U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission file number 0-14962
MORLEX, INC.
(Exact name of small business issuer as specified in its charter)
Colorado 84-1028977
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
P.O. Box 3755, Englewood, CO 80155
(Address of principal executive offices (Zip Code)
Issuer's telephone number, including area code: (303) 699-8784
No change
(Former name, former address and former
fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 X No.
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 389,200,000 shares of Common
Stock, par value $ .0001 per share, outstanding as of August 7, 2000.
<PAGE>
FORM 10-QSB
FINANCIAL STATEMENTS AND SCHEDULES
MORLEX, INC.
For the Quarter ended June 30, 2000
The following financial statements and schedules of the registrant and its
consolidated subsidiaries are submitted herewith:
PART I- FINANCIAL INFORMATION
Page of
Form 10-
QSB
--------
Item 1. Financial Statements:
Balance Sheets - June 30, 2000 (unaudited) and
December 31, 1999 3
Statement of Stockholders' Equity (unaudited) as at June 30, 2000 and
December 31, 1999 and 1998 4
Statements of Operations (unaudited) for the three months ended
June 30, 2000 and 1999 and the six months ended June 30, 2000 and 1999 5
Statement of Cash Flows (unaudited) for the three months ended
June 30, 2000 and 1999 and the six months ended June 30, 2000 and 1999 6
Notes to Financial Statements 7
Item 2. Management's Discussion and Analysis or Plan of Operation 8
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<PAGE>
MORLEX, INC.
(FORMERLY AMERICA ONLINE, INC.)
BALANCE SHEET
June 30 December 31
2000 1999
(Unaudited)
ASSETS
CURRENT ASSETS
Cash $ 5,824 $ 3,101
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accrued expenses $ 974 $ 1,480
Shareholder advances 9,000 0
--------- ---------
TOTAL LIABILITIES 9,974 1,480
--------- ---------
STOCKHOLDERS' EQUITY
Common stock, $.0001 par value
1,000,000,000 shares authorized; 389,200,000
shares issued and outstanding 38,920 38,920
Additional paid-in capital 303,728 303,728
Deficit (346,797) (341,027)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY (4,149) 1,621
--------- ---------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,825 $ 3,101
========= =========
<PAGE>
MORLEX, INC.
(FORMERLY AMERICA ONLINE, INC.)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Additional Total
Common Stock Paid in Stockholders'
Shares Amount Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1997 125,680,000 $ 12,568 $ 291,728 $ (304,296) $ 0
Issuance of common stock 188,520,000 18,852 0 0 18,852
Capital contributed 0 0 7,000 0 7,000
Net loss for the year
ended December 31, 1998 0 0 0 (22,664) (22,664)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 1998 314,200,000 31,420 298,728 (326,960) 3,188
Capital contributed 0 0 5,000 0 5,000
Issuance of common stock 75,000,000 7,500 0 0 7,500
Net loss for the year ended
December 31, 1999 0 0 0 (14,067) (14,067)
----------- ----------- ----------- ----------- -----------
Balance, December 31, 1999 389,200,000 38,920 303,228 (341,027) 1,621
Net loss for the six months
ended June 30, 2000 (unaudited) 0 0 0 (5,770) (5,770)
----------- ----------- ----------- ----------- -----------
Balance, June 30, 2000 (unaudited) 389,200,000 $ 38,920 $ 303,728 $ (346,797) $ (4,149)
=========== =========== =========== =========== ===========
</TABLE>
<PAGE>
MORLEX, INC.
(FORMERLY AMERICA ONLINE, INC.)
STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Three For The Six
Months Ended Months Ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
REVENUE NONE NONE NONE NONE
------------- ------------- ------------- -------------
EXPENSES
Professional $ 1,826 $ 2,845 $ 4,236 $ 4,068
Consulting 0 0 0 0
General and administrative 64 0 64 95
Filing and transfer fees 675 0 1,470 1,768
------------- ------------- ------------- -------------
TOTAL 2,565 2,845 5,770 5,931
------------- ------------- ------------- -------------
NET LOSS $ (2,565) $ (2,845) $ (5,770) $ (5,931)
============= ============= ============= =============
LOSS PER SHARE:
Net loss per share NIL NIL NIL NIL
============= ============= ============= =============
Weighted average number
of common shares outstanding 389,200,000 314,200,000 389,200,000 314,200,000
============= ============= ============= =============
</TABLE>
<PAGE>
MORLEX, INC.
(FORMERLY AMERICA ONLINE, INC.)
