10QSB 1 mhut10q.txt U.S. SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB [X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 For Quarter Ended: April 30, 2001 OR [ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Commission File No. 000-27119 MEDI-HUT CO., INC (Exact name of registrant as specified in its charter) Delaware 222-436-721 (State of incorporation) (I.R.S. Employer Identification No.) 1935 Swarthmore Avenue Lakewood, New Jersey 08701 (732) 901-0606 (Address and telephone number of principal executive offices and principal place of business) Indicate by check mark 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 [ ] As of May 31, 2001, Medi-Hut had a total of 12,708,800 shares of common stock issued and outstanding. TABLE OF CONTENTS PART I: FINANCIAL INFORMATION Item 1: Financial Statements. . . . . . . . . . . . . . . . . .3 Item 2: Management's Discussion and Analysis. . . . . . . . . 14 PART II: OTHER INFORMATION Item 2: Changes in Securities and Use of Proceeds . . . . . . 16 Item 4: Submission of Matters to a Vote of Security Holders. . 17 Item 6: Exhibits and Reports filed on Form 8-K . . . . . . . 17 Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 19 PART I: FINANCIAL INFORMATION ITEM 1: FINANCIAL STATEMENTS The financial information set forth below with respect to Medi-Hut's statements of operations for the six months ended April 30, 2001 and 2000 is unaudited. This financial information, in the opinion of Medi-Hut's management, includes all adjustments consisting of normal recurring entries necessary for the fair presentation of such data. The results of operations for the six months ended April 30, 2001 are not necessarily indicative of results to be expected for any subsequent period. Medi-Hut Co., Inc. Balance Sheet April 30, 2001
April 30, 2001 ASSETS CURRENT ASSETS Checking account $ 1,398,787 Money Market account 3,683 Investment-Commercial Paper 2,250,000 Accounts Receivable 1,619,360 Accrued Interest Receivable 14,863 Deferred Insurance 58,255 Deferred Consulting Services 89,319 Merchandise Inventory 191,011 TOTAL CURRENT ASSETS 5,625,278 PROPERTY AND EQUIPMENT, NET OF ACCUMULATED DEPRECIATION 409,711 OTHER ASSETS Joint Venture Investment at Equity 1,000,000 Patent, Net of Amortization 36,603 TOTAL OTHER ASSETS 1,036,603 TOTAL ASSETS $7,071,592
See Notes to Interim Financial Statements **Unaudited** F-1 Medi-Hut Co., Inc. Balance Sheet April 30, 2001
April 30, 2001 LIABILITIES AND EQUITY CURRENT LIABILTIES Accounts Payable $1,262,931 Payroll Taxes Payable 3,175 Accrued Expenses 29,222 Accrued Income Taxes Payable 98,404 Deferred Income Taxes Payable 36,018 Due to Joint Venture Investment 250,000 TOTAL CURRENT LIABILITIES 1,679,750 EQUITY Capital Stock 12,109 Additional Paid in capital 8,585,974 Consultant services to be Provided (2,106,000) Deferred Charges (57,506) Retained (Deficit)/Earnings (1,042,735) TOTAL EQUITY 5,391,842 TOTAL LIABILITIES AND EQUITY $7,071,592
See Notes to Interim Financial Statements **Unaudited** F-2 Medi-Hut Co., Inc. Income Statement For the Quarters and Six Months Ended April 30, 2001 and April 30, 2000
RESTATED RESTATED February 1, February 1, November 1, November 1, 2001, to 2000 to 2000 to 1999 to April 30, April 30, April 30, April 30, 2001 2000 2001 2000 SALES Sales $ 2,315,528 $ 2,340,224 $4,520,674 $ 3,497,023 Sales discounts (1,022) (126) (6,688) (1,973) Total SALES 2,314,506 3,340,098 4,513,986 3,495,050 COST OF SALES BEGINNING INVENTORY 214,054 131,515 238,808 28,500 Purchases 1,885,757 2,133,778 3,802,956 3,298,451 Purchases discounts 0 (10) 0 (63) Freight In 0 42 0 2,167 Ending Inventory (191,012) (175,362) (191,012) (175,362) Freight Out 21,082 2,869 33,158 3,524 Total COST OF SALES 1,929,881 2,092,832 3,883,910 3,157,217 Total GROSS PROFIT 384,625 247,266 630,076 337,833 GENERAL & ADMINISTRATIVE 171,832 155,053 312,628 278,575 Total NET OPERATING INCOME (LOSS) 212,793 92,213 317,448 59,258 OTHER (INCOME) AND EXPENSES Interest Income (31,420) (15,279) (47,768) (28,856) Interest Expense 861 0 1,461 0 Depreciation Expense 16,319 74 30,253 74 Amort of Patent Expenses 552 640 701 1,280 Total OTHER (INCOME) AND EXPENSES (13,688) (14,565) (15,353) (27,502) NET INCOME (LOSS) BEFORE TAX 226,481 106,778 332,801 86,760 INCOME TAXES Provision for Income Taxes 101,589 3,924 131,313 4,781 INCOME TAXES 101,589 3,924 131,313 4,781 NET INCOME (LOSS) $124,892 $102,854 $201,488 $81,979 INCOME/(LOSS) PER COMMON SHARE 0.010 0.010 0.018 0.008 INCOME/(LOSS) PER COMMON SHARE ASSUMING DILUTION 0.010 0.017 WEIGHTED AVERAGE OF COMMON SHARES OUTSTANDING 12,103,463 10,476,418 11,484,578 10,474,589 (AS DILUTED) 12,254,631 11,635,746
