-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CERNM8TZt6oDDR9bHhycNCdbzwjtiA3v+Wz2RrwxhMuyoUSTC9J9A6l2l4royiZA lqfaib/qiFxr6TXdfGo82A== 0000927016-96-001724.txt : 19961115 0000927016-96-001724.hdr.sgml : 19961115 ACCESSION NUMBER: 0000927016-96-001724 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CORE INC CENTRAL INDEX KEY: 0000880238 STANDARD INDUSTRIAL CLASSIFICATION: INSURANCE AGENTS BROKERS & SERVICES [6411] IRS NUMBER: 042828817 STATE OF INCORPORATION: MA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19600 FILM NUMBER: 96661820 BUSINESS ADDRESS: STREET 1: 18881 VON KARMAN AVE STREET 2: STE 1750 CITY: IRVINE STATE: CA ZIP: 92715 BUSINESS PHONE: 6173226400 MAIL ADDRESS: STREET 1: 18881 VON KARMAN AVE STREET 2: SUITE 1750 CITY: IRVINE STATE: CA ZIP: 92715 FORMER COMPANY: FORMER CONFORMED NAME: PEER REVIEW ANALYSIS INC DATE OF NAME CHANGE: 19930328 10-Q 1 FORM 10-Q - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ---------------- FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996 COMMISSION FILE NUMBER 0-19600 CORE, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) MASSACHUSETTS 04-2828817 (I.R.S. EMPLOYER IDENTIFICATION NO.) (STATE OF OTHER JURISDICTION OF INCORPORATION OR ORGANIZATION) 18881 VON KARMAN AVENUE, SUITE 1750, IRVINE, CALIFORNIA 92715 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (714) 442-2100 Indicate by check "X" 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. Yes X No On November 8, 1996, there were 7,140,890 shares of the Registrant's Common Stock outstanding. - ------------------------------------------------------------------------------- - ------------------------------------------------------------------------------- CORE, INC. FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1996 TABLE OF CONTENTS
PAGE ---- PART I. FINANCIAL INFORMATION Item 1. Financial Statements Consolidated Condensed Balance Sheets.................................................. 3 Consolidated Condensed Statements of Operations........................................ 5 Consolidated Condensed Statements of Cash Flows........................................ 6 Notes to Consolidated Condensed Financial Statements................................... 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.. 8 PART II. OTHER INFORMATION Item 1. Legal Proceedings...................................................................... N/A Item 2. Changes in Securities.................................................................. N/A Item 3. Defaults Upon Senior Securities........................................................ N/A Item 4. Submission of Matters to a Vote of Security Holders.................................... N/A Item 5. Other Information...................................................................... 12 Item 6. Exhibits and Reports on Form 8-K....................................................... 12 Signatures...................................................................................... 12
2 CORE, INC. Consolidated Condensed Balance Sheets
December 31, September 30, 1995 1996 (Note 1) (Unaudited) ------------- -------------- Assets Current assets: Cash and cash equivalents $ 1,005,807 $ 107,464 Cash pledged as collateral 106,000 Customer advances 286,550 281,650 Investments available-for-sale 1,531,610 13,284,644 Accounts receivable, net of allowance for doubtful accounts of $170,337 in 1995 and $171,925 at September 30, 1996 2,987,356 4,916,564 Notes receivable from officers 35,507 107,602 Prepaid expenses and other current assets 499,921 1,273,847 ------------- -------------- Total current assets 6,452,751 19,971,771 Property and equipment, net 3,155,234 5,470,480 Cash pledged as collateral 192,000 192,000 Deposits and other assets 178,402 170,262 Goodwill, net of accumulated amortization of $17,000 in 1995 and $70,100 at September 30, 1996 1,929,885 2,052,904 Intangibles, net 286,927 226,789 ------------- -------------- Total assets $12,195,199 $28,084,206 ============= ==============
See accompanying notes
CORE, INC. Consolidated Condensed Balance Sheets - Continued December 31, September 30, 1995 1996 (Note 1) (Unaudited) ------------- -------------- Liabilities and stockholders' equity Current liabilities: Accounts payable $ 846,156 $ 1,183,478 Accrued expenses 1,525,623 1,684,474 Accrued payroll 184,795 Accrued restructuring costs 130,498 39,896 Deferred income taxes 68,316 68,316 Current portion of notes payable 155,994 Current portion of obligations to former shareholders 298,509 291,865 Current portion of capital lease payments 91,159 55,926 ----------------------------- Total current liabilities 3,301,050 3,323,955 Long-term obligations to former shareholders, net of current portion 745,106 Capital lease obligations, net of current portion 71,969 50,611 Deferred rent, net of current portion 279,317 592,932 Deferred income taxes 149,500 149,500 Commitments and contingencies Stockholders' equity Preferred stock, no par value, authorized 500,000 shares: no shares outstanding Common stock, $0.10 par value per share; authorized 10,000,000 shares: issued and outstanding 4,794,403 at December 31, 1995 and 7,140,039 at September 30, 1996 479,440 714,004 Additional paid-in capital 18,052,547 34,420,537 Deferred compensation (51,120) (51,120) Cumulative unrealized gain (loss) on investments available-for-sale 30,975 (32,554) Accumulated deficit (10,863,585) (11,083,659) ----------------------------- Total stockholders' equity 7,648,257 23,967,208 ----------------------------- Total liabilities and stockholders' equity $ 12,195,199 $ 28,084,206 =============================
See accompanying notes
CORE, INC. Consolidated Condensed Statements of Operations (Unaudited) Three months ended Nine months ended September 30, September 30, September 30, September 30, 1995 1996 1995 1996 ---- ---- ---- ---- Revenues $5,076,380 $ 7,460,262 $14,686,327 $20,603,169 Cost of services 3,069,546 4,538,792 9,242,671 12,325,764 ---------------------------------------------------------------- Gross profit 2,006,834 2,921,470 5,443,656 8,277,405 Operating expenses: General and administrative 1,155,669 1,584,502 3,454,942 4,483,418 Sales and marketing 328,228 337,892 1,015,424 1,236,383 Restructuring costs 557,515 Merger costs and expenses 436,104 Non-recurring write-off of AmHealth Acquisition 2,029,555 2,029,555 Depreciation and amortization 207,692 323,663 649,775 891,230 ---------------------------------------------------------------- Total operating expenses 1,691,589 4,275,612 6,113,760 8,640,586 Income (loss) from operations 315,245 (1,354,142) (670,104) (363,181) Other income (expense): Interest income 64,828 118,277 206,580 193,035 Interest expense 3,148 (21,273) (54,229) (66,684) Realized gain (loss) on sale of investments available-for-sale 10,785 9,123 16,003 Other income 2,661 8,181 481 ---------------------------------------------------------------- 81,422 97,004 169,655 142,835 Net income (loss) $ 396,667 ($1,257,138) ($500,449) ($220,346) ================================================================ Net income (loss) per common share $0.08 ($0.21) ($0.09) ($0.04) ============== ============= =============== ============== Weighted average number of common shares outstanding 5,271,000 6,072,000 5,271,000 6,072,000 ============== ============== =============== ==============
