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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,7MJHwamUL81u524nNpR9RHQHqdvoCBDn2j/BTtk+oX6rkQFL56Zus8AME22K0qyIk8/7cPlPGEtLDSFE2yPTITBw==910<SEC-DOCUMENT>0000351129-99-000003.txt : 1999101811<SEC-HEADER>0000351129-99-000003.hdr.sgml : 1999101812ACCESSION NUMBER: 0000351129-99-00000313CONFORMED SUBMISSION TYPE: 10-K14PUBLIC DOCUMENT COUNT: 415CONFORMED PERIOD OF REPORT: 1999063016FILED AS OF DATE: 199910041718FILER:1920COMPANY DATA:21COMPANY CONFORMED NAME: CDX COM INC22CENTRAL INDEX KEY: 000035112923STANDARD INDUSTRIAL CLASSIFICATION: ELECTROMEDICAL & ELECTROTHERAPEUTIC APPARATUS [3845]24IRS NUMBER: 84077118025STATE OF INCORPORATION: CO26FISCAL YEAR END: 06302728FILING VALUES:29FORM TYPE: 10-K30SEC ACT:31SEC FILE NUMBER: 000-0973532FILM NUMBER: 997227233334BUSINESS ADDRESS:35STREET 1: ONE RICHMOND SQUARE36STREET 2: NO 2737CITY: PROVIDENCE38STATE: RI39ZIP: 0290640BUSINESS PHONE: 40127414444142MAIL ADDRESS:43STREET 1: ONE RICHMOND SQUARE44STREET 2: NO 2745CITY: PROVIDENCE46STATE: RI47ZIP: 029064849FORMER COMPANY:50FORMER CONFORMED NAME: CDX CORP51DATE OF NAME CHANGE: 1992070352</SEC-HEADER>53<DOCUMENT>54<TYPE>10-K55<SEQUENCE>156<TEXT>5758SECURITIES AND EXCHANGE COMMISSION59Washington, D.C. 205496061FORM 10-K62Annual Report Pursuant to Section 13 or 15(d)63of the Securities Exchange Act of 19346465[x] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF66THE SECURITIES EXCHANGE ACT OF 19346768For the fiscal year ended June 30, 19996970[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF71THE SECURITIES EXCHANGE ACT OF 1934727374For the transition period from ___________ to _____________757677CDX CORPORATION78(Exact name of Registrant as specified in its charter)7980Commission file number8182Colorado 84-077118083(State or other jurisdiction of (I.R.S. Employer84incorporation or organization Identification No.)858687One Richmond Square 0290688Providence, RI (Zip Code)89(Address of principal executive offices)9091Registrant's telephone number, including area code92(401)274-14449394Securities registered pursuant to Section 12(b) of the Act:9596Title of each class Name of each exchange on which registered97None None9899Securities registered pursuant to 12(g) of the Act:100Common Stock, Par Value $.01101(Title of class)102103Indicate by check mark whether the Registrant (1) has filed all reports104required to be filed by Section 13 or 15(d) of the Securities Exchange Act of1051934 during the preceding 12 months (or for such shorter period that the106Registrant was required to file such reports), and (2) has been subject to107such filing requirements for the past 90 days. Yes ___ No X.108109Indicate by check mark if disclosure of delinquent filers pursuant to Item110405 of Regulation S-K is not contained herein, and will not be contained, to111the best of registrant's knowledge, in definitive proxy or information112statements incorporated by reference in Part III of this Form 10-K or any113amendment to this Form 10-K. [ ]114115Since February of 1986, there have been no published prices of the116Registrant's stock. The total number of shares held by nonaffiliates of the117Registrant as of September 30, 1999 was 1,180,191.118119Indicate the number of shares outstanding of each of the Registrant's classes120of common stock, as of June 30, 19991211224,887,927123124DOCUMENTS INCORPORATED BY REFERENCE125Document Part of 10-K into which incorporated126127None128129CDX CORPORATION1301999 Annual Report on Form 10-K131132Table of Contents Page #133134PART I135136ITEM 1 - Business 3137138A. General 3139B. Products And Services 3140C. Marketing And Customers 4141D. Product Development 4142E. Product Protection 5143F. Backlog 5144G. Competition 5145H. Employees 5146147ITEM 2 - PROPERTIES 5148149ITEM 3 - LEGAL PROCEEDINGS 5150151ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 6152153PART II154155ITEM 5 - MARKET FOR REGISTRANT'S COMMON STOCK AND RELATED156SECURITY HOLDER MATTERS 6157158ITEM 6 - SELECTED FINANCIAL DATA 6159160ITEM 7 - MANAGEMENT DISCUSSIONS AND ANALYSES OF FINANCIAL161CONDITION AND RESULTS OF OPERATIONS 7162163ITEM 8 - FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA 8164165ITEM 9 - CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON166ACCOUNTING AND FINANCIAL DISCLOSURES 8167168PART III169170ITEM 10 - DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT 9171172ITEM 11 - EXECUTIVE COMPENSATION 10173174ITEM 12 - CERTAIN BENEFICIAL OWNERS AND MANAGEMENT 12175176ITEM 13 - CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS 13177178PART IV179180ITEM 14 - EXHIBITS, FINANCIAL SCHEDULES AND REPORTS ON FORM 8-K 13181182SIGNATURES 14183184<PAGE> 3185186PART I187188Item 1. BUSINESS189190A. General191192CDX Corporation is a Colorado corporation incorporated in 1978 with its193corporate offices headquartered in Providence, Rhode Island.194195The Company is in the process of changing its name to better reflect its196marketing efforts and its vision of future marketing channels.197198The Business of the Company has consisted of the sale of computerized199pulmonary diagnostic equipment which is used in the medical profession to200test for indications of lung or congestive heart disease. Approximately20111,000 units have been sold.202203In December 1994 the Company acquired Compliance Systems, a manufacturer of204infection control products which provide emergency personnel with protection205during trauma response situations and assist compliance with certain OSHA206mandates. In FY96 the Company also introduced a new version of its Instant207Response Mask (IRM) with improved features designed to protect personnel208involved in administering emergency cardio-resuscitation techniques to209compliment the Compliance Systems product line.210211CDX also generates revenue from the sale of consumable supplies and accessory212items associated with its diagnostic equipment. In addition, the Company has213developed an upgrade for its spirometers marketed to existing customers. The214Company has an updated version of its Model 110S spirometer currently which215incorporates the latest technology. This product is marketed to physician216offices, hospitals and industrial sites.217218B. Products And Services219220Approximately 20% of the Company's gross revenues in its most recent fiscal221year was attributable to the sale of its testing machines, 65% of gross222revenues was attributable to sales of consumable and accessory items and 7%223of gross revenues was attributable to repairs and testing. Bio-hazard control224products and the IRM comprised 8% of sales.225226The Company's objective is to increase gross revenues with the introduction227of new and upgraded version of the current spirometer. A new version of the228Instant Response Mask was released in December 1995. Although initially well229received, this product has not lived up to the Company's expectations and230marketing efforts and expenditures in connection with it have been curtailed.231232The types of products which the Company currently markets are described below.2332341. CDX SPIRO 850. A new model of spirometer, the CDX850, was procurred under235an exclusive OEM supply arrangement to replace the CDX Spiro236110's and was introduced in the beginning of FY 99. The CDX850237is a portable, compact pulmonary diagnostic machine utilizing238digital electronics and the latest technology. The unit has239been well received.2402412. CDX SPIRO 110's. The Company previously sold a line of spirometers242(the 110 series) which it manufactured. Production of the 110243Series spirometers was curtailed at the