<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
(MARK ONE)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
-----------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________________ TO __________________
COMMISSION FILE NUMBER 33-68722
----------
POSITRON CORPORATION
-----------------------------------------------------------------
(EXACT NAME OF SMALL BUSINESS ISSUER AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
TEXAS 76-0083622
- ----------------------------------------------- -----------------------------
(STATE OF OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) (I.R.S. EMPLOYER IDENTIFICATION NO.)
</TABLE>
16350 PARK TEN PLACE, HOUSTON, TEXAS 77084
-------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE, INCLUDING ZIP CODE)
281-492-7100
--------------
(ISSUER'S TELEPHONE NUMBER, INCLUDING AREA CODE)
N/A
-----------------------------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
CHECK WHETHER THE ISSUER, (1) FILED ALL REPORTS REQUIRED TO BE FILED
BY SECTION 13 OR 15(D) OF THE EXCHANGE ACT DURING THE PAST 12 MONTHS (OR FOR
SUCH SHORTER PERIOD THAT THE REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND
(2) HAS BEEN SUBJECT TO SUCH FILING REQUIREMENTS FOR THE PAST 90 DAYS.
YES /X/ NO / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
CHECK WHETHER THE REGISTRANT FILED ALL DOCUMENTS AND REPORTS REQUIRED
TO BE FILED BY SECTION 12, 13 OR 15(d) OF THE EXCHANGE ACT AFTER THE
DISTRIBUTION OF SECURITIES UNDER A PLAN CONFIRMED BY A COURT.
YES /X/ NO / /
APPLICABLE ONLY TO CORPORATE ISSUERS
STATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES
OF COMMON EQUITY, AS OF NOVEMBER 11, 1996: 4,075,726
================================================================================
<PAGE> 2
POSITRON CORPORATION
Form 10-QSB for the quarter ended September 30, 1996
INDEX
<TABLE>
<CAPTION>
Page
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS AS OF DECEMBER 31, 1995
AND SEPTEMBER 30, 1996 1
STATEMENT OF OPERATIONS FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 1995 AND 1996 2
STATEMENT OF OPERATIONS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1995 AND 1996 3
STATEMENTS OF CASH FLOW FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1995 AND 1996 4
NOTES TO FINANCIAL STATEMENTS 5, 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION 7, 8
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 9
ITEM 2. CHANGES IN SECURITIES 9
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 9
ITEM 5. OTHER INFORMATION 9
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURE 11
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
POSITRON CORPORATION
Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
December 31, 1995 September 30, 1996
----------------- ------------------
ASSETS: (unaudited)
- ------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 102 $ 117
Accounts receivable 1,417 1,282
Notes receivable -- 324
Inventory 2,666 2,556
Prepaid expenses 172 4
Other current assets 58 366
-------------- ----------------
Total Current Assets 4,415 4,649
Plant and equipment, net 1,028 827
Notes receivable 324 --
Intangible assets, net 131 113
-------------- ----------------
Total Assets $ 5,898 $ 5,589
============== ================
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
- -----------
Current Liabilities:
Accounts payable, trade $ 1,755 $ 681
Accrued liabilities 1,319 2,779
Notes payable to affiliate 1,073 663
Unearned revenue 457 216
-------------- ----------------
Total Current Liabilities 4,604 4,339
-------------- ----------------
Other Liabilities 79 71
-------------- ----------------
SHAREHOLDERS' EQUITY
Preferred stock, Series A 8% cumulative convertible
redeemable,$1 par, 3,075,318 shares authorized,
issued, 2,694,562 outstanding -- 2,695
Preferred stock, Series B 8% cumulative,
convertible, redeemable, $1 par, 25,000 shares
authorized issued and outstanding -- 25
Common stock, $0.01 par, 15,000,000 shares
authorized 4,022,244 issued and outstanding 36 40
Additional paid-in capital 39,309 41,193
Accumulated deficit (38,130) (42,774)
-------------- ----------------
Total Shareholders' Equity 1,215 1,179
-------------- ----------------
Total Liabilities and Shareholders' Equity $ 5,898 $ 5,589
============== ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE> 4
POSITRON CORPORATION
Statement of Operations
(in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended September 30,
----------------------------------------
1995 1996
------ ------
<S> <C> <C>
REVENUE:
- -------
System sales $ -- $ --
Fee per scan -- 152
Service and components 433 1,184
--------------- ---------------
433 1,336
--------------- ---------------
Cost of system sales 25 --
Cost of fee per scan -- 41
Cost of service and components 164 257
--------------- ---------------
189 298
--------------- ---------------
Gross profit 244 1,038
--------------- ---------------
OPERATING EXPENSE:
- -----------------
Research and development 609 599
Selling and marketing 350 308
General and administrative 827 1,056
--------------- ----------------
1,786 1,963
