U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Fiscal Quarter ended: June 30, 1999
Commission File No. 0-23780
MEDIAX CORPORATION
(Exact Name of Small Business Issuer as Specified in its Charter)
Nevada
(State or Other Jurisdiction of Incorporation or Organization)
84-1107138
(I.R.S. Employer Identification Number)
8522 National Boulevard, Suite 110, Culver City, California 90232
(Address of Principal Executive Offices, Including Zip Code)
(310) 815-8002
Issuer's Telephone Number
Securities Registered Pursuant to Section 12(b) of the Act: None.
Securities Registered Pursuant to Section 12(g) of the Act:
SHARES OF COMMON STOCK, $.0001 PAR VALUE
Check whether the Issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the Registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes [X] No []
The aggregate market value of the Issuer's Common Stock, $.0001 Par Value, held
by non-affiliates of the Issuer, based on the closing sale price of the Common
Stock on July 31,1999 as reported on the OTC Bulletin Board, was approximately
$20,996,423.
As of July 31, 1999 there were 5,995,042 shares of the Issuer's Common Stock,
$.0001 Par Value, outstanding.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
MEDIAX CORPORATION
FORM 10-QSB
Page
PART I
Item 1. Financial Statements
Condensed Balance Sheet as of June 30, 1999 (unaudited)..........2
Condensed Statements of Operations for the Three and Six Months
Ended June 30, 1999 and 1998 (unaudited) ........................3
Condensed Statements of Cash Flows for the Six Months Ended
June 30, 1999 and 1998 (unaudited)...............................5
Notes to Condensed Financial Statements..........................6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations .......................................7
PART II
Item 1. Legal Proceedings................................................11
Item 2. Changes In Securities............................................11
Item 3. Defaults Upon Senior Securities..................................11
Item 4. Submission of Matters to a Vote of Security Holders..............11
Item 5. Other Information................................................11
Item 6. Exhibits And Reports On Form 8-K.................................11
Signatures.......................................................12
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
<TABLE>
<CAPTION>
MEDIAX CORPORATION
(A Development Stage Company)
Condensed Balance Sheet (Unaudited)
June 30,
1999
---------------------
ASSETS
<S> <C>
Current assets
Cash and cash equivalents $ 79,840
Accounts receivable, net 75,410
Inventories 91,675
Prepaid advertising costs 1,100,000
Other prepaid expenses 11,839
----------------------
Total current assets 1,358,764
Property and equipment
Computers and office equipment 243,515
Software 162,272
Furniture and fixtures 19,859
----------------------
425,646
Less: accumulated depreciation (252,599)
173,047
Other assets
Note and interest receivable - officer 113,830
Deferred software development costs 302,247
License agreement and trademark 102,288
Organization costs, net 869
Deposits and other assets 10,564
-----------------------
529,798
$ 2,061,609
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities
Convertible debentures payable $ 1,172,467
Accrued expenses 18,482
Accounts payable - trade 129,491
Subscriptions 329,993
---------------------
1,650,433
Commitments, contingency and subsequent events --
Stockholders' equity (deficit)
Preferred stock, $.0001 par value per shares; 10,000,000 shares
authorized and no shares issued --
Common stock, $.0001 par value per share; 7,500,000 shares
authorized; 5,879,042shares issued and outstanding 588
Additional paid-in capital 6,354,099
Deficit accumulated during the development stage (5,943,511)
----------------------
411,176
$ 2,061,609
</TABLE>
The accompanying notes are an integral part of this condensed statement.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
<TABLE>
<CAPTION>
MEDIAX CORPORATION
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
For the Three Months Ended
June 30,
-----------------------------------------------
1999 1998
----------------------- -----------------------
<S> <C> <C>
Sales/Cost of sales
Sales $ 11,056 $ 57,678
Allowances for returns -- (44,769)
Cost of sales (47,527) (125,242)
----------------------- -----------------------
Gross profit (36,471) (112,333)
Operating Expenses
Amortization and depreciation 11,433 44,637
Professional, legal and accounting services 62,107 69,819
Marketing and selling 28,438 661,811
Rent and utilities 30,530 24,608
Salaries 187,920 141,453
General and administrative 73,308 67,253
------------------------ ----------------------
393,736 1,009,581
Other Income (Expenses)
Interest income 1,000 1,675
