<TABLE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended September 30, 1995
OR
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
For the transition period from to
Commission file number 0-17973
MEDCROSS, INC.
(Exact name of small business issuer as specified in its charter)
FLORIDA 59-2291344
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3227 Bennet Street North, St. Petersburg, Florida 33713
(Address of principal executive offices)
(813) 521-1793
(Issuer's telephone number)
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 issuer was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X No
State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest
practicable date.
Class Outstanding at October 31, 1995
Common Stock, par value $0.007 1,751,243
Traditional Small Business Disclosure Format (Check One): Yes No X <PAGE>
PART I - FINANCIAL INFORMATION
<PAGE>
Item 1 - Financial Statements
MEDCROSS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
<CAPTION>
Assets
September 30
1995
<S> <C>
Current Assets
Cash and cash equivalents $ 78,692
Accounts receivable less allowance of $727,640 878,851
Inventory 798,839
Prepaid expenses 75,378
Total current assets 1,831,760
Property and equipment 3,388,737
Less accumulated depreciation 1,677,603
Net property and equipment 1,711,134
Intangible assets, net of amortization of $223,910 556,445
Other assets 70,945
Total assets $ 4,170,284
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 545,258
Advance deposits received 191,735
Reserve for warranty liability 40,144
Note payable - related party 218,000
Note payable - other 400,000
Current portion of long-term debt 119,434
Current obligations under capital lease 219,007
Total current liabilities 1,733,578
Long-term debt 675,000
Minority equity interest in consolidated subsidiaries 378,843
Commitments and contingencies -
Stockholders' equity
Preferred stock 2,075,000
Common stock 12,244
Other stockholders' deficit ( 704,381)
Total stockholders' equity 1,382,863
Total liabilities and stockholders' equity $ 4,170,284
<CAPTION>
The accompanying notes are an integral part of these consolidated financial statements.
<PAGE>
MEDCROSS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Net operating revenue $ 607,014 $ 1,152,859 $ 2,482,866 $ 2,981,139
Cost of goods sold - equipment sales
and service ( 46,601) 473,460 193,197 473,460
Salaries and benefits 262,787 319,885 903,205 928,937
Repairs and maintenance 78,673 76,800 233,161 238,931
Provision for doubtful accounts 18,444 43,135 342,089 99,507
Depreciation and amortization 113,901 122,722 348,594 368,689
Other operating expenses 341,950 335,921 956,486 939,367
Operating loss ( 162,140) ( 219,064) ( 493,866) ( 67,752)
Interest expense 44,066 41,880 124,886 128,058
Other income ( 16,493) ( 7,023) ( 39,892) ( 24,540)
Gain on sale of interest in unconsolidated
subsidiary ( 20,500) - ( 20,500) -
Equity in net income of unconsolidated
subsidiary - 1,139 - 14,444
Loss before minority interest in net income
(loss) of consolidated subsidiaries and
income tax provision ( 169,213) ( 255,060) ( 558,360) ( 185,714)
Minority interest in net income (loss) of
consolidated subsidiaries 4,160 ( 22,394) ( 3,684) 16,123
Loss before income tax provision ( 173,373) ( 232,666) ( 554,676) ( 201,837)
Income tax provision - ( 73,280) - ( 68,094)
Net loss $( 173,373) $( 159,386) $( 554,676) $( 133,743)
Loss per common share $( .03)$( .02) $( .08 )$( .02)
Weighted average common and equivalent
shares outstanding 6,833,956 6,885,537 6,849,875 6,922,575
<CAPTION>
The accompanying notes are an integral part of these consolidated financial statements.
