-----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, IwPAlmIEx8rceQrJkVzdkE7EBsQfMCp6i033VNbvwq5rDllQ3Jevdc3f0n8JBdrH tyYkXMADaNe1TMBIhmb0vQ== 0000891020-99-001906.txt : 19991115 0000891020-99-001906.hdr.sgml : 19991115 ACCESSION NUMBER: 0000891020-99-001906 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: AFEM MEDICAL CORP CENTRAL INDEX KEY: 0000820608 STANDARD INDUSTRIAL CLASSIFICATION: CONVERTED PAPER & PAPERBOARD PRODS (NO CONTAINERS/BOXES) [2670] IRS NUMBER: 330202574 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-17119 FILM NUMBER: 99750071 BUSINESS ADDRESS: STREET 1: 10180 SW NIMBUS AVE STE J 5 CITY: PORTLAND STATE: OR ZIP: 97223-4340 BUSINESS PHONE: 5039688800 MAIL ADDRESS: STREET 1: 10180 SW NIMBUS AVE STREET 2: SUITE J-5 CITY: PORTLAND STATE: OR ZIP: 97223 FORMER COMPANY: FORMER CONFORMED NAME: XTRAMEDICS INC /NV/ DATE OF NAME CHANGE: 19920703 10QSB 1 FORM 10-QSB FOR PERIOD ENDED SEPTEMBER 30, 1999 1 U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [X] Quarterly Report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended September 30, 1999 [ ] Transition Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For the transition period from __________ To __________ Commission File Number: 0-17119 A-Fem Medical Corporation ----------------------------------------------------------------- (exact name of small business issuer as specified in its charter) Nevada 33-0202574 ------------------------------- ----------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 10180 SW Nimbus Ave., Suite J5 Portland, OR 97223 -------------------------------------- (Address of principal executive offices) (503) 968-8800 -------------------------------------- (Issuer's telephone number) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ] As of September 30, 1999, the issuer had outstanding 9,563,225 shares of its $.01 par value Common Stock. Transitional Small Business Disclosure Format: (Check one) Yes [] No [X] Page 1 2 PART I - FINANCIAL INFORMATION See "Basis of Presentation." ITEM 1. FINANCIAL STATEMENTS A-Fem Medical Corporation BALANCE SHEETS
As of September 30, December 31, 1999 1998 --------------------------------- (unaudited) ASSETS CURRENT ASSETS: Cash and cash equivalents $ 494,689 $ 668,369 Accounts receivable 23,556 59,735 Inventory 71,336 70,855 Prepaids and other 154,996 257,603 ------------ ------------ Total current assets 744,577 1,056,562 EQUIPMENT, FURNITURE and LEASEHOLDS, at cost 1,256,610 1,235,173 Less: accumulated depreciation (612,455) (524,484) ------------ ------------ 644,155 710,689 PATENTS and LICENSES, net 55,094 59,872 LOANS RECEIVABLE - officers and directors 64,805 62,193 ------------ ------------ Total assets $ 1,508,631 $ 1,889,316 ============ ============ LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 120,676 $ 299,471 Note payable 441,836 417,345 Current portion of capital lease obligation 66,670 183,339 Accrued expenses 82,423 74,075 Accrued salaries and related liabilities 107,805 138,394 ------------ ------------ Total current liabilities 819,410 1,112,624 Long-term portion of capital lease obligation 6,167 41,607 ------------ ------------ Total liabilities 825,577 1,154,231 STOCKHOLDERS' EQUITY: Series A Convertible Preferred Stock, $0.01 par value; authorized 8,200,000 shares; issued 6,710,905 and 5,773,405 shares at September 30,1999 and December 31, 1998 67,109 57,734 Common Stock, $0.01 par value; authorized 33,000,000 shares; issued 9,563,225 and 9,471,875 shares at September 30, 1999 and December 31, 1998 95,632 94,719 Warrants issued for Series A Convertible Preferred Stock 1,120,007 761,882 Warrants issued for common stock 76,491 76,491 Additional paid-in capital 17,653,132 16,102,543 Accumulated deficit (18,329,317) (16,358,284) ------------ ------------ Total stockholders' equity 683,054 735,085 ------------ ------------ Total liabilities and stockholders' equity $ 1,508,631 $ 1,889,316 ============ ============
The accompanying notes are an integral part of these balance sheets. Page 2 3 A-Fem Medical Corporation STATEMENTS OF OPERATIONS (unaudited)
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30, ENDED SEPTEMBER 30, --------------------------------- --------------------------------- 1999 1998 1999 1998 ------------ ------------ ------------ ------------ Sales, net $ 13,740 $ 99,090 $ 57,278 $ 367,023 Cost of sales 76,190 150,433 204,455 379,280 ------------ ------------ ------------ ------------ Gross Margin (62,450) (51,343) (147,177) (12,257) Operating expenses: Research and development 302,183 236,763 812,080 634,388 Marketing and selling 32,452 635,300 273,322 1,937,508 General and administrative 223,182 270,958 715,253 705,974 ------------ ------------ ------------ ------------ Total operating expenses 557,817 1,143,021 1,800,655 3,277,870 ------------ ------------ ------------ ------------ Net operating loss (620,267) (1,194,364) (1,947,832) (3,290,127) ------------ ------------ ------------ ------------ Other expense (1,405) (21,851) (23,201) (45,580) ------------ ------------ ------------ ------------ Net loss (621,672) (1,216,215) (1,971,033) (3,335,707) ============ ============ ============ ============ Basic and diluted net loss per share $ (0.07) $ (0.10) $ (0.21) $ (0.25) ============ ============ ============ ============ Weighted average shares outstanding 9,546,717 12,566,644 9,505,888 13,093,071 ============ ============ ============ ============
The accompanying notes are an integral part of these statements. Page 3 4 A-Fem Medical Corporation STATEMENTS OF CASH FLOWS Increase (Decrease) in Cash (unaudited)
For The Nine Months Ended September 30, ------------------------------- 1999 1998 ----------- ----------- Cash Flows From Operating Activities: Net loss $(1,971,033) $(3,335,707) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 95,696 119,318 (Gain) loss on disposal of assets 4,782 (134) Other non-cash expenses 24,491 470,833 Other non-cash income (2,612) (2,612) Changes in working capital: Restricted cash - 52,500 Accounts receivable 36,179 4,499 Inventory (481) 70,462 Prepaid expenses and other 102,607 (12,372) Accounts payable (178,795) (495,654) Accrued expenses 8,348 (44,866) Accrued salaries and related liabilities (30,589) (80,011) ----------- ----------- Net cash used in operating activities (1,911,407) (3,253,744) Cash Flows From Investing Activities: Purchases of equipment, furniture and leaseholds (29,166) (37,175) Other assets - 350 ----------- ----------- Net cash used in investing activities (29,166) (36,825) Cash Flows From Financing Activities: Net repayments of lease obligations (152,109) (196,458) Net proceeds from sale of common and preferred stock, exercise of options and warrants, net of expenses 1,919,002 3,071,789 ----------- ----------- Net cash provided by financing activities 1,766,893 2,875,331 Net Decrease in Cash and Cash Equivalents (173,680) (415,238) Cash and Cash Equivalents, beginning of period 668,369 525,767 ----------- ----------- Cash and Cash Equivalents, end of period $ 494,689 $ 110,529 =========== ===========
