Broadcast International Inc – ‘10KSB’ for 12/31/96

As of:  Monday, 3/31/97   ·   For:  12/31/96   ·   Accession #:  740726-97-3   ·   File #:  0-13316

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Annual Report — Small Business   —   Form 10-KSB
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10KSB       Annual Report -- Small Business                       49    180K 
 2: EX-27       Financial Data Schedule (Pre-XBRL)                     1      7K 

10KSB   —   Annual Report — Small Business
Document Table of Contents

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UNITED STATES 
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549 

Form 10-KSB 

(Mark One)                                                                      
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange    
Act of 1934 [Fee Required]                                              
For the fiscal year ended                 December 31, 1996                     
                         -----------------------------------------------------
Commission File No.                       0-13316                               
                    ----------------------------------------------------------
LASER CORPORATION     
------------------------------------------------------------------------------- 
(Name of small business issuer in its charter)          

    Utah                                          87-0395567
---------------------------------               ------------------------------- 
(State or other jurisdiction of                           (I.R.S. Employer      
incorporation or organization)                        Identification Number)  

1832 South 3850 West, Salt Lake City, Utah                     84104            
-------------------------------------------     ------------------------------- 
(Address of principal executive offices)                    (Zip Code)          

Issuer's telephone number, including area code:       (801) 972-1311            
                                               -------------------------------
Securities registered under Section 12(b) of the Exchange Act:                  

Title of each class                    Name of each exchange on 
                                      which registered
(None)                                   (None)     
--------------------------------          ------------------------------------- 
Securities registered under Section 12(g) of the Exchange Act:

Common Stock, par value $.05 per share    
------------------------------------------------------------------------------- 
(Title of class)

Check whether the issuer (1) filed all reports required to be filed by Section  
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter  
period that the registrant was required to file such reports), and (2) has been 
subject to such filing requirements for the past 90 days.  Yes   X    No        
                                                             -----     -----

Check if there is no disclosure of delinquent filers in response to Item 405 of 
Regulation S-B is not contained in this form, and no disclosure will be         
contained, to the best of registrant's knowledge, in definitive proxy or        
information statements incorporated by reference in Part III of this Form 10-KSB
or any amendment to this Form 10-KSB. [X]                                       

Issuer's revenues for its most recent fiscal year.      $3,514,263              
                                           ---------------------
As of March 17, 1997, 678,088 shares of Common Stock were outstanding.  The     
aggregate market value of the shares held by non-affiliates of the registrant   
(based upon the closing price of these shares on March 17, 1997, of $3.00 per   
share) was approximately $1,324,119.                                            

Documents Incorporated by Reference:        
Proxy Statement for May 21, 1997 Annual Meeting of Shareholders which Registrant
intends to file pursuant to Regulation 14(A) by a date no later than 120 days   
after December 31, 1996.  If such definitive Proxy Statement is not filed in    
that 120-day period, the information called for by Part III will be filed as an 
amendment to this Form 10-KSB not later than the end of the 120-day period (Part
III of this report).                                                            

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PART I

ITEM 1. BUSINESS                                                                
----------------                                                                

  During 1996, Laser Corporation was engaged in the business of designing,
manufacturing, marketing and servicing  of lasers and laser systems through its 
wholly-owned subsidiary, American Laser Corporation ("American Laser").         

Laser Corporation is a Utah corporation organized on January 12, 1983.
Unless the context indicates otherwise, all references to the "Company" include 
Laser Corporation and its subsidiaries.                                         

American Laser was incorporated in June 1970 and became a wholly-owned
subsidiary of Laser Corporation in August 1984.  American Laser designs,        
manufactures, markets and services lasers and related laser systems which are   
primarily used by original equipment manufacturers ("OEM").  These OEMs then    
manufactures equipment that incorporates the lasers into products as a component
part.                                                                           

     In June 1996, the Company established two developmental stage subsidiaries,
American Laser Medical, Inc. ("ALM"), formally NuvoMed, Inc. and American Laser 
Software, Inc. ("ALS"). These two new wholly owned subsidiaries were established
to develop and market retail medical products.                                  

     The Company's 1996 Annual Meeting of Stockholders was held on May 22, 1996.
At that meeting, the proposed slate of Directors was elected and the            
Shareholders approved the amendment to the Company's Articles of Incorporation  
to increase the authorized number of shares of common stock to 10,000,000 but   
failed to approve the proposal to amend the Company's Articles of Incorporation 
to authorize up to 2,000,000 shares of preferred stock of the Company issuable  
in one or more series.                                                          

Laser Products and Services                                           
---------------------------                                           

The word "laser" is an acronym for Light Amplification by Stimulated  
Emission of Radiation.  A laser is capable of generating an intense beam of     
light at visible, infrared and ultraviolet wavelengths.  Lasers are broadly     
distinguished by whether their mediums are gas, liquid or solid.  The laser's   
medium determines the wavelength, power and other characteristics of the optical
radiation emitted.  Lasers are also distinguished by their operational mode     
(either continuous mode or pulsed mode)  and the power of the beam emitted.     
"Q-switching" or "mode-locking" allows the output and intensity of the laser to 
be modulated to emit short, powerful bursts of laser light of greater energy    
density than that emitted during continuous mode operation.  Thus, the active   
medium, operational mode and power determine the particular tasks lasers are    
best able to perform.                                                           

The Company principally produces laser tubes filled with argon,       
krypton/argon or krypton gas.  A mirror is placed at one end of the tube, and a 
partial mirror is placed at the opposite end.  An external power supply         
activates the gas within the tube and causes the gas to produce light.  The     

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light reflects off the mirror at one end of the tube and exits from the tube    
through the partial mirror at the other end.                                    

    The Company manufacturers lasers with a variety of power outputs and other
performance specifications, often customized to the requirement of the          
customer's application.  The Company's laser products are used in confocal      
microscopes, retinal photocoagulators in ophthalmology, laser printers,         
composite material curing devices in dentistry, entertainment and display,      
research and development, and other commercial and medical applications.        

During 1996 the Company began expanding its business into the retail  
medical marketplace.  The Company has developed or is in the process of         
developing three new products: the NUVOLASE 600 SERIES MEDICAL LASER SYSTEM, a  
dermatology laser for the treatment of skin lesions, the SIMULEYES, an          
ophthalmic educational device which simulates retinal laser treatments and, the 
PAIS, an office management and patient care file system which stores a complete 
patient history including a library of high resolution digital images.          

   The Company normally conducts quality tests on its laser systems prior to
their shipment.  The Company's "Terms and Conditions of Sale" offer a standard  
product warranty against defects in materials and workmanship for a period of   
one year from the date of original shipment, although non-warranty terms or the 
level of warranty coverage, as well as the warranty period, are subject to      
negotiation.  The two largest customers of the Company have modified warranty   
terms and warranty periods which exceed one year.   At December 31, 1996, the   
reserve for anticipated warranty expenses for the laser products which had been 
sold as of that date was $100,000, although no assurance can be given that this 
reserve will be adequate to cover the actual warranty expenses.  The lasers are 
generally returned for service or repair to the Company at its Salt Lake City,  
Utah, facility.                                                                 

  Service sales is a term used internally by the Company for the repair or
refurbishment of customer owned laser products.  Service and repair typically   
entail the replacement, repair or refurbishment of component parts comprising   
the laser products or sub-assemblies.                                           

Sales and Marketing                                                   
-------------------                                                   

In the past, essentially all of the Company's sales have been to OEM  
customers.  OEM customers manufacture equipment in which the Company's laser    
products are a component part.  As each OEM customer has unique needs and       
product requirements, the Company markets its laser products and services       
directly by executive, engineering and sales management.                        

The Company sells to over 100 customers worldwide.  For the year ended
December 31, 1996, two companies accounted for over 10% of the Company's sales. 
Company C and A accounted for 30% and 20%, respectively, of the Company's 1996  
sales.  For the year ended December 31, 1995, two companies accounted for over  
10% of the Company's sales.  Company A and B accounted for 43% and 11%,         
respectively, of the 1995 sales.                                                

    Customers typically fulfill their product requirements by placing purchase

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orders with the Company which are generally filled and shipped within the       
customer's requested delivery schedule.  Customers sales and purchase order     
levels typically can be expected to fluctuate in part due to (i) changes in the 
quantity of Company products held in inventory by its customers, (ii) changes in
end user demand for customer products in which the Company's laser products are 
a component part, (iii) the competitiveness, cost and customer use of           
alternative products, technologies or suppliers, and (iv) other factors.  The   
Company's backlog of new products and service orders for its laser systems as of
December 31, 1996 was approximately $682,718, as compared to approximately      
$925,647 on December 31, 1995.  Based on past experience, the Company           
anticipates that substantially all of its unfilled orders for laser products    
will be delivered in 1997.                                                      

  For many years, the Company has been and remains substantially dependent
upon a limited number of OEM customers for sales of its laser products and      
service sales.  The Company believes that future sales of its laser products and
service sales will depend upon its ability to attract and maintain a variety of 
volume OEM customers requiring its laser products.  However, there can be no    
assurance that the Company will be successful in these efforts, or that its     
competitors, customers or others will not introduce products or technologies    
superior to those of the Company or produce comparable products at lower prices,
in which case the Company's business could be adversely affected.  In addition, 
rapid technological advances made by competitors, customers, or others could    
make the product lines obsolete.  Also, overall customer demand for laser       
products and sub-assemblies may decrease as a result their replacement by       
superior, alternative, or lower cost products and technologies.                 

In the medical markets, the Company is in the pre-market stage of its 
dermatologic and ophthalmic products introductions.  The Company plans to use a 
distributor network as well as marketing through trade magazines and medical    
conventions for the sales of its new medical products.  The Company has         
qualified its initial distributors for its NuvoLase product and is now in the   
process of identifying additional qualified distributors in the United States   
and internationally.                                                            

The Company typically bills its laser customers upon product shipment.
Payment on approved credit terms is generally due in 30 days after date of      
invoice, but such terms can vary, especially in the case of foreign sales.      
Collection of trade accounts receivable typically occurs within 30 to 60 days   
after invoice.                                                                  

Foreign Sales                                                         
-------------                                                         

   The Company sells a majority of its laser products to customers in Europe
and other foreign countries.  The Company's two largest customers for laser     
products in 1996 were foreign customers.  Foreign sales to Customer C and       
Customer A accounted for approximately 26% and 20% respectively, of the total   
laser products sales during 1996.  Total sales to all foreign customers         
accounted for approximately 66% of the Company's total laser products sales.    
(See Note 10 to Consolidated Financial Statements for further discussion).      

