UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
|X| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 (FEE REQUIRED)
For the fiscal year ended June 30, 1999
OR
|_| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 (NO FEE REQUIRED)
Commission File No. 0-4454
INTERDYNE COMPANY
(Exact name of registrant as specified in its charter)
California 95-2563023
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7 Whatney
Irvine, California 92618
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (949) 454-2441 ext. 261
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, no par value
(Title of Class)
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 (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. YES |X| NO |_|
The aggregate market value of Common Stock held by non-affiliates on August 31,
1999 was $312,500.
As of August 31, 1999, there were 40,000,000 shares of Common Stock, no par
value, issued and outstanding.
DOCUMENTS INCORPORATED BY REFERENCE: None
PART I
ITEM 1. BUSINESS
The Company is currently dormant and is looking for new opportunities.
ITEM 2. PROPERTIES
The Company presently shares office space at the facilities of Acculogic,
Inc. at 7 Whatney, Irvine, CA 92618, and was charged management fee by
Acculogic, Inc. totaling $5,000 during fiscal year 1999 for the use of the
facilities, accounting and other services.
ITEM 3. LEGAL PROCEEDINGS
The Company is not a party to any pending legal proceedings and no such
proceedings are known to be contemplated.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matter was submitted to a vote of security holders of the Company
during the fiscal year 1999.
PART II
ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
The following table sets forth the range of high and low bid prices for
the Company's common stock, for each fiscal quarter commencing July 1, 1996 and
ending June 30, 1999, as reported by the National Quotation Bureau, Inc. Such
quotations reflect inter-dealer prices, without retail mark-up, mark-down or
commission and do not necessarily represent actual transactions.
1996
----
Quarter ended September 30 $0.01 $0.25
Quarter ended December 31 $0.01 $0.25
1997
----
Quarter ended March 31 $0.01 $0.25
Quarter ended June 30 $0.005 $0.25
Quarter ended September 30 $0.03 $0.25
Quarter ended December 31 $0.01 $0.03
1998
----
Quarter ended March 31 $0.01 $0.14
Quarter ended June 30 $0.01 $0.01
Quarter ended September 30 $0.01 $0.01
Quarter ended December 31 $0.01 $0.01
1999
----
Quarter ended March 31 $0.01 $0.01
Quarter ended June 30 $0.01 $0.01
As of August 31, 1999, both the high and low bid prices for the Company's
Common Stock were $0.01. There were approximately 1.642 record owners of such
Common Stock. To management's knowledge, the Company has never paid dividends on
its common stock. The Company does not intend to pay dividends in the
foreseeable future.
2
ITEM 6. SELECTED FINANCIAL DATA
The following table summarizes certain financial information of the
Company for the five years period ended June 30, 1999. These data should be read
in conjunction with the financial statements of the Company and the notes
thereto.
================================================================================
6.30.1999 6.30.1998 6.30.1997 6.30.1996 6.30.1995
--------- --------- --------- --------- ---------
- --------------------------------------------------------------------------------
Statement of Operations
Data:
- --------------------------------------------------------------------------------
Total Income $20,386 $19,581 $19,010 $20,834 $22,489
- --------------------------------------------------------------------------------
Net Income $6,779 $6,536 $3,371 $7,805 $6,162
- --------------------------------------------------------------------------------
Income Per Share $0.0002 $0.0002 $0.0001 $0.0002 $0.0002
- --------------------------------------------------------------------------------
Shares Used in
Calculating
Net Income Per Share 40,000,000 40,000,000 40,000,000 40,000,000 40,000,000
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Balance Sheet Data:
- --------------------------------------------------------------------------------
Current Assets $222,399 $214,816 $207,524 $201,754 $254,587
- --------------------------------------------------------------------------------
Working Capital 207,703 199,925 193,388 190,018 182,213
- --------------------------------------------------------------------------------
Total Assets 222,399 215,816 208,524 202,754 255,587
- --------------------------------------------------------------------------------
Total Liabilities 14,696 14,891 14,136 11,736 72,374
- --------------------------------------------------------------------------------
Total Shareholders'
Equity 207,703 200,925 194,388 191,018 183,213
================================================================================
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Company's
financial statements.
