-----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, SJyLvrOw1YfD0XoKRWqcrobg6tbIU4hBEMAbcINA3D00GrtMsHjw5QkknOYd08Hz xXYBJbKBYJ+YaNYEooymMg== 0001016295-98-000064.txt : 19980521 0001016295-98-000064.hdr.sgml : 19980521 ACCESSION NUMBER: 0001016295-98-000064 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19980520 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: UNIDYN CORP CENTRAL INDEX KEY: 0000894542 STANDARD INDUSTRIAL CLASSIFICATION: BLANK CHECKS [6770] IRS NUMBER: 870438639 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 033-55254-31 FILM NUMBER: 98629074 BUSINESS ADDRESS: STREET 1: 7201 E. CAMELBACK ROAD, SUITE 250 STREET 2: SUITE 460 CITY: SCOTTSDALE STATE: AZ ZIP: 85251 BUSINESS PHONE: 6029705500 MAIL ADDRESS: STREET 1: 3098 S HIGHLAND DR STE 460 CITY: SALT LAKE CITY STATE: UT ZIP: 84106 FORMER COMPANY: FORMER CONFORMED NAME: MACAW CAPITAL INC DATE OF NAME CHANGE: 19940706 10QSB 1 1ST QUARTER FILING UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-QSB (Mark One) [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998 [ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to _______________ Commission File No. 33-55254-31 UNIDYN, CORP. (Exact name of Small Business Issuer as specified in its charter) NEVADA 87-0438639 (State or other jurisdiction of (I.R.S. Employer Identification Number) incorporation or organization) 8621 North Seventy Ninth Avenue Peoria, Arizona 85345 (Address of principal executive offices) (Zip Code) Issuer's telephone number, including area code (602) 979-2800 Indicate by check mark whether the Issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Issuer was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. [X] Yes [ ] No Indicate the number of shares outstanding of each of the Issuer's classes of common stock, as of the latest practicable date. Class Outstanding as of March 31, 1998 - ------------------------------------ -------------------------------------- $.001 PAR VALUE CLASS A COMMON STOCK 32,000,000 SHARES 1 ITEM 1. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. THE FOLLOWING DISCUSSION INCLUDES FORWARD-LOOKING STATEMENTS WITH RESPECT TO THE COMPANY'S FUTURE FINANCIAL PERFORMANCE. ACTUAL RESULTS MAY DIFFER MATERIALLY FROM THOSE CURRENTLY ANTICIPATED AND FROM HISTORICAL RESULTS DEPENDING UPON A VARIETY OF FACTORS, INCLUDING THOSE DESCRIBED BELOW UNDER THE SUB-HEADING, "BUSINESS RISKS." SEE ALSO THE COMPANY'S ANNUAL REPORT ON FORM 10K FOR THE YEAR ENDED DECEMBER 31ST, 1997. OVERVIEW The Company was incorporated in the State of Utah in 1986 as Macaw Capital, Inc. and was reincorporated in 1993 in the State of Nevada. In December of 1997, Macaw Capital, Inc. acquired a portion of the assets of Universal Dynamics, Inc., a private manufacturer of environmental vibration testing equipment formed in December 1989, and was renamed UniDyn, Corp. No material relationship exists between the former management and directors of Macaw Capital, Inc. and the current management and directors of UniDyn, Corp. UniDyn, Corp. shares are currently traded under the symbol UNDY on the NASDAQ Electronic Bulletin Board System. Vibration Stress Screening (VSS) requires three basic elements; the vibration hardware or "shaker" unit which mechanically vibrates the test platform, the software control system which measures output and regulates intensity, and the amplifier unit which provides power to the shaker. On the production line, VSS can identify latent defects not readily identified through visual inspection or during the development and design process. Vibration Stress Screening of electronic and mechanical components, such as printed circuit boards saves rework time during production, reduces warranty exposure and can enhance product quality and longevity. VSS is most effective in detecting intermittent defects such as loose connections, broken parts, cracked traces, poor solder joints and mechanical flaws. As manufacturers in a variety of industry have embraced miniaturization and technological complexity, demand has increased for more sophisticated quality control testing factory product. The Company currently markets its controller product under the Northstar brand and to other OEM's to be repackaged for use in the aerospace, automotive and semiconductor industries. The Company is also in the process of filing patents on a new testing process called Sterling. The Sterling process provides for completely automated quality control testing of printed circuit boards. It is expected that the Sterling process can significantly reduce warranty liability for a variety of industries, including manufacturers of computers, consumer electronic products, and aerospace and military systems, by anticipating hidden defects. To meet the objectives of its business plan and reach an economy of scale in the short-term, the Company has entered into several asset acquisition agreements. In December of 1997, the Company closed a transaction with Universal Dynamics, Inc. an Arizona corporation, for the transfer of certain assets including equipment, inventory, accounts receivable, software and other intangible assets related to the business of vibration testing systems. These systems are Microsoft Windows-based and have been integrated in the Company's proprietary control systems software. 