<PAGE> 1
THE SECURITIES AND EXCHANGE
COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED: MARCH 31, 1997
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _________ TO __________
Commission File No. 0-16472
COMC, INC.
FORMERLY AUTOMEDIX SCIENCES, INC.
(Exact Name of Registrant as Specified in its Charter)
Illinois 36-3021754
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
400 N. Glenoaks Blvd.
Burbank, California 91502
(Address of principal executive offices)
(818) 556-3333
(Issuer's telephone number)
Check whether the issuer filed all required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past
12 months (or for such shorter Period that the registrant was
required to file such reports), and has been subject to such filing
requirements for the past 90 days. Yes No X
The number of shares outstanding of Registrants Common Stock as of May 6, 1997
was 12,498,107.
Transitional Small Business Disclosure Format. Yes No X
<PAGE> 2
PART I. FINANCIAL
INFORMATION
Item 1. Financial Statements
COMC, INC AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 11,152 $ 57,180
Accounts receivable 1,189,754 738,724
Inventories 90,705 97,040
Prepaid expenses and other 38,219 21,103
----------- -----------
TOTAL CURRENT ASSETS 1,329,830 914,047
PROPERTY AND EQUIPMENT, Net 114,874 115,177
OTHER ASSETS
Deposits 17,825 17,825
----------- -----------
$ 1,462,529 $ 1,047,049
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 614,132 $ 192,284
Accrued expenses 74,864 47,323
Income taxes payable 2,045 2,045
Current portion of long-term debt 50,000 50,000
Notes payable 300,000 300,000
----------- -----------
TOTAL CURRENT LIABILITIES 1,041,041 591,652
----------- -----------
LONG-TERM DEBT, net of current portion 154,167 166,667
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock - authorized 40,000,000 shares, $.01 par value
issued and outstanding - 12,498,107 shares 124,981 124,981
Additional paid-in capital 210,022 210,022
Accumulated deficit (67,682) (46,273)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 267,321 288,730
----------- -----------
$ 1,462,529 $ 1,047,049
=========== ===========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
<PAGE> 3
COMC, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------------
March 31, March 31,
1997 1996
------------ ------------
<S> <C> <C>
REVENUES $ 1,020,569 $ 590,414
COST OF REVENUES 684,523 385,045
------------ ------------
GROSS PROFIT 336,046 205,369
OPERATING EXPENSES 346,869 322,220
------------ ------------
LOSS BEFORE
OTHER INCOME (EXPENSE) (10,823) (116,851)
OTHER INCOME (EXPENSE)
Interest income 124 124
Interest expense (10,710) (5,977)
------------ ------------
TOTAL OTHER INCOME (EXPENSE) (10,586) (5,853)
------------ ------------
LOSS BEFORE INCOME TAXES (21,409) (122,704)
INCOME TAXES -- --
------------ ------------
NET LOSS $ (21,409) $ (122,704)
============ ============
PRO FORMA:
Historical loss before income taxes $ (21,409) $ (122,704)
Adjustment to officer's compensation -- (9,250)
------------ ------------
Pro forma loss boss before income taxes (21,409) (131,954)
Pro forma income taxes (benefit) -- (52,500)
------------ ------------
Pro forma net loss $ (21,409) $ (79,454)
============ ============
Pro forma net loss per share $ (0.00) $ (0.01)
============ ============
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING 12,498,107 10,000,000
============ ============
</TABLE>
See accompanying Notes to Consolidated Financial Statements
<PAGE> 4
COMC, INC AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
-----------------------
March 31, March 31,
1997 1996
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (21,409) $(122,704)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation 7,909 12,500
(Increase) decrease in:
Accounts receivable (451,030) 155,660
Securities available for sale -- (28,275)
Inventories 6,335 (24,533)
Prepaid expenses and other current assets (17,116) (5,343)
Deposits -- (62,970)
Increase (decrease) in:
Account payable and accrued expenses 449,389 (94,264)
Income taxes payable and deferred income tax -- (1,485)
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (25,922) (171,414)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (7,606) (12,974)
Loans receivable -- (28,314)
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES: (7,606) (41,288)
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash overdraft -- 40,352
Principal payments on long-term borrowings (12,500) --
--------- ---------
NET CASH PROVIDED BY(USED IN) FINANCING (12,500) 40,352
--------- ---------
ACTIVITIES
NET DECREASE IN CASH AND CASH EQUIVALENTS (46,028) (172,350)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR 57,180 172,350
--------- ---------
CASH AND CASH EQUIVALENTS, END OF YEAR $ 11,152 $ --
--------- ---------
SUPPLEMENTAL DISCLOSURES OF CASH FLOWS INFORMATION
Cash paid during the year for interest $ 10,710 $ 5,977
========= =========
Cash paid during the year for income taxes $ -- $ 1,485
========= =========
</TABLE>
See accompanying Notes to Consolidated Financial Statements
<PAGE> 5
COMC, INC AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited consolidated financial statements, which are for the
interim periods, do not include all disclosures provided in the annual
consolidated financial statements. These unaudited consolidated financial
statements should be read in conjunction with the consolidated financial
statements and the footnotes thereto contained in the Annual Report on Form
10-KSB for the year ended December 31, 1996 of COMC, Inc. (the "Company"), as
filed with the Securities and Exchange Commission. The December 31, 1996 balance
sheet was derived from audited consolidated financial statements, but does not
include all disclosures required by generally accepted accounting principles.