Interest expense (37,858) (26,087)
Other (loss) income -- --
------------------------ ----------------------
(36,858) (24,412)
------------------------ ----------------------
Net loss $ (467,065) $ (1,146,326)
======================== ======================
Basic and diluted weighted average number of
common shares 5,162,815 1,700,265
======================== ======================
Basic and diluted net loss per common share $ (.09) $ (.67)
======================== ======================
</TABLE>
The accompanying notes are an integral part of this condensed statement.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
<TABLE>
<CAPTION>
MEDIAX CORPORATION
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
For the Six Months Ended
June 30,
1999 1998
----------------------- ------------------
<S> <C> <C>
Sales/Cost of sales
Sales $ 52,050 $ 323,800
Allowances for returns -- (116,282)
Cost of sales (83,965) (278,754)
------------------------ ------------------
Gross profit (31,915) (71,236)
Operating Expenses
Amortization and depreciation 23,253 59,166
Professional, legal and accounting services 164,208 132,147
Marketing and selling 57,799 899,417
Rent and utilities 58,829 56,236
Salaries 357,754 260,159
General and administrative 141,393 179,829
----------------------- -------------------
803,236 1,586,954
Other Income (Expenses)
Interest income 2,060 4,254
Interest expense (69,157) (47,210)
Other (loss) income -- (2,093)
----------------------- -------------------
(67,097) (45,049)
----------------------- -------------------
Net loss $ (902,248)$ (1,703,239)
======================= ===================
Basic and diluted weighted average number of 4,624,440 1,659,175
common shares ======================= ===================
Basic and diluted net loss per common share $ (.20) $ (1.03)
======================= ===================
</TABLE>
The accompanying notes are an integral part of this condensed statement.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
<TABLE>
<CAPTION>
MEDIAX CORPORATION
(A Development Stage Company)
Condensed Statements of Cash Flows (Unaudited)
For the Six Ended
June 30,
1999 1998
-------------------- -------------------
<S> <C> <C>
Cash Flows from Operating Activities
Net income (loss) $ (902,248) $ (1,703,239)
Adjustments to reconcile to net cash provided by operating
activities:
Amortization and depreciation 23,253 59,165
Changes in assets and liabilities
Decrease (Increase) in accounts receivable 1,398 (307,432)
Decrease in prepaid expense 18,486 530,121
Decrease (Increase) in inventories 1,088 (12,829)
(Increase) in note and interest receivable - officer (2,000) (2,000)
(Increase) in deposits and other assets - (3,115)
(Decrease)Increase in accounts payable - trade (163,361) 99,614
(Decrease) in accounts payable - related parties -- (19,853)
Increase in accrued and other expenses 10,006 159,140
Increase in product refund reserve -- 116,282
-------------------- --------------------
Net cash (used) by operating activities (1,013,378) (1,084,146)
-------------------- --------------------
Cash Flows from Investing Activities
Deferred software development costs (196,803) --
Purchase of fixed assets (20,151) (6,330)
-------------------- --------------------
Net cash (used) provided by investing activities (216,954) (6,330)
-------------------- --------------------
Cash Flow from Financing Activities
Principal payments on capital lease - (2,546)
Stock subscriptions payable 9,993 --
Net proceeds from sale of stock to private investors 1,230,008 500,000
Payments on notes payable (18,179) (14,468)
Proceeds received from issuance of notes payable and
convertible debentures 68,375 346,094
-------------------- --------------------
Net cash provided by financing activities 1,290,197 829,080
-------------------- --------------------
Increase (Decrease) in cash and cash equivalents 59,865 (261,396)
Cash and cash equivalents, beginning of period 19,975 392,673
-------------------- --------------------
Cash and cash equivalents, end of period $ 79,840 $ 131,277
==================== ====================
</TABLE>
The accompanying notes are an integral part of this condensed statement.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
MEDIAX CORPORATION
(A Development Stage Company)
Notes to Condensed Financial Statements
Note 1: BASIS OF PRESENTATION
The condensed financial statements of MediaX Corporation (the "Company")
for the three and six months ended June 30, 1999 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 periods 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
fiscal year ended December 31, 1998. The results of operations for the three and
six months ended June 30, 1999 are not necessarily indicative of the results for
the entire year ending December 31, 1999.
