-----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, VIxb3v+ZaVt9ItYQdh/GyjkDyXftYJTCHxbSOHyThXlDmFT6NOhpqLjoV8ajKIYB 8ZjqmdONMT5pX/N69Y18Jw== /in/edgar/work/0001020568-00-500004/0001020568-00-500004.txt : 20001115 0001020568-00-500004.hdr.sgml : 20001115 ACCESSION NUMBER: 0001020568-00-500004 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 20000930 FILED AS OF DATE: 20001114 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DISTINCTIVE DEVICES INC CENTRAL INDEX KEY: 0000059963 STANDARD INDUSTRIAL CLASSIFICATION: [5084 ] IRS NUMBER: 131999951 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-02749 FILM NUMBER: 763480 BUSINESS ADDRESS: STREET 1: 110 E ATLANTIC AVENUE STREET 2: SUITE 230 CITY: DELRAY BEACH STATE: FL ZIP: 33444 BUSINESS PHONE: 5612744233 MAIL ADDRESS: STREET 1: 110 E ATLANTIC AVENUE STE 134 CITY: DELRAY BEACH STATE: FL ZIP: 33444 FORMER COMPANY: FORMER CONFORMED NAME: LMC DATA INC DATE OF NAME CHANGE: 19761021 10QSB 1 0001.txt UNITED STATES 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 the quarterly period ended September 30, 2000 ( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT For the transition period from ____ to ____ Commission file number 0-2749 DISTINCTIVE DEVICES, INC. (Name of small business issuer in its charter) New York 13-1999951 (State of incorporation or organization) (IRS Identification No.) 110 E. Atlantic Avenue, Suite 240, Delray Beach, Florida 33444 (Address of principal executive offices) (Zip Code) Issuer's telephone number: (561)279-9632 N/A (Issuer's former address) Check whether the issuer (1) filed all reports required to be filed by 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. Yes(X) No( ) 17,163,404 shares of issuer's common stock, $.05 par value, were outstanding at October 31, 2000. Issuer has no other class of common equity. INDEX Page PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Consolidated Balance Sheet-- September 30, 2000 3 Condensed Consolidated Statements Of Operations-- Three and nine months ended September 30, 2000 and 1999 February 5, 1998 (Inception) to September 30, 2000 4 Condensed Consolidated Statements Of Changes In Stockholders' Equity-- Inception to September 30, 2000 5 Condensed Consolidated Statements Of Cash Flows-- Nine months ended September 30, 2000 and 1999 February 5, 1998 (Inception) to September 30, 2000 6 Notes To The Consolidated Financial Statements 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 8 PART II - OTHER INFORMATION Item 5. OTHER INFORMATION 10 Item 6. EXHIBITS AND REPORTS ON FROM 8-K 11 SIGNATURES 11 [2] PART I - FINANCIAL INFORMATION Item 1. - FINANCIAL STATEMENTS DISTINCTIVE DEVICES, INC. AND SUBSIDIARY (Development Stage Companies) CONSOLIDATED BALANCE SHEET (unaudited) September 30, 2000 ASSETS CURRENT ASSETS Cash $ 1,334,827 Other Receivables 11,190 --------- Total Current Assets 1,346,017 PROPERTY AND EQUIPMENT, Net 870,168 OTHER ASSETS 65,839 -------- $ 2,282,024 ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable and Accrued Liabilities $ 106,538 ------- COMMITMENTS MINORITY INTEREST STOCKHOLDERS' EQUITY Preferred Stock, Par Value $1; Authorized 1,000,000 Shares, Issued 0 Shares Common Stock, Par Value $.05; Authorized 20,000,000 Shares 858,170 Additional Paid-In Capital 3,396,717 Deficit Accumulated During the Development Stage (2,079,401) --------- 2,175,486 --------- $ 2,282,024 ========= The Accompanying Notes are an Integral Part of These Financial Statements [3] DISTINCTIVE DEVICES, INC. AND SUBSIDIARY (Development Stage Companies) CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (unaudited) Three Months Nine Months Period From Ended Ended February 5, 1998 September 30, September 30, (Inception) to 2000 1999 2000 1999 Sept. 30, 2000 Revenue $ $ $ $ $ General and Administrative Expenses 483,566 159,883 1,590,109 443,294 2,327,913 ------- ------- --------- ------- --------- Operating Loss (483,566) (159,883) (1,590,109) (443,294) (2,327,913) Interest and Other Income 12,302 3,877 44,846 3,877 56,646 ------- ------- --------- ------- --------- (471,264) (156,006) (1,545,263) (439,417) (2,271,267) Minority Interest - 43,131 51,628 78,104 170,673 ------- ------- --------- ------- --------- Net Loss $ (471,264) $ (112,875) $(1,493,635) $ (361,313) $(2,100,594) ======= ======= ========= ======= ========= Weighted Average Shares of Common Stock Outstanding 17,163,404 12,292,954 16,282,235 12,292,954 9,851,903 ========== ========== ========== ========== ========= Loss Per