<PAGE>
MEDCROSS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Nine Months Ended
September 30
1995 1994
<S> <C> <C>
Cash provided (used) by operating activities $ 156,525 $( 414,598)
Cash flows from investing activities
Purchase of property and equipment ( 18,321) ( 41,488)
Proceeds from sale of property and equipment 4,900 425
Proceeds from sale of interest in unconsolidated subsidiary 28,000 -
Investment in unconsolidated subsidiary - ( 3,750)
Net cash provided (used) by investing activities 14,579 ( 44,813)
Cash flows from financing activities
Proceeds of note payable - related party 218,000 -
Proceeds (reduction) of note payable - other (151,000) 200,000
Reduction of long-term debt (280,997) ( 291,858)
Reduction of capital lease obligations (182,589) ( 165,781)
Issuance of common stock - 8
Additional paid-in capital - 263,391
Minority interest distributions ( 54,750) ( 36,267)
Net cash used by financing activities (451,336) ( 30,507)
Effect of foreign currency translation on cash flows ( 2,233) ( 87,306)
Decrease in cash and cash equivalents (282,465) ( 577,224)
Cash and cash equivalents at beginning of period 361,157 1,176,757
Cash and cash equivalents at end of period $ 78,692 $ 599,533
<CAPTION>
Supplemental cash flow information
In February 1995 a holder of Class B Preferred Stock converted 9,350 shares into 227,714 shares of Common
Stock.
The accompanying notes are an integral part of these consolidated financial statements.
<PAGE>
MEDCROSS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Financial Statements
In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for
a fair statement of (a) the results of operations for the three-month and nine-month periods ended September
30, 1995 and September 30, 1994, (b) the financial position at September 30, 1995, and (c) cash flows for the
nine-month periods ended September 30, 1995 and September 30, 1994, have been made.
The unaudited consolidated financial statements and notes are presented as permitted by Form 10-QSB.
Accordingly, certain information and footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been omitted. The accompanying consolidated
financial statements and notes should be read in conjunction with the audited financial statements and notes of
the Company for the fiscal year ended December 31, 1994. The results of operations for the nine-month period
ended September 30, 1995 are not necessarily indicative of those to be expected for the entire year.
Note 2 - Related Party Transactions
The Company received advances from Mortgage Network International. The Company issued a promissory note
bearing interest at one percent over the prime rate at Southwest Bank of Texas, N.A. with maturity of October
1, 1995. The Company's Vice Chairman/President has management control over Mortgage Network
International. The principal balance due at September 30 is $218,000. Mortgage Network International has
agreed to extend the term of the note to three years provided the Company makes monthly principal and interest
payments beginning December 1, 1995.
Note 3 -Earnings Per Common Share
Earnings per common share are based upon the weighted average number of common shares outstanding and
the dilutive effect of common stock equivalents consisting of stock options and convertible preferred stock. Fully
diluted earnings per share are not presented because it approximates earnings per common share.
Note 4 - Geographic Segment Information
The Company's operations consist of providing diagnostic and clinical outpatient health care services domestically
and the sale and service of used medical equipment in the People's Republic of China (PRC). The corporate
office provides management and operational services for domestic outpatient health care services. The
eliminations represent charges for these services to entities included in the consolidation. Financial information
for the different geographic segments is as follows:
Nine Months Ended Corporate/
September 30, 1995 Domestic China Management Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Revenue $ 1,907,911 $ 337,889 $ 340,036 $( 102,970) $ 2,482,866
Operating Profit (Loss) $ 258,469 $( 197,230) $( 452,135) $( 102,970) $( 493,866)
Identifiable Assets $ 3,106,345 $ 1,043,769 $ 167,384 $( 147,214) $ 4,170,284
<CAPTION>
<PAGE>
Nine Months Ended Corporate/
September 30, 1994 Domestic China Management Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Revenue $ 2,118,420 $ 443,600 $ 499,020 $( 79,901) $ 2,981,139
Operating Profit (Loss) $ 607,388 $( 255,810) $( 339,429) $( 79,901) $( 67,752)
Identifiable Assets $ 3,854,289 $ 1,284,576 $ 488,766 $( 74,979) $ 5,552,652
<CAPTION>
Item 2 - Management's Discussion and Analysis
The following discussion should be read in conjunction with the information contained in the financial statements
of the Company and the notes thereto appearing elsewhere herein and in conjunction with Management's
Discussion and Analysis set forth in the Company's Form 10-KSB for the fiscal year ended December 31, 1994.