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Manufacturing and Suppliers                                           
---------------------------                                           

   The Company relies upon unaffiliated suppliers for components used in the
fabrication of its products.  For most components, the Company is not dependent 
upon any one particular supplier and has not experienced significant delays in  
obtaining components.  Currently, certain components utilized in the manufacture
of the products are available from a limited number of suppliers.  The Company  
believes that its operations could be adversely affected in the event that it is
unable to obtain components on a timely basis from these suppliers.             

     The Company maintains an inventory of laser components as well as a minimal
level of finished goods.  The Company generally manufactures its products in    
response to customer orders.                                                    

     Net of inventory reserves, the Company's raw material inventory at December
31, 1996 was $756,930, work in process inventory was $468,573, and the remaining
$63,500 was finished goods inventory.                                           

Competition                                                           
-----------                                                           

   The laser market is complex and fragmented as a result of the specialized
nature of laser products and the various applications required by purchasers of 
lasers and laser systems.  Rapid technological advances and intense competition 
are characteristic of the laser industry.  The Company is subject to the risk   
that its competitors or customers may introduce products or technologies which  
are superior to those of the Company or produce products at lower prices, which 
could make its products obsolete.  The Company is also subject to the risk that 
customer products which incorporate its lasers may become obsolete or may be    
redesigned, eliminating the need for its products.  The principal competitive   
factors for its OEM laser products are technology, price, service, quality,     
performance and ability to meet customer specifications.  The principal         
competitive factors for medical products are the product's technological        
capabilities and proven clinical ability, price, service, quality, and scope of 
regulatory approval.                                                            

Future sales are in a large part dependent on the success of the      
introduction of new or improved laser and medical products and on the Company's 
ability to become and remain competitive in the medical marketplace.  In        
addition, future laser sales are dependent on the Company's OEM customers       
remaining competitive in their marketplace.                                     

There can be no assurance that the Company's competitors, customers or
others will not develop products or technologies which could render the products
of the Company obsolete.  If such products or technologies were successfully    
developed, continued sales of the existing products could rapidly diminish, in  
which case the Company's business, results of operations or ability to maintain 
or increase its market share could be adversely affected.                       

   Certain of the Company's current or future competitors have substantially
greater financial, technical and marketing resources than the Company.  There   
can be no assurance that competition will not adversely affect the Company's    
business, results of operations or ability to maintain or increase it market    
share could be adversely affected.                                              

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Patents, Licenses and Trade Secrets                                   
-----------------------------------                                   

Although the Company owns certain domestic patents relating to laser  
technology, the Company believes that the ownership of patents is not essential 
to its current OEM laser operations.  However, the Company's future success may 
depend, in part, on its ability to operate and introduce new products without   
infringing on the rights of third parties.                                      

The Company entered into a license agreement in March 1989 with Patlex
Corporation which requires the Company to pay royalties based on a percentage of
net sales of products covered by certain patents.                               

Government Regulation                                                 
---------------------                                                 

    Laser Products manufactured by the Company are subject to the requirements
of the Center for Devices and Radiological Health ("CDRH") of the United States 
Food and Drug Administration.   The CDRH is the Federal government body         
primarily responsible for the regulation and administration of laser technology 
and related products.  The CDRH has issued laser radiation safety regulations   
which require certain laser manufacturers and end users to file new product and 
annual reports, to maintain records of sales and quality control results,       
conduct proper testing, and to incorporate certain design and operating         
features, including warning labels and protective devices in all lasers sold to 
end users.  The regulations required generally do not apply to OEM laser        
products which are incorporated as components in laser-based end products.      

During 1996 the Company introduced a new medical laser product with   
applications in the field of dermatology.  These lasers manufactured by the     
Company are regulated as medical devices by the FDA, CDRH under the Federal     
Food, Drug and Cosmetic Act.  As such, these devices require premarket approval 
by the FDA prior to commercialization.  The FDA classifies medical devices in   
commercial distribution into one of three classes: Class I, II or III.  This    
classification is based on the control the FDA deems necessary to reasonably    
ensure the safety and effectiveness of medical devises.  The Company's laser    
based medical products are classified as Class II devices.  If a manufacturer of
a medical device can establish that a proposed device is "substantially         
equivalent" to a legally marketed Class II medical device the manufacturer may  
seek FDA clearance for the device by filing a submission of a premarket         
notification to the CDRH, Office of Device Evaluation, in accordance with       
Section 510(k) of the Federal Food, Drug, and Cosmetic Act.                     

In August 1996 the Company submitted a Section 510(k) premarket       
notification to the FDA, CDRH seeking approval of its new laser product.  In    
November 1996 the Company received its 510(k) clearance to market its product.  

 The Company and its medical products manufactured, pursuant to a 510(k)
premarket clearance notification, are or will be subject to continuing          
regulation by the FDA and must comply with all applicable requirements of the   
FDA on an ongoing basis.  The Federal Food, Drug, and Cosmetic Act also requires
the Company to manufacture its products in registered establishments and in     
accordance with the quality system requirements of the Current Good             

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Manufacturing Practices (CGMP), 21 CFR 820 (Technical equivalent to the ISO 9001
& ISO/DIS 13485).  The Company's facilities in the United States are subject to 
periodic inspections by the FDA.                                                

Certain of the Company's products manufactured and sold in foreign    
countries are required to comply with the European Community's Medical Device   
Directive ("MDD")  (93/42/EEC), by June 1998, and the emissions and immunity    
requirements set forth by the European Community under the requirements of the  
Electromagnetic Compatibility ("EMC") Directive (89/336/EEC).  The Company has  
received its applicable certification of Compliance as required.                

    Although the Company believes that it currently complies and will continue
to comply with the applicable regulations, such regulations are always subject  
to change.  There can be no assurance that future changes in law, regulations,  
review guidelines, administrative interpretations by the FDA, any international 
governing agency or other regulatory bodies will not adversely affect the       
Company.                                                                        

Product Development                                                   
-------------------                                                   

  The Company continues to be engaged in the development of laser products
and technologies and to a lessor extent, the development of the SIMULEYES and   
PAIS systems.  During 1996, the Company focused its efforts on the NUVOLASE 600 
SERIES MEDICAL LASER SYSTEMS and the development of solid state laser products. 

In 1995, the Company entered into a joint research and development    
agreement with the University of Utah and the Center for Electronics Systems    
Technology to develop solid state laser products providing visible blue or green
output.  However, in January 1997, the Company notified all parties that for the
present it would withhold further development funding pending the completion of 
a product and performance review by the Company.                                

 The Company spent $605,585 in 1996 and $333,325 in 1995 on research and
development activities.                                                         

Insurance                                                             
---------                                                             

The Company does not have product liability insurance on its laser    
products.                                                                       

Compliance with Environment Laws                                      
--------------------------------                                      

The costs and effects of compliance with environmental laws (federal, 
state, and local) to and on the Company have been minimal.                      

Employees                                                             
---------                                                             

    On December 31, 1996, the Company had 42 full-time equivalent employees: 5
in general and administrative services, 27 in manufacturing and support         
services, 7 in Engineering and 3 in management and marketing.                   

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ITEM 2.  DESCRIPTION OF PROPERTIES                                              
----------------------------------                                              

  The Company's administrative offices and primary assembly facilities for
its laser products are located in a building of approximately 46,000 square feet
in Salt Lake City, Utah, which is owned by Dr. William H. McMahan, a significant
shareholder and former Chairman, President and Chief Executive Officer of the   
Company.  The Company leases the building from Dr. McMahan pursuant to a lease  
agreement which terminates on April 30, 1999.  In 1996, the Company paid annual 
base rent of $236,725.                                                          

      The Company believes that the foregoing facilities are currently more than
adequate for its activities.                                                    

Item 3.  LEGAL PROCEEDINGS                                                      
--------------------------                                                      

There are no pending legal proceedings.                               

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS                    
------------------------------------------------------------                    
Not applicable.                                                       

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PART II 

ITEM 5.  MARKET FOR COMMON EQUITY AND RELATED STOCKHOLDER MATTERS               
-----------------------------------------------------------------               

  The Company's common stock trades on the NASDAQ Small-Cap Market tier of
the NASDAQ Stock Market under the symbol LSER.  The following table sets forth  
the prices for the periods as indicated.  The high and low sales price are used 
in reporting.  Such quotations reflect inter-dealer prices, without retail      
mark-up, mark-down or commission and may not necessarily represent actual       
transactions.                                                                   

                 High              Low
                 ----              ---

1996   First quarter              2 5/8             2 1/8               
Second quarter             4 1/2             2 1/4        
Third quarter              2 1/2             1 5/8        
Fourth quarter             2 3/4             1 3/4        

1995   First quarter              5                 2 15/16             
Second quarter             4                 2 1/2        
Third quarter              3 5/8             1 1/4        
Fourth quarter             2 3/4             1 7/8        

    As of December 31, 1996 there were approximately 500 beneficial holders of
the Company's Common Stock.                                                     

   The Company did not pay dividends on its common stock in 1996 and it does
not anticipate paying any dividends thereon in the foreseeable future.          

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ITEM 6.  MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION.             
-------------------------------------------------------------------             

Results of Operations                                                 
---------------------                                                 

     Net sales for the year ended December 31, 1996, were $3,419,719 as compared
to $3,809,710 for the same period in 1995, a decrease of $389,991 or 10%. This  
decrease was primarily a result of decreases in laser product and service sales 
during 1996 to two of the Company's major customers totaling $1,231,256.  This  
decrease was partially offset by an increase in product and service sales of    
$920,112 to another major customer during the same 1996 period.                 

