-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, CKHW4+0Egz9HAlARKYJiTXjP34TB08nb42sCqtRa+fNoenNFtfnflkVgfVDhECFv YvPt7YYVBKwnELhrD88ciQ== 0000950144-01-000056.txt : 20010122 0000950144-01-000056.hdr.sgml : 20010122 ACCESSION NUMBER: 0000950144-01-000056 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20000630 FILED AS OF DATE: 20010104 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAC TECHNOLOGIES GROUP INTERNATIONAL INC CENTRAL INDEX KEY: 0001102750 STANDARD INDUSTRIAL CLASSIFICATION: CUTLERY, HANDTOOLS & GENERAL HARDWARE [3420] IRS NUMBER: 650847852 STATE OF INCORPORATION: FL FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-29211 FILM NUMBER: 1501893 BUSINESS ADDRESS: STREET 1: 3200 NORTH OCEAN BLVD CITY: FT LAUDERDALE STATE: FL ZIP: 33308 BUSINESS PHONE: 9543750119 MAIL ADDRESS: STREET 1: 3200 NORTH OCEAN BLVD CITY: FT LAUDERDALE STATE: FL ZIP: 33308 10QSB/A 1 g66254a2e10qsba.txt DAC TECHNOLOGIES GROUP INT'L. 10QSB A#2 06/30/00 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSBA [X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from ______ to ______ Commission File Number 000-29211 DAC Technologies Group International, Inc. (Name of Small Business Issuer in its charter Florida 65-0847852 ------------------------------- ------------------ (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3200 N. Ocean Blvd., Suite 1006, Ft. Lauderdale, FL 33308 --------------------------------------------------------- (Address of principal executive offices) (Zip Code) (954) 375-0119 (Issuer's telephone number) Check whether the Issuer (1) has filed all reports required to be filed by the Section 13 or 15(d) of the Exchange Act during the past 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. (1) Yes [X] No [ ] (2) Yes [ ] No [X] State the number of shares outstanding of each of the issuer's class of common equity, as of the latest practicable date. As of June 30, 2000, 5,243,000 shares of Common Stock are issued and outstanding. Transitional Small Business Disclosure Format: Yes [ ] No [X] 2 TABLE OF CONTENTS PART I.........................................................................3 ITEM 1. FINANCIAL STATEMENTS..............................................3 SELECTED NOTES TO FINANCIAL STATEMENTS....................................9 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION..........................................................10 Background...............................................................10 Financial Condition and Results of Operations............................11 PART II.......................................................................13 ITEM 1. LEGAL PROCEEDINGS..........................................13 ITEM 2. CHANGES IN SECURITIES......................................13 ITEM 3. DEFAULTS UPON SENIOR SECURITIES............................14 ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS....................................................14 ITEM 5. OTHER INFORMATION..........................................14 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K...........................14 SIGNATURES....................................................................15 2 3 PART I ITEM 1. FINANCIAL STATEMENTS DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. Balance Sheet June 30, 2000 Unaudited Assets Current assets Cash $ 31,350 Accounts receivable, less allowance for doubtful accounts of $19,649 583,251 Inventories 423,546 Prepaid expenses 118,738 ----------- Total current assets 1,156,885 ----------- Property and equipment Furniture and fixtures 104,102 Molds, dies, and artwork 352,673 Vehicles 34,709 ----------- 491,484 Accumulated depreciation (199,364) ----------- Net property and equipment 292,120 ----------- Other assets Patents and trademarks, net of accumulated amortization of $3,498 31,547 Other 10,411 ----------- Total other assets 41,958 ----------- Total assets $ 1,490,963 =========== 3 4 DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. Balance Sheet June 30, 2000 Unaudited Liabilities and Stockholders' equity Current liabilities Due to factor $ 437,251 Accounts payable-trade 108,725 Accounts payable-related parties 33,214 Accrued payroll tax withholdings 114,750 Accrued expenses-other 24,209 Current maturities of long-term debt 143,149 ----------- Total current liabilities 861,298 ----------- Long-term debt, less current maturities 21,799 ----------- Stockholders' equity Common stock, $.001 par value; authorized 10,000,000 shares; issued and outstanding 5,243,000 shares 5,243 Additional paid-in capital 742,776 Retained earnings (deficit) (140,153) ----------- Total stockholders' equity 607,866 ----------- Total liabilities and stockholders' equity $ 1,490,963 =========== 4 5 DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. Statements of Operations For the Six Months Ended June 30, 