It's been two months since we dropped by for a visit of sorts with the folks at New Jersey-based Medi-Hut Inc. (MHUT

They're the medical supply firm that got bent out of shape when we raised questions in early February about Medi-Hut's finances. 

Specifically, we reported that two-thirds of Medi-Hut's revenues last year came from sales to a Farmingdale, Long Island company named Larval Corp., which may in fact have been secretly owned by a Medi-Hut vice president. 

In recent days, Medi-Hut filed its latest quarterly financial statement with the Securities and Exchange Commission, and questions now present themselves, regarding business ties between Medi-Hut and several other New York-area companies. 

The two key ones: a pip-squeak drugstore in Northport, Long Island, and, at the opposite extreme, the largest privately owned drug wholesaler in the U.S., Queens-based Kinray Inc. 

At issue in all this is a concern that gets addressed regularly in this space: In the deregulated capital markets of America, what confidence can a nervous investor really have in the financial statements of companies? 

In too many cases the financial statements that are supposed to provide enlightenment instead turn out to be artfully crafted to hide basic facts that any informed investor would want to know. 

Medi-Hut is not a big company. Its revenues last year totaled less than $13 million, with net income of barely $500,000. But the company has nearly 14.5 million shares of stock in the public market. That alone makes Medi-Hut just as important as IBM or General Motors to anyone who holds even one Medi-Hut share. 

The company's basic pitch to investors is that revenue growth will surge 400 percent in 2002, to $60 million, with net income for the year of 57 cents per share. 

At a current average price/earnings ratio of 25 times earnings, that would translate into a price of more than $14 per share, giving the company a value on Wall Street of more than $200 million. 

Though the stock is now selling for not much more than $3, it earlier touched $12 per share, and can easily sell there again soon. Unfortunately, there is little to suggest that Medi-Hut is worth anywhere near that amount. 

Though the company issued a press release in late February claiming to be on the verge of introducing a new generic drug for hormone replacement therapy, the manufacturer of the drug, one Muhammed Malik of Long Island, tells me he has no contract with Medi-Hut and may wind up distributing the drug through other channels. 

Malik will not say whether he has even applied for a license to produce it. Meantime, there's the still-unsettled matter of Larval's ownership. 

Two months after we first reported (following searches in the Dun & Bradstreet corporate database) that Larval Corp. was in fact owned by Lawrence Marasco, Medi-Hut said that Marasco has"transferred his ownership interest in Larval" to some unnamed individual or entity. 

I checked with Dun & Bradstreet's head of North American operations, Michael Prevosnak, and he said the following: 

"On February 11 we opened an official investigation to confirm the current ownership of Larval Corp., and we have been unsuccessful. Our telephone calls are simply not being returned." 

I asked Prevosnak why Dun & Bradstreet had listed Marasco in its files as the president and CEO of Larval in the first place, and he answered, "Because that is what Marasco told us." 

Now, Medi-Hut's latest quarterly financial filing, issued March 15, drags a whole new group of businesses into the spotlight. They're listed obscurely in the filing as "Major Customers" one through four, accounting for 96 percent of revenues, and "Major Suppliers" one and two, accounting for 90 percent of purchases. 

And guess what: the filing says that Medi-Hut's "major suppliers" are also its "major customers." 

Don't you think an investor would be interested to know who these companies actually are? After all, they collectively represent all the business Medi-Hut really has. 

Well, I spent days reading through press releases and financial documents until I had a pretty good idea as to the identities of the actual companies. Then I called the companies and got their top officials to acknowledge that their companies were in fact Medi-Hut's mystery business partners. 

One key company turns out to be Queens-based Kinray. 

Inquiries at Kinray - whose publicity-seeking owner, Stewart Rahr, recently paid $48,000 to be featured in a walk-on appearance in HBO's "Sex and the City" - brought plenty of stonewalling. At one point, there was even some outright lying when a Kinray official tried to hide behind a false name during an interview with me. 

Yet eventually I reached an official who had direct involvement not just with Medi-Hut, but with Larval and Marasco. 

The official also oversaw a business relationship in which Kinray functioned as a supplier to an outfit named "824 Drug." 

The Kinray official described Medi-Hut as little more than a medical supply brokerage firm that traffics in whatever crumbs fall from various wholesalers in the trade. The official said, "Medi-Hut is how we sometimes get rid of overstock. We sell it to them, and they sell it to someone else." 

Similarly, the source explained that when he finds himself short of an item, he'll see if Medi-Hut can locate it. At one point, the source described Kinray as Medi-Hut's largest customer - and at another point he described it as the smallest. 

The conflicting claims led me to Medi-Hut, which reluctantly acknowledged that Kinray was in fact Medi-Hut's "Customer Number Four" as well as "Supplier Number One." 

Further phoning revealed Medi-Hut's largest customer and its second most important supplier to be a "pharmaceutical wholesaler" known as "824 Drug." This fact Medi-Hut also reluctantly confirmed. 

In reality, 824 Drug is a mom-and-pop-sized drugstore in Northport that Kinray supplies with Band-Aids, lotions, drugs and whatnot. The sign on the door reads "Northport Pharmacy," but when the pharmacy winds up with too much stock, it sells it to Medi-Hut under the name "824 Drug." 

The Kinray man said 824 Drug buys and sells from Medi-Hut as well, in just the way Kinray does. 

But when one considers the small universe of customers and suppliers that account for nearly the whole of Medi-Hut's business, certain conclusions become inescapable. 

For example, if one believes Medi-Hut isn't simply buying and selling the same exact merchandise back and forth with 824 Drug, then 80 percent of Medi-Hut's actual business consists of buying merchandise from Kinray, then selling it to one of Kinray's own customers: Northport Pharmacy. 

When I called the telephone number for 824 Drug, a woman answered saying, "Northport Pharmacy." And when I asked to speak to someone from 824 Drug, she said, "He's not here now." 

Then a man came on the line and said, "We're a private company, we don't comment." 

But how did the Kinray man know about Medi-Hut's dealings with 824 Drug in the first place? "Because I introduced them," he said. 

As for Larval Corp. and Marasco, well, the Kinray official knew all about them as well. Said he: "Yes, I know Larry. He runs Larval." 

Does all this make you feel comfortable about an outfit like Medi-Hut - with its tight little knot of unnamed companies and mystery business partners all doing business with each other in secret? 

Well, deal with it, because the message from the regulators seems to be pretty clear: In pursuit of the public's money, double talk and obfuscation are just fine - Enron or no Enron.