U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2006 OR TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to ___________ Commission file number 0-26206 ------- Orthometrix, Inc. ----------------- (Exact name of small business issuer as specified in its charter) Delaware 06-1387931 ----------------------------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 106 Corporate Park Drive, Suite 102, White Plains, NY 10604 ----------------------------------------------------- ---------------------- (Address of principal executive office) (Zip Code) Registrant's telephone number, including area code (914) 694-2285 ---------------- Indicate by check mark whether Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No ----- ----- There were 44,353,618 shares of common stock outstanding as of April 21, 2006. 1 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- PART I - FINANCIAL INFORMATION ------------------------------ ITEM 1. FINANCIAL STATEMENTS. BALANCE SHEET (UNAUDITED) ASSETS ------ March 31, 2006 --------------- Current assets: Cash $ 210,379 Accounts receivable - trade 32,885 Inventories 359,829 Prepaid expenses and other current assets 215,394 --------------- Total current assets 818,487 Property and equipment, net 100,621 Other 11,658 --------------- Total Assets $ 930,766 =============== LIABILITIES AND STOCKHOLDERS' DEFICIT ------------------------------------- Current liabilities: Accounts payable - trade $ 876,240 Accrued expenses 80,952 Related party loans 410,716 Unearned service revenue 65,554 Loan payable - equipment 16,290 Line of credit 340,000 --------------- Total current liabilities 1,789,752 Long term loan payable - equipment 51,154 Stockholders' deficit: Common stock - par value $.0005 per share, 75,000,000 shares authorized, and 44,353,618 shares issued and outstanding 22,176 Preferred stock - par value $.0005 per share, 1,000,000 shares authorized - Additional paid-in capital 43,183,233 Accumulated deficit (44,115,549) --------------- Total stockholders' deficit (910,140) --------------- Total Liabilities and Stockholders' Deficit $ 930,766 =============== See notes to financial statements. 2 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- STATEMENTS OF OPERATIONS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, MARCH 31, 2006 2005 ---------------- --------------- Revenue $ 748,066 $ 470,980 Cost of revenue 223,798 174,330 ------------- ------------ Gross profit 524,268 296,650 Sales and marketing expense 443,559 350,633 General and administrative expense 335,498 388,555 Research and development expense 42,031 135,242 ---------------- --------------- Operating loss (296,820) (577,780) Interest expense (31,645) (40,329) Interest income 67 1,244 Other income 75,231 - ---------------- --------------- Net loss $ (253,167) $ (616,865) ================ =============== Basic and diluted weighted average shares 44,288,618 37,935,677 ================ =============== Basic and diluted loss per share: Net loss $ (0.01) $ (0.02) ================ =============== See notes to financial statements. 3 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- STATEMENTS OF CASH FLOWS (UNAUDITED) FOR THE THREE MONTHS ENDED MARCH 31, MARCH 31, 2006 2005 ------------- ------------- Cash Flows From Operating Activities: Net loss $ (253,167) $ (616,865) Adjustments to reconcile net loss to net cash used in operating activities: Stock options and warrants issued 61,479 153,050 Non cash compensation - 72,000 Amortization expense 15,945 33,597 Depreciation expense 5,443 1,266 Changes in assets and liabilities: Decrease in accounts receivable 2,655 14,859 Increase in inventories (97,333) (26,785) Increase in prepaid expenses and other current assets (59,263) (47,248) Increase (decrease) in accounts payable 171,819 (192,198) Increase (decrease) in accrued expenses 23,695 (9,329) Increase in unearned service revenue 27,609 12,250 Increase in unearned income - 99,650 ------------- ------------- Net cash used in operating activities (101,118) (505,753) ------------- ------------- Cash Flows From Investing Activities: Purchases of property and equipment (11,831) - ------------- ------------- Cash used in investing activities (11,831) - ------------- ------------- Cash Flows From Financing Activities: Repayment of borrowings from related parties - (500,000) Proceeds of borrowings from related parties 275,000 - Proceeds for issuance of common stock - 1,740,000 Exercise of stock options 17,046 5,650 Proceeds from line of credit 10,000 - Repayment of loan payable - equipment (1,579) - ------------- ------------- Net cash provided by financing activities 300,467 1,245,650 ------------- ------------- Net increase in cash 187,518 739,897 Cash at beginning of period 22,861 - ------------- ------------- Cash at end of period $ 210,379 $ 739,897 ============= ============= Supplemental disclosure of non-cash investing and financing activities: Purchase of property and equipment 64,028 - Less: Amount financed (52,197) - ------------- ------------- 11,831 - ============= ============= See notes to financial statements. 