10-Q/A 1 de902a.txt SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (Mark One) /X/ Quarterly report pursuant to Section 13 or 15(d) of the Securities Act of 1934 For the quarterly period ended September 30, 2002 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) P.O. Box 940007, Belle Harbor, New York 11694 ------------------------------------------------------ (Address of Principal Executive Office) (Zip Code) (718) 318-0994 ------------------------------------------------------ (Registrant's Telephone Number, Including Area Code) ------------------------------------------------------ (Registrant's Former Address) 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. 1,242,374 10Q-1 DAINE INDUSTRIES, INC. FINANCIAL STATEMENTS SEPTEMBER 30, 2002 I N D E X Page BALANCE SHEETS 1 STATEMENTS OF SHAREHOLDERS' EQUITY 2 STATEMENTS OF OPERATIONS 3 STATEMENTS OF CASH FLOWS 4 NOTES TO THE FINANCIAL STATEMENTS 5-7 DAINE INDUSTRIES, INC. BALANCE SHEETS Sept. 30, 2002 June 30, (Unaudited) 2002 -------------- ---------- A S S E T S CURRENT ASSETS Cash and Cash Equivalents $ 23,816 $ 28,936 ---------- ---------- Total Current Assets 23,816 28,936 ---------- ---------- FIXED ASSETS, At Cost Machinery and Equipment 31,032 31,032 Less: Accumulated Depreciation (31,032) (31,032) ---------- ---------- -0- -0- ---------- ---------- TOTAL ASSETS $ 23,816 $ 28,936 ========== ========== 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 $ 4,500 $ 4,500 ---------- ---------- Total Current Liabilities 4,500 4,500 ---------- ---------- SHAREHOLDERS' EQUITY Common Stock (Par Value $.00001) 50,000,000 shares authorized, 1,242,374 shares issued and outstanding 12 12 Paid-In Capital 1,444,070 1,444,070 Retained Earnings (Deficit) (1,424,766) (1,419,646) ---------- ---------- TOTAL SHAREHOLDERS' EQUITY 19,316 24,436 ---------- ---------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 23,816 $ 28,936 ========== ========== See notes to financial statements. Page 1 of 7 DAINE INDUSTRIES, INC. STATEMENTS OF SHAREHOLDERS' EQUITY For The Period July 1, 2001 to September 30, 2002 Common Stock ---------------- Total Total Number $.00001 Retained Share- of Par Paid-In Earnings holders' Shares Value Capital (Deficit) Equity ---------- ------- ---------- ----------- -------- BALANCES AT JULY 1, 2001 1,242,374 $ 12 $1,444,070 $(1,392,540) $ 51,542 Net Income (Loss) for the year ended June 30, 2002 (27,106) (27,106) --------- ---- ---------- ----------- -------- BALANCES AT JUNE 30, 2002 1,242,374 12 1,444,070 (1,419,646) 24,436 Net Income (Loss) for the three months ended Sept. 30, 2002 (Unaudited) (5,120) (5,120) --------- ---- ---------- ----------- -------- BALANCES AT SEPT. 30, 2001 (UNAUDITED) 1,242,374 $ 12 $1,444,070 $(1,424,766) $ 19,316 ========= ==== ========== =========== ======== See notes to financial statements. Page 2 of 7 DAINE INDUSTRIES, INC. STATEMENTS OF OPERATIONS (Unaudited) For The Three Months Ended Sept. 30, -------------------------- 2002 2001 ---------- ---------- Interest Income $ 61 $ 358 General and Administrative Expenses (4,581) (5,566) ---------- ---------- Income (Loss) Before Income Taxes (4,520) (5,208) Income Tax Expense 600 600 ---------- ---------- NET INCOME (LOSS) $ (5,120) $ (5,808) ---------- ---------- Earnings (Loss) Per Share - Basic and Diluted NIL NIL ========== ========== Weighted Average Number of Common Stock Outstanding - Basic and Diluted 1,242,374 1,242,374 ========== ========== See notes to financial statements. Page 3 of 7 DAINE INDUSTRIES, INC. STATEMENTS OF CASH FLOWS (Unaudited) For The Three Months Ended Sept. 30, -------------------------- 2002 2001 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES Net Income (Loss) $ (5,120) $ (5,808) ---------- ---------- Net Cash Provided By (Used In) Operations Activities (5,120) (5,808) Cash and Cash Equivalents at Beginning of Period 28,936 56,042 ---------- ---------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 23,816 $ 50,234 ---------- ---------- Supplemental Disclosures of Cash Flow Information: Cash Paid During the Period for: Interest $ -0- $ -0- Income Taxes $ 600 $ 600 See notes to financial statements. Page 4 of 7 DAINE INDUSTRIES, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 (Unaudited) NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS Daine Industries, Inc. ("Daine") was incorporated on September 24, 1987 and is currently seeking to acquire an operating business. From February 1990 until November 19, 1998 Daine operated the business of Lite King Corp. and currently is a public vehicle to acquire an operating business. On February 26, 1990, Daine 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, Daine filed a Form 10-SB to spin-off Lite King Corp's shares of common stock to its shareholders on a pro rata basis. Daine 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. Lite King Corp. merged with National Cabling services in March 2001. NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 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, At Cost Depreciation is calculated using the straight line method over the asset's estimated useful life, which generally approximates 10 years. ESTIMATES IN FINANCIAL STATEMENTS The preparation of financial statements in conformity with U.S. 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. Page 5 of 7 DAINE INDUSTRIES, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 (Unaudited) (Continued) 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. NOTE 3: INCOME TAXES Income taxes are accrued at the statutory U.S. and state income tax rates. Current income tax expense for September 30, 2002 and 2001 is principally due to state and local income taxes based upon capital. Deferred tax liabilities relate to depreciation timing differences. September 30, 2002 2001 ------ ------ Current tax expense Income tax at statutory rates $ 600 $ 600 ------ ------ Total Tax Expense $ 600 $ 600 ====== ====== The tax effect of significant temporary differences, which comprise the deferred tax assets and liabilities are as follows: Sept. 30, June 30, 2002 2002 --------- -------- Deferred tax asset: Operating loss carryback $ 53,700 $ 52,200 Valuation allowance (53,700) (52,200) -------- -------- Net deferred tax asset $ -0- $ -0- ======== ======== Page 6 of 7 DAINE INDUSTRIES, INC. NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002 (Unaudited) (Continued) The Company has net operating loss (NOL) carryforwards for income tax purposes of approximately $145,100. This loss is allowed to be offset against future income until the year 2022 when the NOL's will expire. The tax benefits associated with these 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. NOTE 5: INTERIM FINANCIAL REPORTING The unaudited financial statements of the Company for the period July 1, 2002 through September 30, 2002 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. NOTE 6: COMMON STOCK On July 24, 2000 the Company effected a one (1) for two hundred (200) reverse split of the Company's common stock and reduced the number of authorized shares from 350,000,000 to 50,000,000. The effective date of the reverse split is July 24, 2000 and all share and per share amounts are retroactively restated to give effect for the reverse split within these financial statements. NOTE 7: CONTINGENCIES The Company as owner of a vehicle and the Company's president, as driver are defendants in a lawsuit in the County of Brooklyn, New York State seeking damages of $1,100,000 as a result of an accident. The Company has liability insurance in the amount of $1,000,000. The Company and its president have denied any and all liability and are being defended by the insurance company. The Company expects the lawsuit to be dismissed or to be settled within the policy limits. Accordingly, there has been no accrual for a contingent liability in these financial statements. Page 7 of 7 PART I. FINANCIAL INFORMATION --------------------- Item 1. 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 the 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. Lite King Corp. merged with National Cabling services in March 2001. During the three months ended September 30, 2002, the Registrant's only revenues consisted of interest income which amounted to $61. Total expenses (excluding income tax expense) amounted to $4,581, consisting of general and administrative expenses (primarily legal and accounting fees). Income tax expense amounted to $600. The two expense items offset by interest income resulted in a net loss of $5,120. For the three months ended September 30, 2001, the Registrant had a net loss of $5,808. The net loss of $5,808 was the result of interest income of $358, general and administrative expenses (primarily legal and accounting expenses) of $5,566, and income tax expense of $600, resulting in a loss of $5,808. At September 30, 2002, the Registrant had total assets of $23,816, consistingof current assets of 23,816 (cash and cash equivalents), and fixed assets of $-0-. At June 30, 2002, the Registrant had total assets of $28,936, consisting of cash and cash equivalents (current assets) of $28,936 and fixed assets of $-0-. At September 30, 2002, the Registrant's total liabilities consisted of accounts payable and accrued expenses of $4,500. At June 30, 2002 total liabilities amounted to $4,500. Shareholders equity at September 30, 2002 amounted to $19,316 as compared with $24,436 as of June 30, 2002. 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. Item 4. Controls and Procedures. The President, who is also chief executive and chief financial officer of the Registrant, has concluded based on his evaluation as of a date within 90 days prior to the date of the filing of this Report, that the Registrant's disclosure controls and procedures are effective to ensure that information required to be disclosed by the Registrant in the reports filed or submitted by it under the Securities Act of 1934, as amended, is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission's rules and forms, and include controls and procedures designed to ensure that information required to be disclosed by the Registrant in such reports is accumulated and communicated to the Registrant's management, including the president, as appropriate to allow timely decisions regarding required disclosure. There was no significant changes in the Company's internal controls or in other factors that could significantly effect these controls subsequent to the date of such evaluation. PART II. OTHER INFORMATION Item 1. Legal Proceedings. The Registrant as owner of a vehicle and the Company's president, as driver are defendants in a lawsuit in the County of Brooklyn, New York State seeking damages of $1,100,000 as a result of an accident. The Registrant has liability insurance in the amount of $1,000,000. The Registrant and its president have denied any and all liability and are being defended by the insurance company. The Registrant expects the lawsuit to be dismissed or to be settled within the policy limits. 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: October 21, 2002 CERTIFICATIONS I, Arthur J. Seidenfeld certify that: 1. I have reviewed this quarterly report on Form 10-Q of Daine Industries, Inc. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report. 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function); a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls: and b) any fraud whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: October 21,2002 /s/ Arthur J. Seidenfeld ------------------------ Arthur J. Seidenfeld President and Chief Executive Officer CERTIFICATIONS I, Arthur J. Seidenfeld certify that: 1. I have reviewed the quarterly report on Form 10-Q of Daine Industries Inc. 2. Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this quarterly report. 3. Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant, as of, and for, the periods presented in this quarterly report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rule 13a-14 and 15d-14) for the registrant and we have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and c) presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function); a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls: and b) any fraud whether or not material, that involves management or other employees who have a significant role in the Registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: October 21 2002 /s/ Arthur J. Seidenfeld ------------------------ Arthur J. Seidenfeld President and Chief Financial Officer