--------------- ----------------
Operating loss (1,542) (925)
--------------- ----------------
OTHER INCOME (EXPENSE):
- ----------------------
Other income (expense), net 1 (92)
Interest income (expense), net (3) 12
--------------- ----------------
(2) (80)
--------------- ----------------
Net loss $ (1,544) $ (1,005)
============= ================
Net loss per share $ (0.42) $ (0.26)
============= ================
Weighted average shares used in computing
net loss per share 3,637,320 3,828,876
============= ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
<PAGE> 5
POSITRON CORPORATION
Statement of Operations
(in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months ended September 30,
-------------------------------------------
1995 1996
------ ------
<S> <C> <C>
REVENUE:
- -------
System sales $ 2,560 $ 650
Fee per scan -- 342
Service and components 1,290 2,036
---------------- ----------------
3,850 3,028
---------------- ----------------
Cost of system sales 1,603 316
Cost of fee per scan -- 131
Cost of service and components 448 579
Provision for loss on system exchange -- 1,000
---------------- ----------------
2,051 2,026
---------------- ----------------
Gross profit 1,799 1,002
---------------- ----------------
OPERATING EXPENSE:
- -----------------
Research and development 1,809 1,700
Selling and marketing 1,216 797
General and administrative 2,296 2,916
---------------- ----------------
5,321 5,413
---------------- ----------------
Operating loss (3,522) (4,411)
---------------- ----------------
OTHER INCOME (EXPENSE):
- ----------------------
Other income (expense), net 13 (140)
Interest income (expense), net 72 (93)
---------------- ----------------
85 (233)
---------------- ----------------
Net loss $ (3,437) $ (4,644)
================ ================
Net loss per share $ (0.94) $ (1.25)
================ ================
Weighted average shares used in computing
net loss per share 3,637,320 3,701,639
================ ================
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE> 6
POSITRON CORPORATION
Statement of Cash Flows
(in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1995 1996
------ ------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
- ------------------------------------
Net loss $ (3,437) $ (4,644)
Adjustments to reconcile net loss to net cash
used by operating activities -
Depreciation 127 262
Amortization of intangible assets 18 18
Change in assets and liabilities -
Decrease in accounts receivable 308 135
(Increase) decrease in inventories (477) 110
Decrease in prepaid expenses 57 168
(Increase) in other current assets (20) (308)
Decrease in other assets -- --
Increase (decrease) in accounts payable, trade 759 (1,074)
Increase in accrued liabilities 59 1,460
(Decrease) in note payable to affiliate -- (410)
Increase (decrease) in unearned revenue 597 (241)
(Decrease) in other liabilities (8) (8)
(Decrease) in accrued research grants (442) --
----------------- ---------------
Net cash used by operating activities (2,459) (4,532)
----------------- ---------------
CASH FLOWS FROM INVESTING ACTIVITIES:
- ------------------------------------
Capital expenditures (914) (61)
----------------- ---------------
Net cash used in investing activities (914) (61)
----------------- ---------------
CASH FLOWS FROM FINANCING ACTIVITIES:
- ------------------------------------
Proceeds from conversion of warrant to common stock -- 8
Proceeds from issuance of preferred stock -- 4,625
Conversion of note payable to affiliates to preferred stock -- 650
Preferred stock offering costs -- (675)
----------------- --------------
Net cash provided by financing activities -- 4,608
----------------- --------------
Net increase (decrease) in cash and cash equivalents (3,373) 15
Cash and cash equivalents at the beginning of the period 3,550 102
------------------ --------------
Cash and cash equivalents at the end of the period $ 177 $ 117
================== ==============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE> 7
POSITRON CORPORATION
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation:
The accompanying unaudited interim financial statements have been
prepared in accordance with generally accepted accounting principles and the
rules of the U.S. Securities and Exchange Commission, and should be read in
conjunction with the audited financial statements and notes thereto contained
in the Company's Annual Report on Form 10-KSB for the year ended December 31,
1995. In the opinion of management, all adjustments, consisting of normal
recurring adjustments, necessary for a fair presentation of financial position
and the results of operations for the interim periods presented have been
reflected herein. The results of operations for interim periods are not
necessarily indicative of the results to be expected for the full year. Notes
to the financial statements which would substantially duplicate the disclosure
contained in the audited financial statements for the most recent fiscal year
ended December 31, 1995, as reported in the Form 10-KSB, have been omitted.
