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Proc-Type: 2001,MIC-CLEAR
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<SEC-DOCUMENT>/in/edgar/work/0000351129-00-500005/0000351129-00-500005.txt : 20001122
<SEC-HEADER>0000351129-00-500005.hdr.sgml : 20001122
ACCESSION NUMBER: 0000351129-00-500005
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 1
CONFORMED PERIOD OF REPORT: 20000630
FILED AS OF DATE: 20001121
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CDX COM INC
CENTRAL INDEX KEY: 0000351129
STANDARD INDUSTRIAL CLASSIFICATION: [3845
] IRS NUMBER: 840771180
STATE OF INCORPORATION: CO
FISCAL YEAR END: 0630
</COMPANY-DATA>
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 000-09735
FILM NUMBER: 774551
</FILING-VALUES>
BUSINESS ADDRESS:
STREET 1: ONE RICHMOND SQUARE
STREET 2: NO 27
CITY: PROVIDENCE
STATE: RI
ZIP: 02906
BUSINESS PHONE: 4012741444
</BUSINESS-ADDRESS>
MAIL ADDRESS:
STREET 1: ONE RICHMOND SQUARE
STREET 2: NO 27
CITY: PROVIDENCE
STATE: RI
ZIP: 02906
</MAIL-ADDRESS>
FORMER COMPANY:
FORMER CONFORMED NAME: CDX CORP
DATE OF NAME CHANGE: 19920703
</FORMER-COMPANY>
</FILER>
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>cdxx10-kval.txt
<TEXT>
CDX COM INC
Filing Type:
10-K
Description:
Annual Report
Filing Date:
November ____, 2000
Period End:
June 30, 2000
Primary Exchange:
Over the Counter Includes OTC
and OTCBB
Ticker:
CDXX
Table of Contents
10-K
PART I 4
Item 1 5
Item 2 6
Item 3 6
Item 4 7
PART II 7
Item 5 7
Item 6 7
Table1 7
Table2 6
Item 7 8
Item 8 8
Item 9 9
PART III 9
Item 10 9
Table3 9
Table4 9
Item 11 10
Table5 10
Table6 11
Item 12 12
Table7 12
Item 13 12
PART IV 13
Item 14 13
Balance Sheet 16
Income Statement 37
10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ___________ to
_____________
CDX CORPORATION
(Exact name of Registrant as specified in
its charter)
Commission file number
Colorado
84-0771180
(State or other jurisdiction of
(I.R.S. Employer
incorporation or organization
Identification No.)
One Richmond Square
02906
Providence, RI
(Zip Code)
(Address of principal executive offices)
Registrant's telephone number,
including area code
(401)274-1444
Securities registered pursuant to Section 12(b) of
the Act:
Title of each class Name of each
exchange on which registered
None None
Securities registered pursuant to 12(g) of the Act:
Common Stock, Par Value $.01
(Title of class)
Indicate by check mark whether the Registrant (1) has
filed all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of
1934 during the preceding 12 months (or for such
shorter period that the
Registrant was required to file such reports), and
(2) has been subject to
such filing requirements for the past 90 days. Yes
___ No X.
Indicate by check mark if disclosure of delinquent
filers pursuant to Item
405 of Regulation S-K is not contained herein, and
will not 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-K or any
amendment to this Form 10-K. [ ]
Since February of 1986, there have been no published
prices of the
Registrant's stock. The total number of shares held
by nonaffiliates of the
Registrant as of June 30, 2000 was 1,180,191.
Indicate the number of shares outstanding of each of
the Registrant's classes
of common stock, as of June 30, 2000
4,887,927
DOCUMENTS INCORPORATED BY REFERENCE
Document Part of 10-K into which
incorporated
None
CDX CORPORATION
2000 Annual Report on Form 10-K
Table of Contents
Page #
PART I
ITEM 1 - Business
3
A. General
3
B. Products And Services
3
C. Marketing And Customers
4
D. Product Development
4
E. Product Protection
5
F. Backlog
5
G. Competition
5
H. Employees
5
ITEM 2 - PROPERTIES
5
ITEM 3 - LEGAL PROCEEDINGS
5
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS 6
PART II
ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED
SECURITY HOLDER MATTERS
6
ITEM 6 - SELECTED FINANCIAL DATA
6
ITEM 7 - MANAGEMENT DISCUSSIONS AND ANALYSES OF
FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
7
ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA 8
ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURES
8
PART III
ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE
REGISTRANT 9
ITEM 11 - EXECUTIVE COMPENSATION
10
ITEM 12 - CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
12
ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS 13
PART IV
ITEM 14 - EXHIBITS, FINANCIAL SCHEDULES AND
REPORTS ON FORM 8-K 13
SIGNATURES
14
PART I
Item 1. BUSINESS
A. General
CDX Corporation is a Colorado corporation
incorporated in 1978 with its corporate offices
headquartered in Providence, Rhode Island.
The Business of the Company has consisted of the sale
of computerized pulmonary diagnostic equipment which
is used in the medical profession to test for
indications of lung or congestive heart disease.
Approximately 11,000 units have been sold.
In December 1994 the Company acquired Compliance
Systems, a manufacturer of infection control
products which provide emergency personnel with
protection during trauma response situations
and assist compliance with certain OSHA mandates.
In FY96 the Company also introduced a new version
of its Instant Response Mask (IRM) with improved
features designed to protect personnel involved
in administering emergency cardio-resuscitation
techniques to compliment the Compliance Systems
product line. Marketing of the IRM was
discontinued in FY 99.
CDX also generates revenue from the sale of
consumable supplies and accessory items
associated with its diagnostic equipment. In
addition, the Company procured a new model of
spirometer in FY 99.