2 The Company also entered into an agreement to acquire an 80% interest in Derritron, a United Kingdom based manufacturer of vibration testing equipment. With this acquisition, the Company will receive patents, products, manufacturing equipment and an established market presence internationally. Derritron is currently 1 of 4 shaker manufacturers worldwide and holds patents on 30 variations of shaker models. RESULTS OF OPERATIONS For the three months ending March 31st, 1998, the Company posted earnings of $113,158 on revenues of $623,798. For the three months ending March 31st, 1997, the Company generated no revenues or income. Substantially all sales were generated from the NorthStar product. NorthStar is composed of off the shelf items and has minimal assembly requirements. For the three months ending March 31st, 1998, the Company has filled 73 purchase orders for Northstar product ranging in price from $15,000 to $28,000 for both OEM and direct customers such as FUJITSU, Ford General Motors, AT&T, Donnely, McDonnell Douglas, Kodak, MIT and NASA. Approximately 440 Northstar units have been sold to date over the preceding two years, primarily through Universal Dynamics, Inc. prior to the December, 1997 asset purchase. Sales are subject to materially monthly fluctuations as the Company integrates recent acquisitions, modifies operations, introduces new product lines, and modifies its existing customer base. There can be no assurance that the Company will have the capital resources necessary to complete the introduction of the Sterling Process in a timely manner in accordance with the Company's business plan. Cost of Goods Sold for the three months ended March 31st, 1998 were $186,466 with a resultant gross profit of $437,332. Gross margin for the period was in excess of 70%. Until new products are introduced, including the Sterling Process, there is significant uncertainty about future gross margins. Gross margin percentage is highly dependent upon product prices, sales volumes, materials cost and allocation of manufacturing overhead. Selling, General and Administrative costs for the period were $270,124. The Company currently employs a total of 34 people in the United States and the United Kingdom. Of those employed, approximately 18 are on contract lease agreements. Management believes that by leasing its primary workforce, the Company has substantially limited fixed overhead costs and provided for a larger free-cash flow for the Company's growth phase. For the three months ending March 31st, 1998 the majority of the Company's research was conducted at the Company's Engineering and Development Center in American Fork, Utah. Substantial research and development costs were incurred by Universal Dynamics for the development of the Northstar and Sterling Process products prior to the December, 1997 asset purchase. LIQUIDITY AND CAPITAL RESOURCES The Company is currently seeking additional working capital to meet its short term growth planning. Management believes, although there can be no assurance, that the Company will have sufficient cash needs for the next 12 months regardless of its success in attracting additional capital investment. However, 3 management also believes that a lack of additional working capital over the remainder of the current fiscal year would substantially curtail the roll-out of the Sterling Process product line. As of the three months ending March 31st, 1998, the Company has approximately $258,079 in working capital. NEW ACCOUNTING PRONOUNCEMENTS The Financial Accounting Standards Board has adopted several notices with regard to the treatment of interim financial statements. These issues are presented in the Company's interim financial statements. As discussed in the notes to the interim financial statements, the implementation of these new pronouncements is not expected to have a material effect on the financial statements. BUSINESS RISKS While management believes, but there can be no assurance, that