Results of Operations
The following Table represents the net operating revenue and operating profit (loss) of the Company for each
category of service offered. The net operating revenue and operating profit (loss) shown are net of
intercompany transactions that were eliminated in consolidation.
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
NET OPERATING REVENUE
Diagnostic Imaging $ 534,049 $ 589,429 $ 1,907,911 $ 2,118,420
Sales and Service of Medical
Equipment - 443,600 337,889 443,600
Management and Other 72,965 119,830 237,066 419,119
$ 607,014 $ 1,152,859 $ 2,482,866 $ 2,981,139
OPERATING PROFIT (LOSS)
Diagnostic Imaging $ 21,339 $ 91,067 $ 258,469 $ 607,388
Sales and Service of Medical
Equipment 44,921 ( 160,044) ( 197,230) ( 255,810)
Management and Other ( 228,400) ( 150,087) ( 555,105) ( 419,330)
$( 162,140) $( 219,064) $( 493,866) $( 67,752)
<CAPTION>
Diagnostic Imaging
Net operating revenue from diagnostic imaging services for the three-month and nine-month periods ending
September 30, 1995 decreased 9% and 10%, respectively, as compared to the same periods in 1994. MRI
revenue of Tampa MRI decreased $15,518 (6%) for the three-months ended September 30, 1995 and $199,705
(21%) for the nine-months ended September 30, 1995. The decrease in revenues for the nine-months ended
September 30, 1995 is a result of a decrease in the number of MRI procedures performed for that period of 17%
as compared to the same period in the prior year. In addition, since Tampa MRI has obtained several managed
care contracts, the average revenue per case has also declined 6%. For the three-months ended September 30,
1995 the number of procedures has increased 6% as compared to the same period in 1994. However, the fact
that Tampa MRI has obtained managed care contracts providing for fixed charges per patient which are generally
lower than the charges obtainable for other patients has caused the average revenues per procedure to decrease
12% for the three-months ended September 30, 1995 as compared to the same period in 1994. MRI revenue
<PAGE>
of Medcross Imaging, Ltd. decreased by $88,267 (25%) and $251,306 (21%), for the three-month and nine-month
periods ended September 30, 1995, respectively, as compared to the same periods in 1994. This was a result of
a decrease in number of patients treated of 24% for the three-month and 21% for the nine-month periods ended
September 30, 1995 as compared to the same periods in 1994 and was caused by increased competition in the
area. A mobile MRI company began providing service to a local hospital in the first quarter of 1995. The
hospital closed in June 1995 and the mobile company opened an MRI center in St. Petersburg, Florida which
creates direct competition for Medcross Imaging, Ltd. Urological Ultrasound Services of Tampa Bay (UUSTB)
was acquired and included in the consolidated financial statements of the Company effective October 1, 1994.
On May 1, 1995, the Company transferred its ultrasound operations to Tampa MRI. Ultrasound revenue for
the three-month and nine-month periods ended September 30, 1995 were $48,405 and $240,502, respectively.
Ultrasound revenues decreased 43% for the three-month period ended September 30, 1995 and increased 5%
for the nine-month period ended September 30, 1995 as compared to the revenue of the unconsolidated joint
venture for the same periods in 1994. The number of procedures increased 6% for the three month period
ended September 30, 1995 and 20% for the nine-month period ended September 30, 1995 as compared to the
corresponding periods of the prior year. The increase in the number of procedures performed for the three-
month and nine-month periods ended September 30, 1995 were offset by decreases in the average revenues per
procedure for those same periods.
The operating profit from diagnostic imaging services decreased $69,728 and $348,919 for the three-month and
nine-month periods ended September 30, 1995, respectively, as compared to the same periods of the prior year.
