<PAGE>
================================================================================
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, 1997
-------------------
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 0-24092
-----------
POSITRON CORPORATION
----------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
TEXAS 76-0083622
----------------------- -----------------------
(State of Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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 _______ 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 1, 1997: 5,128,990
-----------------
================================================================================
<PAGE>
POSITRON CORPORATION
Form 10-QSB for the quarter ended September 30, 1997
INDEX
Page
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
BALANCE SHEETS AS OF DECEMBER 31, 1996
AND SEPTEMBER 30, 1997 1
STATEMENTS OF OPERATIONS FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 2
STATEMENTS OF OPERATIONS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 3
STATEMENTS OF CASH FLOW FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1996 AND 1997 4
NOTES TO FINANCIAL STATEMENTS 5
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATION 7,8,9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS 10
ITEM 2. CHANGES IN SECURITIES 10
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 10
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 10
ITEM 5. OTHER INFORMATION 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
SIGNATURES 11
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
POSITRON CORPORATION
Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
December 31, 1996 September 30, 1997
----------------- -------------------
(unaudited)
ASSETS:
- -------
<S> <C> <C>
Current Assets:
Cash and cash equivalents $ 382 $ 3
Accounts receivable 520 621
Inventory 2,633 2,643
Notes receivable 324 324
Prepaid expenses 159 71
Other current assets 426 115
------- --------
Total Current Assets 4,444 3,777
Plant and Equipment, net 967 778
Intangible Assets, net 106 88
------- --------
Total Assets $ 5,517 $ 4,643
======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
- ------------
Current Liabilities:
Bank overdraft $ --- $ 95
Accounts payable, trade 1,113 1,539
Accrued liabilities 2,654 4,229
Revolving line of credit 75 ---
Notes payable to affiliates 663 663
Notes payable to others 1,335 956
Unearned revenue 267 469
-------- --------
Total Current Liabilities 6,107 7,951
-------- --------
Other Liabilities 68 60
-------- --------
SHAREHOLDERS' EQUITY (DEFICIT)
Preferred stock, Series A 8% cumulative convertible
redeemable, $1 par, 3,075,318 shares authorized,
2,694,562 and 1,595,005 outstanding, respectively 2,405 1,595
Preferred stock, Series B 8% cumulative convertible
redeemable, $1 par, 25,000 shares authorized,
issued and outstanding 25 25
Common stock, $0.01 par, 15,000,000 shares
authorized 3,637,320 issued and outstanding 43 51
Additional paid-in capital 41,374 42,191
Accumulated deficit (44,505) (47,230)
-------- --------
Total Shareholders' Equity (658) (3,368)
-------- --------
Total Liabilities and Shareholders' Equity $ 5,517 $ 4,643
======== ========
</TABLE>
The accompanying notes are an integral part of these financial statements.
1
<PAGE>
POSITRON CORPORATION
Statements of Operations
(in thousands except per share amounts)
(Unaudited)
Three months ended September 30,
--------------------------------
1996 1997
---------- ----------
REVENUE:
- --------
System sales $ -- $ --
Fee per scan 152 229
Service and components 1,184 431
---------- ----------
1,336 660
---------- ----------
Cost of system sales - --
Cost of fee per scan 41 39
Cost of service and components 257 221
---------- ----------
298 260
---------- ----------
Gross profit 1,038 400
---------- ----------
OPERATING EXPENSE:
- ------------------
Research and development 599 421
Selling and marketing 308 230
General and administrative 1,056 673
---------- ----------
1,963 1,324
---------- ----------
Operating loss (925) (924)
---------- ----------
OTHER INCOME (EXPENSE):
- -----------------------
Other (92) 8
Interest income (expense) 12 (53)
---------- ----------
(80) (45)
---------- ----------
Net loss $ (1,005) $ (969)
========== ==========
Net loss per share $ (.26) $ (.19)
========== ==========
Weighted average shares used in computing
net loss per share 3,828,876 5,111,292
========== ==========
The accompanying notes are an integral part of these financial statements.