the Company is sufficiently capitalized to continue operations for the remainder of the fiscal year, management is currently seeking additional capital investment to fulfill inventory requirements and outstanding purchase orders which could have a material impact on short-term growth objectives. This report contains a number of forward-looking statements which reflect the Company's current views with respect to future events and financial performance. These forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from historical results or those anticipated. In this report, the words "anticipates", "believes", "expects", "intends", "future" and similar expressions identify forward-looking statements. Readers are cautioned to consider the specific risk factors described in the Company's Annual Report on Form 10-K for the year ended December 31st, 1997 and not to place undue reliance on the forward-looking statements contained herein, which speak only as of the date hereof. The Company undertakes no obligation to publicly revise these forward-looking statements, to reflect events or circumstances that may arise after the date hereof. ITEM 2. LEGAL PROCEEDINGS Legal proceedings are outlined in detail in the Company's 10K filing for the year ending December 31st, 1997. On January 7, 1994, the Bureau of Securities of the State of New Jersey filed a complaint in the matter of Capital General Corporation, David R. Yeaman and 74 other named defendants, Nevada and Utah corporations including the Company, which complaint proposed that civil monetary penalties totaling $30,000.00 be assessed against Capital General Corporation for alleged violations of the Uniform Securities Law (1967), N.J.S.A. 49:3-47 et. seq. by (1) selling to 24 New Jersey residents between April 1986 and May 1991, securities in 25 of the 74 respondent corporations named in the proceeding, including the Company, which were neither registered nor exempt from registration, and (2) making untrue statements of material fact and omitting to state material facts in connection with the New Jersey sales in 6 of the 74 to resident corporations named in the proceeding, not including the Company. Also on January 7, 1994, the Bureau of Securities of the State of New Jersey based on substantially similar allegations as in the above referred complaint, issued its Order Denying Exemptions and to Cease and Desist. This order summarily denied the exemptions contained in N.J.S.A. 49:3-50(b), (1), (2), (3), (9), (11) and (12) of the securities of Capital General Corporation and the other 74 respondent corporations, including the Company, except that excluded from the summary denial of the exemption contained in N.J.S.A. 49-3-50(b)(12) is the Offer of Rescission by Capital General Corporation 4 to 24 New Jersey residents pursuant to the offer of rescission which began about April 28, 1993. This order also ordered Capital General Corporation and David Yeaman to Cease and Desist from offering or selling any securities in blind pool corporations into, or from the State of New Jersey. Capital General and David Yeaman filed answers denying the material allegations of the complaint and resisting the imposition of the civil monetary penalties, and the Order Denying Exemptions and to Cease and Desist. Subsequently the issues raised in the complaint and order were settled by agreement between the Bureau of Securities and Mr. Yeaman and Capital General Corporation in a consent order dated July 11, 1994 and approved by an administrative law judge of the State of New Jersey Office of Administrative Law September 2, 1994. Under the terms of the consent order, all claims in the complaint against all named respondents were settled by the payment of $3,000 civil penalty, and the order was modified so that it does not apply to 27 of the respondent companies; however the order does still apply to the Company. During 1986 and 1987, Capital General gifted small amounts of stock (usually 100 shares to each giftee) in 48 subsidiary companies, which included the Company, to approximately 1,000 persons or entities. Capital General did not register the gifts of shares in these companies with the Securities Division of the State of Utah or with the Securities Exchange Commission because it believed these gifts to be outside the scope of the Utah Uniform Securities Act and the Securities Act of 1933 in as much as such acts require registration for sales and do not require registration of gifts. Nevertheless, in connection with the distribution of shares of its subsidiaries, Capital General was found by the Utah Securities Advisory Board, in two decisions affirmed by