SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K/A
AMENDMENT NO. 1 TO FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities and Exchange Act of 1934
Date of report (Date of earliest event reported) March 12, 1997
-----------------------
OrthoLogic Corp.
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(Exact Name of Registrant as Specified in Its Charter)
Delaware
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(State or Other Jurisdiction of Incorporation)
0-21214 86-0585310
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(Commission File Number) (I.R.S. Employer Identification No.)
2850 South 36th Street, Phoenix, Arizona 85034
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(Address of Principal Executive Offices) (Zip Code)
(602) 437-5520
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(Registrant's Telephone Number, Including Area Code)
<PAGE>
OrthoLogic Corp., a Delaware corporation ("OrthoLogic"), hereby amends
Item 7 of its Report on Form 8-K dated March 12, 1997.
Item 7. Financial Statements and Exhibits.
On March 12, 1997, OrthoLogic Corp., a Delaware corporation
("OrthoLogic") acquired certain assets and assumed certain liabilities of each
of Danninger Medical Technology, Inc., a Delaware corporation ("DMTI"), and
Danninger Healthcare, Inc., an Ohio corporation and a wholly owned subsidiary of
DMTI ("DHI, and together with DMTI, "Danninger"), pursuant to an Asset Purchase
Agreement (the "Agreement") dated March 12, 1997. This Form 8-K/A includes one
year audited financial statements for the net assets of DMTI and DHI acquired by
OrthoLogic on March 12, 1997 for the year ended December 31, 1996 and an
unaudited balance sheet as of March 12, 1997 and comparable statements of
revenue and expenses for the period from January 1, 1996 to March 12, 1996 and
January 1, 1997 to March 12, 1997 and a report thereon from Deloitte & Touche
LLP.
(a) Financial Statements of Businesses Acquired.
2
<PAGE>
------------------------------------------
NET ASSETS OF DANNINGER
MEDICAL TECHNOLOGY, INC. AND
DANNINGER HEALTHCARE, INC.
TO BE ACQUIRED BY
ORTHOLOGIC CORP.
Consolidated Financial Statements
Periods From January 1 to
March 12, 1997 and 1996 (Unaudited) and
Year Ended December 31, 1996, and
Independent Auditors' Report
<PAGE>
INDEPENDENT AUDITORS' REPORT
Danninger Medical Technology, Inc.
Columbus, Ohio
We have audited the accompanying consolidated statement of net assets of
Danninger Medical Technology, Inc. ("DMTI") and Danninger Healthcare, Inc.
("DHI") (a wholly owned subsidiary of DMTI) to be acquired by OrthoLogic Corp.
(collectively, "Danninger") as of December 31, 1996, and the related
consolidated statement of revenues and expenses of net assets for the year then
ended, pursuant to the Asset Purchase Agreement by and among OrthoLogic Corp.,
DMTI and DHI dated March 12, 1997, as described in Note 1 to the financial
statements. These financial statements are the responsibility of the Danninger's
management. Our responsibility is to express an opinion on these financial
statements based on our audit.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
The accompanying financial statements were prepared to present the consolidated
net assets and the revenues and expenses of net assets of Danninger to be
acquired by OrthoLogic Corp. pursuant to the Asset Purchase Agreement described
in Note 1, and is not intended to be a complete presentation of Danninger's
financial position or results of operations.
In our opinion, such financial statements present fairly, in all material
respects, the consolidated net assets of Danninger to be acquired by OrthoLogic
Corp. pursuant to the Asset Purchase Agreement described in Note 1, as of
December 31, 1996, and the consolidated revenues and expenses of net assets of
Danninger to be acquired by OrthoLogic Corp. for the year then ended in
conformity with generally accepted accounting principles.
Deloitte & Touche LLP
Phoenix, Arizona
May 8, 1997
<PAGE>
NET ASSETS OF DANNINGER MEDICAL TECHNOLOGY, INC. AND
DANNINGER HEALTHCARE, INC. TO BE ACQUIRED BY
ORTHOLOGIC CORP.
