SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Quarter Ended September 30, 2000
Commission file number 0-29462
DOMINIX, INC.
(Exact name of Registrant as specified in its charter.)
DELAWARE 13-4127624
(State of other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
142 West 36th Street
New York, New York 10018 (Address
of principal executive offices, including zip code.)
(212) 268-5600
Registrant's telephone number, including area code.
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 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 90 days.
YES [x] NO [ ]
The number of shares outstanding of the Registrant's Common Stock, .0001 par
value per share, at September 30, 2000 was 6,488,685.
<PAGE>
DOMINIX, INC.
ORGANIZATION
Medical Management Systems, Inc. (MMSI) was a Colorado corporation. It was
initially incorporated as Apache Investments. The name was changed in 1991 to
Dog World, Inc. and in 1995 this name was changed to Medical Management
Systems, Inc. On April 17, 2000 an agreement was signed whereby
BookDigital.com ("BookDigital") directors became directors of MMSI and the
MMSI directors resigned. As part of the transaction, BookDigital agreed to
pay $200,000 to MMSI to satisfy unpaid wages. MMSI also agreed to execute an
exchange offer for BookDigital. The exchange offer was completed on June 30,
2000.
The Company's mission is to become the premier reference library site on the
internet. The company's site (www.Bookdigital.com) on the internet is
designed to maintain a very comprehensive set of books, manuals, pamphlets,
journals, research data and links. Bookdigital.com serves as a home base
library for educational and intellectual advancement. Viewer may search,
review, browse and download information needed in any subject such as
physics, law, astronomy, etc. at the Bookdigital.com site. The search can be
made by title, subject or author for any reference materials. Currently all
reference materials are in English. However, the Company intends to develop a
global reference site in Spanish, French, German, Italian, etc. The Company
intends to register its viewers and may charge a subscription fee in the
future.
The Company's other internet sites are www.bookdigitalschools.com and
www.lawxpressusa.com. Bookdigitalschools.com serving educational centers such
as schools k-12 in order to enhance quality of education for students.
Lawxpressusa.com is intended to provide legal and business research to
attorneys nationwide.
SUBSEQUENT EVENTS
The Company entered into an agreement with the major shareholder of Syndata,
Inc., a developer of Encryption Software, to acquire his interest in exchange
for stock of Dominix, Inc.
Subsequent to September 30, 2000, the Company issued 77,100 shares of its stock
for cash and services valued at between $4.00 and $5.88 per share.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations - Quarter ended September 30, 2000 and September 30, 1999
As the Company's operation for the quarter ended September 30, 2000 is not
comparable to the quarter ended September 30, 1999, no meaningful comparisons
can be made. Bookdigital.com is a development stage company, and as such, has
not generated any significant revenues to date.
Liquidity and Capital Resources.
The Company had $260,856 in cash as of the quarter ended September 30, 2000. The
Company anticipates raising additional capital, which will be required in order
to continue operations.