the Utah State Courts, to have violated the registration provisions of the Utah Uniform Securities Act. See In re Amenity Inc., No. SD-86-11 (Utah Sec. Adv. Bd. February 18, 1987) aff'd C87-2625 (3d Dist. Ct. September 18, 1987) aff'd sub nom Capital General Corp. v. Utah Dep't of Business Reg., 777 P.2d 494, 498 (Utah Ct. App.) cert. denied, 781 P.2d 873 (Utah S. Ct. 1989); In re H&B Carriers Inc., No. 87-09-28-01 (Utah Sec. Adv. Bd., Apr. 15, 1988) aff'd No. 88-5900053 (3d Dist. Ct. Sept 10, 1990) aff'd sub nom Capital General Corp. v. Utah Dep't of Business Reg., Case No 91-196 (Utah Ct. App. February 10, 1992. All of the subsidiary companies, including the company, were parties to the H&B Carriers order. Both of these actions sought suspension of transactional exemptions respecting the shares of these companies pursuant to Section 14 (3) of the Utah Uniform Securities Act. Capital General defended both actions on the grounds that the Utah Uniform Securities Act did not apply to gifts of securities, that the gifts were good faith gifts specifically exempted by the Act, and that in any event even if it had "sold" shares in violation of the Act, suspension of transactional exemptions was not an authorized remedy under the statute. These defenses were rejected at the administrative agency level, and upon judicial review at the District Court level and by the Utah Court of Appeals. Management does not feel that the legal problems of the former officers and directors will have an adverse effect on the Company in the future. Management intends to comply with all applicable securities laws in the future. On February 8, 1996, David R. Yeaman was charged in the United States District Court for the Eastern District of Pennsylvania with conspiracy, wire fraud and fraud in the offer, purchase and sale of securities, in violation of 18 U.S.C. Sections 2, 371 and 1343; 15 U.S.C. Sections 77q(a), 77x, 78j(b), and 78ff; and Rule 10b-5 promulgated by the Securities and Exchange Commission, Title 17, Code of Federal Regulations, Section 240.10b-5 (1986). On February 22, 1996, Mr. Yeaman entered his not guilty plea to all charges. The allegations against Mr. Yeaman are based on the government's claims that he and five of the other defendants named in the proceeding violated the aforesaid laws by inflating the apparent worth of certain reinsurance companies by leasing them alleged worthless securities. Specifically, it is alleged that Mr. Yeaman, with other defendants, engaged in practices which falsely increased the quoted prices of the securities and misrepresented restricted securities as free trading securities. 5 Based on these allegations, the charges against Mr. Yeaman include one count of conspiracy, seven counts of wire fraud, six counts of securities fraud, and aiding and abetting with respect to each count. On April 16, 1997, Mr. Yeaman was convicted on one count of conspiracy, five counts of wire fraud, and three counts of Securities Fraud. The U.S. Securities and Exchange Commission, Securities Act of 1933 Release No. 7008 and Securities Exchange Act of 1934 Release No. 32669 announced that on July 23, 1993, it ordered David R. Yeaman and Capital General Corporation to permanently cease and desist from committing or causing further violations of Section 5(a) and (c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 13(g) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20 and 13d-1(c) thereunder. Krista Nielson was ordered to permanently cease and desist from committing or causing further violations of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5 and 12b-20 thereunder. In addition, the Commission ordered the revocation of the registration of the common stock of Altara International, Inc., Arrow Management, Inc., Atlas Equity, Inc., Dynamic Associates, Inc., Energy Systems, Inc., Four Star Ranch, Inc., Panorama Industries, Inc., Partisan Corporation, Quiescent Corporation, Saber, Inc., Upsilon, Inc., Vicuna, Inc., Why Not?, Inc., Xebec Galleon, Inc., Zebu, Inc., and Zeus Enterprises, Inc. pursuant to Section 12(j) of the Exchange Act. The Commission found that each of the issuers had filed a registration statement on Form 10 that contained materially false and misleading statements in violation of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Each of the respondents had submitted an Offer of Settlement consenting to the entry of the Order without admitting or denying the allegations in the Order. Prior to the submission of the Offers of Settlement, Capital General, on behalf of the above mentioned companies, except for Panorama Industries, Inc., filed a registration