CONSOLIDATED STATEMENTS OF NET ASSETS
(Amounts in Thousands)
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<TABLE>
<CAPTION>
March 12,
1997
(Unaudited) December 31,
ASSETS TO BE ACQUIRED: (Note 5) (Note 9) 1996
<S> <C> <C>
CURRENT ASSETS:
Accounts receivable trade - net of allowance for
doubtful accounts of $340 (1997) and $330 (1996) $ 3,142 $ 3,001
Inventories (Note 3) 1,524 1,351
Prepaid expenses and other current assets 26 20
-------------- ------------
Total current assets 4,692 4,372
PROPERTY AND EQUIPMENT - Net (Note 4) 1,051 1,029
OTHER ASSETS AND INTANGIBLES - Net of accumulated
amortization of $129 (1997) and $92 (1996) (Note 4) 2,685 2,727
-------------- ------------
TOTAL ASSETS TO BE ACQUIRED 8,428 8,128
-------------- ------------
LIABILITIES TO BE ASSUMED:
CURRENT LIABILITIES:
Accounts payable - trade 1,152 715
Accrued expenses and other liabilities 157 168
Term debt - current portion (Note 5) 1,615 1,557
Capital lease obligations - current portion (Note 6) 12 14
-------------- ------------
TOTAL CURRENT LIABILITIES 2,936 2,454
TERM DEBT - Non-current portion (Note 5) 2,194 2,438
CAPITAL LEASE OBLIGATIONS - Net of current maturities (Note 6) 12 13
-------------- ------------
TOTAL LIABILITIES TO BE ASSUMED 5,142 4,905
-------------- ------------
COMMITMENTS AND CONTINGENCIES (Notes 5, 6 and 7)
NET ASSETS $ 3,286 $ 3,223
============== ============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
NET ASSETS OF DANNINGER MEDICAL TECHNOLOGY, INC. AND
DANNINGER HEALTHCARE, INC. TO BE ACQUIRED BY
ORTHOLOGIC CORP.
CONSOLIDATED STATEMENTS OF REVENUES AND EXPENSES OF NET ASSETS
(Amounts in Thousands)
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Period From Year
January 1 to March 12, Ended
--------------------------
1997 1996 December 31,
(Unaudited) 1996
(Note 9)
REVENUES:
Sales $ 1,967 $ 1,646 $ 7,983
Lease and rental revenue 443 253 1,989
-------- -------- --------
Total revenues 2,410 1,899 9,972
COST OF GOODS SOLD 985 869 4,326
-------- -------- --------
Gross margin 1,425 1,030 5,646
-------- -------- --------
OPERATING EXPENSES:
Sales and marketing 486 320 1,934
General and administrative 410 326 1,802
Research and development 93 78 414
-------- -------- --------
Total operating expenses 989 724 4,150
-------- -------- --------
OPERATING INCOME 436 306 1,496
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OTHER EXPENSE:
Interest expense - net 70 23 182
Other 3 1
-------- -------- --------
Total other expense 73 23 183
-------- -------- --------
INCOME BEFORE INCOME TAXES 363 283 1,313
INCOME TAX EXPENSE 148 113 526
-------- -------- --------
EXCESS OF REVENUES OVER EXPENSES $ 215 $ 170 $ 787
========= ========= =========
See notes to consolidated financial statements.
