<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended June 30, 1998
Commission File Number: 33-22142
REDOX TECHNOLOGY CORPORATION
Delaware Corporation 55-0681106
(State of Incorporation) (I.R.S. Employer Identification No.)
340 North Sam Houston Parkway East, Suite 250
Houston, Texas 77060
(281) 445-0020
DCUSA CORPORATION
(Former Name and former fiscal year, changed since last report)
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 Exchange 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 ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
CLASS NUMBER OF SHARES OUTSTANDING
ON: June 30, 1998
Common Stock
par value $0.00005 per share 45,680,179
<PAGE> 2
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS OF ReDOX TECHNOLOGY CORPORATION
(Hereinafter referred to as Registrant or Company)
Registrant prepared the accompanying financial statements from its own books and
records. In management's opinion, these financial statements present fairly in
all material respects Registrant's financial condition and changes therein as of
June 30, 1998, and the results of operations and cash flows for the period, in
conformity with generally accepted accounting principles.
As discussed in the Notes to these financial statements, these statements have
been prepared on the presumption that the Company is and will remain a going
concern. The Registrant's long-term survival, and its ability to generate
revenues from operations is contingent upon raising capital in sufficient
amounts to commence operations for production and sale of its products. The
likelihood of this acquisition of capital is uncertain, and the Registrant
cannot assure success in so doing. If Registrant does not receive suitable
funding, the Company will continue to incur losses, and could be unable to
continue as a going concern. The accompanying financial statements do not
include any provisions for the outcome of this uncertainty.
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REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
BALANCE SHEET
as of
June 30, 1998
ASSETS
Current Assets:
Cash - Checking $ 218
-----------------------------
TOTAL CURRENT ASSETS 218
FIXED ASSETS: (See Note 3)
Office Equipment $ 24,909
Furniture & Fixtures 20,303
Accumulated Depreciation (25,258)
-----------------------------
TOTAL FIXED ASSETS $ 19,954
OTHER ASSETS:
Patent (See Note 4) $ 21,500
Security Deposits 1,159
Organization Costs 250
Goodwill $ 50,000
-----------------------------
TOTAL OTHER ASSETS 72,909
-----------------------------
TOTAL ASSETS $ 93,081
=============================
<PAGE> 4
REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
BALANCE SHEET
as of
June 30, 1998
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable $ 7,193
--------------
SHAREHOLDERS' EQUITY:
Common Stock, par value $.00005 per share
100,000,000 authorized. 45,680,179 issued and outstanding.
(See Note 6 and 11) $ 2,285
Convertible Preferred Stock, par value $.001
10,000,000 shares authorized. 6,000,000 shares
issued and outstanding. (See Note 11) 6,000
Additional Paid-in Capital (See Note 7) 542,439
Accumulated Deficit - June 30, 1998 (464,836)
==============
TOTAL SHAREHOLDERS EQUITY 85,888
--------------
TOTAL LIABILITIES AND EQUITY $ 93,081
==============
<PAGE> 5
REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
STATEMENT OF INCOME AND RETAINED EARNINGS
for the Three Months ending
June 30, 1998
INCOME:
Revenues $ 0
--------------
TOTAL REVENUES $ 0
EXPENSES:
Auto Expense 35
Depreciation 4,140
Office Supplies 4,158
Professional Fees 19,776
Public Relations 11,981
Rent 5,168
Telephone Expense 3,787
Travel Expense 8,191
--------------
TOTAL EXPENSES $ 57,236
--------------
NET INCOME (Loss) FOR THE PERIOD $ (57,236)
--------------
ACCUMULATED DEFICIT - December 31, 1997 $ (407,599)
--------------
ACCUMULATED DEFICIT - June 30, 1998 $ (464,835)
==============
<PAGE> 6
REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
STATEMENT OF CASH FLOW
For The Three Months Ended
June 30, 1998
CASH FLOW FROM OPERATING ACTIVITIES
Net Income $ (57,236)
ADJUSTMENT TO RECONCILE NET INCOME TO
NET DEPRECIATION AND AMORTIZATION $ 4,140
--------------
NET CASH PROVIDED (Used) BY OPERATION ACTIVITIES $ (53,096)
==============
CASH FLOW FROM FINANCING ACTIVITIES $ 53,072
NET INCREASE/(Decrease) IN CASH $ (24)
CASH AT BEGINNING OF PERIOD $ 242
CASH AT END OF PERIOD $ 218
<PAGE> 7
REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE 1. NATURE OF BUSINESS
REDOX TECHNOLOGY CORPORATION, was incorporated on April 25, 1988, under the laws
of the State of Delaware. The original name of the corporation was DCUSA
CORPORATION. DCUSA Management referred to the company as a "blind pool" or
"blank check" company. Its primary business was to obtain an acquisition and/or
merger transaction whereby its stockholders would benefit. On June 1, 1993, the
name of the corporation was changed to REDOX TECHNOLOGY CORPORATION. During
1993, the Company acquired a pending patent and all rights thereto which REDOX
Management intends to develop for commercial purposes.
