SECURITIES AND EXCHANGE COMMISSION FORM 10Q WASHINGTON, D.C. 20549 QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For Quarter Ended JUNE 30, 1999 Commission File Number 2-2996 DI-AN CONTROLS, INC. Exact Name of Registrant as specified in its charter MASSACHUSETTS 04-2237138 State of Incorporation I.R.S. Employer Identification Number 530 West Street Braintree, Massachusetts 02184 Address of principal executive offices Zip Code Shares of Common Stock outstanding as of: March 31, 1999 826,405 shares Registrant's telephone number, including area code: (781) 848 - 1299 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 Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes No X DI-AN CONTROLS, INC. BALANCE SHEET JUNE 30 JUNE 30 1999 1998 ASSETS CURRENT ASSETS CASH 303,830 47,245 ACCOUNTS RECEIVABLE 104,735 36,496 LESS: ALLOWANCE, BAD DEBTS (13,715) (13,715) INVENTORY 131,944 244,886 TOTAL 526,795 314,913 EQUIPMENT AND IMPROVEMENTS MACHINERY AND EQUIPMENT 63,938 63,938 LEASEHOLD IMPROVEMENTS 0 0 LESS: ACCUM DEPRECIATION (63,938) (63,938) NET 0 0 OTHER ASSETS CASH SURRENDER VALUE OFFICER'S LIFE INSURANCE 31,947 32,231 DEPOSITS 2,917 2,917 DEFERRED CHARGES 34,344 34,344 OTHER 6,894 641 TOTAL, OTHER ASSETS 76,102 70,133 TOTAL ASSETS 602,897 385,046 DI-AN CONTROLS, INC. LIABILITIES AND STOCKHOLDERS DEFECIT JUNE 30 JUNE 30 1999 1998 CURRENT LIABILITIES ACCOUNTS PAYABLE 13,839 48,963 RESERVE, WARRANTIES 10,000 10,000 DEFERRED REVENUE 48,464 40,799 NOTE, PRINCIPAL STOCKHOLDER 1,847,741 1,586,400 DUE TO RELATED PARTIES 3,661,641 3,348,835 TOTAL LIABILITIES 5,581,685 5,034,997 STOCKHOLDERS' DEFICIT COMMON STOCK 82,641 82,641 CAPITAL, EXCESS OF PAR 1,124,451 1,124,451 ACCUMULATED DEFICIT (6,185,880) (5,857,043) TOTAL STOCKHOLDERS' DEFICIT (4,978,788) (4,649,951) TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT 602,897 385,046 DI-AN CONTROLS, INC. STATEMENT OF OPERATIONS AND STOCKHOLDERS' DEFICIT JUNE 30 JUNE 30 1999 1998 REVENUE NET SALES 279,571 397,339 SERVICE REVENUES 10,452 11,134 OTHER INCOME 3,108 0 TOTAL REVENUE 293,131 408,473 COSTS AND EXPENSES COST OF SALES & SERVICES 189,705 152,618 SELLING EXPENSES 37,402 36,808 GENERAL AND ADMIN EXPENSE 91,564 90,011 INTEREST 116,219 94,336 TOTAL EXPENSES 434,890 373,773 NET GAIN (LOSS) (141,759) 34,700 STOCKHOLDERS BEGINNING DEFICIT (6,044,120) (5,891,744) STOCKHLDERS' DEF. END OF QUARTER (6,185,879) (5,857,044) NET GAIN (LOSS) PER SHARe ($0.17) $0.04 MANAGEMENT DISCUSSION SUMMARY OF RESULTS OF OPERATIONS (UNAUDITED) Interest expense of $109,953.00 was incurred on short term loans to fund current operations. Management has determined that the consequences of its YEAR 2000 issues would not have any material affect on the results of operations or on the company's financial condition. This determination is the result of thorough testing by company staff. LIQUIDITY A principal stockholder has loaned the company funds to carry out company operations. BASIS OF PRESENTATION The financial information included herein is unaudited; however, such information reflects all adjustments (consisting solely of normal recurring adjustments) which are, in the opinion of management, necessary for a fair statement of results for the interim periods. The results of operations for the period ending June 30, 1999 are not necessarily indicative of the results to be expected for the full year. SALES OF UNREGISTERED SECURITIES (DEBT OR EQUITY): NONE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. DI/AN CONTROLS, INC. Date August 19, 1999 By Robert D. Kodis Robert D. Kodis President/Treasurer