UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
------------------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from ____________________ to ______________________
Commission File Number:
0-21214
ORTHOLOGIC CORP.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 86-0585310
- --------------------------------------------------------------------------------
(State of other jurisdiction (I.R.S. Employer Identification No.)
of incorporation or organization)
2850 S. 36th Street, #16, Phoenix, Arizona 85034
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(602) 437-5520
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
[X] Yes[ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
9,853,900 shares of common stock outstanding as of April 30, 1996
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
ORTHOLOGIC CORP.
BALANCE SHEETS
March 31, December 31,
1996 1995
------------ -------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 5,112,403 $ 8,830,514
Short-term investment 11,209,665 9,149,360
Accounts receivable 9,285,555 6,488,203
Inventory 2,210,069 1,829,865
Prepaids and other current assets 628,700 273,237
------------ ------------
Total current assets 28,446,392 26,571,179
FURNITURE AND EQUIPMENT:
Total furniture and equipment 2,069,876 1,891,987
Less accumulated depreciation and
amortization (1,275,890) (1,196,055)
------------ ------------
Furniture and equipment - net 793,986 695,932
DEPOSITS AND OTHER ASSETS 90,548 97,748
NOTE RECEIVABLE - Officer 125,000 125,000
------------ ------------
TOTAL $ 29,455,926 $ 27,489,859
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,420,398 $ 1,053,323
Accrued expenses 2,188,960 1,999,924
------------ ------------
Total current liabilities 3,609,358 3,053,247
STOCKHOLDERS' EQUITY:
Common stock, $.0005 par value -
authorized, 15,000,000 shares;
issued 9,840,700 and 9,625,864
shares at March 31, 1996 and
December 31, 1995, respectively 4,920 4,813
Additional paid-in capital 44,363,026 43,887,804
Retained deficit (18,521,378) (19,456,005)
------------ ------------
Total stockholders' equity 25,846,568 24,436,612
------------ ------------
TOTAL $ 29,455,926 $ 27,489,859
============ ============
See notes to financial statements.
2
<PAGE>
ORTHOLOGIC CORP.
STATEMENTS OF OPERATIONS
Three months ended
March 31,
------------------------------
1996 1995
------------ ------------
NET SALES $ 6,759,732 $ 2,517,083
COST OF GOODS SOLD 1,122,279 560,304
------------ ------------
GROSS MARGIN 5,637,453 1,956,779
OPERATING EXPENSES:
Selling, general and administrative 4,424,148 2,337,350
Research and development 551,611 621,730
------------ ------------
Total operating expenses 4,975,759 2,959,080
------------ ------------
Operating income (loss) 661,694 (1,002,301)
------------ ------------
OTHER INCOME (EXPENSE):
Grant revenue 49,400 35,816
Interest income 238,533 51,063
Interest expense 0 (20,392)
------------ ------------
Total other income 287,933 66,487
------------ ------------
Income (loss) before taxes 949,627 (935,814)
Income tax provision (15,000) 0
------------ ------------
Net income (loss) $ 934,627 ($ 935,814)
============ ============
NET INCOME (LOSS) PER WEIGHTED AVERAGE
NUMBER OF COMMON SHARES OUTSTANDING $ 0.09 ($ 0.13)
============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 10,398,099 7,146,593
============ ============
See notes to financial statements.
3
<PAGE>
<TABLE>
ORTHOLOGIC CORP.
STATEMENTS OF CASH FLOWS
<CAPTION>
Three months ended
March 31,
--------------------------
1996 1995
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income (loss) $ 934,627 ($ 935,814)
Adjustment to reconcile net income (loss) to net cash
used in operating activities:
Depreciation and amortization 79,835 77,590
Change in operating assets and liabilities:
Accounts receivable (2,797,352) (593,905)
Inventory (380,204) (291,606)
Prepaids and other current assets (355,463) (24,484)
Deposits and other assets 7,200 370
Accounts payable 367,075 37,934
Accrued expenses 189,036 24,043
----------- -----------
Net cash used in operating activities (1,955,246) (1,705,872)
INVESTING ACTIVITIES:
Expenditures for furniture and equipment (177,889) (51,932)
Purchase of short-term investments (2,060,305) 0
----------- -----------
Net cash used in investing activities (2,238,194) (51,932)
FINANCING ACTIVITIES:
Payments under long term debt 0 (19,706)
Advances on line of credit 0 870,495
Proceeds from issuance of common stock 475,329 1,945,270
----------- -----------
Net cash provided by financing activities 475,329 2,796,059
----------- -----------
NET (DECREASE) INCREASE IN CASH AND (3,718,111) 1,038,255
CASH EQUIVALENTS
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 8,830,514 3,265,350
=========== ===========
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 5,112,403 $ 4,303,605
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION - Cash paid during the period for interest 0 $ 20,392
=========== ===========
</TABLE>
See notes to financial statements.
