UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 31, 2005
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: 0-28132
LANVISION SYSTEMS, INC.
(Exact name of registrant as specified in its charter)
Delaware 31-1455414
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10200 Alliance Road, Suite 200
Cincinnati, Ohio 45242-4716
(Address of principal executive offices) (Zip Code)
(513) 794-7100
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
----- -----
Indicate by check mark whether the registrant is an accelerated filer (as
defined in Rule 12b-2 of the Exchange Act). Yes No X
----- -----
Indicate by check mark whether the registrant is a shell company (as
defined in Rule 12b-2 of the Exchange Act). Yes No X
----- -----
1
Number of shares of Registrant's Common Stock ($.01 par value per share)
issued and outstanding, as of August 31, 2005: 9,120,541.
2
TABLE OF CONTENTS
Page
----
Part I. FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements................... 4
Condensed Consolidated Balance Sheets at July 31, 2005 and
January 31, 2005.............................................. 4
Condensed Consolidated Statements of Operations for the three
and six months ended July 31, 2005 and 2004................... 6
Condensed Consolidated Statements of Cash Flows for the six
months ended July 31, 2005 and 2004........................... 7
Notes to Condensed Consolidated Financial Statements.......... 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations..................................... 13
Item 4. Controls and Procedures....................................... 24
Part II. OTHER INFORMATION
Item 1. Legal Proceedings............................................. 24
Item 3. Defaults on Senior Securities................................. 25
Item 6. Exhibits and Reports on Form 8-K.............................. 25
Signatures.................................................... 26
3
PART I. FINANCIAL INFORMATION
Item 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
LANVISION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
July 31, January 31,
2005 2005
----------- -----------
Assets
Current assets:
Cash (restricted by long-term debt agreement) $ 4,167,521 $ 4,181,073
Accounts receivable, net of allowance for doubtful
accounts of $200,000, respectively 1,577,285 1,901,846
Contract receivables 1,396,192 1,404,364
Prepaid expenses 479,297 377,116
Deferred tax asset 309,000 309,000
----------- -----------
Total current assets 7,929,295 8,173,399
Property and equipment:
Computer equipment 1,732,431 1,501,796
Computer software 938,232 832,304
Office furniture, fixtures and equipment 726,215 537,137
Leasehold improvements 520,322 37,504
----------- -----------
3,917,200 2,908,741
Accumulated depreciation and amortization (2,319,303) (1,996,129)
----------- -----------
1,597,897 912,612
Capitalized software development costs, net of accumulated
amortization of $3,633,230 and $3,233,228, respectively 2,256,699 2,056,701
Other, including deferred taxes 708,241 850,523
----------- -----------
$12,492,132 $11,993,235
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
4
LANVISION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited) (Audited)
July 31, January 31,
2005 2005
------------ ------------
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 858,934 $ 886,090
Accrued compensation 409,801 276,292
Accrued other expenses 742,323 719,135
Deferred revenues 2,191,968 2,231,442
Long-term debt, current portion 1,000,000 --
Current portion of capitalized leases 52,406 168,121
------------ ------------
Total current liabilities 5,255,432 4,281,080
Long-term debt, non-current portion 1,000,000 2,000,000
Non-current lease incentives 237,091 --
Stockholders' equity:
Convertible redeemable preferred stock, $.01 par value per share
5,000,000 shares authorized -- --
Common stock, $.01 par value per share, 25,000,000 shares
authorized, 9,120,541 and 9,084,535 shares issued, respectively 91,205 90,845
Capital in excess of par value 35,047,305 35,002,961
Accumulated (deficit) (29,138,901) (29,381,651)
------------ ------------
Total stockholders' equity 5,999,609 5,712,155
------------ ------------
$ 12,492,132 $ 11,993,235
============ ============
See Notes to Condensed Consolidated Financial Statements.
5
LANVISION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three and Six Months Ended July 31,
(Unaudited)
Three Months Six Months
----------------------- -----------------------
2005 2004 2005 2004
---------- ---------- ---------- ----------
Revenues:
Systems sales $1,571,893 $ 165,467 $1,712,697 $ 452,350
Services, maintenance and support 1,753,322 1,755,512 3,552,346 3,477,170
Application-hosting services 740,516 637,316 1,497,561 1,270,330
---------- ---------- ---------- ----------
Total revenues 4,065,731 2,558,295 6,762,604 5,199,850
Operating expenses:
Cost of systems sales 666,753 241,238 946,940 600,150
Cost of services, maintenance and support 742,634 711,236 1,503,998 1,391,481
Cost of application-hosting services 237,793 221,147 488,695 437,795
Selling, general and administrative 1,291,927 924,805 2,348,808 1,838,273
Product research and development 579,428 543,791 1,181,085 1,057,790
---------- ---------- ---------- ----------
Total operating expenses 3,518,535 2,642,217 6,469,526 5,325,489
---------- ---------- ---------- ----------
Operating income (loss) 547,196 (83,922) 293,078 (125,639)
Other income (expense):
Interest income 20,097 15,091 37,891 39,194
Interest expense (31,024) (393,497) (71,219) (796,946)
---------- ---------- ---------- ----------
Earnings (loss) before taxes 536,269 (462,328) 259,750 (883,391)
Income taxes (17,000) -- (17,000) --
---------- ---------- ---------- ----------
Net earnings (loss) $ 519,269 $ (462,328) $ 242,750 $ (883,391)
========== ========== ========== ==========
Basic net earnings (loss) per common share $ 0.06 $ (0.05) $ 0.03 $ (0.10)
========== ========== ========== ==========
Diluted net earnings (loss) per common share
$ 0.06 $ (0.05) $ 0.03 $ (0.10)
========== ========== ========== ==========
Number of shares used in per common share computations:
Basic 9,108,146 9,067,700 9,097,564 9,051,973
========== ========== ========== ==========
Diluted 9,286,607 9,067,700 9,306,761 9,051,973
========== ========== ========== ==========
See Notes to Condensed Consolidated Financial Statements.
