<PAGE> 1
U.S. SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[ X ] Quarterly report under section 13 or 15(d) of the Securities Exchange Act
of 1934 for the quarter period ended September 30, 1997.
[ ] Transition report under Section 13 or 15(d) of the Securities Exchange
Act of 1934 for the transition period
from to.
Commission File umber 0-9185
MEDCO HEALTH CORPORATION
(Formerly Williston Oil Corporation)
Nevada 22-1934084
(State or other jurisdiction of (IRS Employer Identification Number)
incorporated or organization)
532 Sylvan Avenue
Englewood Cliffs, New Jersey 07632
(address of Principal Executive Offices) (Zip Code)
(201)541-8444
(Registrant's telephone number, including area code)
Securities registered under Section 12(b) of
the Exchange Act:
None
Securities registered under Section 12(g) of the exchange Act:
Class A Common Stock, $.001 Par Value
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the preceding twelve (12) months
(or for such shorter period that registrant ?was required to file such reports),
and (2) has been subject to such filing requirements for the past ninety (90)
days. YES [ X ] [ ].
Applicable Only to Corporate Issuers
State the number of shares outstanding of each of the issuer's classes
of common equity:
40,140,143 Shares of Class A Common Stock, $.001 par value
1,250,000 Shares of Class B Common Stock, $.001 par value
Transitional Small Business Disclosure Format
YES [ ] NO [ X ]
<PAGE> 2
MEDCO HEALTH CORPORATION
(FORMERLY WILLISTON OIL CORPORATION)
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C>
Part I
Page
----
Item 1 - Financial Information
Medco Health Corporation's Balance Sheets as of 09/30/97 and 06/3096 1
Statements of Operations for the three month period ended 09/30/97,
and 1996 2
Statements of Stockholders Equity 3
Statements of Cash Flows for the three month periods ended 09/30/97,
and 1996 4
Notes to Financial Statements 5-8
Item 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 8-9
Part II
Item 1 - Legal Proceedings 9
Item 2 - Changes in Securities 9
Item 3 - Defaults upon Senior Securities 9
Item 4 - Submission of Matter to a Vote of Security Holders 9
Item 5 - Other Information 9
Item 6 - Exhibits and Reports on Form S-K 9-10
</TABLE>
-i-
<PAGE> 3
Item 1. Financial Statements
The financial statements of the company, are set forth below:
Medco Health Corporation (formerly Medco, Inc.)
(A Development Stage Company)
Balance Sheets
Assets
<TABLE>
<CAPTION>
September 30, 1997 June 30,1996
------------------ ------------
<S> <C> <C>
Current assets
Cash $ 9,030 $ 8,720
Accounts receivable,
Deposits on equipment 20,000 20,000
Prepaid expenses 80,000 80,000
--------- ---------
109,030 108,720
--------- ---------
Equipment, at cost, net of accumulated
depreciation of $63,797 - September, 1997 and
$48,448 - June, 1996 469,317 235,189
---------
Other assets
Organization costs, net of accumulated
amortization of $2,250 - September, 1997 and
$2,000 - June, 1996 2,750 3,000
License fees 5,005 5,005
--------- ---------
7,755 8,005
--------- ---------
$ 586,102 $ 351,914
========= =========
Liability and Stockholders' Equity (Deficit)
Current liabilities
Current maturities of long-term debt $ 60,281 $ 6,782
Accrued expenses 33,000 25,000
--------- ---------
93,281 31,782
--------- ---------
Long-term debt, net of current maturities 250,710 34,710
--------- ---------
Due to stockholder 423,416 400,895
--------- ---------
Stockholders' equity (deficit)
Common stock 40,140 40,140
Additional paid-in capital 268,667 268,667
Deficit accumulated during the development stage (490,122) (424,280)
--------- ---------
(181,305) (115,473)
--------- ---------
$ 586,102 $ 351,914
========= =========
</TABLE>
See Notes to Financial Statements
(Unaudited)
-1-
<PAGE> 4
Medco Health Corporation (formerly Medco, Inc.)