4
<PAGE>
ORTHOLOGIC CORP.
NOTES TO FINANCIAL STATEMENTS
1. Financial Statement Presentation
The balance sheet as of March 31, 1996, and the statements of operations
and cash flows for the three months ended March 31, 1996 and 1995 are
unaudited but, in the opinion of management, include all adjustments
(consisting only of normal recurring adjustments) necessary for a fair
presentation of financial position, results of operations and cash flows.
The results of operations for the interim periods are not necessarily
indicative of the results to be expected for the complete fiscal year.
Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these financial statements be read in conjunction with the financial
statements and notes thereto included in the Company's 1995 Annual Report
and Form 10-K.
2. Net Income (Loss) per Common Share
Net income (loss) per common share is computed on the weighted average
number of common and common equivalent shares outstanding during each
period. Common equivalent shares represent the dilutive effect of the
assumed exercise of outstanding stock options.
3. Inventory
Inventory is stated at the lower of cost (FIFO method) or market and
consists of the following:
March 31, 1996
------------
Raw materials $1,667,719
Work-in process 62,790
Finished goods 479,560
============
$2,210,069
============
5
<PAGE>
ORTHOLOGIC CORP.
NOTES TO FINANCIAL STATEMENTS (continued)
4. Line of Credit
The Company has available a $2 million revolving line of credit from a
bank. The Company may borrow on the line of credit in amounts up to 70% of
eligible accounts receivable. At March 31, 1996 the aggregate amount which
the Company could borrow totaled $2,000,000. The line of credit is
collateralized by all accounts receivable, inventory and fixed assets of
the Company, bears interest at prime plus one and three-quarter percentage
points and matures on June 2, 1996. The Company must meet certain
covenants including monthly financial ratios and minimum net worth and
quarterly net loss amounts. At March 31, 1996, there were no amounts
outstanding under this line of credit.
5. Income Taxes
The Company has recorded a deferred tax asset of $7.5 million relating to
its NOL carry forward. This amount is completely offset by a valuation
allowance. For the three months ended March 31, 1996, the Company has
recognized the estimated alternative minimum tax which will be due.
6. Subsequent Event
On April 30, 1996 the Company issued 2,530,000 shares of common stock upon
the closing of a public offering of its common stock. Gross proceeds to
the Company were $78.4 million. Net proceeds to the Company after
deducting costs of the offering were approximately $73.5 million. The
common stock was sold at $31 per share.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Net Sales. OrthoLogic's sales increased 169% from $2.5 million
during the three months ended March 31, 1995 to $6.8 million for
the comparable period during 1996. The increase in the net sales
was primarily attributable to higher sales levels of the
OrthoLogic 1000.
Gross Margin. Gross margin increased 188% from $2.0 million during
the three months ended March 31, 1995 to $5.6 million for the
comparable period during 1996. Gross margin as a percentage of
sales increased from 78% in 1995 to 83% in 1996. The gross margin
percentage improved as a result of absorption of fixed
manufacturing cost over a higher volume of manufactured product
and from a change in product sales mix to a higher gross margin
product in 1996 compared to 1995.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased 89% from $2.3 million during the
three months ended March 31, 1995 to $4.4 million for the
comparable period during 1996. The increase was attributable to
higher personnel costs and other costs which relate directly to
higher sales levels of the OrthoLogic 1000, such as commissions to
sales representatives, allowance for bad debts and royalties.