4 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- NOTES TO FINANCIAL STATEMENTS ----------------------------- 1. BASIS OF PRESENTATION AND GOING CONCERN --------------------------------------- The financial statements of Orthometrix, Inc. presented herein, have been prepared pursuant to the rules of the Securities and Exchange Commission for quarterly reports on Form 10-QSB 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, 2005, and included in the Company's Report on Form 10-KSB as filed with the Securities and Exchange Commission on February 24, 2006. In the opinion of management, the accompanying interim unaudited financial statements contain all adjustments (consisting of normal, recurring accruals) necessary for a fair presentation of the financial position, results of operations and cash flows for these interim periods. During the past two fiscal years ended December 31, 2005 and 2004, the Company has experienced aggregate losses from operations of $4,332,317 and has incurred total negative cash flow from operations of $3,000,606 for the same two-year period. During the three months ended March 31, 2006 the Company experienced a net loss of $253,167 and a negative cash flow from operating activities of $101,118. These matters raise substantial doubt about the Company's ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. The Company's continued existence is dependent upon several factors including increased sales volume and the ability to achieve profitability on the sale of some of the Company's remaining product lines. 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. On February 1, 2006, the Company formed an alliance with Healthcare Reimbursement Solutions, Inc. ("HRSI") to provide customers using the Orbasone(TM) ESWT pain management system with a broad range of billing advisory services. These services include billing and reimbursement consulting, turn-key billing, as well as a reimbursement hotline dedicated to one on one consulting and assistance with denial and claim review. The services of HRSI are provided to customers at no extra charge. 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. The results of operations for the three months ended March 31, 2006 are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 2006. 2. INVENTORIES ----------- As of March 31, 2006, inventories consisted of $359,829 of sub-assemblies, parts and spare parts. 3. CASH FLOWS ---------- The Company paid $10,469 and $37,053 for interest during the three months ended March 31, 2006 and 2005, respectively. 5 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- 4. INCOME TAXES ------------ 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. 5. CONTINGENCY ----------- 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 expiring on July 31, 2008. Minimum future rental commitments with regard to the original and amended lease are payable as follows: 2006 $ 30,816 2007 31,584 2008 18,424 ----------------- $ 80,824 ================= 6. RELATED PARTY TRANSACTIONS -------------------------- During the three months ended March 31, 2006, the Company borrowed $275,000 from certain officers and directors in addition to borrowings of $285,000 from related parties and others in 2005. $40,000 of the borrowings in 2005 were short term, non-interest bearing loans and were repaid in 2005. $25,000 of the borrowings in 2005 were short term loans, bearing interest at prime which mature when the Company receives their next sale proceeds, and the remaining $495,000 were notes issued in 2005 and 2006 that bear interest at the JPMorgan Chase prime rate plus one (8.75% at March 31, 2006) which mature one year from the date of issuance. As of March 31, 2006, $106,618 of the remaining proceeds received were allocated to the warrants based on the application of the Black-Scholes option pricing model, with the remaining proceeds of $388,382 allocated to the notes payable. The value allocated to the warrants is being amortized to interest expense over the term of the notes. At March 31, 2006, the unamortized discount on the notes payable is $84,284. During the quarter ending March 31, 2006, the Company recorded interest expense of $15,946. 6 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- 7. STOCK-BASED COMPENSATION ------------------------ Beginning in the first quarter of 2006, the Company applied SFAS No. 123 (Revised 2004), "Share-Based Payment" ("SFAS No. 123R") to determine the compensation cost of stock options granted to employees and non-employees based on the fair value method. Non-cash compensation cost is recognized over the service or vesting period. During the three months ended March 31, 2006, the Company's board of directors approved a grant of stock options to employees, directors and independent consultants to purchase an aggregate of 430,000 shares of its common stock with exercise prices equal to 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 value of these issuances was based on the application of the Black-Scholes option pricing model and valued at $61,479. The value of options was recorded as non-cash compensation expense and additional paid-in capital. 