SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(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, 1996
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
--------------- ---------------
Commission File No. 33-18834-LA
MED-TEX CORPORATION
-------------------
(Exact name of small business issuer as specified in its charter)
Nevada 87-0306464
(State or other jurisdiction of
incorporation or organization) (IRS Employer Identification No.)
2440 South Progress Drive, Salt Lake City, Utah 84119
-----------------------------------------------------
(Address of principal executive offices) (Zip Code)
(801) 972-2201
--------------------
(Issuer's telephone number)
------------------------------------------------------------------------
(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
----- -----
As of October 31, 1996, 5,877,668 shares of Common Stock of the issuer
were outstanding.
<PAGE>
<PAGE>
MED-TEX CORPORATION
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1996
(unaudited)and December 31, 1995 (audited)................1
Unaudited Consolidated Statements of Operations -
For the three months and nine months September 30,
1996 and 1995.............................................2
Unaudited Consolidated Statements of Cash Flows -
For the nine months ended September 30, 1996 and 1995.....3
Notes to Unaudited Consolidated Financial Statements......4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations......................5
PART II - OTHER INFORMATION...........................................5
SIGNATURES............................................................7
</TABLE>
<PAGE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MED-TEX CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
ASSETS
September 30 December 31
1996 1995
------------ -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 1,165 $ 18,130
Accounts Receivable 3,519 15,506
Inventory 116,052 124,933
Prepaid Expenses 7,000 -
--------- ----------
Total Current Assets $ 127,736 $ 158,569
---------- ----------
PROPERTY AND EQUIPMENT
Leasehold Improvements $ 172,572 $ 172,572
Less Accumulated depreciation 13,852 9,427
-------- ----------
Net Property and Equipment $ 158,720 $ 163,145
--------- ----------
OTHER ASSETS
Licenses and permits, net $ 145,570 $ 155,570
Goodwill, net 363,662 386,617
Deposits and Other 11,176 11,177
---------- ----------
Total Other Assets $ 520,408 $ 553,364
========== ===========
Total Assets $ 806,864 $ 875,078
---------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 256,270 $ 304,048
Accrued Interests Payable 146,444 79,796
Current Portion Long Term Debt 49,811 37,183
Other Accrued Liabilities 3,500 8,329
---------- -----------
Total Current Liabilities $ 456,025 $ 429,356
---------- -----------
Long Term Debt $1,188,835 $1,106,833
STOCKHOLDERS' EQUITY (Deficit):
Common Stock, $.001 Par Value; 50,000,000 Shares
Authorized, 5,877,668 Shares Issued and
Outstanding $ 5,878 $ 5,836
Additional Paid In Capital 1,439,663 1,393,362
Accumulated Deficit (2,283,537) (2,060,309)
---------- ---------
Total Stockholders Equity (837,996) (661,111)
---------- ----------
Total liabilities and Stockholder Equity $ 806,864 $ 875,078
========== ==========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
<PAGE>
MED-TEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
For the For the
Three Months Ended Nine Months Ended
September 30 September 30
---------------------- --------------------
1996 1995 1996 1995
--------- ---------- --------- ---------
<S> <C> <C> <C> <C>
Net Revenues $ 24,389 $ 88,541 $ 67,890 $ 250,440
Cost of Sales 13,199 150,157 40,392 177,345
---------- ---------- --------- ---------
Gross Profit (Loss) $ 11,190 $ (61,616) $ 27,498 $ 73,095
Operating Expenses 68,307 125,706 250,736 370,559
---------- ---------- --------- ---------
Net Income (Loss) $ (57,117) $ (187,322) $(223,238) $(297,464)
========== ========== ========== ==========
Net Income (Loss) per
Common Share $ (.01) $ .03 $ (.04) $ (.06)
========== ========== ========== ==========
Weighted Average Shares
Outstanding 5,877,668 5,368,106 5,850,372 5,368,106
========== ========== ========= =========
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
<PAGE>
<PAGE>
MED-TEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
----------------------
1996 1995
--------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income <Loss> $(23,228) $(110,143)
Adjustments to reconcile net income <loss> to
cash provided by (used in)operating activities
Depreciation and Amoritization 37,380 31,959
Decrease (Increase) in accounts receivable 11,987 (3,152)
Decrease (Increase) in inventory 8,882 28,846
Decrease (Increase) in prepaid expenses (7,000) 1,301
Increase (Decrease) in accounts payable (9,764) (78,123)
Increase in accrued interest payable 66,648 22,795
Decrease (Increase) in other accrued liabilities 3,500 5,774
-------- --------
Net Cash Provided by (Used in) Operating
Activities $(111,595) (100,743)
--------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from related parties $ 122,683 $104,967
Principal payment on loan 28,053 -
--------- --------
Net Cash Provided by (Used in) Financing
Activities $ 94,630 $104,967
--------- --------
Increase (Decrease) in cash $ 16,965 $ 4,224
Cash at beginning of period 18,130 10,946
--------- --------
Cash at end of period $ 1,165 $ 15,170
--------- --------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements<PAGE>
<PAGE>
<PAGE>
<PAGE>
MED-TEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
1. The interim financial statements are prepared pursuant to the requirements
for reporting on Form 10-QSB. The December 31, 1995 balance sheet data
was derived from audited financial statements but does not include all
disclosures required by generally accepted accounting principles. The
interim financial statements and notes thereto should be read in
conjunction with the financial statements and footnotes thereto included
in the Company's report on Form 10-KSB for the year ended December 31,
1995. In the opinion of management, the interim financial statements
reflect all adjustments of a normal recurring nature necessary for a fair
statement of the results for the interim periods presented.
