UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: August 31, 2003 Commission File Number 000-49908
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REXRAY CORPORATION
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(Exact name of registrant as specified in its charter)
COLORADO 75-3056237
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
16200 WCR 18E, Loveland, Colorado 80537
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(Address of principal executive offices) (Zip code)
(970) 635-0346
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(Registrant's telephone number, including area code)
10077 W. County Line Road, Longmont, Colorado 80501
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(Former name, former address and former fiscal year, if changed
since last report.)
Indicate by check whether the registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common stock, no par value 1,780,000
Class Number of shares outstanding at October 13, 2003
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This document is comprised of 10 pages.
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INDEX
Page
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PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed balance sheet, August 31, 2003 (unaudited).................... 3
Condensed statements of operations, three months ended
August 31, 2003 (unaudited) and May 2, 2002 (inception)
through August 31, 2003 (unaudited).................................. 4
Condensed statements of cash flows, three months ended
August 31, 2003 (unaudited) and May 2, 2002 (inception)
through August 31, 2003 (unaudited).................................. 5
Notes to unaudited condensed financial statements...................... 6
Item 2. Plan of Operation.............................................. 8
PART 2 - OTHER INFORMATION
Item 1. Legal Information.............................................. 9
Item 2. Changes in Securities.......................................... 9
Item 3. Defaults Upon Senior Securities................................ 9
Item 4. Submission of Matters to a Vote of Security Holders............ 9
Item 5. Other Information.............................................. 9
Item 6. Exhibits and Reports on Form 8-K............................... 9
Signatures.............................................................. 10
2
Part 1. Item 1. Financial Information
REXRAY CORPORATION
(A Development Stage Company)
Condensed Balance Sheet
(Unaudited)
August 31, 2003
Assets
Cash..................................................................$ 48
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Liabilities and Shareholders' Deficit
Liabilities:
Accounts payable and accrued liabilities..........................$ 500
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Total liabilities................................... 500
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Shareholders' deficit:
Preferred stock................................................... --
Common stock...................................................... 11,800
Additional paid-in capital........................................ 8,215
Deficit accumulated during development stage...................... (20,467)
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Total shareholders' deficit......................... (452)
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$ 48
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See accompanying notes to condensed financial statements
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REXRAY CORPORATION
(A Development Stage Company)
Condensed Statements of Operations
(Unaudited)
May 2,
2002
Three Months Ended (Inception)
August 31, Through
----------------------------------- August 31,
2003 2002 2003
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Operating expenses:
Stock-based compensation:
Incorporation and organization services............ $ -- $ -- $ 8,000
Contributed services, related party (Note 2).......... -- 1,245 2,970
Contributed rent, related party (Note 2).............. 300 -- 1,100
Rent, related party (Note 2).......................... -- 300 500
Professional fees..................................... 1,500 1,535 7,710
Other................................................. 28 18 187
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Total operating expenses.............. 1,828 3,098 20,467
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Loss before income taxes.............. (1,828) (3,098) (20,467)
Income tax provision (Note 4)............................. -- -- --
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Net loss.............................. $ (1,828) $ (3,098) $ (20,467)
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Basic and diluted loss per share.......................... $ (0.00) $ (0.00)
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Basic and diluted weighted average
common shares outstanding............................. 1,180,000 1,156,667
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See accompanying notes to condensed financial statements
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REXRAY CORPORATION
(A Development Stage Company)
Condensed Statements of Cash Flows
(Unaudited)
May 2,
2002
Three Months Ended (Inception)
August 31, Through
--------------------------- August 31,
2003 2002 2003
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Net cash used in
operating activities....................$ (2,528) $ (1,103) $ (7,697)
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Cash flows from financing activities:
Expenses paid by an officer on behalf of
the Company (Note 2)...................................... 2,500 -- 4,145
Proceeds from the sale of common stock (Note 3).............. -- 200 3,600
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Net cash provided by
financing activities.................... 2,500 200 7,745
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Net change in cash...................... (28) (903) 48
Cash, beginning of period........................................ 76 1,714 --
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Cash, end of period..............................................$ 48 $ 811 $ 48
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Supplemental disclosure of cash flow information:
Income taxes.................................................$ -- $ -- $ --
============ ============= ===========
Interest.....................................................$ -- $ -- $ --
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See accompanying notes to condensed financial statements
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REXRAY CORPORATION
(A Development Stage Company)
Notes to Unaudited Condensed Financial Statements
Note 1: Basis of Presentation
The condensed financial statements presented herein have been prepared by the
Company in accordance with the instructions for Form 10-QSB and the accounting
policies in its Form 10-KSB filed for the year ended May 31, 2003 and should be
read in conjunction with the notes thereto.
