U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended:
September 30, 1997
Commission File No. 0-23780
MEDIAX CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Nevada 84-1107138
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
8522 National Boulevard, Suite 110 Culver City, California
(Address of Principal Executive Offices)
Registrant's telephone number, including area code: (310) 815-8002
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__
As of November 11, 1997, there were 15,288,139 shares of the Company's
Common Stock, $.0001 Par Value, outstanding.
Transitional Small Business Disclosure Format (check one): YES __ NO _X_
<PAGE>
MEDIAX CORPORATION
FORM 10-QSB
For the Quarter Ended September 30, 1997
----------------------------------------
Table of Contents
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements...............................................3
Balance Sheet, September 30, 1997 (unaudited)......................3
Statements of Operations
Three Months Ended September 30, 1996 and 1997 (unaudited)......4
Nine Months Ended September 30, 1996 and 1997 (unaudited).......5
Statements of Cash Flows
Nine Months Ended September 30, 1996 and 1997 (unaudited).......6
Notes to Financial Statements......................................7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations.............................8
PART II
OTHER INFORMATION AND SIGNATURES
Item 1. Legal Proceedings.................................................13
Item 2. Changes in Securities.............................................13
Item 6. Exhibits and Reports of Form 8-K..................................14
Signatures........................................................15
2
<PAGE>
PART I FINANCIAL INFORMATION
Item 1: Financial Statements
MEDIAX CORPORATION
Balance Sheet (unaudited)
September 30, 1997
<TABLE>
<CAPTION>
<S> <C>
Current Assets:
Cash and cash equivalents $ 866,141
Accounts receivable - trade 10,000
Accounts receivable - other 19,480
Prepaid expenses 32,160
--------------
927,781
--------------
Property and Equipment:
Computer and office equipment 208,819
Software 62,563
Furniture and fixtures 10,419
Leasehold improvements 7,902
--------------
289,703
Less: Accumulated depreciation (158,542)
--------------
131,161
--------------
Other Assets:
Note and interest receivable - officer 106,830
License agreement and deferred software costs 190,000
Organization costs, net 2,521
Other 10,391
--------------
309,742
==============
$ 1,368,684
==============
Current Liabilities:
Accounts payable - trade $ 76,311
Accounts payable - related parties 59,197
Obligation under capital lease, current portion 7,054
Subscriptions 100,000
Notes payable, to former MediaX
Shareholders, current portion 42,500
Notes payable 802,981
--------------
1,088,043
--------------
Long Term Liabilities
Obligation under capital lease, non-current portion 2,597
Stockholders' Equity:
Common stock, $.0001 par value. Authorized
75,000,000 shares; issued and outstanding
14,738,139 shares. 1,473
Additional paid-in capital 2,333,197
Deficit accumulated during the development stage (2,056,626)
--------------
278,044
--------------
$ 1,368,684
==============
</TABLE>
The accompanying notes are an integral part of this statement.
3
<PAGE>
MEDIAX CORPORATION
Statements of Operations (unaudited)
Three Months Ended September 30, 1996 and 1997
<TABLE>
<CAPTION>
<S> <C> <C>
1996 1997
-------------- -------------
SALES/COST OF SALES
Sales $ 141,051 $ 90,000
Cost of sales 129,128 208,711
-------------- -------------
Gross profit 11,923 (118,711)
-------------- -------------
GENERAL AND ADMINISTRATIVE
EXPENSES 212,534 277,522
-------------- -------------
OTHER INCOME (EXPENSES)
Interest income 530 5,534
Interest expense - (19,173)
Miscellaneous expense (806) -
-------------- -------------
(276) (13,639)
-------------- -------------
Net loss $ (200,887) $ (409,872)
============== =============
Net loss per common share $ (0.02) $ (0.03)
============== =============
Weighted average number of common shares
used in computation of net loss per share 13,312,100 14,706,346
============== =============
</TABLE>
The accompanying notes are an integral part of this statement.
