-----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, ByLXktzVr/TbEDIexv70WDm8lv9xn2riWVKI8nqVuKC6qGdKEyKzVrfsxwNYXvFE Kuh3BTKbTu1HzmJkkTNyHw== 0001034592-00-000007.txt : 20000215 0001034592-00-000007.hdr.sgml : 20000215 ACCESSION NUMBER: 0001034592-00-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAINE INDUSTRIES INC CENTRAL INDEX KEY: 0000824845 STANDARD INDUSTRIAL CLASSIFICATION: ELECTRONIC COMPONENTS & ACCESSORIES [3670] IRS NUMBER: 112881685 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-17330 FILM NUMBER: 539193 BUSINESS ADDRESS: STREET 1: P O BOX 940007 STREET 2: 461BEACH 124 ST CITY: BELLE HARBOR STATE: NY ZIP: 11694-0007 BUSINESS PHONE: 7184746568 MAIL ADDRESS: STREET 1: 461 BEACH 124 STREET CITY: BELLE HARBOR STATE: NY ZIP: 11694 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) /X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities Act of 1934 For the quarterly period ended December 31, 1999 or / / Transition report pursuant to Section 13 or 15(d) of the Securities Act of 1934 For the transition period from to Commission file number 0-17330 DAINE INDUSTRIES, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 11-2881685 (State or other jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 240 Clarkson Avenue Brooklyn, New York 11226 (Address of Principal Executive Office) (Zip Code) (718)469-3132 (Registrant's Telephone Number, Including Area Code) 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 and Exchange Act of 1934 during the preceding twelve 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 ninety days. Yes / X / No / / APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. Yes / / No / / APPLICABLE ONLY TO CORPORATE ISSUERS Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 248,461,935 10Q-1 DAINE INDUSTRIES, INC. FINANCIAL STATEMENTS DECEMBER 31, 1999 I N D E X Page REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT 1 BALANCE SHEET 2 STATEMENTS OF SHAREHOLDERS' EQUITY 3 STATEMENTS OF OPERATIONS 4-5 STATEMENTS OF CASH FLOWS 6 NOTES TO THE FINANCIAL STATEMENTS 7-10 ACCOUNTANTS' REVIEW REPORT To the Board of Directors and Shareholders DAINE INDUSTRIES, INC. Brooklyn, New York 11226 We have reviewed the accompanying balance sheet of DAINE INDUSTRIES, INC. as of December 31, 1999 and the related statements of operations, shareholders' equity and cash flows for the six month periods ended December 31, 1999 and 1998, in accordance with standards established by the American Institute of Certified Public Accountants. All information included in these financial statements is the representation of management of DAINE INDUSTRIES, INC. A review of interim financial information consists principally of obtaining an understanding of the system for the preparation of interim financial information, applying analytical review procedures to financial data, and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an examination in accordance with generally accepted auditing standards, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion. Based on our review, we are not aware of any material modifications that should be made to the financial statements for them to be in conformity with generally accepted accounting principles. We have previously audited, in accordance with generally accepted auditing standards, the balance sheet as of June 30, 1999, and the related consolidated statements of operations, shareholders' equity and cash flows for the year then ended (not presented herein); and in our report dated August 6, 1999, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of June 30, 1999 is fairly stated in all material respects in relation to the consolidated balance sheet from which it has been derived. GREENBERG & COMPANY LLC Springfield, New Jersey January 13, 2000 Page 1 of 10 DAINE INDUSTRIES, INC. BALANCE SHEET Dec. 31, 1999 (Unaudited) June 30, 1999 A S S E T S CURRENT ASSETS Cash and Cash Equivalents $ 101,121 $ 111,126 Total Current Assets 101,121 111,126 FIXED ASSETS, At Cost Machinery and Equipment 31,032 31,032 Less: Accumulated Depreciation (25,030) (22,370) 6,002 8,662 TOTAL ASSETS $ 107,123 $ 119,788 L I A B I L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y CURRENT LIABILITIES Accounts Payable & Accrued Expenses $ 2,500 $ 6,500 Total Current