In the opinion of management, the accompanying condensed financial statements
contain all adjustments (consisting only of normal recurring adjustments) which
are necessary to provide a fair presentation of operating results for the
interim periods presented. The results of operations presented for the three
months ended August 31, 2003 are not necessarily indicative of the results to be
expected for the year.
The Company is in the development stage in accordance with Statements of
Financial Accounting Standards (SFAS) No. 7 "Accounting and Reporting by
Development Stage Enterprises". As of August 31, 2003, the Company has devoted
substantially all of its efforts to financial planning and raising capital.
Financial data presented herein are unaudited.
Note 2: Related Party Transactions
The Company paid rent to Amery Coast Corporation ("ACC"), an affiliate under
common control, from May 2002 through September 2002. The office space was
valued at $100 per month based on the market rate in the local area and is
included in the accompanying financial statements as "rent, related party".
During the period from October 2002 through August 31, 2003, ACC contributed
office space to the Company. The office space was valued at $100 per month based
on the market rate in the local area and is included in the accompanying
financial statements as "contributed rent, related party" expense with a
corresponding credit to "additional paid-in capital".
During the three months ended August 31, 2003, an officer contributed $2,500 to
the Company for working capital. The working capital contributions are included
in the accompanying financial statements as "additional paid-in capital".
An officer contributed time and effort to the Company valued at $2,970 for the
year ended May 31, 2003. The time and effort was valued by the officer between
$20 and $75 per hour based on the level of services performed and is included in
the accompanying financial statements as "contributed services, related party"
with a corresponding credit to "additional paid-in capital".
Note 3: Income taxes
The Company records its income taxes in accordance with SFAS No. 109,
"Accounting for Income Taxes". The Company incurred net operating losses for all
periods presented resulting in a deferred tax asset, which was fully allowed
for; therefore, the net benefit and expense resulted in $-0- income taxes.
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REXRAY CORPORATION
(A Development Stage Company)
Notes to Unaudited Condensed Financial Statements
Note 4: Subsequent events
Common stock sales
During September 2003, the Company sold 600,000 shares of its common stock for
gross proceeds totaling $30,000 ($.05 per share). The Company relied upon
exemptions from registration believed by it to be available under federal and
state securities laws in connection with the sales. The shares were sold through
the Company's officer and director. Following the stock sales, the Company's
issued and outstanding common stock increased from 1,180,000 shares to 1,780,000
shares.
Acquisition Agreement and Change of Control
On September 30, 2003, the Company entered into an Acquisition Agreement (the
"Agreement") with CytoDyn of New Mexico, Inc. ("CytoDyn"), a New Mexico
corporation. Under the terms of the Agreement, the Company agrees to affect a
one for two (1:2) reverse stock split and issue to CytoDyn 5,362,640 post-split
shares of the Company's common stock in exchange for the following assets:
1. The trademarks CytoDyn and Cytolin and related trademark symbol;
2. The assignment of certain patent license agreement dated July 1, 1994
by and between Allen D. Allen and CytoDyn of New Mexico, Inc. and
covers U.S. patent numbers 5424066, 5651970, and 6534057; and
3. A cash payment of $10,000.
Following the closing of the agreement, the Company would have approximately
6,277,640 shares of its common stock issued and outstanding, of which CytoDyn
would own approximately 85.4 percent, resulting in a change of control in the
Company.
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Part I. Item 2. Plan of operation
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REXRAY CORPORATION
(A Development Stage Company)
PLAN OF OPERATION
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The Company intends to seek out, investigate, and pursue a merger, acquisition,
or other business combination with an operating entity. There have been no
revenues from operations since inception, and none are anticipated prior to
completing a business combination.