6
LANVISION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended July 31,
(Unaudited)
2005 2004
----------- -----------
Operating activities:
Net earnings (loss) $ 242,750 $ (883,391)
Adjustments to reconcile net earnings (loss) to net cash
Provided by (used for) operating activities:
Depreciation and amortization 723,176 585,127
Cash (used for) provided by assets and liabilities:
Accounts and contract receivables 332,733 2,495,933
Other current assets (102,181) (66,442)
Accounts payable and accrued expenses 129,541 (656,406)
Deferred revenues (39,474) (255,157)
----------- -----------
Net cash provided by operating activities 1,286,545 1,219,664
----------- -----------
Investing activities:
Purchases of property and equipment (682,459) (207,701)
Long-term lease incentive (88,909) --
Capitalization of software development costs (600,000) (499,998)
Other 142,282 (29,286)
----------- -----------
Net cash (used for) investing activities (1,229,086) (736,985)
----------- -----------
Financing activities:
Proceeds from issuance of long-term debt -- 3,500,000
Repayment of long-term debt -- (1,000,000)
Payment of long-tern accrued interest -- (4,635,169)
Payment of capitalized leases (115,715) (108,270)
Exercise of stock options and employee stock purchase plan 44,704 72,179
----------- -----------
Net cash (used for) financing activities (71,011) (2,171,260)
=========== ===========
(Decrease) in cash (13,552) (1,688,581)
Cash at beginning of period 4,181,073 6,227,236
----------- -----------
Cash at end of period $ 4,167,521 $ 4,538,655
=========== ===========
Supplemental cash flow disclosures:
Income taxes paid ( refund ) $ (27,874) $ 105,570
=========== ===========
Interest paid $ 42,233 $ 5,411,785
=========== ===========
Leasehold improvements (included in property and equipment)
paid for by the landlord as a lease inducement $ 326,000 $ --
=========== ===========
See Notes to Condensed Consolidated Financial Statements.
7
LANVISION SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - BASIS OF PRESENTATION
The accompanying unaudited Condensed Consolidated Financial Statements have been
prepared by LanVision Systems, Inc. ("LanVision or the Company") without audit,
in accordance with accounting principles generally accepted in the United States
for interim financial information, pursuant to the rules and regulations
applicable to quarterly reports on Form 10-Q of the U. S. Securities and
Exchange Commission. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation of
the Condensed Consolidated Financial Statements have been included. These
Condensed Consolidated Financial Statements should be read in conjunction with
the financial statements and notes thereto included in the most recent LanVision
Systems, Inc. Annual Report on Form 10-K, Commission File Number 0-28132.
Operating results for the three and six months ended July 31, 2005, are not
necessarily indicative of the results that may be expected for the fiscal year
ending January 31, 2006.
Note 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A summary of the Company's significant accounting policies is presented
beginning on page 37 of its fiscal year 2004 Annual Report to Stockholders on
Form 10-K. Users of financial information for interim periods are encouraged to
refer to the footnotes contained in the Annual Report to Stockholders when
reviewing interim financial results. There has been no material change in the
accounting policies followed by the Company during fiscal year 2005.
Note 3 - CHANGES IN BALANCE SHEET ACCOUNT BALANCES
The decrease in cash during the quarter results primarily from the increased
expenses associated with additional personnel and capital expenditures
associated with the new offices required to accommodate the Company's expansion
plans, during the quarter and the first six months.
The decrease in accounts and contract receivables is due to timing of
contractual billings and subsequent collections thereof.
Prepaid expenses consist of software and hardware awaiting installation (related
to unrecognized revenue) and prepaid expenses, including commissions.
The increase in property and equipment, is primarily the result of the an
increase in leasehold improvements resulting from the Company moving to new
leased facilities in February, and the acquisition of additional equipment to
accommodate the expanding staff.
8
Other non-current assets consist primarily of the deferred federal income tax
assets relating to the net operating loss carry forward.
The increase in accrued compensation results primarily from the increase in the
accrual for quarterly and annual bonuses payable under the employee bonus plans
because of additional personnel and an increase in the bonus pay out as a result
of achieving certain financial results in the current quarter of the current
fiscal year which financial results were not achieved and the financial results
portion of the bonus was not paid in the comparable prior quarter.
Note 4 - STOCK OPTIONS
During the first six months of the current fiscal year, the Company granted
50,000 stock options under all Plans. During the same period, 25,000 options
were forfeited and 24,000 options were exercised under all plans during the
first six months.
Statement of Financial Accounting Standards No. 123, Accounting for Stock-Based
Compensation, establishes a fair value method of financial accounting and
reporting for stock-based compensation plans. LanVision elected to continue to
account for stock options under the intrinsic value method prescribed by
Accounting Principles Board Opinion No. 25, Accounting for Stock Issued to
Employees and, accordingly, has adopted the disclosure only provisions of
Statement 123. At July 31, 2005, LanVision had two stock-based compensation
plans, the 1996 Employees Stock Purchase Plan, which is more fully disclosed in
Note 8 of the Notes to Consolidated Financial Statements in the Form 10-K for
the Fiscal year ended January 31, 2005 and the 2005 Incentive Compensation Plan,
which is more fully disclosed in the Form 8-K with the report date of May 25,
2005. No stock-based compensation cost is reflected in the Statements of
Operations, as the Employee Stock Purchase Plan is considered a non-compensatory
plan and all stock options granted had exercise prices equal to the fair market
value of the underlying common stock on the date of grant. The following table
illustrates the effect on net earnings and earnings per share as if LanVision
had applied the fair value recognition provisions of Statement of Financial
Accounting Standards No. 123, to stock-based employee compensation.
9
2005 2004
-------- ---------
Three months ended July 31,
Net earnings (loss), as reported $519,269 $(462,328)
Deduct: Total stock based compensation
expense determined under the fair
value based method for all awards, net
of related tax effects (15,108) (16,052)
-------- ---------
Pro forma net earnings (loss) $504,161 $(478,380)
======== =========
Earnings (loss) per share:
Basic - as reported $ 0.06 $ (0.05)
======== =========
Basic - pro forma $ 0.06 $ (0.05)
======== =========
Diluted - as reported $ 0.06 $ (0.05)
======== =========
Diluted - pro forma $ 0.05 $ (0.05)
======== =========
2005 2004
-------- ---------
Six months ended July 31,
Net earnings (loss), as reported $242,750 $(883,391)
-------- ---------
Deduct: Total stock based compensation
expense determined under the fair
value based method for all awards, net
of related tax effects (26,498) (31,125)
-------- ---------
Pro forma net earnings (loss) $216,252 $(914,516)
======== =========
Earnings (loss) per share:
Basic - as reported $ 0.03 $ (0.10)
======== =========
Basic - pro forma $ 0.02 $ (0.10)
======== =========
Diluted - as reported $ 0.03 $ (0.10)
======== =========
Diluted - pro forma $ 0.02 $ (0.10)
======== =========
The assumptions used to calculate the fair value of options granted are
evaluated and revised, as necessary, to reflect current market conditions and
prior experience.
