Stock deemed outstanding
immediately prior to such issuance (which shall include the actual
number of shares outstanding plus all shares issuable upon the
conversion or exercise of all outstanding convertible securities,
warrants and options other than shares excluded from the definition of
Additional Stock by Section 3.2.2(c)) by the Conversion Price then in
effect, and (2) the aggregate consideration, if any, received by the
corporation upon the issuance of such Additional Stock;
(B) the number of shares of Common Stock of the
corporation outstanding immediately after such issuance (including the
shares deemed outstanding as provided in clause (A) above).
(ii) No adjustment of the Conversion Price shall be made
in an amount less than one cent per share, provided, that any adjustments which
are not required to be made by reason of this sentence shall be carried forward
and shall be taken into account in any subsequent adjustment made to the
Conversion Price. Except as provided in Sections 3.2.2(b)(v)(C) and (D) below,
no adjustment of the Conversion Price shall have the effect of increasing the
Conversion Price above the Conversion Price in effect immediately prior to such
adjustment.
(iii) In the case of the issuance of Common Stock for
cash, the consideration shall be deemed to be the amount of cash paid therefor
before deducting any discounts, commissions or other expenses allowed, paid or
incurred by the corporation for any underwriting or otherwise in connection with
the issuance and sale thereof.
(iv) In the case of the issuance of Common Stock for a
consideration in whole or in part other than cash, the consideration other than
cash shall be deemed to be the fair
Page 22
<PAGE> 11
value thereof as determined in good faith by the Board of Directors irrespective
of any accounting treatment.
(v) In the case of the issuance of options or warrants to
purchase or rights to subscribe for Common Stock, securities by their terms
convertible into or exchangeable for Common Stock, or options or warrants to
purchase or rights to subscribe for such convertible or exchangeable securities,
the following provisions shall apply:
(A) the aggregate maximum number of shares of Common Stock
deliverable upon exercise of such options or warrants to purchase or
rights to subscribe for Common Stock shall be deemed to have been issued
at the time such options, warrants, or rights were issued for a
consideration equal to the consideration (determined in the manner
provided in Sections 3.2.2(b)(iii) and (iv) above), if any, received by
the corporation upon the issuance of such options, warrants or rights
plus the minimum purchase price provided in such options, warrants or
rights for the Common Stock covered thereby, but no further adjustment
to the Conversion Price shall be made for the actual issuance of Common
Stock upon the exercise of such options, warrants or rights in
accordance with their terms;
(B) the aggregate maximum number of shares of Common Stock
deliverable upon conversion of or in exchange for any such convertible
or exchangeable securities or upon the exercise of options or warrants
to purchase or rights to subscribe for such convertible or exchangeable
securities and subsequent conversion or exchange thereof shall be deemed
to have been issued at the time such securities were issued or such
options, warrants or rights were issued for a consideration equal to the
consideration received, if any, by the corporation for any such
securities and any related options, warrants or rights, plus the minimum
additional consideration, if any, to be received by the corporation upon
the conversion or exchange of such securities or the exercise of any
related options, warrants or rights (the consideration in each case to
be determined in the manner provided in Sections 3.2.2(b)(iii) and (iv)
above), but no further adjustment to the Conversion Price shall be made
for the actual issuance of Common Stock upon the conversion or exchange
of such securities in accordance with their terms;
(C) if such options, warrants, rights or convertible or
exchangeable securities by their terms provide, with the passage of time
or otherwise, for any change in the consideration payable to the
corporation or in the number of shares of Common Stock issuable upon the
exercise, conversion or exchange thereof, including, without limitation,
a change resulting from the antidilution provisions thereof, the
Conversion Price computed upon the original issue thereof, and any
subsequent adjustments based thereon, shall, upon such change becoming
effective, be recomputed to reflect such change, but no further
adjustment to the Conversion Price shall be made for the actual issuance
of Common Stock upon the exercise of any such options, warrants or
rights or the conversion or exchange of such securities in accordance
with their terms; and
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<PAGE> 12
(D) upon the expiration of any such options, warrants or
rights, the termination of any such rights to convert or exchange or the
expiration of any options, warrants or rights related to such
convertible or exchangeable securities, the Conversion Price shall
forthwith be readjusted to such Conversion Price as would have been
obtained had the adjustment which was made upon the issuance of such
options, warrants, rights or securities or options, warrants or rights
related to such securities been made upon the basis of the issuance of
only the number of shares of Common Stock (and convertible or
exchangeable securities which remain in effect) actually issued upon the
exercise of such options, warrants or rights, upon the conversion or
exchange of such securities or upon the exercise of the options,
warrants or rights related to such securities.
