U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
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þ
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the quarterly period ended
September 30, 2008
OR
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o
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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For the transition period from
to
Commission file number
0-26206
Orthometrix, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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06-1387931
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer Identification No.)
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106 Corporate Park Drive, Suite 102, White Plains, NY
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10604
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(Address of principal executive office)
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(Zip Code)
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Registrant’s telephone number, including area code
(914) 694-2285
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.
þ
Yes
o
No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):
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Large accelerated filer
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Accelerated filer
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Non-accelerated filer
o
(Do not check if a smaller reporting company)
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Smaller reporting company
þ
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the
Exchange Act).
o
Yes
þ
No
There were 49,638,896 shares of common stock outstanding as of October 30, 2008.
TABLE OF CONTENTS
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets
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September 30, 2008
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December 31, 2007
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(Unaudited)
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Assets
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Current assets:
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Cash
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$
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2,332
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$
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27,077
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Accounts receivable — trade
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17,047
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144,972
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Other receivable
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35,565
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—
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Inventories
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473,844
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548,047
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Prepaid expenses
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9,500
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7,792
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Total current assets
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538,288
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727,888
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Property and equipment, net
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31,893
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53,202
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Deferred financing costs, net
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—
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1,388
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Other
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11,658
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11,658
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Total Assets
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$
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581,839
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$
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794,136
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Liabilities and Stockholders’ Deficit
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Current liabilities:
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Accounts payable — trade
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$
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1,154,634
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$
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1,351,830
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Accrued expenses
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175,409
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167,986
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Customer deposits
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64,747
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64,747
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Related party loans
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263,126
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115,000
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Notes payable related party, net of discount
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2,340,973
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1,843,517
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Unearned service revenue
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77,224
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68,649
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Loan payable — equipment
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4,198
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13,971
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Total current liabilities
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4,080,311
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3,625,700
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Long term loan payable — equipment
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6,574
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14,147
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Long term notes payable — related party
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—
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20,000
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Total long term liabilities
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6,574
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34,147
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Stockholders’ deficit:
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Common stock — par value $.0005 per share,
75,000,000 shares authorized, 49,638,896 and
45,908,618 shares issued and outstanding, respectively
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24,818
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22,953
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Preferred stock — par value $.0005 per share,
1,000,000 shares authorized
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—
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—
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Additional paid-in capital
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44,204,948
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44,029,964
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Accumulated deficit
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(47,734,812
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(46,918,628
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Total stockholders’ deficit
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(3,505,046
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(2,865,711
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Total Liabilities and Stockholders’ Deficit
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$
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581,839
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$
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794,136
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See notes to consolidated financial statements.
2 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
Consolidated Statements of Operations (Unaudited)
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For The Nine Months Ended
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September 30,
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September 30,
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2008
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2007
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Revenue
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$
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720,036
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$
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1,672,883
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Cost of revenue
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468,370
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942,046
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Gross profit
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251,666
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730,837
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Sales and marketing expense
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325,411
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651,521
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General and administrative expense
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496,895
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508,993
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Research and development expense
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684
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5,990
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Operating loss
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(571,324
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(435,667
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Interest expense
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(254,381
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(490,912
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Interest income
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666
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447
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Other income (expense)
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8,855
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(6,723
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Net loss
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$
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(816,184
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$
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(932,855
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Basic and diluted weighted average shares
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47,654,527
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45,205,211
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Basic and diluted loss per share:
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Net loss
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$
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(0.02
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$
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(0.02
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See notes to consolidated financial statements.
3 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
Consolidated Statements of Operations (Unaudited)
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For The Three Months Ended
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September 30,
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September 30,
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2008
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2007
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Revenue
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$
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130,130
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$
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726,417
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Cost of revenue
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117,537
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384,831
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Gross profit
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12,593
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341,586
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Sales and marketing expense
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104,890
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183,738
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General and administrative expense
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147,901
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166,977
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Research and development expense
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—
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579
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Operating loss
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(240,198
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(9,708
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Interest expense
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(70,102
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(129,587
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Interest income
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—
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19
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Other income (expense)
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642
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(6,723
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Net loss
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$
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(309,658
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$
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(145,999
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Basic and diluted weighted average shares
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49,638,896
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45,257,531
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Basic and diluted loss per share:
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Net loss
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$
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(0.01
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$
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(0.00
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See notes to consolidated financial statements.