     Sales to Company A decreased from $1,654,868 or 43% of net sales in 1995 to
$697,591, or 20% of net sales in 1996.  Sales to Company B were $400,154 or 11% 
of net sales in 1995 compared to $126,175, or 4% of net sales during the 1996   
period.  Sales to Company C increased from $122,636, or 3% of net sales during  
1995 to $1,042,748 or 30% of net sales during 1996.  Sales to all other         
customers during 1996 decreased by $78,847.  The Company believes but cannot    
guarantee that normal recurring fluctuations in the overall level of product and
service orders by a limited number of OEM customers is responsible for the      
decrease in sales during 1996. These fluctuations in customer sales and purchase
order levels have been influenced for years by (i) changes in the quantity of   
Company products held in inventory by its customers, (ii) changes in end user   
demand for customer products in which the Company's laser products are a        
component part, (iii) the competitiveness, cost and customer use of alternative 
products, technologies or suppliers and (iv) various other factors.             

    Cost of products sold as a percentage of the Company's net sales increased
from 77% in 1995 to 83% in 1996.  This percentage increase was the result of    
increases in labor and overhead cost percentages which resulted primarily from  
the decrease in net sales.  To a lesser extent, small increases in material and 
warranty costs during 1996 also contributed to this percentage increase.        

   Selling, general and administrative costs for the year ended December 31,
1996 were $691,381 as compared to $580,759 for the same period in 1995, an      
increase of $110,622 or 19%.  This increase was primarily the result of pre-    
market advertising and other "start up" related costs of the Company's new      
dermatologic and ophthalmic medical products.                                   

    Research and development expenditures for the year ended December 31, 1996
were $605,585 as compared to $333,325 for the same period in 1995, an increase  
of $272,260 or 82%. This increase was primarily the result of increased costs   
associated with the development of the NUVOLASE 600 Series medical laser system,
the SIMULEYES system, the PAIS system, and solid state laser products.          

    Interest income and other revenue for the year ended December 31, 1996 was
$94,544 as compared to $114,022 for the same period in 1995, a decrease of      
$19,478 or 17%.                                                                 

As a result of the significant increase in research and development   
expenditures, the increase in costs relating to the pre-market introduction of  

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the Company's medical products, the decrease in net sales and other factors, the
Company recognized a net loss for the year ended December 31, 1996 of $688,024  
or $1.01 per share compared to income from continuing operations of $13,651 or  
$.02 per share for the same period in 1995.                                     

   On December 31, 1996 the Company had net operating loss carryforwards for
tax purposes of approximately $3,297,000, available to offset future taxable    
income, which will begin to expire in the year 2004.                            

Liquidity and Capital Resources                                       
-------------------------------                                       

On December 31, 1996, the Company had working capital of $1,653,962 as
compared to $2,202,494 at December 31, 1995, a decrease of $548,532 or 25%.     
Cash equivalents at December 31, 1996 were $555,204 as compared to $936,370 on  
December 31, 1995, a decrease of $381,166, or 41%.  Essentially all of the      
Company's working capital requirements have been financed by internally         
generated funds.                                                                

  The decrease in working capital was the result of the Company's net loss
for the year ended December 31, 1996.  The decrease in the cash equivalent      
balance was primarily the result of the Company's net loss for the period ended 
December 31, 1996, which was partially offset by increases in accounts payable  
balances and accrued expenses.                                                  

Currently, the Company has no material commitments for capital        
expenditures, and has not entered into any agreements for additional sources of 
borrowing or capital.                                                           

ITEM 7.  FINANCIAL STATEMENTS                                                   
-----------------------------                                                   

The response to this item is submitted in a separate section of this  
report.  See page F-1.                                                          

ITEM 8.  CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND        
------------------------------------------------------------------------        
FINANCIAL DISCLOSURE                                          
--------------------                                          

There has been no reported disagreement on any matter of accounting   
principles or material financial statement disclosures of a kind described in   
Item 304 of Regulation S-B.                                                     

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  PART III

ITEM 9.  DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS;          
----------------------------------------------------------------------          
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT             
-------------------------------------------------             

   The information called for by this Item is incorporated by reference from
the Company's definitive Proxy Statement which involves the election of         
Directors to be filed pursuant to Regulation 14A and which the Company intends  
to file with the Securities and Exchange Commission not later than 120 days     
after December 31, 1996, the end of the year covered by this Form 10-KSB.  If   
such definitive Proxy Statement is not filed with the Securities and Exchange   
Commission within the 120-day period, the information called for by this Item   
will be filed as an amendment to this Form 10-KSB under cover of Form 8 not     
later than the end of the 120-day period.                                       

ITEM 10.  EXECUTIVE COMPENSATION                                                
--------------------------------                                                

   The information called for by this Item is incorporated by reference from
the Company's definitive Proxy Statement which involves the election of         
Directors to be filed pursuant to Regulation 14A and which the Company intends  
to file with the Securities and Exchange Commission not later than 120 days     
after December 31, 1996, the end of the year covered by this Form 10-KSB.  If   
such definitive Proxy Statement is not filed with the Securities and Exchange   
Commission within the 120-day period, the information called for by this Item   
will be filed as an amendment to this Form 10-KSB under cover of Form 8 not     
later than the end of the 120-day period.                                       

ITEM 11.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT        
------------------------------------------------------------------------        

   The information called for by this Item is incorporated by reference from
the Company's definitive Proxy Statement which involves the election of         
Directors to be filed pursuant to Regulation 14A and which the Company intends  
to file with the Securities and Exchange Commission not later than 120 days     
after December 31, 1996, the end of the year covered by this Form 10-KSB.  If   
such definitive Proxy Statement is not filed with the Securities and Exchange   
Commission within the 120-day period, the information called for by this Item   
will be filed as an amendment to this Form 10-KSB under cover of Form 8 not     
later than the end of the 120-day period.                                       

ITEM 12.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS                        
--------------------------------------------------------                        

   The information called for by this Item is incorporated by reference from
the Company's definitive Proxy Statement which involves the election of         
Directors to be filed pursuant to Regulation 14A and which the Company intends  
to file with the Securities and Exchange Commission not later than 120 days     
after December 31, 1996, the end of the year covered by this Form 10-KSB.  If   
such definitive Proxy Statement is not filed with the Securities and Exchange   
Commission within the 120-day period, the information called for by this Item   
will be filed as an amendment to this Form 10-KSB under cover of Form 8 not     
later than the end of the 120-day period.                                       

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 PART IV

ITEM 13.  EXHIBITS, AND REPORTS ON FORM 8-K                                     
-------------------------------------------                                     

(a)   Exhibits                                                      

3 (i)  -   Articles of Incorporation, as amended        

4 (a)  -  *Specimen Stock Certificate                   

(b)  -  *Incentive Stock Option Plan                

(c)  -  *Non-Statutory Stock Option Plan            

           (d)  -  *Lease Agreement between Dr. McMahan and American Laser
(Salt Lake City)                    

         (e)  -  *Amendment to Lease Agreement between Dr. McMahan and
American Laser (Salt Lake City)   

         (f)  -  *Stock Purchase Agreement dated as of January 1, 1995
                    between Barrie Brewer, Brad Brewer and Jean Brewer and
Registrant.                       

           (g)  -  *Stock Redemption Agreement dated as of January 1, 1995
 between Pro Med Co. and Registrant.

21     -   Statement re:  Subsidiaries of the Registrant

__________________                                                              

*  Previously filed and incorporated herein by reference                        

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  SIGNATURES

    In accordance with Section 13 or 15(d) of the Exchange Act, the registrant

caused this report to be signed on its behalf by the undersigned, thereunto duly

authorized.                                                                     

LASER CORPORATION                                                               

By:  /s/ B. Joyce Wickham                         Date    March 27, 1997        
-----------------------------------            -------------------------- 
B. Joyce Wickham                                                      
President & Chief Executive Officer                                   

   In accordance with the Exchange Act, this report has been signed below by

the following persons on behalf of the registrant and in the capacities and on  

the dates indicated.                                                            

Signature                                      Date         
---------                                      ----         

/s/ B. Joyce Wickham                                 March 27, 1997             
--------------------------------------           -----------------------        
B. Joyce Wickham                                                                
President and Chief Executive Officer                                           
Treasurer and Director                                                          

/s/ Mark L. Ballard                                  March 27, 1997             
--------------------------------------           -----------------------        
Mark L. Ballard                                                                 
Vice President and Director                                                     

/s/ Reo K. Larsen                                    March 27, 1997             
--------------------------------------           -----------------------        
Reo K. Larsen                                                                   
General Accounting Manager                                                      

/s/ Rod O. Julander                                  March 27, 1997             
--------------------------------------           -----------------------        
Rod O. Julander                                                                 
Secretary and Director                                                          

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LASER CORPORATION AND SUBSIDIARIES
----------------------------------
     EXHIBIT 21 - STATEMENT RE: SUBSIDIARIES OF THE REGISTRANT
     ---------------------------------------------------------

       Subsidiary                           Place of Incorporation
       ----------                           ----------------------

American Laser Corporation                            Utah          

American Laser Medical, Inc. (formally NuvoMed)       Utah          

American Laser Software, Inc.                         Utah          

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LASER CORPORATION AND SUBSIDIARIES

Financial Statements              

December 31, 1996 and 1995        

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                                          LASER CORPORATION AND SUBSIDIARIES
                                  Index to Consolidated Financial Statements
------------------------------------------------------------------------------- 

                                                        Page
                                                        ----

Independent auditors' report                                      F-1           

Consolidated balance sheet                                        F-2           

Consolidated statement of operations                              F-3           

Consolidated statement of stockholders'                                         
equity                                                            F-4           

Consolidated statement of cash flows                              F-5           

Notes to consolidated financial statements                        F-7           

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                                  INDEPENDENT AUDITORS' REPORT

To the Board of Directors of                                                    
Laser Corporation                                                               

We have audited the accompanying consolidated balance sheet of Laser Corporation
and subsidiaries as of December 31, 1996 and 1995, and the related consolidated 
statements of operations, stockholders' equity and cash flows for the years then
ended.  These consolidated financial statements are the responsibility of the   
Company's management.  Our responsibility is to express an opinion on these     
consolidated financial statements based on our audits.                          

We conducted our audits in accordance with generally accepted auditing          
standards.  Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements.  An audit also includes
assessing the accounting principles used and significant estimates made by      
management, as well as evaluating the overall financial statement presentation. 
We believe that our audits provide a reasonable basis for our opinion.          