2000 and 1999 Unaudited June 30, June 30, 2000 1999 ----------- ----------- Net sales $ 1,226,608 $ 1,013,190 Cost of sales 708,060 591,933 ----------- ----------- Gross profit 518,548 421,257 ----------- ----------- Operating expenses Selling 69,967 83,818 General and administrative 307,104 255,784 ----------- ----------- Total operating expenses 377,071 339,602 ----------- ----------- Income from operations 141,477 81,655 ----------- ----------- Other income (expense) Interest expense (45,035) (40,640) ----------- ----------- Income (loss) before income tax expense 96,442 41,015 Provision for income taxes -- -- ----------- ----------- Net income (loss) $ 96,442 $ 41,015 =========== =========== Numerator - net income (loss) $ 96,442 $ 41,015 Denominator - weighted average number of shares outstanding 5,082,637 4,919,790 ----------- ----------- Basic earnings (loss) per share $ 0.02 $ 0.01 =========== =========== 5 6 DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. Statements of Cash Flows For the Six Months Ended June 30, 2000 and 1999 Unaudited
June 30, June 30, 2000 1999 --------- --------- Cash flows from operating activities Net income (loss) $ 96,442 $ 41,015 Adjustments to reconcile net income to net cash provided (used in) operating activities: Depreciation 25,583 19,100 Amortization 970 900 Changes in assets and liabilities Accounts receivable (129,867) (144,740) Inventories (40,107) (13,316) Prepaid expenses (94,213) (22,407) Other assets (4,711) (3,005) Accounts payable - trade (19,395) (22,691) Accounts payable - related party (19,368) (48,296) Accrued payroll tax withholdings 38,602 6,910 Accrued expenses other (2,891) (13,448) --------- --------- Net cash provided by (used in) operating activities (245,397) (240,993) --------- --------- Cash flows from investing activities Purchases of property and equipment (20,641) (1,958) Purchases of patents and trademarks -- (2,150) --------- --------- Net cash provided by (used) in investing activities (20,641) (4,108) --------- --------- Cash flows from financing activities Increase (decrease) in due to factor 138,542 75,931 Proceeds on long-term debt 50,000 Payments on long-term debt (63,837) (13,003) Proceeds from issuance of common stock 109,175 39,900 Payments on stock subscriptions receivable 2,632 -- --------- --------- Net cash provided by (used in) financing activities 186,512 152,828 --------- --------- Increase (decrease) in cash 16,916 (51,258) Cash - beginning of period 14,434 68,042 --------- --------- Cash - end of period $ 31,350 $ 16,784 ========= =========
6 7 DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. Statements of Operations For the Three Months Ended June 30, 2000 and 1999 Unaudited June 30, June 30, 2000 1999 ----------- ----------- Net sales $ 645,230 $ 570,694 Cost of sales 365,765 331,409 ----------- ----------- Gross profit 279,465 239,285 ----------- ----------- Operating expenses Selling 39,249 39,666 General and administrative 160,654 123,895 ----------- ----------- Total operating expenses 199,903 163,561 ----------- ----------- Income from operations 79,562 75,724 ----------- ----------- Other income (expense) Interest expense (21,974) (23,149) ----------- ----------- Income (loss) before income tax expense 57,588 52,575 Provision for income taxes -- -- Net income (loss) $ 57,588 $ 52,575 =========== =========== Numerator - net income (loss) $ 57,588 $ 52,575 Denominator - weighted average number of shares outstanding 5,128,412 5,013,540 Basic earnings (loss) per share $ 0.01 $ 0.01 =========== =========== 7 8 DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. Statements of Cash Flows For the Three Months Ended June 30, 2000 and 1999 Unaudited
June 30, June 30, 2000 1990 --------- --------- Cash flows from operating activities Net income (loss) $ 57,588 $ 52,575 Adjustments to reconcile net income to net cash provided (used in) operating activities: Depreciation 13,153 9,550 Amortization 485 450 Changes in assets and liabilities Accounts receivable (74,425) (35,332) Inventories (60,366) (63,025) Prepaid expenses (62,106) (10,904) Other assets (4,711) -- Accounts payable - trade 26,055 27,589 Accounts payable - related party 1,180 (42,600) Accrued payroll tax withholdings 21,776 14,836 Accrued expenses other (7,024) (1,224) --------- --------- Net cash provided by (used in) operating activities (145,983) (100,660) --------- --------- Cash flows from investing activities Purchases of property and equipment (6,023) -- Purchases of patents and trademarks -- (2,150) --------- --------- Net cash provided by (used) in investing activities (6,023) (2,150) --------- --------- Cash flows from financing activities Increase (decrease) in due to factor 103,816 2,525 Payments on long-term debt (20,866) (13,003) Proceeds from issuance of common stock 34,175 39,900 --------- --------- Net cash provided by (used in) financing activities 117,125 29,422 --------- --------- Increase (decrease) in cash 22,707 (20,813) Cash - beginning of period 8,643 37,597 --------- --------- Cash - end of period $ 31,350 $ 16,784 ========= =========