See accompanying notes CORE, INC. Consolidated Condensed Statements of Cash Flows (Unaudited)
Nine Months Ended September 30, 1995 1996 ---- ---- OPERATING ACTIVITIES Net loss $ (500,449) $ (220,346) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 708,380 1,037,790 Provision for doubtful accounts 15,000 Realized gain on sale of investments available-for-sale (16,003) Decrease in obligations to former shareholders (372,666) Changes in operating assets and liabilities Increase in accounts receivable (388,561) (1,929,208) (Increase) decrease in prepaid expenses and other assets 139,106 (844,926) (Increase) decrease in customer advances (4,900) 4,900 Decrease in cash overdraft (301,367) Increase (decrease) in accounts payable and accrued expenses (57,380) 534,391 ----------- ------------ NET CASH USED IN OPERATING ACTIVITES (390,171) (1,806,068) INVESTING ACTIVITIES Additions to property and equipment (884,200) (3,168,926) Additions to goodwill (176,119) Decrease in cash pledged as collateral 464,884 106,000 Purchases of investments available-for-sale (3,987,468) (17,085,027) Sales of investments available-for-sale 8,383,679 5,284,467 Increase to notes receivable from officers (21,945) (72,095) (Increase) decrease in deposits and other assets (18,611) 8,140 ----------- ------------ NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 3,936,339 (15,103,560) FINANCING ACTIVITIES Net repayments under bank revolving line of credit (1,200,000) Payments on officers' notes (200,000) Payments on obligations to former shareholders (379,084) Payments on notes payable (184,082) (155,994) Payments on capital lease obligations (67,206) (56,591) Proceeds from issuance of common stock, net of offering costs 16,351,379 Issuance of common stock upon exercise of stock options and warrants 58,744 251,575 ----------- ------------ NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES (1,592,544) 16,011,285 Net increase (decrease) in cash and cash equivalents 1,953,624 (898,343) Cash and cash equivalents at beginning of period - 1,005,807 ----------- ------------ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,953,624 $ 107,464 =========== ============ Interest paid $ 78,851 $ 35,803
See accompanying notes CORE, INC. Notes to Consolidated Condensed Financial Statements (Unaudited) September 30, 1996 Note 1 - Basis of Presentation The accompanying unaudited consolidated condensed financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission, but do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The balance sheet at December 31, 1995 has been derived from the audited financial statements of CORE, INC. (the "Company") at that date. In the opinion of management, all adjustments, (consisting of only normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the nine-month period ended September 30, 1996 are not necessarily indicative of the results that may be expected for the year ended December 31, 1996. For further information, refer to the consolidated financial statements for the year ended December 31, 1995 contained in the Company's annual report filed on Form 10-K (File #0-19600) with the Securities and Exchange Commission on April 1, 1996. Item 2. Management's Discussion and Analysis of Financial Condition and Results - -------------------------------------------------------------------------------- of Operations. - -------------- CORE, INC. ("CORE" or the "Company") is a national provider of managed disability and health care benefits management services. The Company was incorporated in 1984 under the name Peer Review Analysis, Inc. ("PRA") to provide physician-intensive utilization management services to commercial insurance companies and self-insured employers. PRA became a publicly-held entity in December 1991 with the completion of an initial public offering. In March 1995, PRA completed the CMI/PRA Merger with Core Management, Inc. ("CMI"). CMI provides managed disability services, including benefits analysis and consulting services and health care benefits utilization review and case management services. CMI's utilization review and case management services with respect to mental health and substance abuse cases were acquired in an acquisition in March 1993. The CMI/PRA Merger has been accounted for as pooling of interests, and consequently the financial statements of the Company have been retroactively restated to include the financial position and results of operations of CMI for all periods presented. In July 1995, the Company changed its name to CORE, INC. and in October 1995, the Company acquired Cost Review Services, Inc. ("CRS"), a provider of bill audit and case management services in the workers' compensation market. The Company provides managed disability services (which consist of the Company's WorkAbility/R/ program as well as its bill audit and analytic consulting services), specialty physician and behavioral health review services and health care benefits utilization review and case management services. These services are provided principally to self-insured employers, third-party administrators and insurance carriers, and the Company is typically compensated for these services either on a per review (i.e., per case), hourly or to a lesser extent per enrollee basis. In a limited number of cases, the Company's compensation varies with cost savings realized by the client as a result of the Company's services. Also included in managed disability services revenue is a limited amount (2% of revenue for the nine months ended September 30, 1996) of licensing revenue attributable to license grants by the Company of the medical protocol portion of the WorkAbility software program. A significant portion of the Company's revenues have historically been derived from a limited number of key clients. Current Developments - -------------------- On July 24, 1996, the Company terminated its Asset Purchase Agreement (the "AmHealth Agreement") with AmHealth, Inc. ("AmHealth") entered into on May 10, 1996. AmHealth is a management services organization that manages occupational health clinics and on-site industrial medical facilities in California. As a result of such termination, the Company has incurred a one-time charge to earnings of $1.0 million during the three months ended September 30, 1996 in connection with the write-off of transaction costs related to the proposed AmHealth acquisition. Additionally, in connection with the proposed acquisition, in the first quarter of 1996 the Company made a $1.0 million loan (the "AmHealth Loan") to AmHealth. There is currently substantial doubt about AmHealth's ability to repay the AmHealth Loan, thus the Company wrote-off the AmHealth Loan during the three months ended September 30, 1996 which resulted in an additional non-recurring charge to earnings of $1.0 million. On August 1, 1996, the Company began providing managed disability services, including utilization of CORE's Workability program, to The Bell Atlantic Corporation ("Bell Atlantic") for approximately 57,000 employees from the Company's new operating center in Silver Spring, Maryland. On August 9, 1996, the Company completed a public offering of 2,000,000 shares of Common Stock through a group of underwriters managed by Smith Barney Inc. and Cowen & Company. The public offering price was $8.00 per share. On September 3, 1996, the Company issued an additional 248,800 shares of its Common Stock to cover over-allotments in connection with the public offering. CORE intends to use the net proceeds from this offering for investments in its operating capacity and for working capital and general corporate purposes. Results of Operations - --------------------------- The following table sets forth certain statement of operations data for the periods indicated expressed as a percentage of revenues:
Three months ended September 30, Nine months ended September 30, - ------------------------------------------------------------------------------------------------ 1995 1996 1995 1996 - ------------------------------------------------------------------------------------------------ Revenue 100.0% 100.0% 100.0% 100.0% Cost of services 60.5 60.8 62.9 59.8 Gross profit 39.5 39.2 37.1 40.2 General and administrative 22.8 21.2 23.5 21.8 Sales and marketing 6.5 4.5 6.9 6.0
The following table sets forth the contribution to total revenues of each of the Company's principal service lines for the periods indicated:
Three months ended September 30, Nine months ended September 30, --------------------------------------------------------------------------------------------- 1995 1996 1995 1996 ---- ---- ---- ---- (Dollars in thousands) Amount Percent Amount Percent Amount Percent Amount Percent Specialty physician and behavioral health review $2,115 41.7% $2,226 29.8% $ 6,446 43.9% $ 6,770 32.9% Utilization review and case management 1,434 28.2 1,714 23.0 4,575 31.2 5,392 26.2 Managed disability (including WorkAbility(R), analytic and bill audit) 1,528 30.1 3,520 47.2 3,665 24.9 8,441 40.9 ------ ----- ------ ---- ------- ----- ------- ----- $5,077 100.0% $7,460 100.0% $14,686 100.0% $20,603 100.0% ====== ===== ====== ===== ======= ===== ======= =====
Revenues. Revenues for the three months ended September 30, 1996 increased by - --------- $2,384,000 (47%) from $5,076,000 in 1995 to $7,460,000 in 1996. For the nine months ended September 30, 1996 revenues increased by $5,917,000 (40%) from $14,686,000 to $20,603,000. Approximately 26% of the revenue increase for the third quarter and 30% of the increase for the nine months ended September 30, 1996 is attributable to revenues generated from Bell Atlantic. A portion of the increase in revenues can also be attributed to the number of referrals processed in each of the Company's principal service lines which increased over the prior year comparative period. Approximately $2,000,000 (84%) for the third quarter and $4,800,000 (80%) for the nine months ended September 30, 1996 of the Company's increase in revenues came from growth in managed disability services. Additionally, with the acquisition of CRS in October 1995, CORE expanded its ability to service the workers' compensation market with bill audit services. During the three months ended September 30, 1996, the Company's top five clients represented 40% of revenues compared to 32% during the three months ended September 30, 1995. Bell Atlantic accounted for approximately 18% of revenues for the three months ended September 30, 1996 and Chrysler Corporation accounted for approximately 10% of revenue for the three months ended September 30, 1995. No other single client represented more than 10% of total revenues for the three months ended September 30, 1996 or the three months ended September 30, 1995. During the nine months ended September 30, 1996, the Company's top five clients represented 32% of revenues compared to 43% during the nine months ended September 30, 1995. Chrysler Corporation accounted for approximately 10% of revenues for the nine months ended September 30, 1995. No single client represented more than 10% of total revenues during the nine months ended September 30, 1996. Cost of services. Cost of services for the Company include direct expenses - ----------------- associated with the delivery of its review services, including salaries for professional, clerical and license support staff, the cost of physician reviewer consultants and telephone expense. Cost of services increased for the three months ended September 30, 1996 by $1,469,000 (48%) from $3,070,000 in 1995 to $4,539,000 in 1996. Cost of services for the nine months ended September 30, 1996 increased $3,083,000 (33%) from $9,243,000 in 1995 to $12,326,000 in 1996. The increase is primarily the result of additional costs associated with increased payroll costs to process a higher volume of referrals and increased staffing levels required to service new and growing WorkAbility clients including Bell Atlantic. During the nine months ended September 30, 1996, CORE's cost of services increased by only 33% to service a 40% increase in revenue. Accordingly, gross profit performance improved from 37% for the nine months ended September 30, 1995 to 40% for the nine months ended September 30, 1996. Gross profit performance for the three months ended September 30, 1996 decreased slightly to 39% as compared to a gross profit level of 40% for the nine months ended September 30, 1996. Typically, when a major client such as Bell Atlantic is implemented the Company expends a significant amount of resources during the implementation which results in lower gross profit margins during the implementation period. Consequently, the Company's results of operations for any one quarter may not be indicative of results to be expected for any other quarter or for a particular fiscal year. General and administrative expenses. General and administrative expenses for the - ------------------------------------ three months ended September 30, 1996 increased $429,000 (37%) from $1,156,000 in 1995 to $1,585,000 in 1996. General and administrative expenses for the nine months ended September 30, 1996 increased $1,028,000 (30%) from $3,455,000 in 1995 to $4,483,000 in 1996. Expenses increased due to higher costs associated with additional staffing in the information services areas to support the growth of the Company. Additionally, general and administrative expenses have increased due to the purchase of CRS in October 1995 and the opening of the Silver Spring, Maryland operating center in July, 1996. General and administrative expenses decreased as a percentage of revenue from 24% for the nine months ended September 30, 1995 to 22% for the nine months ended September 30, 1996. This improvement is generally due to greater economies of scale based on higher revenues. Sales and marketing expenses. Sales and marketing expenses include, but are not - ----------------------------- limited to, salaries for sales and account management and travel expenses. Sales and marketing expenses also include costs designed to increase revenues, such as participation in and