The accompanying notes are an integral part of these statements. Page 4 5 A-Fem Medical Corporation NOTES TO FINANCIAL STATEMENTS September 30, 1999 ORGANIZATION OF THE COMPANY AND SIGNIFICANT ACCOUNTING POLICIES The Company A-Fem Medical Corporation is a medical technology company with multiple product platforms targeting women's unmet health needs. A-Fem has developed three proprietary technology platforms: one based on its inSync(R) miniform interlabial pad, another based on its Rapid-Sense(TM) diagnostic tests and the third based on its PadKit(R) Sample Collection System. A-Fem markets the inSync miniform as an alternative to tampons, pads or liners for light flow protection. A-Fem is also developing point-of-care diagnostic products that provide quantified results using its proprietary Rapid-Sense technology. The PadKit, currently in clinical trials, utilizes a miniform as a non-invasive sample collection method for use in testing for certain cancers and other diseases. Basis of Presentation The interim financial data are unaudited; however, in the opinion of management, the interim data include all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of the results for the interim periods. The financial statements included herein have been prepared by A-Fem pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although A-Fem believes that the disclosures included herein are adequate to make the information presented not misleading. Operating results for the periods presented are not necessarily indicative of future results. These financial statements should be read in conjunction with the financial statements and notes to financial statements included in A-Fem's annual report on Form 10-KSB for the year ended December 31, 1998. Net Loss Per Share Basic and diluted loss per share are required to be computed using the methods prescribed by Statement of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128). Basic loss per share is calculated using the weighted average number of common shares outstanding for the period and diluted loss per share is computed using the weighted average number of common shares and dilutive common equivalent shares outstanding. A net loss was reported in each of the three and nine-month periods ended September 30, 1999 and 1998. Stock options for the purchase of 3,552,489 and 3,022,550 shares at September 30, 1999 and 1998, respectively, and warrants for the purchase of Page 5 6 2,428,656 and 2,520,006 shares at September 30, 1999 and 1998, respectively, were not included in loss per share calculations, because to do so would have been anti-dilutive. In addition, shares of A-Fem's convertible preferred stock and warrants covering shares of A-Fem's convertible preferred stock outstanding at September 30, 1999 were not included in loss per share calculations because to do so would have been anti-dilutive. Comprehensive Loss In June 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). This statement establishes standards for reporting and displaying comprehensive income and its components in a full set of general purpose financial statements. The objective of SFAS 130 is to report a measure of all changes in equity of an enterprise that result from transactions and other economic events of the period other than transactions with owners. The Company adopted SFAS 130 during the first quarter of 1998. Comprehensive loss did not differ from currently reported net loss in the periods presented. Recent Accounting Pronouncements In June 1999, the FASB issued Statement of Financial Accounting Standards No. 137, "Accounting for Derivative Instruments and Hedging Activities" (SFAS 137). SFAS 137 is an amendment to SFAS133, "Accounting for Derivative Instruments and Hedging Activities" This statement establishes accounting and reporting standards requiring that every derivative instrument be recorded in the balance sheet as either an asset or liability measured at its fair value. SFAS 137 also requires that changes in the derivative instrument's fair value be recognized currently in results of operations unless specific hedge accounting criteria are met. SFAS 137 is effective for fiscal years beginning after June 15, 2000. The Company expects that adoption of SFAS 137 will not have a material impact on the Company's financial condition or results of operations. Reclassifications Certain amounts have been reclassified in the prior year financial statement presentation to conform to the current year presentation. Page 6 7 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION OR PLAN OF OPERATION A-Fem Medical Corporation is a medical technology company with multiple product platforms targeting women's unmet health needs. A-Fem has developed three proprietary technology platforms: one based on its inSync(R) miniform interlabial pad, another based on its Rapid-Sense diagnostic tests and the third based on its PadKit(R) Sample Collection System. A-Fem markets the inSync miniform as an alternative to tampons, pads or liners for light flow protection. A-Fem is also developing point-of-care diagnostic products that provide quantified results using its proprietary Rapid-Sense technology. The PadKit, currently in clinical trials, utilizes a miniform as a non-invasive sample collection method for use in testing for certain cancers and other diseases In the last year our corporate strategy for the inSync miniform has been modified from aggressive introductory support of a regional roll-out, followed by on-going advertising and promotion, to one requiring modest upfront and on-going promotion utilizing retailers, catalog and on-line, web-based (internet) retailers such as Transitions for Health, PlanetRx and SOMA. InSyncminiform.com, launched in July, enables women nationally to purchase our product. Additionally we are exploring partnering opportunities to assist in the marketing and distribution of the product in retail outlets. A Rapid-Sense test for the detection of Cotinine (a metabolite of nicotine) is being evaluated for sales into the insurance testing market. A-Fem plans to manufacture the product and plans that sales and distribution would be handled through third parties. In addition, A-Fem continues development of a proprietary test using A-Fem's Rapid-Sense technology for Konica, a large Japanese industrial chemical firm. A-Fem is also developing a Rapid-Sense test for a pharmaceutical company. A-Fem plans to continue to seek strategic partners to fund the research and development for, and assist in the marketing and distribution of, specific applications of its Rapid-Sense technology. The company is conducting clinical studies to submit to the FDA for clearance of the PadKit as an alternative to the cervical scrape as a sample-collection system for tests that screen for cervical cancer. OVERVIEW A-Fem experienced significant operating losses during the year ended December 31, 1998. Further, A-Fem has continued to incur losses in the first nine months of 1999 and has never generated significant revenues from operations. A-Fem expects that significant ongoing expenditures will be necessary to successfully implement its business plan and develop, manufacture and market its products. These circumstances raise substantial doubt about A-Fem's ability to continue as a going concern. Execution of A-Fem's plans and its Page 7 8 ability to continue as a going concern depend upon its acquiring substantial additional financing. Management's plans include efforts to obtain additional capital and to seek potential partnering opportunities. A-Fem has raised operating funds in the past by selling shares of its common and preferred stock for consideration totaling approximately $4.7 million during 1998 and $1.9 million through September 1999. A-Fem may not be able to raise additional funding or enter into a strategic alliance. If A-Fem is unable to obtain adequate additional financing, enter into such strategic alliance or generate sufficient sales revenues, management may be required to curtail A-Fem's product development, manufacturing and marketing activities, and A-Fem may be forced to cease operations. RESULTS OF OPERATIONS Net sales for the quarter ended September 30, 1999, were approximately $14,000, as compared to approximately $99,000 for the quarter ended September 30, 1998. For the nine-month period ended September 30, 1999, net sales were $57,000, as compared to $367,000 for the same period in 1998. This decrease for the quarter and nine-month period was the result of decreased levels of promotional support for the inSync miniform as compared to the levels maintained during the product introduction and roll-out in the prior year. Cost of sales for the quarter ended September 30, 1999 was approximately $76,000 as compared to approximately $150,000 for the quarter ended September 30, 1998. For the nine-month period ended September 30, 1999, cost of sales was approximately $204,000 as compared to approximately $379,000 for the same period in 1998. This decrease for the quarter and nine-month period primarily resulted from decreases in the volume of products sold in 1999 as compared