8 9 DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. SELECTED NOTES TO FINANCIAL STATEMENTS 1. Nature of Business DAC Technologies Group International, Inc. (the "Company"), a Florida corporation, is in the business of developing, manufacturing and marketing various consumer products, patented and unpatented, which are designed to provide security for the consumer and their property. In addition, the Company has developed a wide range of security and non-security products for the home, automobile and individual. The majority of the Company's products are manufactured and imported from mainland China and are shipped to the Company's central warehouse facility in Little Rock, Arkansas. These products, along with other items manufactured in the United States, are sold primarily to major retail chains in the United States and Germany. 2. Organization and Summary of Significant Accounting Policies a. Organization and basis of presentation - The Company was incorporated as a Florida corporation in July 1998 under the name DAC Technologies of America, Inc. In July 1999, the Company changed its name to DAC Technologies Group International, Inc. b. Unaudited interim financial statements - The accompanying financial statements of the Company for the six months ended June 30, 2000 and 1999 and for the three months ended June 30, 2000 and 1999 are unaudited, but, in the opinion of management, reflect the adjustments, all of which are of a normal recurring nature, necessary for a fair presentation of such financial statements in accordance with generally accepted accounting principles. The significant accounting policies applied to these interim financial statements are consistent with those applied to the Company's December 31, 1999 audited financial statements included in the Company's Form 10KSB. The results of operations for an interim period are not necessarily indicative of the results for a full year. 3. Equity Transactions On March 17, 2000, pursuant to a private placement offering, the Company raised $75,000 and issued 75,000 shares of common stock, primarily to business associates of existing shareholders. On May 1, 2000, the Company issued 37,500 shares of common stock for consulting services to be rendered in connection with a consulting agreement entered into on that date with Mr. Jim Pledger. On June 5, 2000, the Company issued to Allan M. Lerner, P.A. 1,000 shares of restricted common stock as payment for services rendered to the Company. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933. On June 5, 2000, the Company issued to Robert Goodwin 5,000 shares of restricted common stock as payment for services rendered to the Company. The shares were issued in reliance on Section 4(2) of the Securities Act of 1933. On June 12, 2000, the Company entered into a consulting agreement with International Equities Group to develop strategic plans and find candidates for acquisitions and mergers and increase sales. On June 16, 2000, as payment for services to be rendered to the Company, 100,000 shares of restricted common stock were issued to International Equity's President, Joseph Safina. Twenty Five thousand of the shares were delivered to Joseph Safina and the remaining seventy five thousand shares were held in escrow pending completion of the services to be performed. 9 10 DAC TECHNOLOGIES GROUP INTERNATIONAL, INC. SELECTED NOTES TO FINANCIAL STATEMENTS CONTINUED 4. Long-Term Debt On July 21, 2000, the Company refinanced its bank loan in the principal amount of $145,473.28. The new note is for a term of five years, with an initial floating interest rate of 9.50%. The note is secured by inventory and personal guarantees. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION The following Management Discussion and Analysis of Financial Condition is qualified by reference to and should be read in conjunction with our Financial Statements and the Notes thereto as set forth in this document. We include the following cautionary statement in this Form 10QSBA for any forward-looking statements made by, or on behalf of, the Company. Forward-looking statements include statements concerning plans, objectives, goals, strategies, expectations, future events or performances and underlying assumptions and other statements which are other than statements of historical facts. Certain statements contained herein are forward-looking statements and, accordingly, involve risks and uncertainties which could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements. The Company's expectations, beliefs and projections are expressed in good faith and are believed by the Company to have a