2. Private Placements of Preferred Stock:
In February and March 1996, the Company issued 2,691,977 shares of
Series A 8% Cumulative Convertible Redeemable Preferred Stock, $1.00 par value,
liquidation preference of $1.33 per share and Redeemable Common Stock Purchase
Warrants to purchase 1,346,005 shares of the Company's common stock. The net
proceeds of the private placement were approximately $2,466,000. Subject to
adjustment for certain antidilution events, each share of the Series A
Preferred Stock is immediately convertible into one share of Common Stock.
Subject to adjustment for certain antidilution events, each Redeemable Common
Stock Purchase Warrant is exercisable at a price of $2.00 per share of Common
Stock. The Series A Preferred Stock contains restrictions on the payment of
dividends on the Company's Common Stock.
As part of the issuance of the aforementioned Series A Preferred
Stock, Uro-Tech, Ltd. converted $650,000 of the amount payable to it into
433,329 shares of Redeemable Preferred Stock and 216,671 Redeemable Stock
Purchase Warrants.
In May, 1996, the Company completed the sale of the overallotment
portion of the aforementioned private placement. The overallotment sale
resulted in the issuance of an additional 383,332 shares of Series A 8%
Cumulative Convertible Redeemable Preferred Stock and Redeemable Common Stock
Warrants to purchase 191,669 shares of Common Stock of the Company. Net
proceeds from the closing of the overallotment portion of the private placement
were approximately $506,000.
On July 11, 1996, the Company completed the closing of a private
offering of units consisting of 25,000 shares of its Series B 8% Cumulative
Convertible Redeemable Preferred Stock, par value $1.00 per share, and Common
Stock Purchase Warrants to purchase up to 100,000 shares of its Common Stock,
par value $.01 per share. The Preferred Stock plus the Warrants sold for
approximately $50.00 per share of Preferred Stock. The net proceeds of the
closing were approximately $1,250,000. Subject to adjustment for certain
antidilution events, each share of the Preferred Stock is initially convertible
into 25 shares of Common Stock and each Warrant is exercisable for one share of
Common Stock at an exercise price of $2.00 per share. Each share of the Series
B Preferred Stock has a liquidation preference of $50.00 and is junior to the
outstanding Series A Preferred Stock. The outstanding Series B Preferred Stock
contains restrictions on the payment of dividends on the outstanding Common
Stock of the Company. The Preferred Stock and the Warrants are not convertible
or exercisable until such time as the Company's shareholders approve an
amendment to its Articles of Incorporation increasing the amount of the
authorized Common Stock by at least 2,500,000 shares.
In the third quarter of 1996, 380,756 shares of the outstanding Series
A Cumulative Convertible Redeemable Preferred Stock were converted to Common
Stock.
5
<PAGE> 8
3. Provision For Loss on System Exchange:
The Company was notified in the first quarter of 1996 by a customer
who purchased the initial production model HZL series scanner that the scanner
is not performing up to certain contracted specifications. These
specifications are higher than those customarily provided to purchasers of the
HZL scanner. Additionally, the scanner has experienced certain reliability
problems related to detector module failures which are currently being
corrected by the Company.
The Company has agreed with the customer to replace the scanner with a
new scanner if it is unable to bring the existing scanner up to the contracted
specifications. If the replacement scanner does not meet the contracted
specifications, the customer could, among other things return the system and
demand a full refund of the approximate net purchase price of $1,500,000; or,
request a discount (partial refund) from the contracted purchase price.
In anticipation of the potential losses to be realized in correcting
these problems, the Company increased its reserve for replacement of the
scanner by $1 million in the first quarter of 1996.