B. Products And Services
Approximately 20% of the Company's gross revenues in
its most recent fiscal year was attributable to
the sale of its testing machines, 65% of gross revenues
was attributable to sales of consumable and accessory
items and 7% of gross revenues was attributable to
repairs and testing. Bio-hazard control products
comprised 8% of sales.
The Company's objective is to increase gross revenues
with the introduction of new and upgraded version
of the current spirometer. A new version of the
Instant Response Mask was released in December 1995.
Although initially well received, this product has
not lived up to the Company's expectations and
marketing efforts and expenditures in connection
with it have been curtailed.
The types of products which the Company currently
markets are described below.
1. CDX SPIRO 850. A new model of spirometer, the
CDX850, was procurred under an exclusive OEM supply
arrangement to replace the CDX Spiro 110's and was
introduced in the beginning of FY 99. The CDX850
is a portable, compact pulmonary diagnostic machine
utilizing digital electronics and the latest
technology.
2. CDX SPIRO 110's. The Company previously sold a
line of spirometers(the 110 series) which it
manufactured. Production of the 110 Series
spirometers was curtailed at the end of FY 98.
The Company continues to support and repair such
spirometers.
Additionally, the Company provides for sale of
disposable and accessory items associated
with its testing equipment as well as maintenance and
service agreements.
3. Biosponse
A portable bio-hazard spill kit for bloodborne
pathogens which complies with OSHA
regulation.
4. Biopail
A complete clean up and personal protection for first
responders against blood
pathogens contained in a refillable two gallon pail
meeting OSHA Regulations.
The Company formerly marketed a CPR mask known as the
"Instant Response Mask" or "IRM."
Marketing of the IRM was discontinued in FY98 in an
effort to reduce costs related to
marginal products.
C. Marketing And Customers
The Company's principal customers have historically
been primary care physicians, group
practices, clinic, and medical centers. Portable
spirometers are typically used by
internists, family physicians, and general
practitioners in their offices to conduct
preliminary diagnostic tests of a patients pulmonary
function. Spirometers are also used
extensively in industry to provide screening
diagnosis, establish baselines and monitor
pulmonary function in the workplace. The Company's
customer base includes pulmonologists,
allergists, and cardiologists who require the speed,
accuracy, and flexibility of hospital-
based systems in a small, light-weight, portable
system.
During the year ended June 30, 2000, the Company did
not have any one customer responsible
for 10% or more of sales activity or revenues.
The Company currently markets its products directly
to retail customers from its Rhode
Island office and through medical equipment dealers
and distributors, supported through a
network of factory trained manufacturer's
representatives. The Company supports this sales
network through direct mail, advertising in clinical
and trade publications, and
participation in national and regional trade shows.
D. Product Development
In FY 00 the Company terminated its product
development program which was targeted at the
equipment needs of the physician's office to reduce
costs.
E. Products Protection
The company held a patent issued by the U.S. Patent
office in 1981 for the overall
structure and function of its remote pulmonary
function tester known as the CDX 110. The
patent does not apply outside the United States. The
Company's current products had
protection under certain claims of this patent until
1998. Protection under this patent
lapsed in 1998.
The Company holds a federal trademark "CDX" which is
used on its products.
F. Backlog
The Company does not currently have any backlog of
sales orders or delays of shipments due
to lack of parts or supplies.
G. Competition
The market for the Company's products is
characterized by rapid advancements in technology
and by intense competition among a number of
manufacturers and distributors. The Company
believes that it competes favorably in the market;
however, no assurance can be given that
the Company will have the financial resources,
marketing, distribution, service or support
capabilities, depth of key personnel or technological
expertise to compete successfully in
the future.
H. Employees
As of June 30, 2000, the Company employed no full-
time employees. All services were
provided to the Company by two independent
contractors, one of which is an affiliate.
Item 2. PROPERTIES
In July of 1997 the Company moved its sales
offices and operations to Massachusetts.
In September 1998 the Company moved its sales
offices and operations to Providence, Rhode
Island. Currently the Company rents its facilities
on a month to month basis from an
affiliate. Management believes that the rental rates
charged are the same or more favorable
than those which would be available from unaffiliated
third parties. Rental space is
available in the area, and the Company expects to be
able to continue to be able to obtain
adequate space at costs comparable to its current
rent.
Item 3. LEGAL PROCEEDINGS
There are no legal proceedings pending against
the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF
SECURITY HOLDERS
The corporation did not submit any matter to a
vote of security holders during the
year ended June 30, 2000.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED SECURITY HOLDERS MATTERS
There is no established public trading market
for the Corporation's common stock. The
stock is traded over-the-counter in privately
negotiated transactions between market makers
and brokers. Prices are published in the pink sheets
issued by the National Quotation
Bureau, but sales are not systematically reported by
market makers and brokers.
Holders
Based upon the number of record holders, the
approximate number of shareholders of the
common stock of the Corporation as of June 30, 2000
was 868.
Dividends
No dividends have been declared during the past
fiscal years with respect to common
stock.
Item 6. SELECTED FINANCIAL DATA
2000 1999 1998 1997 1996
Net Sales &
Operating
Revenues $243,327 $318,260
$264,175 $379,608 $394,043
Profit (Loss) $(26,356) $(14,980)
$84,452 (122,372) (206,413)
Profit (Loss)
per Common Share (.005) (.003) .017
(.028) (.057)
Total Assets 105,548 120,151 179,688
185,918 184,081
Long Term
Obligations 25,000 25,000 25,000
25,000 25,000
Cash Dividend
Declared
per Share 0.00 0.00 0.00 0.00
Weighted average
number of
Common Shares
Outstanding 4,887,927 4,887,927 4,887,927
4,339,434 3,587,927
MARKET INFORMATION
CDX Corporation's common stock is traded over-
the-counter in privately negotiated
transactions between makers and brokers.