- 3 -
<PAGE>
NET ASSETS OF DANNINGER MEDICAL TECHNOLOGY, INC. AND
DANNINGER HEALTHCARE, INC. TO BE ACQUIRED BY
ORTHOLOGIC CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
PERIODS FROM JANUARY 1 TO MARCH 12, 1997 AND 1996 (Unaudited) AND
YEAR ENDED DECEMBER 31, 1996
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1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
These consolidated financial statements include the assets and liabilities
to be purchased by OrthoLogic Corp. ("OrthoLogic") pursuant to the asset
purchase agreement dated March 12, 1997 between OrthoLogic, Danninger
Medical Technology, Inc. ("DMTI") and one of its wholly-owned
subsidiaries, Danninger Healthcare, Inc. ("DHI") (the "Asset Purchase
Agreement"). The purchased assets and liabilities of DMTI relate to the
business of designing, manufacturing, and marketing throughout the United
States, through dealers, products that assist orthopedic patients in their
recovery following surgery or trauma. The purchased assets and liabilities
of DHI relate to the business of renting and selling durable medical
equipment to orthopedic patients primarily in the midwest portion of the
United States. The consolidated statements of revenues and expenses
include the allocation of certain general corporate overhead costs
associated with the purchased assets and liabilities. Interest expense has
been allocated based upon specific identification of indebtedness
purchased. Income tax expense has been calculated on a separate return
basis in order to present the results of operations as if these assets and
liabilities had comprised an independent organization, freestanding from
the seller; however, all income tax assets and liabilities remained with
the seller and are excluded from the accompanying statements of net
assets. All significant intercompany accounts and transactions have been
eliminated.
Because the financial statements of the net assets to be acquired are not
those of a separate legal entity and the related cash flow activities for
the periods would not be practicable to obtain or meaningful, a separate
statement of cash flows is not presented.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of certain significant accounting policies
followed in the preparation of these consolidated financial statements:
a. Inventories are stated at the lower of cost (first-in, first-out
("FIFO") basis) or market. An obsolescence reserve is recorded for
quantities which may not be saleable in the foreseeable future.
b. Property and equipment are recorded at cost. Expenditures for major
improvements are capitalized, while expenditures for repairs and
maintenance are charged to expense as incurred. Depreciation is
computed using the straight-line method at rates designed to
amortize the costs of such items over their estimated useful lives.
Estimated useful lives are as follows:
Useful Life
Equipment 3 - 5 years
Furniture and fixtures 7 years
- 4 -
<PAGE>
c. Revenue Recognition - All of the Company's rental contracts are
accounted for as operating leases. Revenue from the sales of
products are recognized upon shipment. Revenue from the rental of
equipment is recorded over the period during which the unit is
rented.
d. Use of Estimates - The preparation of financial statements in
conformity with generally accepted accounting principles necessarily
requires management to make estimates and assumptions that affect
the reported amounts of assets and liabilities and disclosure of
contingent assets and 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 these
estimates.
3. INVENTORIES
Inventories consisted of the following at December 31, 1996 (in
thousands):
Raw materials $ 1,139
Finished goods 352
--------
Total 1,491
Less reserve for obsolescence 140
--------
Inventories - net $ 1,351
========
4. PROPERTY, EQUIPMENT, OTHER ASSETS AND INTANGIBLES
Property and equipment consisted of the following at December 31, 1996 (in
thousands):
Machinery and equipment $ 541
Rental equipment 1,075
Office furniture and fixtures 884
---------
Total equipment 2,500
Less accumulated depreciation 1,471
---------
Property and equipment - net $ 1,029
========
Depreciation expense for the year ended December 31, 1996 was $295,000.
Other assets and intangibles consisted of the following at December 31,
1996 (in thousands):
Other assets $ 19
Intangibles 2,800
---------
Total 2,819
Less accumulated amortization 92
---------
Other assets and Intangibles - net $ 2,727
=========
- 5 -
<PAGE>
Intangible assets including goodwill (Note 8) are amortized on a
straight-line basis over their estimated useful lives ranging from five to
20 years. Management periodically evaluates the recoverability of all
intangible assets based on estimated future cash flows. Amortization
expense for the year ended December 31, 1996 was $55,000.