The decrease in operating profit from diagnostic imaging services for the three-month period ending September
30, 1995 as compared to the same period in 1994 was caused by a decline in operating profit from MRI services
of $60,638 and a decline in the operating profit from ultrasound services of $9,090. The decrease in operating
profit from diagnostic imaging services for the nine-months ended September 30, 1995 as compared to the same
periods of the prior year was caused by a decline in operating profit from MRI services of $407,446 offset by an
increase in the operating profit of ultrasound services of $58,527. The decline in MRI operating profit for the
three-month and nine-month periods ended September 30, 1995 was a result of the decrease in MRI revenue
and the increase in the provision for doubtful accounts offset by decreases in salaries and benefits for those
periods.
During the past several years, there has been increasing pressure from federal and state regulatory and legislative
bodies to prevent physicians from referring patients to diagnostic imaging facilities in which they have an
ownership interest. Legislation passed in the State of Florida, where all of the Company's diagnostic imaging
services operate, placed a fee cap on diagnostic imaging services. An injunction has been obtained preventing
the State of Florida from enforcing the fee cap. See "Item 3. Legal Proceedings" in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1994. The State of Florida is seeking a review of that
injunction on appeal and there can be no assurances as to the outcome of such appeal.
Sales and Service of Medical Equipment
The Company sells and services used and refurbished computerized tomography (CT) scanners in the People's
Republic of China through its own office in Beijing and a joint venture company, Shenyang Medcross Huamei
Medical Equipment Company, Ltd. (SMHME), of which it owns 51%. During the last four months of 1994, the
Beijing office completed the installation of two CT scanners and SMHME completed the installation of one CT
scanner. In the first quarter 1995, the Company's Beijing office completed the installation of two additional CT
scanners. On May 31, 1995, the Beijing office was closed and the responsibilities for the parts depot and the
remaining inventory have been transferred to SMHME. Various issues have been raised by the purchasers in
China regarding maintenance of the scanners, parts depot, etc. The Company has received $125,000 in payments
through September 30, 1995. However, the Company has elected to fully reserve for all amounts due to the
Beijing office for the four scanners installed. This resulted in an expense of $164,214 for the nine-months
ended September 30, 1995 and $188,842 in the fourth quarter of 1994 and an allowance for doubtful accounts
of $353,056 as of September 30, 1995. In June 1995, the Company has written down one of the CT scanners in
inventory to what management believes is fair market value. This resulted in $49,122 of additional cost of goods
sold. The Company has held preliminary discussions regarding the sale of the China operations. Nevertheless,
the Company has not received any definitive offers at this time nor has any decision been made to sell such operations.
<PAGE>
Management and Other
Net operating revenue from management and other activities decreased by $46,865 and $182,053 in the three-
month and nine-month periods ended September 30, 1995, respectively, compared to the same periods in 1994.
The decrease was primarily related to the management contracts with Bay Area Renal Stone Center (BARSC)
and UUSTB. The BARSC contract accounted for $22,432 and $165,921 for the three-month and nine-month
periods ended September 30, 1994, respectively. The UUSTB contract accounted for $24,543 and $76,034 in the
three-month and nine-month periods ended September 30, 1994, respectively. Since UUSTB became a wholly
owned subsidiary in October 1994, management and billing fees have been eliminated in consolidation.
The net operating loss from management and other activities increased by $78,313 and $135,775 in the three-
month and nine-month periods ended September 30, 1995, respectively, as compared to the same periods in 1994.
The increased loss for the three-months ended September 30, 1995 was related to the decrease in revenues from
management and other activities and an increase in corporate expense of $31,448 as compared to the same
period in 1994. The increase in corporate expense for the third quarter of 1995 as compared to the third quarter
of 1994 was a result of the increased use of outside third party consultants during that period. Excluding these
fees paid, corporate overhead expenses decreased $21,302 for the three-months ended September 30, 1995 and
$99,028 for the nine-months ended September 30, 1995 as compared to the same period in 1994. The increased
loss for the nine-months ended September 30, 1995 was related to the decrease in revenues from management
and other activities offset by a decrease in corporate expense of $46,278 as compared to the same period in 1994.
Corporate expenses will be further reduced in the fourth quarter of 1995 due to the resignation of the Vice
President of Acquisitions, Bijan Taghavi, effective July 26, 1995 and the resignation of the Senior Vice
President/CFO, Timothy R. Barnes, effective August 6, 1995. These positions will not be replaced at this time.