The Company is currently dormant.
Between October 8, 1990 and June 30, 1991, the Company made advances to
Acculogic, Inc., an affiliate, totaling $395,000. At June 30, 1999, the
outstanding principal balance totaled $160,000. The advances bear interest of
9.5% per annum. Interest earned from the affiliate were $20,386, $19,581, and
$19,010 for the years ended June 30, 1999, 1998 and 1997, respectively.
The cash needs of the Company will be funded by collections from amounts
due from its affiliates. (See paragraph on Certain Relationships and Related
Transactions in Item 14)
Employees
The Company presently has no employee and is managed by the two incumbent
directors: Dr. Sun Tze Whang, Chairman of the Board and Chief Executive Officer,
and Kit Heng Tan, Chief Financial Officer and Secretary. None of the Company's
employees are currently represented by any labor union.
3
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
The Report of Independent Certified Public Accountants, and Financial
Statements are included at pages F-1 through F-8 of this Form 10-K, following
the signature page.
ITEM 9. YEAR 2000 ISSUES
The Company is aware of the Year 2000 issues, but as the Company is
dormant, such issues have no impact on the Company at the present time.
ITEM 10. CHANGES IN AND DISAGREEMENT WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
On August 31, 1999, the Board of Directors of the Company approved the
replacement of KPMG LLC by Gendron, Lim & Company ("Gendron") as its independent
auditors. Subsequent to this appointment, the Company was informed by Gendron
that they were not a member of the SEC Practice Section of the American
Institute of Certified Public Accountants. On the Company's request, Gendron
resigned on September 15, 1999, and the Board of Directors, on accepting the
resignation of Gendron on September 15, 1999, then appointed Farber & Hass LLP
as its independent auditors.
KPMG LLC expressed an unqualified opinion dated September 18, 1998 on the
Company's financial statements for fiscal years ended June 30, 1998 and 1997.
The Company has not had any disagreements with any of its independent
auditors on any matter of accounting principles or practices or financial
statements disclosure.
PART III
ITEM 11. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The following table sets forth the names and ages of the directors and
executive officers of the Company as of the date of this report, and indicates
all positions and offices with the Company held by each person:
Name Age Position
---- --- --------
Dr. Sun Tze Whang 55 Chairman of the Board
and Chief Executive Officer
Kit Heng Tan 49 Chief Financial Officer
and Secretary
The terms of office of each director of the Company ends at the next
annual meeting of the Company's shareholders or when his or her successor is
elected and qualified. No date for the next annual meeting of shareholders has
been fixed by the Board of Directors. The term of office of each officer of the
Company ends at the next annual meeting of the Company's Board of Directors
which is expected to take place immediately after the next annual meeting of
shareholders. Except as otherwise indicated below, no organization by which any
officer or director previously has been employed is an affiliate, parent, or
subsidiary of the Company. The Company's Bylaws provide that the number of
directors of the Company shall be not less than five nor more than nine. The
exact number of directors is set at five unless changed within the foregoing
limits by a bylaw adopted by the Board of Directors or the shareholders. At
present, there are two persons serving as directors and three vacancies on the
Board of Directors.
4
Dr. Sun Tze Whang has been Chairman of the Board and Chief Executive
Officer since August 17, 1990. From December 1994 to the present, Dr. Whang has
been a director of Metal Containers Pte Ltd ("Metal Containers"), a company
incorporated in the Republic of Singapore, engaged in the manufacturing and sale
of metal containers and in investment activities. From January 1985 to the
present, Dr. Whang has also been a director of Riviera Development Pte. Ltd., a
company incorporated in the Republic of Singapore ("Riviera"), whose principal
business is investment. Riviera is a 53.2% owned subsidiary of Metal Containers.