4
<PAGE>
MEDIA X CORPORATION
Statements of Operations (unaudited)
Nine Months Ended September 30, 1996 and 1997
<TABLE>
<CAPTION>
<S> <C> <C>
1996 1997
--------------- --------------
SALES/COST OF SALES
Sales $ 141,067 $ 243,511
Cost of sales 135,408 595,432
--------------- --------------
Gross profit 5,659 (351,921)
--------------- --------------
GENERAL AND ADMINISTRATIVE
EXPENSES 342,943 734,456
--------------- --------------
OTHER INCOME (EXPENSES)
Interest income 530 11,813
Interest expense - (43,514)
Miscellaneous income 194 10,305
--------------- -------------
724 (21,396)
--------------- -------------
Net loss $ (336,560) $ (1,107,773)
=============== ==============
Net loss per common share $ (0.03) $ (0.08)
=============== ==============
Weighted average number of common
shares used in computation
of net loss per share 1,100,122 14,435,436
=============== ==============
</TABLE>
The accompanying notes are an integral part of this statement.
5
<PAGE>
MEDIA X CORPORATION
Statements of Cash Flows (unaudited)
Nine Months Ended September 30, 1996 and 1997
<TABLE>
<CAPTION>
<S> <C> <C>
1996 1997
----------------- ----------------
Cash Flows from Operating Activities:
Net income (loss) $ (336,560) $ (1,107,773)
Adjustments to reconcile net cash (used) provided
by operating activities:
Amortization & Depreciation - 44,016
Changes in operating assets and liabilities:
Accounts receivable (450) 89,898
Prepaid expenses (1,298) (16,575)
Other assets (50,436) (9,464)
Note and interest receivable - officer - (3,000)
Accounts payable - trade 19,372 5,831
Loans payable (109,719) 32,981
Capital lease, current portion 11,615 (1,080)
----------------- ----------------
Net cash (used) in operating activities (467,476) (965,166)
----------------- ----------------
Cash Flows from Investing Activities:
Reduction in goodwill - 227,157
Purchase of fixed assets (217,061) (49,352)
Disposition of fixed assets - 12,536
Purchase of intangible asset (153,664) (70,000)
----------------- ----------------
Net cash (used) in investing activities (370,725) 120,341
----------------- ----------------
Cash Flows from Financing Activities:
Increase (decrease) in long term debt 350,000 (62,448)
Increase (decrease) in long term lease 3,586 (2,917)
Increase (decrease) in loans payable - (250,000)
Proceeds from sale of stock to private investors 308,000 1,032,000
Proceeds received from issuance of notes payable - 770,000
----------------- ----------------
Net cash provided by financing activities 661,586 1,486,635
----------------- ----------------
Net (decrease) increase in cash and cash equivalents (176,615) 641,810
----------------- ----------------
Cash and cash equivalents at beginning of period 231,154 224,331
----------------- ----------------
Cash and cash equivalents at end of period $ 54,539 $ 866,141
================ ================
Supplementary Disclosures of Cash Flow Information:
No cash was paid during the period for
income taxes or interest.
</TABLE>
The accompanying notes are an integral part of this statement.
6
<PAGE>
MEDIAX CORPORATION
Notes to Financial Statements (unaudited)
September 30, 1996 and 1997
(1) Basis of Presentation
The condensed financial statements of MediaX Corporation (the
"Company") for the nine months ended September 30, 1996 and 1997 are
unaudited and reflect all adjustments, consisting of normal recurring
adjustments as well as additional adjustments, which are, in the
opinion of management, necessary for a fair presentation of the results
for the interim period presented. These condensed financial statements
should be read in conjunction with the financial statements and notes
thereto included in the Company's Annual Report on Form 10-KSB for its
year ended December 31, 1996. The results of operations for the nine
months ended September 30, 1997 are not necessarily indicative of the
results for the entire year ending December 31, 1997.
(2) Net Earnings (Loss) per Share
Net earnings per share is based on the weighted average number of
common and common equivalent shares outstanding during each period.
Common stock equivalents have been excluded from the computation for
the three months and nine months ended September 30, 1997, loss
periods, as their inclusion would be anti-dilutive.
7
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The following information should be read in conjunction with the
financial statements and the notes thereto, as well as the section entitled
"Management's Discussion and Analysis or Plan of Operations" from the Company's
Annual Report on 10-KSB for its year ended December 31, 1996. The analysis set
forth below is provided pursuant to applicable Securities and Exchange
Commission regulations and is not intended to serve as a basis for projections
of future events.