NOTE 2. SIGNIFICANT ACCOUNTING POLICIES
INCOME TAXES:
The Company is currently operating at a loss. It has therefore not provided for
income taxes.
ORGANIZATION COSTS:
The Company has capitalized the costs of organization and registration of its
securities. Amortization is computed on a straight-line basis over sixty months
commencing April 25, 1988. The Company is no longer amortizing its
organizational costs. These costs will be written off at such time that it may
be determined that the company has been unsuccessful in its efforts to attract a
suitable partner.
NOTE 3. FIXED ASSETS
In January 1994, the Company received furniture and office equipment from Mr.
Richard Szymanski as part of a Sale Contract and Bulk Transfer Agreement between
Mr. Szymanski and the Company. The assets have been recorded in the books at
their fair market value of $25,000.
NOTE 4. PATENT ACQUISITION
On April 9, 1993 the Company acquired all interest in a U.S. Patent Pending
application titled "EMERGENCY RESERVE BATTERY." It involves high density energy
technology to enhance battery cells. The rights to the patent pending were
acquired in exchange for fifteen million (15,000,000) shares of par value .0001
per share, with actual value of the intellectual property so acquired to be
determined by an independent agency. For purpose of financial statements, the
value is shown as $1,500. Management decided to record the property on the books
at the aggregate par value $1,500. The value of this property is computed at
$5,200,000. This value has been determined by Battelle Memorial Institute which
is an independent valuation agency.
On August 18, 1997, REDOX executed an exclusive agreement with Clark University,
an option to elect a royalty bearing, limited terms, license to the Patent
Rights in the novel Aluminum-Sulfur Battery developed by Stuart Licht at Clark
University.
<PAGE> 8
REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE 4. PATENT ACQUISITION (continued)
Such exclusivity to apply to the electronics industry and for space
applications. The company paid $20,000.00 for the exclusive use of these patents
for the electronics industry and space application.
NOTE 5. GOODWILL
This represents amounts paid for the acquisition of DCUSA Corporation by Richard
Szymanski. This is reflected on the books as Additional Paid-In Capital.
NOTE 6. COMMON STOCK
On April 9, 1993, the number of outstanding shares of the Company's Common Stock
was increased by fifteen million (15,000,000) shares. These fifteen million
(15,000,000) shares were issued to Richard A. Szymanski in exchange for
assignment of all rights to the pending patent application (See Note 4 above).
On July 1, 1996, the Board of Directors approved and issued a stock option to
purchase 1,000,000 shares to C. D. Douglas, said option to be exercised by July
1, 1998. Said option was exercised by Mr. Douglas.
NOTE 7. ADDITIONAL PAID-IN CAPITAL
The cost of furniture and equipment acquired during the year was $0 (See Note
3). The fair market value has been determined at $25,000. The corporation has
decided to record the asset in the books at the fair market value. The
difference between the acquisition cost and the fair market value has therefore
been transferred to additional paid-in capital.
As of March 31, 1994, the corporation was utilizing capital borrowed from its
principal shareholder, Richard A. Szymanski. The principal and interest due on
the note as of December 31, 1993 was $88,358, and the principal and interest due
as of March 31, 1994 was $120,539, there having been an additional $32,181
accrued during the first quarter 1994. As per an agreement with Mr. Szymanski,
the entire balance due to him was converted to Additional Paid-In Capital. For
all of 1994, that amount was $186,023, there has been $153,842 directly posted
to Additional Paid-In Capital during the second, third, and fourth quarters of
1994, in addition to the $32,181 transferred thereto from the first quarter of
1994.
The following indicates what Richard A. Szymanski has contributed in subsequent
years to Additional Paid-In Capital:
1995.............................................$33,212
1996.............................................$80,636
1997.............................................$89,457
1998 (1Q-2Q).....................................$64,092
<PAGE> 9
REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
NOTES TO FINANCIAL STATEMENTS
June 30, 1998
NOTE 8. CHANGE OF FISCAL YEAR
On June 16, 1993, the Board of Directors approved the change of fiscal year of
the corporation from beginning on June 1 and ending on May 31, to beginning on
January 1 and ending December 31.