Research and Development Expenses. Research and development
expenses during the three months ended March 31, 1995 totaled
$621,730 compared to $551,611 for the comparable period during
1996. The decreased expenses are primarily attributable to a lower
number of patients enrolled in one of its clinical trials during
1996 than in 1995. The Company is nearing the competition of
enrollment for this clinical trial.
Other Income. Other income increased 333% from $66,457 during the
three months ended March 31, 1995 to $287,933 for the comparable
period during 1996. The increase from 1995 to 1996 was primarily
the result of increased interest income as a result of a higher
level of cash and short-term investments.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS (continued)
Liquidity and Capital Resources
At March 31, 1996, the Company had cash, cash equivalents and
short-term investments of $16.3 million. Working capital increased 6% from $23.5
million at December 31, 1995 to $24.8 million at March 31, 1996, primarily due
to net income for this three month period.
The Company has available an aggregate $2 million revolving line of
credit with a bank under which it may borrow up to 70% of eligible accounts
receivable. At March 31, 1996 the aggregate amount which the Company could
borrow totaled $2 million, and there were no amounts outstanding under this line
of credit.
The Company anticipates that the cash generated from the proceeds of
the secondary offering (Note 6), product sales and current cash balances will be
sufficient to meet the Company's capital requirements for the foreseeable
future. There can be no assurance however, that the Company
will not require additional financing in the future, or that such
sources of capital will be available on terms favorable to the Company,
if at all.
8
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
(a) The 1996 Annual Meeting of Stockholders of the Company (the
"Annual Meeting") was held on May 3, 1996.
(b) The following persons were elected as directors of the Company
at the Annual Meeting:
Results
-------------------------------------
Withhold Broker
For Authority Non-Votes
--------- --------- ---------
Three-year term John M. Holliman III 8,863,186 57,381 0
Augustus A. White III 8,863,071 57,496 0
The following persons are continuing directors; Fredric J. Feldman,
Elwood D. Howse, Jr., George A. Oram, Jr. and Allan M. Weinstein, Ph.D.
(c) In addition to the election of directors, the following agenda
items were submitted to a shareholders' vote:
<TABLE>
<CAPTION>
Results
------------------------------------------------------
Broker
For Against Abstain Non-Votes
--- ------- ------- ---------
<S> <C> <C> <C> <C>
1. Amendment to the Company's Certificate of
Incorporation to increase the number of
authorized shares of common stock from
15,000,000 to 40,000,000 6,424,969 2,443,969 26,644 24,986
2. Ratification of Deloitte & Touche LLP as
independent auditors for the year
ending December 31, 1995 8,887,709 5,503 27,355 - 0 -
</TABLE>
(d) The Annual Meeting was adjourned to a later date before action on
an amendment to the Company's Stock Option Plan ("Plan") to increase the number
of shares available for grant of options under the Plan by 600,000 shares.
Shareholders will consider this amendment on Friday, May 17, 1996 at 9:00 a.m.
local time at the Executive Offices of the Company, 2850 South 36th Street,
Phoenix, Arizona 85034.
9
<PAGE>
PART II - OTHER INFORMATION (continued)
Item 6. Exhibits and Reports on Form 8-K
A. Exhibits
Exhibit
Number Description
------ -----------
3.1 Ameded and Restated Certificate of
Incorporation
11.1 Statement of Computation of net income
(loss) per Weighted Average Number of
Common Shares Outstanding
B. Reports on Form 8-K.
No current Reports on Form 8-K were filed by the Company
during the three months ended March 31, 1996.
10
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Allan M. Weinstein Chairman of the Board of Directors, President and May 12, 1996
- ---------------------- Chief Executive Officer (Principal Executive
Allan M. Weinstein Officer)
/s/ Allen R. Dunaway Vice-President and Chief Financial Officer May 12, 1996
- -------------------- (Principal Financial Officer)
Allen R. Dunaway
</TABLE>
EXHIBIT 3.1
AMENDED AND RESTATED CERTIFICATE OF INCORPORATION
OF
ORTHOLOGIC CORP.
1. Name. The name of the corporation is OrthoLogic Corp.
2. Registered Agent. The name and address of the initial
registered office and registered agent of the Corporation is The Corporation
Trust company, Corporation Trust center, 1209 Orange Street, New Castle County,
Wilmington, Delaware 19801.