FORWARD-LOOKING STATEMENTS
EXCEPT FOR HISTORICAL INFORMATION CONTAINED HEREIN, THE MATTERS
DISCUSSED IN THIS FORM 10-QSB ARE FORWARD-LOOKING STATEMENTS THAT ARE SUBJECT TO
CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER
MATERIALLY FROM THOSE SET FORTH IN SUCH FORWARD-LOOKING STATEMENTS. SUCH RISKS
AND UNCERTAINTIES INCLUDE, WITHOUT LIMITATION, THE COMPANY'S DEPENDENCE ON THE
TIMELY DEVELOPMENT, INTRODUCTION AND CUSTOMER ACCEPTANCE OF PRODUCTS, THE IMPACT
OF COMPETITION AND DOWNWARD PRICING PRESSURES, THE ABILITY OF THE COMPANY TO
REDUCE ITS OPERATING EXPENSES AND RAISE ANY NEEDED CAPITAL, THE EFFECT OF
CHANGING ECONOMIC CONDITIONS AND RISKS IN TECHNOLOGY DEVELOPMENT. OTHER FACTORS
THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE SET FORTH IN
SUCH FORWARD-LOOKING STATEMENTS INCLUDE THE RISKS AND UNCERTAINTIES DETAILED IN
THE COMPANY'S MOST RECENT FORM 10-KSB AND ITS OTHER FILINGS WITH THE SECURITIES
AND EXCHANGE COMMISSION FROM TIME TO TIME.
Overview
The technology market is currently expanding at an unprecedented rate.
Shipments of multimedia-equipped personal computers now exceed one million per
month and cumulative shipments to date exceed 80 million. This constantly
increasing hardware base has spurred demand for interactive multimedia content.
CD-ROM titles are sold through all mass-merchandising retail channels and
revenue from CD-ROM publishing is projected to surpass $4 billion in 1997.
Penetration of multimedia CD-ROMs in U.S. households reportedly now surpasses
33%. Internet subscribers are expected to grow from 10 million to over 100
million by 1999. Revenue from Internet content publishing alone is forecasted to
reach $15 billion in the next five years.
MediaX (the "Company") operates primarily by acquiring intellectual
properties and developing, authoring, producing, marketing and distributing
Company-owned interactive multimedia titles and software development tools; this
vertically integrated model contrasts with its earlier development and
production-for-fee service model (prior to 1997).
MediaX currently has several such Company-owned projects in various
stages of development and is continuing to review/acquire rights to new
intellectual properties on which it later typically pays a royalty on sales.
Through vertical integration and a focus on high marquis-value projects, the
Company intends to maintain strict control on both quality and costs and to
retain profits that are otherwise traditionally dispersed across several
separate entities (as is still common in this and the film and recording
industries).
Background
Although the Company and its predecessor entities have been in
existence since 1986, its current
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operations have been in place only since its merger with MediaX in June 1996.
Accordingly, the Company is still in many respects subject to many of the risks
and uncertainties inherent in a new enterprise.
The Company develops, produces and markets software products for the
information/entertainment and development tool sector of the software industry
in the form of software distributed on floppy disks and CD-ROMs. Two recently
released CD-ROM entertainment products are "On the Road with BB King" and
"Queensryche's Promised Land" which are being distributed by MCA and EMI
records, respectively.
During December 1996, the Company signed an Electronic Rights License
Agreement with Newspeak Media, Inc., which grants the Company the production and
exclusive publishing rights for an interactive project based on George Orwell's
novel "1984," entitled "Big Brother," in consideration for an agreed upon
royalty. Production has commenced and the product is expected to be released
into the market in Spring 1998.
The Company has signed a contract with Peter Norton and Verbum for the
exclusive publishing and marketing rights for an interactive, multimedia
infotainment project entitled "Peter Norton - PC Guru," for which there is an
option for up to five CD-ROMs. The Company has commenced work on the first such
CD-ROM, which is expected to be released in late 1997. Peter Norton - PC Guru is
a Windows 3.1 and Windows 95 CD-ROM developed specifically to help PC users
understand and use their computer systems to enhance both work and home life and
to get support when a problem or question arises. It will introduce the user to
key hardware internals and numerous software solutions for common personal and
professional applications through illustrated, animated tutorials, and hands-on
experience with demonstration versions of popular software products included on
the disk. Software update, support and other current information will be
provided to owners of the CD via "hot-links" to active third party Internet Web
sites and a specific companion PC Guru website. The information provided on the
disk will be comprehensive and accurate, from top technical experts. The major
sections of the disk cover system software and hardware, peripheral devices,
major application categories (such as "creativity" and "learning"),
trouble-shooting, hands-on demonstration software applications and usable
utilities and system customizing elements such as background graphics and
start-up sounds. The additional ability to connect directly from the CD-ROM to
major Internet sites will assure that the user, even long after the purchase of
the CD-ROM, will always have the opportunity to bring his knowledge up-to-date
and, in addition, take advantage of many existing download opportunities for
free software on the Internet.
