UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB/A#1
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 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 July 30, 1995
Common Stock, par value $0.007 1,749,163
Traditional Small Business Disclosure Format (Check One): Yes No X
<PAGE> 1
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
<TABLE>
<CAPTION>
MEDCROSS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(unaudited)
Assets
June 30
1995
------------
<S> <C>
Current assets
Cash and cash equivalents $ 270,084
Accounts receivable less allowance of $773,958 913,727
Inventory 799,849
Prepaid expenses 63,764
---------
Total current assets 2,047,424
---------
Property and equipment 3,386,165
Less accumulated depreciation 1,584,319
---------
Net property and equipment 1,801,846
---------
Investment in unconsolidated subsidiary 7,500
Intangible assets, net of amortization of $203,386 583,176
Other assets 67,901
---------
Total assets $ 4,507,847
=========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $ 522,853
Advance deposits received 192,093
Reserve for warranty liability 87,119
Note payable - related party 218,000
Note payable - other 450,000
Current portion of long-term debt 206,220
Current obligations under capital lease 258,643
---------
Total current liabilities 1,934,928
---------
Long-term debt 600,380
Obligations under capital leases 22,702
Minority equity interest in consolidated subsidiaries 393,260
Commitments and contingencies -
Stockholders' equity
Preferred stock 2,075,000
Common stock 12,244
Other stockholders' deficit ( 530,667)
---------
Total stockholders' equity 1,556,577
---------
Total liabilities and stockholders' equity $ 4,507,847
=========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 2
<TABLE>
<CAPTION>
MEDCROSS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three Months Ended Six Months Ended
June 30 June 30
-------------------------- --------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net operating revenue $ 758,359 $ 895,910 $ 1,875,852 $ 1,828,280
--------- --------- --------- ---------
Cost of goods sold - equipment sales and service 54,641 - 239,798 -
Salaries and benefits 311,487 316,049 640,418 609,052
Repairs and maintenance 77,542 82,094 154,488 162,131
Provision for doubtful accounts ( 3,943) 20,282 323,645 56,372
Depreciation and amortization 116,741 125,290 234,693 245,967
Other operating expenses 297,748 276,668 614,536 603,446
--------- --------- --------- ---------
Operating profit (loss) ( 95,857) 75,527 ( 331,726) 151,312
Interest expense 41,692 43,724 80,820 86,178
Other income ( 19,583) ( 9,110) ( 23,399) ( 17,517)
Equity in net income of unconsolidated subsidiary - 18,664 - 13,305
--------- --------- --------- ---------
Income (loss) before minority interest in net income
(loss) of consolidated subsidiaries and income
tax provision ( 117,966) 22,249 ( 389,147) 69,346
Minority interest in net income (loss) of consolidated
subsidiaries ( 20,623) 15,363 ( 7,844) 38,517
--------- --------- --------- ---------
Income (loss) before income tax provision ( 97,343) 6,886 ( 381,303) 30,829
Income tax provision - 2,699 - 5,186
--------- --------- --------- ---------
Net income (loss) $( 97,343) $ 4,187 $( 381,303) $ 25,643
========= ========= ========= =========
Loss per common and equivalent share
after preferred dividends $( .07) $( .02) $( .25) $( .02)
========= ========= ========= =========
Weighted average common and equivalent shares
outstanding 1,749,163 1,520,313 1,749,163 1,520,313
========= ========= ========= =========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 3
<TABLE>
<CAPTION>
MEDCROSS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended
June 30
--------------------------
1995 1994
---------- ------------
<S> <C> <C>
Cash provided by operating activities $ 155,982 $ 57,006
------- ---------
Cash flows from investing activities
Purchase of property and equipment ( 15,375) ( 39,506)
Proceeds from sale of property and equipment 4,500 75
Investment in unconsolidated subsidiary - ( 3,750)
------- ---------
Net cash used by investing activities ( 10,875) ( 43,181)
------- ---------
Cash flows from financing activities
Proceeds of note payable - related party 218,000 -
Proceeds (reduction) of note payable - other (101,000) 211,000
Reduction of long-term debt (194,571) ( 194,571)
Reduction of capital lease obligations (120,251) ( 109,182)
Additional paid-in capital - 260,417
Minority interest distributions ( 36,500) ( 20,867)
------- ---------
Net cash provided (used) by
financing activities (234,322) 146,797
------- ---------
Effect of foreign currency translation on cash flows ( 1,858) ( 86,941)
------- ---------
Increase (decrease) in cash and cash equivalents ( 91,073) 73,681
Cash and cash equivalents at beginning of period 361,157 1,176,757
------- ---------
Cash and cash equivalents at end of period $ 270,084 $ 1,250,438
======= =========
<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.