7 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS ---------------------------------------------------------- The matters discussed in this Form 10-QSB 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-QSB 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 they are made. 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 generally 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. Other than the bone densitometry systems, the Company's products are covered by warranties provided by its vendors. Therefore, no warranty reserve is required on such products. In the United States and Canada, the Company offers one-year warranties covering parts and labor on both hardware and software components of its bone densitometry systems (except for computer systems, if any, which are covered under their respective manufacturers' warranty). Outside of the United States and Canada, the Company only offers one-year warranties on parts; the labor warranty is provided by the distributors. The provision for product warranties represents an estimate for future claims arising under the terms of the various product warranties. The estimated future claims are accrued at the time of sale. To the extent that the Company provides warranty services for products that the Company does not manufacture, the Company invoices the manufacturer for the costs of performing such warranty services. The Company has no obligations to provide any other services to any of its third party dealers or distributors or their customers. 8 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN 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 uncollectable 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 three years through the sale of equity securities and the issuance of debt. For the two years ending December 31, 2005 and 2004, the Company incurred aggregate net losses from operations of $4,332,317 and negative cash flow from operations of $3,000,606. During the three months ended March 31, 2006, the Company incurred a net loss of $253,167 and negative cash flow from operations of $101,118. As of March 31, 2006, the Company had $210,379 in unrestricted cash and cash equivalents 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. In order to increase cash flow, the Company is continuing its efforts to stimulate sales. On February 1, 2006, the Company formed an alliance with Healthcare Reimbursement Solutions, Inc. ("HRSI") to provide customers using the Orbasone(TM) ESWT pain management system with a broad range of billing advisory services. These services include billing and reimbursement consulting, turn-key billing, as well as a reimbursement hotline dedicated to one on one consulting and assistance with denial and claim review. The services of HRSI are provided to customers at no extra charge. 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. 9 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (CONTINUED) ---------------------------------------------------------------------- Liquidity and Capital Resources (Continued) ------------------------------------------- The Company is pursuing several initiatives to increase liquidity, including obtaining equity and debt financings and a bank line of credit. On March 31, 2006, the Company had outstanding borrowings of $340,000 in principal amount under the existing line of credit with HSBC Bank USA, N.A. Interest on borrowings under the credit line accrues at HSBC's prime rate plus 1.50%. The level of the Company's cash and cash equivalents increased to $210,379 at March 31, 2006 from $22,861 at December 31, 2005. The Company expended $101,118 in cash for operations and $11,831 for investments during the three months ended March 31, 2006 which were offset by $300,467 in cash provided by financing activities during the three month period. Through these financing activities the Company received $275,000 in loans from officers and directors, $17,046 pursuant to the exercise of stock options, and $10,000 from the HSBC line of credit, which were slightly offset by the repayment of equipment loan payable of $1,579. During the three months ended March 31, 2006, the Company borrowed $275,000 from certain officers and directors in addition to borrowings of $285,000 from related parties and others in 2005. $40,000 of the borrowings in 2005 were short term, non-interest bearing loans and were repaid in 2005. $25,000 of the borrowings in 2005 were short term loans, bearing interest at prime which mature when the Company receives their next sale proceeds, and the remaining $495,000 were notes issued in 2005 and 2006 that bear interest at the JPMorgan Chase prime rate plus one (8.75% at March 31, 2006) which mature one year from the date of issuance. As of March 31, 2006, $106,618 of the remaining proceeds received were allocated to the warrants based on the application of the Black-Scholes option pricing model, with the remaining proceeds of $388,382 allocated to the notes payable. The value allocated to the warrants