-----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, AMl1xhnVdBk9ee09utO2P+Y4W/xekL3Nr/vhJmgweADpvacC/gSMIDXKiNQb8Wq3 3qhaD9bthDUA3ENwu/5uDA== 0001020568-01-500007.txt : 20010516 0001020568-01-500007.hdr.sgml : 20010516 ACCESSION NUMBER: 0001020568-01-500007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 20010331 FILED AS OF DATE: 20010515 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DISTINCTIVE DEVICES INC CENTRAL INDEX KEY: 0000059963 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-INDUSTRIAL MACHINERY & EQUIPMENT [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: 1634560 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 ddi10q.txt DDI 10QSB 3-31-2001 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 March 31, 2001 ( ) 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 230, 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( ) 17,345,864 shares of issuer's common stock, $.05 par value, were outstanding at April 30, 2001. Issuer has no other class of common equity. INDEX Page PART I - FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Condensed Consolidated Balance Sheet-- March 31, 2001 3 Condensed Consolidated Statements Of Operations-- Three months ended March 31, 2001 and 2000 February 5, 1998 ( Inception) to March 31, 2001 4 Condensed Consolidated Statements Of Changes In Stockholders' Equity-- Inception to March 31, 2001 5 Condensed Consolidated Statements Of Cash Flows-- Three months ended March 31, 2001 and 2000 February 5, 1998 (Inception) to March 31, 2001 6 Notes To The Condensed Consolidated Financial Statements 7 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION 8 PART II - OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K 10 SIGNATURES 10 [2] PART I - FINANCIAL INFORMATION Item 1. - FINANCIAL STATEMENTS DISTINCTIVE DEVICES, INC. AND SUBSIDIARY (Development Stage Companies) CONDENSED CONSOLIDATED BALANCE SHEET (unaudited) March 31, 2001 ASSETS CURRENT ASSETS Cash $ 695,757 Other Receivables 7,190 Loans Receivable 23,000 Inventories 282,637 Prepaid Expenses 8,797 ------- Total Current Assets 1,017,381 PROPERTY AND EQUIPMENT, Net 605,273 OTHER ASSETS 65,839 --------- $ 1,688,493 ========= LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts Payable and Accrued Liabilities $ 19,273 Accrued Accounting Fees 26,405 ------ Total Current Liabilities 45,678 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 867,293 Additional Paid-In Capital 3,387,594 Shares to be issued; 18,961 Shares of Common 73,642 Deficit Accumulated During the Development Stage (2,685,714) --------- 1,642,815 --------- $ 1,688,493 ========= 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) Period From February 5,1998 Three Months Ended March 31, (Inception) to 2001 2000 March 31, 2001 Revenue $ $ $ General and Administrative Expenses 325,397 499,775 2,958,539 ------- ------- --------- Operating Loss (325,397) (499,775) (2,958,539) ------- ------- --------- Other Income and Expense Interest and Other Income 9,363 6,199 87,459 Loss on Disposal of Assets (6,500) ------- ------- --------- Total Other Income and Expense 9,363 6,199 80,959 ------- ------- --------- (316,034) (493,576) (2,877,580) Minority Interest 51,628 170,673 ------- ------- --------- Net Loss $ (316,034) $ (441,948) $(2,706,907) ======= ======= ========= Weighted Average Shares of Common Stock Outstanding 17,315,589 14,510,235 11,020,962 ========== ========== ========== Loss Per Share - Basic and Diluted $ (0.02) $ (0.03) $ (0.25) ==== ==== ==== 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 Shares Accumulated Common Stock Paid-in to be During the Shares Amount Capital Issued Development Stage Initial Issuance 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 Finder's Fee 121,712 6,086 85,198 Net Loss (606,764) ---------- ------- ------- ----- ------- Balance at December 31, 1999 12,292,954 614,648 483,429 (606,959) Issuance of Shares for Cash 3,156,810 157,841 2,998,969 Issuance of Shares for Acquisition of Minority Interest 1,713,640 85,681 (85,681) Shares to be Issued for Finder's Fee 73,040 Reduction of Minority Interest 21,193 Net Loss (1,783,914) ---------- ------- --------- ------ --------- Balance at December 31, 2000 17,163,404 858,170 3,396,717 73,040 (2,369,680) Issuance of Shares for Acquisition Of Minority Interest 182,460 9,123 (9,123) Shares to be Issued for Finder's Fee 602 Net Loss (316,034) ---------- ------- --------- ------ --------- Balance at March 31, 2001 17,345,864 $ 867,293 $ 3,387,594 $ 73,642 $(2,685,714) ========== ======= ========= ====== =========
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 Three Months Ended March 31, (Inception) to 2001 2000 March 31, 2001 CASH FLOWS FROM OPERATING ACTIVITIES $ (270,631) $ (578,860) $(3,060,954) ------- ------- --------- CASH FLOWS FROM INVESTING ACTIVITIES Purchase of Property and Equipment (10,644) (283,002) (772,833) Proceeds from the Sale of Property and Equipment 2,500 Issuance of Notes Receivable (8,000) (28,000) Payments Received on Notes Receivable 5,000 Cash Effect of Recapitalization 398,904 ------- ------- --------- Net Cash Used in Investing Activities (18,644) (283,002) (394,429) ------- ------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from Issuance of Common Stock 3,156,810 4,151,140 ------- --------- --------- Increase in Cash (289,275) 2,294,948 695,757 Cash: Beginning 985,032 429,259 ------- ------- ------- Ending $ 695,757 $2,724,207 $ 695,757 ======= ========= ======= The Accompanying Notes are an Integral Part of These Financial Statements [6] DISTINCTIVE DEVICES, INC. AND SUBSIDIARY (Development Stage Companies) NOTES TO THE CONDENSED 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, 2000 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 March 31, 2001 and the results of their operations and cash flows for the three months ended March 31, 2001 and 2000 and the period from February 5, 1998 (inception) to March 31, 2001. 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, 2001. 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 have been issued. 