Share-- Basic and Diluted $ (0.03) $ (0.01) $ (0.09) $ (0.03) $ (0.21) ======== ======= ======== ======= ======= The Accompanying Notes are an Integral Part of These Financial Statements [4] DISTINCTIVE DEVICES, INC. AND SUBSIDIARY (Development Stage Companies) CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY (unaudited) Deficit Additional Accumulated Common Stock Paid-in During the Shares Amount Capital Development Stage Initial Issuance of Shares for Cash 6,000,000 $ 300,000 $ (299,700) $ Net Loss (195) --------- ------- ------- ---- Balance at December 31, 1998 6,000,000 300,000 (299,700) (195) Issuance of Shares for Cash 2,051,340 102,567 699,597 Acquisition of Net Assets on Recapitalization 4,119,902 205,995 (1,666) Issuance of Shares for Services 121,712 6,086 85,198 Net Loss (606,764) --------- ------- ------- ------- Balance at December 31, 1999 12,292,954 614,648 483,429 (606,959) (unaudited) Issuance of Shares for Cash (Note 4) 3,156,810 157,841 2,998,969 Issuance of Shares for Minority Interest 1,713,640 85,681 (85,681) Reduction of Minority Interest 21,193 Net Loss (1,493,635) ------- ------- --------- --------- Balance at September 30, 2000 (unaudited) 17,163,404 $858,170 $3,396,717 $(2,079,401) ========== ======= ========= ========= The Accompanying Notes are an Integral Part of These Financial Statements [5] DISTINCTIVE DEVICES, INC. AND SUBSIDIARY (Development Stage Companies) CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (unaudited) Period From February 5, 1998 Nine Months Ended September 30, (Inception) to 2000 1999 September 30, 2000 CASH FLOWS FROM OPERATING ACTIVITIES $ (1,510,027) $ (317,029) $ (2,224,489) CASH FLOWS FROM INVESTING ACTIVITIES (741,215) (65,789) (591,824) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Issuance of Common Stock 3,156,810 1,189,823 4,151,140 -------- --------- --------- Increase in Cash 905,568 807,005 1,334,827 Cash: Beginning 429,259 5 _ ------- ------- Ending $ 1,334,827 $ 807,010 $ 1,334,827 ========= ======= ========= The Accompanying Notes are an Integral Part of These Financial Statements [6] DISTINCTIVE DEVICES, INC. AND SUBSIDIARY (Development Stage Companies) NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: BASIS OF CONSOLIDATION The accompanying unaudited condensed consolidated financial statements include the accounts of Distinctive Devices, Inc. ("DDI") and its subsidiary, EagleView Industries, Inc. (EagleView). NOTE 2: INTERIM FINANCIAL DATA In the opinion of management, the accompanying unaudited financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission and generally accepted accounting principles for interim financial information. These financial statements do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. The annual financial statements of the Company as of December 31, 1999, should be read in conjunction with these statements. The financial information included herein has not been audited. However, management believes the accompanying unaudited interim financial statements contain all adjustments, consisting of only normal recurring adjustments, necessary to present fairly the consolidated financial position of the Company as of September 30, 2000 and the results of their operations for the three months and nine months ended September 30, 2000 and 1999 and cash flows for the nine months ended September 30, 2000 and 1999. The results of operations and cash flows for the period are not necessarily indicative of the results of operations or cash flows for the year ending December 31, 2000. NOTE 3: CAPITAL STRUCTURE Preferred Stock The Company has 1,000,000 shares of preferred stock (par value $1) authorized. The Board has authority to issue the shares in one or more series and to fix the designation preferences, powers and other rights as it deems appropriate. No shares of preferred stock are outstanding. Common Stock The Company has 20,000,000 shares of common stock (par value $.05) authorized. Common stock has one vote per share for the election of directors and all other matters submitted to a vote of stockholders. Shares of common stock do not have cumulative voting, preemptive, redemption or conversion rights. [7] DISTINCTIVE DEVICES, INC. AND SUBSIDIARY (Development Stage Companies) NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS NOTE 4: PRIVATE PLACEMENT During the nine months ended September 30, 2000, DDI offered in a private placement, shares of its $.05 par value common stock, at a price of $1 per share. The shares