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 quarterly period ended June 30, 1996
Commission File Number: 0-23780
MEDIAX CORPORATION
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(Exact name of small business issuer as specified in its charter)
Nevada 84-1107138
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(State of other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3960 Ince Boulevard, Second Floor, Culver City, California 90222
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(Address of principal executive offices including zip code)
(310) 815-8002
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(Issuer's telephone number)
ZEITGEIST WERKS, INC.
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(Former name, address or fiscal year, if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act 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 August 19, 1996, 13,312,100 shares of common stock, $.0001 par value per
share, were outstanding.
Transitional Small Business Disclosure Format (check one): Yes___ No X
MEDIAX CORPORATION
(A Development Stage Company)
CONSOLIDATED BALANCE SHEETS
(Unaudited)
For the Period Ended
June 30, December 31,
1996 1995
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ASSETS
Current Assets:
Cash $ 99,839 $ 231,254
Accounts Receivable 450 0
Prepaid Assets 1,298 0
Total Current Assets 101,587 $ 231,254
Fixed Assets:
Equipment, Furniture, Improvements 290,778 0
Depreciation & Amortization (60,041) 0
Total Furniture and Equipment 230,737 0
Other Assets:
Loan to officer 50,000 0
Goodwill Net of Amortization 152,852 0
Deposits 1,096 0
TOTAL ASSETS $ 536,272 $ 231,254
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 0 $ 19,601
Loans 83,575 299,996
Current Portion of Capital lease 11,615 0
Total Current Liabilities 94,190 319,597
Long Term Liabilities:
Capital Lease 8,098 0
Payable for Acquisition of MediaX 350,000 0
Total Liabilities 452,288 319,597
Stockholders' Equity:
Common Stock, $.0001 par value,
75,000,000 shares authorized,
13,158,100 and 210,229 shares issued 1,331 21
Additional paid-in capital 556,589 249,902
Retained Earnings (338,266) (338,266)
Current Period Net Income(Loss) (135,670) 0
Total Stockholders' Equity 83,984 (88,343)
Total Liabilities and Stockholders' Equity $ 536,272 $ 231,254
The accompanying notes are an integral part of this statement.
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MEDIAX CORPORATION
(A Development Stage Company)
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
For the For the
Six Months Ended Three Months Ended
6/30/96 6/30/95 6/30/96 6/30/95
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Income:
Contract Income $ 16 $ 0 $ 16 $ 0
Interest Income 0 0 0
Miscellaneous Income 1,000 0 0 0
Total Income 1,016 0 16 0
Cost of Goods Sold 6,280 0 6,280 0
Gross Profit (5,264) 0 (6,264) 0
Expenses:
Consulting Fees 30,016 9,000 9,600 4,500
Bad Debts 0 0 0 0
Depreciation/Amortization 1,639 0 1,222 0
Fees & Licenses 0 304 0 304
Legal & accounting 14,434 0 9,656 0
Office Expense 34,222 0 25,462 0
Other G & A 1,332 1,695 (1,251) 238
Rent 3,391 1,500 2,390 750
Travel & Entertainment 3,319 0 130 0
Other Exp. - Interest 8,519 0 8,049 0
Total Expenses 130,407 12,499 88,793 5,792
Net Income(Loss) (135,671) (12,499) (95,057) (5,792)
Weighted average
Number of shares 11,000,122 210,229 8,842,143 210,229
Loss per common share ($0.01) ($.06) ($0.03) ($0.03)
The accompanying notes are an integral part of this statement.
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MEDIAX CORPORATION
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
For the Six Months Ended
6/30/96 6/30/95
(Unaudited) (Unaudited)
Cash Flows from operations:
Net income(loss) $(127,670) $ (12,499)
Noncash items:
Bad Debts 0 0
Changes in Assets & Liabilities:
(Increase)decrease in A/R (450) 0
(Increase)decrease in Prepaid Assets (1,298) 0
(Increase)decrease in Equipment (13,676) 0
(Increase)decrease in Loans Receivable
Increase(decrease) in A/P (19,601) 8,521
(Incresae)decrease in Other Assets (51,096) 0
Increase(decrease) in Loans Payable 58,073 0
Increase(decrease) in Curr Lease 11,615 0
Cash from operating activities (144,103) (3,978)
Cash flow from investing:
(Increase)decrease Goodwill - MediaX (152,852) 0
(Increase)decrease in Equip. - MediaX (217,061) 0
(369,913) 0
Cash from financing activities:
LT debt - MediaX 350,000 0
Increase(decrease) in LT Lease-MediaX 8,098 0
Increase(decrease) in Loans-MediaX 24,502 0
Cash from financing activities 382,600 0
Net change in cash (131,416) (3,978)
CASH, BEGINNING 231,254 5,959
CASH, ENDING 99,838 1,981
The accompanying notes are an integral part of this statement.