Liabilities 2,500 6,500 TOTAL LIABILITIES 2,500 6,500 SHAREHOLDERS' EQUITY Common Stock (Par Value $.00001) 350,000,000 shares authorized, 248,461,935 shares issued and outstanding 2,485 2,485 Paid-In Capital 1,441,597 1,441,597 Retained Earnings (Deficit) (1,339,459) (1,330,794) TOTAL SHAREHOLDERS' EQUITY 104,623 113,288 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 107,123 $ 119,788 See Accountants' Review Report and notes to the financial statements. Page 2 of 10 DAINE INDUSTRIES, INC. STATEMENTS OF SHAREHOLDERS' EQUITY For The Period July 1, 1998 to December 31, 1999 Total Number $.00001 Retained Share- of Par Paid-In Earnings holders' Shares Value Capital (Deficit) Equity BALANCES AT JULY 1, 1998 248,461,935 $2,485 $1,441,594 $ 134,520 $1,578,602 Net Income(Loss) for the Year Ended June 30, 1999 (97,486) (97,486) Lite King Corp spinoff to Daine stockholders (1,367,828) (1,367,828) BALANCES AT JUNE 30, 1999 (Audited) 248,461,935 2,485 1,441,594 (1,330,794) 113,288 Net Income (Loss) for the six months ended Dec. 31, 1999 (Unaudited) (8,665) (8,665) BALANCES AT DEC. 31, 1999 (Unaudited) 248,461,935 $2,485 $1,441,597 $(1,339,459) $ 104,623 See Accountants' Review Report and notes to the financial statements. Page 3 of 10 DAINE INDUSTRIES, INC. STATEMENTS OF OPERATIONS (Unaudited) For The Three Months Ended December 31, 1999 1998 Interest Income $ 1,184 $ 1,432 General and Administrative Expenses (1,044) (9,295) Depreciation and Amortization Expense (1,330) (1,330) Income (Loss) Before Income Taxes (1,190) (9,193) Income Tax Expense (Benefit) -0- -0- Income (Loss) from Continuing Operations (1,190) (9,193) Spun Off Operations Income (Loss) from operation of Lite King Corp subsidiary (net of applicable income tax (benefit) of $20,197) -0- (47,376) NET INCOME (LOSS) $(1,190) $(56,569) Basic and Diluted Earnings (Loss) Per Share NIL NIL Weighted Average Number of Shares Outstanding 248,461,935 248,461,935 See Accountants' Review Report and notes to the financial statements. Page 4 of 10 DAINE INDUSTRIES, INC. STATEMENTS OF OPERATIONS (Unaudited) For The Six Months Ended December 31, 1999 1998 Interest Income $ 2,243 $ 3,197 General and Administrative Expenses (7,747) (14,320) Depreciation and Amortization Expense (2,660) (2,660) Income (Loss) Before Income Taxes (8,164) (13,783) Income Tax Expense (Benefit) 501 1,309 Income (Loss) from Continuing Operations (8,665) (15,092) Spun Off Operations Income (Loss) from operation of Lite King Corp subsidiary (net of applicable income tax expense $7,271) -0- 19,107 NET INCOME (LOSS) $(8,665) $ 4,015 Basic and Diluted Earnings (Loss) Per Share NIL NIL Weighted Average Number of Shares Outstanding 248,461,935 248,461,935 See Accountants' Review Report and notes to the financial statements. Page 5 of 10 DAINE INDUSTRIES, INC. STATEMENTS OF CASH FLOWS (Unaudited) For The Six Months Ended December 31, 1999 1998 CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ (8,665) $ 4,015 Adjustment to Reconcile Net Income to Net Cash Provided By (Used In) Operating Activities: Depreciation and Amortization Expense 2,660 2,660 Change in Assets and Liabilities: Increase (Decrease) in Accounts Payable & Accrued Expenses (4,000) (3,500) Cash flows (used in) from Spunoff Operations -0- (26,534) Net Cash Provided By (Used In) Operating Activities (10,005) (23,359) Cash and Cash Equivalents at Beginning of Period 111,126 165,322 CASH AND CASH EQUIVALENTS AT END OF PERIOD $101,121 $141,963 Supplemental Disclosures of Cash Flow Information: Cash Paid During the Period for: Interest $ -0- $ -0- Taxes $ 501 $ 1,309 See Accountants' Review Report and notes to the financial statements. Page 6 of 10 DAINE INDUSTRIES, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 1999 (Unaudited) NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS Daine Industries, Inc. (Daine) is a Delaware corporation. Daine owned 100% of the stock of Lite King Corp. (LKC) a New York corporation through November 19, 1998. Daine's principal purpose is to acquire and merge with an operating company. LKC's principal business is the manufacture and assembly of electrical wiring devices, cord sets and sockets. LKC's customers consist of manufacturers of lamps, chandeliers, Christmas and Halloween illuminated decorations, novelties, point of purchase displays, signs, and other electrical specialties. The customers are located throughout North America. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF PRESENTATION The accounts of the Company and its consolidated 100% owned subsidiary, Lite King Corporation, are included in the consolidated financial statements through March 31, 1999. LKC incurred a loss of $36,841 through March 31, 1999. (See spinoff) All significant intercompany balances and transactions have been eliminated. CASH AND CASH EQUIVALENTS Cash equivalents consist of highly liquid, short-term investments with maturities of 90 days or less. The carrying amount reported in the accompanying balance sheets approximates fair value. PROPERTY AND EQUIPMENT Renewals and betterments are capitalized; maintenance and repairs are expensed as incurred. Depreciation is calculated using the straight line method over the asset's estimated useful life, which generally approximates 10 years. REVENUE RECOGNITION POLICY The company recognizes sales, for both financial statement purposes and for tax purposes, when the products are shipped to customers. Page 7 of 10 DAINE INDUSTRIES, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 1999 (Unaudited) (Continued) ESTIMATES IN FINANCIAL STATEMENTS 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 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. INCOME TAXES The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards ("SFAS") No. 109, "Accounting for Income Taxes." SFAS 109 has as its basic objective the recognition of current and deferred income tax assets and liabilities based upon all events that have been recognized in the financial statements as measured by the provisions of the enacted tax laws. Valuation allowances are established when necessary to reduce deferred tax assets to the estimated amount to be realized. Income tax expense represents the tax payable for the current period and the change during the period in the deferred tax assets and liabilities. SPINOFF In April of 1999, Daine Industries Inc. distributed all 2,484,620 issued and outstanding shares of Lite King Corp. to the shareholders of Daine Industries Inc. on a pro rata basis. Daine did not recognize any gain or loss on the distribution and also relies on Internal Revenue Code section 355 to treat the distribution as a nontaxable stock dividend to Daine's shareholders. Page 8 of 10 DAINE INDUSTRIES, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 1999 (Unaudited) (Continued) NOTE 3: INCOME TAXES Income taxes are accrued at the statutory U.S. and state income tax rates. December 31, 1999 1998 Current tax expense: Income tax at statutory rates $ 501 $ 1,309 Total Tax Expense $ 501 $ 1,309 The tax effect of significant temporary differences, which comprise the deferred tax assets and liabilities are as follows: 12/31/99 6/30/99 Deferred tax asset: Operating loss carryback $25,060 $20,060 Valuation allowance (25,060) (20,060) Net deferred tax asset $ -0- $ -0- During the year ended June 30, 1999, Daine distributed the stock of its subsidiary Lite King to Daine shareholders in a tax free spinoff. Therefore, Daine will not be filing a consolidated tax return with Lite King for the year ended June 30, 1999 and the loss that Daine has generated for that year of approximately $59,000 must be carried forward for tax purposes until 2019. The loss of $8,665 for the six months ended December 31, 1999 generates a tax benefit of approximately $2,700 and expires in 2020. The tax benefits associated with the losses have been fully reserved in the valuation allowance due to Daine's lack of operating profitability. NOTE 4: POSTRETIREMENT EMPLOYEE BENEFITS The company does not have a policy to cover employees for any health care or other welfare benefits that are incurred after employment (postretirement). Therefore, no provision is required under SFAS's 106 or 112. Page 9 of 10 DAINE INDUSTRIES, INC. NOTES TO THE FINANCIAL STATEMENTS DECEMBER 31, 1999 (Unaudited) (Continued) NOTE 5: INTERIM FINANCIAL REPORTING The unaudited financial statements of the company for the period July 1, 1999 to December 31, 1999 have been prepared by management from the books and records of the company, and reflect, in the opinion of management, all adjustments