3. Purpose. The purpose for which this Corporation is
organized is the transaction of any or all lawful activity for which
corporations may be organized under the General Corporation Law of Delaware, as
it may be amended from time to time.
4. Election of Directors. Elections of directors at an annual
or special meeting of stockholders shall be by written ballot unless the Bylaws
of the Corporation shall otherwise provide. Advance notice of stockholder
nominations for the election of directors shall be given in the manner provided
in the Bylaws of the Corporation.
5. Authorized Capital. The total number of shares of stock
which the Corporation shall have authority to issue is 42,000,000 shares,
consisting of 40,000,000 shares of common stock having a par value of $.0005 per
share (the "Common Stock") and 2,000,000 shares of preferred stock having a par
value of $.0005 per share (the "Preferred Stock").
The Board of Directors is authorized, subject to limitations
prescribed by law and the provisions of Article 5, to provide for the issuance
of the shares of Preferred Stock in series, and by filing a certificate pursuant
to the applicable law of the State of Delaware, to establish from time to time
the number of shares to be included in each such series, and to fix the
designation, powers, preferences and rights of the shares of each such series
and the qualifications, limitations or restrictions thereof.
The authority of the Board with respect to each series shall
include, but not be limited to, determination of the following:
(a) The number of shares constituting that series and the
distinctive designation of that series;
(b) The dividend rate on the shares of that series, whether
dividends shall be cumulative, and, if so, from which
<PAGE>
date or dates, and the relative rights of priority, if any, of payment of
dividends on shares of that series;
(c) Whether that series shall have voting rights, in addition
to the voting rights provided by law, and, if so, the terms of such voting
rights;
(d) Whether that series shall have conversion privileges, and,
if so, the terms and conditions of such conversion, including provision for
adjustment of the conversion rate in such events as the Board of Directors shall
determine;
(e) Whether or not the shares of that series shall be
redeemable, and, if so, the terms and conditions of such redemption, including
the date or dates upon or after which they shall be redeemable, and the amount
per share payable in case of redemption, which amount may vary under different
conditions and at different redemption dates;
(f) Whether that series shall have a sinking fund for the
redemption or purchase of shares of that series, and, if so, the terms and
amount of such sinking fund;
(g) The rights of the shares of that series in the event of
voluntary or involuntary liquidation, dissolution or winding up of the
Corporation, and the relative rights of priority, if any, of payment of shares
of that series; and
(h) Any other relative rights, preferences and limitations of
that series.
6. Classification and Terms of Directors. The business and affairs of
the Corporation shall be managed by or under the direction of the Board of
Directors consisting of not less than three directors nor more than nine
directors, the exact number of directors to be determined from time to time by
resolution adopted by the Board of Directors. The directors shall be divided
into three classes, designated Class I, Class II and Class III. Each class shall
consist, as nearly as may be possible, of one-third of the total number of
directors constituting the entire Board of Directors. The terms of the initial
Class I directors shall terminate on the date of the first annual meeting of
stockholders held after the effective date of this Article 6; the term of the
initial Class II directors shall terminate on the date of the second annual
meeting of stockholders held after the effective date of this Article 6; and the
term of the initial Class III directors shall terminate on the date of the third
annual meeting of stockholders held after the effective date of this Article 6.
At each annual meeting of stockholders beginning with the first annual meeting
held after the effective date of this Article 6, successors to the class of
directors whose term expires at that annual meeting
2
<PAGE>
shall be elected for a three-year term. If the number of directors is changed,
any increase or decrease shall be apportioned among the classes so as to
maintain the number of directors in each class as nearly equal as possible, and
any additional directors of any class elected to fill a vacancy resulting from
an increase in such class shall hold office for a term that shall coincide with
the remaining terms of that class, but in no case will a decrease in the number
of directors shorten the term of any incumbent director. A director shall hold
office until the annual meeting for the year in which his term expires and until
his successor shall be elected and shall qualify, subject, however, to prior
death, resignation, retirement, disqualification or removal from office. Any
vacancy on the Board of Directors, howsoever resulting (including without
limitation newly created directorships), may be filled by a majority of the
directors then in office, even if less than a quorum, or by a sole remaining
director. Any director elected to fill a vacancy shall hold office for a term
that shall coincide with the term of the class to which such director shall have
been elected.