statement on Form S-1 during December of 1992 to register the common stock of those companies under the Securities Act of 1933. Concurrently with the signing of the Offers of Settlement, the Registration Statement was declared effective on June 30, 1993. A Post Effective Amendment was filed and declared effective September 2, 1993. Although the registration of the common stock under Section 12(g) of the 1934 Act was revoked on July 23, 1993, the companies are now registered and reporting under the Securities Act of 1933 by virtue of the filing of Form S-1 as indicated by Commission File No. 33-55254. Management does not feel that the legal problems of the former officers and directors will have an adverse effect on the Company in the future. Any outstanding legal proceedings relate only to the operational activities of the Company prior to the December 1997 activities which changed control of the Company and are not a reflection of current management and/or business strategy. No material relationship existed or now exists between current management and any former director, officer, or affiliate of the Company. Management does not feel that the legal problems of the former officers and directors will have an adverse effect on the Company in the future. However, no assurance can be given that costs, expenses or any awards of damages will not exceed the expectations of management, which could have a material adverse impact on the Company. Item 6. Exhibits and Reports on Form 8-K (a) Exhibits Financial statements as of March 31, 1998 (b) Reports on Form 8-K None 6 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the Issuer has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. UNIDYN, CORP. Dated: May 20, 1998 /s/ Ira Gentry Ira Gentry, President and Director 7 SMITH & COMPANY A PROFESSIONAL CORPORATION OF CERTIFIED PUBLIC ACCOUNTANTS MEMBERS OF: 10 WEST 100 SOUTH, SUITE 700 AMERICAN INSTITUTE OF SALT LAKE CITY, UTAH 84101 CERTIFIED PUBLIC ACCOUNTANTS TELEPHONE: (801) 575-8297 UTAH ASSOCIATION OF FACSIMILE: (801) 575-8306 CERTIFIED PUBLIC ACCOUNTANTS E-MAIL: smith&co@smithandcocpa.com - -------------------------------------------------------------------------------- INDEPENDENT AUDITOR'S REPORT The Board of Directors and Shareholders UniDyn, Corp. The accompanying balance sheet of UniDyn, Corp. as of March 31, 1998, and the related statements of operations, and cash flows for the three months ended March 31, 1998 and 1997, and the period from inception to March 31, 1998 were not audited by us and, accordingly, we do not express an opinion on them. /s/ Smith & Company CERTIFIED PUBLIC ACCOUNTANTS Salt Lake City, Utah May 8, 1998 F - 1 UNIDYN, CORP. (A Development Stage Company) BALANCE SHEET (Unaudited)
March 31, 1998 ---------------------- ASSETS CURRENT ASSETS Cash in bank $ 48,057 Accounts receivable 282,538 Inventory 54,191 ---------------------- TOTAL CURRENT ASSETS 384,786 ---------------------- $ 384,786 ====================== LIABILITIES & EQUITY CURRENT LIABILITIES Accounts payable $ 36,707 Income taxes payable 54,000 Loan payable - related party (Note 4) 36,000 ---------------------- TOTAL CURRENT LIABILITIES 126,707 STOCKHOLDERS' EQUITY Common Stock $.001 par value: Authorized - 100,000,000 shares Issued and outstanding 32,000,000 shares 32,000 Additional paid-in capital 172,653 Treasury stock (20,992) Earnings accumulated during the development stage 74,418 ---------------------- TOTAL STOCKHOLDERS' EQUITY 258,079 ---------------------- $ 384,786 ======================
F - 2 UNIDYN, CORP. (A Development Stage Company) STATEMENTS OF OPERATIONS (Unaudited)
5/2/86 Three Months Ended (Date of March 31, inception) to 1998 1997 3/31/98 ----------------- ----------------- ----------------------- Net sales $ 623,798 $ 0 $ 623,798 Cost of sales 186,466 0 186,466 ----------------- ----------------- ----------------------- GROSS PROFIT 437,332 0 437,332 General and administrative expenses 270,124 0 280,864 ----------------- ----------------- ----------------------- NET INCOME BEFORE INCOME TAXES 167,208 0 156,468 Income tax expense 54,050 0 54,050 ----------------- ----------------- ----------------------- NET INCOME $ 113,158 $ 0 $ 102,418 ================= ================= ======================= Net income per weighted average share $ .00 $ .00 ================= ================= Weighted average number of common shares used to compute net income per weighted average share 32,000,000 1,000,000 ================= =================
F - 3 UNIDYN, CORP. (A Development Stage Company) STATEMENTS OF CASH FLOWS (Unaudited)