end of FY 98. The244Company continues to support and repair such spirometers.245246Additionally, the Company provides for sale of disposable and accessory items247associated with its testing equipment as well as maintenance and service248agreements.2492503. Biosponse251A portable bio-hazard spill kit for bloodborne pathogens which252complies with OSHA regulation.2532544. Biopail255A complete clean up and personal protection for first responders256against blood pathogens contained in a refillable two gallon257pail meeting OSHA Regulations.258259260The Company formerly marketed a CPR mask known as the "Instant Response Mask"261or "IRM." Marketing of the IRM was discontinued in FY98 in an effort to262reduce costs related to marginal products.263264Additionally the Company resells certain products for use in physicians market,265for example, blood pressure cuffs and laryngoscopes. The Company feels these266items are in demand by its core customers and fit well with current sales267efforts.268269C. Marketing And Customers270271The Company's principal customers have historically been primary care272physicians, group practices, clinic, and medical centers. Portable273spirometers are typically used by internists, family physicians, and general274practitioners in their offices to conduct preliminary diagnostic tests of a275patients pulmonary function. Spirometers are also used extensively in276industry to provide screening diagnosis, establish baselines and monitor277pulmonary function in the workplace. The Company's customer base includes278pulmonologists, allergists, and cardiologists who require the speed,279accuracy, and flexibility of hospital-based systems in a small, light-weight,280portable system.281282During the year ended June 30, 1999, the Company did not have any one283customer responsible for 10% or more of sales activity or revenues.284285The Company currently markets its products directly to retail customers from286its Rhode Island office and through medical equipment dealers and287distributors, supported through a network of factory trained manufacturer's288representatives. The Company supports this sales network through direct mail,289advertising in clinical and trade publications, and participation in national290and regional trade shows.291292Relative to the IRM mask, initially the Company held exclusive worldwide293distribution rights under terms of an agreement with Valley Forge Scientific.294During FY 96 the Company relinquished its exclusive rights and has undertaken295to co-distribute the IRM with Valley Forge in return for a 10% royalty on296all IRM sales by Valley Forge. The Company has curtailed active marketing of297the IRM mask.298299D. Product Development300301The Company has undertaken a product development program with the ultimate302objective of the following:303304The development of products specifically targeted at the equipment needs of305the physician's office.306307<PAGE> 5308309310E. Products Protection311312The company holds a patent issued by the U.S. Patent office in 1981 for the313overall structure and function of its remote pulmonary function tester known314as the CDX 110. The Company's current products have protection under certain315claims of this patent. The patent does not apply outside the United States.316Protection under this patent lapsed in 1998.317318The Company holds a federal trademark "CDX" which is used on its products.319The Company uses additional trademarks related to the IRM mask.320321The Company's developmental efforts on the IRM mask has resulted in a U.S.322patent application. As per the terms of an agreement between the Company and323Valley Forge Scientific this patent has been assigned to Valley Forge. Under324the further terms of this agreement, the Company received the exclusive325worldwide distribution rights for the IRM mask.326327F. Backlog328329The Company does not currently have any backlog of sales orders or delays of330shipments due to lack of parts or supplies.331332G. Competition333334The market for the Company's products is characterized by rapid advancements335in technology and by intense competition among a number of manufacturers and336distributors. The Company believes that it competes favorably in the market;337however, no assurance can be given that the Company will have the financial338resources, marketing, distribution, service or support capabilities, depth of339key personnel or technological expertise to compete successfully in the340future.341342H. Employees343344As of June 30, 1999, the Company employed one full-time employee whose services345are provided to the Company by an affiliate on full reimbursement basis.346347Item 2. PROPERTIES348349In July of 1997 the Company moved its sales offices and operations to350Massachusetts. The Company's administrative offices and manufacturing351facilities consist of approximately 1,500 square feet of office,352manufacturing and storage space located in a mixed-use commercial building in353Dedham, Massachusetts which it rents on a short term basis. The Company354believes that its rental costs are comparable to those charged for comparable355space on month to month basis. The facilities have been rented on a month to356month basis since March 1, 1995. In September 1998 the Company moved its357sales offices and operations back to Providence, Rhode Island. Currently358the Company rents its facilities on a month to month basis from an affiliate.359Management believes that the rental rates charged are the same or more360favorable than those which would be available from unaffiliated third361parties. Rental space is available in the area, and the Company expects to362be able to continue to be able to obtain adequate space at costs comparable363to its current rent.364365Item 3. LEGAL PROCEEDINGS366367There are no legal proceedings pending against the Company.368369<PAGE> 6370371Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS372373The corporation did not submit any matter to a vote of security holders374during the year ended June 30, 1999.375376PART II377378Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND379RELATED SECURITY HOLDERS MATTERS380381There is no established public trading market for the Corporation's382common stock. The stock is traded over-the-counter in privately negotiated383transactions between market makers and brokers. Prices are published in the384pink sheets issued by the National Quotation Bureau, but sales are not385systematically reported by market makers and brokers.386387Holders388389Based upon the number of record holders, the approximate number of390shareholders of the common stock of the Corporation as of June 30, 1999391was 868.392393Dividends394395No dividends have been declared during the past fiscal years with396respect to common stock.397398399400401Item 6. SELECTED FINANCIAL DATA402403<TABLE>404<S> <C> <C> <C> <C> <C>4051999 1998 1997 1996 1995406407Net Sales &408Operating409Revenues $318,260 $264,175 $379,608 $394,043 $445,285410411Profit (Loss) $(14,980) $84,452 (122,372) (206,413 (75,028)412413Profit (Loss)414per Common Share (.003) .017 (.028) (.057) (.022)415416Total Assets 120,151 179,688 185,918 184,081 303,838417418Long Term419Obligations 25,000 25,000 25,000 25,000 25,000420421Cash Dividend422Declared423per Share 0.00 0.00 0.00 0.00 0.00424425Weighted average426number of427Common Sharesoutstanding 4,887,927 4,887,927 4,339,434 3,587,927 3,472,094428429</TABLE>430431<PAGE> 7432433MARKET INFORMATION434435CDX Corporation's common stock is traded over-the-counter in privately436negotiated transactions between makers and