2
<PAGE>
POSITRON CORPORATION
Statements of Operations
(in thousands except per share amounts)
(Unaudited)
Nine Months ended September 30,
------------------------------
1996 1997
----------- ----------
REVENUE:
- --------
System sales $ 650 $ --
Fee per scan 342 437
Service and components 2,036 1,321
---------- ---------
3,028 1,758
---------- --------
Cost of system sales 316 ---
Cost of fee per scan 131 117
Cost of service and components 579 500
Provision for loss on system exchange 1,000 ---
---------- ---------
2,026 617
---------- ---------
Gross profit 1,002 1,141
---------- ---------
OPERATING EXPENSE:
- ------------------
Research and development 1,700 1,037
Selling and marketing 797 572
General and administrative 2,916 1,921
---------- ---------
5,413 3,530
---------- ---------
Operating loss (4,411) (2,389)
---------- ---------
OTHER INCOME (EXPENSE):
- -----------------------
Other (140) (93)
Interest income (expense) (93) (243)
---------- ---------
(233) (336)
---------- ---------
Net loss $ (4,644) $ (2,725)
========== =========
Net loss per share $ (1.25) $ (.57)
========== =========
Weighted average shares used in computing
net loss per share 3,701,639 4,791,107
========== =========
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
POSITRON CORPORATION
Statements of Cash Flows
(in thousands)
(Unaudited)
Nine months
ended September 30,
--------------------
1996 1997
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES:
- -------------------------------------
Net loss $(4,644) $(2,725)
Adjustments to reconcile net loss to net cash
used by operating activities -
Depreciation 262 192
Amortization of intangible assets 18 18
Change in assets and liabilities -
(Increase) decrease in accounts receivable 135 (101)
(Increase) decrease in inventories 110 (10)
Decrease in prepaid expenses 168 88
(Increase) decrease in other current assets (308) 311
Increase in bank overdrafts --- 95
Increase (decrease) in accounts payable, trade (1,074) 426
Increase (decrease) in accrued liabilities 1,460 1,575
(Decrease) in note payable to affiliate (410) ---
Increase (decrease) in unearned revenue (241) 202
(Decrease) in notes payable to others --- (379)
(Decrease) in revolving line of credit --- (75)
(Decrease) in other liabilities (8) (8)
------- -------
Net cash used by operating activities (4,532) (391)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
- -------------------------------------
Capital expenditures, net (61) 3
-
------- -------
Net cash provided by (used in) investing activities (61) 3
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
- -------------------------------------
Proceeds from conversion of warrants to common stock 8 3
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 15 (385)
Cash and cash equivalents at the beginning of the period 102 382
------- -------
Cash and cash equivalents at the end of the period $ 117 $ 3
======= =======
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
POSITRON CORPORATION
(Form 10-QSB for the three and nine months ended September 30, 1997)
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, 1996. 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, 1996, as reported in the Form 10-KSB, have been omitted.
2. Company Operations
Since its inception the Company has been unable to sell its POSICAM(TM)
systems in sufficient quantities to be profitable. Consequently, the Company
has sustained substantial losses. Net losses for the year ended December 31,
1996 and the three and nine months ended September 30, 1997 were $6,375,000,
$969,000 and $2,723,000, respectively. The Company had an accumulated deficit
of $47,230,000 at September 30, 1997. Due to the sizeable selling prices of the
Company's systems and the limited number of systems sold or placed in service,
the Company's revenues have fluctuated significantly period to period.
At September 30, 1997, the Company had cash and cash equivalents totaling
approximately $3,000 and bank overdrafts totaling approximately $95,000 compared
to cash and cash equivalents of approximately $382,000 at December 31, 1996.
The bank overdrafts were cleared subsequent to the end of September 1997 without
any loss to the Company or payees. During the first nine months of 1997, the
Company has been unable to meet certain of its obligations as they came due. As
a result of the Company's liquidity problem, employees have deferred payment of
1997 salaries through September 30, 1997 totaling approximately $720,000.
Additionally, the Company is in arrears to most of its vendors and suppliers. As
of September 30, 1997, such amount owed totaled approximately $1,500,000. The
Company has had discussions with a number of potential investors regarding the
sale of additional equity securities to such investors. If the Company is
successful in raising additional capital, it is its intention to utilize a
portion of such funds to significantly reduce the level of its past due
obligations to its employees, vendors and suppliers.
Although the Company has been actively pursuing the above financing
alternative, no assurances can be given that the Company will be able to
successfully alleviate its current financial difficulties. Failure of the
Company to obtain an alternate source of capital is likely to have a material
adverse effect on the Company's ability to continue as a going concern.