Note 5 - Tax Provision
The current quarter tax provision is primarily state income taxes and federal
Alternative Minimum Taxes, after utilization of net operating carryforwards.
10
Note 6 - EARNINGS PER SHARE
The basic earnings (loss) per common share is calculated using the weighted
average number of common shares outstanding during the period.
The 2005 diluted net earnings per common share calculation, is based on the
weighted average number of common shares outstanding adjusted for the dilutive
effect of the common stock equivalents (stock options and the employee stock
purchase plan) of 178,461 shares in the second quarter and 209,197 shares in the
first six months of 2005. The Company had approximately 100,775 option shares
outstanding at July 31, 2005 that were not included in the diluted net earnings
per share calculations as the inclusion thereof would be antidilutive.
The 2004 diluted net (loss) per common share calculation, excludes the effect of
the common stock equivalents (stock options), as the inclusion thereof would be
antidilutive. The Company had approximately 525,000 option shares outstanding at
July 31, 2004 that were not included in the diluted net (loss) per share
calculation as the inclusion thereof would be antidilutive.
In December 2004, the Financial Accounting Standards Board adopted Statement of
Financial Accounting Standards No, 123 (revised 2004) - Share-Based Payment. The
statement establishes new accounting standards for entities which exchange
equity instruments (e.g. stock options, restricted stock, stock appreciation
rights, employee stock purchase plans etc.) for goods or services. Based upon an
initial review of the standard, the Company does not believe the impact will be
material with respect to previously issued, outstanding and unvested stock
options and can not predict with any reasonable certainty the impact, of future
equity awards, if any are awarded, that may be granted by the Board of Directors
because the financial statement impact is determined based upon a number of
factors including the number of grants awarded.
Note 6 - CONTRACTUAL OBLIGATIONS
The following table details the remaining obligations, by fiscal year, as of the
end of the quarter for the capitalized leases, long-term debt, other commitments
and the operating leases.
Total 2005 2006 2007 2008 2009
---------- -------- ---------- ---------- -------- --------
Capitalized leases $ 53,286 $ 53,286 $ -- $ -- $ -- $ --
Long-term debt 2,000,000 -- 1,000,000 1,000,000 -- --
Other commitments 25,000 25,000 -- -- -- --
Operating leases 1,650,534 208,118 390,103 359,601 350,228 342,484
---------- -------- ---------- ---------- -------- --------
Total $3,728,820 $286,404 $1,390,103 $1,359,601 $350,228 $342,484
========== ======== ========== ========== ======== ========
Capitalized Leases
During fiscal year 2002, LanVision acquired computer equipment and related
software for a new application-hosting services data center, which are accounted
for as capitalized leases. The amount of the leased assets by category is
computer equipment $372,705; computer software $196,799; and prepaid maintenance
and expenses $84,626, for a total of $654,130 in new assets.
11
The leases are payable monthly in installments of $19,991, through August 2005
and an additional amount of $8,323, through December 2005. The present value of
the future lease payments upon lease inception was $654,130 using the interest
rates implicit in the lease agreements at the inception of the leases.
Long-term Debt
In July 2004, LanVision entered into a new three year working capital term loan
agreement, as amended in June 2005. The long-term debt of $2,000,000 is secured
by all of the assets of LanVision and the loan agreement restricts LanVision
from incurring additional indebtedness for borrowed money, including capitalized
leases, etc. without lender consent. The loan is repayable in two installments,
which are due and payable of not less than $1,000,000 by July 30, 2006 and
$1,000,000 by July 30, 2007 and interest is payable quarterly, at the bank's
prime rate (currently 6.50%). In addition, LanVision was previously required to
meet certain financial covenants, including; minimum level of tangible net
worth, fixed charge coverage ratio and funded indebtedness to earnings before
interest, taxes, depreciation and amortization. However, the lender has waived
compliance with these covenants and has verbally agreed to revise the current
loan agreement to remove the aforementioned financial covenants. Also, LanVision
has agreed to maintain a minimum cash balance of $2,000,000 through the earlier
of the repayment or maturity of the loan on July 31, 2007.
In 1998, LanVision issued a $6,000,000 note which was repaid in full in July,
2004. In connection with the issuance of the note, LanVision issued Warrants to
purchase 750,000 shares of Common Stock of LanVision at $3.87 per share at any
time through July 16, 2008. The Warrants are subject to customary antidilution
and registration rights provisions.
Warranties and Indemnities
LanVision provides for the estimated cost of the product warranties at the time
revenue is recognized. Should products fail to meet certain performance
standards for an initial warranty period, LanVision's estimated warranty
liability might need to be increased. LanVision bases its warranty estimates on
the nature of any performance complaint, the effort necessary to resolve the
issue, customer requirements and any potential concessions, which may be
required to be granted to a customer, which result from performance issues.
LanVision's ASPeN(SM) application-hosting services guarantees specific "up-time"
and "response time" performance standards, which, if not met may result in
reduced revenues, as a penalty, for the month in which the standards are not
met. LanVision's standard agreements with its customers also usually include
provisions to indemnify them from and against third party claims, liabilities,
damages, and expenses arising out of LanVision's operation of its business or
any negligent act or omission of LanVision. To date, LanVision has always
maintained the ASPeN performance standards and has not been required to make any
material penalty payments to customers or indemnify any customers for any
material third party claims. At July 31, 2005 and January 31, 2005, LanVision
had a warranty reserve in the amount of $250,000. Each contract is reviewed
quarterly with the appropriate LanVision Client Manager to determine the need
for a warranty
12
reserve based upon the most currently available information as to the status of
the contract, the customer comments, if any, and the status of any open or
unresolved issues with the customer.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
In addition to historical information contained herein, this Quarterly Report on
Form 10-Q contains forward-looking statements. The forward-looking statements
contained herein are subject to certain risks and uncertainties that could cause
actual results to differ materially from those reflected in the forward-looking
statements, included herein. These risks and uncertainties include, but are not
limited to, the impact of competitive products and pricing, product demand and
market acceptance, new product development, key strategic alliances with vendors
that resell LanVision products, the ability of LanVision to control costs,
availability of products obtained from third-party vendors, the healthcare
regulatory environment, healthcare information system budgets, availability of
healthcare information systems trained personnel for implementation of new
systems, as well as maintenance of legacy systems, fluctuations in operating
results and other risk factors that might cause such differences including those
discussed herein. Readers are cautioned not to place undue reliance on these
forward-looking statements, which reflect management's analysis only as of the
date hereof. The Registrant undertakes no obligation to publicly revise these
forward-looking statements, to reflect events or circumstances that arise after
the date hereof. Readers should carefully review the risk factors described in
other documents LanVision files from time to time with the Securities and
Exchange Commission, including Quarterly Reports on Form 10-Q and any Current
Reports on Form 8-K.
