<PAGE>
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 June 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
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(Exact name of small business issuer as specified in its charter)
Nevada 87-0306464
- --------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
2440 South Progress Drive, Salt Lake City, Utah 84119
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(Address of principal executive offices) (Zip Code)
(801) 972-2201
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(Issuer's telephone number)
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(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 July 31, 1996, 5,836,724 shares of Common Stock of the issuer were
outstanding.
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MED-TEX CORPORATION
INDEX
PAGE
NUMBER
------
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - June 30, 1996
and December 31, 1995........................................ 1
Unaudited Consolidated Statements of Operations - For the
three months and six months June 30, 1996 and 1995........... 2
Unaudited Consolidated Statements of Cash Flows - For the
six months ended June 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
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MED-TEX CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
ASSETS
<TABLE>
June 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
CURRENT ASSETS:
Cash $ 2,085 $ 18,130
Accounts Receivable 6,287 15,506
Inventory 118,740 124,933
Prepaid Expenses 7,000 -
----------- -----------
Total Current Assets $ 134,112 $ 158,569
----------- -----------
PROPERTY AND EQUIPMENT
Leasehold Improvements 172,572 172,572
----------- -----------
$ 172,572 $ 172,572
Less Accumulated depreciation 13,852 9,427
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Net Property and Equipment $ 158,720 $ 163,145
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OTHER ASSETS
Licenses and permits, net
Goodwill, net $ 148,904 $ 155,570
371,314 386,617
Deposits and Other 11,176 11,177
----------- -----------
Total Other Assets $ 531,394 $ 553,364
----------- -----------
Total Assets $ 824,226 $ 875,078
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LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 302,145 $ 304,048
Accrued Interests Payable 118,677 79,796
Current Portion Long Term Debt 41,921 37,183
Other Accrued Liabilities 8,330 8,329
----------- -----------
Total Current Liabilities $ 471,073 $ 429,356
----------- -----------
Long Term Debt $ 1,180,385 $ 1,106,833
STOCKHOLDERS' EQUITY (Deficit):
Common Stock, $.001 Par Value; 50,000,000 Shares
Authorized, 5,836,724 Shares Issued and Outstanding 5,836 5,836
Additional Paid In Capital 1,393,362 1,393,362
Accumulated Deficit (2,226,430) (2,060,310)
----------- -----------
Total Stockholders Equity (827,232) (661,111)
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Total liabilities and Stockholder Equity $ 824,226 $ 875,078
----------- -----------
----------- -----------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
1
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MED-TEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
For the For the
Three Months Ended Six Months Ended
June 30 June 30
----------------------- ----------------------
1996 1995 1996 1995
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Sales $ 22,370 $ 138,863 $ 43,501 $ 161,898
Cost of Sales 14,749 4,288 27,193 27,188
--------- --------- --------- ---------
Gross Profit $ 7,621 $ 134,575 $ 16,308 $ 134,710
Operating Expenses 86,075 107,050 182,429 244,853
--------- --------- --------- ---------
Net Income (Loss) $ (78,454) $ 27,525 $(166,121) $(110,143)
--------- --------- --------- ---------
--------- --------- --------- ---------
Net Income (Loss) per Share $ (.01) $ .01 $ (.03) $ (.02)
--------- --------- --------- ---------
--------- --------- --------- ---------
Weighted Average Number of
Shares Outstanding 5,368,106 5,368,106 5,836,724 5,368,106
--------- --------- --------- ---------
--------- --------- --------- ---------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
2
<PAGE>
MED-TEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
For the Six Months
Ended June 30,
------------------------
1996 1995
---------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $(166,121) $(110,143)
Adjustments to reconcile net income (loss)
to cash provided by (used in)
operating activities
Depreciation and Amoritization 26,394 31,959
Decrease (Increase) in accounts receivable 9,219 (3,152)
Decrease (Increase) in inventory 6,193 28,846
Decrease (Increase) in prepaid expenses (7,000) 1,301
Increase (Decrease) in accounts payable (1,902) (78,123)
Increase in accrued interest payable 38,881 22,795
Write off of miscellaneous assets -
Decrease (Increase) in other accrued liabilities 5,774
--------- ---------
Net Cash Provided by (Used in) Operating Activities $ (94,336) (100,743)
--------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of equipment & leasehold improvements -
$
--------- ---------
Net Cash Provided by (Used in) Investing Activities 0 0
--------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Loans from related parties $ 103,219 104,967
Principal payment on loan 24,928 -
--------- ---------
Net Cash Provided by (Used in) Financing Activities 78,291 104,967
--------- ---------
Increase (Decrease) in cash $ (16,045) 4,224
Cash at beginning of period 18,130 10,946
--------- ---------
Cash at end of period $ 2,085 $ 15,170
--------- ---------
--------- ---------
</TABLE>
See Accompanying Notes to Consolidated Financial Statements
3
<PAGE>
MED-TEX CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
JUNE 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.
