FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Quarterly Report Under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the combined two quarterly periods ended December 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
For Two Quarters Ended Commission File Number
December 31, 1996 0-9735
CDX CORPORATION
(Exact name of registrant
as specified in its charter)
COLORADO 84-0771180
(State of Incorporation) (I.R.S. Employer
Identification Number)
Two Charles Street
Providence, RI 02904
(Address of principal
executive offices) (Zip Code)
Registrant's telephone number, including area code (401) 274-9518
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 ninety days.
YES NO X
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS SHARES OUTSTANDING AT DECEMBER 31, 1996
Common, $.01 par value 4,888,094
<PAGE> 2
CDX CORPORATION
FORM 10-QSB QUARTERLY REPORT
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statement:
Condensed Balance Sheets as of December 31, 1996
and June 30, 1996 . . . . . . . . . . . . . . . . . . . . . 3
Condensed Statements of Operations - Three months ended
September 30, 1996 and September 30, 1995 . . . . . . . . . 4
Condensed Statements of Operations - Three months ended
December 31, 1996 and December 31, 1995 . . . . . . . . . . 5
Condensed Statements of Operations - Combined six months
ended December 31, 1996 and December 31, 1995 . . . . . . . 6
Condensed Statements of Cash Flows - Combined six months
ended December 31, 1996 and December 31, 1995 . . . . . . . 7
Notes to Condensed Financial Statements . . . . . . . . . . 8
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . 9
Other Information . . . . . . . . . . . . . . . . . . . . . 10
<PAGE> 3
CDX CORPORATION
CONDENSED BALANCE SHEETS
ASSETS
December 31, 1996 June 30,1996
(unaudited) (note)
Current Assets:
Cash and Cash Equivalents $ 9,325 $ 69
Accounts Receivable, Net 48,467 53,177
Inventory 46,199 73,587
Prepaid Expenses & Other 5,959 6,497
Total Current Assets 109,950 133,330
Property at Cost:
Furniture & Equipment 187,044 186,754
Less Accumulated Depreciation (166,432) (163,948)
Property-Net: 20,612 22,806
Intangible Assets, Net: 59,065 27,945
Total Assets $ 189,627 $ 184,081
LIABILITIES AND STOCKHOLDERS' EQUITY
December 31, 1996 June 30,1996
(unaudited) (note)
Current
Liabilities:
Accounts Payable-Trade $ 105,085 $ 182,659
Accounts Payable-Other 98,911 98,911
Accounts Payable-Affiliate 261,317 243,544
Note Payable 55,000 55,000
Notes Payable-Affiliate 193,620 119,859
Accrued Expenses & Other 44,762 35,942
Total Current Liabilities 758,695 491,028
Stockholders' Equity:
Common Stock,$.01 Par Value
Authorized 10,000,000 Shares
Issued: 4,888,094 ; 3,588,094 48,881 35,881
Capital Surplus 4,771,798 4,771,798
Accumulated Deficit - (5,389,747) (5,289,485)
Less Treasury Stock,
166 Shares;
No Assigned Value -------- --------
Total Stockholder's Equity $ (569,068) $ (481,806)
Total $ 189,627 $ 184,081
Note: The balance sheet at June 30, 1996, has been taken from the audited
financial statement at that date and condensed.