to 1998. Gross margin for the quarter ended September 30, 1999 was -454.5% as compared to -51.8% for the quarter ended September 30, 1998. For the nine-month period ended September 30, 1999, gross margin was -257.0% as compared to -3.3% for the same period in 1998. Because certain of A-Fem's manufacturing costs are fixed, the decrease in manufacturing volume in 1999 as compared to 1998 created a situation of worsening gross margin in 1999 as compared to the prior year. Marketing and selling expense for the third quarter of 1999 was approximately $32,000, as compared to approximately $635,000 for the quarter ended September 30, 1999. For the nine-month period ended September 30, 1999, marketing and selling expense was approximately $273,000, as compared to approximately $1,938,000 for the same period in 1998. The decrease in marketing and selling expense for the quarter and nine-month period resulted from decreased expenditures for advertising, marketing and sales consultants in 1999 as compared to the expenditures required to support the product roll-out in 1998. Page 8 9 Research and development expense for the quarter ended September 30, 1999, was approximately $302,000, as compared to approximately $237,000 for the same quarter of the prior year. For the nine-month period ended September 30, 1999, research and development expense was approximately $812,000, as compared to approximately $634,000 for the same period in 1998. Research and development expense increased as the result of additional clinical studies in support of the PadKit. General and administrative expense was approximately $223,000 for the quarter ended September 30, 1999, as compared to approximately $271,000 for the same period in the prior year. This decrease was primarily the result of the elimination of two temporary clerical positions and a reduction in A-Fem's insurance premiums. For the nine-month period ended September 30, 1999, general and administrative expense was approximately $715,000, as compared to $706,000 for the same period in 1998. A-Fem's operating loss for the quarter ended September 30, 1999, was approximately $620,000, as compared to approximately $1,194,000 for the same quarter of the prior year. For the nine-month period ended September 30, 1999, the operating loss was approximately $1,948,000, as compared to an operating loss of approximately $3,290,000 for the same period in 1998. This decrease resulted primarily from lower marketing expenses in 1999 as compared to the expenses associated with the rollout of the inSync miniform in 1998. A-Fem's net loss for the quarter ended September 30, 1999, was approximately $622,000, as compared to approximately $1,216,000 for the same period in the prior year. For the nine-month period ended September 30, 1999, the Company's net loss was approximately $1,971,000, as compared to a net loss of $3,336,000 for the same period in the prior year. This decrease reflects the higher levels of expenses incurred in 1998 to support the roll-out of A-Fem's inSync miniform, partially offset by research and development expense increases in 1999 to support additional PadKit clinical studies. LIQUIDITY AND CAPITAL RESOURCES As of September 30, 1999, A-Fem had cash and cash equivalents of $494,689. A-Fem's net cash position was reduced by $173,680 between December 31, 1998 and September 30, 1999, as a result of normal operating expenses. A-Fem expects to continue to incur losses through 1999 and into 2000, because the costs of research and development are expected to continue to exceed income from product sales. A-Fem incurs approximately $200,000 per month of operating expenses. In order to carry out its development plans for Rapid-Sense products and the PadKit, A-Fem will need to raise approximately $3 million in addition to the funds needed for its monthly operating expenses A-Fem does not expect significant amounts of debt financing to be available to it in the near term, and that it will have to issue additional equity. A-Fem cannot predict on what terms any such financing might be available, but any such financing could involve Page 9 10 issuance of equity below current market prices and result in significant dilution of existing stockholders. FACTORS AFFECTING FORWARD-LOOKING STATEMENTS The statements contained in this report that are not statements of historical fact may include forward-looking statements (as defined in Section 27A of the Securities Act of 1933, as amended) that involve a number of risks and uncertainties. Moreover, from time to time A-Fem may issue other forward-looking statements. The following factors are among those that could cause actual results to differ materially from the forward-looking statements and should be considered in evaluating any forward-looking statements: need for additional financing; uncertainty associated with need for regulatory approvals; continuing operating losses; results of financing efforts; lack of revenues from products; market acceptance risks; uncertainty associated with product development; the impact of competitive products and pricing; the effect of economic conditions generally and within the medical technology industry; and the additional factors listed from time to time in the Company's SEC reports, including but not limited to, the Company's report on Form 10-KSB for the fiscal year ended December 31, 1998, as amended. YEAR 2000 A-Fem has conducted a review of its computer systems' devices, applications and manufacturing equipment to identify those areas that could be affected by Year 2000 noncompliance. All of the computer hardware and software currently used by A-Fem, including embedded technology that we use in our manufacturing processes, is Year 2000 compliant. A-Fem believes that a material failure by one or more of its vendors or customers to comply with Year 2000 requirements in a timely fashion will not have a material effect on A-Fem's operations. Page 10 11 PART II - OTHER INFORMATION ITEM 2. RECENT SALES OF UNREGISTERED SECURITIES On August 19, 1999, the Company issued 104,170 shares of Series A Preferred Stock and warrants to purchase an additional 20,834 shares of Series A Preferred Stock, at an exercise price of $.01 per share, to one entity, Capital Consultants, LLC (formerly Capital Consultants, Inc.), acting as agent for individual investors, for cash consideration of $200,006.40. On September 22, 1999 the Company issued 260,400 shares of Series A Preferred Stock and warrants to purchase an additional 52,080 shares of Series A Preferred Stock at an exercise price of $.01 per share to one entity, Capital Consultants, LLC, acting as agent for individual investors, for cash consideration of $499,968.00. The warrants expire 10 years from their respective dates of issue. Shares of Series A Preferred Stock are convertible into shares of the Company's Common Stock on a one-for-one basis, subject to adjustment under certain circumstances to prevent dilution. Capital Consultants, LLC, represented that such entity and each individual represented by such entity was an "accredited investor" within the meaning of Rule 501(a) of the Securities Act. In issuing these securities, the Company relied upon an exemption from registration pursuant to Section 4(2) of the Securities Act. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K a) Exhibits 3.1 Articles of Incorporation, as amended 3.2 Amended and Restated Bylaws(1) 11.1 Statement re: computation of per share earnings 27.1 Financial Data Schedule - ------------------------- (1) Incorporated by reference to the exhibits to A-Fem's annual report on Form 10-KSB for the year ended December 31, 1998, as amended. b) Reports on Form 8-K None Page 11 12 SIGNATURES In accordance with the requirements of the Exchange Act, the Company caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. A-FEM MEDICAL CORPORATION Date: November 12, 1999 /s/ Steven T. Frankel ------------------------------- Steven T. Frankel President and Chief Executive Officer /s/ Martin Harvey ------------------------------- Martin Harvey Controller Page 12 EX-3.1 2 ARTICLES OF INCORPORATION, AS AMENDED 1 EXHIBIT 3.1 AMENDED AND RESTATED ARTICLES OF INCORPORATION OF A-FEM MEDICAL CORPORATION ARTICLE 1. NAME The name of the Corporation is A-FEM MEDICAL CORPORATION. ARTICLE 2. PRINCIPAL OFFICE AND REGISTERED AGENT Its principal office in the State of Nevada is located at One East First Street, Reno, Washoe County, Nevada 89501. The name and address of its resident agent is The Corporation Trust Company of Nevada, One East First Street, Reno, Nevada 89501. ARTICLE 3. PURPOSE The nature of the business, or objects or purposes to be transacted, promoted or carried on by the corporation are: To engage in any lawful activity and to manufacture, purchase or otherwise acquire, invest in, own, mortgage, pledge, sell, assign and transfer or otherwise dispose of, trade, deal in and deal with goods, wares and merchandise and personal property of every class and description. To perform research and development services and to manufacture and market health case devices, products and services. To hold, purchase and convey real and personal estate and to mortgage or lease any such real or personal estate with its franchises and to take the same by devise or bequest. To acquire, and pay for in cash, stock or bonds of this corporation or otherwise, the goodwill, rights, assets and property, and to undertake or assume the whole or any part of the obligations or liabilities of any person, firm, association or corporation. To acquire, hold, use, sell, assign, lease, grant licenses in respect of, mortgage, or otherwise dispose of letters patent of the United States or any foreign country, patent rights, licenses and privileges, inventions, improvements and processes, copyrights, trademarks and trade names, relating to or useful in connection with any business of this corporation. To guarantee, purchase, hold, sell, assign, transfer, mortgage, pledge or otherwise dispose of the shares of the capital stock of or any bonds, securities or evidences of the indebtedness Page 13 2 created by any other corporation or corporations of this state, or any other state or government, and, while owner of such stock, bonds, securities or evidence of indebtedness, to exercise all the rights, powers and privileges of ownership, including the right to vote, if any. To borrow money and contract debts when necessary for the transaction of its business, or for the exercise of its corporate rights, privileges or franchises, or for any other lawful purpose of its incorporation; to issue bonds, promissory notes, bills of exchange, debentures, and other obligations and evidences of indebtedness, payable at specified time or times, or payable upon the happening of a specified event or events, whether secured by mortgage, pledge or otherwise, or unsecured, for money borrowed, or in payment for property purchased, or acquired, or for any other lawful objects. To purchase, hold, sell and transfer shares of its own capital stock, and use therefor its capital, capital surplus, surplus, or other property or funds; provided it shall not use its funds or property for the purchase of its own shares of capital stock when such use would cause any impairment of its capital; and provided further, that shares of its own capital stock belonging to it shall not be voted upon, directly or indirectly, nor counted as outstanding, for the purpose of computing any stockholders' quorum or vote. To conduct business, have one or more offices, and hold, purchase, mortgage and convey real and personal property in this state, and in any of the several states, territories, possessions and dependencies of the United States, the District of Columbia, and in any foreign countries. To do all and everything necessary and proper for the accomplishment of the objects hereinbefore enumerated or necessary or incidental to the protection and benefit of the corporation, and, in general, to carry on any lawful business necessary or incidental to the attainment of the objects of the corporation, whether or not such business is similar in nature to the objects hereinbefore set forth. The objects and purposes specified in the foregoing clauses will, except where otherwise expressed, be in nowise limited or restricted by reference to, or inference from, the terms of any other clause in these articles of incorporation, but the objects and purposes specified in each of the foregoing clauses of this article shall be regarded as independent objects and purposes. ARTICLE 4. SHARES 4.1 AUTHORIZED CAPITAL The corporation is authorized to issue two classes of stock to be designated, respectively, "Common Stock" and "Preferred Stock." The total number of shares of stock that the corporation shall have authority to issue shall be 43,000,000, consisting of 33,000,000 shares of Common Stock with a par value of $.01 per share, and 10,000,000 shares of Preferred Stock with a par value of $.01 per share. Page 14 3 4.2 COMMON STOCK Subject to any preferential or other rights granted to any series of Preferred Stock, the holders of shares of the Common Stock shall be entitled to receive dividends out of funds of the corporation legally available therefor, at the rate and at the time or times as may be provided by the Board of Directors and shall be entitled to receive distributions legally payable to stockholders on the liquidation of the corporation. The holders of shares of Common Stock, on the basis of one vote per share, shall have the right to vote for the election of members of the Board of Directors of the corporation and the right to vote on all other matters, except where a separate class or series of the corporation's stockholders vote by class or series. Holders of Common Stock shall not be entitled to cumulate their votes for the election of directors. 4.3 PREFERRED STOCK Shares of Preferred Stock may be issued from time to time in one or more series, in any manner permitted by law, as determined from time to time by the Board of Directors and stated in the resolution or resolutions providing the issuance thereof, prior to the issuance of any shares thereof. The Board of Directors shall have the authority to fix and determine the rights and preferences of the shares of any series so establish. 4.4 NO PREEMPTIVE RIGHTS Stockholders of the corporation do not have preemptive rights. ARTICLE 5. BOARD OF DIRECTORS The governing board of the corporation will be known as directors, and the number of directors may from time to time be increased or decreased in such manner as shall be provided by the bylaws of the corporation, provided that the number of directors will not be reduced to less than three (3), except that in cases where all the shares of the corporation are owned beneficially and of record by either one or two stockholders, the number of directors may be less than three (3) but not less than the number of stockholders. ARTICLE 6. STOCKHOLDER LIABILITY The capital stock, after the amount of the subscription price or par value has been paid in, will not be subject to assessment to pay the debts of the corporation. ARTICLE 7. INCORPORATORS (Omitted pursuant to NRS 78.403). ARTICLE 8. DURATION The corporation is to have perpetual existence. Page 15 4 ARTICLE 9. AUTHORITY OF THE BOARD OF DIRECTORS In furtherance, and not in limitation of the powers conferred by statute, the board of directors is expressly authorized: Subject to the bylaws, if any adopted by the stockholders, to make, alter, or amend the bylaws of the corporation. To fix the amount to be reserved as working capital over and above its capital stock paid in, to authorize and cause to be executed mortgages and liens upon the real and personal property of the corporation. By resolution passed by a majority of the whole board, to designate one (1) or more committees, each committee to consist of one (1) or more of the directors of the corporation, which, to the extent provided in the resolution or in the bylaws of the corporation, will have and may exercise the powers of the board of directors in the management of the business and affairs of the corporation, and may authorized the seal of the