<PAGE>
<TABLE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEET
(UNAUDITED)
SEPTEMBER 30,
<CAPTION>
================================================================================================
2000
------------------------------------------------------------------------------------------------
<S> <C>
ASSETS
CURRENT ASSETS
Cash $ 260,856
Marketable Equity Securities 2,143
------------------------------------------------------------------------------------------------
TOTAL CURRENT ASSETS 262,999
------------------------------------------------------------------------------------------------
PROPERTY AND EQUIPMENT
Furniture and Fixtures 37,252
Equipment 118,188
Leasehold Improvements 22,380
Software Costs 3,080,853
Accumulated Depreciation, Amortization (15,497)
------------------------------------------------------------------------------------------------
TOTAL PROPERTY AND EQUIPMENT 3,247,102
------------------------------------------------------------------------------------------------
OTHER ASSETS
Investment 11,202
Other 5,000
Security Deposits 153,337
------------------------------------------------------------------------------------------------
TOTAL OTHER ASSETS 169,539
------------------------------------------------------------------------------------------------
TOTAL ASSETS $ 3,679,640
================================================================================================
LIABILITY AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 208,724
Payroll Taxes Payable 32,112
------------------------------------------------------------------------------------------------
TOTAL CURRENT LIABILITIES 240,836
------------------------------------------------------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred Stock - $.001 Par Value; 5,000,000 Shares Authorized;
0 Shares Issued and Outstanding
Common Stock - $.001 Par Value; 20,000,000 Shares
Authorized; 6,488,685 Shares Issued and Outstanding 6,489
Paid-in Capital 6,743,473
Retained (Deficit) Accumulated during Development Stage (3,311,158)
------------------------------------------------------------------------------------------------
TOTAL STOCKHOLDERS' EQUITY 3,438,807
------------------------------------------------------------------------------------------------
TOTAL LIABILITY AND STOCKHOLDERS' EQUITY $ 3,679,640
================================================================================================
</TABLE>
F-1
<PAGE>
<TABLE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE
(UNAUDITED)
FOR THE PERIOD
<CAPTION>
====================================================================================================
July 1, July 1, March 25, 1999
2000 to 1999 to (inception)
Sept. 30, Sept. 30, to Sept. 30,
2000 1999 2000
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------------
REVENUES
Sales $ 2,320 $ 0 $ 490
----------------------------------------------------------------------------------------------------
EXPENSES
Officer's Compensation 503,891 54,684 1,002,923
Management, Administrative Salaries 12,523 7,248 188,675
Programming 0 5,169 143,561
Commission 0 0 61,000
Employee Benefits 4,721 0 17,831
Consulting Fees 108,524 61,708 295,066
Advertising, Printing 8,981 0 48,373
Insurance 12,702 1,418 30,920
Office Expenses 16,150 1,632 67,875
Professional Fee - Public Relations 611 6,000 58,611
Professional Fee - Accounting 1,510 0 30,710
Professional Fee - Legal 25,775 17,000 136,803
Professional Fee - Other 0 34,980 116,579
IPO Expenses 0 52,853 221,920
Software Expense 0 5,312 10,136
Rent 27,034 6,088 92,104
Retainer Fee 0 10,000 65,000
Stock/Registration Fees 2,359 2,848 32,429
Advertising - Internet 2,252 24,500 44,252
Depreciation Expense, Amortization 3,000 0 14,573
Payroll Tax Expense 2,987 6,733 77,017
Miscellaneous 26,035 27,809 40,109
Telephone Expenses 11,539 5,323 35,475
Training, Education 0 0 9,337
Contributions 0 0 90,000
Travel, Entertainment 26,688 218 46,522
----------------------------------------------------------------------------------------------------
TOTAL EXPENSES 797,582 331,523 2,978,101
----------------------------------------------------------------------------------------------------
</TABLE>
F-2
<PAGE>
<TABLE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS AND DEFICIT ACCUMULATED DURING DEVELOPMENT STAGE (CONTINUED)
(UNAUDITED)
FOR THE PERIOD
<CAPTION>
=========================================================================================================
July 1, July 1, March 25, 1999
2000 to 1999 to (inception)
Sept. 30, Sept. 30, to Sept. 30,
2000 1999 2000
---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OTHER INCOME (EXPENSE)
Interest Income $ 0 $ 1,366 $ 2,979
Gain on Sale of Marketable Securities 0 (60,192) 36,792
Shareholder Meeting 0 0 0
Interest Expense 0 (382) (1,313)
---------------------------------------------------------------------------------------------------------
TOTAL OTHER INCOME (EXPENSE) 0 (59,208) (6,507)
NET (LOSS) (795,262) (390,731) (2,981,798)
PRIOR PERIOD ADJUSTMENT