In our opinion, the consolidated financial statements referred to above present 
fairly, in all material respects, the consolidated financial position of Laser  
Corporation and subsidiaries as of December 31, 1996 and 1995, and the results  
of their operations and their cash flows for the years then ended, in conformity
with generally accepted accounting principles.                                  

                                            Tanner + Co.

Salt Lake City, Utah                                                            
February 14, 1997                                                               

                                                                         F-1

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                                                                [Download Table]
                                            LASER CORPORATION AND SUBSIDIARIES 
                                                    Consolidated Balance Sheet 

                                                                  December 31, 
-------------------------------------------------------------------------------
                                                         1996          1995    
                                                    ---------------------------
          Assets                                                               
          ------                                                               

  Current assets:                                                              
      Cash and cash equivalents                     $   555,204    $   936,370 
      Receivables, net                                  572,138        543,902 
      Inventories                                     1,289,003      1,186,172 
      Notes receivable - current portion                176,284        171,873 
      Other current assets                               34,829         10,025 
                                                    ---------------------------
            Total current assets                      2,627,458      2,848,342 

  Equipment and leasehold improvements, net             221,930        261,107 

  Notes receivable                                      534,308        693,320 
  Other assets                                           62,996          4,299 
                                                    ---------------------------
                                                    $ 3,446,692    $ 3,807,068 
                                                    ===========================

-------------------------------------------------------------------------------

                                                                [Download Table]
        Liabilities and Stockholders' Equity                                   
        ------------------------------------                                   
  Current liabilities:                                                         
      Accounts payable                              $   696,133    $   336,955 
      Accrued expenses                                  177,363        145,483 
      Accrued warranty expense                          100,000        140,000 
      Current portion of capital lease obligations          -           23,410 
                                                    ---------------------------
            Total current liabilities                   973,496        645,848 

  Commitments and contingency                               -              -   

  Stockholders' equity:                                                        
      Common stock, $.05 par value, authorized                                 
      10,000,000 shares, issued 682,088 shares           34,105         34,105 
      Additional paid-in capital                        701,537        701,537 
      Retained earnings                               1,837,554      2,525,578 
      Treasury stock, at cost                          (100,000)      (100,000)
                                                    ---------------------------
            Total stockholders' equity                2,473,196      3,161,220 
                                                    ---------------------------
                                                    $ 3,446,692    $ 3,807,068 
                                                    ===========================

-------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.               F-2 

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                                                                [Download Table]
                                            LASER CORPORATION AND SUBSIDIARIES 
                                          Consolidated Statement of Operations 

                                                      Years Ended December 31, 
-------------------------------------------------------------------------------
                                                         1996          1995    
                                                    ---------------------------
  Revenues:                                                                    
     Net sales                                      $ 3,419,719    $ 3,809,710 
     Interest and other income                           94,544        114,022 
                                                    ---------------------------
                                                      3,514,263      3,923,732 

  Cost and expenses:                                                           
     Cost of products sold                            2,844,349      2,930,652 
     Selling, general and administrative                691,381        580,759 
     Research and development                           605,585        333,325 
     Royalties                                           58,446         56,596 
     Interest                                             2,526          8,549 
                                                    ---------------------------
                                                      4,202,287      3,909,881 
                                                    ---------------------------

  (Loss) income from continuing operations                                     
           before income taxes                         (688,024)        13,851 

  Income tax expense - current                              -             (200)
                                                    ---------------------------

  (Loss) income from continuing operations             (688,024)        13,651 

  Discontinued operations:                                                     
     Income on disposal of discontinued operations,                            
      net of income tax expense of $800                     -           53,111 
                                                    ---------------------------
  Net (loss) income                                 $  (688,024)    $   66,762 
                                                    ===========================

  Net (loss) income per share from                                             
   continuing operations                            $     (1.01)    $      .02 

  Net income per share from                                                    
   discontinued operations                                   -             .08 
                                                    ---------------------------
  Net (loss) income per share                       $     (1.01)    $      .10 
                                                    ===========================

  Weighted average number of shares of common                                  
  and common equivalent shares outstanding              682,000        687,000 
                                                    ===========================

-------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.               F-3 

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                                                                [Download Table]
                                            LASER CORPORATION AND SUBSIDIARIES 
                                Consolidated Statement of Stockholders' Equity 

                                        Years Ended December 31, 1996 and 1995 
-------------------------------------------------------------------------------

            Common Stock   Additional           Treasury Stock                 
            ------------    Paid-In   Retained  --------------                 
            Shares Amount   Capital   Earnings  Shares   Amount       Total    
            -------------------------------------------------------------------
Balance at                                                                     
January 1,                                                                     
1995        682,088 $34,105 $701,537 $2,458,816  10,000  $(100,000) $3,094,458 

Net income      -       -        -       66,762     -          -        66,762 
            -------------------------------------------------------------------
Balance at                                                                     
December 31,                                                                   
1995        682,088  34,105  701,537  2,525,578  10,000   (100,000)  3,161,220 

Net loss        -       -        -     (688,024)    -         -       (688,024)
            -------------------------------------------------------------------
Balance at                                                                     
December 31,                                                                   
1996        682,088 $34,105 $701,537 $1,837,554  10,000  $(100,000) $2,473,196 
            ===================================================================

-------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.               F-4 

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                                                                [Download Table]
                                            LASER CORPORATION AND SUBSIDIARIES 
                                          Consolidated Statement of Cash Flows 

                                                      Years Ended December 31, 
-------------------------------------------------------------------------------
                                                         1996            1995  
                                                         ----            ----  
  Cash flows from operating activities:                                        
     Net (loss) income                              $  (688,024)   $    66,762 
     Less income on disposal of                                                
      discontinued operations                               -          (53,111)
     Adjustments to reconcile net (loss)                                       
      income to net cash provided by                                           
      (used in) operating activities:                                          
        Depreciation and amortization                   103,058        106,712 
        Increase in allowance for doubtful accounts      54,500            -   
        Increase in other assets                        (60,000)           -   
     (Increase) decrease in:                                                   
        Accounts receivable                             (82,736)        28,516 
        Inventories                                    (102,831)      (189,334)
        Other current assets                            (24,804)         2,434 
        Other assets                                      1,303            -   
     Increase (decrease) in:                                                   
        Trade accounts payable and accrued expenses     391,058        (87,015)
        Accrued warranty expense                        (40,000)       (40,000)
        Income taxes payable                                -          (10,800)
                                                    ---------------------------
               Net cash used in                                                
               operating activities                    (448,476)      (175,836)
                                                    ---------------------------
  Cash flows from investing activities:                                        
     Purchase of property and equipment                 (63,881)       (21,369)
     Proceeds from note receivable                      154,601        101,585 
                                                    ---------------------------
     Cash from investing activities                                            
      - continuing operations                            90,720         80,216 
     Cash from investing activities                                            
      - discontinued operations                             -        1,000,000 
                                                    ---------------------------
               Net cash provided by                                            
               investing activities                      90,720      1,080,216 
                                                    ---------------------------
     Cash flows from financing activities-                                     
      payments on capital lease obligations             (23,410)       (38,510)
                                                    ---------------------------
               Net cash used in                                                
               financing activities                     (23,410)       (38,510)
                                                    ---------------------------
  (Decrease) increase in cash and cash equivalents     (381,166)       865,870 

  Cash and cash equivalents, beginning of year          936,370         70,500 
                                                    ---------------------------
  Cash and cash equivalents, end of year            $   555,204    $   936,370 
                                                    ===========================

-------------------------------------------------------------------------------
See accompanying notes to consolidated financial statements.               F-5 

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                                                                [Download Table]

                                            LASER CORPORATION AND SUBSIDIARIES  
                                          Consolidated Statement of Cash Flows  
                                                                     Continued  

------------------------------------------------------------------------------- 

Supplemental disclosure of noncash transactions                                 
-----------------------------------------------                                 

During 1996, the Company recorded an investment of $60,000 in exchange for      
services of $60,000.                                                            

During 1995, the Company sold its 80% owned subsidiary.  As part of the         
sale price the Company received notes receivable totaling $966,778 and          
cancellation of notes payable to minority shareholders of ProMed of $795,496.   

Supplemental disclosures of cash flow information                               
-------------------------------------------------                               
                                                  1996        1995              
                                            ---------------------------         
                                                                                
      Interest paid                         $     2,526    $     8,549          
                                            ---------------------------         

      Income taxes paid                     $     - 0 -    $     8,000          
                                            ---------------------------         

------------------------------------------------------------------------------- 
See accompanying notes to financial statements.                            F-6  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  

                                                    December 31, 1996 and 1995  
------------------------------------------------------------------------------- 

1. Significant   Principles of Consolidation and Description of Activity        
   Accounting    -------------------------------------------------------        
   Policies      The consolidated financial statements include the accounts of  
                 Laser Corporation (Laser) and its wholly-owned subsidiaries,   
                 American Laser Corporation (American Laser), American Laser    
                 Software, Inc. (ALS), and American Laser Medical, Inc. (ALM)   
                 (the Company) located in Salt Lake City, Utah.  All significant
                 intercompany account balances and transactions have been       
                 eliminated in consolidation.                                   

                 The Company is engaged in designing, manufacturing, marketing  
                 and servicing of laser systems.                                

                 Cash and Cash Equivalents                                      
                 -------------------------                                      
                 For purposes of the statements of cash flows, the Company      
                 considers all highly liquid certificates of deposit with       
                 maturities of three months or less to be cash equivalents.     

                 Inventories                                                    
                 -----------                                                    
                 Inventories are valued at the lower of cost (first-in,         
                 first-out method) or market value.                             

                 Equipment and Leasehold Improvements                           
                 ------------------------------------                           
                 Equipment and leasehold improvements are recorded at cost.     
                 Depreciation and amortization are calculated using the         
                 straight-line and declining balance methods over the estimated 
                 useful lives or lease terms of the assets as follows:          

                         Equipment                        3-10 years            
                         Leasehold improvements             10 years            

                 Income Taxes                                                   
                 ------------                                                   
                 Deferred income taxes are provided for temporary differences in
                 reporting income for financial statement and tax purposes      
                 arising primarily from differences between financial reporting 
                 and income tax reporting in the methods of accounting for      
                 depreciation of property and equipment, accrued liabilities,   
                 asset and liability research.                                  