corporation to be affixed to all papers that may require it. Such committee or committees will have such name or names as may be stated in the bylaws of the corporation or as may be determined from time to time by resolution adopted by the board of directors. When and as authorized by the affirmative vote of stockholders holding stock entitling them to exercise at lease a majority of the voting power given at a stockholders' meeting called for that purpose, or when authorized by the written consent of the holders of at least a majority of the voting stock issued and outstanding, the board of directors will have power and authority at any meeting to sell, lease, or exchange all of the property and assets of the corporation, including its good will and its corporate franchises, upon such terms and conditions as its board of directors deem expedient and for the best interests of the corporation. ARTICLE 10. LOCATION OF MEETINGS AND BOOKS Meetings of the stockholders may be held outside the State of Nevada, if the bylaws so provide. The books of the corporation may be kept (subject to any provision contained in the statutes) outside the State of Nevada at such place or places as may be designated from time to time by the board of directors or in the bylaws of the corporation. ARTICLE 11. AMENDMENTS The corporation reserves the right to amend, alter, change, or repeal any provision contained in these articles of incorporation, in the manner now or hereafter prescribed by statute, or by these articles of incorporation, and all rights conferred upon stockholders herein are granted subject to this reservation. Page 16 5 ARTICLE 12. INDEMNIFICATION The Bylaws of the corporation shall provide for the indemnification of the corporation's directors, officers, employees and agents for expenses incurred in connection with the defense of actions, suits or proceedings to the fullest extent permitted by Nevada law. ARTICLE 13. LIMITATION OF DIRECTOR AND OFFICER LIABILITY No director or officer of the corporation shall be liable to the corporation or to the stockholders for damages for any breach of fiduciary duty; provided, however, that a director or officer shall be liable for damages that result from any of the following: (a) Acts or omissions that involve intentional misconduct, fraud or a knowing violation of law; (b) The willful or grossly negligent payment of any improper dividend or distribution; or (c) Acts or omissions that occurred prior to March 18, 1987. These Amended and Restated Articles of Incorporation were adopted by the Board of Directors on June 13, 1997 and by the stockholders on December 12, 1997. Page 17 6 IN WITNESS WHEREOF, A-Fem Medical Corporation has caused these Amended and Restated Articles of Incorporation to be signed by its President and Secretary this 19th day of August, 1998. A-FEM MEDICAL CORPORATION By /s/ J. Peter Burke ------------------------------- J. Peter Burke, President By /s/ William H. Fleming ------------------------------- William H. Fleming, Secretary STATE OF OREGON ) ) ss: COUNTY OF WASHINGTON ) The foregoing instrument was acknowledged before me, a Notary Public, on this 19th day of August, 1998, by J. Peter Burke, President, and William H. Fleming, Secretary, of A-Fem Medical Corporation. /s/ Steve Fleming Notary Public for Oregon My commission expires October 1, 2000 [Notary Stamp or Seal] /Seal/ Page 18 7 CERTIFICATE OF DESIGNATION OF PREFERENCES OF PREFERRED STOCK OF A-FEM MEDICAL CORPORATION A NEVADA CORPORATION 1. The undersigned, J. Peter Burke and William H. Fleming, hereby certify that: 2. They are the duly elected and acting President and Secretary, respectively, of A-Fem Medical Corporation, a Nevada corporation (the "Corporation"). Pursuant to authority given by the Corporation's Articles of Incorporation, the Board of Directors of the Corporation has duly adopted the following recitals and resolutions: WHEREAS, the Board of Directors of the Corporation is authorized to determine or alter the rights, preferences, privileges and restrictions granted to or imposed upon any wholly unissued series of Preferred Stock, to fix the number of shares constituting any such series and to determine the designation thereof, or any of them, and WHEREAS, the Corporation has not issued any shares of such Preferred Stock and the Board of Directors of the Corporation desires, pursuant to its authority as aforesaid, to determine and fix the rights, preferences, privileges and restrictions relating to the initial series of said Preferred Stock and the number of shares constituting and the designation of said series; NOW, THEREFORE, BE IT RESOLVED, that the Board of Directors hereby fixes and determines the designation of, the number of shares constituting, and the rights, preferences, privileges and restrictions relating to, said initial series of Preferred Stock as follows: SECTION 1. DESIGNATION AND NUMBER OF SHARES 1.1 DESIGNATION The initial series of Preferred Stock shall be designated "Series A Convertible Preferred Stock." The term "Series A Stock" as used herein refers to the Series A Convertible Preferred Stock. 1.2 NUMBER OF SHARES The number of shares constituting the Series A Stock shall be 4,500,000 shares. Page 19 8 SECTION 2. DIVIDENDS AND DISTRIBUTIONS; LIQUIDATION RIGHTS 2.1 DIVIDENDS The holders of shares of Common Stock and Series A Stock shall be entitled to receive dividends, when, as and if declared by the Board of Directors of the corporation, out of any assets legally available therefor; provided, however, that no such dividend or distribution may be declared or paid on any shares of Common Stock unless at the same time an equivalent dividend or distribution is declared or paid on all outstanding shares of Series A Stock. The dividend or distribution on shares of Series A Stock shall be payable based upon the number of shares of Common Stock that the holder of shares of Series A Stock would have held if such holder had converted such shares of Series A Stock into Common Stock immediately prior to the record date of such dividend or distribution. 2.2 LIQUIDATION PREFERENCE In the event of any liquidation, dissolution or winding up of the Corporation, either voluntary or involuntary, the holders of the Series A Stock shall be entitled to receive, prior and in preference to any distribution of any of the assets of the Corporation to the holders of the Common Stock, an amount per share equal to $4.00, plus a further amount equal to any declared but unpaid dividends thereon before any payment shall be made or any assets distributed to the holders of Common Stock. If upon such liquidation, dissolution or winding up of the Corporation, the assets thus distributed among the holders of the Series A Stock shall be insufficient to permit the payment in full of the aforesaid preferential amounts, the entire assets of the Corporation to be distributed shall be distributed among the holders of the Series A Stock so that the holder of each share of Series A Stock shall receive the same percentage of the stated liquidation preferences of such share as is received by every other holder of Series A Stock. Following the completion of the distribution of the stated liquidation preferences to be paid to the holders of the Series A Stock, any remaining assets shall be distributed to the holders of the Common Stock of the Corporation; provided, however, if no shares of Common Stock are outstanding at the time of such distribution, the holders of the Series A Stock shall be entitled to receive, ratably (assuming conversion of all shares of Series A Stock to Common Stock), all assets of the Corporation remaining after the payment of the stated liquidation preferences of the Series A Stock as set forth herein. SECTION 3. CONVERSION 3.1 CONVERSION RIGHTS A holder of shares of Series A Stock shall be entitled, at any time, to cause any or all of such shares to be converted into shares of Common Stock. Page 20 9 3.1.1 CONVERSION RATE The conversion rate for Series A Stock in effect at any time (the "Conversion Rate") shall equal $3.84 divided by the Conversion Price, calculated as provided in Section 3.1.2. 