attendance at industry trade shows and conferences. Sales and marketing expenses for the three months ended September 30, 1996 increased $10,000 (3%) from $328,000 in 1995 to $338,000 in 1996. Sales and marketing expenses for the nine months ended September 30, 1996 increased $221,000 (22%) from $1,015,000 in 1995 to $1,236,000 in 1996. The increase is primarily due to increased travel expenses in the account management department and increased payroll due to staffing increases to support the marketing department. The Company's sales and marketing strategy has focused the efforts of the Company's industry-known senior management team and a small sales and marketing staff on a few but significantly large sales prospects. Depreciation and amortization expenses. Depreciation and amortization expenses - --------------------------------------- for the three months ended September 30, 1996 increased $116,000 (56%) from $208,000 in 1995 to $324,000 in 1996. Depreciation and amortization expenses for the nine months ended September 30, 1996 increased $241,000 (37%) from $650,000 in 1995 to $891,000 in 1996. The increase is attributable to increased depreciation expense on assets purchased for the new operating center in Silver Spring, Maryland to service the Bell Atlantic contract as well as increased amortization expense on the goodwill acquired in the purchase of CRS. Financial Condition, Liquidity and Capital Resources - ---------------------------------------------------- For the nine months ended September 30, 1996, the Company's cash and cash equivalents decreased by $898,000. For this period, operating activities used $1,806,000 primarily due to a net loss of $220,000 and an increase of $1,929,000 in accounts receivable, offset by an increase in accounts payable of $534,000. Approximately 70% of the increase in receivables related to Bell Atlantic revenues generated in the third quarter, all of which was subsequently collected in November 1996. The Company's investing activities used $15,104,000 of cash, primarily due to purchases of investments available-for- sale of $17,085,000 and $3,169,000 for the funding of equipment and furniture purchases and leasehold improvements as offset by sales of investments of $5,284,000. Approximately 31% of the equipment and furniture purchases and leasehold improvements is attributable to the opening of a new operating center in Silver Spring, Maryland. The Company's financing activities provided $16,011,000 for this period primarily due to the proceeds from the secondary public offering of $16,821,000. A portion of the public offering proceeds were used to pay for offering costs of approximately $500,000 and to payoff the Company's line of credit of approximately $1,000,000. At September 30, 1996, the Company had available $2,500,000 on its line of credit under which no principal or interest was outstanding. The line of credit may be utilized to meet short-term demands for cash that fluctuate based on the timing of collections on accounts receivable. The Company plans to finance its operations and working capital requirements with the proceeds of the August, 1996 offering, earnings from operations, investments on hand and other sources of available funds, including the Company's available line of credit of $2,500,000. The Company presently believes that these resources will be sufficient to meet its liquidity and funding requirements through at least the year 1997. EX-4.1 2 RESTATED ARTICLES OF ORGANIZATION THE COMMONWEALTH OF MASSACHUSETTS MICHAEL JOSEPH CONNOLLY FEDERAL IDENTIFICATION Secretary of State ONE ASHBURTON PLACE, BOSTON, MASS: 02108 NO.04-2828817 ------------------- RESTATED ARTICLES OF ORGANIZATION GENERAL LAWS, CHAPTER 156B, SECTION 74 This certificate must be submitted to the Secretary of the Commonwealth within sixty days after the date of the vote of stockholders adopting the restated articles of organization. The fee for filing this certificate is prescribed by General Laws, Chapter 156B, Section 114. Make check payable to the Commonwealth of Massachusetts. ____________ We, Eric R. Spitzer President, and John I. Sandson, M.D. Clerk of Peer Review Analysis, Inc. ........................................................................... (Name of Corporation) located at 380 Pleasant Street, Malden, MA 02148........................... do hereby certify that the following restatement of the articles of organization of the corporation was duly adopted at a meeting held on November 18, 1991, by vote of 1,022,670 shares of Common Stock out of 1,439,090 shares outstanding, ............... ............... .............. (Class of Stock) ..............shares of...............out of........shares outstanding, and (Class of Stock) .............shares of............... out of............shares outstanding, (Class of Stock) being at least two-thirds of each class of stock outstanding and entitled to vote and of each class or series of stock adversely affected thereby:- 1. The name by which the corporation shall be known is:- Peer Review Analysis, Inc. 2. The purposes for which the corporation is formed are as follows:- To promote, develop, organize and operate medical peer review procedures to evaluate the necessity for and quality of health care provided to the public; To enter into agreements with employers to perform review of health care provided to their employees under employer-sponsored health care insurance and plans; To enter into agreements to provide and obtain health care review and consulting services; To buy, sell, mortgage and lease real property; To borrow money; and grant security interests in connection therewith; and To pursue its purposes and to conduct and carry on any and all lawful business or activities in connection with or incidental thereto, in Massachusetts, in any other state, territory or possession of the United States, in the District of Columbia, and in foreign countries. Note:If the space provided under any article or item on this form is insufficient, additions shall be set forth on separate 8 1/2 X 11 sheets of paper leaving a left hand margin of at least 1 inch for binding. Additions to more than one article may be continued on a single sheet so long as each article requiring each such addition is clearly indicated. 