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-----BEGIN PRIVACY-ENHANCED MESSAGE-----1Proc-Type: 2001,MIC-CLEAR2Originator-Name: [email protected]3Originator-Key-Asymmetric:4MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen5TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB6MIC-Info: RSA-MD5,RSA,7TQpLeRjuAyCah2ITuav114Fr+pT9Y2dkNSeuOk4/+8MFcBUui/KNgSO+ZAMirEGg8UTJDuplQLkh2w6OC1KQ42A==910<SEC-DOCUMENT>0000351129-98-000006.txt : 1998050411<SEC-HEADER>0000351129-98-000006.hdr.sgml : 1998050412ACCESSION NUMBER: 0000351129-98-00000613CONFORMED SUBMISSION TYPE: 10-K14PUBLIC DOCUMENT COUNT: 415CONFORMED PERIOD OF REPORT: 1996063016FILED AS OF DATE: 1998050117SROS: NASD1819FILER:2021COMPANY DATA:22COMPANY CONFORMED NAME: CDX CORP23CENTRAL INDEX KEY: 000035112924STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]25IRS NUMBER: 84077118026STATE OF INCORPORATION: CO27FISCAL YEAR END: 09302829FILING VALUES:30FORM TYPE: 10-K31SEC ACT:32SEC FILE NUMBER: 000-0973533FILM NUMBER: 986073603435BUSINESS ADDRESS:36STREET 1: 75 MCNEIL WAY, NO. 20737STREET 2: NO 2738CITY: DEDHAM39STATE: MA40ZIP: 0202641BUSINESS PHONE: 781-320-05304243MAIL ADDRESS:44STREET 1: 75 MCNEIL WAY45STREET 2: NO 2746CITY: DEDHAM47STATE: MA48ZIP: 0202649</SEC-HEADER>50<DOCUMENT>51<TYPE>10-K52<SEQUENCE>153<TEXT>545556SECURITIES AND EXCHANGE COMMISSION57Washington, D.C. 205495859FORM 10-K60Annual Report Pursuant to Section 13 or 15(d)61of the Securities Exchange Act of 19346263[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF64THE SECURITIES EXCHANGE ACT OF 19346566For the fiscal year ended June 30, 19966768[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF69THE SECURITIES EXCHANGE ACT OF 1934707172For the transition period from ___________ to _____________737475CDX CORPORATION76(Exact name of Registrant as specified in its charter)7778Commission file number 0-97357980Colorado 84-077118081(State or other jurisdiction of (I.R.S. Employer82incorporation or organization Identification No.)8384852 Charles Street 0290486Providence, RI (Zip Code)87(Address of principal executive offices)8889Registrant's telephone number, including area code90(401)274-47009192Securities registered pursuant to Section 12(b) of the Act:9394Title of each class Name of each exchange on which registered95None None9697Securities registered pursuant to 12(g) of the Act:98Common Stock, Par Value $.0199(Title of class)100101Indicate by check mark whether the Registrant (1) has filed all reports102required to be filed by Section 13 or 15(d) of the Securities Exchange Act of1031934 during the preceding 12 months (or for such shorter period that the104Registrant was required to file such reports), and (2) has been subject to105such filing requirements for the past 90 days. Yes ___ No X.106107Indicate by check mark if disclosure of delinquent filers pursuant to Item108405 of Regulation S-K is not contained herein, and will not be contained, to109the best of registrant's knowledge, in definitive proxy or information110statements incorporated by reference in Part III of this Form 10-K or any111amendment to this Form 10-K. [ ]112113Since February of 1986, there have been no published prices of the114Registrant's stock. The total number of shares held by nonaffiliates of the115Registrant as of September 30, 1996 was 1,330,191.116117Indicate the number of shares outstanding of each of the Registrant's classes118of common stock, as of September 30, 19961191203,588,094121122DOCUMENTS INCORPORATED BY REFERENCE123124Document Part of 10-K into which incorporated125126None127128CDX CORPORATION1291996 Annual Report on Form 10-K130131Table of Contents Page #132133PART I134135ITEM 1 - Business 3136137A. General 3138B. Products And Services 3139C. Marketing And Customers 4140D. Product Development 4141E. Product Protection 5142F. Backlog 5143G. Competition 5144H. Employees 5145146ITEM 2 - PROPERTIES 5147148ITEM 3 - LEGAL PROCEEDINGS 5149150ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 6151152PART II153154ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED155SECURITY HOLDER MATTERS 6156157ITEM 6 - SELECTED FINANCIAL DATA 6158159ITEM 7 - MANAGEMENT DISCUSSIONS AND ANALYSES OF FINANCIAL160CONDITION AND RESULTS OF OPERATIONS 7161162ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 8163164ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON165ACCOUNTING AND FINANCIAL DISCLOSURES 8166167PART III168169ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 9170171ITEM 11 - EXECUTIVE COMPENSATION 10172173ITEM 12 - CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 12174175ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 13176177PART IV178179ITEM 14 - EXHIBITS, FINANCIAL SCHEDULES AND REPORTS ON FORM 8-K 13180181SIGNATURES 14182183<PAGE> 3184185PART I186187Item 1. BUSINESS188189A. General190191CDX Corporation is a Colorado corporation incorporated in 1978 with its192corporate offices headquartered in Providence, Rhode Island.193194The Business of the Company has consisted of the sale of computerized195pulmonary diagnostic equipment which is used in the medical profession to196test for indications of lung or congestive heart disease. Approximately 10,000197units have been sold.198199In December 1994 the Company acquired Compliance Systems, a manufacturer of200infection control products which provide emergency personnel with protection201during trauma response situations and assist compliance with certain OSHA202mandates. In FY96 the Company also introduced a new version of its Instant203Response Mask (IRM) with improved features designed to protect personnel204involved in administering emergency cardio-resuscitation techniques to205compliment the Compliance Systems product line.206207CDX also generates revenue from the sale of consumable and accessory items208associated with its diagnostic equipment. In addition, the Company is209developing an upgrade for its spirometers to be marketed to existing210customers. The Company has an updated version of its Model 110S spirometer211currently in development which incorporates the latest technology. This212product will be marketed to physician offices, hospitals and industrial sites213and is expected to be brought to market in 1997.214215B. Products And Services216217Approximately 17% of the Company's gross revenues in its most recent fiscal218year was attributable to the sale of its testing machines, 59% of gross219revenues was attributable to sales of consumable and accessory items and 9%220of gross revenues was attributable to repairs and maintenance. Bio-hazard221control products and the IRM comprised 13% of sales.222223The Company's objective is to increase gross revenues with the introduction224of the upgrade and upgraded version of the current spirometer and to225aggressively pursue the export markets. A new version of the Instant Response226Mask was released in December 1995. Although initially well received, this227product has not lived up to the Company's expectations and marketing efforts228and expenditures in connection with it have been greatly reduced.229230The types of products which the Company currently markets are described below.2312321. Instant Response Mask233Provides protection against the transmission of infectious234pathogens during the administration of emergency resuscitation235techniques such as CPR.2362372. 110S Spirometer238Computerized pulmonary diagnostic equipment which is used in239the medical profession to test for indications of lung or240congestive heart disease.241242<PAGE> 42432443. 110M Spirometer245A metric version of the 110S Spirometer specifically designed246for the international markets.2472484. 