Price Range (closing bid) For fiscal year ending June
30:
2000
1999
Quarter
Bid
High
Prices
Low
Asked
High
Prices
High
Bid
High
Prices
Low
Asked
High
Prices
High
1st
.08
.09
.09
.12
.125
.125
.1875
.175
2nd
.08
.09
.09
.14
.125
.125
.2188
.1875
3rd
.05
.09
.09
.15
.125
.125
.1875
.1875
4th
.08
.09
.09
.12
.125
.125
.1875
.1875
These market quotations are from the National Daily
Quotation Service. They reflect prices
between dealers without retail mark up, mark down or
commission. They do not represent
actual transactions. No dividends have been declared
during the past two fiscal years with
respect to common stock.
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Net Sales and Operating Revenues for FY 00
decreased by $74,935 which is down
approximately 24% from the previous fiscal year.
This compares with an increase of
$54,085, or approximately 20%, in similar figures for
FY 99 to FY 98. Cost of Sales
decreased by $66,534 for FY 00 compared to FY 99,
with the Company incurring an Operating
Loss of $26,356. During the previous fiscal year,
Cost of Sales increased by $77,856 from
those of FY 98 resulting in Operating Loss of
$14,900. FY 98 showed an Operating income of
$84,452. The Operating Loss for FY 00 was 10.7% as a
percentage of Net Sales compared with
Operating Loss of 4.4% for FY 99 and operating income
of 31% for FY 98, respectively. The
decrease in profitability and FY 00 and FY 99 is the
result of higher unit costs and lower
sales. The improvement in operating results for FY 99
was a reflection of reduced costs and
expenses, primarily in the areas of cost of goods,
payroll and rent. Management hopes to
continue its efforts to reduce expenses and keep them
in line with margins and to increase
sales volume.
Cost of Goods Sold as a percent of Net Sales
decreased from 44.8% ($109,177) in FY 00
from 53.3% (169,711) in FY 99 due primarily to
decreased sales. Similar costs for FY 98 to
FY 99 increased from 34.4% ($91,855) in FY 98 to
53.1% ($169,711) in FY 99.
Selling and Administrative Expenses decreased
overall by $26,241, to $130,925 for FY
00 from $157,166 for FY 99. As a percentage of Net
Sales these figures were 53.5% and
49.38% respectively which represents a 17.2% decrease
in such expenses between the two
years. Comparable expenses for FY 98 were 57.1%
($162,303). The increase in percentages
of expenses shown in FY 00 over FY 99 reflects a
decrease in Net Sales without a
corresponding decrease in expenses.
Interest expense for FY 00 increased to $29,581
from $21,863 for FY 99. In FY 99,
interest expense decreased $1,213. Interest income
was immaterial for FY 99 and 00.
Inflation has had a minimum impact upon the
Revenues and Costs of the Company.
Liquidity And Capital Resources
In fiscal year 2000, the Company's liquidity
decreased by $11,875. This compares with
a decreased position of $3,257 in FY 99. The FY 00
increase primarily reflects the impact
of an increase in cash provided by operations for FY
00 of $9,219 versus cash from
operations of $2,656 in FY 99.
The Company expects that its current working
capital position is sufficient to
continue to meet operating requirements during the
coming fiscal year and that it has
sufficient reserves to meet some unforeseen
contingencies given a continued willingness on
the part of several of its officers to fund deficits
with loans.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
See Item 14 of this report.
Item 9. CHANGES IN AND DISAGREEMENTS WITH
ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS
The current directors and executive officers of
the Corporation, their ages, their
positions held in the Corporation and the term during
which each served in such position
are as follows:
DIRECTORS
Year First Elected
Name and All Positions or Nominated to
Held With the Corporation Age Become a Director
Harold I. Schein 65 1985
Chairman of the Board,
Treasurer and Director
Michael L. Schein 36 1998
President
Philip D. Schein 37 1989
Secretary
And Director
Officers and directors are elected on an annual
basis. The present term of office for
each director will expire at the next annual meeting
of the Company's stockholders at such
time as his successor is duly elected.
Officers serve at the discretion of the Board of
Directors.
EXECUTIVE OFFICERS
Name and All Positions Year First
Term of
Currently Held Elected to
Office
With the Corporation Age This Office
Expiring
Harold I. Schein (2) 65
Chairman of the Board, 1989
(1)
Chief Executive Officer, 1989
(1)
Treasurer, 1989
(1)
Director 1985
(1)
Michael L. Schein (2) 36
President 1998
(1)
Philip D. Schein (2) 37
Secretary, 1989
(1)
Director 1989
(1)
(1) The executive officers serve at the pleasure
of the board of directors and do not
have fixed terms.
(2) Michael L. Schein and Philip D. Schein are
sons of Harold I. Schein
HAROLD I. SCHEIN, 65, serves as Chairman of the
Board, Chief Executive Officer, Treasurer
and a Director. Mr. Schein, since January 1990, has
been President of Richmond Square
Capital Corporation, a private lender and venture
capital corporation. Prior to 1990, Mr.
Schein served as chairman and chief executive officer
of William Bloom & Son, Inc, a
manufacturer of store fixtures. From March 1989 to
September 1992, Mr. Schein also served
as chairman of Piezo Electric Products, Inc. of
Metuchen, New Jersey, a publicly owned
company. He is also a developer of commercial real
estate. Mr. Schein became chairman of
the board of directors and treasurer of the
Corporation in March 1989.
MICHAEL L. SCHEIN, 36, serves as President. Mr.
Schein became president of the corporation
in May 1999. Mr. Schein has been in the private
practice of law from 1990 to the present.
Mr. Schein served as a special assistant prosecutor
in the Rhode Island Department of
Attorney General from 1990 to 1993. He is a 1986
graduate of Tufts University and received
his JD from Boston University School of Law in 1990.