(A Development Stage Company)
Statements of Operation
<TABLE>
<CAPTION>
Cumulative
Period from
Three Months Ended July 1, 1994
September 30 (Date of
Inception) to
1996 1997 September 30, 1997
------------------------------------------------------
<S> <C> <C> <C>
Revenues $ -- $ -- $ 225,369
Cost of sales -- -- 99,439
------------ ------------ ------------
Gross profit -- -- 125,930
------------ ------------ ------------
General and administrative expenses:
Payroll - officers 32,390 -- 39,890
Payroll - other 8,000 -- 17,692
Taxes and licenses 2,517 936 5,653
Real estate taxes -- -- 11,304
Management fees 1,065 -- 5,925
Commission expense 200 -- 8,400
Travel 450 -- 15,362
Miscellaneous 1,641 5 3,450
Bad debt -- -- 60,746
Insurance 2,779 1,635 29,514
Outside services -- 11,072 81,624
Supplies 2,270 -- 5,400
Advertising -- -- 1,844
Truck and auto expenses 746 50 10,553
Rent 2,250 25,100 81,725
Telephone 79 318 11,786
Utilities 134 459 5,850
Repairs and maintenance 35 -- 1,193
Office expense 195 635 5,190
Seminars -- -- 648
Professional fees 4,045 5,000 86,768
Depreciation and amortization 2,650 15,622 66,070
------------ ------------ ------------
61,446 60,832 556,587
------------ ------------ ------------
Operating loss (61,446) (60,832) (430,657)
------------ ------------ -----------
Other income (expense)
Interest expense -- (5,000) (25,000)
(Loss) Gain on equipment 59,800 -- (33,628)
------------ ------------ ------------
59,800 (5,000) (58,628)
------------ ------------ ------------
Loss before provision for income taxes (1,646) (65,832) (489,285)
Provision for income taxes -- -- 827
n ------------ ------------ ------------
Net loss $ (1,646) $ (65,832) $ (490,112)
============ ============ ============
Net loss per common share $ -- $ -- $ (.01)
============ ============ ============
Weighted average shares of
common stock outstanding 38,017,913 38,986,977 38,986,977
============ ============ ============
</TABLE>
See Notes to Financial Statements
(Unaudited)
-2-
<PAGE> 5
Medco Health Corporation (formerly Medco, Inc.)
(A Development Stage Company)
Statements of Stockholders' Equity (Deficit)
<TABLE>
<CAPTION>
Common Paid in Retained
Stock Capital Earnings Total
----- ------- -------- -----
<S> <C> <C> <C> <C>
Capital contribution $37,944 $ (27,944) $ -- $ 10,000
Net loss -- -- (42,665) (42,665)
------- --------- --------- ---------
Balance, June 30, 1995 37,944 (27,944) (42,665) (32,665)
Net loss - June 30, 1996 -- -- (89,266) (89,266)
Capital contributions 184 91,816 -- 92,000
------- --------- --------- ---------
Balance - June 30, 1996 38,128 63,872 (131,931) (29,931)
Capital contributions 2,012 204,795 -- 206,807
Net loss - June 30, 1997 -- -- (292,349) (292,349)
------- --------- --------- ---------
Balance - June 30, 1997 $40,140 $ 268,667 $(424,280) $(115,473)
Net Loss - September 30, 1997 -- -- (65,832) (65,832)
------- --------- --------- ---------
Balance - September 30, 1997 $40,140 $ 268,667 $ 490,112 $(181,305)
- ----------------------------- ======= ========= ========= =========
</TABLE>
See Notes to Financial Statements
(Unaudited)
-3-
<PAGE> 6
Medco Health Corporation (formerly Medco, Inc.)