reasonable basis, including without limitations, management's examination of historical operating trends, data contained in the Company's records and other data available from third parties, but there can be no assurance that management's expectations, beliefs or projections will result or be achieved or accomplished. (a) Background We were incorporated as a Florida corporation in July 1998, under the name DAC Technologies of America, Inc. for the purpose of succeeding to the interest of DAC Technologies of America, Inc. an Arkansas corporation ("DAC Arkansas"). DAC Arkansas was formed in 1993, and sold its first product, the Body Alarm, a small, beeper sized, 130 decibel, electronic personal security alarm, for under $10. In 1994, we brought to market our patented Key Alert, a 110 decibel hand held alarm with key chain and built-in flashlight. Other products followed over the next few years, including the patented SWAT Steering 10 11 Wheel Alarm, SWAT II Talking Car Alarm, and the patented Clampit Cupholder and Plateholder. In 1994, we developed our patented Trigger Lock, an inexpensive, plastic trigger lock for handguns. Recognizing the public's and government's concern for gun safety, we have developed a new metal Trigger Lock, a steel Gun Lock, a Lever Hammer Lock for lever action rifles, and a cable lock. The new metal trigger locks are currently carried by Wal Mart and K Mart. We have devoted a significant amount of time and effort the past year in establishing ourselves in the area of gun safety. These efforts have included targeting law enforcement agencies and community service and civic groups as gun safety customers. This effort has resulted in the sales of gun locks to over thirty new law enforcement agencies and civic groups such as the Rotary Club. On May 1, 2000, the Company entered into a consulting agreement with Jim Pledger. Mr. Pledger is the former National Sales Manager for Glock, Inc., one of the leading gun manufacturers, and is also a former senior executive for the Federal Bureau of Investigation. The Company believes Mr. Pledger's expertise, experience and contacts in the gun safety industry will be invaluable in enabling the Company to develop a strong presence in the gun safety market. Additional developments include: Internet - The Company's website, www.dactec.com, is now operational. This website provides information about the Company and its products, as well as investor and stock information. Negotiations are currently underway with several servers to provide e-commerce capabilities to our website. The Company continues its efforts to develop new and innovative consumer products. Development of a new fingerprint and combination safe for handguns is underway. The Company is working to acquire two new patented gun locks for semi-automatic handguns that can be used on loaded guns. Also, marketing efforts have been stepped up for the Company's leather, horizontal cell phone cases. On June 19, 2000, the Company's common stock began trading on the NASDAQ OTC Bulletin Board under the trading symbol "DAAT. (b) Financial Condition and Results of Operations. The Company had working capital of $295,587 at June 30, 2000, as compared to working capital of $124,472 at December 31, 1999. This increase in working capital of $171,115 was due, primarily, to an increase in accounts receivable. 11 12 Net income for the six months ended June 30, 2000 was $96,242, as compared to $41,015 for the same period in the prior year. This increase of $55,427, representing a 135% increase, was due primarily to an increase in net sales of $213,418 (a 21% increase over prior year). Net income for the three months ended June 30, 2000 was $57,588, as compared to $52,575 for the same period in the prior year. This increase of $5,013, was due primarily to an increase in sales of $74,536 (a 13% increase). Operating expenses for both the six month and three month periods ending June 30, 2000 increased over the same period of the preceding year. For the six month period, the increase was $37,469 and for the three month period was $36,342. These increases are due primarily to additional accounting, legal and filing costs relating to the filing of the Company's Forms 10SBA, 10KSB and 10QSB with the Securities and Exchange Commission. Total expenses for these items were $37,144 for the six month period and $28,195 for the three month period ending June 30, 2000. (c) Liquidity and Capital Resources Our primary source of cash is funds from our operations. We believe that external sources of liquidity could easily be obtained in the form of bank loans, letters of credit, etc. We maintain an account receivable factoring arrangement in order to insure an immediate cash flow. The factor may also, at its discretion, advance funds prior to the collection of our accounts. Advances are payable to the factor on demand. Should