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, 2004
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE
ACT
For the transition period from ______ to ______
Commission File Number 000-29211
DAC Technologies Group International, Inc.
(Name of Small Business Issuer in Its Charter)
Florida 65-0847852
------------------------------- ------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1601 Westpark Drive #4C Little Rock, Ar 72204
(Address of Principal Executive Offices) (Zip Code)
(501) 661-9100
(Issuer's Telephone Number)
CHECK WHETHER THE ISSUER (1) HAS FILED ALL REPORTS REQUIRED TO BE FILED
BY THE 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.
(1) YES [X] NO [ ] (2) YES [X ] NO [ ]
STATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASS OF
COMMON EQUITY, AS OF THE LATEST PRACTICABLE DATE. AS OF MAY 7, 2004, 5,713,056
SHARES OF COMMON STOCK ARE ISSUED AND OUTSTANDING.
TRANSITIONAL SMALL BUSINESS DISCLOSURE FORMAT: YES [ ] NO [X]
TABLE OF CONTENTS
PART I......................................................................3
ITEM 1. FINANCIAL STATEMENTS...............................................3
PART F/S................................................................... 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
Background................................................9
Financial Condition and Results of Operations............11
Liquidity and Capital Resources..........................12
Trends...................................................12
Critical Accounting Estimates............................13
ITEM 3. CONTROLS & PROCEDURES.............................................13
PART II ...................................................................14
ITEM 1. LEGAL PROCEEDINGS ................................................14
ITEM 2. CHANGES IN SECURITIES ............................................14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES ..................................15
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS ..............15
ITEM 5. OTHER INFORMATION ................................................15
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K .................................15
SIGNATURES ................................................................17
2
PART I
ITEM 1. FINANCIAL STATEMENTS
Our financial statements are contained in pages 4 through 7 following.
3
DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
BALANCE SHEET (CONSOLIDATED)
MARCH 31, 2004
Unaudited
ASSETS
Current assets
Cash $ 60,545
Accounts receivable, less allowance for doubtful
accounts of $5,500 342,704
Due from factor 105,394
Inventories 1,150,206
Prepaid expenses and deferred charges 108,365
Current deferred income tax benefit 8,227
-----------
Total current assets 1,775,441
-----------
Property and equipment
Furniture and fixtures 129,846
Molds, dies, and artwork 475,074
-----------
604,920
Accumulated depreciation (392,779)
-----------
Net property and equipment 212,141
-----------
Other assets
Patents and trademarks, net of
accumulated amortization of $44,591 166,657
Advances to employees 3,325
Note receivable - related party 106,927
Note receivable - stockholder 91,238
-----------
Total other assets 368,147
-----------
Total assets $ 2,355,729
===========
4
DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
BALANCE SHEET (CONSOLIDATED)
MARCH 31, 2004
Unaudited
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Notes payable $ 331,584
Notes payable - stockholders 128,454
Accounts payable-trade 747,026
Accrued payroll tax withholdings 85,187
Accrued expenses-other 25,500
-----------
Total current liabilities 1,317,751
-----------
Stockholders' equity
Common stock, $.001 par value; authorized
50,000,000 shares; issued 5,843,056 shares;
outstanding 5,713,056 shares 5,843
Preferred stock, $.001 par value; authorized
10,000,000 shares; none issued and outstanding
Treasury stock, at cost (101,400)
Additional paid-in capital 1,249,065
Retained earnings (deficit) (115,530)
-----------
Total stockholders' equity 1,037,978
-----------
Total liabilities and stockholders' equity $ 2,355,729
===========
5
DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
STATEMENTS OF OPERATIONS (CONSOLIDATED)
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
Unaudited
MARCH 31, 2004 MARCH 31, 2003
-------------- --------------
Net sales $ 1,337,452 $ 769,342
Cost of sales 801,844 453,746
----------- -----------
Gross profit 535,608 315,596
----------- -----------
Operating expenses
Selling 163,011 90,171
General and administrative 187,397 162,883
----------- -----------
Total operating expenses 350,408 253,054