5/2/86 (Date of Three Months Ended March 31, Inception) to 1998 1997 3/31/98 ---------------- --------------- --------------- OPERATING ACTIVITIES Net income $ 113,158 $ 0 $ 102,418 Adjustments to reconcile net income to cash provided by operating activities: Amortization 0 0 50 Stock issued for expenses 0 0 196 Changes in assets and liabilities: Accounts receivable (169,751) 0 (169,751) Inventory 0 0 (13,513) Accounts payable 13,652 0 36,707 Income taxes payable 54,000 0 54,000 ---------------- --------------- --------------- NET CASH PROVIDED BY OPERATING ACTIVITIES 11,059 0 10,107 INVESTING ACTIVITIES Organization costs 0 0 (50) ---------------- --------------- --------------- NET CASH PROVIDED (USED) BY INVESTING ACTIVITIES 0 0 (50) FINANCING ACTIVITIES Proceeds from sale of common stock 0 0 2,000 Loans - related party 36,000 0 36,000 ---------------- --------------- --------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 36,000 0 38,000 ---------------- --------------- --------------- INCREASE IN CASH AND CASH EQUIVALENTS 47,059 0 48,057 Cash and cash equivalents at beginning of year 998 0 0 ---------------- --------------- --------------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 48,057 $ 0 $ 48,057 ================ =============== =============== Cash paid for income taxes $ 50 $ 0 $ 50
F - 4 UNIDYN, CORP. (A Development Stage Company) NOTES TO UNAUDITED FINANCIAL STATEMENTS March 31, 1998 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES Accounting Methods The Company recognizes income and expenses based on the accrual method of accounting. Dividend Policy The Company has not yet adopted any policy regarding payment of dividends in cash. Organization Costs The Company amortized its organization costs over a five year period. Inventory Inventory consists of items for resale and is valued at the lower of cost (first-in, first-out basis) or market. Allowance for Uncollectible Accounts The Company provides an allowance for uncollectible accounts based upon prior experience and management's assessment of the collectability of existing accounts. Revenue Recognition Revenue is recognized upon shipment of products. Cash and Cash Equivalents For financial statement purposes, the Company considers all highly liquid investments with an original maturity of three months or less when purchased to be cash equivalents. Earnings (loss) per share Earnings or loss per common and common equivalent share is computed by dividing net earnings (loss) by the weighted average common shares outstanding during each year. Estimates 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, liabilities, revenues, and expenses during the reporting period. Estimates also affect the disclosure of contingent assets and liabilities at the date of the financial statements. Actual results could differ from these estimates. Such estimates of significant accounting sensitivity are allowance for doubtful accounts. Stock Options The Company has elected to follow Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related interpretations in accounting for its future employee stock options rather than adopting the alternative fair value accounting provided for under Financial Accounting Standards Board ("FASB") FASB Statement No. 123, Accounting for Stock Based Compensation (SFAS 123). Income Taxes The Company records the income tax effect of transactions in the same year that the transactions enter into the determination of income, regardless of when the transactions are recognized for tax purposes. Tax credits are recorded in the year realized. Since the Company has not yet realized income as of the date of this report, no provision for income taxes has been made. In February, 1992, the Financial Accounting Standards Board adopted Statement of Financial Accounting Standards No. 109, Accounting for Income Taxes, which supersedes substantially all existing authoritative literature for accounting for income taxes and requires deferred tax balances to be adjusted to reflect the tax rates in effect when those amounts are expected to become payable or refundable. The Statement was applied in the Company's financial statements for the fiscal year commencing January 1, 1993. F - 5 UNIDYN, CORP. (A Development Stage Company) NOTES TO UNAUDITED FINANCIAL STATEMENTS (continued) March 31, 1998 NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued) At December 31, 1997 a deferred tax asset was not recorded due to the Company's lack of profitable operations to provide income to use the net operating loss carryover of $10,740 which expires as follows: Year Ended Expires Amount December 31, 1986 December 31, 2001 $ 1,950 December 31, 1987 December 31, 