is being amortized to interest expense over the term of the notes. At March 31, 2006, the unamortized discount on the notes payable is $84,284. During the quarter ending March 31, 2006, the Company recorded interest expense of $15,946. During the three months ended March 31, 2006, the Board approved a grant of stock options to employees, directors and independent consultants to purchase an aggregate of 430,000 shares of Common Stock with exercise prices equal to 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, who received options to purchase 45,000 shares of Common Stock) and vest over 4 years. The value of these options was $61,479, based on the application of the Black-Scholes option pricing model and this value was recorded as non-cash compensation expense and additional paid-in capital. The Company had a backlog of orders of $113,080 as of March 31, 2006 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. If the Company is unable to obtain funding on a timely basis, they may be required to significantly curtail one or more of the Company's research or development programs. The 10 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (CONTINUED) ---------------------------------------------------------------------- Liquidity and Capital Resources (Continued) ------------------------------------------- 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. Results of Operations --------------------- The Company had a net loss of $253,167 ($0.01 per share based on 44,288,618 weighted average shares) for the three months ended March 31, 2006 compared to net loss of $616,865 ($0.02 per share based on 37,935,677 weighted average shares) for the three months ended March 31, 2005. Revenue for the three months ended March 31, 2006 increased $277,086 (or 58.8%) to $748,066 from $470,980 from the comparable period of fiscal 2005. The increase in revenue was primarily due to an increase in Orbasone(TM) sales during 2006. Cost of revenue as a percentage of revenue was 29.9% and 37.0% for the three months ended March 31, 2006 and 2005, respectively, resulting in a gross margin of 70.1% for the three months ended March 31, 2006 compared to 63.0% for the comparable period of 2005. The increase in gross margin was due to an increase in Orbasone(TM) sales in 2006, which maintains a large gross profit percentage. Sales and marketing expense for the three months ended March 31, 2006 increased $92,926 (or 26.5%) to $443,559 from $350,633 for the three months ended March 31, 2005. The increase is due to the Company's increase in commissions and additional sales staff hired to market and sell the Orbasone(TM). General and administrative expense for the three months ended March 31, 2006 decreased $53,057 (or 13.7%) to $335,498 from $388,555 for the three months ended March 31, 2005. The decrease was primarily due to a decrease in non-cash compensation associated with the equity financing in 2005. Research and development expense for the three months ended March 31, 2006 decreased $93,211 (or 68.9%) to $42,031 from $135,242 for the three months ended March 31, 2005. The decrease was primarily due to decreased expenses incurred as a result of the PMA process in 2005. The Orbasone(TM) was approved by FDA in 2005. Interest expense decreased $8,684 (or 21.5%) to $31,645for the three months ended March 31, 2006 from $40,329 for the three months ended March 31, 2005. Interest expense decreased due to the satisfaction of all notes issued in 2003 and 2004 during March 2005. Other income increased $75,231 (or 100%) for the three months ended March 31, 2006. The increase was due to the balance adjustment of the legal reserve. 11 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS (CONTINUED) ---------------------------------------------------------------------- New Accounting Pronouncements ----------------------------- In May 2005, the FASB issued FAS No. 154, "Accounting Changes and Error Corrections - A Replacement of APB Opinion No. 20 and FAS Statement No. 3" ("FAS 154"). FAS 154 changes the requirements for the accounting and reporting of a change in accounting principle by requiring retrospective application to prior periods' financial statements of the change in accounting principle, unless it is impractical to do so. FAS 154 is effective for accounting changes and corrections of errors made in fiscal years beginning after December 15, 2005. The Company does not expect the adoption of FAS 154 to have any impact on the financial statements. 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 March 31, 2006 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 $9,274 change in annual interest expense. ITEM 3. 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) and 15d-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 internal controls over financial reporting during the Company's first, second, and third quarter that has materially affected, or is reasonably likely to materially affect, the Company's internal controls over financial reporting. 