----------- -----------
Income from operations 185,200 62,542
----------- -----------
Other income (expense)
Interest expense (35,361) (27,563)
Interest expense - stockholder notes (2,878) (4,888)
Other income 335 795
----------- -----------
Total other income (expense) (37,904) (31,656)
----------- -----------
Income before income tax expense 147,296 30,886
Provision for income taxes 28,240 9,451
----------- -----------
Net income $ 119,056 $ 21,435
=========== ===========
Numerator - net income $ 119,056 $ 21,435
Denominator - weighted average number of shares outstanding 5,713,056 5,818,039
----------- -----------
Basic earnings (loss) per share $ 0.02 $ 0.00
=========== ===========
6
DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
STATEMENTS OF CASH FLOWS (CONSOLIDATED)
FOR THE THREE MONTHS ENDED MARCH 31, 2004 AND 2003
Unaudited
MARCH 31, 2004 MARCH 31, 2003
-------------- --------------
Cash flows from operating activities
Net income $ 119,056 $ 21,435
Adjustments to reconcile net income to
net cash provided by operating activities:
Issuance of common stock for services -- 40
Depreciation 13,589 14,453
Amortization 3,623 4,872
Deferred income tax provision 28,240 9,451
Changes in operating assets and liabilities
Accounts receivable (243,404) (98,701)
Due from factor 117,635 79,695
Inventories (240,854) 40,044
Note receivable 44,665 (620)
Advances to employees -- 9,050
Prepaid expenses (67,261) (29,526)
Accounts payable - trade 229,446 19,448
Accrued payroll tax withholdings 6,316 (13,432)
Accrued expenses other 6,421 (1,940)
--------- ---------
Net cash provided by operating activities 17,472 54,269
--------- ---------
Cash flows from investing activities
Purchases of property and equipment (1,632) (6,209)
Advances on note receivable - related party (34,409)
--------- ---------
Net cash used in investing activities (36,041) (6,209)
--------- ---------
Cash flows from financing activities
Repayments on notes payable (10,997) (26,086)
Repayments on notes payable - stockholders (14,265) --
--------- ---------
Net cash used in financing activities (25,262) (26,086)
--------- ---------
Increase (decrease) in cash (43,831) 21,974
Cash - beginning of period 104,376 13,378
--------- ---------
Cash - end of period $ 60,545 $ 35,352
========= =========
7
PART F/S
DAC TECHNOLOGIES GROUP INTERNATIONAL, INC.
SELECTED NOTES TO FINANCIAL STATEMENTS
O NATURE OF BUSINESS
DAC Technologies Group International, Inc. (the "Company"), a
Florida corporation, is in the business of developing, manufacturing and
marketing various consumer products, patented and unpatented, which are designed
to provide security for the consumer and their property. In addition, the
Company has developed a wide range of security and non-security products for the
home, automobile and individual. The majority of the Company's products are
manufactured and imported from mainland China and are shipped to the Company's
central warehouse facility in Little Rock, Arkansas. These products, along with
other items manufactured in the United States, are sold primarily to mass
merchants and sporting goods retailers throughout the United States and
international locations.
O ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Organization and basis of presentation - The Company was
incorporated as a Florida corporation in July 1998 under the name DAC
Technologies of America, Inc. In July 1999, the Company changed its name to DAC
Technologies Group International, Inc.
Unaudited interim financial statements - The accompanying
financial statements of the Company for the three months ended March 31, 2004
and 2003 are unaudited, but, in the opinion of management, reflect the
adjustments, all of which are of a normal recurring nature, necessary for a fair
presentation of such financial statements in accordance with accounting
principles generally accepted in the United States. The significant accounting
policies applied to these interim financial statements are consistent with those
applied to the Company's December 31, 2003 audited financial statements included
in the Company's Form 10KSB. The results of operations for an interim period are
not necessarily indicative of the results for a full year.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF PLAN OF OPERATION
The following Management Discussion and Analysis of Financial Condition is
qualified by reference to and should be read in conjunction with our Financial
Statements and the Notes thereto as set forth at the end of this document. We
include the following cautionary statement in this Form 10QSB for any
forward-looking statements made by, or on behalf of, the Company.