The Company has implemented an internal reorganizational plan to reduce the Company's operating overhead.
Previously the Company maintained an internal staff for the purpose of finding, addressing, and implementing
proposed acquisitions, at substantial costs to the Company.
Consolidated Operating Results
Net operating revenue of the Company decreased 47% for the three-month period ended September 30, 1995
as compared to the same period in 1994. The decrease is a result of the decline in management fee revenue,
decrease in the sale and service of medical equipment in China, and a decrease in revenue from MRI services,
offset by the inclusion of ultrasound revenues. The cost of goods sold in the third quarter was mainly related
to the reversal of warranty liability accrued at the time the CT scanners were sold. The decrease in salaries and
benefits was due to a decrease in all segments of the Company, offset by the inclusion of UUSTB. The provision
for doubtful accounts decreased due to the collection of receivables from China clients, which were reserved at
100%. The decreases in other operating expenses of the China operations and MRI services were offset by the
increase of other operating expenses in the corporate office and the inclusion of ultrasound services. The
operating profit of the Company increased $56,924 for the third quarter of 1995 as compared to the third quarter
of 1994. This increase was a result of a decrease in operating expenses from the sale and service of medical
equipment in China offset by an increase in operating expenses for diagnostic imaging services (due to the
inclusion of UUSTB) and an increase in the operating expenses for corporate overhead.
Net operating revenue of the Company decreased by 17% in the nine-months ended September 30, 1995 as
compared to the same period of 1994. The decrease was the result of the decline in management fee revenue,
the decrease in the sale and service of medical equipment in China, and a decrease in revenue from MRI service,
offset by the inclusion of ultrasound revenues. The cost of goods sold was related to the sale and service of CT
equipment in China and the write-down of inventory to fair market value. While the cost of the first two CT
scanners sold in 1994 was greater than revenue, there was a significant gross margin on the two scanners installed
in the first quarter of 1995. This increase in the gross margin was due to efficiencies gained through the
Company's prior experience in purchasing, refurbishing, shipping, and installing the equipment in China. The
decrease in salaries and benefits was primarily related to the resignations of Bijan Taghavi and Timothy Barnes
in the corporate office and a reduction in salaries of diagnostic imaging services offset by the inclusion of
UUSTB in the consolidation and an increase in salaries for foreign operations. The large increase in the
<PAGE>
provision for doubtful accounts was a result of recording a reserve for receivables from China clients, as
previously discussed and recording an allowance for UUSTB. The reduction in other operating expenses for the
China operations and Tampa MRI were offset by an increase in other operating expenses for the corporate office
and UUSTB. The overall decline in operating profit was the culmination of the decline in operating profit from
diagnostic imaging services, foreign operations, and the corporate office.
Liquidity and Capital Resources
Working capital provided by operations during the nine-months ended September 30, 1995 was $107,821,
compared to $421,752 in 1994. The working capital decreased mainly due to the decline of net income. The
working capital position of the Company declined by $364,450 during the nine-month period ended September
30, 1995. Working capital position of the Company was $98,182 at September 30, 1995 and $462,632 at
December 31, 1994. Cash flow provided by operating activities was $156,525 for the nine-months ended
September 30, 1995 compared to cash flow used of $414,598 in the same period in 1994. This was mainly due
to the collection of $125,000 from China receivables.
Investing activities expenditures for the nine-months ended September 30, 1995 related to the purchase of
additional equipment for the Tampa MRI unit. Investing activities providing resources to the Company were
related to the sale of medical equipment by Tampa MRI and the sale of an interest in the unconsolidated
subsidiary.