The Company has no full-time employees, incurs nominal rent and administrative
expenses of approximately $100 per month, and has no other recurring operational
expenses except professional fees incurred as necessary. The Company's president
devotes approximately ten hours per month, without compensation, to the affairs
of the Company. Through August 31, 2003, the Company has been operating on
working capital contributed by the Company's president. Should the Company not
complete a business combination within the next three to six months, the Company
plans to raise additional working capital through the sale of its common stock.
There is no assurance that the Company's president will continue to provide
working capital or that Company will be able to raise the capital needed to
maintain its development stage operations.
Acquisition Agreement:
As of the date of this report, the Company had entered into an Acquisition
Agreement (the "Agreement") with CytoDyn of New Mexico, Inc. ("CytoDyn"), a New
Mexico corporation. Under the terms of the Agreement, the Company agrees to
affect a one for two (1:2) reverse stock split and issue to CytoDyn 5,362,640
post-split shares of the Company's common stock in exchange for the following
assets:
1. The trademarks CytoDyn and Cytolin and related trademark symbol;
2. The assignment of certain patent license agreement dated July 1, 1994
by and between Allen D. Allen and CytoDyn of New Mexico, Inc. and
covers U.S. patent numbers 5424066, 5651970, and 6534057; and
3. A cash payment of $10,000.
Following the closing of the agreement, the Company would have approximately
6,277,640 shares of its common stock issued and outstanding, of which CytoDyn
would own approximately 85.4 percent, resulting in a change of control in the
Company. The Agreement had not closed as of the date of this report.
Selection of an appropriate business opportunity is complex and risky due to the
Company's limited financial resources, the speculative nature of operations,
management's limited time commitment to the Company, management's potential
conflicts of interest, the burdens of being a reporting company, lack of market
research, and competition in the marketplace. The Company's success is dependent
upon locating and consummating a business combination, and there are no
assurances that this will occur.
Special note regarding forward-looking statements
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This report contains forward-looking statements within the meaning of federal
securities laws. These statements plan for or anticipate the future.
Forward-looking statements include statements about our future business plans
and strategies, statements about our need for working capital, future revenues,
results of operations and most other statements that are not historical in
nature. In this Report, forward-looking statements are generally identified by
the words "intend", "plan", "believe", "expect", "estimate", and the like.
Investors are cautioned not to put undue reliance on forward-looking statements.
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Except as otherwise required by applicable securities statues or regulations,
the Company disclaims any intent or obligation to update publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise. Because forward-looking statements involve future risks and
uncertainties, these are factors that could cause actual results to differ
materially from those expressed or implied.
Part 2. Other Information
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Item 1 - Legal Information.
No response required.
Item 2 - Changes in Securities.
During September 2003, the Company sold 600,000 shares of its common
stock for gross proceeds totaling $30,000 ($.05 per share). The
Company relied upon exemptions from registration believed by it to be
available under federal and state securities laws in connection with
the sales. The shares were sold through the Company's officer and
director. Following the stock sales, the Company's issued and
outstanding common stock increased from 1,180,000 shares to 1,780,000
shares.
Item 3 - Defaults Upon Senior Securities.
No response required.
Item 4 - Submission of Matters to a Vote of Security Holders.
No response required.
Item 5 - Other Information.
No response required.
Item 6 - Exhibits and Reports on Form 8-K.
(a) Exhibits:
31.1 CEO and CFO Certification pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.
32.1 Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 - CEO
32.2 Certification Pursuant to 18 U.S.C. Section 1350, as
adopted pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002 - CFO
(b) Reports on Form 8-K:
None.
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SIGNATURES
The financial information furnished herein has not been audited by an
independent accountant; however, in the opinion of management, all adjustments
(only consisting of normal recurring accruals) necessary for a fair presentation
of the results of operations for the three months ended August 31, 2003 have
been included.
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
REXRAY CORPORATION
(Registrant)
DATE: October 13, 2003 BY: /s/ James B. Wiegand
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James B. Wiegand
President
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