3. The total number of shares and the par value, if any, of each class of stock which the corporation is authorized to issue is as follows: WITHOUT PAR VALUE WITH PAR VALUE ----------------- -------------- CLASS OF STOCK NUMBER OF SHARES NUMBER OF SHARES PAR VALUE - -------------- ---------------- ---------------- --------- Preferred 500,000 Common 5,000,000 $0.10 *4. If more than one class is authorized, a description of each of the different classes of stock with, if any, the preferences, voting powers, qualifications, special or relative rights or privileges as to each class thereof and any series now established: See Continuation Sheets 4A and 4B *5. The restrictions, if any, imposed by the articles of organization upon the transfer of shares of stock of any class are as follows: None *6. Other lawful provisions, if any, for the conduct and regulation of the business and affairs of the corporation, for its voluntary dissolution, or for limiting, defining, or regulating the powers of the corporation, or of its directors or stockholders, or of any class of stockholders: See Continuation Sheets 6A, 6B and 6C *If there are no such provisions, state "None". Continuation Sheet 4A --------------------- Article IV - ---------- Common Stock ------------ (1) Dividends. After the requirements with respect to preferential --------- dividends upon the Preferred Stock shall have been set, then and not otherwise, the holders of Common Stock shall be entitled to receive such dividends as may be declared from time to time by the Board of Directors. (2) Voting Rights. Each holder of Common Stock shall be entitled to ------------- one vote for each share held and, except with respect to any series of Preferred Stock designated as having voting rights and established by the Board of Directors as provided herein, or except as otherwise provided by law, voting rights shall be vested exclusively in the holders of Common Stock. (3) Preemptive Rights. No holder of shares of any class of stock of ---------------- the Corporation, whether now or hereafter authorized, shall by reason of holding any such share or shares, purchase or subscribe for any shares of any Class of stock of the Corporation, whether now or hereafter authorized, or any bonds, debentures, notes or other obligations or securities convertible into or carrying options or warrants to purchase shares of any class of stock of the Corporation, whether now or hereafter authorized. Preferred Stock --------------- The Preferred Stock shall be issued in one or more series. The Board of Directors is expressly authorized to issue the shares of Preferred Stock in such series and to fix from time to time before issuance the number of shares to be included in any series and the voting powers, designations, preferences and relative participating options or other rights, if any, and the qualifications, limitations or restrictions thereof, if any, of all shares of such series. The authority of the Board of Directors with respect to each series shall include, without limitation thereto, the determination of all of the following, and the shares of each series may vary from the shares of any other series in any or all of the following respects: CONTINUATION SHEET 4B --------------------- (1) the number of shares constituting such series, and the designation thereof to distinguish the shares of all other series; (2) the annual dividend rate on the shares of such series, whether such dividends are payable in installments and whether such dividends shall be cumulative and, if cumulative, the date from which such dividends shall accumulate; (3) the preference, if any, of the shares of such series in the event of any voluntary or involuntary liquidation or dissolution of the Corporation; (4) the voting rights, if any, of the shares of such series, in addition to the voting rights prescribed by law, and the terms and conditions of exercise of any such voting rights; (5) the redemption price or prices, if any, of the shares of such series, and the terms and conditions of any such redemption; (6) the right, if any, of the shares of such series to be converted into shares of any other series or class, and the terms and conditions of any such conversion; and (7) any other relative rights, preferences and limitations of the shares of such series. 2 Continuation Sheet 6A --------------------- Article VI - ---------- (a) All corporate powers of the Corporation shall be exercised by the Board of Directors except as otherwise provided by law. In furtherance and not in limitation of the powers conferred by statute, the Board of Directors is expressly authorized to make, amend or repeal the By-Laws of the Corporation in whole or in part, except with respect to any provision thereof which by law or the By-Laws requires action by the stockholders, and subject to the power of the stockholders to amend or repeal any By-Law adopted by the Board of Directors. (b) Meetings of the stockholders of the Corporation may be held anywhere within the United States. (c) The Corporation may be a partner in any business enterprise which it would have power to conduct by itself. (d) To the fullest extent that the General Laws of the Commonwealth of Massachusetts as they exist on the date hereof or as they may hereafter be amended permit the limitation or elimination of the liability of directors, no director of this Corporation shall be personally liable to this Corporation or its stockholders for monetary damages for breach of fiduciary duty notwithstanding any provision of the law imposing such liability. No amendment to or repeal of this Article shall apply to or have any effect on the liability or alleged liability of any director of this Corporation for or with respect to any acts or omission of such director occurring prior to such amendment of repeal. (e) The Corporation shall, to the extent legally permissible, indemnify each person (and his heirs, executors, administrators, or other legal representatives) who is, or shall have been, a director or officer of the Corporation or any person who is serving, or shall have served, at the request of the Corporation as a director or officer of another corporation, against all liabilities and expenses (including judgments, fines, penalties and attorneys' fees and all amounts paid in compromise or settlement) reasonably incurred by any such director, officer or person in connection with, or arising out of, any action, suit or proceeding in which any such director, officer or person may be a party defendant or with which he may be threatened or otherwise involved, directly or indirectly, by reason of his being or having been a director, officer or agent of the Corporation or such other corporation, except in relation to matters as to which any such director, office or person shall be Continuation Sheet 6B --------------------- finally adjudged, other than by consent, in such action, suit or proceeding not to have acted in good faith in the reasonable belief than his action was in the best interests of the Corporation; provided, however, that indemnity shall not be made with respect to such amounts paid in compromise or settlement, unless: (a) such compromise or settlement shall have been approved as in the best interest of the Corporation, after notice that it involves such indemnification by: (i) The Board of Directors by a majority of a quorum consisting of directors who were not parties to such action, suit or proceeding, or by (ii) The stockholders of the Corporation by a majority vote of a quorum consisting of stockholders who were not parties to such action, suit or proceeding, or (b) in the absence of action by disinterested directors or stockholders as above provided, there has been obtained at the request of a majority of the Board of Directors then in office a written opinion of independent legal counsel to the effect that the director or officer to be indemnified appears to have acted in good faith in the reasonable belief that his action was in the