Forward-looking statements include statements concerning plans, objectives,
goals, strategies, expectations, future events or performances and underlying
assumptions and other statements which are other than statements of historical
facts. Certain statements contained herein are forward-looking statements and,
accordingly, involve risks and uncertainties which could cause actual results or
outcomes to differ materially from those expressed in the forward-looking
statements. The Company's expectations, beliefs and projections are expressed in
good faith and are believed by the Company to have a reasonable basis, including
without limitations, management's examination of historical operating trends,
data contained in the Company's records and other data available from third
parties, but there can be no assurance that management's expectations, beliefs
or projections will result or be achieved or accomplished.
(a) SUMMARY
The first quarter of 2004 has seen a significant improvement in sales and
profits over the comparable quarter for 2003, and the 2004 sales and profits are
expected to continue to exceed those for 2003 for the remainder of the year. Net
sales for the first quarter of $1,337,452 is a 74% increase over the first
quarter of 2003. More importantly, net income for the quarter of $119,056
represents a 455% increase over the prior year.
The increase in sales is primarily due to our line of GunMaster gun
cleaning kits. During the first quarter, the Company introduced over thirty new
items in this line, with favorable responses both from trade show demonstrations
and as evidenced by increased orders. The Company expects continued increases in
future sales orders particularly as the hunting seasons approach (typically the
fall and winter) and the new items are rolled out.
Six of the new gun cleaning kits will be added as permanent module
items in Wal Mart in July. In addition, the Company's Deluxe Universal Gun
Cleaning Kit (Model # UGC 76W), which has been in half of the Wal Mart stores,
will be added as permanent items in all stores. The Company has also added a
number of large, national sporting goods distributors and retailers to its
customer base. With the addition of these new customers and the new items going
into Wal Mart, the Company expects to meet or exceed its projected gross sales
for 2004 of $8,000,000. There, however, can be no assurance that these
expectations, while considered reasonable by the Company, will be met.
DETAILS
We are in the business of developing, marketing and outsourcing the
manufacture of various consumer products, patented and non-patented, designed to
enhance and provide security for the consumer and for his property. We have
placed particular emphasis on OEM gun
9
manufacturers, gun cleaning kits and gun accessories. In particular, our
products consist of gun locks, trigger locks, gun cleaning and accessory items,
security safes, specialty safes, personal protection devices and items for the
health care industry.
A significant portion of our business is with mass market retailers
such as Wal Mart, Walgreens and Kmart, as well as OEM gun manufacturers. With
the addition of our "Gunmaster" gun cleaning kits, we have increased our
business with sporting goods retailers and distributors.
THE COMPANY'S BUSINESS PLAN AND STRATEGY FOR GROWTH FOCUSES ON:
o increased penetration of our existing markets,
particularly in the gun cleaning and accessories
market
o development of new products for the sporting goods
market
o identify and develop new markets for gun cleaning
kits, i.e. government, law enforcement and military
o adoption of new technologies for safety and security
product
o Adoption of new product lines
o identification and recruitment of effective
manufacturer's representatives to actively market
these products on a national and international basis
o aggressive cost containment
Management believes that continued growth will require the Company to
continually innovate and improve its existing line of products and services to
meet consumer, industry and governmental demands. In addition, we must continue
to develop or acquire new and unique products that will appeal to gun owners.
In addition to our traditional products, our management is actively
pursuing initiatives which may add complementary businesses, products and
services. These initiatives are intended to broaden the base of revenues to make
us less dependent on particular products. By developing businesses which focus
on products and services which complement our current line of products,
management hopes to leverage these opportunities to not only develop new sources
of revenue, but to strengthen the demand for our existing products.
Our products can be grouped into four main categories: (a) gun safety,
(b) gun maintenance, (c)personal security, and (d) non-security products. In
developing these products, we focus on developing features, establishing
patents, and formulating pricing to obtain a competitive edge. We currently
design and engineer our products with the assistance of our Chinese and domestic
manufacturers, who are responsible for the tooling, manufacture and packaging of
our products.
A) GUN SAFETY. We market ten (10) different gun safety locks
and five security and specialty safes. The lock's composition
range from plastic to steel, keyed trigger locks to cable
locks. The security safes are of heavy duty, all steel
construction and are designed for firearms, jewelry and other
valuables. Nine of the Company's gun locks and three safes
have been certified for sale consistent
10
with the standards set out by the State of California. These
standards have been adopted by other states and by a variety
of gun manufacturers.