brokers.437438<TABLE>439<CAPTION>440441Price Range (closing bid) For fiscal year ending June 30:4424431999 1998444<S> <C> <C> <C> <C> <C> <C> <C> <C>445446Bid Prices Asked Prices Bid Prices Asked Prices447Quarter High Low High Low High Low High Low4484491st .125 .125 .1875 .175 .125 .125 .1875 .18754502nd .125 .125 .2188 .1875 .125 .125 .1875 .18754513rd .125 .125 .1875 .1875 .125 .125 .1875 .18754524th .125 .125 .1875 .1875 .125 .125 .1875 .175453454</TABLE>455456These market quotations are from the National Daily Quotation Service. They457reflect prices between dealers without retail mark up, mark down or458commission. They do not represent actual transactions. No dividends have459been declared during the past two fiscal years with respect to common stock.460461Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND462RESULTS OF OPERATIONS463464Results of Operations465466Net Sales and Operating Revenues for FY 99 increased by $54,085 which is467up approximately 20% from the previous fiscal year. This compares with a468decrease of $115,433, or approximately 30%, in similar figures for FY 98 to469FY 97. Cost of Sales increased by $77,856 for FY 99 compared to FY 98, with470the Company incurring an Operating Loss of $8,617. During the previous471fiscal year, Cost of Sales decreased by $95,937 from those of FY 97 resulting472in Operating Income of $10,017. FY 97 showed an Operating Loss of $104,327.473Operating Loss for FY 99 was 2.7% as a percentage of Net Sales compared with474Operating Income of 3.8% and Loss 27.5% for FY 98 and FY 97, respectively.475The decrease in profitability is the result of higher unit costs. The476improvement in operating results for FY 98 was a reflection of reduced costs477and expenses, primarily in the areas of cost of goods, payroll and rent.478Management plans to continue its efforts to reduce expenses and keep them in479line with margins and to increase sales volume.480481Cost of Goods Sold as a percent of Net Sales increased from 34.8%482($91,855) in FY 98 to 53.3% ($169,711) in FY 99 due primarily to decreased use483of inventoried parts and greater use of contract manufacture of units resulting484in higher costs coupled with a reduction in unit selling price. Similar costs485for FY 97 to FY 98 decreased from 49.5% ($187,793) to 34.8% ($91,855) of486Revenues.487488Selling and Administrative Expenses decreased overall by $5,137, to489$157,166 for FY 99 from $162,303 for FY 98. As a percentage of Net Sales490these figures were 49.4% and 61.4% respectively which represents a 12.0%491decrease in such expenses between the two years. Comparable expenses for FY49297 were 78.0% ($296,142). The decrease in percentages of expenses shown in493FY 99 and FY 98 reflects a decrease payroll and related expenses, lower rent494expense and the elimination certain marginal marketing and advertising.495496Interest expense for FY 99 decreased $1,813 to $21,863 for the497entire year. In FY 98, interest expense increased $5,631. Interest income was498immaterial for FY 98 and 99.499500For FY 98 the Company had additional other income of $98,111 resulting501from the write down and adjustment of certain payables.502503<PAGE> 8504505Inflation has had a minimum impact upon the Revenues and Costs of506the Company.507508Liquidity And Capital Resources509510In fiscal year 1999, the Company's liquidity decreased by $15,235.511This compares with an increased position of $76,595 in FY 98. This primarily512reflects the impact the Net Loss of $(14,980) for FY 99 compared with Net513Income of $84,452 for the previous FY. In FY 98 this was due to favorable514working capital changes related to collections on accounts receivable and515increases in inventory which were offset by operating income and increases in516accounts payable and borrowings from two of its officers. In FY 98 the517increase in liquidity was the result of moderate reduction of receivables,518utilization of existing inventories, write down of prepaid expenses and519certain capitalized development enhanced by net operating income offset by520reduction in accounts payable, accrued expenses and payments on short term521borrowings.522523The Company expects that its current working capital position is524sufficient to continue to meet operating requirements during the coming525fiscal year and that it has sufficient reserves to meet some unforeseen526contingencies given a continued willingness on the part of several of its527officers to fund deficits with loans.528529Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA530531See Item 14 of this report.532533Item 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND534FINANCIAL DISCLOSURE535536None.537538<PAGE> 9539540PART III541542Item 10. DIRECTORS AND EXECUTIVE OFFICERS543544The current directors and executive officers of the Corporation, their545ages, their positions held in the Corporation and the term during which each546served in such position are as follows:547548DIRECTORS549550551Year First Elected552Name and All Positions or Nominated to553Held With the Corporation Age Become a Director554555556Harold I. Schein 64 1985557Chairman of the Board,558Treasurer and Director559560561Michael L. Schein 35 1998562President563564565566Philip D. Schein 36 1989567Secretary568And Director569570Officers and directors are elected on an annual basis. The present term571of office for each director will expire at the next annual meeting of the572Company's stockholders at such time as his successor is duly elected.573574Officers serve at the discretion of the Board of Directors.575576577EXECUTIVE OFFICERS578579Name and All Positions Year First Term of580Currently Held Elected to Office581With the Corporation Age This Office Expiring582583Harold I. Schein (2) 64584Chairman of the Board, 1989 (1)585Chief Executive Officer, 1989 (1)586Treasurer, 1989 (1)587Director 1985 (1)588589Michael L. Schein (2) 35590President 1998 (1)591592Philip D. Schein (2) 36593Secretary, 1989 (1)594Director 1989 (1)595596(1) The executive officers serve at the pleasure of the board of directors597and do not have fixed terms.598599<PAGE> 10600601(2) Michael L. Schein and Philip D. Schein are sons of Harold I. Schein602603HAROLD I. SCHEIN, 64, serves as Chairman of the Board, Chief Executive604Officer, Treasurer and a Director. Mr. Schein, since January 1990, has been605President of Richmond Square Capital Corporation, a private lender and venture606capital corporation. Prior to 1990, Mr. Schein served as chairman and607chief executive officer of William Bloom & Son, Inc, a manufacturer of store608fixtures. From March 1989 to September 1992, Mr. Schein also served as609chairman of Piezo Electric Products, Inc. of Metuchen, New Jersey, a publicly610owned company. He is also a developer of commercial real estate. Mr. Schein611became chairman of the board of directors and treasurer of the Corporation612in March 1989.613614MICHAEL L. SCHEIN, 34, serves as President. Mr. Schein became president of615the corporation in May 1999. Mr. Schein has been in the private practice of616law from 1990 to the present. Mr. Schein served as a special assistant617prosecutor in the Rhode Island Department of Attorney General from 1990618to 1993. He is a 1986 graduate of Tufts University and received his JD from619Boston University School of Law in 1990.620621PHILIP D. SCHEIN, 36, serves as Secretary and a Director. Mr.Schein became622secretary of the corporation in March 1989 and assumed the office of president623in October 1992. He resigned as president in May, 1999 in order to pursue624other ventures. Prior to this, Mr. Schein held the position of Executive625Vice President