5. TERM DEBT
<TABLE>
<CAPTION>
Term debt at December 31, 1996 was (in thousands):
<S> <C>
Revolving credit agreement $ 300
Note payable to seller of Surgical and Orthopedic Specialties, Ltd. (Note 8),
quarterly principal payments set by the note agreement plus interest at
7.54%, maturing September 1999 1,500
Note payable to bank, monthly principal payments of $16,667 plus interest at
prime (8.25% at December 31, 1996) plus .75%, maturing November 2001 983
Note payable to bank, monthly installments of $16,667 plus interest at prime
(8.25% at December 31, 1996) plus .75%, maturing in June 2000 700
Note payable to bank, monthly principal payments of $7,222 plus interest at prime
(8.25% at December 31, 1996) plus .75%, maturing August 1999 231
Note payable to finance company, monthly principal payments of $5,761 plus
interest at prime (8.25% at December 31, 1996) plus 1.5%, maturing
March 1999 156
Note payable to finance company, monthly principal payments of $6,997 plus
interest at prime (8.25% at December 31, 1996) plus 1.5%, maturing June 1998 125
---------
Total 3,995
Less current maturities 1,557
---------
Term debt - noncurrent portion $ 2,438
=========
</TABLE>
Under the terms of the revolving credit agreement, the Company may borrow
up to $3,000,000 at the bank's prime interest rate (8.25% at December 31,
1996) plus .5%. The borrowings on the revolving credit agreement are due
on June 30, 1997. The agreement contains financial covenants requiring the
Company to maintain certain financial ratios.
Substantially all of the Company's assets are pledged as collateral on the
revolving credit agreement and other term debt.
Term debt maturities (in thousands) at December 31, 1996 are as follows:
1997 $ 1,557
1998 1,105
1999 850
2000 300
2001 183
--------
Total $ 3,995
========
- 6 -
<PAGE>
6. RENTAL AND LEASE AGREEMENTS
Under the terms of the Asset Purchase Agreement, OrthoLogic assumed
certain operating leases for regional sales and rental offices. OrthoLogic
did not assume the main office and manufacturing facility, located in
Columbus, Ohio, operating lease agreement where DMTI conducted its
operations during 1996. Total rent expense for both the assumed and
unassumed operating leases was $238,000 in 1996.
The Company leases certain manufacturing and computer equipment under
noncancelable lease agreements that are accounted for as capitalized
leases. The leases provide that the Company pay taxes, insurance and
maintenance expenses related to the equipment. Leased equipment, assumed
by OrthoLogic in the acquisition, under capital leases is included in the
accompanying consolidated statements of net assets as property and
equipment with an aggregate cost of $59,000 and accumulated depreciation
of $31,000 at December 31, 1996.
The following is a schedule of future minimum lease payments for the years
ending December 31 under non-cancelable lease agreements, assumed by
OrthoLogic in the acquisition, with original terms in excess of one year:
Capital Operating
Leases Leases
(In thousands)
1997 $ 18 $ 81
1998 7 72
1999 5 72
2000 3 72
2001 54
------ -------
Total future minimum lease payments 33 $ 351
=======
Less amounts representing interest 6
------
Present value of net minimum lease payments 27
Less current maturities 14
------
Long-term capital lease obligations $ 13
======
7. COMMITMENTS AND CONTINGENCIES
Certain of the Company's accounts receivable result from third party
reimbursements that may be dependent on limitations imposed by the payor
on the amount of reimbursement. The Company records the receivable and
related revenue net of its estimate of such limitations.
- 7 -
<PAGE>
8. ACQUISITION OF BUSINESS
In September 1996, DMTI acquired all of the outstanding stock of Surgical
and Orthopedic Specialties, Ltd. ("SOS") for approximately $3,000,000. The
consideration was comprised of $1,000,000 cash, $500,000 of common stock
and $1,500,000 in a seller financed note payable (Note 5). SOS is engaged
in the rental of surgical recovery equipment. Intangible assets in the
accompanying consolidated balance sheet include approximately $2,500,000
of goodwill resulting from this transaction which is amortized over 20
years. The acquisition of SOS was accounted for under the purchase method.
Accordingly, the purchase price has been allocated to the assets acquired
and liabilities assumed based on their estimated fair values at the date
of acquisition. The results of operations of SOS as they relate to the
purchased assets and liabilities have been included in the statement of
operations from the acquisition date.
Business acquired as of September 6, 1996 (in thousands):
Fair value of assets $ 3,767
Fair value of liabilities (818)
Common stock issued (500)
Acquisition indebtedness (1,500)
----------
Net cash paid $ 949
=========
9. UNAUDITED INTERIM PERIODS
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. In the opinion of management, all adjustments and
reclassifications considered necessary for a fair and comparable
presentation have been included and are of a normal recurring nature.