See Notes to Interim Financial Statements **Unaudited** F-3 Medi-Hut Co., Inc. Condensed Cash Flow Statements For the Six Months Ended April 30, 2001 and April 30, 2000
Six Months Six Months Ended April 30, 2001 Ended April 30, 2000 Description Net Cash Provided by Operating Activities 88,289 104,024 Cash Flows from Investing Activities- Investment in Joint Venture (750,000) Purchase of marketable securities (1,850,000) Purchase of Equipment (113,562) (16,808) Net Cash (Used) by Investing Activities (2,713,562) (16,808) Cash Flows from Financing Actitivies- Issuance of stock in exchange for insurance coverage 18,000 Exercise of Stock warrants 1,512,500 Redemption of marketable securities 200,000 Sale of Stock 1,995,000 34,793 Net Cash Provided by Financing Activities 3,525,500 234,793 Net Increase (Decrease) in Cash 900,227 322,009 Cash at Beginning of Period 502,243 384,733 Cash at End of Period $1,402,470 $706,742
SCHEDULE OF NON-CASH FINANCING AND INVESTING ACTIVITIES The Balance Sheet of Medi-Hut Co., Inc. presents a non-cash item at 4/30/01, which is a $250,000 existing commitment to the Joint Venture Investment. See Notes to Interim Financial Statements **Unaudited** F-4 Medi-Hut Co., Inc. Notes to the Interim Financial Statements April 30, 2001 NOTE 1 - BASIS OF PRESENTATION The accompanying unaudited interim financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to item 310 of Regulation S-B. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended April 30, 2001 and April 30, 2000 are not necessarily indicative of the results that may be expected for the years ended October 31, 2001 and October 31, 2000 respectively. NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Nature of Organization Medi-Hut Co., Inc. (the Company), is a company in the business of selling wholesale medical supplies. The Company was incorporated on November 22, 1982 in the State of New Jersey. On January 28, 1998, the Company entered into an Agreement and Plan of Reorganization (APR) with a public company Indwest, Inc. (Indwest), a Utah company incorporated on August 20, 1981 (formerly known as Gibraltor Energy, Gibraltor Group, Computermall of Philadelphia, Inc. and Steering Control Systems, Inc.) Pursuant to the APR, Medi-Hut's shareholders exchanged 100% of their common shares for 4,295,000 newly issued shares of Indwest on March 3, 1998. For accounting purposes, the acquisition has been treated as an acquisition of Indwest by Medi-Hut and a recapitalization of Medi-Hut. The historical financial statements prior to January 28, 1998 are those of Medi- Hut. Pro-forma information is not presented since the combination is considered a recapitalization. Subsequent to the exchange, Medi-Hut merged with Indwest whereby Medi-Hut ceased to exist and Indwest, the surviving corporation, changed its name to Medi-Hut Company, Inc. On February 2, 1998 Medi-Hut Company, Inc. changed its state of domicile from Utah to Delaware. The surviving corporation's operations are entirely those of the former and new Medi-Hut. Investments in Marketable Securities The Company invests in debt securities, which are classified at the date of purchase as held-to-maturity securities. Held-to-maturity securities are reported at amortized cost, as the Company has both the ability and intent to hold such securities until maturity. Accounts Receivable No reserve for doubtful accounts has been established since management believes that all accounts receivable are collectible in full. **UNAUDITED** F-5 Medi-Hut Co., Inc. Notes to the Interim Financial Statements April 30, 2001 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Inventory Inventory is stated at the lower of cost (determined on a first-in, first-out basis) or market. Market values represent the lower of replacement cost or estimated net realizable value. Deferred