4 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
Consolidated Statements of Cash Flows (Unaudited)
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For The Nine Months Ended
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September 30,
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September 30,
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2008
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2007
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Cash Flows From Operating Activities:
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Net loss
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$
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(816,184
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$
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(932,855
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Adjustments to reconcile net loss to net cash used in
operating activities:
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Stock issued as compensation
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27,103
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—
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Stock options and warrants issued as compensation
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79,341
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90,744
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Loss on sale of equipment
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4,028
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6,723
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Amortization expense of note payable discounts
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44,937
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332,862
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Amortization expense of deferred financing costs
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1,388
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11,102
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Depreciation expense
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12,781
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15,812
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Changes in assets and liabilities:
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Decrease in accounts receivable
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127,925
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97,756
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Increase in other receivable
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(35,565
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)
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—
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Decrease in inventories
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74,203
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121,023
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(Increase) decrease in prepaid expenses
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(1,708
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16,041
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Decrease in accounts payable
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(197,196
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(52,751
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Increase (decrease) in accrued expenses
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7,423
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(51,443
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Increase in unearned service revenue
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8,575
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6,133
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Increase in customer deposits
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—
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48,404
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Net cash used in operating activities
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(662,949
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(290,449
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Cash Flows From Investing Activities:
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Net proceeds from sale of equipment
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4,500
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9,500
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Purchases of property and equipment
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—
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(9,114
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Net cash provided by investing activities
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4,500
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386
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Cash Flows From Financing Activities:
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Proceeds of borrowings from related parties
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1,065,126
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1,059,402
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Repayment of borrowings from related parties
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(463,726
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(391,054
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Exercise of stock options and warrants
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49,650
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65
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Repayment of line of credit
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—
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(350,000
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Repayment of loan payable — equipment
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(17,346
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(22,792
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Net cash provided by financing activities
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633,704
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295,621
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Net (decrease) increase in cash
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(24,745
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)
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5,558
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Cash at beginning of period
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27,077
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4,011
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Cash at end of period
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$
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2,332
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$
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9,569
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Supplemental disclosure of cash flow information:
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Cash paid for interest
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$
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10,306
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$
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—
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Cash paid for income taxes
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$
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6,754
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$
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—
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See notes to consolidated financial statements.
5 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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1.
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Basis of Presentation and Going Concern
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The consolidated financial statements of Orthometrix, Inc. and Subsidiary (the “Company”)
presented herein, have been prepared pursuant to the rules of the Securities and Exchange
Commission for quarterly reports on Form 10-Q and do not include all of the information and
footnote disclosures required by accounting principles generally accepted in the United
States of America. These statements should be read in conjunction with the audited
financial statements and notes thereto for the year ended December 31, 2007, and included
in the Company’s Report on Form 10-KSB as filed with the Securities and Exchange Commission
on March 21, 2008. In the opinion of management, the accompanying interim unaudited
consolidated financial statements contain all adjustments (consisting of normal, recurring
accruals) necessary for a fair presentation of the consolidated financial position, results
of operations and cash flows for these interim periods.
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During the past two fiscal years ended December 31, 2007 and 2006, the Company has
experienced aggregate losses from operations of $3,056,246 and has incurred total negative
cash flow from operations of $1,390,003 for the same two-year period. During the nine
months ended September 30, 2008, the Company experienced a net loss of $816,184 and a
negative cash flow from operating activities of $662,949. These matters raise substantial
doubt about the Company’s ability to continue as a going concern. The consolidated
financial statements do not include any adjustments that might result from the outcome of
this uncertainty.
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The Company’s continued existence is dependent upon several factors including obtaining
substantial additional financing, increasing sales volume, achieving profitability on the
sale of some products and developing new products. The Company is pursuing initiatives to
increase liquidity, including external investments and obtaining lines of credit. In order
to increase its cash flow, the Company is continuing its efforts to stimulate sales. The
Company has also implemented high credit standards for its customers and is emphasizing the
receipt of down payments from customers at the time their purchase orders are received. The
Company is also requesting prepayment from customers and attempting to more closely
coordinate the timing of purchases with the timing of orders for products.
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The results of operations for the nine months ended September 30, 2008 are not necessarily
indicative of the results to be expected for the entire fiscal year ending December 31,
2008.