LanVision's discussion and analysis of its financial condition and results of
operations are based upon its consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States. The preparation of these financial statements requires LanVision
to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues, and expenses, and related disclosure of contingent
liabilities. On an ongoing basis, LanVision evaluates its estimates, including
those related to product revenues, bad debts, capitalized software development
costs, income taxes, warranty obligations, support contracts, contingencies, and
litigation. LanVision bases its estimates on historical experience and on
various other assumptions that LanVision believes are reasonable under the
circumstances, the results of which form the basis for making judgments about
the carrying values of assets and liabilities and revenue recognition. Actual
results may differ from these estimates under different assumptions or
conditions.
Federal and state laws regulate the confidentiality of patient records and the
circumstances under which such records may be released. These regulations govern
both the disclosure and use of confidential patient health information.
Regulations governing electronic health data privacy are evolving and may have
an impact on the Company. The Company believes that the features and
architecture of LanVision's products are such that it currently supports or
should be able to make the necessary modifications to its products, if required,
to ensure support of evolving regulations.
13
The Securities and Exchange Commission and Federal law, specifically the
Sarbanes-Oxley Act, will impose on the Company additional compliance starting in
fiscal year 2006. The Company has undertaken a project to ensure compliance, but
is unable, at this time, to determine the cost and extent of the changes
required to comply. To date the expenses related to this effort have not been
material.
RESULTS OF OPERATIONS
GENERAL
LanVision is a healthcare information technology company doing business as
"Streamline Health(TM)", which is focused on solutions that improve
document-centric information flows and complement and enhance existing
transaction-centric healthcare information systems. The Company's workflow and
document management solutions bridge the gap between current, predominantly
paper-based processes and transaction-based healthcare information systems by 1)
electronically capturing document-centric information from disparate sources, 2)
electronically directing that information through vital business processes, and
3) providing access to the information to authenticated users (such as
physicians, nurses, administrative and financial personnel and payers) across
the continuum of care.
The Company's workflow-based products and services offer solutions to specific
healthcare business processes within the revenue cycle, such as remote coding,
abstracting and chart completion, remote physician order processing,
pre-admission registration scanning, insurance verification, denial management,
secondary billing services, explanation of benefits processing and release of
information processing, as well as the Supply Chain Management and Human
Resources departments of the healthcare enterprise.
LanVision's products and services also create an integrated document-centric
repository of historical health information that is complementary and can be
seamlessly "bolted on" to existing transaction-centric clinical, financial and
management information systems, allowing healthcare providers to aggressively
move toward fully Electronic Medical Record processes while improving service
levels and convenience for all stakeholders. These integrated systems allow
providers and administrators to dramatically improve the availability of patient
information while decreasing direct costs associated with document retrieval,
work-in-process, chart completion, document retention and archiving.
LanVision's systems can be provided on a subscription basis via remote
application-hosting services or installed locally. LanVision provides its
ASPeN(SM), Application Service Provider-based application-hosting services to,
among others, The University Hospital, a member of The Health Alliance of
Greater Cincinnati, M.D. Anderson Cancer Center and Children's Medical Center of
Columbus, OH among others. In addition, LanVision has installed its workflow and
document management solutions at leading healthcare providers including Stanford
Hospital and Clinics, the Albert Einstein Healthcare Network, Beth Israel
Medical Centers, the University of Pittsburgh Medical Center, Medical University
Hospital Authority of South Carolina, and Memorial Sloan-Kettering Cancer
Center.
14
LanVision's applications allow authenticated users, such as physicians, nurses,
administrative and financial personnel, and payers, with access to patient
healthcare information that exists in disparate systems across the continuum of
care and improve operational efficiencies through business process
re-engineering and automating labor-intensive and demanding paper environments.
LanVision's applications and services are complementary to existing clinical and
financial systems, and use document imaging and advanced workflow tools to
ensure users can electronically access both "structured" and "unstructured"
patient data and all the various forms of clinical and financial healthcare
information from a single permanent and secure repository, including clinician's
handwritten notes, laboratory reports, photographs, insurance cards, etc.
LanVision's workflow solutions offer value to all of the constituents in the
healthcare delivery process by enabling them to simultaneously access and
utilize LanVision's advanced technological workflow applications to process the
document-centric information, on a real-time basis from virtually any location,
including the physician's desktop, using Web-based technology. LanVision's
solutions integrate its own proprietary imaging platform, application workflow
modules and image and web-enabling tools that allow for the seamless merger of
"back office" functionality with existing Clinical and Financial Information
Systems at the desktop.
LanVision offers its own document imaging/management infrastructure (Foundation
Suite) that is built for high volume transaction processing and is specifically
designed for the healthcare industry. In addition to providing access to
information not previously available at the desktop, LanVision's applications
fulfill the administrative and legal needs of the Medical Records and Patient
Financial Services, Supply Chain Management and Human Resources departments.
Furthermore, these systems have been specifically designed to integrate with any
Clinical Information System. For example, LanVision has integrated its products
with selected systems from Siemens Medical Solutions Health Services
Corporation, Cerner Corporation and IDX Information Systems Corporation (IDX)
applications. By offering electronic access to all the patient information
components of the medical record, this integration completes one of the most
difficult tasks necessary to provide a true Electronic Medical Record.
LanVision's systems deliver on-line enterprisewide access to fully updated
patient information, which historically was maintained on a variety of media,
including paper, magnetic disk, optical disk, and microfilm.