Charges Deferred charges are comprised of costs incurred by the Company for seeking small business loan financing. These charges will be amortized over the loan period when and if such financing is obtained or expensed in full should such financing not be obtained. No amortization expense has been recognized during the three months ended April 30, 2001 and April, 30 2000. Depreciation Machinery and equipment are stated at cost. Depreciation is computed using the straight-line method for financial reporting purposes, which amounted to $16,319 and $74 for the three months ended April 30, 2001 and April 30, 2000 respectively. The estimated useful lives of the machinery and equipment assets for financial statement purposes are five years. The estimated useful lives of molds for financial statement purposes are three years. For income tax purposes, recovery of capital costs for machinery and equipment and molds are made using accelerated methods over the asset's class life. Repairs and maintenance expenditures, which do not extend the useful lives of the related assets are expensed as incurred. Research and Development The only research and development costs incurred relate to patent and licensing costs which are being amortized over their remaining useful lives of 20 years on a straight line basis beginning on the patent application dates. Total amortization for the three months ended April 30, 2001 and April 30, 2000 were $552 and $640 respectively. Revenue Recognition Revenue from product sales is recognized at the time of shipment provided that the resulting receivable is deemed probable of collection. Income Taxes In accordance with the provisions of Financial Accounting Standards Board Statement No. 109, "Accounting for Income Taxes" (SFAS No. 109"), deferred taxes are recognized for depreciation differences between book and tax methods and for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to realize. **UNAUDITED** F-6 Medi-Hut Co., Inc. Notes to the Interim Financial Statements April 30, 2001 NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued Use of Estimates The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Securities Issued for Services The Company accounts for common stock and common stock purchase warrants issued for services by reference to the fair market value of the Company's stock on the date of stock issuance or warrant grant in accordance with Financial Accounting Standards Board Statement No. 123 "Accounting for Stock- Based Compensation. (FASB 123)" Compensation/consultant expense is recorded for the fair market value of the stock and warrants issued. NOTE 3 - CONCENTRATIONS OF CREDIT AND BUSINESS RISK The Company maintains cash balances in a financial institution. Accounts at the institution are insured by the Federal Deposit Insurance Corporation up to $ 100,000 per account, of which the Company's accounts may, at times, exceed the federally insured limits. The Company provides credit in the normal course of business to customers located primarily in the northeastern portion of the U.S. The Company performs ongoing credit evaluations of its customers. NOTE 4 - MARKETABLE SECURITIES The Company had investments in Held-to maturity debt securities on April 30, 2001 and April 30, 2000 in the amount of $2,250,000 and $700,000 respectively. The securities had terms ranging from 30 to 90 days and fixed interest rates ranging from 4.92% to 5.99% per annum and are unsecured. NOTE 5 - INVENTORY Inventory consists of purchased finished goods, which totaled $191,011 and $175,362 at April 30, 2001 and April 30, 2000 respectively. **UNAUDITED** F-7 Medi-Hut Co., Inc. Notes to the Interim Financial Statements April 30, 2001 NOTE 6 LINES OF CREDIT On January 31, 2001 the Company received a bank commitment on a $750,000 revolving line of credit under which the bank has agreed to make loans at % above the prime interest rate. The Company's business assets secure the note. As of April 30, 2001 and April 30, 2000 there were $ 0 outstanding on lines of credit. NOTE 7 - EXERCISED WARRANTS On December 18, 2000, 100,000 warrants were exercised by a warrant holder totaling $300,000 of proceeds to the Company and the issuance of 100,000 shares of common stock. On January 