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2.
|
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Inventories
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|
|
|
|
As of September 30, 2008, inventories consisted of $473,844 of sub-assemblies, parts, spare
parts and finished goods. During the nine months ended September 30, 2008, the Company
wrote down the value of its spare parts in excess of on-hand inventory by $66,000.
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6 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
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3.
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Income Taxes
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The Company accounts for deferred income taxes by recognizing the tax consequences of
“temporary differences” by applying enacted statutory tax rates applicable to future years
to differences between the financial statement carrying amounts and the tax basis of
existing assets and liabilities. The effect of a change in tax rates on deferred taxes is
recognized in income in the period that includes the enactment date. The Company realizes
an income tax benefit from the exercise of certain stock options or the early disposition
of stock acquired upon exercise of certain options. This benefit results in an increase in
additional paid in capital. Realization of the deferred tax asset is dependent on the
Company’s ability to generate sufficient taxable income in future periods. Based on the
Company’s existing financial condition, the Company determined that it was more likely than
not that the deferred tax assets would not be realized. Accordingly, the Company recorded a
valuation allowance to reduce the deferred tax assets to zero.
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4.
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Contingency
|
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The Company leases its corporate office space located in White Plains, New York. Effective
August 1, 2003, the Company amended its lease for office space which expired on July 31,
2008. The Company did not renew its corporate office lease on July 31, 2008, but it has
been extended on a month to month basis at $2,632 per month.
|
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5.
|
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Related Party Transactions
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|
As of September 30, 2008, related party debt consists of:
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|
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|
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|
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|
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|
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Interest Rate
|
|
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Loans payable
|
|
$
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263,126
|
|
|
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6
|
%
|
|
Notes payable, net of discount
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|
|
2,340,973
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|
|
|
6% - 12
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%
|
|
|
|
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|
|
|
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|
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Total related party debt
|
|
$
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2,604,099
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|
|
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For all of the notes, the Company is obligated to prepay the principal amount within 10
days upon the occurrence of either of two events; if it (i) receives at least $5,000,000
from an equity financing or (ii) sells substantially all of its assets.
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|
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During the nine months ended September 30, 2008, the Company issued notes and loans payable
to related parties of $1,065,126. In conjunction with the notes payable, 535,000 warrants
were issued. The warrants issued were valued at $20,755. These warrants were valued using
the Black-Scholes option pricing model, and recorded as a discount to the notes payable and
a credit to additional paid in capital. At September 30, 2008, the unamortized discount on
the notes payable is $5,301. During the nine months ended September 30, 2008 and 2007,
amortization of the notes payable discounts of $44,937 and $332,862 was recorded as
interest expense, respectively. During the nine months ended September 30, 2008, the
Company repaid notes and loans payable to related parties of $463,726.
|
7 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
|
5.
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Related Party Transactions (Continued)
|
|
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|
Interest expense for the nine months ended September 30, 2008 and 2007, in relation to
related party loans and notes payable amounted to $207,013 and $152,191, respectively.
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|
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|
During the nine months ended September 30, 2008, the Company’s board of directors approved
a grant of stock options to Mr. Reynald Bonmati to purchase an aggregate of 3,998,750
shares, of its common stock with exercise prices equal to or greater than the market price
of stock on the date of grant. The options are 5-year options (Mr. Bonmati is a 10%
shareholder) and vest over four years. The fair value of these issuances was estimated
using the application of the Black-Scholes option pricing model. During the nine months
ended September 30, 2008, $54,681 of non-cash compensation was recorded as consulting fees
and additional paid-in capital. Mr. Bonmati’s salary was waived for the nine months ended
September 30, 2008.
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|
|
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6.
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|
Stock-Based Compensation
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|
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|
During the nine months ended September 30, 2008, the Company’s board of directors approved
a grant of stock options to employees, directors and independent consultants to purchase an
aggregate of 4,566,250 shares of its common stock (which includes the amount described in
Note 5) with exercise prices equal to or greater than the market price of stock on the date
of grant. The options are 10-year options (with the exception of Mr. Bonmati, a 10%
shareholder, whose options expire in 5 years) and vest over 4 years. The fair value of
these issuances was estimated using the application of the Black-Scholes option pricing
model. During the nine months ended September 30, 2008, $79,342 of non-cash compensation
cost was recognized.