Operating results for the periods from January 1 to March 12, 1996 and
1997 are not necessarily indicative of the results that may be expected
for the year ending December 31. The accompanying financial statements
should be read in conjunction with the Company's most recent audited
financial statements.
10. SUBSEQUENT EVENT
On March 12, 1997, DMTI signed the Asset Purchase Agreement with
OrthoLogic Corp. to sell certain assets and liabilities of DMTI and DHI
for approximately $9,000,000 cash. Under the terms of the agreement, DMTI
will retain the cash, certain assets and liabilities, including income tax
related assets and liabilities, and any litigation; therefore, such assets
and liabilities have been excluded from the accompanying statements of net
assets.
* * * * * *
<PAGE>
b) Pro Forma Financial Information
On March 12, 1997, OrthoLogic Corp. ("OrthoLogic") acquired certain assets and
assumed certain liabilities of each of Danninger Medical Technology, Inc.
("DMTI") and Danninger Healthcare, Inc. ("DHI", and together with DMTI,
"Danninger"), pursuant to an Asset Purchase Agreement dated March 12, 1997, for
approximately $9,000,000 cash.
The Unaudited Pro Forma Consolidated Statements of Income/(Loss) for the year
ended December 31, 1996 and the three months ended March 31, 1997 combine
historical statements of income/(loss) for OrthoLogic and the acquired net
assets of Danninger, as if the acquisition had occurred on January 1, 1996.
The detailed assumptions used to prepare the unaudited pro forma consolidated
financial information are contained in the accompanying Unaudited Pro Forma
Consolidated Statements of Income/(Loss). These statements reflect the use of
the purchase method of accounting for the acquisition.
The unaudited pro forma financial information assumes the acquisition was funded
from currently available cash. The unaudited pro forma consolidated financial
information does not purport to represent the results of operations of
OrthoLogic that actually would have resulted had the acquisition occurred on
January 1, 1996, nor should it be taken as indicative of the future results of
operations.
<PAGE>
OrthoLogic Corp.
Unaudited Pro Forma Consolidated Statement of Income/(Loss)
Three month period ended March 31, 1997
<TABLE>
<CAPTION>
Pro Forma
OrthoLogic Pro Forma Consolidated
Corp. DMTI Adjustments Totals
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES - Net $ 17,301,715 $ 2,410,000 $ - $ 19,711,715
------------ ------------ ------------ ------------
COST OF REVENUES
Cost of goods sold 2,714,037 985,000 -- 3,699,037
Cost of rentals 2,031,331 0 -- 2,031,331
------------ ------------ ------------ ------------
Total cost of revenues 4,745,368 985,000 -- 5,730,368
------------ ------------ ------------ ------------
GROSS PROFIT 12,556,347 1,425,000 -- 13,981,347
------------ ------------ ------------ ------------
OPERATING EXPENSES
Selling, general and administrative 12,889,498 896,000 80,000 (a) 13,865,498
Research and development 576,056 93,000 -- 669,056
------------ ------------ ------------ ------------
Total operating expenses 13,465,554 989,000 80,000 14,534,554
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) (909,207) 436,000 (80,000) (553,207)
OTHER INCOME (EXPENSE) 636,117 (73,000) (125,000)(b) 438,117
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES (273,090) 363,000 (205,000) (115,090)
(PROVISION) BENEFIT FOR INCOME TAXES -- (148,000) 148,000 --
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ (273,090) $ 215,000 $ (57,000) $ (115,090)
------------ ------------ ------------ ------------
NET LOSS PER WEIGHTED
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING $ (0.01) $ - $ - $ (0.00)
============ ============ ============ ============
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 25,037,890 - - 25,037,890
------------ ------------ ------------ ------------
</TABLE>
Pro Forma Adjustment Legend
(a) Reflects a pro forma increase in amortization expense associated with
the capitalization of the cost of acquisition in excess of net assets
acquired resulting from the application of purchase accounting
principles.