(A Development Stage Company)
Statements of Cash Flows
<TABLE>
<CAPTION>
Cumulative
Period from
Three Months Ended July 1, 1994
September 30 (Date of
Inception) to
1996 1997 September 30, 1997
------------- -----------------------------------
<S> <C> <C> <C>
Cash flows from operating activities
Net loss $ (1,646) $ (65,832) $(490,112)
Adjustments to reconcile net loss to net
cash provided by operating activities:
Depreciation and amortization 2,650 15,622 66,070
Bad debts -- -- 60,746
Change in assets and liabilities:
(Increase) in accounts receivable -- -- (60,746)
(Increase) decrease in prepaid expenses (32,000) -- (80,000)
Increase in accrued expenses 2,000 8,000 33,000
Net cash used in operating activities (28,996) (42,210) (471,042)
--------- --------- ----------
Cash flows from investing activities:
Organization costs -- -- (5,000)
License fees -- -- (5,005)
Deposits on equipment 32,000 -- (20,000)
Capital expenditures (53,171) (250,000) (492,145)
--------- --------- ----------
Net cash used in investing activities (21,171) (250,000) (522,150)
--------- --------- ----------
Cash flows from financing activities:
Proceeds from stockholder loan -- 22,520 963,035
Repayment of stockholder loan (1,950) -- (539,620)
Proceeds from issuance of common stock -- -- 300,807
Proceeds from additional paid-in-capital -- -- 8,000
Proceeds from long term borrowings -- 270,000 270,000
Net cash provided by financing activities (1,950) 292,520 1,002,222
--------- --------- ----------
Net (decrease) increase in cash (52,117) 310 9,030
Cash - beginning of period 52,833 8,720 --
--------- --------- ----------
Cash - end of period $ 716 $ 9,030 $ 9,030
========= ========= ==========
Supplemental Disclosure of Cash Flow Information:
Interest paid $ -- $ 5,000 $ 25,000
========= ========= =========
Income taxes paid $ -- $ -- $ 422
========= ========= =========
</TABLE>
See Notes to Financial Statements
(Unaudited)
-4-
<PAGE> 7
Medco Health Corporation (formerly Medco, Inc.)
(A Development Stage Company)
Notes to Financial Statements
Note 1 - Summary of Accounting Policies
Nature of Business
Medco Health Corporation (formerly Medco, Inc.) (the "Company")
was incorporated under the laws of the State of New York on July
1, 1994. The Company's principal business activities have been the
marketing and distribution of medical equipment, supplies and
health care services.
Reorganization
In July 1983, an involuntary Chapter 11 bankruptcy petition was
filed against Williston Oil Corporation by its creditors. In
February 1992, the court granted the creditors' petition and an
order for relief under Chapter 7 of the Bankruptcy Code was
entered. Since 1992 the Company has remained inactive, and has no
pre or post bankruptcy liabilities.
On January 16, 1996 the sole shareholder of Medco, Inc. entered
into an acquisition agreement (the "Acquisition Agreement") with
Williston Oil Corporation for acquisition of all of the
outstanding capital stock of Medco, Inc. in exchange for a portion
of Williston's class A common stock and 100% of class B common
stock. Subsequent to year end Williston Oil Corporation executed a
name change to Medco Health Corporation.
Use of Estimates
Management uses estimates and assumptions in preparing the
financial statements in accordance with generally accepted
accounting principles. Those estimates and assumptions affect the
reported amounts of assets and liabilities, the disclosure of
contingent assets and liabilities, and the reported revenues and
expenses.
Organization Costs
Organization costs are amortized on a straight-line basis over
five years. Amortization expense for the three months ended
September 30, 1997 was $250 and the year ended June 30, 1997 was
$1,000.
Equipment
Equipment is recorded at cost less accumulated depreciation.
Depreciation is provided over the estimated useful lives of the
assets by using the straight-line method of depreciation.
Repairs and maintenance costs are expensed as incurred while
additions and betterments are capitalized. The cost and related
accumulated depreciation of assets sold or retired are eliminated
from the accounts and any gain or losses are reflected in
earnings.
Per Share Data
The primary income (loss) per share was computed on the weighted
number of shares of common stock outstanding during the period.
Common share equivalents were not included as their inclusion
would have been anti-dilutive.