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7.
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Major Customers
|
|
|
|
|
|
During the nine months ended September 30, 2008, approximately 58.6% of total sales were
derived from the Company’s three largest customers.
|
8 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of
Operations
The matters discussed in this Form 10-Q contain certain forward-looking statements and
involve risks and uncertainties (including changing market conditions, competitive and
regulatory matters, etc.) detailed in the disclosure contained in this Form 10-Q and the
other filings with the Securities and Exchange Commission made by the Company from time to
time. The discussion of the Company’s liquidity, capital resources and results of
operations, including forward-looking statements pertaining to such matters, does not take
into account the effects of any changes to the Company’s operations. Accordingly, actual
results could differ materially from those projected in the forward-looking statements as a
result of a number of factors, including those identified herein. This item should be read
in conjunction with the financial statements and other items contained elsewhere in the
report.
Critical Accounting Policies and Estimates
The Company’s financial statements are prepared in accordance with accounting principles
generally accepted in the United States. These accounting principles require management to
make certain estimates, judgments and assumptions that affect the reported amounts of
assets and liabilities and the disclosure of contingent assets and liabilities as of the
date of the financial statements as well as the reported amount of revenues and expenses
during the periods presented. Estimates are used when accounting for the allowance for
uncollectible receivables, potentially excess and obsolete inventory, depreciation and
amortization, warranty reserves, income tax valuation allowances and contingencies, among
others. Actual results could differ significantly from those estimates. The Company
believes that the estimates, judgments and assumptions upon which the Company rely are
reasonable based upon information available at the time.
The Company believes the following accounting policies involve additional management
judgment due to the sensitivity of the methods, assumptions and estimates necessary in
determining the related asset and liability amounts. The Company sells its products
directly to customers and through third-party dealers and distributors. Revenue is
recognized at the time products are shipped and title passes to the customer. The Company
estimates and records provisions for product installation and user training in the period
that the sale is recorded.
In the United States and Canada, the Company offers one-year warranties on both the
hardware and software included in its systems (except for computer systems, if any, which
are covered under their respective manufacturers’ warranty), as well as extended warranty
contracts. Outside of the United States and Canada, the Company only offers one-year
warranties on parts; the labor warranty is provided by the Company’s distributors. The
Company also offers six-month warranties on replacement parts worldwide. The Company
provides warranty services to its customers in the United States and Canada. Any costs
incurred by the Company in connection with a warranty of a system are borne by the
manufacturer pursuant to the applicable distribution agreement. Therefore, no warranty
reserve is required by products sold by the Company.
The Company has no obligations to provide any other services to any of its third party
dealers or distributors or their customers.
9 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Continued)
Critical Accounting Policies and Estimates (Continued)
The Company provides estimated inventory allowances for slow-moving and obsolete inventory
based on current assessments about future demands, market conditions and related management
initiatives. If market conditions are less favorable than those projected by management,
additional inventory allowances may be required.
The Company provides allowances for uncollectible receivable amounts based on current
assessment of collectability. If collectability is less favorable than those projected by
management, additional allowances for uncollectability may be required.
The Company accounts for deferred income taxes by recognizing the tax consequences of
“temporary differences” by applying enacted statutory tax rates applicable to future years
to differences between the financial statement carrying amounts and the tax basis of
existing assets and liabilities. The effect of a change in tax rates on deferred taxes is
recognized in income in the period that includes the enactment date. The Company realizes
an income tax benefit from the exercise of certain stock options or the early disposition
of stock acquired upon exercise of certain options. This benefit results in an increase in
additional paid in capital.
Liquidity and Capital Resources
The Company has financed operations for the past five years through the sale of equity
securities and the issuance of debt. For the two years ending December 31, 2007 and 2006,
the Company incurred aggregate net losses of $3,056,246 and negative cash flow from
operations of $1,390,003. During the nine months ended September 30, 2008, the Company
incurred a net loss of $816,184 and negative cash flow from operations of $662,949. As of
September 30, 2008, the Company had $2,332 in unrestricted cash available for working
capital purposes. These matters raise substantial doubt about the Company’s ability to
continue as a going concern.