(c) "Additional Stock" shall mean any shares of Common Stock or
securities convertible into or exchangeable or exercisable for shares of Common
Stock issued (or deemed to have been issued pursuant to Section 3.2.2(b)(v)
above) by the corporation after the date of initial issuance of any Series A
Stock other than:
(i) Common Stock issued in connection with an
Extraordinary Common Stock Event; and
(ii) Common Stock issued or issuable upon conversion of
Series A Stock.
3.2.3 ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS
If the Corporation at any time after the Filing Date shall make or
issue, or fix a record date for the determination of holders of Common Stock
entitled to receive, a dividend or other distribution payable in securities of
the Corporation other than shares of Common Stock, then and in each such event
provision shall be made so that the holders of the Series A Stock shall receive
upon conversion thereof in addition to the number of shares of Common Stock
receivable thereupon, the amount of securities of the Corporation which the
holders would have received had the holders' Series A Stock been converted into
Common Stock on the date of such event and had thereafter, during the period
from the date of such event to and including the conversion date, retained such
securities (together with any distributions payable thereon during such period)
receivable by them as aforesaid during such period, giving application to all
adjustments called for during such period under Section 3.2 with respect to the
rights of the holders of the Series A Stock.
3.2.4 ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE OR SUBSTITUTION
If the Common Stock issuable upon the conversion of the Series A Stock
shall be changed into the same or different number of shares of any class or
classes of stock, by capital reorganization, involving exchange, substitution,
reclassification or otherwise (other than a subdivision or combination of shares
or stock dividend provided for above, or a reorganization, merger, consolidation
or sale of assets provided for below), then the holders of the shares of
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<PAGE> 13
Series A Stock shall have the right thereafter to convert each such share into
the same kind and amount of shares of stock and other securities and property
receivable upon such exchange, reclassification or other change, as a holder of
the number of shares of Common Stock into which such shares of Series A Stock
might have been converted immediately prior to such substitution,
reclassification or other change, all subject to further adjustment as provided
herein.
3.2.5 REORGANIZATION, MERGER, CONSOLIDATION OR SALE OF ASSETS
If at any time there shall be a capital reorganization of the Common
Stock (other than a subdivision, combination, reclassification or exchange of
shares provided for elsewhere in this Section 3.2) or a merger or consolidation
of the Corporation with or into another corporation, or the sale of all or
substantially all of the Corporation's properties and assets to any other
person, then, as a part of such reorganization, merger, consolidation or sale,
provision shall be made so that the holders of the Series A Stock shall
thereafter be entitled to receive upon conversion of such Series A Stock, the
number of shares of stock or other securities or property of the Corporation, or
of the successor corporation resulting from such reorganization, merger,
consolidation or sale, to which a holder of Common Stock deliverable upon
conversion would have been entitled upon such capital reorganization, merger,
consolidation or sale.
3.2.6 CERTIFICATE OF ADJUSTMENT
Upon the occurrence of each adjustment or readjustment of the Conversion
Rate of the Series A Stock pursuant to this Section 3.2, the Corporation shall
promptly compute such adjustment or readjustment in accordance with the terms
hereof and prepare and furnish to the holders of the Series A Stock, as
applicable, a certificate, signed by the Chairman of the Board, the President or
the Chief Financial Officer, setting forth such adjustment or readjustment and
showing in detail the facts upon which such adjustment or readjustment is based.
3.2.7 FRACTIONAL SHARES
The corporation shall not be obligated to deliver to holders of Series A
Stock any fractional share or shares of Common Stock issuable upon conversion of
such shares of Series A Stock, but in lieu thereof may make a cash payment in
respect thereof in any manner permitted by law.
3.2.8 RESERVATION OF STOCK ISSUABLE UPON CONVERSION
The Corporation shall at all times reserve and keep available, out of
its authorized but unissued Common Stock, solely for the purpose of effecting
the conversion of the Series A Stock, the full number of shares of Common Stock
deliverable upon the conversion of all shares of the Series A Stock from time to
time outstanding. The Corporation shall from time to time, in accordance with
the laws of the State of Nevada, use its best efforts to increase the authorized
amount of its Common Stock if at any time the authorized number of shares of
Common Stock remaining unissued shall not be sufficient to permit the conversion
of all of the shares of the Series A Stock at the time outstanding.