of William Bloom & Son, a manufacturer of custom store626fixtures, where he was in charge of sales and manufacturing. He is a 1985627graduate of Boston University.628629Item 11. EXECUTIVE COMPENSATION630631No executive officer received in excess of $100,000.632633No executive officer of the Corporation received other compensation not634reported in the above cash compensation table in excess of $25,000 or 10% of635the compensation reported in the above cash compensation table.636637Directors who are not regular, full-time employees may be compensated638for service on the board of directors at the rate of $1,500 per director per639quarter, i.e., $6,000 annually. In order to qualify for quarterly640compensation, a director must attend the majority of meetings held within the641quarter. No such payments have been made since 1989.642643644SUMMARY COMPENSATION TABLE645Annual Compensation646647Long Term648Compensation649Awards650651Securities652Name & Principal Fiscal Other Annual Underlying653Position Year Salary Compensation(1) Option/SARS(#)654________________ ______ _______ ____________ ______________655656Michael L. Schein 1999 $ 0657President658659Philip D. Schein 1999 $ 6,200 0660President 1998 52,944 06611997 65,000 5,000662663Harold I. Schein 1999 $ 0 0664Chairman & 1998 0 0665Treasurer 1997 0 17,500666667(1) Certain perquisites provided to each of the named executive officers668totaled less than 10 percent of each officer's total salary and669Stock Option Grants.670671<PAGE> 11672673OPTION/SAR GRANTS TABLE674675Option/SAR Grants in Last Fiscal Year676677The Company did not grant any options during FY 99.678679<TABLE>680<CAPTION>681682AGGREGATED OPTION EXERCISES IN 1999683AND684OPTION/SAR VALUES AT FISCAL YEAR-END685686<S> <C> <C>687Number of unexercised Value of Unexercised688in-the-money in-the-money689options/SARs at options/SARs at690fiscal year-end (#) fiscal year end($) (1)691Name Exercisable/unexercisable Exercisable/unexercisable692693694Philip D. Schein 253,333/0 $6,000/$0695696Harold I. Schein 602,500/0 $9,000/$0697698</TABLE>699700(1) Market value of underlying securities at FYE 6.30.99 discounted by701two-thirds to reflect restrictive provisions, minus exercise or base price.702703Stock Option Plan704705In November, 1987, the Shareholders of the Corporation approved an706incentive stock option plan which provides that options may be granted to707officers and employees, with a maximum aggregate number of 150,000 shares708issuable under the plan. Shares underlying granted options are exercisable70925% on the date of grant and 25% each year thereafter on a cumulative basis.710Unexercised options lapse ten years after the date of grant or expire within71190 days of termination of employment. Exercise price is fair market value of712a share of common stock at date of grant. The plan has a term of ten years.713714In November 1987, the Directors of the Corporation approved a715Non-Qualified Stock Option Plan for employees, consultants and directors.716The Corporation has reserved 60,000 unregistered shares of its common stock717for use in this plan. During 1993, the Board of Directors reserved another7181,440,000 unregistered shares of its common stock for use in this plan. Each719of the four outside directors were granted options for 15,000 shares at $.10720per share exercisable during their continuation as an employee, director or721advisory member of, or consultant to the Company, and for the three year722period thereafter. In addition, during 1993, the Company granted one of its723724<PAGE> 12725726directors options for 250,000 shares at $.10 per share and granted one of its727consultants options for 77,800 shares at $.05 per share. The options on 60,000728shares @$.10 per share granted to outside directors and 77,800 shares @$.05729granted to a consultant have expired unexercised.730731A summary of the plans at June 30, 1999 is as follows:732733TOTAL SHARES SHARES AT OPTION OPTION734RESERVED OUTSTANDING PRICE735____________ ________________ _______7367377387391987 Non-Qualified740Stock Option Plan 1,500,000 250,000 $.10741100,000 $.2574215,000 $.2574322,500 $.25744745746In December 1992, the Company issued 600,000 warrants for its common747stock to certain of its officers and consultants in return for services. The748warrants are exercisable at $.02 per share with an expiration date of December74931, 1998. Also, in February 1995, the Company issued 75,000 warrants for750its common stock to an investor in connection with a loan. The warrants are751divided into three equal classes with exercise prices of $0.25, $0.375 and752$0.50 respectively with all classes expiring in February 1998. During December753of FY99 the terms of the December 1992 warrants and the February 1995 warrants754were modified and extended so that all series of warrants issued prior to755December 31, 1998 shall expire as of December 31, 2001.756757758Item 12. CERTAIN BENEFICIAL OWNERS AND MANAGEMENT759760SECURITY OWNERSHIP OF CERTAIN BENEFICIAL761OWNERS AND MANAGEMENT762763The following table sets forth information as to persons other than management764(see the following table) who are known to management to beneficially own765more than 5% of the outstanding voting stock as of June 30, 1999.766767Title Name and Address Amount and Nature of Percent of768of Class of Beneficial Owner Beneficial Ownership Class769________ ___________________ ____________________ __________770771Common Mendel S. Kaliff 247,223 Direct 5.6%772Stock 70 N.E. Loop 410773No. 450774San Antonio, TX 78216775776The following table sets forth the security ownership of all directors and777executive officers of the corporation as of June 30, 1999.778779Title Name of Amount and Nature of Percent of780of Class Beneficial Owner Beneficial Ownership of Class Position781________ ________________ ____________________ __________ ________782783Common Harold I. Schein 2,616,737 (1) 59.6% Treasurer,784Stock Director, and785Chairman of786the Board787788<PAGE> 13789790Common Philip D. Schein 426,000 (2) 9.7% President,791Stock Secretary,792Director793794Common Directors and 3,042,737 69.3%795Stock Officers as a796Group (2 persons)797____________________________798799(1) Shares subject to sole investment and voting power. Includes options800and warrants granted by the corporation to purchase 585,000 shares, as to801which option shares the optionee/warrantholder disclaims beneficial ownership.802803(2) Shares subject to sole investment and voting power. Includes options804and warrants granted by the corporation to purchase 215,000 shares, as to805which option shares the optionee/warrantholder disclaims beneficial ownership.806807Item 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS808809The Company entered into a lease agreement on March 26, 1990 with a810related party to rent its facilities in Providence, Rhode Island. Base811monthly rental payments were modified to $2,500 beginning October 1995 and the812lease term to five years, expiring on February 28, 1995. In May of 1996 the813Company and related party modified the terms of the lease to month to month814rental payments of $1,500. The Company sublet a part of this space to an815unrelated party for $500 per month. The Company believes this to have been at816or below the rent for comparable space from unrelated parties.817818819PART IV820821Item 14. EXHIBITS, FINANCIAL SCHEDULES AND REPORTS ON FORM 8-K822823(a) The following documents are filed as part of this report:8248251. Financial Statements:826827Opinions of independent public accountants dated828September 30, 1999 on the financial statements as