Notwithstanding the foregoing, whenever the holders of any one or more
classes or series of Preferred Stock issued by the Corporation shall have the
right, voting separately by class or series, to elect directors at an annual or
special meeting of stockholders, the election, term of office, filling of
vacancies and other features of such directorships shall be governed by the
terms of this Certificate of Incorporation or the resolution or resolutions
adopted by the Board of Directors pursuant to Article Five applicable thereto,
and such directors so elected shall not be divided into classes pursuant to this
Article Six unless expressly provided by such terms.
7. Removal of Directors. Subject to the rights, if any, of the holders
of shares of Preferred Stock then outstanding, any or all of the directors of
the Corporation may be removed from office at any time, but only for cause and
only by the affirmative vote of the holders of a majority of the outstanding
shares of the Corporation then entitled to vote generally in the election of
directors, considered for purposes of this Article 7 as one class.
8. Director Liability. No director shall be personally liable to the
Corporation or its stockholders for monetary damages for any breach of fiduciary
duty by such director as a director. Notwithstanding the foregoing sentence, a
director shall be liable to the extent provided by applicable law (i) for breach
of the director's duty of loyalty to the Corporation or its stockholders, (ii)
for acts or omissions not in good faith or which involve intentional misconduct
or a knowing violation of law, (iii) pursuant to Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the
3
<PAGE>
director derived an improper personal benefit. No amendment to or repeal of this
Section 8 shall apply to or have any effect on the liability or alleged
liability of any director of the Corporation for or with respect to any acts or
omissions of such director occurring prior to such amendment.
9. Action by Consent of Stockholders. Any action required or permitted
to be taken by the stockholders must be effected at a duly called and noticed
annual or special meeting of such, stockholders and may not be effected by any
consent in writing by such stockholders.
10. Compromise of Debts. Whenever a compromise or arrangement is
proposed between this Corporation and its creditors or any class of them and/or
between this Corporation and its stockholders or any class of them, any court of
equitable jurisdiction within the State of Delaware may, on the application in a
summary way of this Corporation or of any creditor or stockholder thereof or on
the application of any receiver or receivers appointed for this Corporation
under the provisions of Section 291 of Title 8 of the Delaware Code or on the
application of trustees in dissolution or of any receiver or receivers appointed
for this Corporation under the provisions of Section 279 of Title 8 of the
Delaware Code, order a meeting of the creditors or class of creditors, and/or of
the stockholders or class of stockholders of this Corporation, as the case may
be, to be summoned in such manner as the said court direct. If a majority in
number representing three-fourths in value of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
Corporation, as the case may be, agree to any compromise or arrangement and to
any reorganization of this Corporation as consequence of such compromise or
arrangement, the said compromise or arrangement and the said reorganization
shall, if sanctioned by the court to which the said application has been made,
be binding on all the creditors or class of creditors, and/or on all the
stockholders or class of stockholders, of this Corporation, as the case may be,
and also on this Corporation.
11. Special Voting Requirements.
(a) Except as set forth in Section (b) of this Article 11, the
affirmative vote of the holders of two-thirds of the outstanding stock of the
Corporation entitled to vote shall be required for:
(1) any merger or consolidation to which the Corpora- tion, or
any of its subsidiaries, and an Interested Person (as hereinafter defined) are
parties;
4
<PAGE>
(2) any sale or other disposition by the Corporation, or any
of its subsidiaries, of all or substantially all of its assets to an Interested
Person;
(3) any purchase or other acquisition by the Corporation, or
any of its subsidiaries, of all or substantially all of the assets or stock of
an Interested Person; and
(4) any other transaction with an Interested Person which
requires the approval of the stockholders of the Corporation under the GCL, as
in effect from time to time.