<PAGE> 4
CDX CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
September 30, 1996 September 30, 1995
Revenues:
Net Sales & Other Revenues $ 93,957 $ 85,053
Operating Costs & Expenses:
Cost of Sales 32,677 38,167
Selling & Administrative
Expenses 81,909 100,331
TOTAL OPERATING COSTS &
EXPENSES 114,586 138,498
Operating Income (Loss) (20,629) (53,445)
Other Income/(Expense)
Interest Expense (3,176) (2,377)
Interest Income 1 81
Other Income 305 706
Income (Loss) Before Income Taxes (23,499) (55,035)
Provision for Income Taxes --- ---
Net Earnings (Loss) $ (23,499) $ (53,035)
Net Earnings (Loss) per $ (.007) $ (.015)
Common Share
WEIGHTED-AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 3,588,094 3,588,094
<PAGE> 5
CDX CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended
December 31, 1996 December 31, 1995
Revenues:
Net Sales & Other Revenues $ 91,248 $ 114,157
Operating Costs & Expenses:
Cost of Sales 64,191 76,827
Selling & Administrative
Expenses 89,674 98,121
TOTAL OPERATING COSTS &
EXPENSES 153,865 174,948
Operating Income (Loss) (62,617) (60,791)
Other Income/(Expense)
Interest Expense (4,364) (2,603)
Interest Income 1 12
Other Income 3,466 7,274
Other Expense (13,000) (138)
Income (Loss) Before Income Taxes (76,514) (56,246)
Provision for Income Taxes --- ---
Net Earnings (Loss) $ (76,764) $ (56,246)
Net Earnings (Loss) per $ (.016) $ (.016)
Common Share
WEIGHTED-AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,888,094 3,588,094
<PAGE> 6
CDX CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited)
Combined Six Months Ended
December 31, 1996 December 31, 1995
Revenues:
Net Sales & Other Revenues $ 185,205 $ 199,210
Operating Costs & Expenses:
Cost of Sales 96,867 114,993
Selling & Administrative
Expenses 171,583 198,452
TOTAL OPERATING COSTS &
EXPENSES 268,450 313,445
Operating Income (Loss) (83,245) (114,235)
Other Income/(Expense)
Interest Expense (7,541) (4,980)
Interest Income 2 94
Other Income 3,772 7,979
Other Expense (13,000) (138)
Income (Loss) Before Income Taxes (100,012) (111,280)
Provision for Income Taxes --- ---
Net Earnings (Loss) $ (100,262) $ (111,280)
Net Earnings (Loss) per $ (.021) $ (.031)
Common Share
WEIGHTED-AVERAGE NUMBER OF
COMMON SHARES OUTSTANDING 4,888,094 3,588,094
<PAGE> 7
CDX CORPORATION
CONDENSED STATEMENTS OF CASH FLOW
(unaudited)
Six Months Ended
December 31, 1996 December 31, 1995
OPERATING ACTIVITIES:
Net (Loss) $ (100,262) $ (111,280)
Adjustments to Reconcile
Net Loss to Net Cash Provided/
(Used) by Operating Activities:
Depreciation & Amortization 6,600 5,360
Changes in Operating
Assets & Liabilities:
Accounts Receivable 4,710 10,585
Inventory 27,388 11,905
Prepaid Expenses 539 (9,875)
Accounts Payable-Trade (7,596) 11,348
Accounts Payable-Affiliate 17,822 22,536
Accrued Expenses 8,820 11,785
Total Adjustments 58,283 63,644
Net Cash (Used for)
Operating Activities (41,979) (47,636)
INVESTING ACTIVITIES:
Purchase of Equipment (290)
Acquisition of Assets-Other (35,236) 0
Net Cash (Used for)
Investing Activities (35,526) 0
FINANCING ACTIVITIES:
Short-term Borrowings 73,761 13,858
Issuance of Common Stock 13,000
Net Cash Provided by
Financing Activities 86,761 13,858
Net (Decrease) in Cash
and Cash Equivalents 9,256 (35,418)
Cash and Cash Equivalents,
Beginning of Period 69 36,142
Cash and Cash Equivalents,
End of Period $ 9,325 $ 724
<PAGE> 8
CDX CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
1. In the opinion of Management, the unaudited condensed financial
statements contain all adjustments (consisting of normal accruals) necessary
to present fairly the financial position as of December 31, 1996, the results
of operations for the three months ended September 30, 1996 and September 30,
1995, the results of operations for the three month period ended December 31,
1996 and December 31, 1995 and the results of operations for the combined six
months ended December 31, 1996 and December 31, 1995 and the cash flows for
the six months ended December 31, 1996 and December 31, 1995. These statements
should be read in conjunction with the audited financial statements and notes
thereto included in the Company's Annual Report on Form 10-K for the
year ended June 30, 1996.