2002 10 December 31, 1988 December 31, 2003 10 December 31, 1989 December 31, 2004 10 December 31, 1990 December 31, 2005 10 December 31, 1991 December 31, 2006 10 December 31, 1997 December 31, 2012 8,740 ------------- $ 10,740 ============= The Company expects to use the net operating loss on its 1998 income tax return. NOTE 2: DEVELOPMENT STAGE COMPANY The Company was incorporated under the laws of the State of Utah on May 2, 1986 as Macaw Capital, Inc. and has been in the development stage since incorporation. On December 30, 1993, the Company was dissolved as a Utah corporation and reincorporated as a Nevada corporation. On December 3, 1997, the name was changed to UniDyn, Corp. NOTE 3: CAPITALIZATION On the date of incorporation, the Company sold 1,000,000 shares of its common stock to Capital General Corporation for $2,000 cash for an average consideration of $.002 per share. The Company's authorized stock includes 100,000,000 shares of common stock at $.001 par value. See also Note 6. NOTE 4: RELATED PARTY TRANSACTIONS During 1998, the Company borrowed $36,000 from its largest shareholder. The amount is non-interest bearing and expected to be repaid during 1998. NOTE 5: OTHER 1997 EVENTS On December 1, 1997, the Company constructed a multi-party agreement with the following entities; Universal Dynamics, Inc. an Arizona Corporation, and Unidyn Inc. a company orgainzed under the laws of the Bahamas. Pursuant to the agreement, the Company acquired from Universal Dynamics, Inc. certain assets including equipment, inventory, accounts receivable, software, and other intangible assets all pertaining to the vibration control system known as "NorthStar". The Company also entered into formal negotiations for the acquisition of the Derritron shaker product, and entered into an agreement for the acquisition of 80% of DVCS, LTD, a UK company in the business of Derritron shaker remanufacturing and related shaker services in the UK. In consideration for the NorthStar assets and to publicly disclose its shares for the pending acquisitions, the Company issued 3,000,000 authorized but unissued shares of its common stock, with the following distribution. Universal Dynamics, Inc. received 982,000 shares for the NorthStar product. The structure was concluded December 31, 1997. The Company also issued 1,822,000 shares for the pending acquisition of the Derritron product and 80% ownership of DVCS, LTD. Unidyn Inc. agreed to be the trustee of the shares as required for the pending acquisitions of both Derritron and DVCS, LTD and subsequently returned the shares to the Company as specific share transfer instructions were received pursuant to the individual acquisition agreement. Other interested parties received 196,000 shares. F - 6 UNIDYN, CORP. (A Development Stage Company) NOTES TO UNAUDITED FINANCIAL STATEMENTS (continued) March 31, 1998 The Company also generated a $2,000,000 promissory note in the event it would be required for the pending acquisitions. This note was subsequently destroyed, and not required for the acquisition, and represents no liability to the Company. NOTE 6: FORWARD STOCK SPLIT Effective December 3, 1997, pursuant to written action adopted unanimously by the Board of Directors and a majority of the shareholders, the Company changed its name to UniDyn, Corp., and approved an eight-for-one forward stock split on the Company's common stock as follows: each outstanding share was converted into eight shares. Before the change, the Company was authorized to issue 100,000,000 shares of $.001 par value common stock; after the forward stock split the Company shall continue to be authorized to issue 100,000,000 shares of $.001 par value common stock. The number of outstanding shares of common stock affected by the forward split was 4,000,000. The number of issued and outstanding shares of common stock of the Company after the forward stock split is 32,000,000. NOTE 7: SUBSEQUENT EVENTS On April 2, 1998 the Company announced it intends to issue 14,000,000 shares of its common stock to acquire Derritron, a leading manufacturer of shakers and amplifiers for environmental testing. F - 7 EX-27 2 FDS -- 1ST QUARTER
5 This schedule contains summary financial information extracted from Unidyn, Corp. March 31, 1998 financial statements and is qualified in its entirety by reference to such financial statements. 0000894542 Unidyn, Corp. 3-MOS DEC-31-1998 MAR-31-1998 48,057 0 282,538 0 54,191 384,786 0 0 384,786 126,707 0 0 0 32,000 226,079 384,786 623,798 623,798 186,466 186,466 270,124 0 0 167,208 54,050 113,158 0 0 0 113,158 .00 .00
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