Note 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 and six months
ended June 30, 1999, loss periods, as their inclusion would be anti-dilutive.
Note 3: GOING CONCERN
The Company has experienced recurring net losses and has limited liquid
resources. Management's intent is to increase the Company's sales and continue
searching for additional sources of capital. In the interim, the Company will
continue operating with minimal overhead and administrative functions will be
provided by key employees and consultants, some of whom are compensated
primarily in the form of the Company's common stock. The Company may need to
utilize its common stock to fund its operations through fiscal 1999.
Accordingly, the accompanying condensed financial statements have been presented
under the assumption the Company will continue as a going concern.
Note 4: OTHER TRANSACTIONS
During the second quarter of 1999, the Company sold 130,000 common shares
to accredited unrelated investors for proceeds of $200,000, issued 483,667common
shares of stock pursuant to warrant conversions for proceeds of $102,257 and
issued 120,000 shares of stock pursuant to the exercise of certain stock options
for proceeds of $ 336,000.
In April of 1999, the Company issued 790,000 shares of common stock to an
unrelated consulting firm to provide investor communications and public
relations for a term of one year ending on March 21, 2000. The Company issued
80,000 shares of common stock to unrelated investors for services rendered.
Note 5: RECLASSIFICATION
The 1998 balances have been reclassified to conform with the 1999 balances
where appropriate.
Note 6: SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
There was no cash paid during the six months ended June 30, 1999, for
income taxes or interest.
During the six months ended June 30, 1999, $350,000 of subordinated
convertible debt was converted into 200,000 shares of the Company's common
stock.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
During the six months ended June 30, 1999, the Company entered into an
agreement with a media service provider to acquire $1 million dollars of
advertising credit in exchange for 200,000 restricted shares of the Company's
common stock.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The following information should be read in conjunction with the financial
statements and the notes thereto. 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.
GOING CONCERN
The Company has experienced recurring net losses and has limited liquid
resources. Management's intent is to increase the Company's sales and continue
searching for additional sources of capital. In the interim, the Company will
continue operating with minimal overhead and administrative functions will be
provided by key employees and consultants, some of whom are compensated
primarily in the form of the Company's common stock. The Company may need to
utilize its common stock to fund its operations through fiscal 1999.
Accordingly, the accompanying consolidated financial statements have been
presented under the assumption the Company will continue as a going concern.
NEW BUSINESS PLAN
The Company designs and hosts high-value celebrity web sites such as
rodstewartlive.com and divinemusik.com and others. The web site entertainment
content includes live-chats, on-line shopping for artist specific merchandise
and the production of Internet events such as live concerts that are globally
broadcast on the Internet. The Company has established strategic relationships
with companies like Microsoft, RealNetworks, Broadcast.com, AOL, Yahoo! and
others for this purpose. In February 1999, the Company initiated amuZnet.com, an
e-commerce site offering more than 265,000 entertainment titles on CDs, DVDs and
Videos by major record labels and studios and over 4,000 independent music
labels for purchase on-line. The Company purposely directs the high-traffic
generated by the celebrity web sites through amuZnet.com with a simple link.
This site is constantly updated and developed into a "destination site" serving
increasing revenue streams through its e-commerce model.