31, 2001, 700,000 warrants were exercised by two different warrant holders totaling $1,212,500 of proceeds to the Company and the issuance of 700,000 shares of common stock. NOTE 8 - REGISTRATION OF ADDITIONAL SECURITIES On January 29, 2001 the Company registered an additional 2,250,000 shares of common stock with The Securities and Exchange Commission for the purpose of raising additional working capital. NOTE 9 - OPERATING LEASE COMMITMENTS The Company leases certain office and warehouse space (90 days cancelable) and an automobile under operating leases. The following is a schedule of future minimum rental payments (exclusive of common area charges) required under operating leases that have initial or remaining non-cancelable lease terms in excess of one year as of April 30, 2001 Year Ending October 31, 2001 $ 3,907 2002 6,697 2003 2,789 ------------ Total minimum payments required $13,393 Rent Expense for the three months ended April 30, 2001 and April 30, 2000 amounted to $7,408 and $6,484 respectively. The office and warehouse lease contain provisions for contingent rental payments based upon increases in taxes, insurance and common area maintenance expense. **UNAUDITED** F-8 Medi-Hut Co., Inc. Notes to the Interim Financial Statements April 30, 2001 NOTE 11 - INVESTMENTS On November 16, 2000 the Company entered into a joint venture agreement with a South Korean company whereby Medi-Hut shall contribute $1,000,000 for a 44% interest in the entity. The Korean Government approved the registration of the new entity on February 15, 2001. The entity will provide a facility for the production of the Company's patented safety syringe and allow for better control over the manufacturing and distribution process. As of April 30, 2001 the Company had a liability of $250,000 to the entity. NOTE 12 - ISSUANCE OF STOCK On January 5, 2001 the Company issued 4,000 shares of common stock valued at $18,000 to an insurance company in exchange for a Directors and Officer's liability policy. NOTE 13 SALE OF STOCK On February 1, 2001 the Company sold 475,000 units to an investor in accordance with the provisions of Section4(2) and Regulation D of the Securities Act of 1933. Each unit had a price of $4.20 and was comprised of one share of the Company's common stock and one warrant to purchase a share of common stock in the Company, exercisable for a period of five years. The aforementioned warrants grant the investor or holder the right to purchase one additional share at a price of $5.25 per share. **UNAUDITED** F-9 Medi-Hut Co., Inc. Notes to the Interim Financial Statements April 30, 2001 NOTE 14 - EARNINGS (LOSS) PER COMMON SHARE Earnings (loss) per common share, in accordance with the provisions of Financial Accounting Standards Board No. 128, "Earnings per Share", is computed by dividing net income (loss) by the weighted average number of shares of common stock outstanding during the period. At April 30, 2001, the following amounts were used in computing earnings per share and the effect on the weighted average number of shares of dilutive potential common stock. The number of shares used in the calculations reflects of the common stock equivalents (warrants) if exercised: 3 Months Ended 6 Months Ended 4/30/01 4/30/01 Weighted average number of common Shares used in basic EPS 12,103,463 11,484,578 Effect of Dilutive Securities: Warrants 151,168 151,168 Weighted average number of common Shares and dilutive potential Common stock used in diluted EPS 12,254,631 11,635,746 NOTE 15 FAIR VALUE OF FINANCIAL INSTRUMENTS Cash, Accounts Receivable, Accounts Payable and Lines of Credit The carrying amount approximates fair value because of the short maturities of these instruments. Limitations Fair value estimates are made at a specific point in time, based on relevant market information and information about the financial instrument. These estimates are subjective in nature and involve uncertainties and matters of significant judgment and therefore cannot be determined with precision. Changes in assumptions could significantly affect the estimate. **UNAUDITED** F-10 Medi-Hut Co., Inc. Notes to the Interim Financial Statements April 30, 2001 NOTE 16 WARRANTS/ CONSULTANT SERVICES TO BE PROVIDED On October 1, 