110MAX Spirometer249An upscale version of the 110S Spirometer with additional250features.2512525. Biosponse253A portable bio-hazard spill kit for bloodborne pathogens which254complies with OSHA regulation.2552566. Biopail257A complete clean up and personal protection for first reponders258against blood pathogens contained in a refillable two gallon259pail meeting OSHA Regulations.260261Additionally, the Company provides for sale of disposable and accessory items262associated with its testing equipment as well as maintenance and service263agreements; it also offers disposable items for the infection control markets.264265C. Marketing And Customers266267The Company's principal customers have historically been primary care268physicians, group practices, clinic, and medical centers. Portable spirometers269are typically used by internists, family physicians, and general practitioners270in their offices to conduct preliminary diagnostic tests of a patients271pulmonary function. Spirometers are also used extensively in industry to272provide screening diagnosis, establish baselines and monitor pulmonary273function in the workplace. The Company's customer base includes274pulmonologists, allergists, and cardiologists who require the speed,275accuracy, and flexibility of hospital-based systems in a small, light-weight,276portable system.277278During the year ended June 30, 1996, the Company did not have any one279customer responsible for 10% or more of sales activity or revenues.280281The Company currently markets its products directly to retail customers from282its Rhode Island office and through medical equipment dealers and283distributors, supported through a network of factory trained manufacturer's284representatives. The Company supports this sales network through direct mail,285advertising in clinical and trade publications, and participation in national286and regional trade shows.287288Relative to the IRM mask, the Company held exclusive worldwide distribution289rights under terms of an agreement with Valley Forge Scientific. During FYE2906.30.96 the Company relinquished its exclusive rights and has undertaken to291co-distribute the IRM with Valley Forge in return for a 10% royalty on all292IRM sales by Valley Forge.293294D. Product Development295296The Company has undertaken a product development program with the ultimate297objective of the following:298299The development of products specifically targeted at the equipment needs of300the physician's office. During the year ended June 30, 1996, the Company301spent $8,657 on research and development.302303<PAGE> 5304305Further, in March 1995 the Company acquired all rights to certain technology306relating to the firefighting and industrial markets from Global Environmental307Technologies, Inc. The Company had planned to develop prototype units and308was involved in strategic discussions with several interested parties which309have established presence in these markets. The Company has abandoned310pursuit of this project.311312E. Products Protection313314The company holds a patent issued by the U.S. Patent office in 1981 for the315overall structure and function of its remote pulmonary function tester known316as the CDX 110. The Company's current products have protection under certain317claims of this patent. The patent does not apply outside the United States.318319The Company holds a federal trademark "CDX" which is used on its products.320The Company uses additional trademarks related to the IRM mask.321322The Company's developmental efforts on the IRM mask has resulted in a U.S.323patent application. As per the terms of an agreement between the Company and324Valley Forge Scientific this patent has been assigned to Valley Forge. Under325the further terms of this agreement, the Company received the exclusive326worldwide distribution rights for the IRM mask.327328F. Backlog329330The Company does not currently have any backlog of sales orders or delays of331shipments due to lack of parts or supplies.332333G. Competition334335The market for the Company's products is characterized by rapid advancements336in technology and by intense competition among a number of manufacturers and337distributors. The Company believes that it competes favorably in the market;338however, no assurance can be given that the Company will have the financial339resources, marketing, distribution, service or support capabilities, depth of340key personnel or technological expertise to compete successfully in the341future.342343H. Employees344345As of September 30, 1996, the Company employed two full-time employees.346347Item 2. PROPERTIES348349The Company's administrative offices and manufacturing facilities consist350of approximately 3,500 square feet of office, manufacturing and storage space351which it leases from a related party. The Company believes that its rental352costs are equal to or less than those which would be charged for comparable353space on month to month basis by a third party. The facilities have been354rented on a month to month basis since March 1, 1995. Rental space is355available in the area, and the Company expects to be able to continue to356obtain a lease for adequate space at costs comparable to its current rent.357358Item 3. LEGAL PROCEEDINGS359360There are no legal proceedings pending against the Company.361362<PAGE> 6363364Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS365366The corporation did not submit any matter to a vote of security holders367during the year ended June 30,1996.368369PART II370371Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND372RELATED SECURITY HOLDERS MATTERS373374There is no established public trading market for the Corporation's375common stock. The stock is traded over-the-counter in privately negotiated376transactions between market makers and brokers. Prices are published in the377pink sheets issued by the National Quotation Bureau, but sales are not378systematically reported by market makers and brokers.379380Holders381382Based upon the number of record holders, the approximate number of383shareholders of the common stock of the Corporation as of September 30, 1996384was 809.385386Dividends387388No dividends have been declared during the past fiscal years with389respect to common stock.390391Item 6. SELECTED FINANCIAL DATA392393<TABLE>394<S> <C> <C> <C> <C> <C>3951996 1995 1994 1993 1992396397Net Sales &398Operating399Revenues $394,043 $445,285 $514,825 $568,925 $743,310400401Profit (Loss) (206,413) (75,028) (259,143) (171,709) (419,823)402403Profit (Loss)404per Common Share (.057) (.022) (.076) (.051) (.124)405406Total Assets 184,081 303, 838 248,727 288,749 400,620407408Long Term409Obligations 25,000 25,000 0 0 0410411Cash Dividend412Declared413per Share 0.00 0.00 0.00 0.00 0.00414415Weighted average416number of417Common Shares418outstanding 3,587,927 3,587,927 3,397,927 3,397,927 3,397,927419</TABLE>420421<PAGE> 7422423MARKET INFORMATION424425CDX Corporation's common stock is traded over-the-counter in privately426negotiated transactions between makers and brokers.427428<TABLE>429<CAPTION>430431Price Range (closing bid) For fiscal year ending June 30:4324331996 1995 1994434<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>435436437Bid Prices Asked Prices Bid Prices Asked Prices Bid Prices Asked Prices438439Quarter High Low High Low High Low High Low High Low High Low4404411st .1562 .125 .1875 .1875 .1875 .1875 .3125 .3125 .1875 .15625 .25 .18754422nd .125 .125 .1875 .1875 .15625 .15625 .25 .25 .1875 .15625 .25 .18754433rd .125 .125 .1875 .1875 .15625 .15625 .25 .25 .25 .1875 .25 .18754444th .125 .125 .1875 .175 .15625 .125 .1875 .1875 .1875 .1875 .3125 .3125445446</TABLE>447448These market quotations are from the National Daily Quotation Service. They449reflect prices between dealers without retail mark up, mark down or450commission. They do not represent actual transactions. No dividends have451been declared during the past two fiscal years with respect to common stock.452453Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND454RESULTS OF OPERATIONS455456Results of Operations457458Net Sales and Operating Revenues for FY 96 decreased by $51,242459which is down approximately 12% from the previous fiscal year. This compares460with a decrease of $69,500, or approximately 14%, in similar figures for FY 95461to FY 94. Cost of Sales increased by $14,539 for FY 96 compared to FY 95,462with the Company sustaining an Operating Loss of $195,928. During the463previous fiscal year, costs and expenses decreased by $254,460 from those of464FY 94 resulting in an Operating Loss of $66,193. FY 94 also showed an465Operating Loss of $251,113. Operating Losses as a percentage of Net Sales466were 50%, 16% and 49% for FY 96, FY 95 and FY 94, respectively. Management467plans to renew its efforts to reduce expenses and bring them into line with468margins as was successfully implemented in FY95 resulting in reduction of469$254,460 in Operating Costs and Expenses compared with FY 94.470471Cost of Goods Sold as a percent of Net Sales increased from 52.3%472(232,924) in FY 95 to 62.7% ($247,463) in FY 96 due primarily to increased473cost of raw materials and greater use of contract services. Similar costs474for FY 94 to FY 95 decreased from 62.3% ($315,395) to 52.3% ($232,924) of475Revenues.476477Selling and Administrative Expenses increased overall by $63,954, to478$342,508 for FY 96 from $278,554 for FY 95. As a percentage of Net Sales479these figures were 86.9% and 62.6% respectively which represents a 24.5%480increase in such expenses between the two years. Comparable expenses for FY48194 were 87.5% ($450,593). The increase in percentages of expenses shown in482FY 96 and FY 95 reflects an increase in certain marginal advertising and the483assumption of a major portion of marketing costs related to the marketing of484the new IRM product.485486Interest expense for FY 96 decreased $1,358 to $10,430 for the487entire year. In FY 95, interest expense increased $2,258. Interest income488decreased by $248 in FY 96 from the prior year due to reduced cash levels489during FY 96. FY 95 interest income of $343 represented a $343 increase from490FY 94.491492<PAGE> 8493494Inflation has had a minimum impact upon the Revenues and Costs of495the Company.496497Liquidity And Capital Resources498499In fiscal year 1996, the Company's liquidity decreased by $150,440.500This compares with a decrease of $35,773 for FY 95. In FY95 this was due to501favorable working capital changes related to collections on accounts502receivable and increases in inventory which were offset by operating losses503and increases in accounts payable in connection with marketing efforts for504the IRM mask and increased borrowing from an officer. In FY96 the decrease in505liquidity was the result of decreases in inventories, prepaid expenses and506certain capitalized development costs offset by operating losses and increases507in accounts payable, accrued expenses and short term borrowings from an508officer.509510The Company expects that its current working capital position is511sufficient to continue to meet operating requirements during the coming512fiscal year and that it has sufficient reserves to meet some unforeseen513contingencies given a continued willingness on the part of several of its514officers to fund deficits with loans.515516Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA517518See Item 14 of this report.519520Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND521FINANCIAL DISCLOSURE522523None.524525<PAGE> 9526527PART III528529Item 10. DIRECTORS AND EXECUTIVE OFFICERS530531The current directors and executive officers of the Corporation, their532ages, their positions held in the Corporation and the term during which each533served in such position are as follows:534535DIRECTORS536537538Year First Elected539Name and All Positions or Nominated to540Held With the Corporation Age Become a Director541542543Harold I. Schein 61 1985544Chairman of the Board,545Treasurer and Director546547548Philip D. Schein 33 1989549President, Secretary550and Director551552Officers and directors are elected on an annual basis. The present term553of office for each director will expire at the next annual meeting of the554Company's stockholders at such time as his successor is duly elected.555556Officers serve at the discretion of the Board of Directors.557558559EXECUTIVE OFFICERS560561Name and All Positions Year First Term of562Currently Held Elected to Office563With the Corporation Age This Office Expiring564565Harold I. Schein (2) 61566Chairman of the Board, 1989 (1)567Chief Executive Officer, 1989 (1)568Treasurer, 1989 (1)569Director 1985 (1)570571Philip D. Schein (2) 33572President, 1992 (1)573Secretary, 1989 (1)574Director 1989 (1)575576(1) The executive officers serve at the pleasure of the board of directors577and do not have fixed terms.578579<PAGE> 10580581(2) Philip D. Schein is the son of Harold I. Schein582583HAROLD I. SCHEIN, 61, serves as Chairman of the Board, Chief Executive584Officer, Treasurer and a Director. Mr. Schein, since January 1990, has been585President of Richmond Square Capital Corporation, a Small Business Investment586corporation which is licensed by the SBA. Prior to 1990, Mr. Schein served587as chairman and chief executive officer of William Bloom & Son, Inc, a588manufacturer of store fixtures. From March 1989 to September 1992, Mr. Schein589also served as chairman of Piezo Electric Products, Inc. of Metuchen, New590Jersey, a publicly owned company. He is also a developer of commercial real591estate. Mr. Schein became chairman of the board of directors and treasurer592of the Corporation in March 1989.593594PHILIP D. SCHEIN, 33, serves as President, Secretary and a Director. Mr.595Schein became secretary of the corporation in March 1989 and assumed the596office of president in October 1992. Prior to this, Mr. Schein held the597position of Executive Vice President of William Bloom & Son, a manufacturer598of custom store fixtures, where he was in charge of sales and manufacturing.599He is a 1985 graduate of Boston University.600601Item 11. EXECUTIVE COMPENSATION602603No executive officer received in excess of $100,000.604605No executive officer of the Corporation received other compensation not606reported in the above cash compensation table in excess of $25,000 or 10% of607the compensation reported in the above cash compensation table.608609Directors who are not regular, full-time employees may be compensated610for service on the board of directors at the rate of $1,500 per director per611quarter, i.e., $6,000 annually. In order to qualify for quarterly612compensation, a director must attend the majority of meetings held within the613quarter. No such payments have been made since 1989.614615SUMMARY COMPENSATION TABLE616617Annual Compensation618619Long Term620621Compensation622Awards623624Securities625Name & Principal Fiscal Other Annual Underlying626Position Year Salary Compensation(1) Option/SARS(#)627________________ ______ _______ ____________ ______________628629Philip D. Schein 1996 $65,000 5,000630President & CEO 1995 65,000 15,0006311994 65,000 0632633Harold I. Schein 1996 $ 0 17,500634Chairman & 