our sales revenues significantly decline, it could affect our short-term liquidity. For the period ending June 30, 2000, we owed our factor approximately $437,251. On July 21, 2000, the Company refinanced its bank loan in the principal amount of $145,473.28. The new note is for a five year term with an initial floating interest rate of 9.50%. (d) Trends The recent flurry of publicity involving firearms has caused gun safety to become a prominent issue nationally. Gun violence, especially in schools has prompted the President, as well as national and state legislators, to debate legislation requiring gun safety locks on all firearms. Threatened litigation against gun manufacturers has caused them to seriously consider placing gun safety locks on the guns they manufacture. We continue to believe sales revenues in this area will grow significantly. Sales of our gun safety products for the first six months of 2000 totaled $693,440 as compared to $324,996 for the first six months of 1999. 12 13 PART II ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES On May 1, 2000, pursuant to a consulting agreement entered into by the Company with Jim Pledger, the Company issued 37,500 shares of common stock as consideration for Mr. Pledger's services under the terms of the agreement. More detailed information concerning this transaction is available in the Form S-8 filed with the Securities and Exchange Commission, which is incorporated herein by reference. On June 5, 2000, the Company issued to Allan M. Lerner, P.A. 1,000 shares of restricted common stock as payment for services rendered to the Company, The shares were issued in reliance on Section 4(2) of the Securities Act of 1933. On June 5, 2000, the Company issued to Robert Goodwin, 5,000 shares of restricted common stock as payment for services rendered to the Company, The shares were issued in reliance on Section 4(2) of the Securities Act of 1933. On June 5, 2000, pursuant to a private placement offering, the Company issued 75,000 shares of restricted common stock for $75,000 or $1.00 per share to 5 investors who were either accredited or otherwise sophisticated and with whom we had a pre-existing relationship and who had access to all material information. The transaction was exempt under Rule 504 of Regulation D of the Securities Act On June 12, 2000, the Company entered into a consulting agreement with International Equities Group to develop strategic plans and find candidates for acquisitions and mergers and increase sales. On June 16, 2000, as payment for services to be rendered to the Company,100,000 shares of restricted common stock were issued to International Equitie's President, Joseph Safina. Twenty Five thousand of the shares were delivered to Joseph Safina and the remaining seventy five thousand shares were held in escrow pending completion of the services to be performed. 13 14 ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8 -K The following documents are incorporated by reference from Registrant's Form 10SB filed with the Securities and Exchange Commission (the " Commission"), File No. 000-29211, on January 28, 2000: Exhibits -------- 2 Acquisition Agreement 3(i) Articles of Incorporation 3(ii) By-laws The following documents are filed herewith: Exhibits -------- 23 Consent of Allan M. Lerner, P.A. 27 Financial Data Schedule 14 15 SIGNATURES In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, hereunto duly authorized DAC Technologies Group International, Inc. By: /s/ David A. Collins ---------------------------------------- David A. Collins, President Date: January 4, 2001 15 EX-23 2 g66254a2ex23.txt CONSENT OF ALLAN M. LERNER 1 Law Offices ALLAN M. LERNER A Professional Association Telephone: (954)563-8111 2888 East Oakland Park Boulevard Facsimile : (954)563-8522 Fort Lauderdale, Florida 33306 E.Mail : AMLRWP@AOL.com December 18, 2000 DAC Technologies Group International, Inc. 3200 North Ocean Boulevard Suite 1006 Fort Lauderdale, Florida 33308 Re: Filing of 06/30/00 10Q for DAC Technologies Group International, Inc. --------------------------------------------------------------------- Gentleman: This opinion is submitted pursuant to applicable rules of the Securities and Exchange Commission with respect to the filing of Form 10Q for the quarter ended June 30, 2000. As securities counsel for DAC Technologies Group International, Inc, I have examined the attached Form 10Q and I hereby consent to the use of this opinion in the Form 10-Q to be filed with the Commission. Allan M. Lerner, P.A. AML:ajn EX-27 3 g66254a2ex27.txt FINANCIAL DATA SCHEDULE
5 6-MOS DEC-31-2000 JAN-01-2000 JUN-30-2000 31,350 0 602,900 19,649 423,546 1,156,885 491,484 199,364 1,490,963 861,298 0 0 0 5,243 602,623 1,490,963 1,226,608 1,226,608 518,548 0 0 0 0 0 96,442 96,442 0 0 0 96,442 0.02 0.02
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