MediaX has recently signed marketing co-op agreements with two of the
industry's most influential companies to participate in the Norton project and
promotional activity -- Symantec/Norton Utilities Group for Symantec software,
and AT&T for comprehensive co-marketing with its WorldNet Internet Service.
The Company's Orwell-based "Big Brother" project is progressing on
schedule for a Spring 1998 introduction. Additional personnel for the game
design and engineering area have been hired to bring staffing up to the
necessary levels. Talks for marketing cooperation are currently proceeding with
several domestic and international companies.
The Company has completed Media Manager and is deciding if the product
should enter the market by retail distribution or by licensing/OEM. Multimedia,
Internet and traditional text processing and desktop or printing productions
(accessing data on existing networks or archives, such as legal or medical
documents) almost always involve many individuals or groups of people with
various talents and specialties. Often these groups work together on one
project, either within the same location or in separate locations, connected
through LAN's or wide area networks. A single multimedia production, for
example, can consist of 6,000 to 20,000 files composed of graphic bitmap images,
sound files and animation. Keeping track of those files or, more importantly,
managing modifications to various files and keeping track of which individual or
group is actually working on a file, or a set of files, at any given time can be
a never-ending and cost intensive task for production companies, law firms or
any large corporation. An
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<PAGE>
absolute critical task is indexing, sharing, retrieving and maintaining such
files and their multiple versions on a real-time basis. The objective of Media
Manager is to manage this process by cataloging all work, automatically keeping
historical information and maintaining strict version control.
Media Manager should administrate this task in a very transparent and
visual manner, reproducing thumbnails of graphic images, sound files and text
and spreadsheets files among others. File access will be achieved by simply
double clicking those images. Media Manager should store digital data of any
kind in a proprietary storage system, manage and version control it and create a
flexible, transparent and visual archiving/administration system which can be
dynamically used by different individuals or project groups over a LAN network
or over the Internet.
Media Manager will run on a Windows 95 or Windows NT platform and will
also perform the function of HTML server. Users who are on various other
machines and/or different operating platforms (i.e., MacIntosh's or SGI's)
should be able to browse any media regardless of operating system or computing
platform, as well as check files in and out. As an add-on, Media Manager should
provide a stand alone Web server application, so clients can also run a simple
Web server.
Results of Operations
The Company is still in the developmental stage and has only developed
four products to date. The first six months of 1996 (prior to the merger) were
very limited. Therefore, the only meaningful comparisons that can be made are
for the third quarter.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Net Revenues
- ------------
(Decrease)
1996 Increase 1997
-------- ---------- ---------
Net Revenues Third Quarter $141,051 (36%) $90,000
</TABLE>
The third quarter revenues for 1996 were for the product Surf & Destroy. There
was little revenue generated in the third quarter 1997 since the release date of
"Peter Norton - PC Guru" is expected in the fourth quarter.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Cost of Revenues
- -----------------
(Decrease)
1996 Increase 1997
-------- ------------ ---------
Cost of Revenues Third Quarter $129,128 62% $208,711
</TABLE>
Cost of revenues consists of salaries of employees and outside consultants who
design, test and manage each project. Costs have increased substantially due to
the increase in the number of projects. There were two projects in the
development stage during the third quarter 1996, compared to eight in the third
quarter 1997.
<TABLE>
<CAPTION>
General and Administrative Expenses
- -----------------------------------
<S> <C> <C> <C> <C>
(Decrease)
1996 Increase 1997
-------- ---------- ---------
G&A Expenses Third Quarter $212,534 31% $277,522
</TABLE>
General and administrative expenses are higher in the third quarter 1997 because
of the additional overhead necessary to accommodate the increase in staff.
10
<PAGE>
<TABLE>
<CAPTION>
Other Income (Expense), net
- ---------------------------
<S> <C> <C> <C> <C>
(Decrease)
Other Income 1996 Increase 1997
-------- ------------ ---------
(Expense) Third Quarter ($276) (greater-than ($13,639)
100%)
Other income and expense for the third quarter 1997 decreased due to the
increase in interest expense that was generated from convertible debentures
issued.