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MEDIAX CORPORATION
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
June 30, 1996 (Unaudited)
Note A - Summary of Significant Accounting Policies
ORGANIZATION
MediaX Corporation (the "Company") was incorporated under the laws of the
State of Colorado on August 15, 1986 under the name Fata Morgana, Inc. On
September 15, 1988, the Company amended its articles of incorporation to
change its name to Edinburgh Capital, Inc.
During April, 1994 the Company effected a 1 for 300 reverse stock split
and on February 23, 1996 the Company effected a 3.13 for 1 forward split. All
financial information and share data in this Report give retroactive effect to
these two stock splits.
On February 23, 1996 the Company changed its name to Zeitgeist Werks,
Inc. On February 24, 1996, the Company acquired all of the issued and
outstanding shares of Zeitgeist Inc. in exchange for 12,500,000 shares of its
common stock.
On June 27, 1996 the Company acquired all of the issued and outstanding
common stock of MediaX in exchange for 2,037,500 shares of its common stock.
The Company also agreed to pay $350,000 in cash to the MediaX shareholders.
On the closing, Assisi Limited Partnership, one of the Company's principal
shareholders, surrendered for cancellation 2,037,500 of its shares of Common
Stock. On August 16, 1996, the Company changed its name to MediaX Corporation.
INCOME TAXES
The Company has recorded no income tax benefit because it has incurred
losses since its inception. Net operating losses can be carried forward for
fifteen years.
NET LOSS PER SHARE
The net loss per share of common stock is computed by dividing the net
loss by the weighted average number of shares outstanding during the period.
GOODWILL
The Company recognized Goodwill as the result of the acquisition of
MediaX. Goodwill will be amortized over a period of sixty months.
Note B - Preferred Stock
The Company is authorized to issue 10,000,000 shares of preferred stock
with a $.0001 par value. The preferred stock may be issued by the Board of
Directors in one or more series. The Board shall determine the distinguishing
features in each, including preferences, rights and restrictions, by
resolution upon the establishment of such series.
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ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS
The Company's financial condition improved with the conversion of its
$299,000 loan into 150,000 shares of common stock and the acquisition of
MediaX.
MediaX is a multimedia production studio. Based in Santa Cruz,
California, MediaX for the past three years has produced interactive
multimedia titles for MCA Entertainment and EMI/Capitol, and has created
works for Toshiba, Dow Jones, Apple Computer, New-Line Cinema, and I-Werks
Entertainment.
With the acquisition of MediaX, which was completed on June 27, 1996,
the Company retired 2,037,500 shares from its largest shareholder and then the
Company issued 2,037,500 shares to the shareholders of MediaX. The Company
has an obligation to pay a $350,000 to the shareholders of MediaX.
Additionally, the Company issued stock options and it has a contingent
obligation to pay up to an additional $200,000 based on the achievement of
certain income requirements in the future.
The Company is in the process of raising additional funds to pay for the
MeadiaX transaction and for its strategic growth. The outcome of these
efforts is critical to the Company's future and management is unable to
determine the likelihood of success of these efforts.
There are no meaningful comparisons which can be made between the
results for the six months ended June 30, 1996 and June 30, 1995 because there
were no business activities in either the Company or Zeitgeist, Inc. in the
six months ended June 30, 1995.
Net income for the six months ended June 30, 1996 compared to June 30,
1995 reflected an increased loss from ($5,792) to ($87,056). This increase
was due to the increased personnel, costs associated with implementing the
Company's business plan, and a four day period reflecting costs incurred
subsequent to the acquisition of MediaX.
At June 30, 1996, the Company had no material commitments for capital
expenditures.
PART II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
None.
Item 2. CHANGES IN SECURITIES
None.
Item 3. DEFAULTS UPON SENIOR SECURITIES
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
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Item 5. OTHER INFORMATION
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
A Form 8-K dated June 27, 1996 was filed which reported under Items
1, 2 and 7 the merger of MediaX, a California corporation, with Zeitgeist,
Inc., the Company's wholly-owned subsidiary.
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SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
MEDIAX CORPORATION
By:/s/ Nancy Poertner
Nancy Poertner, President and
Chief Financial Officer
Date: August 19, 1996