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<PAGE> 14
SECTION 4. VOTING RIGHTS
4.1 VOTING RIGHTS OF SERIES A STOCK
4.1.1 VOTING WITH COMMON STOCK
The holders of Series A Stock shall be entitled to vote on all matters
submitted to a vote of the holders of Common Stock of the corporation, voting
together with the holders of Common Stock as one class except as otherwise
provided in this Section 4. Each share of the Series A Stock shall be entitled
to the number of votes equal to the number of shares of Common Stock into which
such share of Series A Stock could be converted on the record date for
determining the shareholders entitled to vote.
4.1.2 VOTING AS A SEPARATE VOTING GROUP
The holders of Series A Stock shall be entitled to vote as a separate
voting group with respect to (i) any of the transactions listed in Section 4.2
hereto, (ii) the creation of any senior or pari passu security, (iii) any
transaction constituting a deemed dividend under federal tax law or (iv) as
otherwise provided by law.
4.2 PROTECTIVE PROVISIONS OF SERIES A STOCK
So long as 400,000 shares or more of the Series A Stock are outstanding
after the Filing Date, the Corporation shall not, without the vote or written
consent of the majority of the holders of the Series A Stock, do any of the
following:
(a) authorize or issue any shares of stock with rights, including
liquidation preferences, superior to the Common Stock;
(b) effect any sale, lease, assignment, transfer, or other conveyance of
all or substantially all of the assets of the Corporation or the sale, transfer
or license of intellectual property other than in the ordinary course of
business;
(c) effect any consolidation or merger involving the Corporation;
(d) effect any voluntary dissolution, liquidation, recapitalization,
reclassification or reorganization of the Corporation;
(e) repurchase or redeem any equity securities, or pay any dividends or
other distributions on equity securities;
(f) engage in any business other than the business currently conducted;
(g) authorize or issue additional equity or options or warrants to
purchase additional equity to employees, consultants or directors;
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<PAGE> 15
(h) amend the Articles of Incorporation or Bylaws;
(i) incur any indebtedness for borrowed money or enter into any capital
lease obligations which aggregate in excess of $25,000.
4.3 STATUS OF CONVERTED STOCK
In case any shares of Series A Stock shall be converted pursuant to
Section 3.2 hereof, the shares so converted shall assume the status of
authorized but undesignated and unissued shares of Series A Stock.
4.4 NOTICES
Any notice required herein except as otherwise specifically provided
herein, to be given to a holder of the Series A Stock shall be in writing and
may be delivered by personal service, sent by overnight professional courier
service, sent by telegraph or cable or sent by United States registered or
certified mail, return receipt requested, with postage thereon fully prepaid.
All such communications shall be addressed to such holder of record at its
address appearing on the books of the Corporation. If sent by telegraph or
cable, a confirmed copy of such telegraphic or cabled notice shall promptly be
sent by mail (in the manner provided above) to the holders. Service of any such
communication made only by mail shall be deemed complete on the date of actual
delivery as shown by the addressee's registry or certification receipt or at the
expiration of the third business day after the date of mailing, whichever is
earlier in time.
RESOLVED FURTHER, that the Chairman of the Board, the President or any
Vice President and the Secretary or any Assistant Secretary of the Corporation
are each authorized to execute, verify and file a certificate of designation of
preferences of preferred stock in accordance with the General Corporation Law of
the State of Nevada.
3. The authorized number of shares of preferred stock of the Corporation
is 10,000,000 shares, and the number of shares constituting Series A Convertible
Preferred Stock, none of which has been issued, is 7,200,000 shares.
[this space intentionally left blank]
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<PAGE> 16
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
August 26, 1998.
/s/ J. Peter Burke
-------------------------------
J. Peter Burke, President
/s/ William H. Fleming
-------------------------------
William H. Fleming, Secretary
State of Oregon )
) ss.
County of Multnomah )
On August 26, 1998, personally appeared before me, a Notary Public,
J. Peter Burke, who acknowledged that he
- -----------------------------------------------
Names of Persons Appearing and Signing Document
executed the above instrument.
/s/ Athona G. Williamson
-------------------------------
Signature of Notary
(NOTARY STAMP OR SEAL)
/Seal/
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<PAGE> 17
CERTIFICATE OF CORRECTION
OF
A-FEM MEDICAL CORPORATION
1. The name of the corporation is A-Fem Medical Corporation.
2. On August 21, 1998, the corporation filed Amended and Restated
Articles of Incorporation (the "Amended and Restated Articles").
3. In such Amended and Restated Articles, it was incorrectly stated that
the Amended and Restated Articles were approved by the Board of Directors on
June 13, 1997 and by the stockholders on December 12, 1997.
4. The Amended and Restated Articles were approved by the Board of
Directors on August 21, 1998. An Amendment to the Articles of Incorporation
creating a class of preferred stock was approved by stockholders on December 21,
1997. Stockholders were not required to approve the Amended and Restated
Articles.