follows:829830Balance Sheets, June 30, 1999 and 1998.831832Statements of Earnings for the years ended June 30, 1999,8331998 and 1997.834835Statements of Cash Flows for the years ended June 30, 1999,8361998 and 1997.837838<PAGE> 14839840Statements of Changes in Stockholders' Equity for the years841ended June 30, 1999, 1998 and 1997.8428432. Financial Statement Schedules:844All schedules for which provision is made in the applicable845regulations of the Securities and Exchange Commission have846been omitted because they are not required if the847information is shown in the financial statements and notes848thereto.849850(b) Reports on form 8-K851No reports on Form 8-K were filed.852853(c) Exhibits854855See the Index of Exhibits immediately preceding the exhibits856attached to this report. The exhibits are incorporated herein857by this reference.858859SIGNATURES860861Pursuant to the requirements of Section 13 or 15(d) of the Securities and862Exchange Act of 1934, the Registrant has duly caused this report to be signed863on its behalf by the undersigned, thereunto duly authorized.864865CDX CORPORATION866(Registrant)867868/s/Michael L. Schein869870By: __________________871Michael L. Schein872President873874Dated: October 4, 1999875876Pursuant to the requirements of the Securities Exchange Act of 1934,877this report has been signed by the following persons on behalf of the878Registrant and in the capacities and on the dates indicated.879880Signature Title Date881882/s/Harold I. Schein883884_______________________ Chairman of the Board, October 4, 1999885Harold I. Schein Treasurer, Chief Finanacial886Officer and Director887888889/s/Philip D. Schein890891_______________________ Secretary and October 4, 1999892Philip D. Schein Director893894<PAGE> 15895896INDEX TO EXHIBITS897898(a) Exhibits:899900The following documents are filed herewith or have been included as901exhibits to previous filings with the Commission and are incorporated902herein by this reference:903Exhibit No. Document904* 3.1 Restated Articles of Incorporation dated905July 3, 1985906(incorporated by reference to the exhibits907and Registrant's report filed on Form 10-K908dated September 25, 1985)909910* 3.2 Articles of Amendment dated December 4, 1987911to the Restated Articles of Incorporation912(incorporated by reference to the exhibits913to Registrant's report filed on Form 10-K914dated September 15, 1989)915916* 3.3 Bylaws dated July 5, 1985917(incorporated by reference to the exhibits918to Registrant's report filed on Form 10-K919dated September 15, 1989)920921x 23.1 Consent of Counsel, Brendan P. Smith, Esq.922923x 23.2 Consent of Cayer, Prescott, Clune & Chatellier,924LLP, Independent Certified Public Accountants925926x 27.0 Financial Data Schedule927______________928929* Incorporated by reference from the issuer's Annual Report Pursuant930to Section 13 or 15(d) of the Securities Exchange Act of 1934931932x Filed herewith933934<PAGE>935936CDX CORPORATION937938FINANCIAL STATEMENTS939YEARS ENDED940JUNE 30, 1999, 1998, and 1997941942<PAGE>943944REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS945946To the Stockholders and Board of Directors947CDX Corporation948949We have audited the balance sheets of CDX Corporation as of June 30, 1999 and9501998, and the related statements of operations, stockholders' equity and cash951flows for the years ended June 30, 1999, 1998, and 1997. These financial952statements are the responsibility of the Company's management. Our953responsibility is to express an opinion on these financial statements based954on our audits.955956We conducted our audits in accordance with generally accepted auditing957standards. Those standards require that we plan and perform the audits to958obtain reasonable assurance about whether the financial statements are free of959material misstatement. An audit includes examining, on a test basis, evidence960supporting the amounts and disclosures in the financial statements. An audit961also includes assessing the accounting principles used and significant962estimates made by management, as well as evaluating the overall financial963statement presentation. We believe that our audits provide a reasonable964basis for our opinion.965966In our opinion, the financial statements referred to above present fairly, in967all material respects, the financial position of CDX Corporation as of June96830, 1999 and 1998, and the results of its operations and its cash flows for969the years ended June 30, 1999, 1998, and 1997 in conformity with generally970accepted accounting principles.971972The accompanying financial statements have been prepared assuming that the973Company will continue as a going concern. As discussed in Note 13 to the974financial statements, the Company has suffered recurring losses from975operations and has a net capital deficiency, which raises substantial doubt976about its ability to continue as a going concern. Management's plans977regarding those matters are also described in Note 13. The financial978statements do not include any adjustments that might result from this979uncertainty.980981982September 30, 1999 /s/ Cayer, Prescott, Clune & Chatellier, LLP983984<PAGE>985986987988989990CDX CORPORATION991992BALANCE SHEETS993JUNE 30, 1999 and 1998994995ASSETS9969971999 1998998___________ __________999Current assets:1000Cash $ 10,259 $ 13,5161001Accounts receivable - trade (net of allowance1002for doubtful accounts of $1,2601003in 1999 and $660 in 1998) 37,045 28,7081004Inventory 9,209 40,4911005Prepaid expenses and other 1,2401006Total current assets 56,513 83,95510071008Property and equipment -1009net of accumulated depreciation 9,178 18,86510101011Other assets:1012Invention rights and deferred product1013development costs (less accumulated1014amortization of $454,256 in 1998 and1015$435,340 in 1997) 54,460 76,86810161017TOTAL ASSETS $ 120,151 $ 179,688101810191020LIABILITIES AND STOCKHOLDERS' EQUITY10211022Current liabilities:1023Current portion of long-term debt $ 4,000 6,0001024Accounts payable - trade 33,089 69,7601025Accounts payable - shareholder 243,500 270,5001026Accrued interest payable 91,974 71,3751027Accrued expenses 6,690 4,2951028Total current liabilities 379,253 421,93010291030Other liabilities:1031Notes payable - officers 212,604 214,4841032Notes payable 50,000 50,0001033Total other liabilities 262,604 264,48410341035Stockholders' equity:1036Common stock, $.01 par value; 10,000,0001037shares authorized, 4,888,093 shares issued1038at June 30, 1998 and 1997 48,881 48,8811039Capital surplus 4,771,798 4,771,7981040Deficit (5,342,385) (5,327,405)1041Less treasury stock; 166 shares,1042no assigned value ___________ ___________1043Total stockholders' equity (521,706) (506,726)1044TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 120,151 $ 179,68810451046SEE NOTES TO FINANCIAL STATEMENTS.10471048<PAGE>10491050CDX CORPORATION10511052STATEMENTS OF OPERATIONS1053YEARS ENDED June 30, 1999, 1998, and 1997105410551999 1998 19971056___________ ___________ ___________1057Revenues:1058Net sales and other revenues $ 318,260 $ 264,175 $ 379,6081059Operating costs and expenses:1060Cost of sales 169,711 91,855 187,7931061Selling & administrative expenses 157,166 162,303 296,1421062Total operating1063costs and expenses 326,877 254,158 483,93510641065Operating income (loss) (8,617) 10,017 (104,327)10661067Other income (expense):1068Interest expense (21,863) (23,676) (18,045)1069De-recognition of previously1070Accrued liability 15,500 98,1111071Net other expense (6,363) 74,435 (18,045)10721073Net income/(loss) $ (14,980) $ 84,452 $ (122,372)10741075Net loss per common share $ (.003) $ .017 $ (.028)10761077Weighted-average number of1078common shares outstanding 4,887,927 4,887,927 4,339,43410791080SEE NOTES TO FINANCIAL STATEMENTS.10811082<PAGE>10831084CDX CORPORATION10851086[CAPTION]10871088STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY1089YEARS ENDED JUNE 30, 1999, 1998 AND 19971090Shares1091Shares Par Capital Accumulated Treasury1092Outstanding Value Surplus Deficit Stock Total1093Balance 6/30/97 4,888,093 $48,881 $4,771,798 $(5,411,857) 166 $(591,178)10941095Net Income 84,452 84,45210961097Balance 6/30/98 4,888,093 48,881 4,771,798 (5,327,405) 166 (506,726)10981099Net Loss (14,980) (14,980)11001101Balance 6/30/99 4,888,093 $48,881 $4,771,798 $(5,342,385) 166 $(521,706)110211031104SEE NOTES TO FINANCIAL STATEMENTS11051106<PAGE>11071108CDX CORPORATION11091110STATEMENTS OF CASH FLOWS1111YEARS ENDED June 30, 1999,11121998, and 19971113111411151999 1998 19971116___________ ___________ ___________11171118Cash was provided by (used for):1119Operating activities:1120Net income (loss) $ (14,980) $ 84,452 $ (122,372)1121Items in net loss not1122affecting cash:1123Depreciation and amortization 33,388 21,724 10,3211124Stock Based Compensation 13,0001125Foregiveness of Note Payable (5,000)1126Increase (decrease) in cash from1127changes in assets and liabilities:1128Accounts receivable (8,337) 10,780 13,6891129Inventory 31,282 6,064 27,0321130Prepaid expenses and other 1,240 16,233 (10,976)1131Other assets (34,915) (39,424)1132Accounts payable - trade (35,931) (89,857) (23,042)1133Accounts payable - shareholder (27,000) 26,9561134Other current liabilities 22,994 (9,604) 20,4491135Total cash provided by1136(used for) operations 2,656 (123) (84,367)1137__________ __________ _________11381139Investing activities:1140Purchase of property and equipment (2,033) (1,445) (1,243)1141Total cash provided by1142(used for) investing activities (2,033) (1,445) (1,243)1143114411451146Financing activities:1147Proceeds from notes payable -1148officers 20,000 90,0001149Payments on notes payable (3,880) (6,221) (3,154)1150Total cash provided by (used1151for) financing activities (3,880) 13,779 86,84611521153Increase (decrease) in cash1154during the year (3,257) 12,221 1,23611551156Cash balance, beginning of the year $ 13,516 $ 1,305 $ 6911571158Cash balance, end of the year $ 10.259 $ 13,516 $ 1,30511591160Supplemental disclosures of1161cash flow information:1162Cash paid during the year1163for interest $ 1,264 $ 1,117 $ 55111641165SEE NOTES TO FINANCIAL STATEMENTS11661167<PAGE>11681169CDX CORPORATION11701171NOTES TO FINANCIAL STATEMENTS1172YEARS ENDED JUNE 30, 1999, 19987 and 19971173117411751. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES11761177Background11781179CDX Corporation (the Company) was incorporated in June, 1978 to1180engage in the manufacture and sale of computerized pulmonary diagnostic1181equipment used in the medical profession. This equipment tests for1182indications of lung or congestive heart disease. The Company also1183manufactures and sells other medical and sanitization equipment.11841185Invention Rights11861187In 1978, the Company's two founding shareholders granted to the1188Company partial invention rights relating to its pulmonary function screening1189devices in exchange for 185,625 shares of common stock. In 1980, they1190granted full rights to the device in exchange for an additional 75,000 shares1191of common stock at a price of $1.332 per share. For financial accounting1192purposes, the invention rights have been recorded at an estimated fair value1193of $350,532 or $1.332 per share for the 260,625 shares of common stock issued,1194and $3,380 for legal fees pertaining to the patent application. Such value is1195considered appropriate based upon the substantial amount of cash invested by1196shareholders at $1.332 per share, other than those who were issued common1197stock in exchange for invention rights. Until fiscal year 1987, amortization1198had been provided on a straight-line basis over an estimated useful life of1199nineteen years. In 1987, Management reviewed the economic benefit of the1200invention rights and accelerated the remaining amortization over a five year1201period in order to represent fairly the remaining economic life of the1202invention rights. The entire effect of this change in estimate is reflected1203in the year ended June 30, 1987 and subsequent years.12041205In July of 1989, the Company entered into a contract for the1206development of technological enhancements to its computerized pulmonary1207equipment. For financial accounting purposes, these enhancements have been1208recorded at cost, in accordance with Statement of Financial Accounting1209Standards No. 86. Amortization is provided on a straight-line basis over the1210estimated useful life of five years. Amortization began in January of 19911211with the introduction of the new Spiro-Max.12121213Revenue Recognition12141215Revenue is recognized upon the invoicing and shipping of equipment.12161217Cash and Cash Equivalents12181219The Company considers all highly liquid investments purchased with a1220maturity of three months or less to be cash equivalents.12211222At June 30, 1999, the carrying amount of the Company's deposits was1223$10,259 and the bank balance was $20,621, of which all was covered by federal1224depository insurance.12251226Accounts Receivable12271228An allowance for doubtful accounts receivable is provided equal to1229the estimated collection losses that will be incurred in collection of all1230receivables. Estimated losses are based on historical collection experience1231coupled with review of the current status of the existing receivables and1232amounted to $1,260 and $660 at June 30, 1999 and 1998, respectively. The1233Company grants credit to customers who are located throughout the United1234States.12351236(CONTINUED)12371238<PAGE>12391240CDX CORPORATION12411242NOTES TO FINANCIAL STATEMENTS1243YEARS ENDED JUNE 30, 1999, 1998, and 1997124412451. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)12461247Inventories12481249Inventories are valued at the lower of cost or market using the1250first-in, first-out method. Work in process and finished goods are valued at1251production cost represented by materials, labor and overhead.12521253Property and Equipment12541255Property and equipment are recorded at cost. Depreciation and1256amortization are recorded using the straight line and double declining1257balance methods over the estimated useful lives of the assets.12581259Income Taxes12601261Effective July 1, 1993, the Company adopted Statement of Financial1262Accounting No. 109, "Accounting for Income Taxes" (FAS 109). Under the1263provisions of FAS 109, an entity recognizes deferred tax assets and1264liabilities for the future tax consequences of events that have been1265previously recognized in the Company's financial statements or tax returns.1266The measurement of deferred tax assets and liabilities is based on provisions1267of the enacted tax law; the effects of future changes in tax laws or rates1268are not anticipated. The adoption of FAS 109 did not have an effect on the1269Company's financial statements, nor have any prior year financial statements1270been restated.12711272Per Share Data12731274Loss per common share was computed by dividing the net loss by the1275weighted average number of shares of common stock outstanding and common1276stock equivalents (unless antidilutive) during the periods (4,887,927 shares1277at June 30, 1999 and June 30, 1998 and 4,339,434 shares at June 30, 1997).12781279Use of Estimates12801281The preparation of financial statements