PHILIP D. SCHEIN, 37, serves as Secretary and a
Director. Mr. Schein became secretary of
the corporation in March 1989 and assumed the office
of president in October 1992. He
resigned as president in May, 1999 in order to pursue
other ventures. Prior to this, Mr.
Schein held the position of Executive Vice President
of William Bloom & Son, a manufacturer
of custom store fixtures, where he was in charge of
sales and manufacturing. He is a 1985
graduate of Boston University.
Item 11. EXECUTIVE COMPENSATION
No executive officer received in excess of
$100,000.
No executive officer of the Corporation received
other compensation not reported in
the above cash compensation table in excess of
$25,000 or 10% of the compensation reported
in the above cash compensation table.
Directors who are not regular, full-time
employees may be compensated for service on
the board of directors at the rate of $1,500 per
director per quarter, i.e., $6,000
annually. In order to qualify for quarterly
compensation, a director must attend the
majority of meetings held within the quarter. No
such payments have been made since 1989.
SUMMARY COMPENSATION TABLE
Annual Compensation
Long Term
Compensation
Awards
Securities
Name & Principal Fiscal Other Annual
Underlying
Position Year Salary
Compensation(1) Option/SARS(#)
________________ ______ _______ ____________
______________
Michael L. Schein 2000 $______ 0 0
President 1999
Philip D. Schein 2000 $ 0
President 1999 6,200 0
1998 52,944 0
1997 65,000 5,000
Harold I. Schein 2000 $ 0
Chairman & 1999 0 0
Treasurer 1998 0 0
1997 0 17,500
(1) Certain perquisites provided to each of the
named executive officers totaled less
than 10 percent of each officer's total salary and
Stock Option Grants.
(2) Michael L. Schein provided services as an
independent contractor to the Company
and was paid $21,000 in FY 00.
OPTION/SAR GRANTS TABLE
Option/SAR Grants in Last Fiscal Year
The Company did not grant any options during FY
2000.
AGGREGATED OPTION EXERCISES IN 2000
AND
OPTION/SAR VALUES AT FISCAL YEAR-END
Name
Number of unexercised in-
the-money options/SARs at
fiscal year-end (#)
Exercisable/unexercisable
Value of Unexercised
in-the-money
options/SARs at
fiscal year end($) (1)
Exercisable/unexercisable
Philip D. Schein
0/0
$0/$0
Harold I. Schein
0/0
$0/$0
(1) Market value of underlying securities at FYE
00 discounted by two-thirds to reflect
restrictive provisions, minus exercise or base price.
Stock Option Plan
In November, 1987, the Shareholders of the
Corporation approved an incentive stock
option plan which provides that options may be
granted to officers and employees, with a
maximum aggregate number of 150,000 shares issuable
under the plan. Shares underlying
granted options are exercisable 25% on the date of
grant and 25% each year thereafter on a
cumulative basis. Unexercised options lapse ten
years after the date of grant or expire
within 90 days of termination of employment.
Exercise price is fair market value of a
share of common stock at date of grant. The plan has
a term of ten years.
In November 1987, the Directors of the
Corporation approved a Non-Qualified Stock
Option Plan for employees, consultants and directors.
The Corporation has reserved 60,000
unregistered shares of its common stock for use in
this plan. During 1993, the Board of
Directors reserved another 1,440,000 unregistered
shares of its common stock for use in
this plan. Each of the four outside directors were
granted options for 15,000 shares at
$.10 per share exercisable during their continuation
as an employee, director or advisory
member of, or consultant to the Company, and for the
three year period thereafter. In
addition, during 1993, the Company granted one of its
directors options for 250,000 shares
at $.10 per share and granted one of its consultants
options for 77,800 shares at $.05 per
share. The options on 60,000 shares @$.10 per share
granted to outside directors and
77,800 shares @$.05 granted to a consultant have
expired unexercised.
A summary of the plans at June 30, 2000 is
as follows:
TOTAL SHARES SHARES AT
OPTION OPTION
RESERVED
OUTSTANDING PRICE
____________
________________ _______
1987 Non-Qualified
Stock Option Plan 1,500,000 250,000
$.10
100,000
$.25
15,000
$.25
22,500
$.25
In December 1992, the Company issued 600,000
warrants for its common stock to certain
of its officers and consultants in return for
services. The warrants are exercisable at
$.02 per share with an expiration date of December
31, 1998. Also, in February 1995, the
Company issued 75,000 warrants for its common stock
to an investor in connection with a
loan. The warrants are divided into three equal
classes with exercise prices of $0.25,
$0.375 and $0.50 respectively with all classes
expiring in February 1998. During December
of FY99 the terms of the December 1992 warrants and
the February 1995 warrants were
modified and extended so that all series of warrants
issued prior to December 31, 1998
shall expire as of December 31, 2001.
Item 12. CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL
OWNERS AND MANAGEMENT
The following table sets forth information as to
persons other than management (see the
following table) who are known to management to
beneficially own more than 5% of the
outstanding voting stock as of June 30, 2000.
Title Name and Address Amount and
Nature of Percent of
of Class of Beneficial Owner Beneficial
Ownership Class
________ ___________________
____________________ __________
Common Mendel S. Kaliff 247,223
Direct 5.6%
Stock 70 N.E. Loop 410
No. 450
San Antonio, TX 78216
The following table sets forth the security ownership
of all directors and executive
officers of the corporation as of June 30, 2000.
Title Name of Amount and Nature of
Percent of
of Class Beneficial Owner Beneficial Ownership
of Class Position
________ ________________ ____________________
__________ ________
Common Harold I. Schein 2,616,737 (1)
59.6% Treasurer,
Stock
Director, and
Chairman of
the Board
13
Common Philip D. Schein 426,000 (2)
9.7% President,
Stock
Secretary,
Director
Common Directors and 3,042,737
69.3%
Stock Officers as a
Group (2 persons)
____________________________
(1) Shares subject to sole investment and voting
power. Includes options and warrants
granted by the corporation to purchase 585,000
shares, as to which option shares the
optionee/warrantholder disclaims beneficial
ownership.