LanVision operates in one segment as a provider of health information technology
solutions that streamline document-centric information flows.
Historically, LanVision has derived most of its revenues from systems sales,
recurring application-hosting services, recurring maintenance fees and
professional services involving the licensing, either directly or through
remarketing partners, of its Medical Record Workflow and Revenue Cycle
Management solutions to Integrated Healthcare Delivery Networks (IDN). In a
typical transaction, LanVision, or its remarketing partners, enter into a
perpetual license or fee-for-service subscription agreement for LanVision's
software application suite and may license or sell other third-party software
and hardware components to the IDN. Additionally, LanVision, provides
professional services, including implementation, training, and product support.
15
With respect to systems sales, LanVision earns its highest margins on
proprietary LanVision software or application-hosting services and the lowest
margins on third-party hardware. Systems sales to customers may include
different configurations of LanVision software, hardware and professional
services, resulting in varying margins among contracts. The margins on
professional services revenues fluctuate based upon the negotiated terms of the
agreement with each customer and LanVision's ability to fully utilize its
professional services, maintenance, and support services staff.
Beginning in 1998, LanVision began offering customers the ability to obtain its
workflow solutions on an application-hosting basis as an Application Service
Provider (ASP). LanVision established a hosting data center and installed
LanVision's suite of workflow products, called ASPeN (Application Service
Provider eHealth Network) within the hosting data center. Under this
arrangement, customers electronically capture information and securely transmit
the data to the hosting data center. The ASPeN services store and manage the
data using LanVision's suite of applications, and customers can view, print,
fax, and process the information from anywhere using the LanVision Web-based
applications. LanVision charges and recognizes revenue for these ASPeN services
on a per transaction or subscription basis as information is captured, stored,
retrieved and processed.
The decisions by a healthcare provider to replace, substantially modify, or
upgrade its information systems are a strategic decision and often involve a
large capital commitment requiring an extended approval process. Since
inception, LanVision has experienced extended sales cycles, which has adversely
affected revenues. It is not uncommon for sales cycles to take six to eighteen
months from initial contact to the execution of an agreement. As a result, the
sales cycles can cause significant variations in quarter-to-quarter operating
results. These agreements cover the entire implementation and maintenance of the
system and specify the installation schedule, which typically takes place in one
or more phases. The licensing agreements generally provide for the licensing of
LanVision's proprietary software and third-party software with a perpetual or
term license fee that is adjusted depending on the number of concurrent users or
workstations using the software. Third-party hardware is sold outright, with a
one-time fee charged for installation and training. Site-specific customization,
interfaces with existing customer systems and other consulting services are sold
on a fixed fee or a time and materials basis. Alternatively, with LanVision's
ASPeN services solution, the application-hosting services agreements generally
provide for utilizing LanVision's software and third-party software on a fee per
transaction or recurring subscription basis.
ASPeN services was designed to overcome obstacles in the buying decision such as
large capital commitment, length of implementation, and the scarcity of time for
Healthcare Information Systems ("HIS") personnel to implement new systems.
LanVision believes that IDN's and smaller healthcare providers are looking for
this type of ASP application because of the ease of implementation and lower
entry-level costs. LanVision believes its business model is especially well
suited for the medium to small acute care facility marketplace as well as the
ambulatory marketplace and is actively pursuing remarketing agreements, in
addition to those discussed below, with other HIS and staff outsourcing
providers to distribute LanVision's workflow solutions.
16
Generally, revenues from systems sales are recognized when an agreement is
signed and products are made available to end-users. Revenue recognition related
to routine installation, integration and project management are deferred until
the work is performed. If an agreement requires LanVision to perform services
and modifications that are deemed significant to system acceptance, revenues are
recorded either on the percentage-of-completion method or revenue related to the
delivered hardware and software components is deferred until such obligations
are deemed insignificant, depending on the contractual terms. Revenues from
consulting, training, and application-hosting services are recognized as the
services are performed. Revenues from short-term support and maintenance
agreements are recognized ratably over the term of the agreements. Billings to
customers recorded prior to the recognition of the revenue are classified as
deferred revenues. Revenues recognized prior to progress billings to customers
are recorded as contract receivables.
LanVision has entered into third party agreements to market, remarket or refer
business to LanVision, including: a five year Reseller Agreement, signed in
January 2002, with IDX Information Systems Corporation. Under the terms of the
agreement, IDX was granted a non-exclusive worldwide license to distribute all
LanVision workflow software including accessANYware(TM), codingANYware(TM), and
ASPeN(SM) application-hosting services to IDX customers and prospective
customers, as defined in the Remarketing Agreement. LanVision has also signed a
Marketing and Referral Agreement with the 3M Health Information Systems, a
division of Minnesota Mining & Manufacturing Co., whereby 3M Health Information
Systems and LanVision entered into a referral marketing agreement for its
product codingANYware.
LanVision's quarterly operating results have varied in the past and may continue
to do so in the future because of various reasons including: demand for
LanVision's products and services, long sales cycles, and extended installation
and implementation cycles based on customer's schedules. Sales are often delayed
because of customers' budgets and competing capital expenditure needs as well as
personnel resource constraints within an integrated delivery network.
Delays in anticipated sales or installations may have a significant impact on
LanVision's quarterly revenues and operating results, because substantial
portions of its operating expenses are relatively fixed.
UNEVEN PATTERNS OF QUARTERLY OPERATING RESULTS
The Company's revenues from systems sales have varied, and may continue to vary,
significantly from quarter-to-quarter because of the volume and timing of
systems sales and delivery. Professional services revenues also fluctuate from
quarter-to-quarter because of the timing of the installation of software and
hardware, project management and customized programming. Revenues from
maintenance services do not fluctuate significantly from quarter-to-quarter, but
have been increasing as the number of customers increase. Revenues from ASP
application-hosting services operations are expected to increase over time, as
more hospitals outsource services to LanVision's ASPeN ASP Division, its
partners begin to utilize the software, and existing customers increase the
volume of documents stored on the systems, and the number of retrievals
increase.
17
The Company's revenues and operating results may vary significantly from
quarter-to-quarter because of a number of other factors, many of which are
outside the Company's control. These factors include the relatively high
purchase price of a system, unpredictability in the number and timing of systems
sales, length of the sales cycle, delays in the installation process, and
changes in the customer's financial condition or budget and the sales activities
of the remarketing partners. As a result, period-to-period comparisons may not
be meaningful with respect to the past operations of the Company nor are they
necessarily indicative of the future operations of the Company.