2000 the Company executed an agreement for public relations services to be provided. The original terms of the agreement required cash payments of $100,000 per month, totaling $1,200,000 and 600,000 warrants entitling the holder to an exercise price of $5.00 per share. The requirements of the agreement were amended to provide no cash payments and the 600,000 warrants to be adjusted to an exercise price of $2.50 per share, The warrants have full vesting rights upon issuance and an expiration date of October 1, 2005 NOTE 17 PLANNED MERGER On March 5, 2001 the Company announced it's signing of a letter of intent to enter into an Agreement and Plan of Reorganization with a competing sales and marketing organization. The Company will enter into the agreement through a stock-for-stock exchange. **UNAUDITED** F-11 In this quarterly report references to "Medi-Hut," "we," "us," and "our" refer to Medi-Hut Co., Inc. FORWARD LOOKING STATEMENTS This Form 10-QSB contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. For this purpose any statements contained in this Form 10-QSB that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, words such as "may," "will," "expect," "believe," "anticipate," "estimate" or "continue" or comparable terminology are intended to identify forward-looking statements. These statements by their nature involve substantial risks and uncertainties, and actual results may differ materially depending on a variety of factors, many of which are not within Medi-Hut's control. These factors include but are not limited to economic conditions generally and in the industries in which Medi-Hut may participate; competition within Medi-Hut's chosen industry, including competition from much larger competitors; technological advances and failure by Medi-Hut to successfully develop business relationships. ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS Medi-Hut wholesales name brand drugs, medical products, our "Elite" brand medical products and our "Tru-Choice" over-the-counter drugs. These products are provided to us by various suppliers. We also manufacture and market our Elite Safety Syringe. The following discussion and analysis should be read in conjunction with the financial statements and notes included with this report. We realize revenue when products are shipped and title passes to our wholesalers. Our inventory consists of finished products which are warehoused at the third-party manufacturer's or supplier's facility or when necessary at our own warehouse. Revenue is net of returns, which have historically been less than 2% of gross sales. Our fiscal year ends on October 31st. Acquisition Treatment In April 2000, in an arm's length transaction, Medi-Hut acquired Vallar Consulting, a privately held New York corporation in the business of selling over-the-counter and name brand pharmaceuticals to distributors and wholesalers nationwide. Pursuant to the agreement, dated January 10, 2000, we issued 350,000 common shares valued at $1,340,500 to Lawrence Marasco, the sole owner of Vallar. The acquisition was treated as a pooling of interests for accounting purposes and Vallar became our wholly-owned subsidiary. Subsequently, Vallar was dissolved and all assets, liabilities and equity were recorded on our books and our financial statements have been restated to reflect these allocations. Results of Operations Six Months Ended April 30, 2001 Compared to Six Months Ended April 30, 2000 The following table summarizes the results of our operations for the six months ended April 30, 2001 and 2000. Three Months Ended April 30, Six Months Ended April 30, 2001 2000 2001 2000 (Restated) (Restated) Total sales $2,314,506 2,340,098 $4,513,986 $3,495,050 Total cost of sales 1,929,881 2,092,832 3,883,910 3,157,217 Gross profit 384,625 247,266 630,076 337,833 General & administrative expenses 171,832 155,053 312,628 278,575 Net operating income 212,793 92,213 371,448 59,258 Total other (income) and expenses (13,688) (14,565) (15,353) (27,502) Income taxes 101,589 3,924 131,313 4,781 Net income $ 124,892 $ 102,854 $ 201,488 $ 81,979