(2) Shares subject to sole investment and voting
power. Includes options and warrants
granted by the corporation to purchase 215,000
shares, as to which option shares the
optionee/warrantholder disclaims beneficial
ownership.
Item 13. CERTAIN RELATIONSHIPS AND RELATED
TRANSACTIONS
The Company entered into a lease agreement on
March 26, 1990 with a related party to
rent its facilities in Providence, Rhode Island.
Base monthly rental payments were
modified to $2,500 beginning October 1995 and the
lease term to five years, expiring on
February 28, 1995. In May of 1996 the Company and
related party modified the terms of the
lease to month to month rental payments of $1,500.
The Company sublet a part of this space
to an unrelated party for $500 per month. The
Company believes this to have been at or
below the rent for comparable space from unrelated
parties.
PART IV
Item 14. EXHIBITS, FINANCIAL SCHEDULES AND REPORTS
ON FORM 8-K
(a) The following documents are filed as part
of this report:
1. Financial Statements:
Opinions of independent public
accountants dated
September 30, 1999 on the
financial statements as follows:
Balance Sheets, June 30, 2000 and
1999.
Statements of Earnings for the
years ended June 30, 2000,
1999 and 1998.
Statements of Cash Flows for the
years ended June 30, 2000,
1999 and 1998.
Statements of Changes in
Stockholders' Equity for the years
ended June 30, 2000, 1999 and
1998.
2. Financial Statement Schedules:
All schedules for which provision
is made in the applicable
regulations of the Securities and
Exchange Commission have
been omitted because they are not
required if the
information is shown in the
financial statements and notes
thereto.
(b) Reports on form 8-K
No reports on Form 8-K were filed.
(c) Exhibits
See the Index of Exhibits immediately
preceding the exhibits
attached to this report. The exhibits
are incorporated herein
by this reference.
SIGNATURES
Pursuant to the requirements of Section 13 or
15(d) of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report
to be signed on its behalf by the
undersigned, thereunto duly authorized.
CDX CORPORATION
(Registrant)
/s/Michael L. Schein
By: __________________
Michael L. Schein
President
Dated: November ____, 2000
Pursuant to the requirements of the Securities
Exchange Act of 1934, this report has
been signed by the following persons on behalf of the
Registrant and in the capacities and
on the dates indicated.
Signature Title
Date
/s/Harold I. Schein
_______________________ Chairman of the Board,
November ____, 2000
Harold I. Schein Treasurer, Chief
Finanacial
Officer and Director
/s/Philip D. Schein
_______________________ Secretary and
November ____, 2000
Philip D. Schein Director
15
INDEX TO EXHIBITS
(a) Exhibits:
The following documents are filed herewith or
have been included as exhibits to
previous filings with the Commission and are
incorporated herein by this reference:
Exhibit No. Document
* 3.1 Restated Articles of
Incorporation dated
July 3, 1985
(incorporated by
reference to the exhibits
and Registrant's report
filed on Form 10-K
dated September 25,
1985)
* 3.2 Articles of Amendment
dated December 4, 1987
to the Restated Articles
of Incorporation
(incorporated by
reference to the exhibits
to Registrant's report
filed on Form 10-K
dated September 15,
1989)
* 3.3 Bylaws dated July 5,
1985
(incorporated by
reference to the exhibits
to Registrant's report
filed on Form 10-K
dated September 15,
1989)
x 23.1 Consent of Counsel,
Brendan P. Smith, Esq.
x 23.2 Consent of Cayer,
Prescott, Clune & Chatellier,
LLP, Independent
Certified Public Accountants
x 27.0 Financial Data Schedule
______________
* Incorporated by reference from the issuer's
Annual Report Pursuant
to Section 13 or 15(d) of the Securities
Exchange Act of 1934
x Filed herewith
CDX CORPORATION
BALANCE SHEETS FOR YEARS ENDED
JUNE 30, 2000 AND 1999
AND
STATEMENTS OF OPERATIONS, STOCKHOLDERS' EQUITY
AND CASH FLOWS FOR YEARS ENDED
JUNE 30, 2000, 1999 AND 1998
INDEPENDENT AUDITOR'S REPORT
To the Stockholders and Board of Directors
CDX Corporation
We have audited the balance sheets of CDX Corporation
as of June 30, 2000 and 1999, and the
related statements of operations, stockholders'
equity and cash flows for the years ended June 30,
2000,
1999, and 1998. These financial statements are the
responsibility of the Company's management. Our
responsibility is to express an opinion on these
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 audits
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 financial statements referred to
above present fairly, in all material respects, the
financial position of CDX Corporation as of June 30,
2000 and 1999, and the results of its operations and
its cash flows for the years ended June 30, 2000,
1999, and 1998 in conformity with generally accepted
accounting principles.
The accompanying financial statements have been
prepared assuming that the Company will
continue as a going concern. As discussed in Note 12
to the financial statements, the Company has
suffered recurring losses from operations and has a
net capital deficiency, which raises substantial
doubt
about its ability to continue as a going concern.
Management's plans regarding those matters are also
described in Note 12. The financial statements do
not include any adjustments that might result from
this
uncertainty.