(b) Reflects a pro forma decrease in interest income imputed on
consideration paid for the acquisition.
<PAGE>
OrthoLogic Corp.
Unaudited Pro Forma Consolidated Statement of Income/(Loss)
Year Ended December 31, 1996
<TABLE>
<CAPTION>
Pro Forma
OrthoLogic Pro Forma Consolidated
Corp. DMTI Adjustments Totals
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES - Net $ 41,884,239 $ 9,972,000 $ -- $ 51,856,239
------------ ------------ ------------ ------------
COST OF REVENUES
Cost of goods sold 5,714,510 4,326,000 -- 10,040,510
Cost of rentals 2,584,530 -- -- 2,584,530
------------ ------------ ------------ ------------
Total cost of revenues 8,299,040 4,326,000 -- 12,625,040
------------ ------------ ------------ ------------
GROSS PROFIT 33,585,199 5,646,000 -- 39,231,199
------------ ------------ ------------ ------------
OPERATING EXPENSES
Selling, general and administrative 31,900,966 3,736,000 385,000 (a) 36,021,966
Research and development 2,169,090 414,000 -- 2,583,090
------------ ------------ ------------ ------------
Total operating expenses 34,070,056 4,150,000 385,000 38,605,056
------------ ------------ ------------ ------------
OPERATING INCOME (LOSS) (484,857) 1,496,000 (385,000) 626,143
OTHER INCOME (EXPENSE) 3,023,246 (183,000) (600,000)(b) 2,240,246
------------ ------------ ------------ ------------
INCOME (LOSS) BEFORE INCOME TAXES 2,538,389 1,313,000 (985,000) 2,866,384
(PROVISION) BENEFIT FOR INCOME TAXES - (526,000) 526,000 -
------------ ------------ ------------ ------------
NET INCOME (LOSS) $ 2,538,389 $ 787,000 $ (459,000) $ 2,866,389
------------ ------------ ------------ ------------
NET INCOME PER WEIGHTED
AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING $ 0.11 $ -- $ -- $ 0.12
------------ ------------ ------------ ------------
WEIGHTED AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 24,143,763 -- -- 24,143,763
------------ ------------ ------------ ------------
</TABLE>
Pro Forma Adjustment Legend
(a) Reflects a pro forma increase in amortization expense associated with
the capitalization of the cost of acquisition in excess of net assets
acquired resulting from the application of purchase accounting
principles.
(b) Reflects a pro forma decrease in interest income imputed on
consideration paid for the acquisition.
<PAGE>
(c) Exhibits. See the Exhibit Index, which is incorporated herein
by reference, immediately following the Signature page to this Report.
<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 hereunto duly authorized.
ORTHOLOGIC CORP.
June 9, 1997 By /s/ Allen R. Dunaway
-------------------------------------
Allen R. Dunaway
Chief Financial Officer
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description of Exhibit Paginated No.
- ------------------ ------------------------------------------------------------------------- ---------------------
<S> <C>
* 2.1 Asset Purchase Agreement dated March 12, 1997 by and
among OrthoLogic Corp., a Delaware corporation, Danninger
Medical Technology, Inc., a Delaware corporation, and
Danninger Healthcare, Inc., an Ohio corporation........................
23.1 Consent of Deloitte & Touche LLP ......................................
</TABLE>
- ---------------------------
* Previously filed.
E-1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in the Registration Statements No.
33-79010, No. 333-1268 and No. 333-09785 of OrthoLogic Corp. on Form S-8 and
Registration Statements No. 33-82050 and No. 333-1558 of OrthoLogic Corp. on
form S-3 of our report dated May 8, 1997 (relating to the financial statements
as of December 31, 1996 and for the year then ended) of net assets of Danninger
Medical Technology, Inc. and Danninger Healthcare, Inc. to be acquired by
OrthoLogic Corp. appearing in this Form 8-K/A of OrthoLogic Corp.
DELOITTE & TOUCHE LLP
Phoenix, Arizona
June 9, 1997