From May 1985 to the present, Dr. Whang has also been the Chairman and a
director of Carlee Electronics Pte. Ltd., a company incorporated in the Republic
of Singapore ("Carlee Electronics"), whose principal business is the manufacture
and sale of industrial electronic products. Carlee is a 64.3% owned subsidiary
of Riviera and a majority shareholder of the Company. From October 1972 to the
present, Dr. Whang has been a director of Lam Soon (Hong Kong) Limited, a
company incorporated in Hong Kong and listed on the Stock Exchange of Hong Kong.
Kit Heng Tan has been Chief Financial Officer, Secretary and a director of
the Company since August 17, 1990. From February 1996 to the present, Mr. Tan
has been a director of Metal Containers. From January 31, 1991 to the present,
Mr. Tan has been an officer and a director of Computer Peripherals, Inc., a
California corporation, which is an affiliate of Metal Containers. From October
1989 to the present, Mr. Tan has been a director and currently also the Chief
Financial Officer of Acculogic, Inc., a California corporation, which is an
affiliate of Metal Containers. From April 1990 to the present, Mr. Tan has been
the Chief Financial Officer and a director of Advanced Matrix Technology, Inc.,
a California corporation, which is an affiliate of Metal Containers. From August
1988 to the present time, Mr. Tan has been a director of Carlee Electronics. Mr.
Tan is a Chartered Accountant (England & Wales) and a Certified Public
Accountant of Singapore.
ITEM 12. EXECUTIVE COMPENSATION
For the fiscal years ended June 30, 1999, 1998 and 1997, there was no cash
compensation paid to executive officers of the Company.
ITEM 13. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following sets forth information, as of August 31, 1999, with respect
to the beneficial ownership of the Company's Common Stock, no par value, by each
person known by the Company to be the beneficial owner of more than five (5%) of
the outstanding Common Stock, by each of the Company's directors, and by the
officers and directors of the Company as a group:
Shares Owned
Beneficially
Beneficial Owner and of Record Percent of Class
- ---------------- ------------- ----------------
Carlee Electronics Pte. Ltd. 25,800,000 64.5%
15 Scotts Road #05-01
Thong Teck Building
Singapore 228218
Officers and directors (1) (1)
as a group (two persons)
(1) By virtue of Dr. Sun Tze Whang's direct and indirect ownership of Carlee
Electronics Pte. Ltd., he may be deemed the beneficial owner of the shares held
by Carlee Electronics Pte. Ltd in the Company.
The Company is not aware of any voting trusts.
The Company's capital consists of 100,000,000 shares of Common Stock, no
par value and 50,000,000 shares of Preferred Stock, no par value. As of the date
hereof, 40,000,000 shares of Common Stock have been issued and outstanding.
5
ITEM 14. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Between October 8, 1990 and June 30, 1991, the Company made advances to
Acculogic, Inc., an affiliate, totaling $395,000. At June 30, 1999, the
outstanding principal balance was $160,000. The advances bear interest of 9.5%
per annum. Interest earned from the affiliate were $20,386, $19,581, and $19,010
for the years ended June 30, 1999, 1998 and 1997, respectively.
The Company presently shares office space at the facilities of Acculogic,
Inc. at 7 Whatney, Irvine, CA 92618, and was charged management fee by
Acculogic, Inc. totaling $5,000 during the fiscal year 1999 for the use of the
facilities, accounting and other services.
Dr. Sun Tze Whang, may be considered to be the indirect beneficial owner
of the shares of the Company's stock owned by Carlee Electronics, and thus Dr.
Whang would be considered a control person of the Company.
PART IV
ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
Page No.
(1) Financial Statements
Independent Auditors' Reports F-2
Balance Sheets at
June 30, 1999 and 1998 F-4
Statements of Income and Accumulated
Deficit for the years ended June 30, 1999,
1998 and 1997 F-5
Statements of Cash Flows for the years
ended June 30, 1999, 1998 and 1997 F-6
Notes to Financial Statements F-7
All supporting schedules have been omitted, as the information is not
required, not material or is otherwise furnished.