------------------------------------------------------------------------------- 
                                                                           F-7  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

1. Significant   Warranty Costs                                                 
   Accounting    --------------                                                 
   Policies      The Company records the estimated cost of warranty obligations 
   Continued     on laser products at the time the related products are sold.   
                 There was no warranty expense relating to the sale of emergency
                 medical equipment as the warranty was provided by the original 
                 manufacturer.                                                  

                 Net Income (Loss) Per Common and Common Equivalent Share       
                 --------------------------------------------------------       
                 Net income (loss) per common and common equivalent share is    
                 computed using the weighted average number of common and common
                 equivalent shares outstanding.  Common equivalent shares       
                 consist of the Company's stock options considered to be        
                 dilutive common stock equivalents, determined using the        
                 treasury stock method.  Fully diluted earnings per share is    
                 the same or antidilutive, and, accordingly, is not presented.  

                 Concentration of Credit Risk                                   
                 ----------------------------                                   
                 The Company designs, manufactures, markets and provides service
                 on lasers and related laser systems which are primarily used by
                 original equipment manufacturers in both domestic and foreign  
                 markets.  These laser products are used in items such as       
                 printers, medical instruments, entertainment products and other
                 applications.  The Company grants credit in these markets      
                 without requiring collateral to substantially all its          
                 customers.                                                     

                 Financial instruments which potentially subject the Company to 
                 concentration of credit risk consist primarily of trade        
                 receivables.  In the normal course of business, the Company    
                 provides credit terms to its customers.  Accordingly, the      
                 Company performs ongoing credit evaluations of its customers   
                 and maintains allowances for possible losses which, when       
                 realized, have been within the range of management's           
                 expectations.                                                  

                 The Company maintains its cash in bank deposit accounts which, 
                 at times, may exceed federally insured limits.  The Company has
                 not experienced any losses in such account.  The Company       
                 believes it is not exposed to any significant credit risk on   
                 cash and cash equivalents.                                     

------------------------------------------------------------------------------- 
                                                                           F-8  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 
1. Significant   Accounting Estimates                                           
   Accounting    --------------------                                           
   Policies      The preparation of financial statements in conformity with     
   Continued     generally accepted accounting principles requires management to
                 make estimates and assumptions that affect the reported amounts
                 of assets and liabilities and disclosure of contingent assets  
                 and liabilities at the date of the financial statements and the
                 reported amounts of revenues and expenses during the reporting 
                 period.  Actual results could differ from those estimates.     

2. Discontinued  On January 1, 1995, the Company entered into two agreements    
   Operations    where it sold its 80 percent ownership in ProMed.  One         
   and Notes     agreement is with the minority shareholders of ProMed wherein  
   Receivable    the Company sold them 31,726 shares of ProMed stock            
                 (approximately 40 percent of the Company's ownership). The     
                 sales price was for $1,095,496 and consisted of a cash payment 
                 of $300,000 and cancellation of the note payable to the        
                 minority shareholders of ProMed which had a balance of $795,496
                 at December 31, 1994.                                          

                 The Company sold its remaining 48,274 shares of ProMed stock   
                 (approximately 60 percent of the Company's ownership) and      
                 forgiveness of an intercompany note for total proceeds of      
                 $1,666,778 to ProMed.  The proceeds consisted of a $700,000    
                 cash payment and notes receivable aggregating in a balance of  
                 $966,778.  Both notes receivable are secured by the common     
                 stock of ProMed and the personal guarantees of the minority    
                 shareholders of ProMed.  The first note of $804,504 requires   
                 monthly payments of $16,121 including interest at 7.5 percent  
                 per annum.  The entire remaining unpaid balance is due February
                 1, 1998.  The second note of $162,274 does not bear interest   
                 and is due January 1, 1998.  The aggregate balance of the notes
                 receivable at December 31, 1996 and December 31, 1995 are      
                 $710,592 and $865,193, respectively.                           

                 The sale of ProMed resulted in a net gain after taxes of       
                 $53,111.                                                       

------------------------------------------------------------------------------- 
                                                                           F-9  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

3. Detail of                                             1996            1995   
   Certain                                          --------------------------- 
   Balance        Receivables:                                                  
   Sheet             Trade receivables              $   624,819    $   541,161  
   Accounts          Less allowance for                                         
                      doubtful accounts                 (56,000)        (1,500) 
                     Other                                3,319          4,241  
                                                    --------------------------- 
                                                    $   572,138    $   543,902  
                                                    =========================== 

                  Inventories:                                                  
                     Raw materials                  $   926,930    $   934,886  
                     Work-in-process                    468,573        423,291  
                     Finished goods                      63,500         17,995  
                     Reserve for obsolescence          (170,000)      (190,000) 
                                                    --------------------------- 
                                                    $ 1,289,003    $ 1,186,172  
                                                    =========================== 

4. Equipment      Equipment and leasehold improvements consist of the following 
   and            at December 31, 1996 and 1995:                                
   Leasehold                                                                    
   Improvements                                           1996           1995   
                                                    --------------------------- 
                  Equipment                         $ 1,389,535    $ 1,356,734  
                  Leasehold improvements                612,260        581,180  
                                                    --------------------------- 
                                                      2,001,795      1,937,914  

                  Less accumulated depreciation                                 
                   and amortization                  (1,779,865)    (1,676,807) 
                                                    --------------------------- 
                                                    $   221,930     $  261,107  
                                                    =========================== 

------------------------------------------------------------------------------- 
                                                                          F-10  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

5. Income Taxes   The provision for income taxes differs from the amount        
                  computed at federal statutory rates as follows:               

                                                             Year Ended         
                                                            December 31,        
                                                    --------------------------- 
                                                           1996          1995   
                                                    --------------------------- 
                  Income tax benefit (expense)                                  
                   at statutory rates               $   234,000    $   (13,000) 
                  Change in valuation allowance        (234,000)        12,000  
                                                    --------------------------- 
                  Total expense                     $     - 0 -    $    (1,000) 
                                                    =========================== 

                  Tax expense applicable to                                     
                   continuing operations            $     - 0 -    $      (200) 
                  Tax expense applicable to                                     
                   discontinued operations                - 0 -           (800) 
                                                    --------------------------- 
                  Total expense                     $     - 0 -    $    (1,000) 
                                                    =========================== 

                  Deferred tax assets (liabilities) consists of the following:  

                                                             December 31,       
                                                    --------------------------- 
                                                            1996         1995   
                                                    --------------------------- 
                  Net operating loss                                            
                   carryforward                     $ 1,222,000    $ 1,033,000  
                  Excess tax depreciation over                                  
                   book depreciation                    (34,000)       (53,000) 
                  Inventory reserve                      58,000         65,000  
                  Warranty reserve                       34,000         16,000  
                  Bad debt reserve                       19,000          1,000  
                  Other accruals                          - 0 -          3,000  
                                                    --------------------------- 
                                                      1,299,000      1,065,000  

                  Valuation allowance                (1,299,000)    (1,065,000) 
                                                   ---------------------------- 
                                                   $      - 0 -    $     - 0 -  
                                                   ============================ 

------------------------------------------------------------------------------- 
                                                                          F-11  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

5. Income Taxes   The Company has net operating loss carry-forwards for tax     
   Continued      purposes of approximately $3,297,000 at December 31, 1996     
                  available to offset future taxable income which begins to     
                  expire in 2004.  Should a change of more than 50 percent in   
                  the Company's ownership occur, any future benefits from such  
                  carry-forwards may be substantially lost.                     

6. Commitments    Operating Leases                                              
   and            ----------------                                              
   Contingencies  The Company's administrative offices and primary assembly     
                  facilities for its laser products are located in a 46,000     
                  square foot building in Salt Lake City, Utah.  The Company    
                  leases the building from a significant shareholder,           
                  Dr. McMahan, pursuant to a lease agreement which terminates on
                  April 30, 1999.  Under this lease, the Company paid annual    
                  rent of $236,725 in 1996 and 1995.                            

                  Future minimum payments under noncancellable operating leases 
                  are as follows at December 31, 1996:                          

                          Year                                Amount            
                          ----                             -------------        
                          1997                             $    236,725         
                          1998                                  236,725         
                          1999                                   78,908         
                                                           -------------        
                                                           $    552,358         
                                                           =============        

                  Investment Agreement                                          
                  --------------------                                          
                  In November 1996, the Company entered into a 12 month         
                  investment agreement with another corporate entity (the       
                  investee).  The agreement provides that the Company will      
                  invest cash and/or services in exchange for the investee's    
                  stock.  At December 31, 1996, the Company had performed       
                  services of $60,000 in exchange for common stock of the       
                  investee.  The investment of $60,000 has been included in     
                  other assets.                                                 

                  Under the investment agreement, the Company is also required  
                  to make another payment of cash and/or services of $60,000 on 
                  or before August 1, 1997.  In addition and contingent upon    
                  certain requirements being met by this investee, the Company  
                  may be required to make further payments of cash and/or       
                  services of approximately $80,000.  Upon completion of this   
                  agreement, the Company will own up to 5% of the investee's    
                  stock.                                                        

------------------------------------------------------------------------------- 
                                                                          F-12  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

6. Commitments    Royalty Agreement                                             
   and            -----------------                                             
   Contingencies  The Company is party to an agreement with Patlex Corporation  
   Continued      which requires the Company to pay royalties based on a        
                  percentage of net sales of products covered by certain        
                  patents.  Total royalty expense was $58,446 and $56,596 in    
                  1996 and 1995, respectively.                                  

                  Product Liability Insurance                                   
                  ---------------------------                                   
                  American Laser does not have product liability insurance on   
                  its laser products.                                           

                  Employment Agreements                                         
                  ---------------------                                         
                  The Company has employment agreements with its President and  
                  Chief Executive Officer and with its Vice President.  These   
                  agreements have a three year term with automatic renewals for 
                  additional terms of equal length unless terminated by either  
                  party.  The agreements also provide for twelve and eleven     
                  month, respectively, of severance benefits at the time of     
                  termination unless termination is for cause, lack of          
                  performance, resignation or by reason of death.               