With this structure the Company is positioned to provide a unique
entertainment and on-line shopping experience available on the Internet today.
The celebrity web sites provide entertainment content, unique global events and
merchandise, while threading the high traffic generated through to the Company's
central e-commerce site, amuZnet.com, and finally channeling the traffic through
it's interactive satellite channel in cooperation with EchoStar Satellite
Corporation ("EchoStar").
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
The Company is currently in the process of programming its content for use
on the Interactive Satellite system and has signed and is continuing to
negotiate consulting agreements with several well-established Hollywood
producers and agencies for the acquisition of content. This new business plan
leverages the high visibility of the Company's artists, expects to overcome the
bandwidth issues currently existing on the Internet and expects to take
advantage of the already existing promotion through record and film companies to
channel traffic to amuZnet.com, thus reducing marketing and public relations
costs that the Company's competition is currently forced to bear to keep
bringing traffic to their web sites.
The Company expects that the model currently in development for EchoStar will
be transferable to a cable company and can be applied to the emerging DSL
systems subscriber base without significant technological changes. Most
recently, during the second quarter of 1999, EchoStar at NAB in Las Vegas had
presented a demonstration of MediaX's EchoStar content.
Although the presentation by EchoStar is promissing, there can be no
assurance that the Company will achieve its objectives or successfully implement
it's new business plan, however, both the Company and it's strategic partners
believe in the fundamentals of the new business plan.
RESULTS OF OPERATIONS
Three Months Ended June 30, 1999 Compared to Three Months Ended June 30,
1998
The Company's net sales for the three months ended June 30, 1999 was
$11,056 as compared to $12,909 for the same quarter last year, resulting in a
decrease of $1,853 or 14%. The change is primarily attributable to a change in
sales mix and the early stages of the Company's Internet business.
The Company's cost of sales for the three months ended June 30, 1999 was
$47,527 as compared to $125,242 for the same quarter last year, resulting in an
decrease of $77,714 or 62%. The decrease in cost of sales is again, primarily
attributable to a change in sales mix and the early stages of the Company's
Internet business.
The Company's total amortization and depreciation for the three months
ended June 30, 1999 was $11,433 as compared to $44,637 for the comparable period
last year. The decrease is attributable to having more fully depreciated assets
during the same quarter last year over the current quarter.
The Company's professional, legal and accounting services were $ 62,107
for the three months ended June 30, 1999, as compared to $69,819 for the same
quarter last year. The change is primarily attributable to decrease services
provided by consultants under professional advisory and management agreements
over the same period last year.
The Company's marketing and selling expenses for the three months ended
June 30, 1999 were $28,438 as compared to $661,811 for the same quarter last
year. The change is directly related a change in sales mix and the focus on the
Company's Internet business .
The Company's rent and utilities for the three months ended June 30, 1999
was $30,530 as compared to $24,608 for the same quarter last year. The change is
a result of renewed leases of the Company's premises during the current quarter
over the same quarter last year.
The Company's salaries for the three months ended June 30, 1999 increase
$187,920 from $141,453 from the same quarter last year. The increase is
attributable to, additional employees and salary increases which includes
provisional increases in the Company's agreements with its executive officers.
However, the Company or the officers' have not elected to exercise their right
to the salary increase for the final year term.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
The Company's general and administrative expenses for the three months
ended June 30, 1999 increased to $73,308 from $67,253 from the same quarter last
year. There was no significant change in the Company's overall operations.
The Company's other income and expenses for the three months ended June
30, 1999 was $36,858 of other expenses as compared to $24,412 for the same
quarter last year. The increase is directly related to the increase in interest
expense of $11,772.
The Company's net loss for the three months ended June 30, 1999 was
$467,065 as compared to $1,146,326 for the same quarter last year. The
improvement of $679,261 is primarily attributable to a change in sales mix and
the early stages of the Company's Internet business.