November 13, 2000
CDX CORPORATION
BALANCE SHEETS
JUNE 30, 2000 AND 1999
ASSETS
2000 1999
Current assets:
Cash $ 22,134 $ 10,259
Accounts receivable - trade (net of allowance for
doubtful accounts of $1,260
in 2000 and 1999) 22,489 37,045
Inventory 17,753 9,209
Total current assets 62,376
56,513
Property and equipment - net of accumulated
depreciation 7,865 9,178
Other assets:
Invention rights and deferred product development
costs (less accumulated
amortization of $495,817 in 2000 and $476,664 in
1999) 35,307 54,460
TOTAL ASSETS $ 105,548 $
120,151
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Current portion of long-term debt $
7,200 $ 4,000
Accounts payable - trade 27,612
33,089
Accounts payable - shareholder 238,317
243,500
Accrued interest payable 114,496
91,974
Accrued expenses 6,581
6,690
Total current liabilities 394,206
379,253
Other liabilities:
Notes payable - officers, net 209,404
212,604
Notes payable 50,000 50,000
Total other liabilities 259,404
262,604
Stockholders' deficiency:
Common stock, $.01 par value; 10,000,000 shares
authorized, 4,888,093
shares issued 48,881 48,881
Capital surplus. 4,771,798 4,771,798
Deficit. (5,368,741) (5,342,385)
Less: treasury stock, 166 shares, no assigned
value
Total stockholders' deficiency
(548,062) (521,706)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY
$ 105,548 $ 120,151
SEE NOTES TO FINANCIAL STATEMENTS.
CDX CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
Shares
Shares Capital Accumulated
Treasury
Outstanding Par Value Surplus Deficit
Stock Total
Balance, June 30, 1998 4,888,093 $48,881
$4,771,798 $(5,327,405) 166 $(506,726)
Net loss
(14,980) (14,980)
Balance, June 30, 1999 4,888,093 48,881
4,771,798 (5,342,385) 166 (521,706)
Net loss
(26,356) (26,356)
Balance, June 30, 2000 4,888,093 $48,881
$4,771,798 $(5,368,741) 166 $(548,062)
SEE NOTES TO FINANCIAL STATEMENTS.
CDX CORPORATION
STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
2000 1999 1998
Revenues:
Net sales and other revenues $243,327
$318,260 $264,175
Operating costs and expenses:
Cost of sales 109,177 169,711
91,855
Selling & administrative expenses 130,925
157,166 162,303
Total operating costs and expenses
240,102 326,877 254,158
Operating income (loss) 3,225 (8,617)
10,017
Other income (expense):
Interest expense. (29,581) (21,863)
(23,676)
De-recognition of previously accrued liability
15,500 98,111
Net other income (expense) (29,581)
(6,363) 74,435
Net income (loss) $ (26,356) $(14,980) $
84,452
Net income (loss) per common share $ (.005)
$ (.003) $ .017
Weighted-average number of common shares outstanding
4,887,927 4,887,927 4,887,927
SEE NOTES TO FINANCIAL STATEMENTS.
CDX CORPORATION
STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
2000 1999 1998
Cash was provided by (used for):
Operating activities:
Net income (loss) $(26,356) $(14,980)
$84,452
Items in net loss not affecting cash:
Depreciation and amortization 20,466
33,388 21,724
Provision for forgiveness of note payable
(5,000)
Increase (decrease) in cash from changes in
assets and liabilities:
Accounts receivable 14,556
(8,337) 10,780
Inventory (8,544) 31,282 6,064
Other assets 1,240 16,233
Accounts payable - trade (5,477)
(35,931) (34,915)
Accounts payable - shareholder
(5,183) (27,000) (89,857)
Other current liabilities 22,413
22,994 (9,604)
Total cash provided by (used for) operating
activities 11,875 2,656 (123)
Investing activities:
Purchase of property and equipment
(2,033) (1,445)
Total cash used for investing activities
0 (2,033) (1,445)
Financing activities:
Proceeds from notes payable - officers
20,000
Payments on notes payable
(3,880) (6,221)
Total cash provided by (used for) financing
activities 0 (3,880) 13,779
Increase (decrease) in cash during the year
11,875 (3,257) 12,211
Cash balance, beginning of the year 10,259
13,516 1,305
Cash balance, end of the year. $22,134
$ 10,259 $ 13,516
Supplemental disclosures of cash flow information:
Cash paid during the year for interest $
7,059 $ 1,264 $ 1,117
SEE NOTES TO FINANCIAL STATEMENTS.
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Background
CDX Corporation (the Company) was
incorporated in June, 1978 to engage in
the manufacture and sale of computerized pulmonary
diagnostic equipment used in the
medical profession. This equipment tests for
indications of lung or congestive heart
disease. The Company also manufactures and sells
other medical and sanitization
equipment.
Invention Rights
In July of 1997, an updated version of the
Spirosource, a technological
enhancement to its computerized pulmonary diagnostic
equipment, became available for
sale to the public. For financial accounting
purposes, this product has been recorded at
cost, amortized on a straight-line basis over an
estimated useful life of five years. The
Three-Liter Calibration Syringe was also developed
and made available for sale to the
public during the year. It has also been recorded at
cost and amortized on a straight-line
basis over an estimated useful life of five years.
Revenue Recognition
Revenue is recognized upon the invoicing
and shipping of equipment.
Cash and Cash Equivalents
The Company considers all highly liquid
investments purchased with a maturity
of three months or less to be cash equivalents.
At June 30, 1999, the carrying amount of the
Company's deposits was $10,259
and the bank balance was $20,621, of which all was
covered by federal depository
insurance.
At June 30, 2000, the carrying amount of the
Company's deposits was $21,834
and the bank balance was $36,629, of which all was
covered by federal depository
insurance.
At June 30, 2000, the carrying value of
deposits of $21,834 and petty cash funds
relate to the Balance Sheet as follows:
Cash deposits $21,834
Add: petty cash 300
Cash $22,134
Accounts Receivable
An allowance for doubtful accounts
receivable is provided equal to the estimated
collection losses that will be incurred in collection
of all receivables. Estimated losses are
based on historical collection experience coupled
with review of the current status of the
existing receivables and amounted to $1,260 at June
30, 2000 and 1999, respectively.