</TABLE>
Net Income (Loss)
For the reasons outlined above, the Company realized a $409,872 net loss during
the third quarter 1997 as compared to a net loss of $200,887 during the third
quarter 1996.
Liquidity and Capital Resources
Cash and cash equivalents increased $641,810 from December 31, 1996 to
September 30, 1997. Over the same period, the Company's working capital deficit
of $160,262 was reduced from a deficit of $435,564 at December 31, 1996 due
primarily to cash received in stock and debt issuances.
Two convertible debentures were sold to an accredited investor in March
and August ($450,000 and $320,000 respectively) which pay interest at 2% per
annum over the prime rate. During August and September the Company sold 646,154
shares of common stock to seven different accredited investors for $612,000.
The Company's success and ongoing financial viability is contingent upon
its selling of its products and the related generation of cash flows. The
Company is currently generating relatively little revenue and related cash flows
and anticipates this trend will continue until such time, if any, that new
products are released and accepted in the marketplace. Management believes that
its existing cash and working capital balances will be sufficient to meet its
working capital needs for the balance of the year ending December 31, 1997. If
the Company decides to commence with additional productions, it may be necessary
to raise additional capital. The Company evaluates its liquidity and capital
needs on a continuous basis and, based on the Company's requirements and capital
market conditions, may from time to time raise working capital through
additional debt or equity financing. There is no assurance that such financing
will be available in the future to meet additional capital needs of the Company,
or as to the terms or conditions of any such financing that is available.
Should there be any significant delays in the release of new products, or
lack of acceptance in the marketplace for such products if released, or the
Company's working capital needs otherwise exceed its resources, the adverse
consequences would be severe. Both the management of the Company's current
growth and the expansion of the Company's current business involve significant
financial risk and require significant capital investment. As of September 30,
1997 the Company had no material commitments for capital expenditures.
Product Development
At present the Company has no product for sale in the retail channel. The
Company is planning to release its first two MediaX products, "Peter Norton - PC
Guru" and "Media Manager" into the market during the last quarter of 1997, and
its third product "Big Brother" in the first half of 1998.
There can be no assurance that new products will be released by the
Company or if released, that such release will be on a timely basis; or that any
products will achieve any significant degree of market acceptance or that such
acceptance, if attained, will be sustained for any significant period; or that
such products will be profitable or that profitability, if any, will be
sustained. As well, the Company's success will depend in part on its ability to
respond promptly to market feedback and provide adequate technical support and
service to customers and there can be no assurance that the Company will be
successful in so responding. Failure to complete on a timely basis, or lack of
demand for new products upon completion and distribution, would have a material
adverse effect upon the Company and such adverse effect would be
11
<PAGE>
severe.
The Company believes continued investment in research and development to
develop state-of-the-art technology for incorporation into its products is
required if it is to remain competitive in the marketplace.
The Company depends on the successful development of new products,
including new titles and the adaptation of existing titles to new platforms and
technologies, to expand its product offerings and to augment revenues from
products that have declined in revenue prospects. The Company also depends on
upgrades of existing products to lengthen the life cycle of such products.
Finally, the Company must continually anticipate and adapt its products to
emerging personal computer platforms and environments. If the Company's products
become outdated and lose market share, or if new products or product upgrades
are not introduced when planned or do not achieve the revenues anticipated by
the Company, the Company's operating results could be materially adversely
affected.
Exclusive of licensing agreements and acquisitions, the length of time
required to develop the Company's products and product upgrades typically ranges
from nine to 16 months, as is common in the multimedia industry. Theoretically,
the Company could experience delays in the planned release of new products or
product upgrades from one to 15 months as a result of completing development,
product testing and quality assurance. There can be no assurance that such
delays from the planned product release dates will not occur in the future.
Additionally, there can be no assurance that the Company will be able to release
new products on schedule or that such new products, if released, will achieve
market acceptance. If a product's release is delayed, it may lose market
position and the Company's expected return on its investment in the product
could be materially delayed or diminished.
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<PAGE>
PART II OTHER INFORMATION
Item 1. Legal Proceedings.
There are no pending legal proceedings, and the Company is not aware of
any threatened legal proceedings to which it is a party.
Item 2. Changes in Securities.