REVENUES
Revenues for the second fiscal quarter ended July 31, 2005, were $4,065,731,
compared with $2,558,295 reported in the comparable quarter of 2004. The
increase was primarily the result of the signing of a significant new software
licensing agreement and increases in Application Hosting revenues when compared
to the prior comparable period.
Revenues for the first six months ended July 31, 2005, were $6,762,604, compared
with $5,199,850 reported in the comparable period of 2004. The increase was
primarily the result of a strong second quarter which significantly improved
revenues as noted above thus improving the first six months when compared to the
prior comparable period.
OPERATING EXPENSES
Cost of Systems Sales
The cost of systems sales includes amortization of capitalized software
development costs on a straight-line basis, royalties and the cost of third
party software and hardware. Cost of systems sales as a percentage of systems
sales may vary from period to period depending on the mix of hardware and
software of the systems or add-on sales delivered.
The cost of systems sales as a percentage of systems sales for the second
quarter of fiscal 2005 and 2004 were 42% and 146%, respectively. The decrease
results from increased software licensing revenues in the current period when
compared to the comparable prior period.
The cost of systems sales as a percentage of systems sales for the first six
months of fiscal 2005 and 2004 were 55% and 132%, respectively. The decrease
results from increased software licensing revenues in the current period when
compared to the comparable prior period.
Cost of Services, Maintenance and Support
The cost of services, maintenance and support includes compensation and benefits
for support and professional services personnel and the cost of third party
maintenance contracts. The Company's support margins are highest on LanVision's
proprietary software. Accordingly, margins improve as more customers are added.
18
As a percentage of services, maintenance and support revenues, the cost of such
services, maintenance and support was 42% and 40% for the second quarter of
fiscal 2005 and 2004, respectively.
As a percentage of services, maintenance and support revenues, the cost of such
services, maintenance and support was 42% and 40% for the first six months of
fiscal 2005 and 2004, respectively.
Cost of Application-hosting services
The cost of application-hosting services includes compensation and benefits for
hosting center personnel, the cost of third party maintenance contracts,
occupancy and depreciation on the hosting center equipment.
As a percentage of application-hosting revenues, the cost of application-hosting
was 32% and 35% for the second quarter of fiscal 2005 and 2004, respectively.
As a percentage of application-hosting revenues, the cost of application-hosting
was 33% and 34% for the first six months of fiscal 2005 and 2004, respectively.
The decline in the cost percentage reflects the higher revenues from existing
clients without a corresponding increase in operating costs.
Selling, General and Administrative
Selling, General and Administrative expenses consist primarily of compensation
and related benefits and reimbursable travel and living expenses related to the
Company's sales, marketing and administrative personnel; advertising and
marketing expenses, including trade shows and similar type sales and marketing
expenses; and general corporate expenses, including occupancy costs.
During the second quarter of fiscal 2005, Selling, General and Administrative
expenses were $1,291,927 compared with $924,805 in the comparable prior period.
The increase when compared with the comparable prior quarter was primarily the
result of increased headcount and bonuses accrued during the current period that
were not accrued during the prior comparable period when such bonuses were not
earned under the bonus plan.
During the first six months of fiscal year 2005, Selling, General and
Administrative expenses were $2,348,808 compared with $1,838,273 in the
comparable prior period. The increase when compared with the comparable prior
quarter was primarily the result of increased headcount and bonuses accrued
during the current period that were not accrued during the prior comparable
period when such bonuses were not earned under the bonus plan.
19
Demand for Medical Record technologies and healthcare information access systems
is growing and the frequency of requests for proposals received is increasing.
Accordingly, the Company has increased its sales and marketing efforts to take
advantage of current market opportunities.
Product Research and Development
Product research and development expenses consist primarily of compensation and
related benefits; the use of independent contractors for specific development
projects; and an allocated portion of general overhead costs, including
occupancy.
During the second quarter, research and development expenses of $579,428
increased compared with $543,791 in the comparable prior quarter. The increase
results primarily from additional staff associated with new products under
development in 2005.
During the six months, research and development expenses were $1,181,085
compared with $1,057,790 in the comparable prior period. The increase results
primarily from additional staff associated with new products under development
in 2005 and are expected to increase in the third quarter as additional staff is
hired and additional contractors retained to expedite the completion of these
new products.
The Company monitors closely and augments its Research and Development staff, as
necessary, with outside contractors to assist with the development and testing
of new products. The Company capitalized, in accordance with Statement of
Financial Accounting Standards No. 86, approximately $300,000 and $250,000 of
product research and development costs in the second quarter of fiscal 2005 and
2004, respectively, and approximately $600,000 and $500,000 of product research
and development costs in the first six months of fiscal 2005 and 2004,
respectively.
Operating income (loss)
The operating income for the second quarter of fiscal 2005 was $547,196 compared
with an operating loss of ($83,922) in the second quarter of fiscal 2004. The
increase in operating income is primarily the result of increased system sales,
and in particular software licensing revenues in the current quarter, as noted
above.
The operating income for the first six months of fiscal year 2005 was $293,078
compared with an operating loss of ($125,639) in the first six months of 2004.
The increase is primarily the result of the strong second quarter, as discussed
above.
Interest income consists primarily of interest on invested cash. The decrease
for the six months in interest income results from decreased average cash
balances.
Interest expense relates primarily to the long-term debt and includes the
interest expense on the capitalized leases. The decrease results from the
repayment, in July 2004, of the high interest rate debt and replacing it with a
smaller loan with a more conventional rate.
20
The current quarter tax provision is primarily state income taxes and federal
Alternative Minimum Taxes, after utilization of net operating carryforwards.
Net earnings (loss)
The net earnings for the second quarter of fiscal 2005 was $519,269 ($0.06 per
share) compared with a net loss of ($462,328) ($0.05 per share loss) in the
second quarter of fiscal 2004. This increase results primarily from an increase
in system sales software licensing revenues offset by increased expenses.
The net earnings for the first six months of fiscal year 2005 was $242,750
($0.03 per share) compared with net (loss) of ($883,391) or ($0.10 per share
loss) in the first six months of fiscal year 2004. This increase is primarily
the result of primarily the strong second quarter operations and reduced
interest expense of more that $725,000, as noted above.