(B) GUN MAINTENANCE. We market over thirty-five different gun
cleaning kits, rod sets, tools and accessories used to clean
and maintain virtually any firearm on the market. These kits
are solid brass, and consist of "universal" kits designed to
fit a variety of firearms, caliber specific kits, as well as
replacement brushes, mops, etc. These kits are available in
solid wood or aluminum cases, as well as blister packed.
(C) PERSONAL SECURITY. We market over seven (7) different
electronic security devices designed to protect the person. We
also market non-electronic security devices such as pepper
spray and tear gas.
(D) NON-SECURITY PRODUCTS. We market two licensed products,
the Clampit Cupholder and Plateholder. We also market through
Wal-Mart and other customers nation-wide, the Sportsman
Lighter, a windproof, water resistant, refillable butane
lighter.
We are in the process of improving and redesigning our website
(WWW.DACTEC.COM). All of our products will be available via e-commerce on this
new site. Our web site is intended to be the only direct link by the Company to
the retail market.
(b) FINANCIAL CONDITION AND RESULTS OF OPERATIONS
For the three months ended March 31, 2004, the Company had net income
of $119,056 on net sales of $1,337,452, as compared to net income of $21,435 on
net sales of $769,342 for the same period in 2003.
The increase in net income of $97,621, or 455% was mainly due to the
increase in sales. The increase in net sales of $568,110 represents a 74%
increase over the same three month period of 2003. The Company's line of
Gunmaster gun cleaning kits, a new product line rolled out in the second quarter
of 2003, accounted $772,184 of our net sales or for 136% of the net sales
increase, whiles sales of other products decreased by $186,074.
Gross profit for the three months ended March 31, 2004 was $535,608 as
compared to $315,596 for the prior year, an increase of $220,012, or 70%. Gross
margin percentages remained virtually unchanged at 40%/41%.
Operating expenses for the three months ended March 31, 2004 were
$350,408 as compared to $253,054 for the prior year. This is an increase of
$97,354, or 38% over 2003. This increase is primarily related to an increase in
sales commissions resulting from the increased sales described above, and
approximately $15,000 paid in consulting fees relating to the promotion of the
Company by financial services firms. These arrangements were not subject to
long-term contract and may be terminated at any time by either party.
Income from operations increased from $62,542 in 2003 to $185,200 in
2004, an increase of 196%. Due to the fact that the Company has been profitable
for eight consecutive quarters, the Company's overall financial condition has
improved significantly since December 31, 2002.
11
At March 31, 2004, the Company had net working capital of $457,690 as compared
to net working capital of $125,275 at March 31, 2003. In addition, the Company's
total assets have increased from $1,715,816 to $2,355,729, and stockholders'
equity has increased from $709,840 to $1,037,978 from March 31, 2003 to 2004.
(c) LIQUIDITY AND CAPITAL RESOURCES
Our primary source of cash is funds from our operations. Our cash
position as of March 31, 2004 was $60,545. Net cash generated from operating
activities in the three-month period ended March 31, 2004 was $17,472 compared
to an operating cash generation of $54,269 in the three months ended March 31,
2003.
We believe that external sources of liquidity could be obtained in the
form of bank loans, letters of credit, etc., if necessary. We maintain an
account receivable factoring arrangement in order to insure an immediate cash
flow. The factor may also, at its discretion, advance funds prior to the
collection of our accounts. Advances are payable to the factor on demand. Should
our sales revenues significantly decline, it could affect our short-term
liquidity. As of March 31, 2004, our factor had advanced us $516,141. The
Company has engaged Keane & Co., Inc., an investment banker as its placement
agent in connection with a private equity raise of $1.7 million. The offering is
scheduled to close in mid-June 2004.