3.1.2 CONVERSION PRICE The conversion price for the Series A Stock in effect from time to time, except as adjusted in accordance with Section 3.2.2, shall be $3.84 (the "Conversion Price"). 3.2 CONVERSION PROCEDURE; ANTI-DILUTION ADJUSTMENTS 3.2.1 CONVERSION PROCEDURE Before a holder of the Series A Stock shall be entitled to convert the same into shares of Common Stock, such holder shall surrender the certificate or certificates therefor, duly endorsed in blank or accompanied by proper instruments of transfer, at the office of the Corporation or of any transfer agent for the shares of the Series A Stock, and shall give written notice to the Corporation at such office that such holder elects to convert the same and shall state in writing therein the name or names in which such holder wishes the certificate or certificates for shares of Common Stock to be issued. The Corporation shall, as soon as practicable thereafter, issue and deliver at the address of the holder of the Series A Stock, or to the holder's nominee or nominees, certificates for the number of full shares of Common Stock to which the holder shall be entitled, as aforesaid, together with cash in lieu of any fraction of a share as hereinafter provided in this Section 3.2. Such conversion shall be deemed to have been made as of the date of such surrender of the shares of the Series A Stock to be converted, and the person or persons entitled to receive the shares of Common Stock issuable upon such conversion shall be treated for all purposes as the record holder or holders of such shares of Common Stock on said date. 3.2.2 ADJUSTMENTS TO APPLICABLE CONVERSION PRICE (a) Extraordinary Common Stock Event. Upon the happening of an Extraordinary Common Stock Event (as defined below) after the date of the initial issuance of any shares of Series A Stock, the Conversion Price shall, simultaneously with the happening of such Extraordinary Common Stock Event, be adjusted by multiplying the then effective Conversion Price, by a fraction, the numerator of which shall be the number of shares of Common Stock outstanding immediately prior to such Extraordinary Common Stock Event and the denominator of which shall be the number of shares of Common Stock outstanding immediately after such Extraordinary Common Stock Event (with the number of shares issuable with respect to Common Stock Equivalents (as defined below) determined in the manner provided for deemed issuances in Section 3.2.2(b)(v)), and the product so obtained shall thereafter be the Conversion Price. The Conversion Price, as so adjusted, shall be readjusted in the same manner upon the happening of any successive Extraordinary Common Stock Event or Events. Page 21 10 "Extraordinary Common Stock Event" shall mean (i) the issuance of additional shares of Common Stock, as a dividend or other distribution on outstanding Common Stock of the corporation, or other securities or rights convertible into, or entitling the holder thereof to receive directly or indirectly, additional shares of Common Stock ("Common Stock Equivalents"), (ii) a split or subdivision of outstanding shares of Common Stock into a greater number of shares of Common Stock, or (iii) a combination of outstanding shares of Common Stock into a smaller number of shares of Common Stock. (b) Sale of Shares Below Applicable Conversion Price. (i) If the corporation shall issue any Additional Stock (as defined below) without consideration or for a consideration per share less than the Conversion Price in effect immediately prior to the issuance of such Additional Stock, the Conversion Price in effect immediately prior to issuance of such Additional Stock (except as otherwise provided in this Section 3.2.2(b)) shall be adjusted down to a price equal to the quotient obtained by dividing the total computed under clause (A) below by the total computed under clause (B) below as follows: (A) an amount equal to the sum of (1) the result obtained by multiplying the number of shares of Common Stock deemed outstanding immediately prior to such issuance (which shall include the actual number of shares outstanding plus all shares issuable upon the conversion or exercise of all outstanding convertible securities, warrants and options other than shares excluded from the definition of Additional Stock by Section 3.2.2(c)) by the Conversion Price then in effect, and (2) the aggregate consideration, if any, received by the corporation upon the issuance of such Additional Stock; (B) the number of shares of Common Stock of the corporation outstanding immediately after such issuance (including the shares deemed outstanding as provided in clause (A) above). (ii) No adjustment of the Conversion Price shall be made in an amount less than one cent per share, provided, that any adjustments which are not required to be made by reason of this sentence shall be carried forward and shall be taken into account in any subsequent adjustment made to the Conversion Price. Except as provided in Sections 3.2.2(b)(v)(C) and (D) below, no adjustment of the Conversion Price shall have the effect of increasing the Conversion Price above the Conversion Price in effect immediately prior to such adjustment. (iii) In the case of the issuance of Common Stock for cash, the consideration shall be deemed to be the amount of cash paid therefor before deducting any discounts, commissions or other expenses allowed, paid or incurred by the corporation for any underwriting or otherwise in connection with the issuance and sale thereof. (iv) In the case of the issuance of Common Stock for a consideration in whole or in part other than cash, the consideration other than cash shall be deemed to be the fair Page 22 11 value thereof as determined in good faith by the Board of Directors irrespective of any accounting treatment. (v) In the case of the issuance of options or warrants to purchase or rights to subscribe for Common Stock, securities by their terms convertible into or exchangeable for Common Stock, or options or warrants to purchase or rights to subscribe for such convertible or exchangeable securities, the following provisions shall apply: (A) the aggregate maximum number of shares of Common Stock deliverable upon exercise of such options or warrants to purchase or rights to subscribe for Common Stock shall be deemed to have been issued at the time such options, warrants, or rights were issued for a consideration equal to the consideration (determined in the manner provided in Sections 3.2.2(b)(iii) and (iv) above), if any, received by the corporation upon the issuance of such options, warrants or rights plus the minimum purchase price provided in such options, warrants or rights for the Common Stock covered thereby, but no further adjustment to the Conversion Price shall be made for the actual issuance of Common Stock upon the exercise of such options, warrants or rights in accordance with their terms; (B) the aggregate maximum number of shares of Common Stock deliverable upon conversion of or in exchange for any such convertible or exchangeable securities or upon the exercise of options or warrants to purchase or rights to subscribe for such convertible or exchangeable securities and subsequent conversion or exchange thereof shall be deemed to have been issued at the time such securities were issued or such options, warrants or rights were issued for a consideration equal to the consideration received, if any, by the corporation for any such securities and any related options, warrants or rights, plus the minimum additional consideration, if any, to be received by the corporation upon the conversion or exchange of such securities or the exercise of any related options, warrants or rights (the consideration in each case to be determined in the manner provided in Sections 3.2.2(b)(iii) and (iv) above), but no further adjustment to the Conversion Price shall be made for the actual issuance of Common Stock upon the conversion or exchange of such securities in accordance with their terms; (C) if such options, warrants, rights or