12 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- PART II - OTHER INFORMATION --------------------------- ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS --------------------------------------------------- None. ITEM 6. EXHIBITS -------- 2.1 Asset Purchase Agreement with Cooper Surgical Acquisition Corp. and Orthometrix, Inc. (E) 3.1 Restated Certificate of Incorporation of Orthometrix, Inc. (C) 3.2 Certificate of Amendment of Restated Certificate of Incorporation (F) 3.3 By-laws of Orthometrix, Inc. as amended (D) 4.1 Form of warrant to purchase shares of common stock of Orthometrix, Inc. (G) +10.1 Assignment and Assumption Agreement, dated as of April 12, 2002 by and between Bionix, L.L.C. and Orthometrix, Inc. (A) +10.2 Product Approval and Licensing Agreement, dated February 12, 2002, by and between M.I.P. GmbH and Bionix L.L.C. (A) +10.3 Assignment and Assumption Agreement, dated as of April 12, 2002 by and between Bionix, L.L.C. and Orthometrix, Inc. (A) +10.4 Distribution Agreement, dated as of October 1, 1999, by and between Stratec Medizintechnik, GmbH and Bionix, L.L.C. (A) +10.5 Assignment and Assumption Agreement, dated as of April 12, 2002 by and between Bionix, L.L.C. and Orthometrix, Inc. (A) +10.6 Distribution Agreement, dated as of October 1, 1999 by and between Novotec Maschinen GmbH and Bionix, L.L.C. (A) 10.7 $50,000 Promissory Note, dated October 4, 2005, between Orthometrix, Inc. and Michael Huber (G) 10.8 $20,000 Promissory Note, dated October 11, 2005, between Orthometrix, Inc. and John Utzinger (G) 10.9 $100,000 Promissory Note, dated November 18, 2005, between Orthometrix, Inc. and Reynald Bonmati (G) 13 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- ITEM 6. EXHIBITS (CONTINUED) -------------------- 10.10 $50,000 Promissory Note, dated December 12, 2005, between Orthometrix, Inc. and The Chrystele Bonmati Trust (H) 10.11 $25,000 Promissory Note, dated January 17, 2006, between Orthometrix, Inc. and The Chrystele Bonmati Trust 10.12 $150,000 Promissory Note, dated February 28, 2006, between Orthometrix, Inc. and Reynald Bonmati 10.13 $100,000 Promissory Note, dated March 15, 2006, between Orthometrix, Inc. and The Chrystele Bonmati Trust 10.14 Securities Purchase Agreement, dated February 25, 2005, between Orthometrix, Inc. and Rock Creek Investment Partners, L.P. (B) 10.15 Securities Purchase Agreement, dated March 3, 2005, between Orthometrix, Inc. and Psilos Group Partners II SBIC, L.P. (B) 10.16 Amended and Restated 1994 Stock Option and Incentive Plan for Employees (F) 10.17 Amended and Restated 2000 Stock Option and Incentive Plan for Non Employee Directors and Consultants (F) 10.18 Small Business Grid Note, dated October 3, 2005, between HSBC Bank USA, N.A. and Orthometrix, Inc. (G) 10.19 General Security Agreement, dated October 3, 2005, between HSBC Bank USA, N.A. and Orthometrix, Inc. (G) 23.1 Consent of Radin, Glass & Co., LLP (G) 23.2 Consent of Kirkpatrick & Lockhart Nicholson Graham LLP (G) 24 Power of Attorney (included on signature page) Exhibits required by Item 601 of Regulation S-B are filed herewith: 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. 14 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- ITEM 6. EXHIBITS (CONTINUED) -------------------- 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. + Confidentiality requested as to certain provisions. (A) This Exhibit was previously filed as an Exhibit to the Company's Report on Form 10-QSB dated May 15, 2003 and is incorporated herein by reference. (B) This Exhibit was previously filed as an Exhibit to the Company's Report on Form 10-KSB dated March 24, 2005 and is incorporated herein by reference. (C) This Exhibit was previously filed as an Exhibit to the Company's Report on Form 10-Q dated November 13, 1997, and is incorporated herein by reference. (D) This Exhibit was previously filed as an Exhibit to the Company's Registration Statement on Form S-I (Registration No. 33-93220), effective August 1, 1995, and is incorporated herein by reference. (E) This Exhibit was previously filed as an Exhibit to the Company's Report on Form 8-K dated April 15, 2002, as incorporated herein by reference. (F) This Exhibit was previously filed as an Exhibit to the Company's Report on Form 10-QSB dated August 2, 2005, as incorporated herein by reference. (G) This Exhibit was previously filed as an Exhibit to the Company's Registration Statement on Form SB-2 (Registration No. 333-130095), effective December 14, 2005, and is incorporated herein by reference. (H) This Exhibit was previously filed as an Exhibit to the Company's Report on Form 10-KSB dated February 22, 2006, as incorporated herein by reference. 15 of 16 ORTHOMETRIX, INC. ----------------- FORM 10-QSB MARCH 31, 2006 -------------------------- 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. ORTHOMETRIX, INC. ----------------- BY: /s/ Reynald G. Bonmati -------------------------------------------- Reynald G. Bonmati President BY: /s/ Neil H. Koenig -------------------------------------------- Neil H. Koenig Chief Financial Officer (Principal Financial Officer) Dated: 5/10/06 ---------------------- 16 of 16