2. The Company's financial statements are prepared using generally accepted
accounting principles applicable to a going concern which contemplates the
realization of assets and liquidation of liabilities in the normal course
of business. However, the Company does not have significant cash or other
material assets, nor does it have an established source of revenues
sufficient to cover its operating costs and to allow it to continue as a
going concern.
<PAGE>
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Material Changes in Results of Operation
Three Months Ended September 30
Sales for the three months ended September 30, 1996 decreased $64,152 or
72.4%, to $24,389 from $88,541 for the three months ended September 30, 1995.
This decrease in sales is attributable to the Company winding down its
business affairs.
Gross profit increased by $77,806 to $11,190 for the three months ended
September 30, 1996 from a loss of $61,616 for the three months ended September
30, 1995. This increase in gross profit margins was attributable to the sale
of raw materials in the current period (instead of finished goods) which
products produce a higher margin.
Operating expenses decreased by $57,399, or 54.3%, to $68,307 for the three
months ended September 30, 1996 from $125,706 for the three months ended
September 30, 1995. This decline is attributable to the Company winding down
its business operations.
Nine Months Ended September 30
Sales for the nine months ended September 30, 1996 decreased $182,550, or
72.9%, to $67,890 from $250,440 for the nine months ended September 30, 1995.
This decrease in sales is attributable to the Company winding down its
business affairs.
Gross Profits for the nine months ended September 30, 1996 decreased $45,597,
or 62.4%, to $27,498 from $73,095 for the nine months ended September 30,
1995. This decrease in gross profits is principally attributable to reduced
sales volume.
Operating expenses decreased $119,823 or 32.3% to $250,736 for the three
months ended September 30, 1996 from $370,559 for the nine months ended
September 30, 1995. This decrease in operating expenses is attributable to
the Company winding down its business affairs.
Changes in Financial Condition, Liquidity and Capital Resources
For the past twelve months, the Company has funded its operating losses and
capital requirements through loans from related parties and other issuance of
debt. As of September 30, 1996, the Company had a cash balance of $1,165 and
a deficiency in working capital of $328,289.
Net cash used in operating activities increased to $111,595 from $100,743 for
the nine months ended September 30, 1996 and 1995, respectively. The increase
resulted from a larger net operating loss partially offset by an increase in
current payables.
Net cash provided by financing activities decreased to $94,630 from $104,967
for the nine months ended September 30, 1996 and 1995, respectively. This
decrease is attributable to reduced net borrowings from a related party.
At September 30, 1996, the Company had long term debt of $1,188,835
consisting principally of loans from affiliates. Also included in such long
term debt is a bank loan which calls for installments of principal and
interest in the amount of $4,539 per month. Because of the Company's deficit
in working capital and ongoing operating losses, the Company's ability to make
required payments on outstanding debt, payments on which are now in arrears,
is dependent upon the receipt of additional funding from affiliates or other
sources. No commitments to provide such funding presently exists.
<PAGE>
<PAGE>
The Company has experienced significant operating losses throughout its
history. The Company and its subsidiaries' ability to survive is dependent on
their ability to refinance their debt, borrow additional sums from affilates,
acquire a profitable operating subsidiary through the issuance of stock, or
raise additional capital to purchase or start a new business operation.
Without the success of one of these options, the Company does not have
sufficient cash to satisfy its working capital requirements for the next
twelve months.
<PAGE>
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
has duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
<TABLE>
<S> <C>
(REGISTRANT) MED-TEX CORPORATION
BY (SIGNATURE) /S/ K. Scott Crawford
(NAME AND TITLE) K. Scott Crawford,
President and Chief Executive Officer
(DATE) November , 1996
BY (SIGNATURE) /S/ Karen Pollino
(NAME AND TITLE) Karen Pollino,
Chief Financial Officer
(DATE) November , 1996
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,165
<SECURITIES> 0
<RECEIVABLES> 3,519
<ALLOWANCES> 0
<INVENTORY> 116,052
<CURRENT-ASSETS> 127,736
<PP&E> 172,572
<DEPRECIATION> 13,852
<TOTAL-ASSETS> 806,864
<CURRENT-LIABILITIES> 456,025
<BONDS> 0
0
0
<COMMON> 5,878
<OTHER-SE> (843,874)
<TOTAL-LIABILITY-AND-EQUITY> 806,864
<SALES> 24,389
<TOTAL-REVENUES> 24,389
<CGS> 13,199
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 68,307
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (57,117)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (57,117)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