4. General Electric Medical Systems Acquisition
Additionally, in July, 1996, the Company entered into an asset
purchase agreement with GE Medical Systems ("GE") to purchase the assets of
GE's PET operations, including its Sweden-based cyclotron division for $25
million in cash plus 10 percent of the Company's outstanding common stock. GE
also received a three-year option to purchase an additional 15 percent of the
Company's common stock. The Company and GE will each continue to sell PET
products. GE will sell and distribute PET products produced by the Company for
GE, under the terms of a purchase and distribution agreement. GE will continue
to provide service and application support to its installed base and future
installations. The transaction and associated agreements are contingent upon,
among other matters, the Company securing financing and shareholder approval.
6
<PAGE> 9
POSITRON CORPORATION
(Form 10-QSB for the three and nine months ended September 30, 1996)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following information should be read in conjunction with the financial
statements and the notes thereto and in conjunction with Management's
Discussion and Analysis of Financial Condition and Results of Operations in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1995.
This analysis is provided pursuant to applicable Securities and Exchange
Commission regulations and is not intended to serve as a basis for projections
of future events.
Comparison of the Results of Operations for the nine months ended September 30,
1995 and 1996.
Total revenue decreased $822,000 or 21% from $3,850,000 for the nine months
ended September 30, 1995 to $3,028,000 for the same period in 1996.
Sales revenue decreased from $2,560,000 for the nine months ended September 30,
1995, to $650,000 for the same period in 1996, a decrease of $1,910,000 or 75%.
Included in the 1996 period is a system sale of a refurbished system. There
were two sales of the HZ series machines in the earlier comparative period.
In the third quarter of 1995, Positron shipped its first system under a fee per
scan contract. This system was installed and operable in the fourth quarter of
1995. Under the terms of the contract, Positron retains ownership to the
Posicam(TM) system and recognizes revenue based on the number of patients
scanned on a monthly basis. Included in the 1996 nine month period is $342,000
of fee per scan revenue. There was no fee per scan revenue in the three
quarters ended September 30, 1995.
Service revenue increased $746,000 or 58% from $1,290,00 for the nine months
ended September 30, 1995, to $2,036,000 for the first three quarters of 1996.
The increase is attributable to a system upgrade of $750,000 in 1996.
Gross profit for the first three quarters of 1996 was $1,002,000 compared to
$1,799,000 for the first three quarters of 1995, a decrease of $797,000 or 44%.
The decrease is due to 1) a $1,000,000 warranty accrual booked in the first
quarter of 1996 for the purchaser of the initial HZ production scanner and, 2)
a reduction in gross profit of $623,000 due to two HZ sales in the 1995 period
and only one sale of a refurbished system in 1996. These decreases were
offset by an increase of $750,000 for the system upgrade mentioned above, the
cost of which was booked in the fourth quarter of 1995, and an increase in
gross profit of $211,000 for the fee per scan system for which there was no
gross profit in the 1995 period.
Total operating expense increased $92,000 or 2% from $5,321,000 for the nine
months ended September 30, 1995, to $5,413,000 for the same period in 1996.
Research and development expense decreased $109,000 or 6% from $1,809,000 for
the first three quarters of 1995 to $1,700,000 for the first three quarters of
1996. The decrease is mainly due to reduced personnel and program material
costs.
Selling and marketing expense decreased $419,000 or 34% from $1,216,000 for the
nine months ended September 30, 1995, to $797,000 for the same period in 1996.
The decrease is due to commissions for three system sales paid in the 1995
period and only one sale in the same period of 1996. Additionally, there were
fewer employees in the sales and marketing area in the 1996 period as compared
to the 1995 period as well as reduced participation in trade shows earlier in
the year 1996.
7
<PAGE> 10
General and administrative expense increased $620,000 or 27% from $2,296,000
for the first three quarters of 1995 to $2,916,000 for the same 1996 period.
The increase is attributable to the reversal of a $200,000 bonus accrual in the
1995 period compared to $80,000 in the 1996 nine month period, an increase in
personnel costs and inventory reserves from the 1995 to the 1996 period, as
well as increased bad debt expense, professional fees, property taxes, and
public relations costs.
Comparison of the Results of Operations for the three months ended September
30, 1995 and 1996.