STATEMENT OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
For The Three For the Six
Months Ended Months Ended
June 30, June 30,
2000 1999 2000 1999
<S> <C> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss $(2,565) $(2,845) $(5,770) $(5,931)
Increase in accrued expenses (1,001) 34 (506) 1,619
------- ------- ------- -------
NET CASH USED BY OPERATING ACTIVITIES (3,566) (2,811) (6,276) (4,312)
------- ------- ------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Capital contributed 0 0 0 1,000
Shareholder advances 9,000 0 9,000 0
------- ------- ------- -------
NET CASH PROVIDED BY FINANCING ACTIVITIES 9,000 0 9,000 1,000
------- ------- ------- -------
NET INCREASE (DECREASE) IN CASH 5,434 (2,811) 2,724 (3,312)
BEGINNING CASH BALANCE 391 3,163 3,101 3,664
------- ------- ------- -------
ENDING CASH BALANCE $ 5,825 $ 352 $ 5,825 $ 352
======= ======= ======= =======
</TABLE>
<PAGE>
MORLEX, INC.
(FORMERLY AMERICA ONLINE, INC.)
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 2000 AND 1999
(UNAUDITED)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and pursuant to
the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal accruals)
considered necessary for fair presentation have been included. The unaudited
financial statements should be read in conjunction with the financial statements
and footnotes thereto included in the Company's Annual Report on Form 10-KSB for
the year ended December 31, 1999.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The Company incurred a net loss of $ 2,565 for the three months ended June
30, 2000 and a net loss of $5,770 for the six months ended June 30, 2000.
Combined with the fact that the Company has virtually no working capital and an
accumulated deficit of $346,797, it is management's assertion that these
circumstances may hinder the Company's ability to continue as a going concern.
The Company completed two private placements of its Common Stock, par value
$.0001 per share, in December 1997 and July 1998. In December 1997, Charles T.
Gould, a director and the Company's President, purchased 35,970,000 shares of
Common Stock in exchange for the cancellation of $49,191 of indebtedness of the
Company to Mr. Gould. In August 1998, Steven J. Goodman and Lawrence E. Kaplan,
both directors of the Company, each purchased 94,260,000 shares of Common Stock
in exchange for $3,000 each in cash and $6,246 each in previous services
rendered, or an aggregate of 188,520,000 shares of Common Stock with an
aggregate purchase price of $6,000 in cash and $12,852 in previous services
rendered. The Company currently has virtually no cash or other assets.
On August 16, 1999, Steven J. Goodman, Lawrence Kaplan and Charles T.
Gould, each directors and major shareholders of the Company, each purchased
25,000,000 shares of Common Stock in exchange for $2,500 each in cash previously
advanced to the Company.
Plan of Operation. The Company has not realized any revenues from
operations in the past two fiscal years, and its plan of operation for the next
twelve months shall be to continue its efforts to locate suitable acquisition
candidates. The Company can provide no assurance that it can continue to satisfy
its cash requirements for at least the next twelve months.
The Company filed, on June 14, 1999, a Registration Statement under the
Securities Exchange Act of 1934 (the "Exchange Act"), on Form 10-SB, pursuant to
which the Company sought to register its Common Stock under the Exchange Act.
The Registration Statement became effective on August 14, 1999, and now the
Company intends to seek a listing of its common stock on the Nasdaq OTC Bulletin
Board. The Company believes that it can enhance its opportunities to acquire or
merge with an operating company if its securities are listed on the Bulletin
Board. There can be no assurance that the Company's securities will be listed on
the Bulletin Board.
Liquidity and Capital Resources. As of June 30, 2000, the Company had
assets consisting of $5,824 in cash. This compares to assets of $3,101 in cash
for the fiscal year ended December 31, 1999.
Results of Operations. The Company has not conducted any active operations
in the past two fiscal years, except for its efforts to locate suitable
acquisition transactions. No revenue has been generated by the Company during
such two-year period. It is unlikely the Company will have any revenues unless
it is able to effect an acquisition of or merger with an operating company, of
which there can be no assurance.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings. To the best knowledge of the officers and directors,
the Company is not party to any legal proceeding or litigation.
Item 2. Changes in Securities. None
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) Exhibit No. Description
27.1 Financial Data Schedule
(b) Reports on Form 8-K. None.
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant has
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
Date: August 8, 2000
MORLEX, INC.
By: /s/ Lawrence Kaplan
--------------------------
Lawrence Kaplan, President