Total sales were $2,314,506 for the second quarter of 2001 and $4,513,986 for the six month period ended April 30, 2001. The six month figure represents a $1,018,936 increase over the same period last year. The increase in sales was primarily the result of sales of name brand pharmaceuticals and our Elite Safety Syringe. Total cost of sales as a percentage of total sales decreased for the comparable quarter and the six month period. Such costs were 83.4% of total sales for the second quarter of 2001 compared to 89.4% of total sales for the second quarter of 2000, and were 86.0% for the 2001 six month period compared to 90.3% for the six month period of 2000. The improved costs of sales are reflective of the greater profit margin of The Elite Safety Syringe. As a result of reductions in costs of sales and increased revenues, our gross profit increased by $137,359 in the second quarter of 2001 compared to the second quarter of 2000, and increased $292,243 in the 2001 six month period compared to the 2000 six month period. General and administrative expenses increased $16,779 in the second quarter of 2001 compared to the second quarter of 2000 and increased $34,053 in the six month period of 2001 compared to the six month period of 2000. Such expenses were 6.9% of total sales in the 2001 six month period compared to 8.0% of total sales for the comparable 2000 period. The increase in sales resulted in our net operating income increasing $120,580 in the 2001 second quarter compared to the 2000 second quarter, and an increase of $258,190 in the 2001 six month period compared to the same period in 2000. We recorded total other income, net of other expenses, of $13,688 for the 2001 second quarter compared to $14,565 for the second quarter of 2000. For the six month period of 2001 we recorded total other income, net of other expenses, of $15,353 compared to $27,502 for the same period in 2000. The reductions in 2001 compared to 2000 were due primarily to depreciation expense from the new syringe molds we placed into service. Our income taxes increased $97,665 in the second quarter of 2001 and $126,532 for the six month period as a result of our increased net income. Our net income, after tax, increased $22,038 in the 2001 second quarter and $119,509 in the 2001 six month period compared to 2000 comparable periods. As a result, we posted a net income per share of $0.018 compared to an income per share of $0.008 for the 2000 six month period. Liquidity and Capital Resources We have funded our cash requirements primarily through revenues and sales of our common stock. Management anticipates we will continue to meet our present requirements for working capital and capital expenditures for the next twelve months from revenues and equity transactions. For the period ended April 30, 2001, we had $1,402,470 in cash and working capital of $3,945,529 compared to cash of $502,243 and working capital of $1,192,888 at the year ended October 31, 2000. We had total current assets of $5,625,278 with total current liabilities of $1,679,749 as of April 30, 2001, compared to $2,908,632 total current assets and $1,716,444 total current liabilities for the fiscal year ended October 31, 2000. Net cash provided by our operating activities was $88,289 for the 2001 six month period ended April 30, 2001, compared to $104,024 net cash provided by operating activities for the comparable 2000 six month period. Net cash used by investing activities was $2,713,562 for the 2001 period compared to $16,808 net cash used by investing activities for the same period in 2000. $750,000 of this amount is related to our investment of capital funding in Medi-Hut International (Mfg.) Co., Ltd. under our joint venture agreement with COA Industrial. In addition, we invested $1,850,000 to purchase marketable securities, which are unsecured, with terms ranging from 30 to 90 days and fixed interest rates ranging from 4.92% to 5.99% per annum. Net cash provided by financing activities was $3,525,500 for the 2001 period compared to $234,793 for the 2000 period. The 2001 increase was primarily related to proceeds of $1,512,500 from the exercise of 800,000 warrants. The warrants were granted under various agreements and the underlying common shares were registered under the Securities Act of 1933 on January 29, 2001. 