Additionally, the Company currently has no shares of its Common Stock
available for issuance and all authorized shares have either been issued or
reserved for issuance in respect of outstanding options and warrants or
convertible securities. The lack of such available shares significantly
restricts the Company's ability to raise capital through the issuance of
additional equity securities. While the Company believes that its shareholders
will approve an increase in the number of authorized shares of Common Stock at
its Annual Meeting of Shareholders, no assurance can be given that such increase
in authorized shares will be approved by the Company's shareholders.
5
<PAGE>
3. General Electric Transaction
In July 1996, the Company and General Electric Company ("GE") entered into
an Acquisition Agreement (the "Agreement"), which initially expired on January
4, 1997, pursuant to which the Company agreed to purchase a portion of GE's
product line relating to the design, engineering, and manufacture of certain PET
equipment and related cyclotron systems (the "Business"). Under the terms of
the Agreement, the Company agreed to (i) purchase from GE all of the capital
stock of its wholly owned Swedish subsidiary, and (ii) purchase or license from
GE substantially all of its assets which are used principally in the conduct of
Business. Additionally, the Company and GE entered into a Sales and Marketing
Agreement (the "Marketing Agreement") pursuant to which, subject to the
conditions and limitations set forth therein GE agrees to purchase on an
exclusive basis, and the Company agreed to supply to GE, certain PET equipment
and related cyclotron systems (collectively the "PET Products"). The initial
term of the Marketing Agreement was for five (5) years. Subject to the
conditions set forth therein, GE agreed that, during the initial term of the
Marketing Agreement, GE would not, directly or indirectly engage in the design,
engineering or manufacturing of PET Products.
In exchange for the sale by GE of the assets described above and the
capital stock of its Swedish subsidiary, as well as the performance by GE of its
obligations under the Marketing Agreement, the Company agreed to pay to GE cash
of $25 million, subject to certain specified adjustments. Additionally, the
Company agreed to issue to GE a number of shares of its Common Stock (the
"Acquisition Stock") which, would equal 10% of the Common Stock outstanding
immediately after consummation of the acquisition and issuance of the
Acquisition Stock, assuming conversion of all outstanding shares of the
Company's convertible preferred stock and related common stock purchase warrants
and the issuance and exercise of the GE Option (described below). The Company
also agreed to issue to GE an option (the "GE Option") to purchase a number of
shares of Common Stock which, upon exercise and conversion into shares of the
Company's Common Stock, would equal 15% of the Common Stock outstanding
immediately after consummation of the acquisition and the issuance of the
Acquisition Stock, assuming conversion of all outstanding shares of the
Company's convertible preferred stock and the issuance, exercise and conversion
of the GE Option. The GE option was initially exercisable for three (3) years
at an exercise price of $4.25. On January 4, 1997, GE and the Company agreed to
extend the expiration date of the Agreement until March 31, 1997.
Closing of the GE Acquisition did not occur on March 31, 1997, nor did GE
agreed to extend the Agreement beyond March 31, 1997. On April 10, 1997, GE
informed the Company that it was exercising its right to terminate the Agreement
and that it would pursue other options for its PET business. GE remained open
to discussing a transaction on revised terms, if and only if, (i) a prompt
closing and payment of the full purchase price are assured, (ii) the transaction
makes business sense for both parties, and (iii) all necessary details can be
agreed upon by parties. The Company and GE have no binding agreement to proceed
with these discussions, nor can any assurances be given that if they do proceed,
the parties will reach any workable agreement.
4. Net Loss Per Share
Net loss per common share for the three and nine months ended September 30,
1996 and 1997 have been computed by dividing net loss by the weighted
average number of shares of Common Stock outstanding during these periods.
5. Reclassifications:
Certain amounts have been reclassified in order to conform to current-
period presentations.
6. Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosures of contingent assets or liabilities at the date of the
financial statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those
estimates.
6
<PAGE>
POSITRON CORPORATION
(Form 10-QSB for the three and nine months ended September 30, 1997)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Comparison of the Results of Operations for the nine months ended September
30, 1996 and 1997.