-5-
<PAGE> 8
Medco Health Corporation (formerly Medco, Inc.)
(A Development Stage Company)
Notes to Financial Statements
Income Taxes
The Company has a net operating loss carryover of approximately
$420,000 as of June 30, 1997, expiring through 2012.
Note 1 - Summary of Accounting Policies (continued)
Income Taxes (continued)
The Company adopted Statement of Financial Accounting Standards
(SFAS) No. 109, Accounting for Income Taxes. SFAS No.109 requires
the establishment of a deferred tax asset for all deductible
temporary differences and operating loss carry forwards. Because
of the uncertainties discussed in Note 2, however, any deferred
tax asset established for utilization of the Company's tax loss
carry forwards would correspondingly require a valuation allowance
of the same amount pursuant to SFAS No. 109. Accordingly, no
deferred tax asset is reflected in these financial statements.
<TABLE>
<S> <C>
Note 2 - Long-Term Debt
Note payable in equal monthly installments of $875 including
interest at the rate of 9.66%; final payment due June 2002,
collateralized by a vehicle with an undepreciated cost of
approximately $51,600 $ 40,991
Note payable in equal monthly installments of $4,500 in 270,000
addition to interest payable at the rate of prime plus 1%.
This loan is secured by the residence of the majority shareholder.
Final payment is due August, 2002.
Less: current maturities 60,281
-----------
Long-term debt $ 250,710
===========
The aggregate amount of debt maturing during the next five is as
follows:
1998 $ 6,782
1999 $ 7,471
2000 $ 8,221
2001 $ 9,052
2002 $ 9,966
----------
$ 41,492
----------
Note 3 - Capital Stock
The following is a summary of the various classes of capital stock
at September 30, 1997:
Common Stock
Class A - Par value $.001 per share:
authorized 100,000,000 shares;
36,978,453 issued and outstanding $ 38,890
</TABLE>
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<PAGE> 9
Medco Health Corporation (formerly Medco, Inc.)
(A Development Stage Company)
Notes to Financial Statements
<TABLE>
<S> <C>
Class B - Par value $.001 per share:
authorized 25,000,000 shares;
1,250,000 issued and outstanding 1,250
-----------
$ 40,140
===========
Preferred Stock Par value $.001 per share:
authorized 25,000,000 shares;
none issued and outstanding $ -
===========
</TABLE>
The holders of Class A common stock possess the voting power of
one vote for each share of stock held. The holders of Class A
common stock do not possess any pre-emptive rights. Class A common
stock holders have the right to elect a minority of the directors
of the Corporation.
Note 3 - Capital Stock (continued)
The holders of Class B common stock possess the voting power of
three votes for each share of stock held and do not possess any
pre-emptive rights. Class B common stock holders have the right to
elect the majority of the directors of the Corporation. Class B
common stock holders will not be entitled to cash dividends only
for a period of three (3) years from the original date of issuance
of that share. The shares of Class B common stock shall be
convertible at any time and from time to time at the option of the
holder into one share of Class A common stock at the rate of one
share of Class B common stock for one share of Class A common
stock.
Preferred stock may be issued, from time to time, in one or more
series, each of such series to have such designations,
preferences, and relative participating, optional or other special
rights, and qualifications, limitations or restrictions thereof as
are stated and expressed in the resolution or resolutions
providing for the issue of such series, adopted by the Board of
Directors.
Note 4 - Going Concern
As shown in the accompanying financial statements, the Company
incurred a net cumulative loss of $490,112 during the period July
1, 1994 (date of inception) to September 30, 1997, and as of that
date, the Company's total liabilities exceeded its total assets by
$181,305.
In January 1996, the Company, under a plan of reorganization was
merged into Williston Oil Corporation (Williston). Williston is a
publicly traded company. It is the intentions of management that
the Company will obtain additional capital from a public offering.
These factors create an uncertainty about the Company's ability to
continue as a going concern. The financial statements do not
include any adjustments that might be necessary if the Company is
unable to continue as a going concern.