1995 0 0635Treasurer 1994 0 5,000636637(1) Certain perquisites provided to each of the named executive officers638totaled less than 10 percent of each officer's total salary and639Stock Option Grants.640641<PAGE> 11642643OPTION/SAR GRANTS TABLE644<TABLE>645<CAPTION>646647Option/SAR Grants in Last Fiscal Year648649Individual Grants650651<S> <C> <C> <C> <C> <C>652Percent of total653options/SARs654granted to Exercise or655Options/SARs employees in base price Grant date656Name Granted(#) fiscal year ($/sh) Expiration Date Value(1)657________________ ____________ ________________ ___________ _______________ ___________658659Philip D. Schein 5,000 22.2 $0.25 10/98 $0660661Harold I. Schein 17,500 77.8 0.25 04/98 0662</TABLE>663664(1) Market value of underlying securities at grant date discounted by665two-thirds to reflect restrictive provisions, minus exercise or base price.666667<TABLE>668<CAPTION>669670AGGREGATED OPTION EXERCISES IN 1996671AND672OPTION/SAR VALUES673674<S> <C> <C>675Number of unexercised Value of unexercised in-the-money676options/SARs at fiscal year-end(#) options/SARs at fiscal year end($)677Name Exercisable/unexercisable Exercisable/unexercisable678_________________ __________________________________ __________________________________679680Philip D. Schein 253,333/0 $6,000/$0681682Harold I. Schein 602,500/0 $9,000/$0683684</TABLE>685686(1) Market value of underlying securities at FYE 6.30.96 discounted by687two-thirds to reflect restrictive provisions, minus exercise or base price.688689Stock Option Plan690691In November, 1987, the Shareholders of the Corporation approved an692incentive stock option plan which provides that options may be granted to693officers and employees, with a maximum aggregate number of 150,000 shares694issuable under the plan. Shares underlying granted options are exercisable69525% on the date of grant and 25% each year thereafter on a cumulative basis.696Unexercised options lapse ten years after the date of grant or expire within69790 days of termination of employment. Exercise price is fair market value of698a share of common stock at date of grant. The plan has a term of ten years.699700In November 1987, the Directors of the Corporation approved a701Non-Qualified Stock Option Plan for employees, consultants and directors.702The Corporation has reserved 60,000 unregistered shares of its common stock703for use in this plan. During 1993, the Board of Directors reserved another7041,440,000 unregistered shares of its common stock for use in this plan. Each705of the four outside directors were granted options for 15,000 shares at $.10706per share exercisable during their continuation as an employee, director or707advisory member of, or consultant to the Company, and for the three year708period thereafter. In addition, during 1993, the Company granted one of its709710<PAGE> 12711712directors options for 250,000 shares at $.10 per share and granted one of its713consultants options for 77,800 shares at $.05 per share.714715A summary of the plans at June 30, 1996 is as follows:716717TOTAL SHARES SHARES AT OPTION OPTION718RESERVED OUTSTANDING PRICE719____________ ________________ _______7207217221987 Incentive Stock 150,000 0 n/a723Option Plan7247251987 Non-Qualified726Stock Option Plan 1,500,000 310,000 $.1072777,800 $.05728100,000 $.2572915,000 $.2573022,500 $.25731732In December 1992, the Company issued 600,000 warrants for its common733stock to certain of its officers and consultants in return for services. The734warrants are exercisable at $.02 per share with an expiration date of December73531, 1998. Also, in February 1995, the Company issued 75,000 warrants for736its common stock to an investor in connection with a loan. The warrants are737divided into three equal classes with exercise prices of $0.25, $0.375 and738$0.50 respectively with all classes expiring in February 1998.739740741Item 12. CERTAIN BENEFICIAL OWNERS AND MANAGEMENT742743SECURITY OWNERSHIP OF CERTAIN BENEFICIAL744OWNERS AND MANAGEMENT745746The following table sets forth information as to persons other than management747(see the following table) who are known to management to beneficially own748more than 5% of the outstanding voting stock as of June 30, 1996.749750Title Name and Address Amount and Nature of Percent of751of Class of Beneficial Owner Beneficial Ownership Class752________ ___________________ ____________________ __________753754Common Mendel S. Kaliff 247,223 Direct 5.6%755Stock 70 N.E. Loop 410756No. 450757San Antonio, TX 78216758759The following table sets forth the security ownership of all directors and760executive officers of the corporation as of June 30, 1995.761762Title Name of Amount and Nature of Percent of763of Class Beneficial Owner Beneficial Ownership of Class Position764________ ________________ ____________________ __________ ________765766Common Harold I. Schein 2,616,737 (1) 59.6% Treasurer,767Stock Director, and768Chairman of769the Board770771<PAGE> 13772773Common Philip D. Schein 426,000 (2) 9.7% President,774Stock Secretary,775Director776777Common Directors and 3,042,737 69.3%778Stock Officers as a779Group (2 persons)780____________________________781782(1) Shares subject to sole investment and voting power. Includes options783and warrants granted by the corporation to purchase 585,000 shares, as to784which option shares the optionee/warrantholder disclaims beneficial ownership.785786(2) Shares subject to sole investment and voting power. Includes options787and warrants granted by the corporation to purchase 215,000 shares, as to788which option shares the optionee/warrantholder disclaims beneficial ownership.789790Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS791792The Company entered into a lease agreement on March 26, 1990 with a793related party to rent its facilities in Providence, Rhode Island. Base794monthly rental payments were modified to $2,500 beginning October 1995 and the795lease term is five years, expiring on February 28, 1995. In May of 1996 the796Company and related party modified the terms of the lease to month to month797rental payments of $1,500. The Company subleases a part of this space to an798unrelated party for $500 per month. The Company believes this to be at or799below the rent for comparable space.800801PART IV802803Item 14. EXHIBITS, FINANCIAL SCHEDULES AND REPORTS ON FORM 8-K804805(a) The following documents are filed as part of this report:8068071. Financial Statements:808809Opinions of independent public accountants dated810January 10, 1997 on the financial statements as follows:811812Balance Sheets, June 30, 1996 and 1995.813814Statements of Earnings for the years ended June 30, 1996,8151995 and 1994.816817Statements of Cash Flows for the years ended June 30, 1996,8181995 and 1994.819820<PAGE> 14821822Statements of Changes in Stockholders' Equity for the years823ended June 30, 1996, 1995 and 1994.8248252. Financial Statement Schedules:826All schedules for which provision is made in the applicable827regulations of the Securities and Exchange Commission have828been omitted because they are not required if the829information is shown in the financial statements and notes830thereto.831832(b) Reports on form 8-K833No reports on Form 8-K were filed.834835(c) Exhibits836837See the Index of Exhibits immediately preceding the exhibits838attached to this report. The exhibits are incorporated herein839by this reference.840841SIGNATURES842843Pursuant to the requirements of Section 13 or 15(d) of the Securities and844Exchange Act of 1934, the Registrant has duly caused this report to be signed845on its behalf by the undersigned, thereunto