The Company grants credit to customers who are
located throughout the United States.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(Continued)
Inventories
Inventories are valued at the lower of
cost or market using the first-in, first-out
method.
Property and Equipment
Property and equipment are recorded at
cost. Depreciation and amortization are
recorded using the straight line and double declining
balance methods over the estimated
useful lives of the assets.
The estimated useful lives of property
and equipment are as follows:
Office furniture 7 years
Office equipment 5 years
Production equipment 5 years
Computer equipment 5 years
Leasehold improvements 31.5 years
Income Taxes
Effective July 1, 1993, the Company
adopted Statement of Financial Accounting
No. 109, "Accounting for Income Taxes" (FAS 109).
Under the provisions of FAS 109, an
entity recognizes deferred tax assets and liabilities
for the future tax consequences of
events that have been previously recognized in the
Company's financial statements or
tax returns. The measurement of deferred tax assets
and liabilities is based on
provisions of the enacted tax law; the effects of
future changes in tax laws or rates are
not anticipated. The adoption of FAS 109 did not
have an effect on the Company's
financial statements, nor have any prior year
financial statements been restated.
Per Share Data
Loss per common share was computed by
dividing the net loss by the weighted
average number of shares of common stock outstanding
and common stock equivalents
(unless antidilutive) during the periods.
The weighted average number of shares of common stock
were 4,887,927
shares at June 30, 2000 and 1999.
Use of Estimates
The preparation of financial statements in
conformity with 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.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
2. INVENTORY
Inventory consisted of the following at
June 30:
2000 1999
Finished goods $17,753 $9,209
Total $17,753 $9,209
The company charged a write-off of
obsolete/outdated inventory items in the
amount of $30,667 to cost of goods sold during fiscal
year 1999.
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the
following at June 30:
2000 1999
Office equipment and furniture $
66,795 $66,795
Production equipment 35,257
35,257
Computer equipment 72,242
72,242
Leasehold improvements 16,256
16,256
Total 190,550 190,550
Less: accumulated depreciation
(182,685) (181,372)
Net property and equipment $
7,865 $ 9,178
Depreciation expense for the years ended
June 30, 2000 and 1999 was $1,313
and $10,981, respectively.
4. INCOME TAXES
Due primarily to the utilization of net operating
loss carryforwards, the Company
has no provisions for income taxes for 2000, 1999,
and 1998.
Deferred income taxes reflect the net tax effects of
temporary differences
between the carrying amounts of assets and
liabilities for financial reporting purposes
and the amounts used for income tax purposes. The
Company's net deferred tax asset
balances are primarily attributable to net operating
loss carryforwards and tax credits. At
June 30, 2000, 1999, and 1998, the Company's deferred
tax assets consisted of the
following:
2000 1999 1998
Deferred tax assets $593,480
$597,289 $680,712
Valuation allowance (593,480)
(597,289) (680,712)
Net deferred tax assets recognized
on the accompanying balance sheets
$ 0 $ 0 $
0
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
4. INCOME TAXES (Continued)
The components of the income tax provision (benefit)
consisted of the following
for the years ended June 30, 2000, 1999, and 1998:
2000 1999 1998
Current $ 0 $ 0 $
0
Deferred - using a blended federal and state
rate of 24% (6,300) (3,600) 20,000
Tentative tax provision (benefit)
(6,300) (3,600) 20,000
Expiration of net operating loss carryforwards
348,000 87,023 106,711
Change in valuation allowance (348,000)
(83,423) (126,711)
Net income tax provision (benefit)
$ 0 $ 0 $ 0
The Company has a net operating and economic
loss carryforward of
approximately $2,470,000 available to offset future
federal and state taxable income
through 2018 as follows:
2001 $348,000
2002 142,500
2005 95,500
2006 349,000
2007 334,500
2008 207,000
2009 253,000
2012 71,500
2013 205,000
2014 121,000
2018 12,949
The Company has approximately $15,777 of research and
development credits
that will expire in year 2002.
If certain substantial changes in the Company's
ownership should occur, there
would be a limitation on the amount of net operating
loss and investment tax credit
carryforwards, which could be utilized.
5. NOTES PAYABLE - OFFICERS
During 1993, an officer of the Company
loaned the Company $80,100, with
interest to be paid at 8%. During 1994, the same
officer loaned the Company an
additional $5,000 at 8% interest. No payments are
expected during the next fiscal year
per a forbearance agreement on December 2, 1996.
During 1995, an officer of the Company
loaned the Company $15,000, with
interest to be paid at 8%. No payments are expected
during the next fiscal year.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
5. NOTES PAYABLE - OFFICERS (Continued)
During 1996, officers of the Company
loaned the Company $22,500 with interest
to be paid at 9%, monthly principal and interest
payments will continue to be made during
the next fiscal year.
During 1997, an officer of the Company
loaned the Company $75,000, with
interest to be paid at 9%, monthly principal and
interest payments will continue to be
made during the next fiscal year. Another officer of
the Company loaned the Company
$15,000 with interest to be paid at 13.99%, monthly
principal and interest payments will
continue to be made during the next fiscal year.
During 1998, an officer of the Company
loaned the Company $20,000 with
interest to be paid at 8%. No payments are expected
during the next fiscal year.
Future maturities of long-term debt are as
follows:
Year ended
June 30 Amount
2001 $ 7,200
2002 and thereafter 209,404
Total $216,604
6. NOTES PAYABLE
At June 30, notes payable consisted of
the following:
2000 1999
6% interest bearing note payable to a related
party $25,000 $25,000
10% interest bearing note payable to a related
party 25,000 25,000
Total $50,000 $50,000
7. STOCK OPTION PLANS
In November 1987, the Directors of the
Company approved a Non-Qualified
Stock Option Plan for employees, consultants and
directors. The Company has reserved
60,000 unregistered shares of its common stock for
use in this plan. During 1992, the
Board of Directors reserved another 1,440,000
unregistered shares of its common stock
for use in this plan. In addition, during 1993, the
Company granted one of its directors
options for 250,000 shares at $.10 per share. In
1995 the Company granted to an officer
of the Company a five year option to purchase 15,000
shares at $.25 per share. In 1996,
the Company granted to officers of the Company five
year options to purchase 22,500
shares at $.25 a share.