7. Stock Plans    In January 1985, the Company adopted a stock bonus plan       
   and Options    whereby 50,000 shares of the Company's common stock have      
                  been reserved for ultimate issuance to qualified employees.   
                  The Company's Board of Directors has complete discretion as to
                  which employees qualify, the number of shares to be granted   
                  and any restrictions to be placed upon such shares.  No more  
                  than 1,000 shares may be granted to any one employee during   
                  any fiscal year.                                              

------------------------------------------------------------------------------- 
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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 
7. Stock Plans    The Company has an incentive stock option plan and a          
   and Options    non-qualified stock option plan whereby an aggregate of       
   Continued      100,000 shares, or 50,000 shares for each plan, of the        
                  Company's unissued and restricted common stock was reserved   
                  for ultimate issuance to selected employees.  The stock option
                  committee of the Board of Directors administers both plans and
                  has discretion to determine the terms of options granted under
                  each plan.   Such terms include the exercise price of each    
                  option, the number of shares subject to each option, and the  
                  exercisability of such options.  Options under the incentive  
                  plan must be granted at the fair market value on the date of  
                  grant except that the option price must be one hundred ten    
                  percent (110%) of such fair market value if the optionee owns 
                  more than ten percent (10%) of the outstanding common stock.  
                  The aggregate fair market value of the shares issuable on     
                  exercise of options granted to any employee in a calendar year
                  may not exceed $20,000 plus certain carry over allowances.    
                  Options under the non-statutory plan must be granted at a     
                  price equal to at least the fair market value of the shares on
                  the date of grant.  For either plan, no more than 20 percent  
                  of the shares under option may be exercised during the first  
                  year following the date of grant, and options expire five     
                  years from the date of grant.  The incentive plan and the     
                  non-qualified plan, as amended on May 21, 1993, expires on    
                  June 30, 1998.                                                

                  On September 10, 1992, the Board of Directors reinstated a    
                  non-employee director option plan whereby an aggregate total  
                  of 60,000 shares of the Company's unissued or reacquired      
                  common stock may be issued to outside directors effective May 
                  29, 1992.  Beginning June 1, 1992, outside directors were     
                  granted a five-year option to purchase 2,000 shares of common 
                  stock at the end of each six months of service.  On June 1,   
                  1993, the plan was amended to change the method of calculating
                  the exercise price to that of the employee's Incentive Stock  
                  Option.                                                       

------------------------------------------------------------------------------- 
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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

7. Stock Plans    Information regarding the Option Plans are summarized below:  
   and Options                                                                  
   Continued                                       Number of     Option Price   
                                                   Options       Per Share      
                                                  ----------------------------- 
                     Outstanding at                                             
                      December 31, 1995              58,000     $    1.43-5.13  
                     Granted                         19,000     $    2.50-3.00  
                     Exercised                        - 0 -     $        ---    
                     Expired                          - 0 -     $        ---    
                                                  ----------------------------- 
                     Outstanding at                                             
                      December 31, 1996              77,000     $    1.43-5.13  
                                                  ============================= 

                  Options exercisable and shares available for future grants are
                  as follows:                                                   
                                                           December 31,         
                                                  ----------------------------- 
                                                      1996             1995     
                                                  ----------------------------- 
                  Options exercisable                77,000           58,000    
                  Shares available for grant         23,000           42,000    

------------------------------------------------------------------------------- 
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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

7. Stock Plans    In October 1995, the Financial Accounting Standards Board     
   and Options    issued Statement of financial Accounting Standards No. 123,   
   Continued      "Accounting for Stock-Based Compensation" (FAS 123) which     
                  established financial accounting and reporting standards for  
                  stock-based compensation.  The new standard defines a fair    
                  value method of accounting for an employee stock option or    
                  similar equity instrument.  This statement gives entities the 
                  choice between adopting the fair value method or continuing to
                  use the intrinsic value method under Accounting Principles    
                  Board (APB) Opinion No. 25 with footnote disclosures of the   
                  pro forma effects if the fair value method had been adopted.  
                  The Corporation has opted for the latter approach.            
                  Accordingly, no compensation expense has been recognized for  
                  the stock option plans.  Had compensation expense for the     
                  Corporation's stock option plan been determined based on the  
                  fair value at the grant date for awards in 1996 and 1995      
                  consistent with the provisions of FAS No. 123, the            
                  Corporation's results of operations would have been reduced to
                  the pro forma amounts indicated below:                        

                                                           December 31,         
                                                  ----------------------------- 
                                                         1996         1995      
                                                  ----------------------------- 
                  Net Income - as reported        $   (688,024)    $    66,762  
                  Net Income - pro forma          $   (715,361)    $    36,940  
                  Earnings per share - as reported   $   (1.01)       $    .10  
                  Earnings per share - pro forma     $   (1.05)       $    .05  
                                                  ============================= 

                  The fair value of each option grant is estimated in the date  
                  of grant using the Black-Scholes option pricing model with the
                  following assumptions:                                        

                                                           December 31,         
                                                  ----------------------------- 
                                                        1996         1995       
                                                  ----------------------------- 
                  Expected dividend yield                - 0 -          - 0 -   
                  Expected stock price volatility       53.29%         53.29%   
                  Risk-free interest rate                6.13%          5.50%   
                  Expected life of options             5 years        5 years   
                                                  ============================= 

                  The weighted average fair value of options granted during 1996
                  and 1995 are $1.44 and $1.57, respectively.                   

------------------------------------------------------------------------------- 
                                                                          F-16  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

7. Stock Plans    The following table summarized information about fixed stock  
   and Options    options outstanding at December 31, 1996:                     
   Continued                                                                    
                               Options Outstanding         Options Exercisable  
                           ---------------------------------------------------- 
                                       Weighted                                 
                             Number    Average    Weighted  Number    Weighted  
                  Range of Outstanding Remaining  Average Exercisable Average   
                  Exercise     at     Contractual Exercise    at      Exercise  
                   Prices   12/31/96     Life      Price   12/31/96   Price     
                                        (Years)                                 
                  ------------------------------------------------------------- 
                  $  1.40                                                       
                  to 2.00    19,500      1.8      $ 1.59     19,500     $ 1.59  
                  $  2.10                                                       
                  to 3.15    40,000      3.4      $ 2.63     40,000     $ 2.63  
                  $  3.60                                                       
                  to 5.15    17,500      3.2      $ 4.31     17,500     $ 4.31  
                  ------------------------------------------------------------- 
                  $  1.40                                                       
                  to 5.15    77,000      3.0      $ 2.75     77,000     $ 2.75  
                  ============================================================= 

8. Profit         American Laser adopted a 401(k) retirement savings and profit 
   Sharing        sharing plan.  All full-time employees of American Laser who  
   Plans          are at least 21 years of age and have a minimum of three      
                  months of service with American Laser are eligible to         
                  participate.  The plan contains a matching contribution which 
                  is at American Laser's discretion and is limited to two       
                  percent of the applicable employee's salary.  No matching     
                  contributions were made during 1996 and 1995.                 

9. Related        The Company has a lease agreement with Dr. William H. McMahan,
   Party          a significant shareholder and former Chairman, President and  
   Transactions   Chief Executive Officer of the Company, which is described in 
                  note 6.                                                       

                  The Company has employment agreements with its President and  
                  Chief Executive Officer and Vice President as described in    
                  note 6.                                                       

------------------------------------------------------------------------------- 
                                                                          F-17  

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                                            LASER CORPORATION AND SUBSIDIARIES  
                                    Notes to Consolidated Financial Statements  
                                                                     Continued  
------------------------------------------------------------------------------- 

10. Export        Export sales to unaffiliated customers were as follows:       
    Sales                                                                       
    and                                                    Year Ended           
    Major                                                 December 31,          
    Customers                                     ----------------------------- 
                                                        1996         1995       
                                                  ----------------------------- 
                     Europe                       $  2,199,169    $  2,647,435  
                     Other                              66,864         153,300  
                                                  ----------------------------- 
                                                  $  2,266,033    $  2,800,735  
                                                  ============================= 

                  Combined domestic and foreign sales and service of lasers to  
                  the Company's major customers are as follows:                 

                                                           Year Ended           
                                                          December 31,          
                                                  ----------------------------- 
                     Major customers                   1996         1995        
                     ---------------              ----------------------------- 
                     Company A                    $    697,591    $  1,654,868  
                     Company B                    $    126,175    $    400,154  
                     Company C                    $  1,042,748    $    122,636  

11. Fair Value    None of the Company's financial instruments are held for      
    of            trading purposes.  The Company estimates that the fair value  
    Financial     of all financial instruments at December 31, 1996, does not   
    Instruments   differ materially from the aggregate carrying values of its   
                  financial instruments recorded in the accompanying balance    
                  sheet.  The estimated fair value amounts have been determined 
                  by the Company using available market information and         
                  appropriate valuation methodologies.  Considerable judgement  
                  is necessarily required in interpreting market data to develop
                  the estimates of fair value, and, accordingly, the estimates  
                  are not necessarily indicative of the amount that the         
                  Company could realize in a current market exchange.           

------------------------------------------------------------------------------- 
                                                                          F-18  

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                                                Co 101751                       
 RECEIVED                                       State of Utah                   
 JUN 18 1996                                Department of Commerce              

 Utah Div. of Corp.              Division of Corporations and Commercial Code   
 & Comm. Code                 I Hereby certify that the foregoing has been filed
                              and approved on the  18  day of  June  19 96      
                                                  ----        ------   ----     
                              in the office of this Division and hereby issue   
                              this Certificate thereof.                         

                              Examiner      BS           Date    6/19/96        
                                      -----------------      ----------------   
                                              /s/ Korla T. Woods                
                                              --------------------              
                               [State]           Korla T. Woods                 
                               [Seal ]           Division Director              

                             ARTICLES OF AMENDMENT                              

                        TO THE ARTICLES OF INCORPORATION             /s/ BS     

                               LASER CORPORATION                                

          Pursuant to the provisions. of Section 16-10a-1001 a seq. of the      

Utah Revised Business Corporation Act, the undersigned corporation adapts the   

following Articles of Amendment to its Articles of Incorporation:               

          FIRST: The name of the corporation is Laser Corporation               

          SECOND: The following amendment of the Articles of Incorporation was  

adopted by the shareholders of the corporation on May 22, 1996, in the manner   

prescribed by the Utah Revised Business Corporation Act.                        

          Article IV of the corporation's Article of Incorporation is hereby    

amended to read in its entirety as follows:                     [6170000035]    

          The corporation shall have the Authority to issue 10.000,000          
          shares of common stock, each having a par value of $0.05 per          
          share. All common shares issued by the corporation shall be fully     
          paid and nonassessable and shall have equal rights.                   