convertible or exchangeable securities by their terms provide, with the passage of time or otherwise, for any change in the consideration payable to the corporation or in the number of shares of Common Stock issuable upon the exercise, conversion or exchange thereof, including, without limitation, a change resulting from the antidilution provisions thereof, the Conversion Price computed upon the original issue thereof, and any subsequent adjustments based thereon, shall, upon such change becoming effective, be recomputed to reflect such change, but no further adjustment to the Conversion Price shall be made for the actual issuance of Common Stock upon the exercise of any such options, warrants or rights or the conversion or exchange of such securities in accordance with their terms; and Page 23 12 (D) upon the expiration of any such options, warrants or rights, the termination of any such rights to convert or exchange or the expiration of any options, warrants or rights related to such convertible or exchangeable securities, the Conversion Price shall forthwith be readjusted to such Conversion Price as would have been obtained had the adjustment which was made upon the issuance of such options, warrants, rights or securities or options, warrants or rights related to such securities been made upon the basis of the issuance of only the number of shares of Common Stock (and convertible or exchangeable securities which remain in effect) actually issued upon the exercise of such options, warrants or rights, upon the conversion or exchange of such securities or upon the exercise of the options, warrants or rights related to such securities. (c) "Additional Stock" shall mean any shares of Common Stock or securities convertible into or exchangeable or exercisable for shares of Common Stock issued (or deemed to have been issued pursuant to Section 3.2.2(b)(v) above) by the corporation after the date of initial issuance of any Series A Stock other than: (i) Common Stock issued in connection with an Extraordinary Common Stock Event; and (ii) Common Stock issued or issuable upon conversion of Series A Stock. 3.2.3 ADJUSTMENTS FOR OTHER DIVIDENDS AND DISTRIBUTIONS If the Corporation at any time after the Filing Date shall make or issue, or fix a record date for the determination of holders of Common Stock entitled to receive, a dividend or other distribution payable in securities of the Corporation other than shares of Common Stock, then and in each such event provision shall be made so that the holders of the Series A Stock shall receive upon conversion thereof in addition to the number of shares of Common Stock receivable thereupon, the amount of securities of the Corporation which the holders would have received had the holders' Series A Stock been converted into Common Stock on the date of such event and had thereafter, during the period from the date of such event to and including the conversion date, retained such securities (together with any distributions payable thereon during such period) receivable by them as aforesaid during such period, giving application to all adjustments called for during such period under Section 3.2 with respect to the rights of the holders of the Series A Stock. 3.2.4 ADJUSTMENT FOR RECLASSIFICATION, EXCHANGE OR SUBSTITUTION If the Common Stock issuable upon the conversion of the Series A Stock shall be changed into the same or different number of shares of any class or classes of stock, by capital reorganization, involving exchange, substitution, reclassification or otherwise (other than a subdivision or combination of shares or stock dividend provided for above, or a reorganization, merger, consolidation or sale of assets provided for below), then the holders of the shares of Page 24 13 Series A Stock shall have the right thereafter to convert each such share into the same kind and amount of shares of stock and other securities and property receivable upon such exchange, reclassification or other change, as a holder of the number of shares of Common Stock into which such shares of Series A Stock might have been converted immediately prior to such substitution, reclassification or other change, all subject to further adjustment as provided herein. 3.2.5 REORGANIZATION, MERGER, CONSOLIDATION OR SALE OF ASSETS If at any time there shall be a capital reorganization of the Common Stock (other than a subdivision, combination, reclassification or exchange of shares provided for elsewhere in this Section 3.2) or a merger or consolidation of the Corporation with or into another corporation, or the sale of all or substantially all of the Corporation's properties and assets to any other person, then, as a part of such reorganization, merger, consolidation or sale, provision shall be made so that the holders of the Series A Stock shall thereafter be entitled to receive upon conversion of such Series A Stock, the number of shares of stock or other securities or property of the Corporation, or of the successor corporation resulting from such reorganization, merger, consolidation or sale, to which a holder of Common Stock deliverable upon conversion would have been entitled upon such capital reorganization, merger, consolidation or sale. 3.2.6 CERTIFICATE OF ADJUSTMENT Upon the occurrence of each adjustment or readjustment of the Conversion Rate of the Series A Stock pursuant to this Section 3.2, the Corporation shall promptly compute such adjustment or readjustment in accordance with the terms hereof and prepare and furnish to the holders of the Series A Stock, as applicable, a certificate, signed by the Chairman of the Board, the President or the Chief Financial Officer, setting forth such adjustment or readjustment and showing in detail the facts upon which such adjustment or readjustment is based. 3.2.7 FRACTIONAL SHARES The corporation shall not be obligated to deliver to holders of Series A Stock any fractional share or shares of Common Stock issuable upon conversion of such shares of Series A Stock, but in lieu thereof may make a cash payment in respect thereof in any manner permitted by law. 3.2.8 RESERVATION OF STOCK ISSUABLE UPON CONVERSION The Corporation shall at all times reserve and keep available, out of its authorized but unissued Common Stock, solely for the purpose of effecting the conversion of the Series A Stock, the full number of shares of Common Stock deliverable upon the conversion of all shares of the Series A Stock from time to time outstanding. The Corporation shall from time to time, in accordance with the laws of the State of Nevada, use its best efforts to increase the authorized amount of its Common Stock if at any time the authorized number of shares of Common Stock remaining unissued shall not be sufficient to permit the conversion of all of the shares of the Series A Stock at the time outstanding. Page 25 14 SECTION 4. VOTING RIGHTS 4.1 VOTING RIGHTS OF SERIES A STOCK 4.1.1 VOTING WITH COMMON STOCK The holders of Series A Stock shall be entitled to vote on all matters submitted to a vote of the holders of Common Stock of the corporation, voting together with the holders of Common Stock as one class except as otherwise provided in this Section 4. Each share of the Series A Stock shall be entitled to the number of votes equal to the number of shares of Common Stock into which such share of Series A Stock could be converted on the record date for determining the shareholders entitled to vote. 4.1.2 VOTING AS A SEPARATE VOTING GROUP The holders of Series A Stock shall be entitled to vote as a separate voting group with respect to (i) any of the transactions listed in Section 4.2 hereto, (ii) the creation of any senior or pari passu security, (iii) any transaction constituting a deemed dividend under federal tax law or (iv) as otherwise provided by law. 4.2 PROTECTIVE PROVISIONS OF SERIES A STOCK So long as 400,000 shares or more of the Series A Stock are outstanding after the Filing Date, the Corporation shall not, without the vote or written consent of the majority of the holders of the Series A Stock, do any of the following: (a) authorize or issue any shares of stock with rights, including liquidation preferences, superior to the Common Stock; (b) effect any sale, lease, assignment, transfer, or other conveyance of all or substantially all of the assets of the Corporation or the sale, transfer or license of intellectual property other than in the ordinary course of business; (c) effect any consolidation or merger involving the Corporation; (d) effect any voluntary dissolution, liquidation, recapitalization, reclassification or reorganization of the Corporation; (e) repurchase or redeem any equity securities, or pay any dividends or other distributions on equity securities; (f) engage in any business other than the business currently conducted; (g) authorize or issue additional equity or options or warrants to purchase additional equity to employees, consultants or directors; Page 26 15 (h) amend the Articles of Incorporation or Bylaws; (i) incur any indebtedness for borrowed money or enter into any capital lease obligations which aggregate in excess of $25,000. 