were offered on a best efforts basis with no minimum and DDI issued an aggregate of 3,156,810 shares of its common stock for $3,156,810 in cash. NOTE 5: MINORITY INTEREST During the nine months ended September 30, 2000, DDI exchanged 1,713,640 shares of its common stock for 856,820 shares of EagleView common stock held by minority shareholders. As a result of this transaction, at September 30, 2000, DDI owned approximately 97.9% of the outstanding shares of EagleView. As this is a continuation of the August 10, 1999 recapitalization, no goodwill has been recorded and only an adjustment to additional paid-in capital has been made for the resultant differences in par value. As a result of the EagleView stockholders' deficit, the minority interest has been reduced to zero with a corresponding offset to equity. NOTE 6: COMMITMENT In April 2000, the Company entered into a noncancelable operating lease for facilities in New York. The lease provides for an annual base rent of $90,280, subject to semi-annual increases based on changes to the Consumer Price Index, limited to 3% semi-annually, plus tax, operating expenses and common area maintenance. The lease expires in 2010. NOTE 7: RECLASSIFICATION OF PRIOR PERIOD Certain amounts in the prior period's financial statements have been reclassified to conform to the current period presentation. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Plan of Operation As described in Part II, Item 5, of this Report, a change occurred in the management of the Company and its subsidiary on July 14, 2000. New management's attention turned immediately to curtailing cash expenditures. During the three months ended March 31, 2000, negative cash flow from operating activities amounted to $578,860. During the three months ended June 30, 2000, negative cash flow rose to $642,567. These amounts were in addition to $661,350 invested in equipment during the six-month period. [8] As a consequence of staff reductions, and other economies, negative cash flow from operating activities for the three months ended September 30, 2000, was reduced to $288,600. In a further plan to reduce expenses, we elected to seek out established providers of Internet and related services, in the New York City metropolitan area, to market our wireless Internet connection services, rather than undertaking the costly process of establishing our own sales organization in that locale. In that regard, we are currently negotiating agreements with two firms - one in New York City and the other in northern New Jersey - to act as marketers or resellers of our service. The New York City firm is a successful provider of data storage and retrieval, and other business solution, services to banks, insurance companies and brokerages. The New Jersey firm has been similarly successful in providing Internet provider and access services to small businesses in its marketing area. During the September quarter, beta testing of our antenna array tower in Union City, New Jersey, was carried out to a number of locations in New York City and northern New Jersey. Results were satisfactory and users at several sites may begin paying for the service before year end. Service charges and billing dates await the outcome of the marketing or reseller agreements referred to above. Subsequent Events Our array tower structure in Union City includes a satellite antenna system. From there, we can re-transmit incoming Internet traffic to customer locations worldwide, either directly or via another earth station. Several users of our prospective New York City marketer's services have a need for such international connectivity. Satellite operations require licensing by the Federal Communications Commission (FCC) and, this month, we retained the services of FCC counsel to prepare and submit our license application. Meanwhile, we have reached an understanding with Cidera, Inc., of Laurel, Maryland, a privately-held corporation organized in 1997, whereby Cidera will provide a licensed satellite antenna on our Union City rooftop location as part of its Internet services. Cidera serves customers from four satellites-in-orbit. Cidera offers direct wireless Internet connectivity between content and access providers, thereby bypassing the congestion, delays and omissions now becoming common in the high speed transmission of data via the Internet landlines, or "backbone". Further, Cidera's satellites can broadcast data, streaming video, Usenet news and large data bases to any number of