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (which are of a normal recurring nature)
necessary for a fair presentation of the financial statements. The results of
operations for the three months ended March 31, 1997 are not necessarily
indicative of the results to be expected for the full fiscal year.
Net Income (loss) Per Share - Net income (loss) per share is based upon the
weighted average number of common shares outstanding during the periods
presented.
The pro-forma net income (loss) per share information for the three months ended
March 31, 1996 gives effect to the proposed level of officer's compensation at a
base of $104,000 plus 1% of gross revenues per annum net of amounts already
charged to operations, and pro-forma income taxes assuming the Company was
subject to federal and state income taxes.
<PAGE> 6
Item 2. Management Discussion and Analysis of Financial Condition and Results of
Operations
The following discussion should be read in conjunction with the financial
statements and related notes thereto of the Company included elsewhere herein.
Initially, the Company's purpose was the research and development of
medical technologies for the treatment of cancer and other conditions. Because
the Company was unable to raise capital to continue the clinical trials with
respect to the medical device for cancer treatment which it had designed, in the
spring of 1992, it ceased its operations. As a consequence, the Board of
Directors of the Company began to investigate the possibility of a new business
direction and to search for viable acquisition or merger candidates which would
enable the Company to maximize value to shareholders. As previously mentioned,
the Company completed the acquisition of Complete Communications, Inc.("CCI"),
in November 1996. The transaction was accounted for as a reverse acquisition.
Therefore, discussion in this section will be based on the operating results of
CCI for the three months ended March 31, 1997 and 1996.
Results of Operations
Three months ended March 31, 1997 compared to three months ended March 31, 1996.
Revenues increased approximately $430,000 or 72.9% between the comparable
quarters primarily due to a large contract for Bank of America where CCI is
acting as subcontractor for Western Carlson Design (general contractor). While
this initial contract will be completed in May 1997, additional work at the site
will continue for several months in diminishing amounts. Cost of revenues
increased $299,000 or 77.8%. Technician labor increased $22,000 or 9.9% while
material purchased increased $274,000 or 173.7% to meet the needs of the Bank of
America contract. Operating expenses increased $25,000 or 7.7% due to
professional and consulting fees for the public entity plus merger and
acquisition costs. These expenses were offset by reductions in payroll, office
supplies, travel and entertainment. Other expenses increased $4,733 or 80.9%
primarily due to additional interest expenses from two new lines of credit
required for acquisition costs incurred in 1995 and 1996. As a result of the
above, loss before taxes was reduced by $101,000 resulting in a loss for the
three months ended March 31, 1997 of $21,409.
For the three months ended March 31, 1997 Western Carlson Design and DEB
Construction accounted for 57% and 8% of the Company's revenue, respectively.
Western Carlson Design represented 2% of revenues for the three months ended
March 31, 1996 while there was no activity involving DEB Construction.
The Company deals with many material suppliers under various credit term
policies. It is CCI's practice to secure the most competitive pricing among
these suppliers. For the three months ended March 31, 1997 GTE Supply, Cable
Connector Warehouse and Energy Electric Cable accounted for 45%, 17% and 11% of
the companies total material purchases, respectively. Of these suppliers, only
Cable Connector Warehouse was used in the comparable period last year and
accounted for 6% of total material purchased.
