CDX COM INC
Filing Type:
10QSB
Description:
Quarterly Report
Filing Date:
Nov 21, 2000
Period End:
Sep 30, 00
Primary Exchange:
Over the Counter Includes OTC
and OTCBB
Ticker:
CDXX
Table of Contents
To jump to a section, double-click on the section name.
10QSB
PART I 2
Item 1. 2
Item 2. 2
Balance Sheet 2
Income Statement 3
Income Statement2 4
Cash Flow Statement 5
Table5 7
PART II 10
ITEM 1 10
ITEM 2 10
ITEM 3 10
ITEM 4 10
ITEM 5 10
ITEM 6 10
EX-27
Exhibit 27 Table 12
10QSB
1
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 quarterly period ended September 30, 2000
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
For The quarter Ended Commission File Number
September 30, 2000 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)
One Richmond Square
Providence, RI 02916
(Address of principal
executive offices) (Zip Code)
Registrant's telephone number, including area code (401) 274-1444
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 X NO
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 SEPTEMBER 30, 2000
Common, $.01 par value 4,887,927
CDX CORPORATION
FORM 10-QSB QUARTERLY REPORT
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1.
Financial Statement:
Condensed Balance Sheets as of September 30, 2000
. . . . . . . . . . . . . . . . . . . . . 3
Condensed Statements of Operations - Three months ended
September 30, 1998 and September 30, 1997 . . . . . . . . . 4
Notes to Condensed Financial Statements . . . . . . . . . . 8
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . . . . . 9
Other Information . . . . . . . . . . . . . . . . . . . . . 10
CDX CORPORATION
CONDENSED BALANCE SHEETS
ASSETS
CDX CORPORATION
BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30, 2000
ASSETS
Current assets:
Cash $ 6,353
Accounts receivable - trade (net of allowance for doubtful accounts of
$1,261 in 2000) 27,574
Inventory 29,412
Total current assets 63,339
Property and equipment - net of accumulated depreciation 7,865
Other assets:
Invention rights and deferred product development costs (less accumulated
amortization of $499,794 in 2000) 31,330
TOTAL ASSETS $ 102,534
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities:
Current portion of long-term debt $ 13,700
Accounts payable - trade 18,613
Accounts payable - shareholder 238,317
Accrued interest payable 120,553
Accrued expenses 6,144
Total current liabilities 397,327
Other liabilities:
Notes payable - officers, net 209,404
Notes payable 50,000
Total other liabilities 259,404
Stockholders' deficiency:
Common stock, $.01 par value; 10,000,000 shares authorized, 4,888,093
shares issued 48,881
Capital surplus. 4,771,798
Deficit. (5,374,876)
Less: treasury stock, 166 shares, no assigned value
Total stockholders' deficiency (554,197)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIENCY $ 102,534
CDX CORPORATION
STATEMENTS OF CHANGES IN STOCKHOLDERS' DEFICIENCY
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
Shares
Shares Capital Accumulated Treasury
Outstanding Par Value Surplus Deficit Stock Total
Balance, June 30, 1999 4,888,093 $48,881 $4,771,798 $(5,342,385) 166 $(521,706)
Net Profit 5,688 5,688
Balance September 30, 1999 4,888,093 $48,881 $4,771,798 $(5,336,697) 166
$(516,018)
Balance, June 30, 2000 4,888,093 $48,881 $4,771,798 $(5,368,741) 166
$(548,062)
Net Loss (6,135) (6,135)
Balance September 30, 2000 4,888,093 $48,881 $4,771,798 $(5,374,876)
166 $(554,197)
CDX CORPORATION
STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
2000 1999
Revenues:
Net sales and other revenues $ 48,773 $59,105
Operating costs and expenses:
Cost of sales 21,648 22,903
Selling & administrative expenses 27,203 30,514
Total operating costs and expenses 48,851 53,417
Operating income (loss) (78) 5,688
Other expense:
Interest expense. (6,057)
Net other expense (6,057) 0
Net income (loss) $ (6,135) $5,688
Net income (loss) per common share $ (.001) $ .001
Weighted-average number of common shares outstanding 4,887,927 4,887,927
SEE NOTES TO FINANCIAL STATEMENTS.
CDX CORPORATION
STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
2000 1999
Cash was provided by (used for):
Operating activities:
Net loss $ (6,135) $ 5,688
Items in net loss not affecting cash:
Depreciation and amortization 3,977
Increase (decrease) in cash from changes in assets and liabilities:
Accounts receivable (5,085) 2,311
Inventory (11,659) (10,166)
Other assets 1,000
Accounts payable - trade (8,999) (15,574)
Other current liabilities 5,620 5,128
Total cash used for operating activities (22,281) (11,613)
Investing activities:
Purchase of property and equipment (164)
Total cash used for investing activities 0 (164)
Financing activities:
Lease proceeds 5,589
Proceeds from notes payable - officers 10,000
Payments on notes payable - officers (3,500) (4,484)
Total cash provided by financing activities 6,500 1,105
Decrease in cash during the period (15,781) (10,672)
Cash balance, beginning of the period 22,134 10,259
Cash balance, end of the period $ 6,353 $ (413)
Supplemental disclosures of cash flow information:
Cash paid during the three months for interest $ 0 $ 0
SEE NOTES TO FINANCIAL STATEMENTS.
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
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 estimateduseful 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 September 30, 2000, the carrying amount of the Company's deposits was
$6,053 and the bank balance was $9,005, of which all was covered by federal
depository insurance.
At September 30, 2000, the carrying value of deposits of $6,053 and petty
cash funds relate to the Balance Sheet as follows:
Cash deposits $6,053
Add: petty cash 300
Cash $6,353
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 $1,261 at September 30, 2000. The Company grants credit to
customers who are located throughout the United States.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
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 September 30, 2000.