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE> 4
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 six-month periods ended June 30, 1995 and
June 30, 1994, (b) the financial position at June 30, 1995, and (c) cash flows
for the six-month periods ended June 30, 1995 and June 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 six-
month period ended June 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 31, 1995. The Company's
Vice Chairman/President has management control over Mortgage Network
International.
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:
<TABLE>
Six Months Ended Corporate/
June 30, 1995 Domestic China Management Eliminations Consolidated
- ------------------------ ----------- ----------- ----------- ------------ ------------
<S> <C> <C> <C> <C> <C>
Revenue $ 1,373,862 $ 337,889 $ 245,315 $( 81,214) $ 1,875,852
========= ========= ========= ========= =========
Operating Profit (Loss) $ 237,130 $( 242,151) $( 245,491) $( 81,214) $( 331,726)
========= ========= ========= ========= =========
Identifiable Assets $ 3,340,780 $ 1,089,569 $ 220,668 $( 143,170) $ 4,507,847
========= ========= ========= ========= =========
<PAGE> 5
<CAPTION>
Six Months Ended Corporate/
June 30, 1994 Domestic China Management Eliminations Consolidated
<S> <C> <C> <C> <C> <C>
Revenue $ 1,528,991 $ - $ 355,427 $( 56,138) $ 1,828,280
========= ========= ========= ========= =========
Operating Profit (Loss) $ 516,321 $( 95,776) $( 213,105) $( 56,138) $ 151,312
========= ========= ========= ========= =========
Identifiable Assets $ 3,991,714 $ 905,332 $ 1,095,681 $( 10,396) $ 5,982,331
========= ========= ========= ========= =========
</TABLE>
<PAGE> 6
PART II - OTHER INFORMATION
Item 6(a) - Exhibits
11 Statement regarding computation of earnings per common share. PAGE 11.
Item 6(b) - Reports on Form 8-K
None.
<PAGE> 9
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: August 14, 1995 By: /s/ HENRY TOH
Henry Toh
President
(Acting Principal Financial Officer
& Acting Principal Accounting
Officer)
<PAGE> 10
<TABLE>
<CAPTION>
EXHIBIT 11
COMPUTATION OF EARNINGS PER COMMON SHARE
Three Months Ended Six Months Ended
June 30 June 30
-------------------------- -------------------------
1995 1994 1995 1994
------------ ------------ ------------ -----------
<S> <C> <C> <C> <C>
Earnings per common and common equivalent share
Net loss available to common
and equivalent shares $( 129,675) $( 23,014) $( 444,598) $( 26,773)
========= ========= ========= =========
Weighted average common shares
outstanding 1,749,163 1,503,305 1,690,970 1,503,305
Adjustments
Assumed conversion of Class B Variable Rate
Cumulative Convertible Preferred Stock - 17,008 58,193 17,008
--------- --------- --------- ---------
Total common and equivalent shares 1,749,163 1,520,313 1,749,163 1,520,313
========= ========= ========= =========
Loss per common and equivalent share
after preferred dividends $( .07) $( .02) $( .25) $( .02)
========= ========= ========= =========
Fully diluted earnings per common and common equivalent share
Net income (loss) available to common
and equivalent shares $( 129,675) $( 23,014) $( 444,598) $( 26,773)
========= ========= ========= =========
Weighted average common shares
outstanding 1,749,163 1,503,305 1,690,970 1,503,305
Adjustments
Assumed conversion of Class B Variable Rate
Cumulative Convertible Preferred Stock - 17,008 58,193 17,008
--------- --------- --------- ---------
Total common and equivalent shares 1,749,163 1,520,313 1,749,163 1,520,313
========= ========= ========= =========
Loss per common and equivalent share
after preferred dividends $( .07) $( .02) $( .25) $( .02)
========= ========= ========= =========
</TABLE>
<PAGE> 11
<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 SIX MONTHS ENDED JUNE 30, 1995 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> 270084
<SECURITIES> 0
<RECEIVABLES> 1687685
<ALLOWANCES> 773958
<INVENTORY> 799849
<CURRENT-ASSETS> 2047424
<PP&E> 3386165
<DEPRECIATION> 1584319
<TOTAL-ASSETS> 4507847
<CURRENT-LIABILITIES> 1934928
<BONDS> 0
<COMMON> 12244
0
2075000
<OTHER-SE> (530667)
<TOTAL-LIABILITY-AND-EQUITY> 4507847
<SALES> 337889
<TOTAL-REVENUES> 1875852
<CGS> 239798
<TOTAL-COSTS> 239798
<OTHER-EXPENSES> 1644135
<LOSS-PROVISION> 323645
<INTEREST-EXPENSE> 80820
<INCOME-PRETAX> (381303)
<INCOME-TAX> 0
<INCOME-CONTINUING> (381303)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (381303)
<EPS-PRIMARY> (.25)
<EPS-DILUTED> (.25)
</TABLE>