On March 25, 1997, the Company sold to an accredited investor for
$450,000, a convertible debenture which pays interest at 2% per annum over the
prime rate of the Bank of America, calculated monthly on the principal portion
of $350,000 from February 11, 1997 and on the principal portion of $100,000 from
March 25, 1997. The debenture is due on February 28, 1998, but the principal sum
and any accrued interest may be converted into shares of common stock at any
time before the due date at a price of $1.00 per share.
On April 20, 1997, the Company engaged a consultant to provide
financial public relations services for the Company for a term of twelve months.
As part of the compensation for such services, the Company issued to the
consultant 75,000 shares of the Company's common stock and 125,000 options, each
option to purchase one share of common stock at $1.25 per share, and an
additional 125,000 options, each option to purchase one share of common stock at
$2.50 per share. All such options vest in monthly increments of one-twelfth or
8.333% of the total share and options per month from April 10, 1997.
On July 21, 1997, the Company engaged a firm to act as sales
representative for the Company's software. As part of the consideration for such
services, the Company granted the principals of the firm options to purchase
250,000 shares of the Company's common stock at a price of $1 1/8 per share.
Options to purchase 25,000 shares vested on September 30, 1997. Additional
options vest upon the future shipment of units.
On August 1, 1997, the Company sold a convertible debenture to an
accredited investor for $320,000, which pays interest on the principal of
$320,000 at 2% per annum over the prime rate of the Bank of America, calculated
monthly from August 1, 1997. The debenture is due on July 31, 1998, but the
principal sum and any accrued interest may be converted into shares of common
stock at any time before the due date at a price of $0.70 per share.
On August 12, 1997, the Company engaged a firm to provide investor
relations/public relations services for the Company for a term of one year. As
part of the consideration for such services, the Company granted the firm 45,000
options, each option to purchase one share of the Company's common stock at a
price of $1.38 per share. The options vest at a rate of 3,750 per month, each
month.
On August 22, 1997, the Company sold 200,000 shares of common stock to
an accredited investor for $148,000.
On August 29, 1997, the Company sold 50,000 shares of common stock and
50,000 warrants (each warrant to purchase one share of common stock at an
exercise price of $1.30 per share, exercisable for five years from the date of
sale) to an accredited investor for $52,000.
On September 2, 1997, the Company sold 50,000 shares of common stock
and 50,000 warrants (each warrant to purchase one share of common stock at an
exercise price of $1.30 per share, exercisable for five years from the date of
sale) to an accredited investor for $52,000.
On September 7, 1997, the Company sold 100,000 shares of common stock
and 100,000 warrants (each warrant to purchase one share of common stock at an
exercise price of $1.30 per share, exercisable
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<PAGE>
for five years from the date of sale) to an accredited investor for $104,000.
On September 9, 1997, the Company sold 100,000 shares of common stock
and 100,000 warrants (each warrant to purchase one share of common stock at an
exercise price of $1.30 per share, exercisable for five years from the date of
sale) to an accredited investor for $104,000.
On September 10, 1997, the Company sold 50,000 shares of common stock
and 50,000 warrants (each warrant to purchase one share of common stock at an
exercise price of $1.30 per share, exercisable for five years from the date of
sale) to an accredited investor for $52,000.
On September 25, 1997, the Company sold 96,154 shares of common stock
to an accredited investor for $100,000.
Exemption from registration under the Securities Act of 1933, as
amended (the "Act"), is claimed for the sale of all of the securities set forth
above in reliance upon the exemption afforded by Section 4(2) of the Act.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits filed with this report:
Exhibit 27: Financial Data Schedule
(b) Reports filed on Form 8-K: None filed by the Company during the
quarter for which this report is filed.
14
<PAGE>
SIGNATURE
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.
MEDIAX CORPORATION
Date: November 14, 1997 By: /s/ Nancy Poertner
------------------
Nancy Poertner
President
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the MediaX
Form 10-QSB for the quarterly period ended September 30, 1997 and is qualified
in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-END> Sep-30-1997
<CASH> 866,141
<SECURITIES> 0
<RECEIVABLES> 29,480
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 927,781
<PP&E> 289,703
<DEPRECIATION> (158,542)
<TOTAL-ASSETS> 1,368,684
<CURRENT-LIABILITIES> 1,088,043
<BONDS> 0
0
0
<COMMON> 1,473
<OTHER-SE> (276,571)
<TOTAL-LIABILITY-AND-EQUITY> 1,368,684
<SALES> 243,511
<TOTAL-REVENUES> 243,511
<CGS> 170,664
<TOTAL-COSTS> 170,664
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