(b) Reports on Form 8-K
Changes in Registrant's Certifying Accountant dated August 31, 1999,
and September 15, 1999 (See Item 10 above)
6
SIGNATURE
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 hereunto duly authorized.
Dated: September 27, 1999
INTERDYNE COMPANY
(Registrant)
By: /s/ Kit H. Tan
-----------------------
Kit H. Tan
Chief Financial Officer
INDEPENDENT AUDITORS' REPORT
To the Board of Directors of
Interdyne Company:
We have audited the accompanying balance sheet of Interdyne Company (the
"Company") as of June 30, 1999 and the related statements of income and
accumulated deficit and of cash flows for the year then ended. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements present fairly, in all material
respects, the financial position of Interdyne Company as of June 30, 1999 and
the results of its operations and its cash flows for the year then ended in
conformity with generally accepted accounting principles.
/s/ Farber & Hass LLP
Ornard, California
September 27, 1999
F-2
Independent Auditors' Report
The Board of Directors
Interdyne Company:
We have audited the accompanying balance sheet of Interdyne Company as of June
30, 1998 and the related statements of operations and accumulated deficit and
cash flows for the years ended June 30, 1998 and 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Interdyne Company as of June
30, 1998 and the results of its operations and its cash flows for years ended
June 30, 1998 and 1997 in conformity with generally accepted accounting
principles.
/s/ KPMG LLP
Los Angeles, California
September 18, 1998
F-3
INTERDYNE COMPANY
BALANCE SHEETS
JUNE 30, 1999 AND 1998
1999 1998
---- ----
ASSETS
CURRENT ASSETS:
Cash $ 3,159 $ 3,126
Due from affiliate - current portion 219,240 211,690
--------- ---------
Total current assets 222,399 214,816
--------- ---------
EQUIPMENT HELD FOR SALE 1,000
--------- ---------
TOTAL ASSETS $ 222,399 $ 215,816
========= =========
LIABILITIES
CURRENT LIABILITIES:
Due to affiliate $ 7,886 $ 7,886
Accrued expenses 6,810 7,005
--------- ---------
Total current liabilities 14,696 14,891
--------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock, no par value,
authorized 50,000,000 shares,
no shares outstanding
Common stock, no par value,
100,000,000 shares authorized;
40,000,000 shares issued 500,000 500,000
Accumulated deficit (292,297) (299,075)
--------- ---------
Total stockholders' equity 207,703 200,925
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 222,399 $ 215,816
========= =========
See accompanying notes to financial statements.
F-4
INTERDYNE COMPANY
STATEMENTS OF INCOME AND ACCUMULATED DEFICIT
FOR THE YEARS ENDED JUNE 30, 1999, 1998 and 1997
1999 1998 1997
---- ---- ----
EXPENSES:
Professional fees $ 6,850 $ 5,300 $ 4,100
General and administrative 5 957 6,945 10,739
--------- --------- ---------
Total expenses 12,807 12,245 14,839
OTHER INCOME - Interest 20,386 19,581 19,010
--------- --------- ---------
INCOME BEFORE INCOME TAXES 7,579 7,336 4,171
INCOME TAXES 800 800 800
--------- --------- ---------
NET INCOME 6,779 6,536 3,371
ACCUMULATED DEFICIT,
BEGINNING OF YEAR (299,075) (305,611) (308,982)
--------- --------- ---------
ACCUMULATED DEFICIT,
END OF YEAR $(292,296) $(299,075) $(305,611)
========= ========= =========
NET INCOME PER SHARE $ 0.0002 $ 0.0002 $ 0.0001
========= ========= =========
See accompanying notes to financial statements.