The Company’s continued existence is dependent upon several factors including obtaining
substantial additional financing, increasing sales volume, achieving profitability on the
sale of some products and developing new products. However, in order to increase cash
flow, the Company is continuing its efforts to stimulate sales. In order to manage credit
risk, the Company has begun to implement higher credit standards for customers and to
emphasize the receipt of down payments from customers at the time their purchase orders are
received. The Company has also begun to request more prepayments from customers and
attempt to more closely coordinate the timing of purchases with the timing of orders for
products. The Company cannot predict whether or to what extent these risk management
functions may slow its ability to grow revenues.
The level of the Company’s cash decreased to $2,332 at September 30, 2008 from $27,077 at
December 31, 2007. The Company had net cash used in operating activities of $662,949 for
the nine months ended September 30, 2008 which was substantially offset by $633,704 in net
cash provided by financing activities and $4,500 of cash provided by investing activities.
Financing activities consisted of
10 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Continued)
Liquidity and Capital Resources (Continued)
$1,065,126 in loans from related parties and $49,650 of proceeds received from the exercise
of stock options and warrants, which were partially offset by the repayment of equipment
loan payable of $17,346 and repayment of borrowings of $463,726 from related parties.
Investing activities consisted of $4,500 of net proceeds received from the sale of
equipment.
For all of the notes, the Company is obligated to prepay the principal amount within 10
days upon the occurrence of either of two events; if it (i) receives at least $5,000,000
from an equity financing or (ii) sells substantially all of its assets.
During the nine months ended September 30, 2008, the Company’s board of directors approved
a grant of stock options to employees, directors and independent consultants to purchase an
aggregate of 4,566,250 shares of its common stock with exercise prices equal to or greater
than the market price of stock on the date of grant. The options are 10-year options (with
the exception of Mr. Bonmati, a 10% shareholder, whose options expire in 5 years) and vest
over 4 years. The fair value of these issuances was estimated using the application of the
Black-Scholes option pricing model. During the nine months ended September 30, 2008,
$79,342 of non-cash compensation cost was recognized as non-cash compensation expense and
additional paid-in capital.
The Company had no backlog of orders as of September 30, 2008 and there are no material
commitments for capital expenditure as of that date. The Company believes that they will
need to raise substantial additional capital within the next twelve months in order to
support the planned growth of the business. The Company may seek additional funding through
collaborative arrangements and public or private financings. Additional funding may not be
available on acceptable terms or at all. In addition, the terms of any financing may
adversely affect the holdings or the rights of the Company’s stockholders. For example, if
the Company raises additional funds by issuing equity securities, further dilution to
existing stockholders may result. The Company also could be required to seek funds through
arrangements with collaborators or others that may require the Company to relinquish rights
to some of their technologies, product candidates or products which they would otherwise
pursue on their own.
Star Trac Health & Fitness, Inc. (“Star Trac”), a leading provider of exercise equipment to
the commercial and retail fitness markets, entered into a licensing agreement with the
Company. Star Trac acquired from the Company a non-exclusive license to design,
manufacture, market and service worldwide whole body vibration devices using the same
patented technology that the Company uses for its VibraFlex® whole body vibration systems.
Style for Life, Inc., a provider of fitness and wellness products and services, acquired
from the Company a non-exclusive license to design and manufacture worldwide, and to market
and service in the United States, Canada and Mexico, whole body vibration devices using the
same patented technology that the Company uses for its VibraFlex® whole body vibration
systems.
11 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Continued)
Results of Operations
The Company had a net loss of $816,184 ($0.02 per share based on 47,654,527 weighted
average shares) for the nine months ended September 30, 2008 compared to net loss of
$932,855 ($0.02 per share based on 45,205,211 weighted average shares) for the nine months
ended September 30, 2007.
Revenue for the nine months ended September 30, 2008 decreased $952,847 (or 57.0%) to
$720,036 from $1,672,883 from the comparable period of fiscal 2007. The decrease in revenue
was primarily due to a decrease in VibraFlex
Ò
and XCT system sales during 2008.
Cost of revenue as a percentage of revenue was 65.0% and 56.3% for the nine months ended
September 30, 2008 and 2007, respectively, resulting in a gross profit of 35.0% for the
nine months ended September 30, 2008 compared to 43.7% for the comparable period of 2007.
The decrease in gross profit was due to the strength of the Euro and a weak dollar, which
creates the cost of products to rise.