Notwithstanding the less than anticipated number of new customer agreements
signed in the first two quarters, management continues to believe that the
healthcare document imaging and workflow market is going to be a significant
market. Management believes it has made, and continues to make, significant
investments in the talent and technology necessary to establish the Company as a
leader in this marketplace, and continues to believe the Company is well
positioned to experience significant revenue growth.
Since commencing operations in 1989, the Company has incurred operating losses.
Although the Company achieved profitability in fiscal years 1992, 1993, and 2000
through 2004, the Company incurred a net (loss) in fiscal years 1994 through
1999. In view of the Company's prior operating history, there can be no
assurance that the Company will be able to achieve consistent profitability on a
quarterly or annual basis or that it will be able to sustain or increase its
revenue growth in future periods. Based upon the expenses associated with
current and planned staffing levels, profitability is dependent upon increasing
revenues.
LIQUIDITY AND CAPITAL RESOURCES
During the last seven fiscal years, LanVision has funded its operations, working
capital needs, and capital expenditures primarily from a combination of cash
generated by operations, and a $6,000,000 1998 working capital loan and
$3,500,000 2004 refinancing loan. LanVision's liquidity is dependent upon
numerous factors including: the timing and amount of revenues and collection of
contractual amounts from customers, amounts invested in research and
development, capital expenditures, and the level of operating expenses, all of
which can vary significantly from quarter-to-quarter.
LanVision's customers typically have been well-established hospitals or medical
facilities or major HIS companies that resell LanVision' products, which have
good credit histories and payments have usually been received within normal time
frames for the industry. However, some healthcare organizations have experienced
significant operating losses as a result of limits
21
on third-party reimbursements from insurance companies and governmental
entities. Accordingly, some customers are not current in the payment of their
invoices to the Company. Based on past experience, the past due accounts do not
represent an unreasonable risk, and the Company believes they will be paid.
Agreements with customers often involve significant amounts and contract terms
typically require customers to make progress payments.
LanVision has no significant obligations for capital resources, other than as
noted in note 6 to the financial statements included herein. Capital
expenditures for property and equipment in 2005 are not expected to exceed
$1,500,000 (including leasehold improvements of which $326,000 was provided by
the landlord as a lease incentive).
Over the last several years, LanVision's revenues were less than its internal
plans. However, during the same period, LanVision has expended significant
amounts for capital expenditures, product research and development, support and
consulting expenses and debt repayments. This resulted in significant net cash
outlays over the last five years. Although LanVision reduced staffing levels and
related expenses during the period 2001 - 2004, it was able to improve operating
results in years 2001 - 2003 when compared to the period 1996 - 2000. However,
the stringent expense controls and reduced staffing, caused by the necessity to
retire the 1998 long-term debt, hampered the growth of revenues during the last
three years. Accordingly, to continue to achieve increasing revenues and
profitability, it is necessary for the Company to significantly increase sales
and marketing expenses and research and development expenses for new products in
fiscal 2005. The Company believes that this strategic initiative to expand sales
and marketing should produce improved results in 2005 and beyond as the expanded
sales and marketing efforts begin to produce results. However, there can be no
assurance LanVision will be able to do so.
At July 31, 2005, LanVision had cash of $4,167,521. Under the terms of its loan
agreement, as amended, LanVision has agreed to maintain a minimum cash balance
of $2,000,000 through the earlier of the repayment or maturity of the loan on
July 31, 2007. The current loan can be repaid at any time without penalty.
LanVision has carefully monitored operating expenses during the last five fiscal
years. Notwithstanding the current levels of revenues and operating profit, for
the foreseeable future, LanVision will need to continually assess its revenue
prospects compared to its then current expenditure levels. If it does not appear
likely that revenues will increase, it may be necessary to reduce operating
expenses or raise cash through additional borrowings, the sale of assets, or
other equity financing. Certain of these actions will require current lender
approval. However, there can be no assurance LanVision will be successful in any
of these efforts. If it is necessary to significantly reduce operating expenses,
this could have an adverse effect on future operating performance.
LanVision believes that its present cash position, combined with cash generation
currently anticipated from operations, will be sufficient to meet anticipated
cash requirements during the remainder of fiscal year 2005.
To date, inflation has not had a material impact on LanVision's revenues or
expenses.
22
Net cash provided by operations in fiscal 2004 exceeded $3,000,000, up from
approximately $2,000,000 in the prior two fiscal years primarily because of the
collection of unbilled receivables in 2004. Cash was used in fiscal 2004
primarily for financing activities, primarily the repayment of debt. Future cash
flow from operations is dependent upon revenues and the terms and conditions
relating to the timing of payments of new agreements. In 2005, the Company
intends to invest in additional operating expenses, leasehold improvements and
equipment which will reduce the amount of cash flow from operations available
for investing and financing activities. During the first six months the net cash
provided by operations was approximately $1.286 million and net cash uses for
investing activities was approximately $1.229 million, resulting primarily from
the move to new facilities and the purchase of additional equipment for the
expanding operations, primarily additional headcount during the first six
months. It is not currently anticipated that such a substantial additional
expenditure for leasehold improvements and equipment will be necessary during
the remainder of the fiscal year. The total cash, notwithstanding the increased
expenditures decreased only $13,552 during the first six months.
SIGNED AGREEMENTS - BACKLOG
LanVision, or its remarketing partners, enter into master agreements with their
customers to specify the scope of the system to be installed and services to be
provided, the agreed upon aggregate price and the timetable for implementation.
The master agreement typically provides that the Company, or its remarketing
partner, will deliver the system in phases pursuant to the customer's purchase
orders, thereby allowing the customer flexibility in the timing of its receipt
of systems and to make adjustments that may arise based upon changes in
technology or changes in customer needs. The master agreement also allows the
customer to request additional components as the installation progresses, which
additions are then separately negotiated as to price and terms. Historically,
customers have ultimately purchased systems and services in addition to those
originally contemplated by the master agreement. Although there can be no
assurance that customers will continue in the future to expand their systems and
purchase additional licenses and services, LanVision believes, based on its past
experience, that its customers will expand their existing systems.