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: MINORITY INTEREST During the quarter ended March 31, 2001, DDI exchanged 182,460 shares of its common stock for 91,230 shares of EagleView common stock held by minority shareholders. As a result of this transaction, at March 31, 2001, DDI owned approximately 99.7% 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. NOTE 5: GOING CONCERN As shown in the accompanying financial statements, the Company incurred net losses of $316,034 and $2,706,907 during the three months ended March 31, 2001, and the period from February 5, 1998 (inception) to March 31, 2001, respectively. The Company's working capital at March 31, 2001 of approximately $972,000 is not sufficient to fund continuing operations at the current level. These factors create a substantial doubt about the Company's ability to continue as a going concern. Management of the Company is considering plans to commence operations, reduce expenses, obtain financing through the issuance of stock or the acquisition of or merger with an operating company. The ability of the Company to continue as a going concern is dependent on their ability to continue to obtain financing and the successful implementation of management's plan and the establishment of profitable operations. The financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION Plan of Operation Our Annual Report to the SEC on Form 10-KSB, filed six weeks ago, referred to discussions underway with Symphony Telecom International, Inc., of Brampton, Canada, regarding the possible acquisition by DDI of a Symphony subsidiary which provides long distance telephone services in the United States. These discussions are continuing. Currently, we are also in discussions with two privately owned entities, both involved in providing communications services, whose owners have expressed an interest in being acquired by DDI. Each of these transactions, if concluded, would take the form of a "reverse merger" in which the present owners of the business being acquired would emerge with control of DDI. It is too early to predict if any one of these prospective transactions will be consummated. [8] Meanwhile, we plan to enter into a joint venture with FMC Telecommunications, Inc. ("FMC") and Nationwide Computer Systems, Inc. ("NCS"), both Florida corporations and both headquartered in Davie, Florida. This venture would offer wireless telecommunications services, including satellite, in Florida and elsewhere. FMC is a leading satellite equipment systems integrator and service provider offering turnkey business solutions for the carriage of data, video, Internet, voice and voice over IP traffic. FMC's client list includes WorldCom, CNBC, IBM, AT&T, Amerijet, MCI and Harris Corporation, among others. Frank Cassidy, President and controlling shareholder of FMC, has over 35 years experience in telecommunications and has been involved with satellite communications since that industry's infancy. NCS has offered systems integration, software development, computer hardware, network management and Internet services to businesses in South Florida since 1986. In 1996, NCS expanded its service base by becoming a full service facilities-based Internet Service Provider (ISP). It now provides ISP services to over 1,000 residences and businesses in two Florida markets. NCS's ISP in one of these markets is managed, remotely, via satellite connectivity provided by FMC. When activated, the joint venture would be capitalized at $600,000. DDI plans to invest $250,000 of that amount by contributing certain equipment and inventory to the venture, plus $50,000 in cash. FMC and NCS would, together, invest a like amount in promissory notes which can be paid by them by providing cash, goods or services to the venture. DDI would hold a 49% interest in the venture and FMC and NCS would share equally in the remaining 51%. Certain new business prospects available to the three participants are proposed to be serviced by the venture, including clients of a telehealthcare operator based in Atlanta, Georgia and Boynton Beach, Florida, and remote locations in the Western U.S. inhabited by Native Americans. Locally, a recently completed broadcast tower located in Davie, Florida is offering wireless connectivity to the Internet. A second tower in adjacent Weston, Florida should be operational next month. We continue to test our antenna array in Union City, New Jersey, for Internet and telecommunications transmission to, and reception from, various locations in Manhattan. Even though the point-to-multipoint service envisioned when the system was designed is not deemed ready for commercial service, the aim would be to provide point-to-point connectivity to office and apartment buildings wherein multiple users in the building could be connected to a single transceiver atop the building, instead of a direct wireless connection to a transceiver mounted on a subscriber's window. Tests are being conducted in cooperation with a long-established telephone service firm in New York City, which would market our wireless service if current tests are successful. The Company has had no operating revenues to the date of this Report. [9] Risks and Uncertainties At March 31, 2001, the Company's cash and equivalent balances approximated $695,000. This amount will not be sufficient to fund operations for the next twelve months, absent meaningful revenue, additional funding, or both. No assurance can be given that such revenue or funding may be realized (see Note 5 to the within financial statements). IN ADDITION TO THE FOREGOING UNCERTAINTY, READERS ARE ADVISED THAT STATEMENTS CONTAINED HEREIN 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 ARE NOT 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 6. EXHIBITS AND REPORTS ON FORM 8-K No reports on Form 8-K were filed by the Company for the period covered by this quarterly Report. 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: May 10, 2001 By: /s/ JAMES W. WOLFF James W. Wolff President and Treasurer Chief Executive Officer Chief Financial Officer [10] -----END PRIVACY-ENHANCED MESSAGE-----