(b) The provisions of Section (a) of this Article 11 shall not be
applicable to any transaction described therein if such transaction is approved
by resolution of the Corporation's Board of Directors, provided that a majority
of the members of the Board of Directors voting for the approval of such
transaction are Continuing Directors. The term "Continuing Director" shall mean
any member of the Board of Directors of the Corporation who is not the
Interested Person, and not an affiliate, associate, representative or nominee of
the Interested Person or of such an affiliate or associate that is involved in
the relevant transaction, and (A) was a member of the Board of Directors prior
to the date that the person, firm or corporation, or any group thereof, with
whom such transaction is proposed, became an Interested Person or (B) whose
initial election as a director of the Corporation succeeds a Continuing Director
or is a newly created directorship, and in either case was recommended by a
majority vote of the Continuing Directors then in office.
(c) As used in this Article 11, the term "Interested Person" shall mean
any person, firm or corporation, or any group thereof, acting or intending to
act in concert, including any person directly or indirectly controlling or
controlled by or under direct or indirect common control with such person, firm
or corporation or group, which owns of record or beneficially, directly or
indirectly, five percent (5%) or more of any class of voting securities of the
Corporation.
12. Special Meetings. Special meetings of the stockholders of the
Corporation for any purpose or purposes may be called at any time only by the
President, or the Board of Directors pursuant to a resolution approved by a
majority of the whole Board of Directors, or at the request in writing of
shareholders owning at least 35% of the capital stock issued and outstanding and
entitled to vote. Special meetings of the stockholders may not be called by any
other person or persons. Business transacted at any special meeting of the
stockholders shall be limited to the purposes stated in the notice of such
meeting.
13. Bylaws. In furtherance and not in limitation of the powers
conferred by statute, the Board of Directors is expressly
5
<PAGE>
authorized by majority vote of the whole Board of Directors to adopt, repeal,
alter, amend or rescind the Bylaws of the Corporation. In addition, the Bylaws
of the Corporation may be adopted, repealed, altered, amended, or rescinded by
the affirmative vote of two-thirds of the outstanding stock of the Corporation
entitled to vote thereon; provided, if the Continuing Directors, as defined in
Article 11 shall by a majority vote of such Continuing Directors have adopted a
resolution approving the amendment or repeal proposal and have determined to
recommend it for approval by the holders of stock entitled to vote thereon, then
the vote required shall be the affirmative vote of the holders of at least a
majority of the outstanding shares entitled to vote thereon.
14. Certificate. The Corporation reserves the right to amend, alter,
change or repeal any provision contained in this Certificate of Incorporation in
the manner now or hereafter prescribed by statute and the Certificate of
Incorporation, and all rights conferred on stockholders herein are granted
subject to the reservations in Article 14. Provided, however, the affirmative
vote of the holders of at least two-thirds of the voting power of the
outstanding stock of the Corporation entitled to vote thereon, shall be required
to alter, amend, or adopt any provision inconsistent with or repeal Articles 4,
6, 7, 9, 11, 12 and 13 and this Article 14; provided, if the Continuing
Directors, as defined in Article 11 shall by a majority vote of such Continuing
Directors have adopted a resolution approving the amendment or repeal proposal
and have determined to recommend it for approval by the holders of stock
entitled to vote thereon, then the vote required shall be the affirmative vote
of the holders of at least a majority of the outstanding shares entitled to vote
thereon.
6
Exhibit 11.1
ORTHOLOGIC CORP.
STATEMENT OF COMPUTATION OF NET INCOME (LOSS) PER
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
(In thousands, except per share amounts)
Three Months Ended
March 31,
----------------------
1996 1995
-------- --------
Net income (loss) $ 935 $ (936)
======== ========
Common shares outstanding at end of period 9,841 7,479
Adjustment to reflect weighted average for
shares issued during the period (82) (332)
Adjustment to reflect assumed exercise
of outstanding stock options 639 0
-------- --------
Weighted average number of common shares
outstanding 10,398 7,147
======== ========
Net income (loss) per weighted average
number of common shares outstanding $ .09 $ (.13)
======== ========
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 887151
<NAME> ORTHOLOGIC CORP.
<MULTIPLIER> 1
<CURRENCY> U.S.DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 5,112,403
<SECURITIES> 11,209,665
<RECEIVABLES> 11,488,496
<ALLOWANCES> 2,202,941
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