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
September 10, 1998.
/s/ J. Peter Burke
-------------------------------
J. Peter Burke, President
State of Oregon )
) ss.
County of Multnomah )
On September 10, 1998, personally appeared before me, a Notary Public,
J. Peter Burke, who acknowledged that he
- ------------------------------------------------
Names of Person Appearing and Signing Document
executed the above instrument.
/s/ Athona G. Williamson
-------------------------------
Signature of Notary
(NOTARY STAMP OR SEAL)
/Seal/
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<PAGE> 18
CERTIFICATE OF AMENDMENT
TO
CERTIFICATE OF DESIGNATION
OF
PREFERENCES OF PREFERRED STOCK
OF
A-FEM MEDICAL CORPORATION,
A NEVADA CORPORATION
1. The undersigned, Steven T. Frankel and William H. Fleming, hereby
certify that:
2. They are the duly elected and acting President and Secretary,
respectively, of A-Fem Medical Corporation, a Nevada corporation (the
"Corporation").
3. Pursuant to authority given by the Corporation's Articles of
Incorporation, the Board of Directors of the Corporation has duly adopted the
following amendment to the Corporation's Certificate of Designation of
Preferences of Preferred Stock:
"SECTION 1. DESIGNATION AND NUMBER OF SHARES
. . .
1.2 NUMBER OF SHARES
The number of shares constituting the Series A Stock shall be
8,200,000 shares."
4. The approval of the stockholders entitled to exercise a majority of
the voting power of the Series A Preferred Stock of the Corporation has been
received, as required pursuant to NRS 78.1955(3).
[this space intentionally left blank]
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<PAGE> 19
IN WITNESS WHEREOF, the undersigned has executed this Certificate on
September 17, 1999.
/s/ Steven T. Frankel
-------------------------------
Steven T. Frankel, President
/s/ William H. Fleming
-------------------------------
William H. Fleming, Secretary
State of Oregon )
) ss.
County of Multnomah )
On September 17, 1999, personally appeared before me, a Notary Public,
Steven T. Frankel and William H. Fleming, who acknowledged that they executed
the above instrument.
/s/ Cheryl R. Mealy
-------------------------------
Signature of Notary
My Commission Expires: June 8, 2001
(NOTARY STAMP OR SEAL)
/Seal/
Page 31
<PAGE> 1
EXHIBIT 11.1
A-FEM MEDICAL CORPORATION
CALCULATIONS OF NET LOSS PER SHARE
<TABLE>
<CAPTION>
FOR THE THREE MONTHS FOR THE NINE MONTHS
ENDED SEPTEMBER 30 SEPTEMBER 30,
--------------------------------- ---------------------------------
1999 1998 1999 1998
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Actual weighted average
shares outstanding 9,546,717 12,566,644 9,505,888 13,093,071
Dilutive common stock,
options and warrants using the
treasury stock method(1) -- - -- --
------------ ------------ ------------ ------------
Total shares used in per
share calculations 9,546,717 12,566,644 9,505,888 13,093,071
------------ ------------ ------------ ------------
Net loss $ (621,672) $ (1,216,215) $ (1,971,033) $ (3,335,707)
------------ ------------ ------------ ------------
Net loss per share $ (0.07) $ (0.10) $ (0.21) $ (0.25)
============ ============ ============ ============
</TABLE>
- ---------------------------------
(1) Preferred stock, warrants and options outstanding are not included, as the
effect would be anti-dilutive.
Page 1
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM A-FEM
MEDICAL CORPORATION'S FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1999 AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 495
<SECURITIES> 0
<RECEIVABLES> 24
<ALLOWANCES> 0
<INVENTORY> 71
<CURRENT-ASSETS> 745
<PP&E> 1,257
<DEPRECIATION> (612)
<TOTAL-ASSETS> 1,509
<CURRENT-LIABILITIES> 819
<BONDS> 0
0
67
<COMMON> 96
<OTHER-SE> 520
<TOTAL-LIABILITY-AND-EQUITY> 1,509
<SALES> 57
<TOTAL-REVENUES> 57
<CGS> 204
<TOTAL-COSTS> 204
<OTHER-EXPENSES> 1,801
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 56
<INCOME-PRETAX> (1,971)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,971)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,971)
<EPS-BASIC> (0.21)<F1>
<EPS-DILUTED> (0.21)<F1>
<FN>
<F1>This information has been prepared in accordance with SFAS No. 128. Basic
and diluted EPS have been entered in place of primary and full diluted EPS,
respectively.
</FN>
</TABLE>