Total revenue increased $903,000 or 209% from $433,000 for the three months
ended September 30, 1995, to $1,336,000 for the comparable period in 1996.
Sales revenue was $0 for both the third quarter of 1995 and 1996. There were
no system sales in either quarter.
In the third quarter of 1995, Positron shipped its first system under a fee per
scan contract. This system was accepted by the customer in November, 1995.
Under the terms of the contract, Positron retains ownership to the Posicam TM
system and recognizes revenue based on the number of patients scanned on a
monthly basis. Included in the third quarter of 1996 is $152,000 of fee per
scan revenue. There was no fee per scan revenue in the third quarter of 1995.
Service revenue increased $751,000 or 173% from $432,00 for the quarter ended
September 30, 1995, to $1,184,000 for the third quarter of 1996. The increase
is attributable to a $750,000 system upgrade in the latter quarter which was
not present in 1995.
Gross profit for the third quarter of 1996 was $1,038,000 compared to $244,000
for the third quarter of 1995, an increase of $794,000. The increase is due to
the sale of the system upgrade, and the fee per scan contract in the 1996
quarter, offset by higher warranty costs for two systems.
Total operating expense increased $177,000 or 10% from $1,786,000 for the
quarter ended September 30, 1995, to $1,963,000 for the same quarter in 1996.
Research and development expense decreased $10,000 or 2% from $609,000 in the
third quarter of 1995 to $599,000 for the third quarter of 1996. The decrease
is due to a slight reduction in labor costs, as well as reduced materials and
supplies cost.
Selling and marketing expense decreased $42,000 or 12% from $350,000 for the
quarter ended September 30, 1995, to $308,000 for the same quarter in 1996. The
decrease is due to reduced labor costs from the loss of employees between the
third quarter of 1995 and 1996.
General and administrative expense increased $229,000 or 28% from $827,000 in
the third quarter of 1995 to $1,056,000 in the same quarter of 1996. The
increase is attributable to an increase in personnel costs, consulting fees,
and inventory reserves in the quarter ended September 30, 1996.
GE Transaction
Additionally, in July, 1996, the Company entered into an asset
purchase agreement with GE Medical Systems ("GE") to purchase the assets of
GE's PET operations, including its Sweden-based cyclotron division for $25
million in cash plus 10 percent of the Company's outstanding common stock. GE
also received a three-year option to purchase an additional 15 percent of the
Company's common stock. The Company and GE will each continue to sell PET
products. GE will sell and distribute PET products produced by the Company for
GE, under the terms of a purchase and distribution agreement. GE will continue
to provide service and application support to its installed base and future
installations.
8
<PAGE> 11
Pursuant to the terms of the purchase agreement, GE has the right to
terminate the purchase agreement if the acquisition is not consummated on or
before January 4, 1997. The Company currently estimates that the acquisition
will close during the later part of the first quarter of 1997. If necessary,
the Company intends to seek an extension of the above described termination
date. The transaction and associated agreements are contingent upon, among
other matters, the Company securing financing and shareholder approval. The
Company has not yet entered into any commitment letters or other similar
agreements regarding any such financing.
Current Financial Condition
The Company has been unable to sell POSICAM systems at quantities
sufficient to be profitable. The Company has experienced liquidity problems
and was unable to timely meet certain obligations on October 31, 1996. On
November 14, 1996, in order to fund its activities, the Company borrowed a
total of $700,000 from ProFutures Bridge Capital Fund, L.P. (The "Loan"). The
Loan bears interest at a rate of 12 percent per annum and matures on June 30,
1997. The Loan is secured by liens and security interest encumbering all of
the assets of the Company including the Company's know-how, patents and
proprietary rights pertaining to its PET technology (the "Intellectual
Property"). In addition, the Company granted ProFutures a warrant to purchase
250,000 shares of its common stock at an exercise price of approximately $2.40
per share. If the Loan is not repaid on or before April 1, 1997, then the
Company will be required to grant to ProFutures additional warrants for
additional 100,000 shares of its common stock. The exercise price of such
additional warrants will be determined based upon the average closing trading
price for the Company's common stock for the ten trading days prior to April 1,
1997. The loan also provides for an additional $700,000 lending facility that
is subject to numerous conditions, including an appraisal that the Company's
Intellectual Property has a value of at least $5,000,000. There are no
assurances that the Company will be able to borrow the additional $700,000
amount.