necessary for a fair presentation of the financial position and operations of the company as of the period indicated herein, and are of a normal recurring nature. Page 10 of 10 Part 1. Financial Information Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. Daine Industries, Inc. ("The Registrant") was incorporated on September 24, 1987 and is currently seeking to acquire an operating business. From February 1990 until November 19, 1998 the Registrant operated business of Lite King Corp. and currently is a public vehicle to acquire an operating business. On February 26, 1990, the Registrant acquired substantially all of the assets (with the exception of the cash) and the business of Lite King Corporation ("Lite King"), a manufacturer and assembler of wiring devices, cord sets and sockets. On November 19, 1998, the Registrant filed a Form 10-SB to spin-off Lite King Corp's shares of common stock to its shareholders on a pro rata basis. The Registrant owned all of the 2,484,620 outstanding shares of Lite King which was distributed to its shareholders as of November 30, 1998 on the basis of one share of Lite King for each 100 shares of Daine held. The distribution of stock certificates of Lite King was made in May 1999. Management of the Registrant believe the two companies as separate entities may create additional value for the shareholders. There is no assurance of any trading market developing. Management will attempt to use the Registrant as a "shell" vehicle to acquire an operating business. During the six months ended December 31, 1999, the Registrant's only revenues consisted of interest income which amounted to $2,243. Total expenses amounted to $10,908, consisting of general and administrative expenses (primarily legal and accounting fees) of $7,747, depreciation and amortization expense of $2,660 and income tax expense of $501, resulting in a net loss of $8,665. For the six months ended December 31, 1998, the Registrant had net income of $4,015. The net income of $4,015 was the result of interest income of $3,197, general and administrative expenses (primarily legal and accounting expenses) of $14,320, depreciation and amortization expenses of $2,660, income tax expense of $1,309, resulting in a loss from continuing operations of $15,092. This loss was balanced by income from the operations of its Lite King Corp subsidiary (net of applicable income tax expense of $7,271) of $19,107 resulting in net income of $4,015. Lite King Corp is a former wholly owned subsidiary of the Registrant which was spun off to the Registrant's shareholders during 1999. At December 31, 1999, the Registrant had total assets of $107,123, consisting of current assets of $101,121 (cash and cash equivalents), and fixed assets of $6,002. At June 30, 1999, the Registrant had total assets of $119,788, consisting of cash and cash equivalents (current assets) of $111,126 and fixed assets of $8,662. At December 31, 1999, the Registrant's total liabilities consisted of accounts payable and accrued expenses of $2,500. At June 30, 1999 total liabilities amounted to $6,500. Shareholders equity at December 31, 1999 amounted to $104,623 as compared with $113,288 as of June 30, 1999. The Registrant is actively seeking candidates for either acquisition or merger. No assurance can be given that such acquisition or merger will occur in the near future. Year 2000 Compliance The Registrant has evaluated the impact of the Year 2000 issue on the business and does not expect to incur significant costs with Year 2000 compliance. The Registrant believes that all software and hardware requirements to enable it to cope with the Year 2000 issue have been or are being currently implemented. However, there can be no assurance that unanticipated costs may arise in implementing these requirements. PART II. OTHER INFORMATION: Item 1. Legal Proceedings. None. Item 2. Changes in Securities. None. Item 3. Defaults upon Senior Securities. None. Item 4. Submission of Matters To A Vote of Security Holders. None. Item 5. Other Materially Important Events. None. Item 6. Exhibits and Reports on Form 8-K. None. SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. By: Arthur Seidenfeld President Dated: February 9, 2000 EX-27 2
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