-7-
<PAGE> 10
Medco Health Corporation (formerly Medco, Inc.)
(A Development Stage Company)
Notes to Financial Statements
Note 5 - Related Party Transactions
During the period July 1, 1994 (date of inception) to September
30, 1997, the stockholder advanced the Company approximately
$423,000. There are no stated terms for repayment and interest is
calculated at 7%.
Note 6 - Commitments and Contingencies
The Company leases its facility under an operating lease which
expires June 30, 2016. The lease provides for monthly payments of
$8,000 through June 2001. Afterwards the rent will be increased by
the increase in the consumer price index. The minimum future
rental payments under this lease are as follows:
<TABLE>
<CAPTION>
June 30 Amount
------- ------
<S> <C> <C>
1998 96,000
1999 96,000
2000 96,000
2001 96,000
2002 1,344,000
---------
Thereafter 1,824,000
---------
</TABLE>
In addition the Company has entered into a contract for
approximately $422,000 to have the new facilities constructed to
accommodate the operations of the Company.
Item 2. Management's Discussion and Analysis of Financial Condition and Result
of Operations
The following is management's discussion and analysis of significant
factors which have affected the Company's financial position and operations
during the fiscal quarter that ended September 30, 1997.
Liquidity and Capital Resources
The activities of the registrant since its reorganization on January
16, 1996 have been financed by various loans and the sale of securities in
private transactions.
The company currently owns three vehicles, a Land Cruiser, a BMW, and a
Dodge Colt. The company will also own the laboratory, including all of its
furnishings, once it is complete.
The company currently had a negative net worth. There is no assurance
that the company will, in fact, be able to raise adequate funding and actually
expand its operations as contemplated, or even to bring its present operations
to a profitable level.
-8-
<PAGE> 11
Results of Operations
The company's revenues from its date of inception until September 30,
1997 is $225,369. The Company's revenues for the three months that ended
September 30, 1997 were $0.00.
The management of the Company has continued to devote the Company's
resources to the completion of the clinical laboratory in Englewood Cliffs, New
Jersey.
Part II
Item 1. Legal Proceedings
The Company is unaware of any pending legal proceedings to which the
Company is a party or of which any of its assets is the subject. No director,
officer or affiliate of the Company, or any associate of any of them, is a party
to or has a material interest in any proceeding adverse to the Company.
There are no existing lawsuits against the Company.
Item 2. Changes in Securities
The Company did not sell or issue any securities of any kind during the
period that ended on September 30, 1997.
Item 3. Defaults Upon Senior Securities
For the period that ended on September 30, 1997, there was no defaults
upon senior securities or securities of any kind by the Company.
Item 4. Submission of Matters to a Vote of Security Holders
There were no matters submitted to a vote of security holders by the
Company fr the period that ended September 30, 1997.
Item 5. Other Information
There is no other information that the Company believes is necessary to
be included in this report.
Item 6. Exhibits and Reports on Form S-K
(a) Exhibits filed herewith:
None
-9-
<PAGE> 12
(b) Current reports on Form 10KSB, dated November 26, 1997, filed with
the Securities and Exchange Commission.
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
MEDCO HEALTH CORPORATION
Date: November 26, 1997 By:/s/ FAHIM SAHRAIE
-----------------------------
FAHIM SAHRAIE
President/Director
Date: November 26, 1997 By:/s/ HASHEM SAHRAIE
-----------------------------
HASHEM SAHRAIE
Secretary/Director
-10-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 9,030
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 109,030
<PP&E> 469,317
<DEPRECIATION> 63,797
<TOTAL-ASSETS> 586,102
<CURRENT-LIABILITIES> 93,281
<BONDS> 0
0
0
<COMMON> 40,140
<OTHER-SE> 268,667
<TOTAL-LIABILITY-AND-EQUITY> 586,100
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 61,446
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (61,446)
<INCOME-TAX> 0
<INCOME-CONTINUING> (59,800)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (59,800)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