best interests of the Corporation. Upon request therefor by any director, officer or person enumerated in the preceding paragraph of this Article, the Corporation may from time to time, if authorized by the Board of Directors, prior to final adjudication or compromise or settlement of the matter or matters as to which indemnification is claimed, advance to such director, officer or person all expenses incurred by him to date of such request. Any advance made pursuant to this provision shall be made on the condition that the director, officer or person receiving such advance shall repay to the Corporation any amounts so advanced if, upon the termination of the matter or matters as to which such advances were made such director, officer or person shall not be entitled to indemnification under the preceding paragraph of this Article. -2- Continuation Sheet 6C --------------------- The foregoing right to indemnification shall not be exclusive of any other rights to which any such director, officer or person is entitled under any agreement, vote of stockholders, statute, or as a matter of law, or otherwise. The provisions of this Article are separable, and if any provision or portion hereof shall for any reason be held inapplicable, illegal or ineffective, this shall not prevent any other provision or portion hereof from applying, and shall not affect any right of indemnification existing otherwise than under this Article. (f) The number of directors shall be determined in accordance with the By-Laws. The nominees for director shall initially be divided into three classes, as nearly equal in number as may be, the term of office of those of the first class to expire at the first annual meeting of stockholders after their election, the term of office of those of the second class to expire at the second annual meeting of stockholders after their election and the term of office of those of the third class to expire at the third annual meeting of stockholders after their election. At each annual election held after the initial election of directors, the directors to succeed those whose terms expire shall be elected for a term of office to expire at the third annual meeting of stockholders after their election. In accordance with the By Laws, directors elected or appointed to fill vacancies created by the resignation or removal of any director shall serve for the remainder of the term of the director who resigned or was removed. -3- * We further certify that the foregoing restated articles of organization effect no amendments to the articles of organization of the corporation as heretofore amended, except amendments to the following articles................ Article III, Article IV, Article V and Article VI ................................................................................ (* if there are no such amendments, state "None".) Briefly describe amendments in space below: Article III of the Articles of Organization was amended to authorize the Corporation to issue 500,000 shares of Preferred Stock having the preferences, voting powers, qualifications, special or relative rights or privileges set forth in section 4 of these Restated Articles of Organization. Article IV of the Articles of Organization was amended to set forth a description of the preferences, voting powers, qualifications, special or relative rights or privileges with respect to the Common and Preferred Stock. Article V of the Articles of Organization was amended to provide that there are no restrictions contained in the Articles of Organization on transfer of shares of stock of any class. Article VI of the Articles of Organization was amended to provide the division of the Board of Directors into classes by term of office. Article VI of the Articles of Organization was amended to eliminate those provisions relating to conflicts of interest among the directors. IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereto signed our names this 18th day of November in the year 1991. /S/ Eric R. Spitzer President ..................................................... Eric R. Spitzer /S/ John I. Sandson, M.D. Clerk ..................................................... John I. Sandson, M.D. THE COMMONWEALTH OF MASSACHUSETTS RESTATED ARTICLES OF ORGANIZATION (GENERAL LAWS, CHAPTER 156B, SECTION 74) I hereby approve the within restated articles of organization and, the filling fee in the amount of $1,000.00 having been paid, said articles are deemed to have been filed with me this 22nd day of November, 1991. /s/ Michael J. Connolly MICHAEL JOSEPH CONNOLLY Secretary of State TO BE FILLED IN BY CORPORATION PHOTO COPY OF RESTATED ARTICLES OF ORGANIZATION TO BE SENT TO: Gerald V. May, Jr. Rich, May, Bilodeau & Flaherty, P.C. .......................................................... 294 Washington Street .......................................................... Boston, MA 02108 .......................................................... Telephone (617) 482-1360 ................................................. COPY MAILED
THE COMMONWEALTH OF MASSACHUSETTS WILLIAM FRANCIS GALVIN CM - ------ Secretary of the Commonwealth 12108 Examiner ONE ASHBURTON PLACE, BOSTON, MASSACHUSETTS 02108 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 156B, SECTION 72 NO. 04-2828817 ----------------- WE Alfred B. Lewis, President, and John I. Sandson Clerk of Peer Review Analysis, Inc. -------------------------------------------------------------------------------------------- (EXACT Name of Corporation) LOCATED AT: Two Copley Place, Boston, Massachusetts --------------------------------------------------------------------------------- (MASSACHUSETTS Address of Corporation) do hereby certify that these ARTICLES OF AMENDMENT affecting Articles NUMBERED: 3 ------------- -------------------------------------------------------------------------------------------- (Number those articles 1,2,3,4, 5 and/or 6 being amended hereby) WF4 N/A of the Restated Articles of Organization were duly adopted at a meeting held on March 23 1995, by - --------- Name vote of: Approved 2,315,375 shares of Common out of 2,811,770 shares outstanding, ----------------------- --------------- ----------------- type, class & series, (if any) ______________________ shares of _______________ out of _______________ shares outstanding, and type, class & series, (if any) ______________________ shares of _______________ out of _______________ shares outstanding, and type, class & series, (if any) CROSS OUT being at least a majority of each type, class or series outstanding and entitled to vote INAPPLI- thereon: CABLE CLAUSE C [_] P [_] M [_] 1 For amendments adopted pursuant to Chapter 156B, Section 70. R.A [_] 2 For amendments adopted pursuant to Chapter 156B, Section 71. Note: If the space provided under any Amendment or item on this form is insufficient, additions shall be set forth on separate 8 1/2 x 11 sheets of paper leaving a left-hand margin of at least 1 inch for binding. Additions to more than 4 one Amendment may be continued on a single sheet so long as each Amendment requiring each such addition is clearly - --------- indicated. P.C.