NOTE 9. ALTERATIONS TO PREVIOUS FINANCIAL STATEMENTS FOR THE SAME PERIOD.
The original audited balance sheet as of March 31, 1994, recognized the patent
at its fair market value of $5,200,000 (See Note 4), with the corresponding
value assigned to Additional Paid-In Capital. Management decided to revise the
March 31, 1994 financial statement to recognize the patent's value at $1,500,
with corresponding value assigned to Additional Paid-In Capital.
NOTE 10. GOING CONCERN
The accompanying financial statements have been prepared on a going concern
basis, which contemplates the realization of assets and the satisfaction of
liabilities in the normal course of business. Because the Company has not yet
commenced operations, it is entirely dependent upon the continued contributions
of capital and other resources provided by its principals until such time as
sufficient capital can be raised from other sources (e.g. from the sale of the
Company's authorized but unissued Common stock) to commence production for sale
of its products. Therefore, the assumption that the Company is a going concern,
is entirely determined upon the uncertain ability of the Company to raise
capital in such an amount as would be necessary to commence operations and
produce sufficient cash flow therefrom to survive.
NOTE 11. LICENSE AGREEMENT
The Company executed a license agreement with Clark University for the exclusive
use of their patented technology in certain industries. The Company paid Twenty
Thousand Dollars ($20,000) for the use of this technology and will pay a royalty
to Clark University on products sold as a result of using the technology.
<PAGE> 10
REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
As previously reported, this corporation is in development stage and has not yet
conducted any business so as to become an income producing entity. The Company
continues to utilize capital borrowed from it principal shareholder, said
capital's recognition as or equity contribution is being negotiated as required.
Management ordered financial statements audited at March 31, 1994 to include
results of a patent valuation report, as management felt that the "fair market
value" of its proprietary technology was appropriate to reflect as an asset of
the Company. The fair market value, as derived from that independent valuation
report was determined to be Five Million Two Hundred Thousand Dollars, and this
value was accordingly posted to Long-term Assets, and to Additional Paid-in
Capital on the Company's Balance Sheet at March 31, 1994. These values were then
carried to the compilations at June 30, 1994 and September 30, 1994.
Subsequently, in consultation with financial, legal and securities counsels on
the matter, management ordered its accountant to re-audit the financial
statements at March 31, 1994, removing the value of $5,200,000 placed on the
patent technology, and replacing it with $1,500 which was the aggregate par
value of the Common Stock which was transferred in consideration for that
technology having been transferred to the Company. This patent value is now
carried on the most recent audited financial statement of December 31, 1997
Registrant's financial condition has not changed materially from December 31,
1997 to the date of the financial statements herewith provided. To the extent
that the Company has incurred continuing expenses without any revenues having
been generated, shareholder's equity would have suffered proportionately had it
not been for the continuing infusion of capital from the Company director
Richard Szymanski. The Notes to the Company's financial statements, as well as
the Independent Auditor's Report, indicate the doubt about the Company's ability
to continue as a going concern without the addition of financial capital.
Because of the absence of revenues and the inability thus far to raise the
capital necessary to commence operations, there are no assurances that the
Company will be able to fully carry out its plans, and continue as a going
concern. However, the principal continues to infuse capital necessary to
maintain the operations of the Company in a non-manufacturing status while
additional capital is being sought.
<PAGE> 11
REDOX TECHNOLOGY CORPORATION
(Formerly DCUSA Corporation)
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None
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 (S 229.30 of this chapter)
(a) Exhibits
27 -- Financial Data Schedule
(b) Reports on Form 8K
The Company filed a report on Form 8-K on May 8, 1998 regarding
Press Releases issued April 17 and 27, 1998.
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934 , the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REDOX TECHNOLOGY CORPORATION
(Registrant)
DATE: August 12, 1998 /s/ Richard A. Szymanski
------------------------- --------------------------------
Richard A. Szymanski
President/Director
<PAGE> 13
INDEX TO EXHIBITS
Exhibit 27 -- Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 218
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 218
<PP&E> 118,121
<DEPRECIATION> (25,258)
<TOTAL-ASSETS> 93,081
<CURRENT-LIABILITIES> 7,193
<BONDS> 0
0
6,000
<COMMON> 2,285
<OTHER-SE> 77,603
<TOTAL-LIABILITY-AND-EQUITY> 93,081
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 57,236
<LOSS-PROVISION> (57,236)
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (57,236)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