At July 31, 2005, LanVision has master agreements, purchase orders or royalty
reports from remarketing partners for systems and related services (excluding
support and maintenance, and transaction-based revenues for the
application-hosting services), which have not been delivered, installed and
accepted which, if fully performed, will generate future revenues of
approximately $3,300,000. The related products and services are expected to be
delivered over the next two to three years. Furthermore, LanVision has entered
into application-hosting agreements, which are expected to generate revenues in
excess of $6,500,000, through their respective renewal dates in fiscal 2006
through 2007.
LanVision's master agreements also generally provide for an initial maintenance
period and give the customer the right to subscribe for maintenance and support
services on a monthly, quarterly, or annual basis. Maintenance and support
revenues for fiscal years 2004, 2003 and 2002 were approximately $5,220,000,
$4,712,000 and $4,176,000, respectively. Maintenance and support
23
revenues are expected to increase in 2005. At July 31, 2005, LanVision had
maintenance agreements, purchase orders or royalty reports from remarketing
partners for maintenance, which if fully performed, will generate future
revenues of approximately $2,800,000, through their respective renewal dates in
fiscal 2005 and 2006.
The commencement of revenue recognition varies depending on the size and
complexity of the system; the implementation schedule requested by the customer
and usage by customers of the application-hosting services. Therefore, LanVision
is unable to predict accurately the revenue it expects to achieve in any
particular period. LanVision's master agreements generally provide that the
customer may terminate its agreement upon a material breach by LanVision, or may
delay certain aspects of the installation. There can be no assurance that a
customer will not cancel all or any portion of master agreement or delay
installations. A termination or installation delay of one or more phases of an
agreement, or the failure of LanVision to procure additional agreements, could
have a material adverse effect on LanVision's business, financial condition, and
results of operations.
Item 4. Controls and Procedures
LanVision maintains disclosure controls and procedures that are designed to
ensure that information required to be disclosed in LanVision's Exchange Act
reports is recorded, processed, summarized and reported within the time periods
specified in the SEC's rules and forms, and that such information is accumulated
and communicated to LanVision's management, including its Chief Executive
Officer and Chief Financial Officer, as appropriate, to allow timely decisions
regarding required disclosure based closely on the definition of "disclosure
controls and procedures" in Rule 13a-15(e) and 15d-15(e) of The Securities and
Exchange Act of 1934, as amended. In designing and evaluating the disclosure
controls and procedures, management recognized that any controls and procedures,
no matter how well designed and operated, can provide only reasonable assurance
of achieving the desired control objectives, and management necessarily was
required to apply its judgment in evaluating the cost-benefit relationship of
possible controls and procedures.
As of the end of the period covered by this report, an evaluation was performed
under the supervision and with the participation of LanVision's senior
management, including the Chief Executive Officer and Chief Financial Officer,
of the effectiveness of the design and operation of LanVision's disclosure
controls and procedures. Based on that evaluation, LanVision's management,
including the Chief Executive and Chief Financial Officer, concluded that
LanVision's disclosure controls and procedures were effective as of the end of
the period covered by this report. There have been no significant changes in
LanVision's internal control or in the other controls that could significantly
affect internal controls subsequent to the date LanVision completed its
evaluation. Therefore, no corrective actions were taken.
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
LanVision is, from time-to-time, a party to various legal proceedings and
claims, which arise, in
24
the ordinary course of business. LanVision is not aware of any legal matters
that will have a material adverse effect on LanVision's consolidated results of
operations or consolidated financial position.
Item 3. DEFAULTS ON SENIOR SECURITIES
The Company is not in default under its existing Loan Agreement.
Item 6. EXHIBITS
(a) Exhibits
3.1 Certificate of Incorporation of LanVision Systems, Inc. (*)
3.2 Bylaws of LanVision Systems, Inc. (*)
10 Third Amendment to the Lease for office space between LanVision, Inc.
(a wholly owned subsidiary) and The Western and Southern Life
Insurance Company, effective January 31, 2005.
11 Computation of Earnings (Loss) Per Common Share
31.1 Certification of Chief Executive Officer pursuant to Rule 13a -14(a)
and Rule 15d - 14(a) of the Securities Exchange Act, as Amended
31.2 Certification of Chief Financial Officer pursuant to Rule 13a -14(a)
and Rule 15d - 14(a) of the Securities Exchange Act, as Amended
32.1 Certification of the Chief Executive Officer Pursuant to 18 U.S.C.
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002
32.2 Certification of the Chief Financial Officer Pursuant to 18 U.S.C.
1350, as adopted pursuant to section 906 of the Sarbanes-Oxley Act of
2002
(*) Incorporated herein by reference from, the Registrant's Registration
Statement on Form S-1, File Number 333-01494, as filed with the Commission on
April 15, 1996.
25
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
LANVISION SYSTEMS, INC.
DATE: September 6, 2005 By: /s/ William A. Geers
------------------------------------
William A. Geers
Chief Operating Officer
DATE: September 6, 2005 By: /s/ Paul W. Bridge, Jr.
------------------------------------
Paul W. Bridge, Jr.
Chief Financial Officer
26
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
3.1 Certificate of Incorporation of LanVision Systems, Inc.
Previously filed with the Commission and incorporated herein
by reference from, the Registrant's Registration Statement
on Form S-1, File Number 333-01494, as filed with the
Commission on April 15, 1996.
3.2 Bylaws of LanVision Systems, Inc. Previously filed with the
Commission and incorporated herein by reference from, the
Registrant's Registration Statement on Form S-1, File Number
333-01494, as filed with the Commission on April 15, 1996.
10 Third Amendment to the Lease for office space between ***
LanVision, Inc. (a wholly owned subsidiary) and The Western
and Southern Life Insurance Company, effective January 31,
2005.
11 Computation of Earnings (Loss) Per Common Share
31.1 Certification of Chief Executive Officer pursuant to Rule
13a -14(a) and Rule 15d - 14(a) of the Securities Exchange
Act, as Amended
31.2 Certification of Chief Financial Officer pursuant to Rule
13a -14(a) and Rule 15d - 14(a) of the Securities Exchange
Act, as Amended
32.1 Certification of the Chief Executive Officer Pursuant to 18
U.S.C. 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002
32.2 Certification of the Chief Financial Officer Pursuant to 18
U.S.C. 1350, as adopted pursuant to section 906 of the
Sarbanes-Oxley Act of 2002
27