duly authorized.846847CDX CORPORATION848(Registrant)849850/s/Philip D.. Schein851852By: __________________853Philip D. Schein854President855856Dated: July 22, 1997857858Pursuant to the requirements of the Securities Exchange Act of 1934,859this report has been signed by the following persons on behalf of the860Registrant and in the capacities and on the dates indicated.861862Signature Title Date863864/s/Harold I. Schein865866_______________________ Chairman of the Board, July 22, 1997867Harold I. Schein Treasurer and Director868869870/s/Philip D. Schein871872_______________________ President, Secretary and July 22, 1997873Philip D. Schein Director874875<PAGE> 15876877INDEX TO EXHIBITS878879(a) Exhibits:880881The following documents are filed herewith or have been included as882exhibits to previous filings with the Commission and are incorporated883herein by this reference:884885Exhibit No. Document886887* 3.1 Restated Articles of Incorporation dated888July 3, 1985889(incorporated by reference to the exhibits890and Registrant's report filed on Form 10-K891dated September 25, 1985)892893* 3.2 Articles of Amendment dated December 4, 1987894to the Restated Articles of Incorporation895(incorporated by reference to the exhibits896to Registrant's report filed on Form 10-K897dated September 15, 1989)898899* 3.3 Bylaws dated July 5, 1985900(incorporated by reference to the exhibits901to Registrant's report filed on Form 10-K902dated September 15, 1989)903904x 23.1 Consent of Counsel, Mark T. Thatcher, P.C.905906x 23.2 Consent of Cayer, Prescott, Clune & Chatellier,907LLP, Independent Certified Public Accountants908909x 27.0 Financial Data Schedule910______________911912* Incorporated by reference from the issuer's Annual Report Pursuant913to Section 13 or 15(d) of the Securities Exchange Act of 1934914915x Filed herewith916917<PAGE>918919CDX CORPORATION920921FINANCIAL STATEMENTS922YEARS ENDED923JUNE 30, 1996, 1995, and 1994924925<PAGE>926927REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS928929To the Stockholders and Board of Directors930CDX Corporation931932We have audited the balance sheets of CDX Corporation as of June 30, 1996 and9331995, and the related statements of operations, stockholders' equity and cash934flows for the years ended June 30, 1996, 1995, and 1994. These financial935statements are the responsibility of the Company's management. Our936responsibility is to express an opinion on these financial statements based937on our audits.938939We conducted our audits in accordance with generally accepted auditing940standards. Those standards require that we plan and perform the audits to941obtain reasonable assurance about whether the financial statements are free of942material misstatement. An audit includes examining, on a test basis, evidence943supporting the amounts and disclosures in the financial statements. An audit944also includes assessing the accounting principles used and significant945estimates made by management, as well as evaluating the overall financial946statement presentation. We believe that our audits provide a reasonable947basis for our opinion.948949In our opinion, the financial statements referred to above present fairly, in950all material respects, the financial position of CDX Corporation as of June95130, 1996 and 1995, and the results of its operations and its cash flows for952the years ended June 30, 1996, 1995, and 1994 in conformity with generally953accepted accounting principles.954955The accompanying financial statements have been prepared assuming that the956Company will continue as a going concern. As discussed in Note 13 to the957financial statements, the Company has suffered recurring losses from958operations and has a net capital deficiency, which raises substantial doubt959about its ability to continue as a going concern. Management's plans960regarding those matters are also described in Note 13. The financial961statements do not include any adjustments that might result from this962uncertainty.963964965January 10, 1997 /s/ Cayer, Prescott, Clune & Chatellier, LLP966967<PAGE>968969CDX CORPORATION970971BALANCE SHEETS972JUNE 30, 1996 and 1995973974ASSETS9759761996 1995977___________ __________978Current assets:979Cash $ 69 $ 36,142980Accounts receivable - trade (net of allowance981for doubtful accounts of $1,560982in 1996 and $2,500 in 1995) 53,177 56,143983Inventory 73,587 109,959984Prepaid expenses and other 6,497 14,630985Total current assets 133,330 216,874986987Property and equipment -988net of accumulated depreciation 22,806 26,098989990Other assets:991Invention rights and deferred product992development costs (less accumulated993amortization of $432,298 in 1996 and994$416,553 in 1995) 27,945 60,866995996TOTAL ASSETS $ 184,081 $ 303,838997998999LIABILITIES AND STOCKHOLDERS' EQUITY10001001Current liabilities:1002Accounts payable - trade $ 182,659 $ 171,4281003Accounts payable - shareholder 243,544 202,8311004Accrued interest payable 31,302 20,9511005Accrued expenses 33,523 28,9221006Total current liabilities 491,028 424,13210071008Other liabilities:1009Notes payable - officers 119,859 100,1001010Notes payable 55,000 55,0001011Total other liabilities 174,859 155,10010121013Stockholders' equity:1014Common stock, $.01 par value; 10,000,0001015shares authorized, 3,588,093 and 3,588,0931016shares issued at June 30, 1996 and 1995 35,881 35,8811017Preferred stock, $1.00 par value; 5,000,0001018shares authorized, none issued and outstanding10191020Capital surplus 4,771,798 4,771,7981021Deficit (5,289,485) (5,083,073)1022Less treasury stock; 166 shares,1023no assigned value ___________ ___________1024Total stockholders' equity (481,806) (275,394)10251026TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 184,081 $ 303,83810271028SEE NOTES TO FINANCIAL STATEMENTS.10291030<PAGE>10311032CDX CORPORATION10331034STATEMENTS OF OPERATIONS1035YEARS ENDED June 30, 1996, 1995, and 1994103610371996 1995 19941038___________ ___________ ___________1039Revenues:1040Net sales and other revenues $ 394,043 $ 445,285 $ 514,8251041Operating costs and expenses:1042Cost of sales 235,441 232,924 315,3951043Selling & administrative expenses 354,430 278,554 450,5431044Total operating1045costs and expenses 589,971 511,478 765,93810461047Operating loss (195,928) (66,193) (251,113)10481049Other income (expense):1050Interest expense (10,430) (11,788) (9,530)1051Interest income 95 3431052Loss on investment (150) 2,610 1,5001053Net other income (10,485) (8,835) (8,030)10541055Net loss $ (206,412) $(75,028) $(259,143)10561057Net loss per common share $ (.057) $ (.022) $ (.076)10581059Weighted-average number of1060common shares outstanding 3,587,927 3,472,094 3,397,92710611062SEE NOTES TO FINANCIAL STATEMENTS.10631064<PAGE>10651066CDX CORPORATION10671068STATEMENTS OF CASH FLOWS1069YEARS ENDED June 30, 1996,10701995, and 19941071107210731996 1995 19941074___________ ___________ ___________10751076Cash was provided by (used for):1077Operating activities:1078Net loss $ (206,413) $ (75,028) $ (259,143)1079Items in net loss not1080affecting cash:1081Depreciation and amortization 20,797 24,596 26,8361082Unrealized loss on investment1083Increase (decrease) in cash from1084changes in assets and liabilities:1085Accounts receivable 2,966 10,221 (13,283)1086Inventory 36,372 (3,387) 31,7731087Prepaid expenses and other 8,134 (8,257) 1,1091088Other assets 17,176 (39,757) (11,510)1089Accounts payable - trade 11,231 3,007 (64,655)1090Accounts payable - shareholder 40,713 53,325 (76,518)1091Other current liabilities 14,952 14,889 14,3651092Total cash used for operations (54,072) (23,001) (70,180)1093__________ ___________ ___________10941095Investing activities:1096Proceeds from sale of equipment 2,610 1,5001097Purchase of property and equipment (1,760) (2,385)1098Total cash provided by1099(used for) investing activities (1,760) 225 1,50011001101Financing activities:1102Cash overdraft (83) 831103Issuance of capital stock 1,9011104Additional paid-in capital 45,6001105Proceeds from notes payable -1106officers 22,500 15,000 5,0001107Proceeds from notes payable 39,009 58,5001108Payments on notes payable (2,741) (42,509)1109Payments on leases payable1110Total cash provided by (used1111for) financing activities 19,759 58,918 63,583111211131114Increase (decrease) in cash1115during the year (36,073) 36,142 (5,097)11161117Cash balance, beginning of the year 36,142 5,09711181119Cash balance, end of the year $ 69 $ 36,142 $ 011201121Supplemental disclosures of1122cash flow information:1123Cash paid during the year1124for interest $ 79 $ 2,980 $ 011251126SEE NOTES TO FINANCIAL STATEMENTS11271128<PAGE>11291130CDX CORPORATION11311132NOTES TO FINANCIAL STATEMENTS1133YEARS ENDED JUNE 30, 1996, 1995 and 19941134113511361. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES11371138Background11391140CDX Corporation (the Company) was incorporated in June, 1978 to1141engage in the manufacture and sale of computerized pulmonary diagnostic1142equipment used in the medical profession. This equipment tests for1143indications of lung or congestive heart disease. The Company also1144manufactures and sells other medical and sanitization equipment.11451146Invention Rights11471148In 1978, the Company's two founding shareholders granted to the1149Company partial invention rights relating to its pulmonary function screening1150devices in exchange for 185,625 shares of common stock. In 1980, they1151granted full rights to the device in exchange for an additional 75,000 shares1152of common stock at a price of $1.332 per share. For financial accounting1153purposes, the invention rights have been recorded at an estimated fair value1154of $350,532 or $1.332 per share for the 260,625 shares of common stock issued,1155and $3,380 for legal fees pertaining to the patent application. Such value is1156considered appropriate based upon the substantial amount of cash invested by1157shareholders at $1.332 per share, other than those who were issued common1158stock in exchange for invention rights. Until fiscal year 1987, amortization1159had been provided on a straight-line basis over an estimated useful life of1160nineteen years. In 1987, Management reviewed the economic benefit of the1161invention rights and accelerated the remaining amortization over a five year1162period in order to represent fairly the remaining economic life of the1163invention rights. The entire effect of this change in estimate is reflected1164in the year ended June 30, 1987 and subsequent years.11651166In July of 1989, the Company entered into a contract for the1167development of technological enhancements to its computerized pulmonary1168equipment. For financial accounting purposes, these enhancements have been1169recorded at cost, in accordance with Statement of Financial Accounting1170Standards No. 86. Amortization is provided on a straight-line basis over the1171estimated useful life of five years. Amortization began in January of 19911172with the introduction of the new Spiro-Max.11731174Revenue Recognition11751176Revenue is recognized upon the invoicing and shipping of equipment.117711781179Accounts Receivable11801181An allowance for doubtful accounts receivable is provided equal to1182the estimated collection losses that will be incurred in collection of all1183receivables. Estimated losses are based on historical collection experience1184coupled with review of the current status of the existing receivables and1185amounted to $1,560 and $2,500 at June 30, 1996 and 1995, respectively. The1186Company grants credit to customers who are located throughout the United1187States.11881189(CONTINUED)11901191<PAGE>11921193CDX CORPORATION11941195NOTES TO FINANCIAL STATEMENTS1196YEARS ENDED JUNE 30, 1996, 1995, and 1994119711981. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)11991200Inventories12011202Inventories are valued at the lower of cost or market using the1203first-in, first-out method. Work in process and finished goods are valued at1204production cost represented by materials, labor and overhead.120512061207Property and Equipment12081209Property and equipment are recorded at cost. Depreciation and1210amortization are recorded using the straight line and double declining1211balance methods over the estimated useful lives of the assets.12121213Income Taxes12141215Effective July 1, 1993, the Company adopted Statement of Financial1216Accounting No. 109, "Accounting for Income Taxes" (FAS 109). Under the1217provisions of FAS 109, an entity recognizes deferred tax assets and1218liabilities for the future tax consequences of events that have been1219previously recognized in the Company's financial statements or tax returns.1220The measurement of deferred tax assets and liabilities is based on provisions1221of the enacted tax law; the effects of future changes in tax laws or rates1222are not anticipated. The adoption of FAS 109 did not have an effect on the1223Company's financial statements, nor have any prior year financial statements1224been restated.12251226Per Share Data12271228Loss per common share was computed by dividing the net loss by the1229weighted average number of shares of common stock outstanding and common1230stock equivalents (unless antidilutive) during the periods (3,587,927 shares1231at June 30, 1996 and 3,472,094 shares at June 30, 1995 and 3,397,927 shares1232at June 30, 1994).12331234Use of Estimates12351236The preparation of financial statements in conformity with generally1237accepted accounting principles requires management to make estimates and1238assumptions that affect the reported amounts of assets and liabilities and1239disclosure of contingent assets and liabilities at the date of the financial1240statements and the reported amounts of revenues and expenses during the1241reporting period. Actual results could differ from those estimates.12421243(CONTINUED)12441245<PAGE>12461247CDX CORPORATION12481249NOTES TO FINANCIAL STATEMENTS1250YEARS ENDED JUNE 30, 1996, 1995, and 19941251125212532. INVENTORY12541255Inventory consisted of the following at June 30:125612571996 19951258____ ____12591260Finished goods $34,224 $ 59,2281261Raw materials 35,720 47,2581262Work-in-progress 3,643 3,47312631264Total $73,587 $109,959126512663. PROPERTY AND EQUIPMENT12671268Property and equipment consists of the following at June 30:126912701996 19951271____ ____12721273Office equipment and furniture $65,839 $ 65,5021274Production equipment 35,527 35,2571275Computer equipment 69,402 68,0691276Leasehold improvements 16,256 16,2561277Total 186,754 185,0841278Less: accumulated depreciation 163,948 158,98612791280Net property and equipment $22,806 $ 26,098128112821283Depreciation expense for the years ended June 30, 1996 and 1995 was1284$5,052 and $5,911, respectively.128512864. INCOME TAXES12871288Due primarily to the utilization of net operating loss carryforwards, the1289Company has no provisions for income taxes for 1996, 1995, and 1994.129012911292(CONTINUED)12931294<PAGE>12951296CDX CORPORATION12971298NOTES TO FINANCIAL STATEMENTS1299YEARS ENDED JUNE 30, 1996, 1995, and 1994130013014. INCOME TAXES (Continued)13021303Deferred income taxes reflect the net tax effects of temporary differences1304between the carrying amounts of assets and liabilities