(d) TRENDS
As we have discussed in previous reports, handgun safety remains a
major concern, and interest to the American public, particularly in light of the
accidental and intentional shootings involving children. The focus continues to
be one of gun safety rather than legislative attempts to ban guns. Gun safety
issues have been moving from the federal level to the state level through the
introduction of mandatory gun lock legislation. The Company, with developed
products that address preventive handgun safety, anticipates that it will be in
a position to benefit from this trend, although this, of course, cannot be
guaranteed. We believe that the continued focus on handgun safety, the use of
gun locks by law enforcement agencies, the litigation aimed at gun manufacturers
and corresponding about-face regarding gun safety locks begun by Smith & Wesson,
as well as the gun legislation will hopefully enhance our product line revenues.
Moreover, the tragic terrorist attack against the United States on
September 11, 2001, continues to have many Americans concerned about their
personal security. As a result, many people are purchasing firearms to maintain
for home defense purposes. While they are purchasing handguns, many are also
concerned with the safe storage of the firearm in the home and want to purchase
affordable gun safes to increase security.
The State of Maryland has passed legislation to require gun
manufacturers to incorporate safety devices similar to the Company's products
into all handguns sold. The State of California enacted legislation to establish
performance standards for "firearm Safety devices," "lock- boxes," and "safes".
These standards permit an attack on the gun lock or safe with hand tools, such
as hammers, screwdrivers, electric drills, screw and hack saws. This legislation
requires manufacturers to have their products tested by an independent testing
laboratory in order to be listed as an approved device. This testing has
resulted in significant expenditures to the
12
company. We anticipate that similar standards will be adopted throughout the
United States in the next few years.
(e) CRITICAL ACCOUNTING ESTIMATES
The Company prepares its consolidated financial statements in
accordance with accounting principles generally accepted in the United States of
America. Certain of these accounting policies as discussed below require
management to make estimates and assumptions about future events that could
materially affect the reported amounts of assets, liabilities, revenues and
expenses and disclosure of contingent assets and liabilities. Accounting
estimates and assumptions discussed in this section are those that we consider
to be the most critical to an understanding of our financial statements because
they inherently involve significant judgments and uncertainties. For all of
these estimates, we caution that future events rarely develop exactly as
forecast, and the best estimates routinely require adjustment.
LONG-LIVED ASSETS. Depreciation expense is based on the estimated
economic useful lives of the underlying property and equipment. Although the
Company believes it is unlikely that any significant changes to the useful lives
of its property and equipment will occur in the near term, an increase or
decrease in the estimated useful lives would result in changes to depreciation
expense. The Company continually reevaluates the carrying value of its
long-lived assets, for events or changes in circumstances, which indicate that
the carrying value may not be recoverable. As part of this reevaluation, if
impairment indicators are present, the Company estimates the future cash flows
expected to result from the use of the asset and its eventual disposal. If the
sum of the expected future cash flows (undiscounted and without interest
charges) is less than the carrying value of the asset, an impairment loss is
recognized to reduce the carrying value of the long-lived asset to the estimated
fair value of the asset.
PATENTS AND TRADEMARKS. Amortization expense is based on the estimated
economic useful lives of the underlying patents and trademarks. Although the
Company believes it is unlikely that any significant changes to the useful lives
of its patents and trademarks will occur in the near term, rapid changes in
technology or changes in market conditions could result in revisions to such
estimates that could materially affect the carrying value of these assets and
the Company's future consolidated operating results.
ITEM 3 CONTROLS AND PROCEDURES
Our Company's Chief Executive Officer and Chief Financial Officer have
evaluated our Company's disclosure controls and procedures within 90 days prior
to the date of filing of this Quarterly Report on Form 10-QSB. Management
believes that our Company's current internal controls and procedures are
effective and designed to ensure that information required to be disclosed by
our Company in its periodic reports is recorded, processed, summarized and
reported, within the appropriate time periods specified by the SEC, and that
such information is accumulated and communicated to our Company's CEO and CFO as
appropriate to allow timely decisions to be made regarding required disclosure.
As of March 31, 2004, there were no significant corrective actions taken by our
Company or other changes made to these internal controls. Our Company's
management does not believe there were changes in other factors that could
significantly affect these controls subsequent to the date of the evaluation.