F-5
INTERDYNE COMPANY
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JUNE 30, 1999, 1998 AND 1997
1999 1998 1997
---- ---- ----
CASH FLOWS FROM OPERATING
ACTIVITIES:
Net income $ 6,779 $ 6,536 $ 3,371
Adjustments to reconcile net
income to net cash provided
by (used in) operating
activities:
Write-down of equipment 1,000
Changes in operating assets
and liabilities:
Due from affiliate (7,551) (8,170) (5,002)
Accrued expenses (195) 755 2,400
------- ------- -------
Net cash provided by (used in)
operating activities 33 (879) 769
CASH, BEGINNING OF YEAR 3,126 4,005 3,236
------- ------- -------
CASH, END OF YEAR $ 3,159 $ 3,126 $ 4,005
======= ======= =======
SUPPLEMENTAL DISCLOSURE OF CASH
FLOW INFORMATION - Income tax paid $ 800 $ 1,665 $ 1,600
See accompanying notes to financial statements.
F-6
INTERDYNE COMPANY
NOTES TO FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Nature of Business - Interdyne Company (the "Company") was incorporated in
October 1946 in the state of California. On November 22, 1988, the Company
filed a voluntary petition for reorganization under Chapter 11 of the
Bankruptcy Code in the United States Bankruptcy Court for the Central
District of California. On May 17, 1990, the Company's Amended Plan of
Reorganization (the "Plan") was confirmed by Bankruptcy Court, and the
Plan became effective May 29, 1990. On July 20, 1990, the Bankruptcy Court
approved a stipulation for nonmaterial modifications to the Plan. All
claims and interest are being settled in accordance with the terms of the
Plan. On August 22, 1990, the Board of Directors approved a change in the
Company's year-end to June 30, pursuant to the Plan.
Reclassifications - Certain 1998 and 1997 amounts have been reclassified
in order to conform with 1999 classifications.
Concentrations of Credit Risk - Financial instruments, which potentially
subject the Company to concentrations of credit risk, consist principally
of the receivables due from affiliate. The ultimate parent company of the
affiliate acts as a guarantor for the balance due from affiliate.
Income Taxes - The Company accounts for income taxes under Statement of
Financial Accounting Standards No. 109, "Accounting for Income Taxes" (see
Note 3).
Use of Estimates - Management of the Company has made a number of
estimates and assumptions relating to the reporting of assets and
liabilities to prepare these financial statements in conformity with
generally accepted accounting principles. Actual results may differ from
those estimates.
Basic Net Income per Common Share - Basic net income per common share is
computed on the basis of the weighted average number of common shares
outstanding during each year. Weighted average shares for computing
earnings per share were 40,000,000 for each of the years presented. There
were no dilutive securities for any years presented.
F-7
2. RELATED PARTY TRANSACTIONS
At June 30, 1999 and 1998, the outstanding principal balance of $160,000
related to advances to Acculogic, Inc., an affiliated company through
common ownership. The advances bear interest of 9.5% per annum. Interest
earned and received from the affiliate totalled $20,386, $19,581 and
$19,000, respectively, for the years ended June 30, 1999, 1998 and 1997.
The balances of principal and accrued interest were $219,240 and $211,690
at June 30, 1999 and 1998, respectively, which are guaranteed by the
ultimate parent company of the affiliate.
Acculogic, Inc. charged a management fee totalling $5,000 for the years
ended June 30, 1999, 1998 and 1997, respectively, for the use of the
facilities, accounting and other services.
3. INCOME TAXES
Income taxes for the years ended June 30, 1999, 1998 and 1997 represent
state minimum franchise tax of $800. At June 30, 1999, the Company had net
operating loss carryforwards for Federal income tax purposes totalling
approximately $26,500,000. The ultimate realization of such loss
carryforwards will be dependent on the Company attaining future taxable
earnings. Based on the level of historical operating results and
projections of future taxable earnings, management believes that it is
more likely than not the Company will not be able to utilize the benefits
of these carryforwards. Therefore, a full valuation allowance has been
provided against the gross deferred tax assets arising from these loss
carryforwards. The valuation allowance decreased approximately $700,000
primarily due to the expiration of certain net operating loss
carryforwards. If not utilized, these carryforwards will expire at various
dates through the year 2007 for Federal income tax purposes.
14. YEAR 2000 COMPLIANCE (UNAUDITED)
The Company has evaluated the impact of the Year 2000 date change on its
computer systems and has concluded that this change will not have a
material impact on its systems.
F-8