1,075,000 warrants remain outstanding and if all of the remaining warrants are exercised we could receive up to $5,493,750. In addition, $1,995,000 in proceeds were realized from the sale of common stock during the 2001 six month period. On November 30, 2000 we agreed to sell, in a private placement, 475,000 units for $1,995,000 to Mid-West First Financial, Inc., an accredited investor. Each unit consisted of one common share and one warrant to purchase one common share. The warrants are exercisable for a period of five years at an exercise price of $5.25. As of April 30, 2001, our principal commitments consisted of office and warehouse space and an automobile lease. Monthly rental payments are approximately $2,025 per month with total future minimum rental payments of $13,393 through the fiscal year 2003. We also are committed to contribute an additional $250,000 to our joint venture with COA Industrial. Financing. We have a $750,000 revolving line of credit which expires January 31, 2002. PNC Bank, N.A. makes loans to us at % above the prime interest rate for the revolving line of credit. This line of credit is secured by all the assets of Medi-Hut. As of the fiscal year ended 2000 and the second quarter ended April 30, 2001 there were no amounts outstanding on the line of credit. On October 4, 1999, we received preliminary approval from the New Jersey Economic Development Authority for $5.75 million in financial assistance to build a manufacturing facility in New Jersey for our Elite Safety Syringe. We continue to seek an underwriter for the bonds, however, the New Jersey Authority may not be able to allocate tax-exempt private activity bonds if it receives financing requests which exceed its private activity bond caps or if it determines that other projects should have priority over Medi-Hut's project. We anticipate that we will rely on manufacturing facilities located in Korea to produce our Elite Safety Syringe for the present. Management anticipates that we may seek additional funding through future securities offerings which will be effected pursuant to applicable exemptions under federal and state laws. We will determine the purchasers and manner of issuance according to our financial needs and the available exemptions. We have no plans to make a public offering of our common stock at this time. We also note that if we issue more shares of our common stock our shareholders may experience dilution in the value per share of their common stock. If additional funds are needed for our future growth, we can not assure that funds will be available from any source, or, if available, that we will be able to obtain the funds on terms agreeable to us. The acquisition of funding through the issuance of debt could result in a substantial portion of our cash flows from operations being dedicated to the payment of principal and interest on the indebtedness, and could render us more vulnerable to competitive and economic downturns. PART II: OTHER INFORMATION ITEM 2: CHANGES IN SECURITIES AND USE OF PROCEEDS (c) Recent Sales of Unregistered Securities The following discussion describes all securities sold by us without registration during the quarter ended April 30, 2001 and as of a recent date. On February 1, 2001, we sold 475,000 units to Mid-West First Financial, Inc., an accredited investor, for $1,995,000 pursuant to a private placement agreement dated November 30, 2000. Each unit consisted of one common share and one warrant to purchase one common share. The warrants are exercisable for a period of five years at an exercise price of $5.25. We relied on an exemption from registration under the Securities Act of 1933 provided by Section 4(2) as a private transaction not involving a public distribution. (d) Use of Proceeds Our registration statement on Form SB-2, file No. 333-53718, was declared effective January 29, 2001. We have issued 1,279,000 shares of the 2,250,000 Medi-Hut common shares registered under this registration statement. We will not receive proceeds from the sale of the registered shares and these shares will be sold from time to time and at the total discretion of the selling stockholders. We have received proceeds of $1,512,500 from the exercise of warrants to purchase 800,000 of the registered shares. We have used these proceeds for business development. ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS On April 3, 2001, we held an annual meeting of shareholders at which the following persons were elected as directors and the following proposals were approved by the shareholders: Election of directors: Votes for Votes against Votes withheld Joseph A. Sanpietro 12,100,000 0 8,800 Vincent J. Sanpietro 12,100,000 0 8,800 Robert Russo 12,100,000 0 8,800 James G. Aaron 12,100,000 0 8,800 James S. Vaccaro 12,100,000 0 8,800 Proposal to transact other 12,100,000 0 8,800 business before the meeting Proposal to approve 12,099,350 350 9,100 reorganization between Medi-Hut and WJL Enterprises, Inc. Proposal to complete 12,099,350 350 9,100 statutory merger to change domicile from Delaware to Nevada ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K (a) Part II Exhibits Exhibit Number Description 2.1 Agreement and Plan of Reorganization between Medi-Hut and Vallar Consulting, dated January 10, 2000. (Incorporated by reference to Medi-Hut's 10-KSB, as amended, filed January 26, 2000) 3.1 Articles of Incorporation of Medi-Hut (Incorporated by reference to exhibit 3.1 to Medi-Hut's Form 10-SB as amended, file No. 0- 27119, filed August 23, 1999.) 3.2 Articles of Merger filed February 20, 1998 (Incorporated by reference to exhibit 3.2 to Medi-Hut's Form 10-SB as amended, file No. 0-27119, filed August 23, 1999.) 3.3 Articles of Merger filed February 27, 1998 (Incorporated by reference to exhibit 3.3 to Medi-Hut's Form 10-SB as amended, file No. 0-27119, filed August 23, 1999.) 3.4 Bylaws of Medi-Hut (Incorporated by reference to exhibit 3.4 to Medi-Hut's Form 10-SB as amended, file No. 0-27119, filed August 23, 1999.) 10.1 Lease between Medi-Hut and Stamos & Sommers, LLC, dated December 12, 1997 (Incorporated by reference to exhibit 10.1 to Medi-Hut's Form 10-SB as amended, file No. 0-27119, filed August 23, 1999.) 10.2 Form of Confidential Agreement (Incorporated by reference to exhibit 10.2 to Medi-Hut's Form 10-SB as amended, file No. 0- 27119, filed August 23, 1999.) 10.3 Promissory Note between Medi-Hut and PNC Bank, N.A., dated October 10, 1997 (Incorporated by reference to exhibit 10.3 to Medi-Hut's Form 10-SB as amended, file No. 0-27119, filed August 23, 1999.) 10.4 Promissory Note between Medi-Hut and PNC Bank, N.A., dated October 10, 1997 (Incorporated by reference to exhibit 10.4 Medi-Hut's 10-KSB, as amended, filed January 26, 2000.) 10.5 Consultant Agreement between Columbia Financial Group and Medi- Hut, dated October 1, 2000. (Incorporated by reference to the Form SB-2, filed January 16, 2001.) 10.6 Amendment to Consultant Agreement between Columbia Financial Group and Medi-Hut, dated October 1, 2000. 10.7 Registration Rights Agreement between Medi-Hut, Mid-West, Columbia Financial and Mutual Ventures, dated November 30, 2000. (Incorporated by reference to exhibit 10.6 to the Form SB-2, filed January 16, 2001.) ______________________ (b) Reports on Form 8-K. On February 5, 2001, we filed an 8-K under Item 5 regarding our registration statement on Form SB-2 being declared effective on January 29, 2001. No financial statements were filed. On February 16, 2001, we filed an 8-K under Item 5 regarding the Korean governmental approval and registration of Medi-Hut International (Mfg.) Co., Ltd. No financial statements were filed. On March 6, 2001, we filed an 8-K under Item 5 regarding the signing of a letter of intent to enter into an Agreement and Plan of Reorganization with WJL Enterprises, Inc. No financial statements were filed. On April 24, 2001, we filed an 8-K under Item 5 regarding appointment of Laurence M. Simon as Chief Financial Officer and the creation of our audit committee. Interim financial statements for the five month period ended March 31, 2001 were filed. On May 10, 2001, we filed an 8-K under Item 5 regarding the modification of our reorganization with WJL Enterprises, Inc. No financial statements were filed. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. Medi-Hut Co., Inc. Date: 6/1/01 By:/S/Joseph A. Sanpietro Joseph A. Sanpietro, President and Director Date: 6/1/01 By:/s/Vincent J. Sanpietro Vincent J. Sanpietro, Secretary and Director Date: 6/1/01 By:/s/Robert Russo Robert Russo, Treasurer and Director