4
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
MATERIAL CHANGES IN RESULTS OF OPERATION
THREE MONTHS ENDED JUNE 30
Sales for the three months ended June 30, 1996 decreased $116,493 or 83.9%,
to $22,370 from $138,863 for the three months ended June 30, 1995. This
decrease in sales is attributable to the Company winding down its business
affairs.
Gross profit decreased by $126,954 to $7,621 for the three months ended
June 30, 1996 from $134,575 for the three months ended June 30, 1995. This
decrease in gross profit margins was principally attributable to reduced sales
volume and the lack of an extraordinary sale.
Operating expenses decreased by $20,975, or 19.6%, to $86,075 from $107,050
for the three months ended June 30, 1995. This decline is attributable to the
winding down of the Company's business operations.
SIX MONTHS ENDED JUNE 30
Sales for the six months ended June 30, 1996 decreased $118,397, or 73.1%,
to $43,501 from $161,898 for the six months ended June 30, 1995. This decrease
in sales is attributable to the Company winding down its business affairs.
Gross Profits for the six months ended June 30, 1996 decreased $118,402, or
87.9%, to $16,308 from $134,710 for the six months ended June 30, 1995. This
decrease in gross profits is principally attributable to the reduced sales
volume and the lack of an extraordinary sale.
Operating expenses decreased $62,424 to $182,429 from $244,853 for the six
months ended June 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 June 30, 1996, the Company had a cash balance of $2,085 and a
deficiency in working capital of $336,961.
Net cash used in operating activities decreased to $94,336 from $100,743
for the six months ended June 30, 1996 and 1995, respectively. The decrease in
cash used on operations resulted principally from a smaller decrease in accounts
payable which was partially offset by a larger operating loss.
Net cash provided by financing activities decreased to $78,291 from
$104,967 for the six months ended June 30, 1996 and 1995, respectively. This
decrease is attributable to reduced borrowings from a related party.
At June 30, 1996, the Company had long term debt of $1,180,385 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 is dependent upon the receipt of additional funding from
affiliates or other sources. No commitments to provide such funding presently
exists.
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.
5
<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.
MED-TEX CORPORATION
Date: August 7, 1996 By: /s/ LARRY L. EASTLAND
---------------------------------------
Larry L. Eastland, President and Chief
Executive Officer
By: /s/ SCOTT CRAWFORD
---------------------------------------
Scott Crawford, Chief Financial Officer
6
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 2,085
<SECURITIES> 0
<RECEIVABLES> 6,287
<ALLOWANCES> 0
<INVENTORY> 118,740
<CURRENT-ASSETS> 134,112
<PP&E> 172,572
<DEPRECIATION> 13,852
<TOTAL-ASSETS> 824,226
<CURRENT-LIABILITIES> 471,073
<BONDS> 0
0
0
<COMMON> 5,836
<OTHER-SE> 833,068
<TOTAL-LIABILITY-AND-EQUITY> 824,226
<SALES> 22,370
<TOTAL-REVENUES> 22,370
<CGS> 14,749
<TOTAL-COSTS> 14,749
<OTHER-EXPENSES> 86,075
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (78,454)
<INCOME-TAX> 0
<INCOME-CONTINUING> (78,454)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (78,454)
<EPS-PRIMARY> (.01)
<EPS-DILUTED> (.01)
</TABLE>