Six Months Ended June 30, 1999 Compared to Six Months Ended June 30, 1998
The Company's net sales for the six months ended June 30, 1999 was $52,050
as compared to $207,518 for the same period last year, resulting in a decrease
of $ 155,468 or 75%. The change is primarily attributable to a change in sales
mix and the early stages of the Company's Internet business.
The Company's cost of sales for the six months ended June 30, 1999 was $
83,965 as compared to $278,754 for the same period last year, resulting in a
decrease of $ 194,789 or 70%. The decrease in cost of sales is again, primarily
attributable to a change in sales mix and the early stages of the Company's
Internet business.
The Company's total amortization and depreciation for the six months ended
June 30, 1999 was $23,253as compared to $59,166 for the comparable period last
year. The decrease is attributable to having more fully depreciated assets
during the same period last year over the current period .
The Company's professional, legal and accounting services were $164,208for
the six months ended June 30, 1999, as compared to $132,147 for the same period
last year. The change is primarily attributable to increase services provided by
consultants under professional advisory and management agreements over the same
period last year.
The Company's marketing and selling expenses for the six months ended June
30, 1999 were $57,799 as compared to $899,417 for the same period last year. The
change is directly related to a change in sales mix and the early stages of the
Company's Internet business.
The Company's rent and utilities for the six months ended June 30, 1999
was $58,829 as compared to $56,236 for the same period last year. The change is
a result of renewed leases of the Company's premises during the current period
over the same period last year.
The Company's salaries for the six months ended June 30, 1999 increased to
$ 357,754 from $260,159 from the same period last year. The increase is
attributable to, additional employees and salary increases which includes
provisional increases in the Company's agreements with its executive officers.
However, the Company or the officers' have not elected to exercise their right
to the salary increase for the final year term.
The Company's general and administrative expenses for the six months ended
June 30, 1999 decreased to $141,393 from $179,829 from the same period last
year. The decrease in cost of sales is again, primarily attributable to a change
in sales mix and the early stages of the Company's Internet business.
.
The Company's other income and expenses for the six months ended June 30,
1999 was $67,097 of other expenses as compared to $45,049 for the same period
last year. The increase is directly related to the increase in interest expense
of $21,948.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
The Company's net loss for the six months ended June 30, 1999was $902,248
as compared to $1,706,239 for the same period last year. The improvement of
$800,991 is primarily attributable to a change in sales mix and the early stages
of the Company's Internet business.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999, the Company had negative working capital of $291,669 as
compared to $1,773,728 at December 31, 1998. The decrease in negative working
capital is attributable to the Company acquiring prepaid advertising credits in
the amount of $1 million, partially offset by payments of current liabilities
for on-going operations during the quarter ended June 30, 1999.
The Company's success and ongoing financial viability is contingent upon
the success of its new e-commerce model, interactive satellite distribution, the
licensing of "Big Brother" and the generation of related cash flows.
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 (discussed below). 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. The generation of the Company's current growth and the expansion of the
Company's current business involve significant financial risk and require
significant capital investment.
The Company hopes to raise up to an additional $5 million through private
placements of it's common stock to provide working capital for the Company's
planned business activities. On April 20, 1999, the Company entered into a
letter of intent with an unrelated investment banker whereby the investment
banker will be the exclusive agent for the private placement of up to $5,000,000
of restricted securities of the Company. The success, or lack thereof, of this
additional funding may have a material impact on the future of the Company.
Similarly, the lack of sufficient sales of the Company's products will have a
material impact on the future of the Company.
As of the date of this Report, the Company had no material commitments for
capital expenditures.
CASH FLOWS
Cash used by operating activities was $1,013,378 for the six months ended
June 30, 1999 as compared to $1,084,146 for the comparable period last year. The
change is primarily attributable to the change in sales mix and the early stages
of the Company's Internet business and decrease in payables over the same period
last year.
Cash used in investing activities was $216,954 for the six months ended
June 30, 1999 as compared to $6,330 for the comparable period last year. The
change is primarily attributable to the increase in deferred software
development costs for "Big Brother".