Sales and marketing expense for the nine months ended September 30, 2008 decreased $326,110
(or 50.1%) to $325,411 from $651,521 for the nine months ended September 30, 2007. The
decrease is due to the Company’s decrease in sales staff to market and sell the Orbasone™
and decreased trade show and travel expenses to market the Orbasone™.
General and administrative expense for the nine months ended September 30, 2008 decreased
$12,098 (or 2.4%) to $496,895 from $508,993 for the nine months ended September 30, 2007.
The decrease was due to a reduction of insurance expenses incurred by the Company.
Interest expense decreased $236,531 (or 48.2%) to $254,381 for the nine months ended
September 30, 2008 from $490,912 for the nine months ended September 30, 2007. Interest
expense decreased primarily due to a reduction in the amortization expense of note payable
discounts.
Recently Issued Accounting Pronouncements
In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and
Hedging Activities” (“SFAS No. 161”). The new standard is intended to improve financial
reporting about derivative instruments and hedging activities by requiring enhanced
disclosures to enable investors to better understand their effects on an entity’s financial
position, results of operations and cash flows. SFAS No. 161 is effective for financial
statements issued for fiscal years and interim periods beginning after November 15, 2008.
The Company does not expect this standard to have a material impact on its financial
position, results of operations or cash flows.
12 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
(Continued)
Recently Issued Accounting Pronouncements (Continued)
In May 2008, the FASB issued SFAS No. 162, “The Hierarchy of Generally Accepted Accounting
Principles” (“SFAS 162”). SFAS 162 identifies the sources of accounting principles and the
framework for selecting the principles used in the preparation of financial statements that
are presented in conformity with generally accepted accounting principles (“GAAP”) in the
United States. SFAS 162 will become effective 60 days following the SEC’s approval of the
Public Company Accounting Oversight board amendments to AU Section 411, “The Meaning of
Present Fairly in Conformity With Generally Accepted Accounting Principles”.
The Company
does not expect the adoption of SFAS 162 to have a material impact on its financial
position, results of operations or cash flows.
Item 3.
Quantitative and Qualitative Disclosures of Market Risk
The Company does not have any financial instruments that would expose it to market risk
associated with the risk of loss arising from adverse changes in market rates and prices.
All of the Company’s loans payable outstanding at September 30, 2008 have variable interest
rates and therefore are subject to interest rate risk. A one percent change in the
variable interest rate would result in a $26,199 change in annual interest expense.
Item 4T.
Controls and Procedures
The Company’s management, with the participation of the Company’s Chief Executive Officer
and Chief Financial Officer, has evaluated the effectiveness of the Company’s disclosure
controls and procedures (as such term is defined in Rules 13a-15(e) under the Securities
Exchange Act of 1934, as amended) as of the end of the period covered by this report.
Based on such evaluation, the Company’s Chief Executive Officer and Chief Financial
Officer have concluded that, as of the end of such period, the Company’s disclosure
controls and procedures are effective.
There has been no change in the Company’s internal controls over financial reporting during
the Company’s third quarter that has materially affected, or is reasonably likely to
materially affect, the Company’s internal controls over financial reporting.
13 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
PART II — OTHER INFORMATION
Item 6.
Exhibits
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|
|
|
|
31.1
|
|
Chief Executive Officer’s Certification, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
31.2
|
|
Chief Financial Officer’s Certification, pursuant to Section 302 of
the Sarbanes-Oxley Act of 2002.
|
|
|
|
|
|
32
|
|
Certification of Chief Executive Officer and Chief Financial
Officer, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002.
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14 of 15
ORTHOMETRIX, INC.
FORM 10-Q SEPTEMBER 30, 2008
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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|
|
|
|
|
|
|
ORTHOMETRIX, INC.
|
|
|
|
BY:
|
/s/ Reynald G. Bonmati
|
|
|
|
|
Reynald G. Bonmati
|
|
|
|
|
President/Chief Executive Officer
|
|
|
|
|
|
|
|
|
|
BY:
|
/s/ Neil H. Koenig
|
|
|
|
|
Neil H. Koenig
|
|
|
|
|
Chief Financial Officer
(Principal Financial Officer)
|
|
|
|
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|
|
Dated: October 31, 2008
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15 of 15
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