13
PART II
ITEM 1. LEGAL PROCEEDINGS
We were the plaintiff against our former manufacturer SKIT
International, Ltd. and Uni- Skit Technologies, Inc. which alleged breach of a
manufacturing contract which required defendants to manufacture certain of our
products with the range of "competitive pricing", a defined term. We sought
damages and recission of 165,000 shares of our common stock as part of the
compensation paid to the defendants. The defendants denied the allegations and
counterclaimed for an outstanding balance of $182,625, for recission of the
manufacturing agreement and for damage to its business reputation.
In August of 2003, this suit went to trial before a twelve
member jury in the Circuit Court of Pulaski County, Arkansas. The jury awarded
the Company damages in the amount of $1,650,560, which includes the value of the
returned shares of stock previously issued to the defendants. In addition, all
counterclaims of the defendants were dismissed. Pursuant to an order of the
Court, the shares issued to the defendants have been cancelled and reissued to
the Company. We have not yet been successful in collecting the damage award,
thus it has not been provided for in the Company's financial statements, with
the exception of the return of the shares of common stock into the Company's
treasury.
On October 23, 2003, the Company initiated suit, seeking
unspecified damages, in the Circuit Court of Pulaski County, Arkansas against
former manufacturers, Uni-Tat International, Inc., Uni-Champion Ltd., and their
respective principals, Victor Lee and Arthur Yung, for common law fraud (as to
Unit-Tat, Lee and Yung), breach of contract, and violation of the Deceptive
Trade Practices Act, and for vicarious liability.
We instituted suit along with The Collins Family Trust, our
affiliate in which David Collins, our Chairman claims a beneficial interest, and
DAC Technologies of America, Inc., our predecessor, against Larry Legel, our
former CPA, Director and the Trustee of The Collins Family Trust. The suit,
commenced in March 2001 alleged a transfer of 180,000 shares of our common stock
for services which the Defendant did not provide. The suit also alleges that the
Defendant breached an agreement not to sell his shares before certain private
investors had recouped their investment. In October, 2002, the Arkansas Court
ordered the transfer rescinded and the stock returned to David Collins. Mr.
Legal has noticed the appeal of the Court's October Order.
Subsequent to the Arkansas action, Mr. Legal instituted
against the Company in August, 2001, alleging failure by the Company and its
officers to permit the sale of his shares of the Company, which were the same
shares that were the subject of the Arkansas action. A Motion to Dismiss was
filed and granted. In February 2003, Legal filed an amended complaint, alleging
that the Company failed to honor his request to sell the shares. The Company has
filed a motion to dismiss or abate the Amended Complaint due to the decision and
pendency of the Arkansas appeal.
ITEM 2. CHANGES IN SECURITIES
None.
14
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
On March 11, 2004, the Company engaged Keane & Co., Inc., an
investment banking firm located in New York City to raise a maximum $1.7 million
with a minimum of $500,000. The unit offering, which consists of the Company's
common stock and warrants, is scheduled to close on or before June 15, 2004. The
proceeds of the offering will be applied for debt reduction, product
development, working capital and receivable financing.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8 -K
No Form 8K was filed during this reporting period. The
following documents required by Item 601 of Regulation S-B are incorporated by
reference from Registrant's Form 10SB filed with the Securities and Exchange
Commission (the "Commission"), File No. 000-29211, on January 28, 2000:
Exhibit Description
------- -----------
2 Asset Purchase Agreement
3(i) Articles of Incorporation
3(ii) By-laws
Exhibits required by Item 601 of Regulation S-B attached:
Exhibit Description
------- -----------
10 Placement Agent Agreement
Lease Agreement-Amendment
31.1 Certification of David A. Collins Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002.
15
31.2 Certification of Robert C. Goodwin Pursuant
to Section 302 of the Sarbanes-Oxley Act of
2002
32.1 Certification of David A. Collins Pursuant
to 18 U.S.C. Section 1350, Section 906 of
the Sarbanes-Oxley Act of 2002
32.2 Certification of Robert C. Goodwin Pursuant
to 18 U.S.C. Section 1350, Section 906 of
the Sarbanes-Oxley Act of 2002.
16
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, hereunto duly
authorized
DAC Technologies Group International, Inc.
By: /s/ David A. Collins
--------------------------------------
David A. Collins, Chairman and CEO
By: /s/ Robert C. Goodwin
--------------------------------------
Robert C. Goodwin, CFO,
May 17, 2004
17