The Company currently believes that its cash on hand, plus the initial
$700,000 Loan proceeds (and the additional $700,000 Loan proceeds that it
intends to borrow), plus cash generated from anticipated sales and operations
will be adequate to provide sufficient funds for its present operations through
June, 1997. In order for the Company to continue its present operations beyond
June, 1997, it will be necessary for the Company to enhance its financial
position by means of raising capital by the sale of additional equity
securities, the placement of additional debt, or increased sales of its
POSICAMTM systems. Although the Company has been actively pursuing the above
alternatives which may enhance its financial position, no assurances can be
given that the Company will be able to successfully alleviate its current
financial difficulties.(1)
(1) This statement is a forward looking statement that involves risks, and
uncertainties. Accordingly, no assurance can be given that the actual
events and results will not be materially different than the
anticipated results described in the forward looking statement. See
the discussion of the company's business and a description of the
various factors that could materially affect the ability of the
Company to achieve the anticipated results described in the forward
looking statement which is included in Item 1 of the Company's annual
report on form 10-KSB for the year ended December 31, 1995.
9
<PAGE> 12
PART II - OTHER INFORMATION
POSITRON CORPORATION
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGE IN SECURITIES
In July 1996, the Company completed a private offering of
units consisting of 25,000 shares of its Series B 8%
Cumulative Convertible Redeemable Preferred Stock, par value
$1 per share, and Common Stock Purchase Warrants to purchase
up to 100,000 shares of its Common Stock, par value$.01 per
share. The Preferred stock plus the Warrants sold for
approximately $50 per share of Preferred Stock. The proceeds
of the closing were approximately $1,250,000. Subject to
adjustment for certain antidilution events, each share of the
Preferred Stock is initially convertible into 25 shares of
Common Stock and each Warrant is exercisable for one share of
Common Stock at an exercise price of $2 per share. The
Preferred Stock and the Warrants are not convertible or
exercisable until such time as the Company's shareholders
approve an amendment to its Articles of Incorporation
increasing the amount of the authorized Common Stock by at
least 2,500,000 shares. The outstanding Series A and B
Preferred Stock contains restrictions on the payment of
dividends on the outstanding Common Stock of the Company.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
EXHIBITS:
The following documents are filed as exhibits to this report.
11.0 Computation of loss per common share for the three months
ended September 30, 1995 and 1996.
11.1 Computation of loss per common share for the six months
ended September 30, 1996 and 1996.
10
<PAGE> 13
SIGNATURES
Pursuant to the requirements of the Exchange Act, the
Registrant caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
POSITRON CORPORATION
(Registrant)
Date: November 14, 1996 /s/ DAVID O. RODRIQUE
---------------------------------------
David O. Rodrigue
Vice President, Chief Financial Officer
(Duly Authorized Officer and
Principal Accounting Officer)
11
<PAGE> 14
INDEX TO EXHIBITS
The following documents are filed as exhibits to this report.
11.0 Computation of loss per common share for three months
ended September 30, 1995 and 1996.
11.1 Computation of loss per common share for the six months
ended September 30, 1996 and 1996.
27.1 Financial Data Schedule
<PAGE> 1
POSITRON CORPORATION
STATEMENT RE: COMPUTATION OF PER SHARE LOSS
for the three months ended September 30,
(in thousands, except share data)
Exhibit 11.0
<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Net loss $ (1,544) $ (1,005)
========== ==========
Weighted average common shares used in computing
net loss per share 3,637,320 3,828,876
========== ==========
Net loss per share $ (0.42) $ (0.26)
========== ==========
</TABLE>
<PAGE> 1
POSITRON CORPORATION
STATEMENT RE: COMPUTATION OF PER SHARE LOSS
for the nine months ended September 30,
(in thousands, except share data)
Exhibit 11.1
<TABLE>
<CAPTION>
1995 1996
---------- ----------
<S> <C> <C>
Net loss $ (3,437) $ (4,644)
=========== ===========
Weighted average common shares used in computing
net loss per share 3,637,320 3,701,639
=========== ==========
Net loss per share $ (0.94) $ (1.25)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
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