Start-up Costs 0 0 (332,978)
OTHER COMPREHENSIVE INCOME
Unrealized Gain on Securities 0 0 475
---------------------------------------------------------------------------------------------------------
COMPREHENSIVE (LOSS) $ (795,262) $ (393,296) $(3,314,301)
=========================================================================================================
(Loss) per Share - Basic $ (.12) $ (.09) $ (.51)
(Loss) per Share - Diluted $ (.12) $ (.09) $ (.51)
Shares Used in Per Share Calculation - Basic 6,488,685 4,616,034 6,488,685
Shares Used in Per Share Calculation - Diluted 6,488,685 4,616,034 6,488,685
=========================================================================================================
</TABLE>
F-3
<PAGE>
<TABLE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF CASH FLOWS
(UNAUDITED)
=====================================================================================================================
<CAPTION>
March 26, 1999
July 1, 2000 (inception) to
to Sept 30, Sept 30,
2000 2000
---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (Loss) $ (795,262) $(2,518,896)
Adjustments to Reconcile Net (Loss) to Net Cash Used by Operating
Activities
Depreciation 2,870 11,031
Amortization 271 542
Changes in Operating Assets and Liabilities:
(Increase) in Software Costs (196,297) (2,884,556)
(Increase) in Security Deposits (125,736) (27,601)
Increase in Accounts Payable 39,001 179,225
Increase in Payroll Taxes Payable 0 22,610
---------------------------------------------------------------------------------------------------------------------
NET CASH USED BY OPERATING ACTIVITIES (1,075,153) (5,217,645)
---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of Furniture and Fixtures (12,458) (24,794)
Purchase of Equipment (6,812) (111,376
Leasehold Improvements (6,130) (16,250)
Other Assets 0) (11,202)
Proceeds from Sale of Securities 0 6,263,344
Purchase of Securities 0 (6,265,487)
Purchase Investment 0 (5,000)
---------------------------------------------------------------------------------------------------------------------
NET CASH USED BY INVESTING ACTIVITIES (25,400)
---------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from Issuance of Common Stock 925,144 5,611,471
Issuance of Warrants 0 213,204
---------------------------------------------------------------------------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 925,144
---------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH (175,409) 436,265
CASH - BEGINNING 436,265 0
---------------------------------------------------------------------------------------------------------------------
CASH - ENDING $ 260,856 $ 436,265
---------------------------------------------------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURE:
Interest Paid $ 0 $ 888
---------------------------------------------------------------------------------------------------------------------
NONCASH INVESTING ACTIVITIES:
Issuance of Common Stock for Services by Officer $ 435 $ 215,412
Issuance of Common Stock for Services included in Software Costs 0 2,718,400
Issuance of Warrants for Services included in Software Costs 0 213,204
=====================================================================================================================
F-4
</TABLE>
<PAGE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
(UNUADITED)
SEPTEMBER 30, 2000
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
HISTORY AND BUSINESS ACTIVITY - Medical Management Systems, Inc. (MMSI)
was a Colorado corporation. It was initially incorporated as Apache
Investments. The name was changed in 1991 to Dog World, Inc. and in
1995 this name was changed to Medical Management Systems, Inc. On April
17, 2000 an agreement was signed whereby BookDigital.com
("BookDigital") directors became directors of MMSI and the MMSI
directors resigned. As part of the transaction, BookDigital paid
$200,000 to MMSI to satisfy unpaid wages. MMSI also agreed to execute
an exchange offer for BookDigital. The exchange offer was completed on
June 30, 2000. In July, 2000 the shares of Medical Management Systems,
Inc. were exchanged on a one-for-one basis with Dominix, Inc. becoming
the surviving corporation.
The Company's mission is to become the premier reference library site
on the internet. The company's site (www.Bookdigital.com) on the
internet is designed to maintain a very comprehensive set of books,
manuals, pamphlets, journals, research data and links. Bookdigital.com
serves as a home base library for educational and intellectual
advancement. Viewer may search, review, browse and download information
needed in any subject such as physics, law, astronomy, etc. at the
Bookdigital.com site. The search can be made by title, subject or
author for any reference materials. Currently all reference materials
are in English. However, the Company intends to develop a global
reference site in Spanish, French, German, Italian, etc. The Company
intends to register its viewers and may charge a subscription fee in
the future.