Total revenue decreased $1,270,000 or 41.9% from $3,028,000 for the
nine months ended September 30, 1996 to $1,758,000 for the same period
ended September 30, 1997.
Revenue from system sales was $650,000 for the first nine months of
1996 compared to $0 for the first nine months of 1996. Fee per scan
revenue increased $95,000 or 27.8% from $342,000 during the first nine
months of 1996 to $437,000 for the nine months of 1997. The increase in fee
per scan revenue was more than offset by a decrease in service and
component sales revenue $715,000 or 35.1% during the same period. Included
in the first nine months of 1996 was a major system upgrade that resulted
in service and component revenue in that period of approximately $750,000.
No corresponding upgrade occurred in the first nine month of 1997.
Gross profit during the first nine months of 1996 was $1,002 compared
to $1,141,000 for the nine months ended September 30, 1997. The 1996 gross
profit includes a provision for loss of $1,000,000 on the anticipated
exchange of the initial production model HZL series scanner that is not
performing up to specification.
Total operating expense decreased approximately $1,883,000 or 34.8%
from $5,413,000 for the nine months ended September 30, 1996 to $3,530,000
for the same period in 1997. The decrease principally results from reduced
personnel cost and lower administrative overhead.
Comparison of the Results of Operations for the three months ended
September 30, 1996 and 1997.
Total revenue decreased $676,000 or approximately 50.6% from
$1,336,000 to $660,000 for the three months ended September 30,1996 and
1997, respectively. Included in the third quarter of 1996 is a major
system upgrade that resulted in approximately $750,000 in service and
component sales revenue in the 1996 quarter. No corresponding upgrade was
present in the 1997 quarter. Fee per scan revenue increased approximately
$77,000 or 50.6% from $152,000 for the quarter ended September 30, 1996 to
$229,000 for the three months ended September 30, 1997
Gross profit for the three months ended September 30, 1997 was
$400,000 a decrease of $638,000 or 61.5% from $1,038,000 for the quarter
ended September 30, 1996. The decrease in gross profit is principally the
result of the previously mentioned 1996 system upgrade the cost of which
was recorded in the fourth quarter of 1995.
Total operating expense decreased 32.6% or $639,000 from $1,963,000
for the quarter ended September 30, 1996 to $1,324,000 for the three months
ended September 30, 1997. Significantly lower personnel cost and lower
rent expense accounted for the decrease.
Financial Condition
Since its inception the Company has been unable to sell its
POSICAM(TM) systems in sufficient quantities to be profitable.
Consequently, the Company has sustained substantial losses. Net losses for
the year ended December 31, 1996 and the three and nine months ended
September 30, 1997 were $6,375,000, $969,000 and $2,723,000, respectively.
The Company had an accumulated deficit of $47,230,000 at September 30,
1997. Due to the sizeable selling prices of the Company's systems and the
limited number of systems sold or placed in service, the Company's revenues
have fluctuated significantly period to period.
At September 30, 1997, the Company had cash and cash equivalents
totaling approximately $3,000 and bank
7
<PAGE>
overdrafts totaling approximately $95,000 compared to cash and cash
equivalents of approximately $382,000 at December 31, 1996. The bank
overdrafts were cleared subsequent to the end of September 1997 without any
loss to the Company or payees. During the first nine months of 1997, the
Company has been unable to meet certain of its obligations as they came
due. As a result of the Company's liquidity problem, employees have
deferred payment of 1997 salaries through September 30, 1997 totaling
approximately $720,000. Additionally, the Company is in arrears to most of
its vendors and suppliers. As of September 30, 1997, such amount owed
totaled approximately $1,500,000. The Company has had discussions with a
number of potential investors regarding the sale of additional equity
securities to such investors. If the Company is successful in raising
additional capital, it is its intention to utilize a portion of such funds
to reduce the level of its past due obligations to its employees, vendors
and suppliers. /(1)/
Although the Company has been actively pursuing the above
financing alternative, no assurances can be given that the Company will be
able to successfully alleviate its current financial difficulties. Failure
of the Company to obtain an alternate source of capital is likely to have a
material adverse effect on the Company's ability to continue as a going
concern. /(1)/
Additionally, the Company currently has no shares of its Common Stock
available for issuance and all authorized shares have either been issued or
reserved for issuance in respect of outstanding options and warrants or
convertible securities. The lack of such available shares significantly
restricts the Company's ability to raise capital through the issuance of
additional equity securities. While the Company believes that its
shareholders will approve an increase in the number of authorized shares of
Common Stock at its Annual Meeting of Shareholders, no assurance can be
given that any such increase in authorized shares will be approved by the
Company's shareholders. /(1)/
Due to the severe financial difficulties being experienced by the
Company as of December 1, 1997 it has not made the necessary upgrade nor
has it replaced the initial production model HZL series scanner mentioned
above. The Company and the customer have agreed to defer ultimate
resolution of this matter until such time as the Company is financially
stronger. The Company anticipates that the ultimate future cash costs of
replacing the scanner will be significantly less than the $1 million
reserve. A possible solution to the problem includes the completion and
installation of a partially complete HZL scanner currently in inventory.