in conformity with generally1282accepted accounting principles requires management to make estimates and1283assumptions that affect the reported amounts of assets and liabilities and1284disclosure of contingent assets and liabilities at the date of the financial1285statements and the reported amounts of revenues and expenses during the1286reporting period. Actual results could differ from those estimates.12871288(CONTINUED)12891290<PAGE>12911292CDX CORPORATION12931294NOTES TO FINANCIAL STATEMENTS1295YEARS ENDED JUNE 30, 1999, 1998, and 1997129612972. INVENTORY12981299Inventory consisted of the following at June 30:130013011999 19981302____ ____13031304Finished goods $ 9,209 20,3531305Raw materials 0 17,5891306Work-in-progress 0 2,54913071308Total $ 9,209 $40,491130913103. PROPERTY AND EQUIPMENT13111312Property and equipment consists of the following at June 30:131313141999 19981315____ ____1316Office equipment and furniture $66,795 $ 67,7201317Production equipment 35,257 35,2571318Computer equipment 72,242 70,2091319Leasehold improvements 16,256 16,2561320Total 190,550 189,4421321Less: accumulated depreciation 181,372 170,57713221323Net property and equipment $ 9,178 $ 18,86513241325Depreciation expense for the years ended June 30, 1999 and 1998 was1326$10,981 and $2,808, respectively.1327132813291330CDX CORPORATION13311332NOTES TO FINANCIAL STATEMENTS1333YEARS ENDED JUNE 30, 1999, 1998, and 1997133413354. INCOME TAXES (Continued)13361337Due primarily to the utilization of net operating loss carryforwards, the1338Company has no provisions for income taxes for 1999, 1998, and 1997.13391340Deferred income taxes reflect the net tax effects of temporary1341differences between the carrying amounts of assets and liabilities for1342financial reporting purposes and the amounts used for income tax purposes.1343The Company's net deferred tax asset balances are primarily attributable net1344operating loss carryforwards and tax credits. At June 30, 1999, 1998, and13451997, the Company's deferred tax assets consisted of the following:134613471999 1998 19971348____ ____ ____13491350Deferred tax assets $ 597,289 $ 680,712 $ 807,4231351Valuation allowance (597,289) (680,712) (807,423)13521353Net deferred tax assets1354recognized on the1355accompanying balance sheets $ 0 $ 0 $ 013561357The components of the income tax (benefit) consisted of the following for the1358years ended June 30, 1998, 1997, and 1996:135913601999 1998 19971361____ ____ ____13621363Current $ (3,600) $ 20,000 $(28,868)1364Deferred - using a blended1365federal and state rate of 24% 0 0 01366Tentative tax provision (benefit) (3,600) (20,000) (28,868)1367Less: valuation allowance 3,600 20,000 28,86813681369Net income tax provision (benefit) $ 0 $ 0 $ 013701371The Company has a net operating and economic loss carryforward of1372aproximately $2,470,955 available to offset future federal and1373state taxable income through 2014.13741375The Company has investment tax credit carryforwards of approximately1376$1,030 which will expire in years 2000 through 2002 and approximately1377$15,777 of research and development costs that will expire in 2002.13781379If certain substantial changes in the Company's ownership should occur,1380there would be an annual limitation on the amount of net operating loss1381and investment tax credit carryforwards which could be utilized.1382138313845. ACCRUED EXPENSES13851386Accrued expenses are as follows for June 30:138713881999 19981389_______ _______1390$ Accrued taxes $ 51 $ 5091391Accrued professional and utilities 6,639 3,78613921393Total $ 6,690 $ 4,29513941395(CONTINUED)13961397<PAGE>13981399CDX CORPORATION1400NOTES TO FINANCIAL STATEMENTS1401YEARS ENDED JUNE 30, 1999, 1998 AND 1997140214036. NOTES PAYABLE - OFFICERS14041405During 1993, an officer of the Company loaned the Company $80,100,1406with interest to be paid at 8%. During 1994, the same officer loaned the1407Company an additional $5,000 at 8% interest. No payments are expected1408during the next fiscal year per a forbearance agreement on December 2,14091996.14101411During 1995, an officer of the Company loaned the Company $15,000,1412with interest to be paid at 8%. No payments are expected during the next1413fiscal year.14141415During 1996, officers of the Company loaned the Company $22,500 with1416interest to be paid at 9%, monthly principal and interest payments will1417continue to be made during the next fiscal year.14181419During 1997, an officer of the Company loaned the Company $75,000,1420with interest to be paid at 9%, monthly principal and interest payments1421will continue to be made during the next fiscal year. Another officer1422of the Company loaned the Company $15,000 with interest to be paid at142313.99%, monthly principal and interest payments will continue to be made1424during the next fiscal year.14251426During 1998, an officer of the Company loaned the Company $20,000 with1427interest to be paid at 8%. No payments are expected during the next fiscal1428year.14291430Future maturities of long-term debt are as follows:14311432Year ended1433June 30 Amount143414352000 $ 4,00014362001 and thereafter 212,6041437Total $ 216,604143814397. NOTES PAYABLE14401441At June 30, notes payable consisted of the following:144214431999 19981444_______ _______144514466% interest bearing note payable to a related party $25,000 $25,0001447144810% interest bearing note payable to a1449related party.145025,000 25,00014511452Total $50,000 $55,000145314548. STOCKHOLDERS' EQUITY14551456In November 1987, the Shareholders of the Company approved an1457incentive stock option plan which provides that options may be granted to1458officers and employees, with a maximum aggregate number of 150,000 shares1459issuable under the plan. Shares underlying granted options are exercisable146025% on the date of grant and 25% each year thereafter on a cumulative basis.1461Unexercisable options lapse ten years after the date of grant or expire within146290 days of termination of employment. Exercise price is fair market value of1463a share of common stock at date of grant. The plan has a term of ten years.14641465(CONTINUED)14661467<PAGE>14681469CDX CORPORATION14701471NOTES TO FINANCIAL STATEMENTS1472YEARS ENDED JUNE 30, 1999, 1998, and 1997147314748. STOCKHOLDERS' EQUITY (Continued)14751476In November 1987, the Directors of the Company approved a Non-Qualified1477Stock Option Plan for employees, consultants and directors. The Company has1478reserved 60,000 unregistered shares of its common stock for use in this plan.1479During 1992, the Board of Directors reserved another 1,440,0001480unregistered shares of its common stock for use in this plan. In addition,1481during 1993, the Company granted one of its directors options for 250,0001482shares at $.10 per share. And in 1994, the Company granted to a related party1483options for 100,000 shares at $.25 per share. In 1995 the Company granted1484to an officer of the Company a five year option to purchase 15,000 shares at1485$.25 per share. In 1996, the Company granted to officers of the Company1486five year options to purchase 22,500 shares at $.25 a share.14871488In addition, in 1992, the Company issued 600,000 warrants for its1489common stock with an exercise price of $.02 to certain of its officers and1490consultants in return for forbearance and modification of certain notes and1491accounts payable and services. The warrants expire December 31, 1998.1492Further, during 1995, the Company issued 75,000 warrants for its common stock1493to an unrelated party in connection with a loan. The warrants are divided1494equally into three classes of 