for financial reporting1305purposes and the amounts used for income tax purposes. The Company's net1306deferred tax asset balances are primarily attributable net operating loss1307carryforwards and tax credits. At June 30, 1996, 1995, and 1994, the1308Company's deferred tax assets consisted of the following:130913101996 1995 19941311____ ____ ____13121313Deferred tax assets $1,157,131 $1,209,251 $1,157,3131314Valuation allowance (1,157,131) (1,209,251) (1,157,313)13151316Net deferred tax assets1317recognized on the1318accompanying balance sheets $ 0 $ 0 $ 013191320The components of the income tax (benefit) consisted of the following for the1321years ended June 30, 1996, 1995, and 1994:132213231996 1995 19941324____ ____ ____13251326Current $(49,539) $(18,007) $(62,194)1327Deferred - using a blended1328federal and state rate of 24% 0 0 01329Tentative tax provision (benefit) (49,539) (18,007) (62,194)1330Less: valuation allowance 49,539 18,007 62,19413311332Net income tax provision (benefit) $ 0 $ 0 $ 013331334At June 30, 1996, the Company had net operating loss carryforwards of1335approximately $4,614,385 available to offset future income that would1336otherwise be subject to federal income taxes. Approximately $95,317 and1337$253,273 will expire in the years 2005 and 2009, respectively, if not1338utilized. Approximately $1,453,610, $421,786, and $458,939 of operating loss1339carryforwards expired in 1996, 1995, and 1994 respectively.13401341The Company has targeted jobs credit tax carryforwards of approximately $3,5281342which will expire in 1996. The Company also has investment tax credit1343carryforwards of approximately $5,165 which will expire in years 1996 through13442001 and approximately $40,986 of research and development costs that will1345expire in years 1996 through 2001.13461347If certain substantial changes in the Company's ownership should occur, there1348would be an annual limitation on the amount of net operating loss and1349investment tax credit carryforwards which could be utilized.13501351(CONTINUED)13521353<PAGE>13541355CDX CORPORATION13561357NOTES TO FINANCIAL STATEMENTS1358YEARS ENDED JUNE 30, 1996, 1995, and 19941359136013615. ACCRUED EXPENSES13621363Accrued expenses are as follows for June 30:136413651996 19951366____ ____1367Accrued vacation $ 4,22 $ 2,5321368Accrued taxes 6,157 6,8251369Accrued payroll and commissions 1,0641370Accrued professional and utilities 22,090 19,56513711372Total $33,523 $28,922137313746. NOTES PAYABLE - OFFICERS13751376During 1993, an officer of the Company loaned the Company $80,100,1377with interest to be paid at 8%. During 1994, the same officer loaned the1378Company an additional $5,000 at 8% interest. No payments are expected1379during the next fiscal year.13801381During 1995, an officer of the Company loaned the Company $15,000,1382with interest to be paid at 8%. No payments are expected during the next1383fiscal year.13841385During 1996, officers of the Company loaned the Company $22,500 with1386interest to be paid at 9%, monthly principal and interest payments will1387continue to be made during the next fiscal year.138813897. NOTES PAYABLE13901391At June 30, notes payable consisted of the following:139213931996 19951394____ ____139513966% interest bearing note payable to a related party $25,000 $25,0001397139810% interest bearing payable to investor.1399Repayment is based on Company profitability 25,000 25,00014001401Non-interest bearing payable to investor.1402Repayment is based on product sales 5,000 5,00014031404Total $55,000 $55,00014051406(CONTINUED)14071408<PAGE>14091410CDX CORPORATION14111412NOTES TO FINANCIAL STATEMENTS1413YEARS ENDED JUNE 30, 1996, 1995, and 1994141414158. STOCKHOLDERS' EQUITY14161417In November 1987, the Shareholders of the Company approved an1418incentive stock option plan which provides that options may be granted to1419officers and employees, with a maximum aggregate number of 150,000 shares1420issuable under the plan. Shares underlying granted options are exercisable142125% on the date of grant and 25% each year thereafter on a cumulative basis.1422Unexercisable options lapse ten years after the date of grant or expire within142390 days of termination of employment. Exercise price is fair market value of1424a share of common stock at date of grant. The plan has a term of ten years.14251426In November 1987, the Directors of the Company approved a Non-Qualified1427Stock Option Plan for employees, consultants and directors. The Company has1428reserved 60,000 unregistered shares of its common stock for use in this plan.1429During 1992, the Board of Directors reserved another 1,440,0001430unregistered shares of its common stock for use in this plan. Each of the1431four outside directors were granted options for 15,000 shares at $.10 per1432share exercisable during their continuation as an employee, director or1433advisory member of, or consultant to the Company, and for the three year1434period thereafter. In addition, during 1993, the Company granted one of its1435directors options for 250,000 shares at $.10 per share and granted one of its1436consultants options for 77,800 shares at $.05 per share, and in 1994, the1437Company granted to a related party options for 100,000 shares at $.25 per1438share. In 1995 the Company granted to an officer of the Company a five year1439option to purchase 15,000 shares at $.25 per share. In 1996, the Company1440granted to officers of the Company five year options to purchase 22,5001441shares at $.25 a share.14421443In addition, in 1992, the Company issued 600,000 warrants for its1444common stock with an exercise price of $.02 to certain of its officers and1445consultants in return for forbearance and modification of certain notes and1446accounts payable and services. The warrants expire December 31, 1998.1447Further, during 1995, the Company issued 75,000 warrants for its common stock1448to an unrelated party in connection with a loan. The warrants are divided1449equally into three classes of 25,000 each designated A, B, C with exercise1450prices of $.25, $.375 and $.50, respectively, all of which expire in February1451of 1998. The Company has reserved 675,000 of its authorized common stock in1452connection with its warrants.14531454A summary of the plans at June 30, 1996 is as follows:14551456Total Shares Share Options Option1457Reserved Outstanding Price1458____________ _____________ ______145914601987 Incentive Stock Option Plan 150,000 75,000 $.225146114621987 Non-Qualified Stock Option Plan 1,500,000 310,000 $.10146377,800 $.051464100,000 $.25146515,000 $.25146622,500 $.25146714681992 Stock Warrants Plan 600,000 600,000 $.0214691995 Stock Warrants Plan 75,000 25,000 $.25147025,000 $.375147125,000 $.5014721473(CONTINUED)14741475<PAGE>14761477CDX CORPORATION1478NOTES TO FINANCIAL STATEMENTS1479YEARS ENDED JUNE 30, 1996, 1995, and 1994148014819. INCOME TAXES14821483At June 30, 1996, the Company had various credits and net operating1484loss carry-forwards which may be offset against taxable income or federal1485income tax of future years as follows:14861487Net Targeted Investment Development1488Operating Loss Jobs Credit Tax Credit Cost Credit1489Expiration Carry - Carry - Carry - Carry -1490Year Forwards Forwards Forwards Forwards1491__________ ______________ ___________ __________ ___________149214931996 1,453,610 $3,528 3,633 $22,54914941997 810,624 502 2,66014951998 358,582 23714961999 362,574 15814972000 42,226 3414982001 142,408 601 15,77714992005 95,31715002006 348,94915012007 334,60615022008 207,26615032009 253,27315042010 204,95015051506Total $4,614,385 $3,528 $5,244 $40,986150715081509Reductions in Investment Tax Credits carry-forwards are due to the1510reduction of benefits provided by the Tax Reform Act of 1986.15111512The Company has a capital loss carryover of $80,000.1513151410. LEASE AGREEMENT - RELATED PARTY15151516The Company entered into a lease agreement on March 26, 1990 with a1517related party to rent its facilities in Providence, Rhode Island. Original1518base monthly rental payments total $4,594 and the lease term is five years,1519expiring on February 28, 1995. On September 1, 1994, the related party agreed1520to reduce base monthly rental to $2,500 on June 1, 1996. The lease agreement1521was not renewed and the Company is renting the facilities on a monthly basis.15221523Minimum lease payments and rental expense charged to operations are1524as follows:15251526Date Minimum lease payments Rental expense1527____ ______________________ ______________15281996 $29,63215291995 $34,188 32,19815301994 55,128 58,82215311532(CONTINUED)15331534<PAGE>15351536CDX CORPORATION15371538NOTES TO FINANCIAL STATEMENTS1539YEARS ENDED JUNE 30, 1996, 1995, and 19941540154111. SEGMENT INFORMATION15421543Industry Segments15441545Approximately 94% of the Company's business consists of sales of1546computerized pulmonary diagnostic equipment and supplies. The rest of the1547Company's business consists of sales of infection and bio-hazard control1548products. The Company does not operate in other industry segments. The1549Company has no foreign operations.15501551Major Customers15521553The Company has sold its products primarily through an independent1554national distribution network. In May of 1989, management put into effect a1555plan to phase out the independent distributors and move towards a nationwide1556team of commissioned representatives. During 1991, current management has1557begun to restore the independent network of distribution and currently has in1558excess of one hundred distributors. The final market for the Company's1559products is the medical field, i.e. physicians, hospitals and the occupational1560health sector. No distributor or customer accounted for 10% or more of the1561Company's sales in 1996, 1995 or 1994.1562156312. SUPPLEMENTARY INCOME STATEMENT INFORMATION15641565For the years ended June 30, the following supplemental expense1566information is presented for analysis.156715681996 1995 19941569____ ____ ____15701571Repairs and maintenance $ 2,160 $11,485 $ 9,1031572Advertising 67,633 8,054 51,4921573Sales and property taxes 2,355 18,917 16,7821574Provision for doubtful accounts 1,800 1,349 7,1241575157613. FUTURE OPERATIONS15771578The accompanying financial statements have been prepared in1579conformity with generally accepted accounting principles, which contemplate1580continuation of the Company as a going concern. However, the Company suffered1581losses of $206,413, $75,028, and $259,143 during the years ended June 30,15821996, 1995, and 1994, respectively. In addition, the Company has a net1583stockholders' deficiency of $459,307 at June 30, 1996.15841585The Company has been in the process of developing new and innovative1586products. The development of these products has taken longer than planned.1587The Company brought some of these products to market in 1995 which had been1588met with a demand for improvements and changes to the products. Management1589plans to develop upgrades and improvements to existing products utilizing1590state of the art technology and to re-market these products to a substantial1591existing client base. Management expects sales and profits to significantly1592increase when the improved products are re-marketed. Management is currently1593implementing a plan to reduce operating costs. Management believes that1594these factors will provide the opportunity for the Company to continue as a1595going concern.15961597(CONTINUED)15981599<PAGE>16001601CDX CORPORATION16021603NOTES TO FINANCIAL STATEMENTS1604YEARS ENDED JUNE 30, 1996, 1995, and 19941605160613. FUTURE OPERATIONS (Continued)16071608While management is confident that the new products will increase1609cash flow and make the Company profitable, there can be no assurance that the1610expected magnitude of growth will be experienced. Should the Company's1611expectations materialize, however, additional capital will not be required1612in order for it to continue operations.16131614(CONCLUDED)16151616<PAGE>1617CDX CORPORATION16181619STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY1620YEARS ENDED JUNE 30, 1996, 1995, AND 19941621<TABLE>16221623<C> <C> <C> <C> <C> <C>1624Shares Capital Accumulated Shares Treasury1625Outstanding Par Value Surplus Deficit Stock Total1626___________ _________ ___________ _______ ________ _____162716281629Balance, June 30, 1993 3,397,927 $ 33,980 $4,726,198 $(4,748,902) 166 $ 11,27616301631Net Loss (259,143) (259,143)16321633Balance, June 30, 1994 3,397,927 33,980 4,726,198 (5,008,045) 166 (247,867)16341635Common stock issued 190,000 1,901 45,600 47,50116361637Net loss (75,028) (75,028)16381639Balance, June 30, 1995 3,587,927 35,881 4,771,798 (5,083,073) 166 (275,394)16401641Net loss (206,412) (206,412)16421643Balance, June 30, 1996 3,587,927 $35,881 $4,771,798 $ 5,289,485 166 $ (481,806)16441645SEE NOTES TO FINANCIALA STATEMENTS16461647</TABLE>1648</TEXT>1649</DOCUMENT>1650<DOCUMENT>1651<TYPE>EX-23.11652<SEQUENCE>21653<TEXT>165416551656CONSENT OF COUNSEL16571658I hereby consent to the use of my name as legal counsel in the Annual1659Report filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of16601934 for the fiscal year ended September 30, 1996 by CDX Corporation on Form166110-KSB.16621663MARK T. THATCHER, P.C.16641665/s/ Mark T. Thatcher16661667By:___________________1668MARK T. THATCHER, ESQ.16691670Newport, RI16711672</TEXT>1673</DOCUMENT>1674<DOCUMENT>1675<TYPE>EX-23.21676<SEQUENCE>31677<TEXT>167816791680CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS16811682We hereby consent to the use of our name as auditing firm in the1683Annual Report filed pursuant to Section 13 or 15(d) of the Securities1684Exchange Act of 1934 for the fiscal year ended September 30, 1996 by1685CDX Corporation on Form 10-KSB.16861687CAYER, PRESCOTT, CLUNE & CHATELLIER, LLP16881689/S/ Cayer, Prescott, Clune & Chatellier, LLP16901691January 10, 19971692Providence, Rhode Island16931694</TEXT>1695</DOCUMENT>1696<DOCUMENT>1697<TYPE>EX-271698<SEQUENCE>41699<DESCRIPTION>ARTICLE 5 FIN. DATA SCHEDULE FOR FISCAL YEAR1700ENDING JUNE 30, 19961701<TEXT>17021703<TABLE> <S> <C>17041705<ARTICLE> 51706<CIK> 00003511291707<NAME> CDX Corporation1708<MULTIPLIER> 11709<CURRENCY> U.S.17101711<S> <C>1712<PERIOD-TYPE> 12-MOS1713<FISCAL-YEAR-END> SEP-30-19961714<PERIOD-START> JUL-01-19951715<PERIOD-END> JUN-30-19961716<EXCHANGE-RATE> 11717<CASH> 691718<SECURITIES> 01719<RECEIVABLES> 53,1771720<ALLOWANCES> 01721<INVENTORY> 73,5871722<CURRENT-ASSETS> 133,3301723<PP&E> 22,8061724<DEPRECIATION> 01725<TOTAL-ASSETS> 184,0811726<CURRENT-LIABILITIES> 491,0281727<BONDS> 174,8591728<PREFERRED-MANDATORY> 01729<PREFERRED> 01730<COMMON> 35,8811731<OTHER-SE> 01732<TOTAL-LIABILITY-AND-EQUITY> 184,0811733<SALES> 394,0431734<TOTAL-REVENUES> 394,0431735<CGS> 235,4411736<TOTAL-COSTS> 589,9711737<OTHER-EXPENSES> 354,4301738<LOSS-PROVISION> (195,928)1739<INTEREST-EXPENSE> (10,430)1740<INCOME-PRETAX> (10,485)1741<INCOME-TAX> 01742<INCOME-CONTINUING> 01743<DISCONTINUED> 01744<EXTRAORDINARY> 01745<CHANGES> 01746<NET-INCOME> (206,412)1747<EPS-PRIMARY> (.057)1748<EPS-DILUTED> (.057)1749175017511752</TEXT>1753</DOCUMENT>1754</SEC-DOCUMENT>1755-----END PRIVACY-ENHANCED MESSAGE-----175617571758