The Company estimates that an additional $200,000 would have to be spent to
complete and install this machine. /(1)/ Alternatively, the Company is
discussing the possibility of refunding a portion of the purchase price to
the customer. The Company anticipates that such refund would not exceed
$500,000. /(1)/
The Company believes that the cash required to fund either of the two
mentioned alternatives would be available from operations or from the below
mentioned financings. /(1)/ If the Company is unable to complete the
mentioned financings or if operations do not generate sufficient cash flow
to finance the purchase of the inventory required to complete the HZL
system in inventory it is likely to have a material adverse effect on the
Company's ability to remain a going concern. /(1)/
The Company has a verbal agreement with Uro-Tech, Ltd. extending the
maturity date of its loan until April 30, 1998. If the Company is unable
to liquidate this debt by such extended maturity date the Company will
request an additional extension of the maturity date. /(1)/ The Company
believes that Uro-Tech, Ltd. will extended the maturity date of its loan
to the Company if requested, however, there can be no assurance that an
additional extension will be granted to the Company. /(1)/
On December 10, 1997, the Company received formal notice under its
loan agreement with ProFutures Bridge Capital Fund, L.P., ("ProFutures") of
the occurrence of an event of default. The default is the failure of the
Company to pay the unpaid principal amount and earned interest under the
note on its original maturity date. As of December 8, 1997 the Company
owed ProFutures $957,601.30 consisting of unpaid principal of $957,601.30
and accrued interest of $0. Additionally, the Company is in violation of
Section 6(f) of the loan agreement wherein it agreed to promptly discharge
all of its uncontested debts and liabilities.
It is the Company's intention to request a formal waiver of the events
of default under the ProFutures loan agreement until such time that it is
able to alleviate its current financial difficulties through one of the
8
<PAGE>
financing alternatives mentioned above. /(1)/ The Company believes that it
will be successful in securing such waiver, however, there can be no
assurance that an additional extension will be granted to the Company.
/(1)/
- -----------------
/(1)/ This statement is a forward-looking statement that involves risks and
uncertainties. Accordingly, no assurances 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, 1996.
9
<PAGE>
PART II - OTHER INFORMATION
POSITRON CORPORATION
(Form 10-QSB for the three and nine months ended September 30, 1997)
ITEM 1. LEGAL PROCEEDINGS
None
ITEM 2. CHANGES IN SECURITIES
None
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
(a) 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, 1996 AND 1997.