The Company's other internet sites are www.bookdigitalschools.com and
www.lawxpressusa.com. Bookdigitalschools.com serving educational
centers such as schools k-12 in order to enhance quality of education
for students. Lawxpressusa.com is intended to provide legal and
business research to attorneys nationwide.
CASH AND CASH EQUIVALENTS - Dominix, Inc. maintains a bank account and
a petty cash fund, both of which it classifies as cash for purposes of
the statement of cash flows.
INVESTMENT SECURITIES - Marketable equity securities are classified as
"available for sale" and are carried at fair value, with unrealized
gains and losses reported in other comprehensive income.
Realized gains and losses and declines in value judged to be other than
temporary are included in earnings. The specific identification method
is utilized in determining the cost of a security that has been sold.
F-5
<PAGE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
(UNAUDITED)
SEPTEMBER 30, 2000
================================================================================
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
PROPERTY, EQUIPMENT - Property, equipment and leasehold improvements
are carried at cost, maintenance and repairs are charged to operations.
Depreciation and amortization expense are computed on a straight-line
method over the estimated useful lives of the respective assets.
Estimated useful lives are:
Furniture and Fixtures 7-10 years
Equipment 3-5 years
Leasehold Improvements 15 years
COMMON STOCK - Common stock issued by the company as payment for
services has been valued by management at the estimated fair market
value of the stock existing at the time of its issuance.
BASIC AND DILUTED NET INCOME (LOSS) PER SHARE - Basic net income (loss)
per share is computed using the weighted average number of common
shares outstanding during the period. Diluted net income (loss) per
share is also computed using the weighted average number of common
shares outstanding during the period, including conversion of any
warrants to equivalent common stock.
USE OF ESTIMATES - The preparation of financial statements in
conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect reported
amounts of assets and liabilities, disclosure of contingent assets and
liabilities at the date of the financial statements and the reported
amounts of revenue and expenses during the reported period. Actual
results could differ from those estimates.
ADVERTISING - Advertising costs are expensed when incurred.
INCOME TAXES - The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards No. 109, "Accounting for
Income Taxes," which requires the use of the "liability method" of
accounting for income taxes. Accordingly, deferred tax liabilities and
asset are determined based upon the differences between the financial
statement and tax bases of assets and liabilities, using enacted rates
in effect for the year in which the differences are expected to
reverse. Current income taxes are based upon the year's taxable income
for federal and state income tax reporting purposes.
OTHER - In accordance with Item 310(b) of Regulation S-B, it is the
opinion of management that all adjustments necessary in order to make
the financial statements not misleading have been made.
F-6
<PAGE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
(UNAUDITED)
SEPTEMBER 30, 2000
================================================================================
NOTE 2 - BUSINESS COMBINATION
In June, 2000 BookDigital.com completed an exchange offer with Medical
Management Systems, Inc. which was accounted for by the
pooling-of-interests method. .3113 shares of Medical Management Systems
Inc. were exchanged for each share of BookDigital in the exchange
offer. In the exchange offer, Medical Management issued as aggregate of
4,616,034 in exchange for 14,828,249 shares of BookDigital which
represented 99.7% of the outstanding shares of BookDigital. In July,
2000 the shares of Medical Management Systems, Inc. were exchanged on a
one-for-one basis with Dominix, Inc. becoming the surviving
corporation.
Prior to the exchange offer, Medical Management Systems, Inc. had no
operating activity. Bookdigital.com, Inc. had no operating income in
prior periods and accumulated losses of $(2,519,039). During the
quarter in which the merger took place, MMSI had no income or expenses
and Bookdigital had no operating income and expenses of $956,693.
There were no adjustments to net assets, no changes to retained
earnings or either Company as a result of the merger. There were no
changes in income or revenues as previously reported by MMSI.