4.3 STATUS OF CONVERTED STOCK In case any shares of Series A Stock shall be converted pursuant to Section 3.2 hereof, the shares so converted shall assume the status of authorized but undesignated and unissued shares of Series A Stock. 4.4 NOTICES Any notice required herein except as otherwise specifically provided herein, to be given to a holder of the Series A Stock shall be in writing and may be delivered by personal service, sent by overnight professional courier service, sent by telegraph or cable or sent by United States registered or certified mail, return receipt requested, with postage thereon fully prepaid. All such communications shall be addressed to such holder of record at its address appearing on the books of the Corporation. If sent by telegraph or cable, a confirmed copy of such telegraphic or cabled notice shall promptly be sent by mail (in the manner provided above) to the holders. Service of any such communication made only by mail shall be deemed complete on the date of actual delivery as shown by the addressee's registry or certification receipt or at the expiration of the third business day after the date of mailing, whichever is earlier in time. RESOLVED FURTHER, that the Chairman of the Board, the President or any Vice President and the Secretary or any Assistant Secretary of the Corporation are each authorized to execute, verify and file a certificate of designation of preferences of preferred stock in accordance with the General Corporation Law of the State of Nevada. 3. The authorized number of shares of preferred stock of the Corporation is 10,000,000 shares, and the number of shares constituting Series A Convertible Preferred Stock, none of which has been issued, is 7,200,000 shares. [this space intentionally left blank] Page 27 16 IN WITNESS WHEREOF, the undersigned has executed this Certificate on August 26, 1998. /s/ J. Peter Burke ------------------------------- J. Peter Burke, President /s/ William H. Fleming ------------------------------- William H. Fleming, Secretary State of Oregon ) ) ss. County of Multnomah ) On August 26, 1998, personally appeared before me, a Notary Public, J. Peter Burke, who acknowledged that he - ----------------------------------------------- Names of Persons Appearing and Signing Document executed the above instrument. /s/ Athona G. Williamson ------------------------------- Signature of Notary (NOTARY STAMP OR SEAL) /Seal/ Page 28 17 CERTIFICATE OF CORRECTION OF A-FEM MEDICAL CORPORATION 1. The name of the corporation is A-Fem Medical Corporation. 2. On August 21, 1998, the corporation filed Amended and Restated Articles of Incorporation (the "Amended and Restated Articles"). 3. In such Amended and Restated Articles, it was incorrectly stated that the Amended and Restated Articles were approved by the Board of Directors on June 13, 1997 and by the stockholders on December 12, 1997. 4. The Amended and Restated Articles were approved by the Board of Directors on August 21, 1998. An Amendment to the Articles of Incorporation creating a class of preferred stock was approved by stockholders on December 21, 1997. Stockholders were not required to approve the Amended and Restated Articles. IN WITNESS WHEREOF, the undersigned has executed this Certificate on September 10, 1998. /s/ J. Peter Burke ------------------------------- J. Peter Burke, President State of Oregon ) ) ss. County of Multnomah ) On September 10, 1998, personally appeared before me, a Notary Public, J. Peter Burke, who acknowledged that he - ------------------------------------------------ Names of Person Appearing and Signing Document executed the above instrument. /s/ Athona G. Williamson ------------------------------- Signature of Notary (NOTARY STAMP OR SEAL) /Seal/ Page 29 18 CERTIFICATE OF AMENDMENT TO CERTIFICATE OF DESIGNATION OF PREFERENCES OF PREFERRED STOCK OF A-FEM MEDICAL CORPORATION, A NEVADA CORPORATION 1. The undersigned, Steven T. Frankel and William H. Fleming, hereby certify that: 2. They are the duly elected and acting President and Secretary, respectively, of A-Fem Medical Corporation, a Nevada corporation (the "Corporation"). 3. Pursuant to authority given by the Corporation's Articles of Incorporation, the Board of Directors of the Corporation has duly adopted the following amendment to the Corporation's Certificate of Designation of Preferences of Preferred Stock: "SECTION 1. DESIGNATION AND NUMBER OF SHARES . . . 1.2 NUMBER OF SHARES The number of shares constituting the Series A Stock shall be 8,200,000 shares." 4. The approval of the stockholders entitled to exercise a majority of the voting power of the Series A Preferred Stock of the Corporation has been received, as required pursuant to NRS 78.1955(3). [this space intentionally left blank] Page 30 19 IN WITNESS WHEREOF, the undersigned has executed this Certificate on September 17, 1999. /s/ Steven T. Frankel ------------------------------- Steven T. Frankel, President /s/ William H. Fleming ------------------------------- William H. Fleming, Secretary State of Oregon ) ) ss. County of Multnomah ) On September 17, 1999, personally appeared before me, a Notary Public, Steven T. Frankel and William H. Fleming, who acknowledged that they executed the above instrument. /s/ Cheryl R. Mealy ------------------------------- Signature of Notary My Commission Expires: June 8, 2001 (NOTARY STAMP OR SEAL) /Seal/ Page 31 EX-11.1 3 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS 1 EXHIBIT 11.1 A-FEM MEDICAL CORPORATION CALCULATIONS OF NET LOSS PER SHARE
FOR THE THREE MONTHS FOR THE NINE MONTHS ENDED SEPTEMBER 30 SEPTEMBER 30, --------------------------------- --------------------------------- 1999 1998 1999 1998 ------------ ------------ ------------ ------------ Actual weighted average shares outstanding 9,546,717 12,566,644 9,505,888 13,093,071 Dilutive common stock, options and warrants using the treasury stock method(1) -- - -- -- ------------ ------------ ------------ ------------ Total shares used in per share calculations 9,546,717 12,566,644 9,505,888 13,093,071 ------------ ------------ ------------ ------------ Net loss $ (621,672) $ (1,216,215) $ (1,971,033) $ (3,335,707) ------------ ------------ ------------ ------------ Net loss per share $ (0.07) $ (0.10) $ (0.21) $ (0.25) ============ ============ ============ ============
- --------------------------------- (1) Preferred stock, warrants and options outstanding are not included, as the effect would be anti-dilutive. Page 1 EX-27.1 4 FINANCIAL DATA SCHEDULE
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM A-FEM MEDICAL CORPORATION'S FORM 10-QSB FOR THE QUARTER ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 9-MOS DEC-31-1999 JAN-01-1999 SEP-30-1999 495 0 24 0 71 745 1,257 (612) 1,509 819 0 0 67 96 520 1,509 57 57 204 204 1,801 0 56 (1,971) 0 (1,971) 0 0 0 (1,971) (0.21) (0.21) This information has been prepared in accordance with SFAS No. 128. Basic and diluted EPS have been entered in place of primary and full diluted EPS, respectively.
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