          THIRD: The number shares of common stock of the corporation           

outstanding and entitled to vote thereon at the time of such adoption was       

672,098. The designation end number of outstanding shares of the only class     

entitled to vote thereon as a class were these 672,.098 shares of common stock. 

          FOURTH. The number of shares voted for such amendment was 424,721, and

the number of shares voted against such amendment was 29,741 with 473           

abstentions.                                                                    

          DATED June 10, 1996                                                   
                    ----                                                        
                                        LASER CORPORATION                       

                                        By: /s/ B. Joyce Wickham                
                                           ---------------------                
                                           B. Joyce Wickham                     
                                           Its: President                       

G.\DIANE\GEL\CLIENTS\LASER\ARTICLES.AMD                                         

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            State of Utah                                      101751           
        Department of Commerce                                                  
Division of Corporations and Commercial Code                                    

I hereby certify that the foregoing has been filed                              
and approved on the  29th  day of  June  19  92                                 
                    ------       --------   ----                                
in the office of this Division and hereby issue                                 
this Certificate thereof.                                                       
                                                            RECEIVED            
Examiner   Carmen Tery   Date   6-29-92               1992 JUN 29 AM 11:45      
         ---------------     --------------         DIVISION OF CORPORATIONS    
              /s/ A.P. (unreadable)                      STATE OF UTAH          
              ---------------------                                             

             G.M. (unreadable)                                                  
             Division Director                                                  

                             ARTICLES OF AMENDMENT                              

                                    TO THE                                      

                           ARTICLES OF INCORPORATION                            

                                      OF                                        

                               LASER CORPORATION                                

           Pursuant to Section 16-10-57 of the Utah Business                    

Corporation Act as amended, the undersigned corporation hereby                  

adopts the following Articles of Amendment to its Articles of                   

Incorporation:                                                                  

           FIRST: The name of the corporation is Laser                          

Corporation (the "Company")                                                     

           SECOND: The following amendment to the Articles of                   

Incorporation of the Company was adopted by the shareholders of                 

the company in the manner prescribed by the Utah Business                       

Corporation Act:                                                                

           RESOLVED: That the Articles of Incorporation of the                  

Company be amended by deleting Article IV and substituting                      

therefor the following:                                                         

           The aggregate number of shares which the                             
           corporation shall have the aurhority to issue                        
           is two million (2,000,000) shares of common                          
           stock. Each such share shall have a par                              
           value of five cents ($.05). All shares of                            
           the Corporation's common stock shall be of                           
           the same class and shall have the same rights                        
           and preferences.  Fully paid shares of the                           
           Corporation shall not be liable to any                               
           further call or assessment.                                          

           THIRD: The shareholders of the Company adopted the                   

foregoing amendment on May 29, 1992.                                            

g:\wpc\218\00001118.W51                                                         

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           FOURTH: The total number of shares of capital stock of               

the Company outstanding at the time of such adoption was                        

3,360,559, and the number of shares entitled to vote on the                     

amendment was 3,360,559.                                                        

           FIFTH: The number of shares voting for such amendment                

was 2,242,585; the number of shares voting against such amendment               

was 82,387; the number of shares abstaining from voting was                     

4,130.                                                                          

           SIXTH: The amendment provides for a reduction in the                 

total number of authorized shares from 10,000,000 to 2,000.000                  

and an increase in the par value of shares from one cent to five                

cents per share.  This amendment will create a one-for five                     

reverse split of the Company's Common Stock.                                    

           B. Joyce Wickham and Rod O. Julander hereby verify and               

declare, under penalties of perjury, that they have examined and                

executed these Articles of Amendment, and that these Articles of                

Amendment are truthful and correct in all respects.                             

           IN WITNESS WHEREOF, these Articles of Amendment have                 

been executed as of the 29th day of June 1992.                                  
                       -----       ------                                       

                                  LASER CORPORATION                             

                                  By: /s/ B. Joyce Wickham                      
                                     ----------------------------               
                                     B. Joyce Wickham, President                

                                  By: /s/ Rod O. Julander                       
                                     ----------------------------               
                                     Rod O. Julander, Secretary                 

g:\wpc\218\00001118.W51                                                         

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Received in the office of the Lt.Gov./Sec-                     RECEIVED         
retary of the State of Utah, on the   31st                  (unreadable)        
                                    ---------               (unreadable)        
day of    Jan    A.D. 19 84                                                     
      ----------        ----                                                    
      DAVID S.MONSON                                                            
    Lt.Gov./Sec. of State                                                       
Filing Clerk  INC   Fees  370.00                                                
            -------      --------                                               

                            CERTIFICATE OF AMENDMENT                            

                        OF ARTICLES OF INCORPORATION OF                         

                               LASER CORPORATION                                

          LASER CORPORATION, a Utah Corporation, hereby certifies               

     that:                                                                      

          1.   The name of the corporation filing this certificate              

     is Laser Corporation (the "Corporation").                                  

          2.   On July 1. 1983, the Corporation's shareholders                  

     adopted an amendment to Article IV of the Corporation's                    

     Articles of Incorporation so that, as amended, Articles IV                 

     reads as follows:                                                          

                                                    [251/569441/31/84 $ 170.00] 

                               Article IV. Shares                               
                               ------------------                               

               The Corporation is authorized to issue an aggregate              
          of ten million (10,000,.000) shares of common stock.  Each            
          such share shall have a par value of one cent ($.01)                  
          All shares of the Corporation's common stock shall be of              
          the same class and shall have the same rights and prefer-             
          ences.  Fully paid shares of the Corporation shall not be             
          liable to any further call or assessment.                             

          3.   On July 1, 1983, the Corporation's shareholders                  

     adopted an amendment to Article VI of the Corporation's                    

     Articles of Incorporation so that, as amended, Article VI                  

     reads as follows:                                                          

                       Article VI. Shareholders Rights.                         
                       --------------------------------                         

               The authorized shares of stock of the Corporation                
          may be issued at such time, upon such terms and condi-                
          tions and such consideration as the Board of                          
          Directors shall determine. Shareholders shall not have                
          preemptive rights to acquire unissued shares of the stock             
          of the Corporation                                                    

          4.   On July 1. 1983, 543,000 shares of the Corporation's             

     common stock were issued and outstanding and entitled to vote              

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     on the foregoing amendments.  All such shares were voted in                

     favor of the adoption of such amendments.                                  

           5. The foregoing amendments do not provide for an                    

     exchange. reclassification, or cancellation of shares of the               

     Corporation's issued and outstanding common stock.                         

           6. The foregoing amendments will not effect a change in              

     the Corporation's stated capital.                                          

           IN WITNESS WHEREOF, LASER CORPORATION'S President and                

     Secretary have signed this Certificate under penalties of                  

     perjury on behalf of the Corporation and have affixed the                  

     corporation's corporate seal hereto this 30th day of December,             
                                         ----             --------              
     1983.                                                                      

                                LASER CORPORATION:                              
                                (Corporate Seal)                                

                                By: /s/ William H. McMahan                      
                                   ----------------------------                 
                                            President                           

                                Attest: /s/ Mark L. Ballard                     
                                       ------------------------                 
                                            Secretary                           

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                            CERTIFICATE OF AMENDMENT                            

                         OF ARTICLE OF INCORPORATION OF                         

                               LASER CORPORATION                                

          LASER CORPORATION, a Utah Corporation, hereby certifies               
     that:                                                                      

          1.   The name of the corporation filing this certificate              

     is Laser Corporation (the "Corporation")                                   

          2.   On July 1, 1983, the Corporation's shareholders                  

     adopted an amendment to Article IV of the Corporation's                    

     Articles of Incorporation so that, as amended, Article IV                  

     reads as follows:                                                          

                              Article IV. Shares                                
                              ------------------                                

               The Corporation is authorized to issue an aggregate              
          of ten million (10,000,000) shares of common stock.  Each             
          such share shall have a par value one cent ($.01).                    
          All shares of the Corporation's common stock shall be of              
          the same class and shall have the same rights and prefer-             
          ences.  Fully paid shares of the Corporation shall not be             
          liable to any further call or assessment.                             

          3.   On July 1, 1983, the Corporation's shareholders                  

     adopted an amendment to Article VI of the Corporation's                    

     Articles of Incorporation so that, as amended, Article VI                  

     reads as follows:                                                          

                         Article VI. Shareholders Rights.                       
                         -------------------------------                        
               The authorized shares of stock of the Corporation                
          may be issued at such time. upon such terms and condi-                
          tions, and for such consideration as the Board of                     
          Directors shall determine.  Shareholders shall not have               
          preemptive rights to acquire unissued shares of the stock             
          of the Corporation.                                                   

          4.   On July 1, 1983, 543.000 shares of the Corporation's             

     common stock were issued and outstanding and entitled to vote              

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     on the foregoing amendments.  All such shares were voted in                

     favor of the adoption of such amendments.                                  

          5.   The foregoing amendments do not provide for an                   

     exchange, reclassification, or cancellation of shares of the               

     Corporation's issued and outstanding common stock.                         

          6.   The foregoing amendments will not effect a change in             

     the Corporation's stated capital.                                          

          IN WITNESS WHEREOF, LASER CORPORATION'S President and                 

     Secretary have signed this Certificate under penalties of                  

     perjury on behalf of the Corporation and have affixed the                  

     corporation's corporate seal hereto this 30th day of December,             
                                              ----        --------              
     1983.                                                                      

                                   LASER CORPORATION                            
                                    (Corporate Seal)                            

                                   By: /s/ William H. McMahan                   
                                      ---------------------------               
                                             President                          

                                   Attest: /s/ Mark L. Ballard                  
                                          -----------------------               
                                             Secretary                          

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Received in the office of the Lt.Gov./Sec-                 RECEIVED             
retary of the State of Utah, on the  12th            1983 JAN 12 PM 3:27        
                                   --------          LT.GOV./SEC. OF STATE      
day of   January      19 83                                                     
      -------------     ----                              101751                
        DAVID S. MONSON                                  --------               
     Lieutenant Governor                                                        
Filing Clerk    JNJ  Fees  $50.00                                               

                           ARTICLES OF INCORPORATION                            
                                      OF                                        
                               LASER CORPORATION                                

          We the undersigned, natural persons of the age of 21 years            

     or more, acting as incorporators of a corporation under the Utah           

     Business Corporation Act, adopt the following Articles of                  

     Incorporation for such corporation.                                        
                                                         [unreadable stamp]     
                           ARTICLE I - CORPORATE NAME                           
                           --------------------------                           
          The name of the corporation is LASER CORPORATION.                     