NOTE 3 - INVESTMENTS
At September 30, 2000 gross unrealized gains and losses on marketable
securities were as follows:
Gross unrealized gains $ 475
Gross unrealized losses $ 0
NOTE 4 - STOCKHOLDERS' EQUITY
COMMON STOCK - The Company is authorized to issue 5,000,000 preferred
shares, $0.001 par value per share and 0 shares of preferred stock are
issued and outstanding and 20,000,000 common shares, $0.001 par value
per share and 6,488,685 shares of common stock are issued and
outstanding. The holders of common stock have one vote per share on all
matters (including election of directors) without provision for
cumulative voting. Thus, holders of more than 50% of the shares voting
for the election of director can elect all of the directors, if they
choose to do so. The common stock is not redeemable and has no
conversion or pre-emptive rights. There are no sinking fund provisions.
In the event of liquidation of the company, the holders of common stock
will share equally in any balance of the company's assets available for
distribution to them after satisfaction of creditors and preferred
stockholders, if any.
F-7
<PAGE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
(UNAUDITED)
SEPTEMBER 30, 2000
================================================================================
NOTE 4 - STOCKHOLDERS' EQUITY (CONTINUED)
WARRANTS - Each Class A warrant entitles the holder to purchase one
share of common stock at an exercise price of during the one-year
period commencing October 1, 1999 ("Exercise Period"). The Class A
warrants are subject to redemption by the company at a price of $0.10
per warrant, at any time on twenty-day prior written notice provided
the closing bid price of the common stock is at least 120% of the
exercise price for twenty consecutive trading days ending three days
prior to the date that notice of redemption was given to warrant
holders. The shares and Class A warrants shall be detachable and
separately tradable as determined by the company.
NOTE 5 - INCOME TAXES
Since the Company has not yet realized income as of the date of this
report, no provision for income taxes has been made. At September 30,
2000, a deferred tax asset has not been recorded due to the company's
lack of operations to provide income to use the net operating loss
carryover of $(3,314,776) which start expiring in 2019.
NOTE 6 - CONTINGENCIES
The Company is not currently aware of any other legal proceedings or
claims that the company believes will have, individually or in the
aggregate, a material adverse effect on the company's financial
position or results of operations.
NOTE 7 - COMMITMENT
In September, 1999, the Company entered into a lease for office space.
The term of the lease is from October 1, 1999 to December 31, 2007. The
lease has annual increases of 3%. Effective September 1, 2000 the
Company entered into a separate lease for additional office space. The
lease expires on August 31, 2005. The lease has annual increases of 4%.
Minimum annual rentals for the year ending December 31 are:
2001 $ 248,451
2002 274,848
2003 287,744
2004 299,112
2005 310,784
----------
$1,420,939
F-8
<PAGE>
DOMINIX, INC.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENT
(UNAUDITED)
SEPTEMBER 30, 2000
================================================================================
NOTE 8 - SUBSEQUENT EVENTS
The Company entered into an agreement with the major shareholder of
Syndata, Inc., a developer of Encryption Software, to acquire his
interest in exchange for stock of Dominix, Inc.
Subsequent to September 30, 2000, the Company issued 77,100 shares of
its stock for cash, products and services valued at between $4.00 and
$5.88 per share.
F-9
<PAGE>
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
There are no material legal proceedings commenced or maintained by, or
against, the Company.
Item 2. Change in Securities.
None.
Item 3. Defaults Upon Senior Securities.
The Company has no debt securities outstanding.
Item 4. Submission of Matters to a Vote of Security Holders.
There were no matters submitted for a vote of the security holders
during the period covered by this report.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
No reports were filed on Form 8-K during the quarter ended September
30, 2000.
<PAGE>
EXHIBIT INDEX
Exhibit
No. Description.
27 Financial Data Schedule
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated this 13th day of November, 2000.
DOMINIX, INC.
(the "Registrant")
BY: /s/ Ray Vahab
---------------------------
Ray Vahab
Chief Executive Officer and
Chairman of the Board