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
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
Unaudited Condensed Financial Statements
In the opinion of management, the unaudited financial statements
contain all adjustments (consisting of normal accruals) necessary to present
fairly the financial position of September 30, 2000, the results of
operations for the three months ended September 30, 2000 and 1999 and the
cash flows for the three months ended September 30, 2000 and 1999. 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 years ended June 30, 2000 and 1999.
2. INVENTORY
Inventory consisted of the following at September 30:
2000
Finished goods $29,412
Total $29,412
3. PROPERTY AND EQUIPMENT
Property and equipment consists of the following at September 30:
2000
Office equipment and furniture $ 66,795
Production equipment 35,257
Computer equipment 72,242
Leasehold improvements 16,256
Total 190,550
Less: accumulated depreciation (182,685)
Net property and equipment $ 7,865
Depreciation expense for the three months ended September 30, 2000
and 1999 was $0.
4. INCOME TAXES
Due primarily to the utilization of net operating loss carryforwards, the
Company has no provisions for income taxes for 2000.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
4. INCOME TAXES (Continued)
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 September 30, 2000 the
Company's deferred tax assets consisted of the following:
2000
Deferred tax assets $593,480
Valuation allowance (593,480)
Net deferred tax assets recognized on the accompanying
balance sheets $ 0
The components of the income tax provision (benefit) consisted of the
following for the three months ended September 30, 2000:
2000
Current $ 0
Deferred - using a blended federal and state rate of 24% (6,300)
Tentative tax provision (benefit) (6,300)
Expiration of net operating loss carryforwards 348,000
Change in valuation allowance (348,000)
Net income tax provision (benefit) $ 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.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
5. NOTES PAYABLE - OFFICERS
During 1993, an officer of the Company loaned the Company
$80,000, with interest to be paid at 8%. Notes are payable in 60 monthly
installments. 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%. Note is payable in 60 monthly
installments. No payments are expected during the next fiscal year.
During 1996, officers of the Company loaned the Company $22,500
with interest to be paid at 9%. Principal and interest payments are due in
24 successive monthly payments.
During 1997, an officer of the Company loaned the Company
$75,000, with interest to be paid at 9%. Principal and interest payment is
due in 30 days. Another officer of the Company loaned the Company $15,000
with interest to be paid at 13.99. Principal and interest payments are due
in 48 successive monthly payments.
During 1998, an officer of the Company loaned the Company $20,000
with interest to be paid at 8%. There are no formal repayment terms.
During 2000, an officer of the Company loaned the Company $10,000
with interest to be paid at 9.5%. Principal and interest is due in ninety days.
Future maturities of long-term debt are as follows:
September 30 Amount
2001 $ 13,700
2002 and thereafter 209,404
Total $223,104
6. NOTES PAYABLE
At September 30, 2000 notes payable consisted of the following:
Note payable to a related party dated January 31, 1995.
Note was payable in five years with interest payable at 10%.
Interest was to accrue only in the years that the Company
was profitable. $25,000
Note payable to a related party dated January 10, 1993.
Note was payable in 60 monthly installments commencing
on March 1, 1994. Interest is payable at 6%. 25,000
Total $50,000
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
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.
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
three months ended September 30, 2000 is shown below:
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 2000 387,500 $0.18
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at September 30, 2000 387,500 $0.18
Available for issuance at September 30, 2000 1,112,500
A summary of options outstanding as of September 30, 2000 is shown
below:
Exercise Number of Shares
Price Outstanding
$0.18 387,500
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
7. STOCK OPTION PLANS (Continued)
1992 Plan
A summary of option transactions for the 1992 Plan during
the three months ended September 30, 2000 is shown below:
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 2000 600,000 $0.02
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at September 30, 2000 600,000 $0.02
Available for issuance at September 30, 2000 0
A summary of options outstanding as of September 30, 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
three months ended September 30, 2000 is shown below:
Number of Weighted-average
Shares Exercise Price
Outstanding at June 30, 2000 75,000 $0.33
Granted 0
Exercised 0
Forfeited 0
Expired 0
Outstanding at September 30, 2000 75,000 $0.33
Available for issuance at September 30, 2000 0
A summary of options outstanding as of September 30, 2000 is
shown below:
Exercise Number of Shares
Price Outstanding
$0.33 75,000
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
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:
Three months ended
September 30, Rent expense
1999 $2,250
2000 $1,000
9. SEGMENT INFORMATION
Industry Segments
For the three months ended September 30, 2000, approximately 85%
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.
For the three months ended September 30, 1999, approximately 87%
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.
10. SUPPLEMENTARY INCOME STATEMENT INFORMATION
For the three months ended September 30, the following
supplemental expense information is presented for analysis.
2000 1999
Advertising $4,711 $5,178
Repairs and maintenance 317
Sales and property taxes 477
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.
(CONTINUED)
CDX CORPORATION
NOTES TO FINANCIAL STATEMENTS
(UNAUDITED)
THREE MONTHS ENDED SEPTEMBER 30, 2000 AND 1999
11. FINANCIAL INSTRUMENTS (Continued)
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 sheet 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 $6,135 during the three months ended September 30, 2000.
In addition, the Company has a net stockholders' deficiency of $5,374,876 at
September 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 (see Note 13).
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 October 19, 2000 a letter of intent was entered into between a Florida
corporation and CDX Corporation whereas the Florida corporation will acquire
all of the shares of the capital stock owned and controlled by CDX for an
amount based on the terms and conditions set forth in the letter of intent.
In addition, the Florida corporation will pay all other additional costs such
as legal, accounting, public relations required to conclude this transaction.
(CONCLUDED)