11.1 COMPUTATION OF LOSS PER COMMON SHARE FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1997.
27.0 FINANCIAL DATA SCHEDULE.
(b) REPORTS ON FORM 8-K:
NONE
10
<PAGE>
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: December 29, 1995 /s/ DAVID O. RODRIGUE
----------------------------------------
David O. Rodrigue
Vice President, Chief Financial Officer
(Duly Authorized Officer and
Principal Accounting Officer)
11
<PAGE>
EXHIBIT 11.0
POSITRON CORPORATION
STATEMENT RE: COMPUTATION OF PER SHARE LOSS
For the three months ended September 30, 1997
(in thousands, except share data)
1996 1997
----------- ----------
Net loss $ (1,005) $ (969)
=========== ==========
Weighted average common shares used in computing
net loss per share 3,828,876 5,111,292
=========== ==========
Net loss per share $ (0.26) $ (0.19)
=========== ==========
<PAGE>
EXHIBIT 11.1
POSITRON CORPORATION
STATEMENT RE: COMPUTATION OF PER SHARE LOSS
For the nine months ended September 30, 1997
(in thousands, except share data)
1996 1997
----------- ----------
Net loss $ (4,644) $ (2,723)
=========== ==========
Weighted average common shares used in computing
net loss per share 3,701,639 4,791,107
=========== ==========
Net loss per share $ (1.25) $ (0.57)
=========== ==========
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
POSITRON CORPORATION
Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
------------ ------------
ASSETS:
Current Assets:
<S> <C> <C>
Cash and cash equivalents 382 3
Accounts receivable 520 621
Inventory 2,633 2,643
Notes receivable 324 324
Prepaid expenses 159 71
Other current assets 426 115
------ ------
Total Current Assets 4,444 3,777
Plant and Equipment, net 967 778
Intangible Assets, net 106 88
------ ------
Total Assets 5,517 4,643
====== ======
LIABILITIES:
Current Liabilities:
Bank overdraft 0 95
Accounts payable, trade 1,113 1,539
Accrued liabilities 2,654 4,229
Revolving line of credit 75 0
Notes payable to affiliates 663 663
Notes payable to others 1,335 956
Unearned revenue 267 469
------ ------
Total Current Liabilities 6,107 7,951
------ ------
Other Liabilities 68 60
------ ------
SHAREHLDERS' EQUITY (DEFICIT):
Preferred stock, Series A 8% cumulative convertible redeemable, $1 par,
3,075,318 shares authorized, 2,694,562 and 1,595,005 outstanding, respectively 2,405 1,595
Preferred stock, Series B 8% cumulative convertible redeemable, $1 par,
25,000 shares authorized, issued and outstanding 25 25
Common stock, $0.01 par, 15,000,000 shares authorized 3,637,320 issued and
outstanding 43 51
Additional paid in capital 41,374 42,191
Accumulated deficit -44,505 -47,230
------ ------
Total Shareholders' Equity (Deficit) -658 -3,368
------ ------
Total Liabilities and Shareholders' Equity (Deficit) 5,517 4,643
====== ======
</TABLE>
<PAGE>
POSITRON CORPORATION
Statements of Operations
for the three months ended September 30,
(in thousands except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
------------ ------------
REVENUE:
- -------
<S> <C> <C>
System sales 0 0
Fee per scan 152 229
Service and components 1,184 431
--------- ---------
1,336 660
COST OF REVENUE:
- ---------------
System sales 0 0
Fee per scan 41 39
Service and components 257 221
--------- ---------
298 260
--------- ---------
Gross profit 1,038 400
--------- ---------
OPERATING EXPENSE:
- -----------------
Research and development 599 421
Selling and marketing 308 230
General and administrative 1,056 673
--------- ---------
1,963 1,324
--------- ---------
Operating loss -925 -924
--------- ---------
OTHER INCOME (EXPENSE):
- ----------------------
Other -92 8
Interest income (expense) 12 -53
--------- ---------
-80 -45
--------- ---------
Net loss -1,005 -969
========= =========
Net loss per share -.26 -.19
========= =========
Weighted average shares used in computing net loss per share 3,828,876 5,111,292
========= =========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1997
<PERIOD-START> JAN-01-1997 JUL-01-1997
<PERIOD-END> SEP-30-1997 SEP-30-1997
<CASH> 3 0
<SECURITIES> 0 0
<RECEIVABLES> 621 0
<ALLOWANCES> 0 0
<INVENTORY> 2,643 0
<CURRENT-ASSETS> 3,777 0
<PP&E> 778 0
<DEPRECIATION> 192 0
<TOTAL-ASSETS> 4,643 0
<CURRENT-LIABILITIES> 7,951 0
<BONDS> 0 0
0 0
1,620 0
<COMMON> 51 0
<OTHER-SE> 3,368 0
<TOTAL-LIABILITY-AND-EQUITY> 4,643 0
<SALES> 1,758 660
<TOTAL-REVENUES> 1,758 660
<CGS> 617 260
<TOTAL-COSTS> 3,530 1,324
<OTHER-EXPENSES> 336 45
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 243 53
<INCOME-PRETAX> (2,725) (969)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (2,725) (969)
<EPS-PRIMARY> 0 0
<EPS-DILUTED> (.57) (.19)
</TABLE>