Liquidity and Capital Resources
In November 1996, the Company consummated the acquisition of Complete
Communications, Inc., a California corporation ("CCI"), in consideration for the
issuance of 10,000,000 shares of Common Stock to John Ackerman, the sole
shareholder of CCI. In connection with this transaction, the Company changed its
name to COMC, Inc.
Cash and cash equivalents decreased $46,028 at March 31, 1997 compared to
December 31, 1996. Cash used in operating activities amounted to $25,922 and was
primarily due to a loss in the quarter of $21, 409 and additional prepaid
assets. Cash used in investing activities decreased $7,606 at March 31, 1997 due
to the purchase of necessary operational equipment. Financing activities used
$12,500 for principal payments on long-term borrowings.
<PAGE> 7
The Company has a $100,000 equipment line of credit which was established
in January 1997 and remains available.
In December 1996 the Company entered into a letter of intent with Able
Cable, Inc. ("ACI"), a provider of interconnect services of voice and data
communications systems. Under the terms of the letter of intent, the Company
will acquire ACI in consideration for a cash payment of $1,000,000 and the
issuance of Common Stock as well as payments in the amount of $960,000 over a
period of four years under employment and consulting agreements to be entered
into with the principals of ACI. Compilations provided to the Company indicate
that during its most recent fiscal year ACI generated revenues of $6.8 million,
while pre-tax profits amounted to $267,000. Consummation of the transaction is
contingent upon financing arrangements and the satisfactory completion of the
Company's due diligence investigation of ACI's affairs, neither of which can be
assured at this time.
In April 1997, the Company entered into a letter of intent providing for a
business combination withICF Communications Systems, Inc. ("ICF"). Pursuant to
the letter of intent, the Company will acquire ICF for a total consideration of
$12.1 million of which $9.6 million is payable in cash with the balance to be
paid by the issuance of the Company's Common Stock. Approximately $8 million is
due at the closing. Additional payments will be made annually over a two- year
period from the closing. It is currently anticipated that two of ICF's
principals will enter into employment agreements with the Company. ICF is a
telephone service provider based in the San Francisco area. According to
compilations provided to the Company, during its most recent fiscal year ICF
generated revenues of approximately $15 million. Its pre-tax profits during
this period aggregated approximately $1.3 million. Consummation of the
transaction is contingent, among other things, upon financing arrangements and
the satisfactory completion of the Company's due diligence investigation of
ICF's affairs, neither of which can be assured at this time.
The Company intends to continue its search for additional merger and
acquisition candidates that will expand its existing markets in related products
and services.
PART II. OTHER INFORMATION
Item 1. Legal proceedings
The Company is not involved in any material legal proceedings.
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not applicable
Item 6. Exhibits and Reports on Form 8-K
On January 9, 1997, Registrant filed an amendment No. 2 to a Current
Report on Form 8-K with respect to a change in accountants.
On February 25, 1997, Registrant filed an amendment to a Current Report on
Form 8-K with respect to the acquisition of CCI.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, Registrant has duly caused this report to be signed
on its behalf by the undersigned thereunto duly authorized.
COMC, INC.
By: /s/ John Ackerman
-----------------
John Ackerman, Chairman and President
Dated: May 6, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934,
this Report has been signed below as of May 6, 1997 by the following persons on
behalf of Registrant and in the capacities indicated.
By: /s/ Ernest C. Mauritson
----------------------
Ernest c. Mauritison, Controller
(Principal Financial and
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 11,152
<SECURITIES> 0
<RECEIVABLES> 1,189,754
<ALLOWANCES> 0
<INVENTORY> 90,705
<CURRENT-ASSETS> 1,329,830
<PP&E> 213,052
<DEPRECIATION> 98,178
<TOTAL-ASSETS> 1,462,529
<CURRENT-LIABILITIES> 1,041,041
<BONDS> 154,167
0
0
<COMMON> 124,981
<OTHER-SE> 142,340
<TOTAL-LIABILITY-AND-EQUITY> 1,462,529
<SALES> 0
<TOTAL-REVENUES> 1,020,569
<CGS> 0
<TOTAL-COSTS> 684,523
<OTHER-EXPENSES> 346,869
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 10,710
<INCOME-PRETAX> (21,409)
<INCOME-TAX> 0
<INCOME-CONTINUING> (21,409)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (21,409)
<EPS-PRIMARY> 0.00
<EPS-DILUTED> 0.00
</TABLE>