To CHANGE the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is: WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ----------------------------------- -------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - ----------------------------------- -------------------------------------------- 5,000,000 $0.10 COMMON:......................... COMMON:................................... ................................ .......................................... - ----------------------------------- -------------------------------------------- PREFERRED:...................... PREFERRED:................................ 500,000 ................................ .......................................... - --------------------------------- -------------------------------------------- CHANGE the total authorized to: WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ----------------------------------- -------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - ----------------------------------- -------------------------------------------- 10,000,000 $0.10 COMMON:......................... COMMON:................................... ................................ .......................................... - ----------------------------------- -------------------------------------------- 500,000 PREFERRED:...................... PREFERRED:................................ ................................ .......................................... - --------------------------------- -------------------------------------------- The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 156B, Section 6 of The General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. LATER EFFECTIVE DATE: ___________ IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed our names this 23rd day of March, in the year 1995. /S/ Alfred B. Lewis - ---------------------------------------------------------------------- President Alfred B. Lewis /S/ John I. Sandson - ------------------------------------------------------------------------ Clerk John I. Sandson THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 156B, SECTION 72 ========================================== I hereby approve the within articles of amendment and, the filing fee in the amount of $5,000 having been paid, said articles are deemed to have been filed with me this 24th day of March, 1995. /S/ WILLIAM FRANCIS GALVIN WILLIAM FRANCIS GALVIN Secretary of the Commonwealth TO BE FILLED IN BY CORPORATION PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO: Stephen M. Kane, Esq. ---------------------------------------------- Rich, May, Bilodeau & Flaherty, P.C. ---------------------------------------------- 294 Washington Street, Boston, MA 02108 ---------------------------------------------- Telephone: 617-482-1360 --------------------------------------
THE COMMONWEALTH OF MASSACHUSETTS [SIGNATURE ILLEGIBLE] OFFICE OF THE MASSACHUSETTS SECRETARY OF STATE - ------- Examiner WILLIAM FRANCIS GALVIN Secretary of the Commonwealth 12108 ARTICLES OF AMENDMENT FEDERAL IDENTIFICATION GENERAL LAWS, CHAPTER 1568, SECTION 72 NO. 04-2828817 ------------------- We William E. Nixon Vice President, and Stephen M. Kane Assistant Clerk of Peer Review Analysis, Inc. -------------------------------------------------------------------------------------------- (EXACT Name of Corporation) located at: Two Copley Place, Boston, Massachusetts --------------------------------------------------------------------------------- (MASSACHUSETTS Address of Corporation) do hereby certify that these ARTICLES OF AMENDMENT affecting Articles NUMBERED: 1 ------------- -------------------------------------------------------------------------------------------- (Number those articles 1,2,3,4, 5 and/or 6 being amended hereby) [SIGNATURE of the Articles of Organization were duly adopted at a meeting held on July 27 1995, by ILLEGIBLE] ------------- - ---------- vote of: Name Approved 3,473,809 shares of Common Stock out of 4,739,875 shares outstanding, ----------------------- --------------- ----------------- type, class & series, (if any) ______________________ shares of _______________ out of _______________ shares outstanding, and type, class & series, (if any) ______________________ shares of _______________ out of _______________ shares outstanding, and type, class & series, (if any) CROSS OUT being at least a majority of each type, class or series outstanding and entitled to vote INAPPLI- thereon: CABLE CLAUSE Article 1 of the Articles of Organization of this corporation be and hereby is amended in its entirety to read as follows: "The name by which this corporation shall be known is CORE, INC." C [_] P [_] M [_] 1 For amendments adopted pursuant to Chapter 156B, Section 70. R.A [_] 2 For amendments adopted pursuant to Chapter 156B, Section 71. Note: If the space provided under any Amendment or item on this form is insufficient, additions shall be set forth separate 8 1/2 x 11 sheets of paper leaving a left-hand margin of at least 1 inch for binding. Additions to more 4 to one Amendment may be continued on a single sheet so long as each Amendment requiring each such addition is - --------- clearly indicated. P.C.
To CHANGE the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is: WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ----------------------------------- -------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - ----------------------------------- -------------------------------------------- COMMON:......................... COMMON:................................... ................................ .......................................... - ----------------------------------- -------------------------------------------- PREFERRED:...................... PREFERRED:................................ ................................ .......................................... - ----------------------------------- -------------------------------------------- CHANGE the total authorized to: WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - ----------------------------------- -------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - ----------------------------------- -------------------------------------------- COMMON:......................... COMMON:................................... ................................ .......................................... - ----------------------------------- -------------------------------------------- PREFERRED:...................... PREFERRED:................................ ................................ .......................................... - ----------------------------------- -------------------------------------------- The foregoing amendment will become effective when these articles of amendment are filed in accordance with Chapter 156B, Section 6 of the General Laws unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. LATER EFFECTIVE DATE: ____________________________ IN WITNESS WHEREOF AND UNDER THE PENALTIES OF PERJURY, we have hereunto signed our names this 28 day of July, in the year 1995. /s/ William E. Nixon - -----------------------------------------------------Executive Vice President William E. Nixon /s/ Stephen M. Kane - --------------------------------------------------------Assistant Clerk Stephen M. Kane THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT GENERAL LAWS, CHAPTER 156B, SECTION 72 ============================================== I hereby approve the within articles of amendment and, the filing fee in the amount of $100 having been paid, said articles are deemed to have been filed with me this 28th day of July, 1995. /S/ William Francis Galvin William Francis Galvin Secretary of the Commonwealth TO BE FILLED IN BY CORPORATION PHOTOCOPY OF ARTICLES OF AMENDMENT TO BE SENT TO: Stephen M. Kane, Esq. ----------------------------------------------- Rich, May, Bilodeau & Flaherty, P.C. ----------------------------------------------- 294 Washington Street, Boston, MA 02108 ----------------------------------------------- Telephone: 617-482-1360 --------------------------------------- THE COMMONWEALTH OF MASSACHUSETTS _________ Examiner WILLIAM FRANCIS GALVIN Secretary of the Commonwealth One Ashburton Place, Boston, Massachusetts 02108-1512 ARTICLES OF AMENDMENT (GENERAL LAWS, CHAPTER 156B, SECTION 72) _________ Name Approved We, Craig C. Horton , President --------------------------------------------------- and William E. Nixon , Clerk --------------------------------------------------- of CORE, INC. , located at ---------------------------------------------------- (Exact Name of corporation) 2 Copley Place, Boston, MA 02116 , certify ------------------------------------------------------- (Street address of corporation in Massachusetts) that these Articles of Amendment affecting numbered: 3 -------------------------------------------------------------------- (Number those articles 1, 2, 3, 4, 5 and/or 6 being amended) of the Articles of Organization were duly adopted at a meeting held on October 21, 1996, by vote of: 5,104,086 shares of Common Stock of 7,121,588 shares --------- ---------------------------- --------- (type class & series, if any) outstanding, __________ shares of ____________________________ of (type class & series, if any) ___________ shares outstanding, and __________ shares of ____________________________ of _______________ shares outstanding, (type class & series, if any) C /1/being at least a majority of each type, class or series P outstanding and entitled to vote thereon: M R.A. *Delete the inapplicable words. **Delete the inapplicable clause. /1/For amendments adopted pursuant to Chapter 156B, Section 70. /2/For amendments adopted pursuant to Chapter 156B, Section 71. NOTE:IF THE SPACE PROVIDED UNDER ANY ARTICLE, OR ITEM ON THIS FORM IS INSUFFICIENT, ADDITIONS SHALL BE SET FORTH ON ONE SIDE ONLY OF SEPARATE 8 1/2 X 11 SHEETS OF PAPER WITH A LEFT MARGIN OF AT LEAST 1 INCH. ADDITIONS TO MORE THAN ONE ARTICLE MAY BE MADE ON A SINGLE _________ SHEET SO LONG AS EACH ARTICLE REQUIRING EACH ADDITION IS CLEARLY P.C. INDICATED. To change the number of shares and the par value (if any) of any type, class or series of stock which the corporation is authorized to issue, fill in the following: The total presently authorized is: - -------------------------------------------------------------------------------- WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - -------------------------------------------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - -------------------------------------------------------------------------------- Common: Common: 10,000,000 $0.10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Preferred: 500,000 Preferred: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Change the total authorized to: - -------------------------------------------------------------------------------- WITHOUT PAR VALUE STOCKS WITH PAR VALUE STOCKS - -------------------------------------------------------------------------------- TYPE NUMBER OF SHARES TYPE NUMBER OF SHARES PAR VALUE - -------------------------------------------------------------------------------- Common: Common: 30,000,000 $0.10 - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- Preferred: 500,000 Preferred: - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- The foregoing amendment(s) will become effective when these Articles of Amendment are filed in accordance with General Laws, Chapter 156B, Section 6 unless these articles specify, in accordance with the vote adopting the amendment, a later effective date not more than thirty days after such filing, in which event the amendment will become effective on such later date. Later effective date: __________________________________. SIGNED UNDER THE PENALTIES OF PERJURY, this 21st day of October, 1996. /s/ Craig C. Horton , President, - -------------------------------------------------------------- Craig C. Horton /s/ William E. Nixon , Clerk. - -------------------------------------------------------------- William E. Nixon THE COMMONWEALTH OF MASSACHUSETTS ARTICLES OF AMENDMENT (GENERAL LAWS, CHAPTER 156B, SECTION 72) ======================================== I hereby approve the within Articles of Amendment and, the filing fee in the amount of $________ having been paid, said articles are deemed to have filed with me this _____ day of ______________ 19 ______. Effective date: __________________________ WILLIAM FRANCIS GALVIN Secretary if the Commonwealth TO BE FILED IN BY CORPORATION PHOTOCOPY OF DOCUMENT TO BE SENT TO: Stephen M. Kane, Esq. -------------------------------------- Rich, May, Bilodeau & Flaherty, P.C. -------------------------------------- 294 Washington Street --------------------------------------- Boston, MA 02108 EX-11 3 COMPUTATION OF EARNINGS PER SHARE Exhibit 11.1 CORE, INC. COMPUTATION OF EARNINGS PER SHARE
For the three months ended September 30, For the nine months ended September 30, 1995 1996 1995 1996 ---- ---- ---- ---- Primary: Average shares outstanding 4,744,000 6,072,000 4,744,000 6,072,000 Shares issuable on assumed exercise of dilutive options and warrants - based on treasury stock method using average market price 527,000 527,000 ------------ ------------- ------------ ------------ Total 5,271,000 6,072,000 5,271,000 6,072,000 ============ ============= ============ ============ Net income (loss) $ 396,667 $ (1,257,138) $ (500,449) $ (220,346) ============ ============= ============ ============ Net income (loss) per share $ 0.08 $ (0.21) $ (0.09) $ (0.04) ============ ============= ============ ============
EX-27 4 FINANCIAL DATA SCHEDULE
5 3-MOS 9-MOS DEC-31-1996 DEC-31-1996 JUL-01-1996 JAN-01-1996 SEP-30-1996 SEP-30-1996 0 107,464 0 13,284,644 0 5,088,489 0 171,925 0 0 0 19,971,771 0 10,072,267 0 4,601,787 0 28,084,206 0 3,323,955 0 0 0 0 0 0 0 714,004 0 23,253,204 0 28,084,206 0 0 7,460,262 20,603,169 0 0 4,538,792 12,325,764 4,275,612 8,640,586 0 0 21,273 66,684 (1,257,138) (220,346) 0 0 (1,257,138) (220,346) 0 0 0 0 0 0 (1,257,138) (220,346) (0.21) (0.04) 0 0
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