During the nine months of 1995, the Company reduced its long term debt and capital lease obligations by
$457,639 and the outstanding balance of its line of credit by $151,000. The Company was in violation of loan
covenants regarding cash balances, consolidated equity, debt to equity ratios, and cash flow coverage ratios, under
the line of credit at September 30, 1995. The bank has waived those covenant violations. Pursuant to the
Company's oral understanding with the bank, the Company was required to reduce the principal by $50,000 on
October 31, 1995, which has not been paid. Due to scheduling difficulties, the Company has been unable to meet
with the bank; however, the Company presently has a meeting scheduled for December 1, 1995. There can be
no assurance the Company will be able to negotiate an acceptable payment schedule or revised terms. During
the first quarter of 1995, the Company received advances totaling $218,000 from Mortgage Network International,
payable on demand. The Company's Vice Chairman/President has management control over Mortgage Network
International. The advances were subsequently formalized by the Company issuing a promissory note bearing
interest at one percent over the prime rate of Southwest Bank of Texas, N.A. with a maturity of October 1, 1995.
Mortgage Network International has agreed to extend the term of the note to three years provided the Company
makes monthly principal and interest payments beginning December 1, 1995. The $260,417 minority interest
contribution during the first quarter of 1994 represents a contribution made by the Company's joint venture
partner in SMHME. The joint venture agreement requires that capital contributions and distributions of capital
are exchanged at a rate of 5.76 Renminbi per U.S. Dollar. The actual exchange rate at the time the
contributions were made was in excess of 8.5 Renminbi per U.S. Dollar. The effects of foreign currencies on
cash flows in 1994 is almost entirely related to the difference between the stipulated exchange rate in the joint
venture agreement and the actual exchange rate at the time the contributions were made.
Capital requirements of the Company for 1995 consist primarily of funding ongoing operations, repayment of
Mortgage Network International advances, and the reduction of the outstanding balance of the Company's line
of credit with First Union National Bank of Florida. The Company has no material commitments for capital
expenditures other than for ordinary expenses incurred during the usual course of business. To the extent that
the Company is unable to collect the receivables from China operations, the Company will need to reduce future
expenses or raise additional capital to meet its operating cash flow requirements. Additional investment in the
Company's China or domestic operations would require that the Company raise additional capital through public
or private debt or equity financing. The availability of these capital sources will depend upon prevailing market
conditions, interest rates and the then existing financial position and results of operations of the Company.
Therefore, no assurances can be made by the Company that such additional capital will be available.
<PAGE>
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
The Company held its Annual Shareholders Meeting on October 17, 1995. Mr. Henry Toh and Mr. Joel
Kanter were elected as Class II Directors at the meeting to serve for three years. Ms. Po Shin Wong
and Dr. R. Huston Babcock, neither of whom are Class II Directors, were not up for election and their
terms of office as Directors continued after the meeting.
The Shareholders approved the adoption of the Medcross, Inc. 1995 Director's Stock Option and
Appreciation Rights Plan, which provides for the issuance of incentive stock options, non-qualified stock
options, and stock appreciation rights. The Preferred shareholders voted 192,500 shares in favor and
none against. The common stock shareholders voted 141,381 shares in favor, 60,175 shares against, and
15,316 shares abstained.
The shareholders approved the adoption of the Medcross, Inc. 1995 Employee Stock Option and
Appreciation Rights Plan, which provides for the issuance of incentive stock options, non-qualified stock
options, and stock appreciation rights. The Preferred shareholders voted 192,500 shares in favor and
none against. The common stock shareholders voted 166,531 shares in favor, 48,375 shares against, and
1,966 shares abstained.
The shareholders ratified the selection of Coopers & Lybrand and the Company's independent public
accounts for the 1995 fiscal year by a vote of 1,005,983 votes in favor, 23,857 votes against, and 7,050
votes abstained.
Item 5 - Other Information
None.
Item 6(a) - Exhibits
4(a) Series CS Warrant to purchase common shares of Medcross, Inc.<F1>
10(a) Consulting Agreement by Medcross, Inc., Kalo Acquisitions, L.L.C., and Jason H. Pollak.<F2>
10(b) Consulting Agreement, dated as of August 6, 1995, between the Company and Timothy R. Barnes.<F1>
10(c) Medcross, Inc. 1995 Director's Stock Option and Appreciation Rights Plan.<F3>
10(d) Medcross, Inc. 1995 Employee Stock Option and Appreciation Rights Plan.<F3>
11 Statement regarding computation of earnings per common share.
- -------------------------------------------
<FN>
<F1>
Incorporated by reference to the Company's registration statement on Form S-8, filed October 27, 1995
(File Number 33-63751).