2. Inventory consists of the following at December 31, 1996 and June 30,
1996.
December 31, 1996 June 30, 1996
(Unaudited)
Raw Material $ 28,227 $ 35,720
Work-in-Process 3,188 3,643
Finished Goods 14,784 34,224
Total $ 46,199 $ 73,587
3. Intangible assets consist of the following at December 31, 1996 and
June 30, 1996.
December 31, 1996 June 30, 1996
Invention Rights, Net $ 19,498 $ 22,750
Software Development Costs 39,567 5,195
Total $ 59,065 $ 27,945
4. Accounts Payable-Affiliate represents rent and related expenses of
office space.
<PAGE> 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Results of Operations
Net sales and operating revenues for six months ended December 31,
1996, decreased by 7% over the equivalent period in the prior year.
The decreased sales volume is related to the discontinuance of several
products in the Company's line of spirometry products.
Cost of sales as a percentage of net sales and operating revenues
decreased by 5.5% from 57.7% to 52.2% compared with the same period
in the prior year.
Sales and administrative expenses in the six months ended December
31, 1996, decreased by 13.5% or $26,869 as compared to the same period
in the prior year. This is primarily due to a reduced payroll and
the elimination of trade journal advertising associated with CPR
mask.
Sales are expected to remain constant during the third quarter
of FY97 or increase slightly based on certain export orders pending.
Liquidity
Working capital deficit at December 31, 1996, increased by $116,188
from June 30, 1996. This increase in the working capital deficit was
primarily due to an increase in short term borrowings and an increase
in non-current assets arising from new product development costs.
Inventory in finished goods decreased by $19,440 during the period
as prior stock was consumed to fill customer orders. Receivables
decreased $4,978 during the period reflecting a decrease in sales from
the fourth quarter FY96.
Capital Resources
During the second quarter FY97 ended December 31, 1996, the Company
made a private placement of its note in the amount of $75,000 to one of
its officers.
Also, the Company issued 1,300,000 shares of common stock to
several of its officers and affiliates as compensation for services,
as consideration for forbearance regarding certain notes payable
and as inducement for making several unsecured loans to the
<PAGE> 10
Company. The shares are restricted and were recorded at par.
Management has not committed to any material capital expenditures
for the future.
Research and Development Resources
CDX has several products in the research and development stage.
Management continues to fund the R&D of these products as needed.
<PAGE> 11
PART II
OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS -
Neither the Registrant nor any of its affiliates
are a party, nor is any of their property subject, to material
pending legal proceedings or material proceedings known to be
contemplated by governmental authorities.
ITEM 2 CHANGES IN SECURITIES -
The Company issued 1,300,000 unregistered, restricted shares of
its common stock to several of its officers and affiliates all of
which are noteholders of the Company's obligations, during the
quarter ended December 31, 1996 in return for their agreements
to forbear collection and declaration of default under the terms
and for services.
ITEM 3 DEFAULTS UPON SENIOR SECURITIES -
None
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS -
None
ITEM 5 OTHER INFORMATION -
None
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K -
A. Exhibits
Exhibit 27. Financial Data Schedule
B. Reports on Form 8-K
None
ADDITIONAL EXHIBITS -
The exhibits required to be furnished are either not
applicable or the information can be clearly determined
from the filed material.
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has dully caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CDX Corporation
/S/ Philip D. Schein
_________________________________________
Philip D. Schein, President and Secretary
/s/ Harold I. Schein
_______________________________________
Harold I. Schein, Chairman of the Board,
and Treasurer
Date: April 30, 1998
<PAGE>
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)
______________
* Incorporated by reference from the issuer's Annual Report Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
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