In 1994, the Company granted to a related
party options for 100,000 shares at
$.25 per share.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
7. STOCK OPTION PLANS (Continued)
In addition, in 1992, the Company issued
600,000 warrants for its common stock
with an exercise price of $.02 to certain of its
officers and consultants in return for
forbearance and modification of certain notes and
accounts payable and services. The
warrant expires December 31, 1998. Further, during
1995, the Company issued 75,000
warrants for its common stock to an unrelated party
in connection with a loan. The
warrants are divided equally into three classes of
25,000 each designated A, B, and C
with exercise prices of $.25, $.375 and $.50,
respectively, all of which were to expire in
February of 1998 and which have been extended and
amended to expire in February of
2001. The Company has reserved 675,000 of its
authorized common stock in connection
with its warrants. In December 1998, the Company
extended the expiration of all its
unexpired and outstanding warrants and options to
December 31, 2001.
In December 1996, the Directors of the
Company issued 1,300,000 shares of its
authorized common stock at $.01 par per share to
officers of the Company and a related
party for services.
1987 Plan
A summary of option transactions for the
1987 Plan during the years ended June
30, 1999 and 2000 is shown below:
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 1998 387,500
$0.18
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at June 30, 1999 387,500
$0.18
Available for issuance at June 30, 1999
1,112,500
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 1999 387,500
$0.18
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at June 30, 2000 387,500
$0.18
Available for issuance at June 30, 2000
1,112,500
A summary of options outstanding as of June 30,
1999 and 2000 is shown below:
Exercise Number of Shares
Price Outstanding
$0.18 387,500
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
7. STOCK OPTION PLANS (Continued)
1992 Plan
A summary of option transactions for the
1992 Plan during the years ended June
30, 1999 and 2000 is shown below:
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 1998 600,000
$0.02
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at June 30, 1999 600,000
$0.02
Available for issuance at June 30, 1999
0
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 1999 600,000
$0.02
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at June 30, 2000 600,000
$0.02
Available for issuance at June 30, 2000
0
A summary of options outstanding as of
June 30, 1999 and 2000 is shown below:
Exercise Number of Shares
Price Outstanding
$0.02 600,000
1995 Plan
A summary of option transactions for the
1995 Plan during the years ended June
30, 1999 and 2000 is shown below:
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 1998 75,000
$0.33
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at June 30, 1999 75,000
$0.33
Available for issuance at June 30, 1999
0
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
7. STOCK OPTION PLANS (Continued)
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 1999 75,000
$0.33
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at June 30, 2000 75,000
$0.33
Available for issuance at June 30, 2000
0
A summary of options outstanding as of
June 30, 1999 and 2000 is shown below:
Exercise Number of Shares
Price Outstanding
$0.33 75,000
8. LEASE AGREEMENT - RELATED PARTY
In October, 1998, the Company entered into an
informal agreement with a
related party for rental of facilities in Providence,
Rhode Island with monthly rental
payments of $750. On November 1, 1999, the related
party agreed to reduce base
monthly rental to $500.
Rent expense charged to operations is as
follows:
Year ended
June 30, Rent expense
2000 $ 4,750
1999 15,147
1998 7,820
9. SEGMENT INFORMATION
Industry Segments
Approximately 92% of the Company's
business consist of sales of computerized
pulmonary diagnostic equipment and supplies. The
rest of the Company's business
consists of sales of infection and biohazard control
products and repair services. The
Company does not operate in other industry segments.
The Company has no foreign
operations.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2000, 1999, AND 1998
10. SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the years ended June 30, the
following supplemental expense information is
presented for analysis.
2000 1999 1998
Repairs and maintenance $ 317 $
280 $ 418
Advertising 23,417 6,678 3,154
Sales and property taxes 207
819
Provision for doubtful accounts
600 2,307
11. FINANCIAL INSTRUMENTS
The Company is engaged primarily in the
distribution of specialized medical
equipment in North America. The Company performs
ongoing credit evaluations of its
customers' financial condition and, generally,
requires no collateral from its customers.
Financial instruments that potentially
subject the Company to concentrations of
credit risk consist principally of trade accounts
receivable. Concentrations of credit risk
with respect to trade receivables are limited due to
the number of customers comprising
the customer base and their dispersion across
geographic areas.
The carrying amounts reflected in the
balance sheets for cash and notes payable
approximate the respective fair values due to the
short maturities of those instruments.
12. FUTURE OPERATIONS
The accompanying financial statements
have been prepared in conformity with
generally accepted accounting principles, which
contemplate continuation of the
Company as a going concern. However, the Company
suffered losses of $26,356 and
$14,980 during the years ended June 30, 2000 and
1999, respectively. In addition, the
Company has a net stockholders' deficiency of
$548,062 at June 30, 2000.
Management continues to look for opportunities
in manufacturing new products
in the medical field. Management is also seeking to
merge with companies with products
and/or services compatible with the Company's core
business.
The Company is in the process of
developing new and innovative products for
the physician's marketplace. Management plans to
develop upgrades and improvements
to existing products utilizing state of the art
technology and to remarket these products to
its substantial existing client base.
13. SUBSEQUENT EVENTS
On September 7, 2000, the Corporation entered
into a promissory note payable
with a related party in the amount of $10,000. This
note bears an interest rate of 9.5%
per year and is due on or before December 7, 2000.
(CONCLUDED)
19
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