25,000 each designated A, B, C with exercise1495prices of $.25, $.375 and $.50, respectively, all of which were to expire in1496February of 1998 and which have been extended and amended to expire in February1497of 2001. The Company has reserved 675,000 of its authorized common stock in1498connection with its warrants. In December 1998, the Company extended the1499expiration of all its outstanding warrants to December 31, 2001.15001501In December 1996, the Directors of the Company issued 1,300,000 shares1502of authorized common stock at $.01 per share to officers of the Company1503and a related party for services.15041505A summary of the plans at June 30, 1999 is as follows:15061507Total Shares Share Options Option1508Reserved Outstanding Price1509____________ _____________ ______151015111987 Non-Qualified Stock Option Plan 1,500,000 250,000 $.101512100,000 $.25151315,000 $.25151422,500 $.25151515161992 Stock Warrants Plan 600,000 600,000 $.0215171995 Stock Warrants Plan 75,000 25,000 $.25151825,000 $.375151925,000 $.5015201521(CONTINUED)15221523<PAGE>15241525CDX CORPORATION1526NOTES TO FINANCIAL STATEMENTS1527YEARS ENDED JUNE 30, 1999, 1998, and 19971528152915309. LEASE AGREEMENT - RELATED PARTY15311532The Company entered into a lease agreement on March 26, 1990 with a1533related party to rent its facilities in Providence, Rhode Island. Original1534base monthly rental payments total $4,594 and the lease term is five years,1535expiring on February 28, 1995. On September 1, 1994, the related party agreed1536to reduce base monthly rental to $2,500 on June 1, 1996. The lease agreement1537was not renewed and currently the Company is renting facilities on a monthly1538basis.15391540Minimum lease payments and rental expense charged to operations are1541as follows:15421543Date Minimum lease payments Rental expense1544____ ______________________ ______________15451999 15,14715461998 7,82015471997 19,4521548154910. SEGMENT INFORMATION15501551Industry Segments15521553Approximately 92% of the Company's business consists of sales of1554computerized pulmonary diagnostic equipment and supplies. The rest of the1555Company's business consists of sales of infection and bio-hazard control1556products. The Company does not operate in other industry segments. The1557Company has no foreign operations.15581559156011. SUPPLEMENTARY INCOME STATEMENT INFORMATION15611562For the years ended June 30, the following supplemental expense1563information is presented for analysis.156415651999 1998 19971566____ ____ ____15671568Repairs and maintenance $ 280 $418 $ 9881569Advertising 6,678 3,154 8,0531570Sales and property taxes 819 2,4891571Provision for doubtful accounts 600 2,307 1,80015721573(CONTINUED)15741575<PAGE>15761577CDX CORPORATION15781579NOTES TO FINANCIAL STATEMENTS1580YEARS ENDED JUNE 30, 1999, 1998, AND 19971581158212. FINANCIAL INSTRUMENTS15831584The Company is engaged primarily in the distribution of specialized1585medical equipment in North America. The Company performs ongoing credit1586evaluations of its customers' financial condition and, generally, requires1587no collateral from its customers.15881589Financial instruments that potentially subject the Company to1590concentrations of credit risk consist principally of trade accounts1591receivable. Concentrations of credit risk with respect to trade receivables1592are limited due to the number of customers comprising the customer base1593and their dispersion across geographic areas.15941595The carrying amounts reflected in the balance sheets for cash and1596notes payable approximate the respective fair values due to the short1597maturities of those instruments.1598159913. FUTURE OPERATIONS16001601The accompanying financial statements have been prepared in1602conformity with generally accepted accounting principles, which contemplate1603continuation of the Company as a going concern. However, the Company suffered1604losses of $14,980, and $122,372 during the years ended June 30,16051999 and 1997, respectively. In addition, the Company has a net1606stockholders' deficiency of $521,726 at June 30, 1999.16071608The Company has been in the process of developing new and innovative1609Products and is in the investigation stage relative to expanding its line of1610medical testing equipment. The development of these products has taken longer1611than planned. The Company has brought some of these products to market, which1612have been met with a demand for improvements and changes to the products.1613Management plans to continue to have its spirometers manufactured by others and1614to emphasize its marketing of that and other medical products utilizing state1615of the art technology and to re-market these products to a substantial existing1616client base. Management expects sales and profits to significantly increase1617when the improved products are re-marketed.16181619While management is confident that the new products will increase1620cash flow and make the Company profitable, there can be no assurance that the1621expected magnitude of growth will be experienced. Should the Company's1622expectations materialize, however, additional capital will not be required1623in order for it to continue operations.16241625(CONCLUDED)162616271628</TEXT>1629</DOCUMENT>1630<DOCUMENT>1631<TYPE>EX-23.11632<SEQUENCE>21633<TEXT>1634163516361637CONSENT OF COUNSEL16381639I hereby consent to the use of my name as legal counsel in the Annual1640Report filed pursuant to Section 13 or 15(d) of the Securities Exchange Act of16411934 for the fiscal year ended June 30, 1999 by CDX Corporation on Form164210-KSB.164316441645BRENDAN P. SMITH, P.C.16461647/s/ Brendan P. Smith16481649By:___________________1650BRENDAN P. SMITH, Esq.16511652Providence, RI16531654</TEXT>1655</DOCUMENT>1656<DOCUMENT>1657<TYPE>EX-23.21658<SEQUENCE>31659<TEXT>1660166116621663166416651666166716681669CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS16701671We hereby consent to the use of our name as auditing firm in the1672Annual Report filed pursuant to Section 13 or 15(d) of the Securities1673Exchange Act of 1934 for the fiscal year ended June 30, 1999 by1674CDX Corporation on Form 10-KSB.16751676CAYER, PRESCOTT, CLUNE & CHATELLIER, LLP16771678/S/ Cayer, Prescott, Clune & Chatellier, LLP16791680September 30, 19991681Providence, Rhode Island16821683</TEXT>1684</DOCUMENT>1685<DOCUMENT>1686<TYPE>EX-271687<SEQUENCE>41688<DESCRIPTION>ARTICLE 5 FIN. DATA SCHEDULE FOR FISCAL YEAR1689ENDING JUNE 30, 19991690<TEXT>16911692<TABLE> <S> <C>169316941695<S> <C>16961697<ARTICLE> 51698<CIK> 00003511291699<NAME> CDX Corporation1700<MULTIPLIER> 11701<CURRENCY> U.S.17021703<S> <C>1704<PERIOD-TYPE> 12-MOS1705<FISCAL-YEAR-END> JUN-30-19991706<PERIOD-START> JUL-01-19981707<PERIOD-END> JUN-30-19991708<EXCHANGE-RATE> 11709<CASH> 10,2591710<SECURITIES> 01711<RECEIVABLES> 37,0451712<ALLOWANCES> 01713<INVENTORY> 9,2091714<CURRENT-ASSETS> 56,5131715<PP&E> 9,1781716<DEPRECIATION> 01717<TOTAL-ASSETS> 120,1511718<CURRENT-LIABILITIES> 379,2531719<BONDS> 262,6041720<PREFERRED-MANDATORY> 01721<PREFERRED> 01722<COMMON> 48,8811723<OTHER-SE> 01724<TOTAL-LIABILITY-AND-EQUITY> 120,1511725<SALES> 318,2601726<TOTAL-REVENUES> 318,2601727<CGS> 169,7111728<TOTAL-COSTS> 326,8771729<OTHER-EXPENSES> 6,3631730<LOSS-PROVISION> 01731<INTEREST-EXPENSE> 21,8631732<INCOME-PRETAX> (14,980)1733<INCOME-TAX> 01734<INCOME-CONTINUING> 01735<DISCONTINUED> 01736<EXTRAORDINARY> 01737<CHANGES> 01738<NET-INCOME> (14,980)1739<EPS-BASIC> (.003)1740<EPS-DILUTED> (.003)17411742174317441745</TABLE>1746</TEXT>1747</DOCUMENT>1748</SEC-DOCUMENT>1749-----END PRIVACY-ENHANCED MESSAGE-----175017511752