Cash provided by financing activities was $1,290,197 for the six months
ended June 30, 1999 as compared to $ 829,080 for the comparable period last
year. The change is primarily attributable to proceeds received from sale of
stock offset by payments on notes payable and partial conversion of note
principal into the Company's common shares.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
YEAR 2000
The Year 2000 issue could result in system failures or miscalculations
causing disruptions of operations, including, among others, a temporary
inability to process transactions, send invoices or engage in similar normal
business activities which may materially adversely affect the Company. To date,
the Company has experienced very few problems related to Year 2000 problems and
the Company does not believe that it has material exposure to the Year 2000
issue with respect to the Company's information systems as these systems
correctly defined the Year 2000.
The Company is currently conducting an analysis to determine the extent to
which the systems of third parties raise Year 2000 issues may affect the
Company. However, we cannot assure that the providers the Company uses to fill
orders for direct-to-consumer products, will, in fact be year 2000 compliant on
a timely basis. Generally, the Company is unable to predict the extent to which
the Year 2000 issue will effect it's suppliers, or the extent to which the
Company would be vulnerable to it's suppliers' failure to remediate any Year
2000 issues on a timely basis. The failure of a major supplier subject to the
Year 2000 issue to convert its systems on a timely basis or a conversion that is
incompatible with the Company's systems could have a material adverse effect on
the Company, which is not currently quantifiable. In addition, most of the
purchases from the Company's on-line web site are made with credit cards, and
the Company's operations may be materially adversely affected to the extent the
Company's customers are unable to use their credit cards due to Year 2000 issues
that are not rectified by credit card providers.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
PART II
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
During the second quarter of 1999, the Company sold 130,000 common shares
to accredited unrelated investors for proceeds of $200,000, issued 483,667
shares of stock pursuant to warrant conversions for proceeds of $102,257, and
issued 120,000 shares of stock pursuant to the exercise of certain stock options
for proceeds of $ 336,000.
In April of 1999, the Company issued 790,000 shares of common stock to an
unrelated consulting firm to provide investor communications and public
relations for a term of one year ending on March 21, 2000. The Company issued
80,000 shares of common stock to unrelated investors for services rendered.
Exemption from registration under the Securities Act of 1933, as amended
(the "Act"), is claimed for the sale of all the securities set forth above in
reliance upon the exemption afforded by Section 4(2) of the Act.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITIES HOLDERS
None.
ITEM 5. OTHER TRANSACTIONS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) 3. EXHIBITS.
NUMBER DESCRIPTION LOCATION
------ ----------------------- -----------------------------
27 Financial Data Schedule Filed herewith electronically
(b) REPORTS ON FORM 8-K.
No Reports on Form 8-K were filed during the Company's fiscal quarter
ended June 30, 1999.
[MEDIAX\10Q:10Q0699.doc]-8
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
Date: August 13, 1999 MEDIAX CORPORATION
By: /s/ Nancy Poertner, President
----------------------------------
Nancy Poertner, President
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following person on behalf of the Registrant
and in the capacities and on the dates indicated.
Signature Title Date
------------------- -------------------- ---------------
/s/ Nancy Poertner President, Secretary August 13, 1999
- ------------------------ and Director
Nancy Poertner
/s/ Rainer Poertner Director August 13, 1999
- ------------------------
Rainer Poertner
/s/ Matthew MacLaurin Executive V.P. and August 13, 1999
- ------------------------ Director
Matthew MacLaurin
/s/ Jacqueline Cabellon Controller August 13, 1999
------------------- (Principal Accounting
Jacqueline Cabellon Officer)
[MEDIAX\10Q:10Q0699.doc]-8
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 79,840
<SECURITIES> 00
<RECEIVABLES> 75,410
<ALLOWANCES> 00
<INVENTORY> 91,675
<CURRENT-ASSETS> 1,358,764
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00
00
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</TABLE>