                      ARTICLE II - DURATION OF CORPORATION                      
                      ------------------------------------                      
          The corporation is to have perpetual existence.                       

                        ARTICLE III - CORPORATE PURPOSES                        
                        --------------------------------                        
          The general purposes and objects for which the corporation            

     is organized are:                                                          

               (a) To engage in commercial and industrial                       
          consulting services. To manufacture, purchase, or                     
          otherwise acquire, and to own, mortgage, pledge, sell,                
          assign, transfer, or otherwise dispose of, and to                     
          invest in, trade in, deal in and with goods, wares,                   
          merchandise, real and personal property, and services                 
          of every class, kind, and description; except that it                 
          is not to conduct a banking, safe deposit. trust,                     
          insurance, surety, express, railroad, canal, telegraph,               
          telephone, or cemetery company, a building and loan                   
          association, mutual fire insurance association,                       
          cooperative association, fraternal benefit society,                   
          state fair of exposition.  To conduct business in, have               
          one or more offices in, and by, hold, mortgage, sell,                 
          convey, lease or otherwise dispose of real and personal               
          property, including franchises, patents, copyrights,                  
          trademarks. and licenses, in the State of Utah and in                 
          all other states and countries. To contract debts and                 
          borrow money, issue and sell or pledge bonds,                         

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          debentures, notes, and other evidences of indebtedness,               
          and to execute such mortgages, transfers of corporate                 
          property, or other instruments to secure the payment of               
          corporate indebtedness as required. To purchase the                   
          corporate assets of any other corporation and engage in               
          the same or other character of business. To guarantee,                
          endorse, purchase, hold, sell, transfer, mortgage,                    
          pledge, or otherwise acquire or dispose of the shares of              
          the capital stock of, or any bonds, securities, or                    
          other evidences of indebtedness created by any other                  
          corporation of the State of Utah or any other state or                
          government, and while owner of such stock to exercise                 
          all the rights, powers, and privileges of ownership,                  
          including the right to vote such stock.                               
               (b) To acquire by purchase, exchange, gift,                      
          bequest. subscription, or otherwise, and to hold, own,                
          mortgage, pledge, hypothecate, sell, assign, transfer,                
          exchange, or otherwise dispose of or deal in or with its              
          own corporate securities or stock or other securities.                
          including, without limitation, any shares of stock,                   
          bonds, debentures, notes, mortgages, or other                         
          obligations, and any certificates, receipts or other                  
          instruments representing rights or interests therein,                 
          or any property or assets created or issued by any                    
          person, firm, associations, or corporations, or any                   
          government or subdivisions, agencies or                               
          instrumentalities thereof; to make payment therefor in                
          any lawful manner or to issue in exchange therefor its                
          own securities or to use its unrestricted and                         
          unreserved earned surplus for the purchase of its own                 
          shares, and to exercise as owner or holder of anv                     
          securities any and all rights, powers and privileges in               
          respect thereof.                                                      
               (c) To do each and every thing necessary,                        
          suitable or proper for the accomplishment of any of the               
          purposes or the attainment of any one or more of the                  
          subjects herein enumerated, or which may at any time                  
          appear conducive to or expedient for protection or                    
          benefit of this corporation, and to do said acts as                   
          fully and to the same extent as natural persons might,                
          or could do, in any part of the world as principals,                  
          agents, partners, trustees or otherwise, either alone                 
          or in conjunction with any other person, association or               
          corporation.                                                          
              (d) The foregoing clauses shall be construed                      
          both as objects and powers and shall not be held to                   
          limit or restrict in any manner the general powers of                 
          the corporation and the enjoyment and exercise thereof                
          as conferred by the laws of the State of Utah; and it                 

                                     - 2 -                                      

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          is the intention that the purposes, objects and powers                
          specified in each of the paragraphs of this Article III               
          shall be regarded as independent purposes, objects and                
          powers.                                                               

                              ARTICLE IV - SHARES                               
                              -------------------                               

          The aggregate number of shares which the Corporation shall            

     have authority to issue is one million (1,000,000), par value of           

     One Cent ($O.01) per share. All shares of the Corporation shall            

     be of the same class and shall have the same rights and                    

     preferences.   Fully paid shares of the Corporation shall not be           

     liable to any further call or assessment.                                  

                        ARTICLE V -  COMMENCING BUSINESS                        
                        --------------------------------                        

          The Corporation will not commence business until con-                 

     sideration of a valve of at least $1.000 has been received for             

     the issuance of shares.                                                    

                        ARTICLE VI -  SHAREHOLDER RIGHTS                        
                        --------------------------------                        
          The authorized shares of stock of the Corporation may be              

     issued at such time, upon such terms and conditions, and for such          

     consideration as the Board of Directors shall determine.                   

     Shareholders shall have preemptive rights to acquire unissued              

     shares of the stock of the Corporation.                                    

                              ARTICLE VII - BYLAWS                              
                              --------------------                              
          The Directors shall adopt Bylaws which are nor inconsistent           

     with law or these Articles for the regulation and management of            

     the affairs of the Corporation. The Bylaws may be amended from             

     time to time or repealed pursuant to law.                                  

                                      - 3 -                                     

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                   ARTICLE VIII - REGISTERED OFFICE AND AGENT                   
                   ------------------------------------------                   
          The address of the Corporation's initial registered office            

     and the name of its original registered agent at such address is:          

               William H. McMahan                                               
               1832 South 3850 West                                             
               Salt Lake City, Utah 84104                                       

                             ARTICLE IX - DIRECTORS                             
                             ----------------------                             
           The number of Directors constituting the initial Board of            

     Directors of the Corporation is three (3). The names and                   

     addresses of persons who are to serve as Directors until the               

     first annual meeting of shareholders, or until their successors            

     be elected and qualify, are:                                               

          William H. McMahan                                                    
          1467 Penrose Drive                                                    
          Salt Lake City. Utah 84103                                            

          Eugene E. Cohen                                                       
          6700 South West 117th Street                                          
          Miami, Florida 33143                                                  

          Robert H. Still, Jr.                                                  
          1011 Windward Way North                                               
          Jacksonville, Florida 32216                                           

                           ARTICLE X - INCORPORATORS                            
                           -------------------------                            
          The name and address of each Incorporator is:                         

                   Mark L. Ballard                                              
                   1832 South 3850 West                                         
                   Salt Lake City, Utah 84104                                   

                   Dale E. Hulse                                                
                   American Plaza II, Suite 400                                 
                   57 West 200 South                                            
                   Salt Lake City, Utah 84101                                   

                                     - 4 -                                      

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                   Craig M. Lundell                                             
                   American Plaza II, Suite 400                                 
                   57 West 200 South                                            
                   Salt Lake City. Utah 84101                                   

                ARTICLE XI - OFFICERS' AND DIRECTORS' CONTRACTS                 
                -----------------------------------------------                 

          No contract or other transaction between this corporation             

     and one or more of its directors or any other corporation, firm,           

     association, or entity in which one or more of its directors are           

     directors or officers or are financially interested, shall be              

     either void or voidable because of such relationship or interest,          

     or because such director or directors are present at the meeting           

     of the Board of Directors, or a committee thereof, which                   

     authorizes, approved or ratifies such contract or transaction, or          

     because his or their votes are counted for such purpose if; (a)            

     the fact of such relationship or interest is disclosed or known            

     to the Board of Directors or committee which authorizes, approves          

     or ratifies the contract or transaction by vote or consent                 

     sufficient for the purpose without counting the votes or consents          

     of such interested director; or (b) the fact of such relationship          

     or interest is disclosed or known to the shareholders entitled to          

     vote and they authorize, approve, or ratify such contract or               

     transaction by vote or written consent; or (c) the contract or             

     transaction is fair and reasonable to the corporation.                     

          Common or interested directors may be counted in determining          

     the presence of a quorum at a meeting of the Board of Directors            

     or committee thereof which authorizes, approves or ratifies such           

     contract or transaction.                                                   

                                     - 5 -                                      

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          DATED this 12th day of January, 1983                                  

                                 /s/ Mark L. Ballard                            
                                    ----------------------------                
                                     Mark L. Ballard                            

                                 /s/ Dale E. Hulse                              
                                    ----------------------------                
                                     Dale E. Hulse                              

                                 /s/ Craig M. Lundell                           
                                    ----------------------------                
                                     Craig M. Lundell                           

     STATE OF UTAH         )                                                    
                           : ss.                                                
     COUNTY OF SALT LAKE   )                                                    

          On the 12th day of January, 1983, personally appeared before          

     me Mark L. Ballard, Dale E. Hulse and Craig Lundell who, being             

     by me first duly sworn, severally declared that they are the               

     persons who signed the foregoing document as incorporators and             

     that the statements therein contained are true.                            

                                        A.B. (unreadable)                       
                                  ------------------------------                
                                          NOTARY PUBLIC                         

                                  Residing at Bountiful, Utah                   

     My Commlssion Expires:                                                     

            8-5-84                                                              
     -------------------------                                                  
        (Notary Seal)                                                           

     NLB010/5627.18/2                                                           

                                     - 6 -                                      

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Dates Referenced Herein   and   Documents Incorporated by Reference

				Referenced-On Page
This ‘10KSB’ Filing		Date		First		Last			Other Filings
		4/30/99		8		29
		6/30/98		31					10QSB
		2/1/98		26
		1/1/98		26
		8/1/97		29					DEF 14A
		5/21/97		1
Filed on:		3/31/97							10QSB
		3/27/97		14
		3/17/97		1
		2/14/97		18
For Period End:		12/31/96		1		35			DEF 14A
		6/10/96		36
		5/22/96		2		36
		12/31/95		3		27			10KSB
		1/1/95		13		26
		12/31/94		26
		6/1/93		31
		5/21/93		31
		9/10/92		31
		6/1/92		31
		5/29/92		31		37
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