access providers simultaneously, in North America and elsewhere. Such simultaneous service is beyond the capability of Internet landlines. Recently, we've become involved in a U.S. government sponsored program to bring Internet services to remote communities. It would appear that wireless is the most economical way to accomplish this objective. While in an early stage of development, this program could provide another outlet for the Company's services. The Company has had no operating revenue to the date of this Report. [9] Future Funding At September 30, 2000, the Company's cash and equivalent balances approximated $1.3 million. This amount will not be sufficient to fund operations for the next twelve months, absent meaningful revenue. Accordingly, discussions have begun with a prospective new investor, although no assurance can be given that funding will be available from this, or another, source, to enable operations to continue if funds now on hand are exhausted. IN ADDITION TO THE FOREGOING UNCERTAINTY, READERS ARE ADVISED THAT STATEMENTS CONTAINED IN THIS REPORT CONCERNING FUTURE ACTIVITIES, PERFORMANCE OR INTENTIONS ARE FORWARD-LOOKING STATEMENTS WHICH, BY THEIR NATURE, INVOLVE RISK AND UNCERTAINTY BECAUSE THEY RELATE TO EVENTS, AND DEPEND ON CIRCUMSTANCES, THAT WILL OCCUR IN THE FUTURE, MANY OF WHICH MAY NOT BE WITHIN THE COMPANY'S CONTROL. ACTUAL RESULTS AND EVENTS MAY DIFFER MATERIALLY FROM THOSE EXPRESSED OR IMPLIED BY SUCH STATEMENTS AS THE RESULT OF KNOWN OR UNKNOWN RISKS, UNCERTAINTIES AND/OR OTHER FACTORS AND THERE CAN BE NO ASSURANCE THAT SUCH EXPECTATIONS WILL PROVE CORRECT. PART II OTHER INFORMATION Item 5. OTHER INFORMATION At a meeting of directors held on June 19, 2000, Mr. Michael J. Paolini resigned as a director, president and CEO of the Company and its subsidiary, EagleView Industries, Inc. ("EVI"). He remained Treasurer and CFO, of both companies, on an interim basis. At a similar meeting held on July 14, 2000, Mr. James W. Wolff was elected a director, president, CEO, treasurer and CFO of the Company and its subsidiary. Directors also re-elected Mr. Sanjay S. Mody, a director, to his former position as Executive Vice President and COO of the Company and EVI. Mr. Wolff, 59, has been engaged in commercial and investment banking for the past 35 years, most recently as president of First Internet Capital, Inc., a Boca Raton, Florida, privately-held, venture banking firm. Previously, he served as a senior officer with the Wall Street Division of Chemical Bank, New York City, and three South Florida banks. Mr. Wolff acted as the finder for the transaction pursuant to which the Company acquired control of EVI on August 10, 1999. His fee earned from that transaction, and the subsequent acquisition of additional EVI shares, was paid by the issuance of 138,848 shares of the Company's common stock. Mr. Mody, 42, a director of the Company and EVI, served briefly as Executive Vice President and COO of both companies during March and April 2000. Since, he has served both companies in a consulting capacity. Prior thereto, he served, for four years, as Vice President of Laidlaw Global Securities, Inc., New York City and for one year as Vice President of Dean Witter & Co., New York City. He holds equity interests in technology companies in his native India. [10] Item 6. EXHIBITS AND REPORTS ON FORM 8-K Exhibit 27. Financial Data Schedule No Reports on Form 8-K were filed by the Company for the quarter ended September 30, 2000. SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. DISTINCTIVE DEVICES, INC. (Registrant) Dated: November 13, 2000 By: /s/ JAMES W. WOLFF James W. Wolff President and Treasurer Chief Executive Officer Chief Financial Officer EX-5 2 0002.txt [ARTICLE] 5 [PERIOD-TYPE] 9-MOS [FISCAL-YEAR-END] DEC-31-2000 [PERIOD-END] SEP-30-2000 [CASH] 1,334,827 [SECURITIES] 0 [RECEIVABLES] 0 [ALLOWANCES] 0 [INVENTORY] 0 [CURRENT-ASSETS] 1,346,017 [PP&E] 983,348 [DEPRECIATION] (113,180) [TOTAL-ASSETS] 2,282,024 [CURRENT-LIABILITIES] 106,538 [BONDS] 0 [PREFERRED-MANDATORY] 0 [PREFERRED] 0 [COMMON] 858,170 [OTHER-SE] 2,175,466 [TOTAL-LIABILITY-AND-EQUITY] 2,282,024 [SALES] 0 [TOTAL-REVENUES] 0 [CGS] 0 [TOTAL-COSTS] 0 [OTHER-EXPENSES] 1,590,109 [LOSS-PROVISION] 0 [INTEREST-EXPENSE] 51,346 [INCOME-PRETAX] (1,545,263) [INCOME-TAX] 0 [INCOME-CONTINUING] (1,545,263) [DISCONTINUED] 0 [EXTRAORDINARY] 0 [CHANGES] 0 [NET-INCOME] (1,493,635) [EPS-BASIC] (0.09) [EPS-DILUTED] (0.09)
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