<F2>
Incorporated by reference to the Company's registration statement on Form S-8, filed on October 27, 1995
(File Number 33-63749).
<F3>
Incorporated by reference to the Company's Proxy Statement filed on September 25, 1995 (File Number
17973).
</FN>
Item 6(b) - Reports on Form 8-K
None.
<PAGE>
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 thereunder duly authorized.
MEDCROSS, INC.
(Registrant)
Date: November 14, 1995 By: /s/ HENRY TOH
Henry Toh
President
(Acting Principal Financial Officer &
Acting Principal Accounting Officer)
<S> <S>
</TABLE>
<TABLE>
<CAPTION>
EXHIBIT 11
COMPUTATION OF EARNINGS PER COMMON SHARE
Three Months Ended Nine Months Ended
September 30 September 30
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Earnings per common and common equivalent share
Net income (loss) available to common
and equivalent shares $( 173,373) $( 159,386) $( 554,676) $( 133,743)
Weighted average common shares
outstanding 1,749,163 1,514,213 1,710,367 1,506,941
Adjustments
Assumed issuance of shares purchased
under stock option and stock purchase
plans 6,782 58,506 6,041 88,622
Assumed exercise of warrants - 627 16,666 7,796
Assumed conversion of:
Class A Variable Rate Cumulative
Convertible Preferred Stock 4,894,463 4,894,463 4,894,463 4,894,463
Class B Variable Rate Cumulative
Convertible Preferred Stock 183,542 417,728 222,338 424,753
Total common and equivalent shares 6,833,950 6,885,537 6,849,879 6,922,575
Loss per common and equivalent share $ ( .03)$( .02) $( .08)$( .02)
Fully diluted earnings per common and common equivalent share
Net loss available to common and
equivalent share $( 173,373) $( 159,386) $( 554,676) $( 133,743)
Weighted average common shares
outstanding 1,749,163 1,514,213 1,710,367 1,506,941
Adjustments
Assumed issuance of shares purchased
under stock option and stock purchase
plans 7,242 58,506 6,323 88,622
Assumed exercise of warrants - 627 16,666 7,796
Assumed conversion of:
Class A Variable Rate Cumulative
Convertible Preferred Stock 4,894,463 4,894,463 4,894,463 4,894,463
Class B Variable Rate Cumulative
Convertible Preferred Stock 183,542 417,728 222,338 424,753
Total common and equivalent shares 6,834,410 6,885,537 6,850,157 6,922,575
Loss per common and equivalent share $ ( .03) $( .02) $( .08)$( .02)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS DOCUMENT CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
MEDCROSS, INC. AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS INCLUDED IN
THE COMPANY'S FORM 10-QSB FOR THE NINE MONTHS ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 78692
<SECURITIES> 0
<RECEIVABLES> 1606491
<ALLOWANCES> 727640
<INVENTORY> 798839
<CURRENT-ASSETS> 75378
<PP&E> 3388737
<DEPRECIATION> 1677603
<TOTAL-ASSETS> 4170284
<CURRENT-LIABILITIES> 1733578
<BONDS> 0
<COMMON> 12244
0
2075000
<OTHER-SE> (704381)
<TOTAL-LIABILITY-AND-EQUITY> 4170284
<SALES> 337889
<TOTAL-REVENUES> 2482866
<CGS> 193197
<TOTAL-COSTS> 193197
<OTHER-EXPENSES> 2441446
<LOSS-PROVISION> 342089
<INTEREST-EXPENSE> 124886
<INCOME-PRETAX> (554676)
<INCOME-TAX> 0
<INCOME-CONTINUING> (554676)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (554676)
<EPS-PRIMARY> (.08)
<EPS-DILUTED> (.08)
</TABLE>
