TASR= Tasers = stun guns! More from 10 K:"
Medi-Hut Co., Inc.
Condensed Interim Statements of Cash Flows
Nine Months Nine Months
Ended July 31, Ended July 31,
2001 2000
-------------- -------------
Net Cash Provided (Used) by Operating Activities (12,869) 353,644
Cash Flows from Investing Activities -
Investment in Joint Venture (1,000,000) -
Purchase of marketable securities (1,850,000) -
Purchase of other assets (400,000) (146,627)
Purchase of equipment (250,850) (1,808)
-------------- -------------
Net Cash (Used) by Investing Activities (3,500,850) (148,435)
Cash Flows from Financing Activities -
Exercise of stock warrants 1,512,500 -
Redemption of marketable securities 2,250,000 -
Issuance of common stock 1,995,000 34,793
-------------- -------------
Net Cash Provided by Financing Activities 5,757,500 34,793
Net Increase in Cash and Interest Bearing Deposits 2,243,781 240,002
Cash and Interest Bearing Deposits -
Beginning of Period 502,243 392,518
-------------- -------------
Cash and Interest Bearing Deposits -
End of Period $ 2,746,024 $ 632,520
============== =============
Schedule of Non-Cash Financing and Investing Activities
Notes Receivable of $3,993,750 were issued pertaining to the exercise of
common stock purchase warrants outstanding
See Notes to the Condensed Interim Financial Statements
**Unaudited**
<PAGE> 5
Medi-Hut Co., Inc.
Notes to the Condensed Interim Financial Statements
July 31, 2001
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed interim financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to item 310 of
Regulation S-B. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and nine
months ended July 31, 2001 and July 31, 2000 are not necessarily indicative of
the results that may be expected for the years ended October 31, 2001 and
October 31, 2000 respectively.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Organization
Medi-Hut Co., Inc. (the Company), is a company in the business of selling
wholesale medical supplies. The Company was incorporated on November 22, 1982
in the State of New Jersey. On January 28, 1998, the Company entered into an
Agreement and Plan of Reorganization (APR) with a public company Indwest, Inc.
(Indwest), a Utah company incorporated on August 20, 1981 (formerly known as
Gibraltor Energy, Gibraltor Group, Computermall of Philadelphia, Inc. and
Steering Control Systems, Inc.) Pursuant to the APR, Medi-Hut's shareholders
exchanged 100% of their common shares for 4,295,000 newly issued shares of
Indwest on March 3, 1998.
For accounting purposes, the acquisition has been treated as an
acquisition of Indwest by Medi-Hut and a recapitalization of Medi-Hut. The
historical financial statements prior to January 28, 1998 are those of
Medi-Hut. Pro-forma information is not presented since the combination is
considered a recapitalization. Subsequent to the exchange, Medi-Hut merged
with Indwest whereby Medi-Hut ceased to exist and Indwest, the surviving
corporation, changed its name to Medi-Hut Company, Inc. On February 2, 1998
Medi-Hut Company, Inc. changed its state of domicile from Utah to Delaware.
The surviving corporation's operations are entirely those of the former and
new Medi-Hut.
Accounts Receivable
No reserve for doubtful accounts has been established since management
believes that all accounts receivable are collectible in full.
**UNAUDITED**
<PAGE> 6
Medi-Hut Co., Inc.
Notes to the Condensed Interim Financial Statements
July 31, 2001
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
Deferred Charges
Deferred charges are comprised of costs incurred by the Company for
seeking small business loan financing. These charges will be amortized over
the loan period when and if such financing is obtained or expensed in full
should such financing not be obtained. No amortization expense has been
recognized during the three months ended July 31, 2001 and July 31, 2000.
Depreciation
Machinery and equipment are stated at cost. Depreciation is computed
using the straight-line method for financial reporting purposes, which
amounted to $31,257 and $144 for the three months ended July 31, 2001 and July
31, 2000 respectively. The estimated useful lives of the machinery and
equipment assets for financial statement purposes are five years. The
estimated useful lives of molds for financial statement purposes are three
years. For income tax purposes, recovery of capital costs for machinery and
equipment and molds are made using accelerated methods over the asset's class
life. Repairs and maintenance expenditures, which do not extend the useful
lives of the related assets are expensed as incurred.
Revenue Recognition
Revenue from product sales is recognized at the time of shipment provided
that the resulting receivable is deemed probable of collection.
Income Taxes
In accordance with the provisions of Financial Accounting Standards Board
Statement No. 109, "Accounting for Income Taxes" (SFAS No. 109"), deferred
taxes are recognized for depreciation differences between book and tax methods
and for operating losses that are available to offset future taxable income.
Valuation allowances are established when necessary to reduce deferred tax
assets to the amount expected to realize.
Earnings Per Common Share
Earnings per common share, in accordance with the provisions of Financial
Accounting Standards Board No. 128, "Earnings per Share", is computed by
dividing net income by the weighted average number of shares of common stock
outstanding during the period and the effect on the weighted average number of
shares of dilutive common stock equivalents (warrants) if exercised.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
**UNAUDITED**
<PAGE> 7
Medi-Hut Co., Inc.
Notes to the Condensed Interim Financial Statements
July 31, 2001
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
Securities Issued for Services
The Company accounts for common stock and common stock purchase warrants
issued for services by reference to the fair market value of the Company's
stock on the date of stock issuance or warrant grant in accordance with
Financial Accounting Standards Board Statement No. 123 "Accounting for
Stock-Based Compensation. (FASB 123)" Compensation/consultant expense is
recorded for the fair market value of the stock and warrants issued.
NOTE 3 - CONCENTRATIONS OF CREDIT AND BUSINESS RISK
The Company maintains cash balances in a financial institution. Accounts
at the institution are insured by the Federal Deposit Insurance Corporation up
to $ 100,000 per account, of which the Company's accounts may, at times,
exceed the federally insured limits.
The Company provides credit in the normal course of business to customers
located primarily in the northeastern portion of the U.S. The Company performs
ongoing credit evaluations of its customers.
NOTE 4 - LINE OF CREDIT
On January 31, 2001 the Company received a bank commitment on a $750,000
revolving line of credit under which the bank has agreed to make loans at %
above the prime interest rate. The Company's business assets secure the note.
As of July 31, 2001 and July 31, 2000 there were $ 0 outstanding on the line
of credit.
NOTE 5 - STOCKHOLDERS' EQUITY TRANSACTIONS
On October 1, 2000 the Company executed an agreement for public relations
services to be provided. The original terms of the agreement required cash
payments of $100,000 per month, totaling $1,200,000 and 600,000 warrants
entitling the holder to an exercise price of $5.00 per share. The
requirements of the agreement were amended to provide no cash payments and the
600,000 warrants to be adjusted to an exercise price of $2.50 per share and an
extension of the service trial period to August 1, 2001. The warrants have
full vesting rights upon issuance and an expiration date of October 1, 2001.
The warrants were exercised in full in May 2001 and a note receivable was
issued for $1,500,000.
On December 18, 2000, 100,000 warrants were exercised by a warrant holder
totaling $300,000 of proceeds to the Company and the issuance of 100,000
shares of common stock.
On January 5, 2001 the Company issued 4,000 shares of common stock valued
at $18,000 to an insurance company in exchange for a Directors and Officer's
liability policy.
**UNAUDITED** |
