SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the quarterly period ended December 31, 2000 or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the transition period from to
Commission file number 0-17330
DAINE INDUSTRIES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-2881685
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
P.O. Box 940007, Belle Harbor, New York 11694
(Address of Principal Executive Office) (Zip Code)
(718)318-0994
(Registrant's Telephone Number, Including Area Code)
240 Clarkson Avenue, Brooklyn, New York 11226
(Registrant's Former Address)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities and Exchange Act of 1934 during the preceding twelve
months or for such shorter period that the Registrant was required
to file such reports, and (2) has been subject to such filing
requirements for the past ninety days.
Yes / X / No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date. 1,242,374
10Q-1
DAINE INDUSTRIES, INC.
FINANCIAL STATEMENTS
DECEMBER 31, 2000
I N D E X
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT 1
BALANCE SHEETS 2
STATEMENTS OF SHAREHOLDERS' EQUITY 3
STATEMENTS OF OPERATIONS 4-5
STATEMENTS OF CASH FLOWS 6
NOTES TO THE FINANCIAL STATEMENTS 7-9
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Shareholders
DAINE INDUSTRIES, INC.
Belle Harbor, New York
We have reviewed the accompanying balance sheet of DAINE INDUSTRIES,
INC. as of December 31, 2000 and the related statements of operations,
shareholders' equity and cash flows for the six month periods ended
December 31, 2000 and 1999, in accordance with standards established by
the American Institute of Certified Public Accountants. All information
included in these financial statements is the representation of
management of DAINE INDUSTRIES, INC.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of interim
financial information, applying analytical review procedures to
financial data, and making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope
than an examination in accordance with generally accepted auditing
standards, the objective of which is the expression of an opinion
regarding the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material modifications that
should be made to the financial statements for them to be in conformity
with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the balance sheet as of June 30, 2000, and the
related statements of operations, shareholders' equity and cash flows
for the year then ended (not presented herein); and in our report dated
July 27, 2000, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the
accompanying balance sheet as of June 30, 2000 is fairly stated in all
material respects in relation to the balance sheet from which it has
been derived.
GREENBERG & COMPANY LLC
Springfield, New Jersey
February 6, 2001
Page 1 of 9
DAINE INDUSTRIES, INC.
BALANCE SHEETS
Dec. 31, 2000
(Unaudited) June 30, 2000
A S S E T S
CURRENT ASSETS
Cash and Cash Equivalents $ 74,809 $ 86,766
Total Current Assets 74,809 86,766
FIXED ASSETS, At Cost
Machinery and Equipment 31,032 31,032
Less: Accumulated Depreciation (31,032) (31,032)
-0- -0-
TOTAL ASSETS $ 74,809 $ 86,766
L I A B I L I T I E S A N D S H A R E H O L D E R S' E Q U I T Y
CURRENT LIABILITIES
Accounts Payable & Accrued Expenses $ 4,500 $ 6,000
Total Current Liabilities 4,500 6,000
TOTAL LIABILITIES 4,500 6,000
SHAREHOLDERS' EQUITY
Common Stock (Par Value
$.00001) 50,000,000 shares
authorized, 1,242,374
shares issued and outstanding 12 12
Paid-In Capital 1,444,070 1,444,070
Retained Earnings (Deficit) (1,373,773) (1,363,316)
TOTAL SHAREHOLDERS' EQUITY 70,309 80,766
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 74,809 $ 86,766
See Accountants' Review Report and notes to the financial statements.
Page 2 of 9
DAINE INDUSTRIES, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For The Period July 1, 1999 to December 31, 2000
Common Stock Total
Number $.00001 Retained Share-
of Par Paid-In Earnings holders'
Shares Value Capital (Deficit) Equity
BALANCES AT
JULY 1, 1999 1,242,374 $12 $1,444,070 $(1,330,794) $113,288
Net Income(Loss)
for the Year Ended
June 30, 2000 (32,522) (32,522)
BALANCES AT
JUNE 30, 2000 1,242,374 12 1,444,070 (1,363,316) 80,766
Net Income(Loss)
for the six
months ended
Dec. 31, 2000 (10,457) (10,457)
BALANCES AT
DEC. 31, 2000
(Unaudited) 1,242,374 $12 $1,444,070 $(1,373,773) $ 70,309
See Accountants' Review Report and notes to the financial statements.
Page 3 of 9
DAINE INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For The Three Months Ended
December 31,
2000 1999
Interest Income $ 1,075 $ 1,184
General and Administrative Expenses (4,773) (1,044)
Depreciation and Amortization Expense -0- (1,330)
Income (Loss) Before Income Taxes (3,698) (1,190)
Income Tax Expense -0- -0-
NET INCOME (LOSS) $(3,698) $(1,190)
Basic and Diluted Earnings (Loss)
Per Share NIL NIL
Weighted Average Number of
Common Stock Outstanding 1,242,374 1,242,374
See Accountants' Review Report and notes to the financial statements.
Page 4 of 9
DAINE INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For The Six Months Ended
December 31,
2000 1999
Interest Income $ 2,156 $ 2,243
General and Administrative Expenses (12,158) (7,747)
Depreciation and Amortization Expense -0- (2,660)
Income (Loss) Before Income Taxes (10,002) (8,164)
Income Tax Expense 455 501
NET INCOME (LOSS) $(10,457) $(8,665)
Basic and Diluted Earnings (Loss)
Per Share $(.01) $(.01)
Weighted Average Number of
Common Stock Outstanding 1,242,374 1,242,374
See Accountants' Review Report and notes to the financial statements.
Page 5 of 9
DAINE INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For The Six Months Ended
December 31,
2000 1999
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $(10,457) $ (8,665)
Adjustment to Reconcile Net Income to
Net Cash Provided By (Used In)
Operating Activities:
Depreciation and Amortization Expense -0- 2,660
Change in Assets and Liabilities:
Increase (Decrease) in Accounts Payable
& Accrued Expenses (1,500) (4,000)
Net Cash Provided By (Used In) Operating
Activities (11,957) (10,005)
Cash and Cash Equivalents at
Beginning of Period 86,766 111,126
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 74,809 $101,121
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period for:
Interest $ -0- $ -0-
Taxes $ 455 $ 501
See Accountants' Review Report and notes to the financial statements.
Page 6 of 9
DAINE INDUSTRIES, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2000
(Unaudited)
NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS
Daine Industries, Inc. (Daine) is a Delaware corporation.
Daine owned 100% of the stock of Lite King Corp. (LKC) a New
York corporation through November 19, 1998. Daine's principal
purpose was to acquire and merge with an operating company.
LKC's principal business is the manufacture and assembly of
electrical wiring devices, cord sets and sockets. LKC's
customers consist of manufacturers of lamps, chandeliers,
Christmas and Halloween illuminated decorations, novelties,
point of purchase displays, signs, and other electrical
specialties. The customers are located throughout North
America.
On November 19, 1998, Daine filed a Form 10-SB to spin-off Lite
King Corp.'s shares of common stock to its shareholders on a
pro rata basis. The Registrant owned all of the 2,484,620
outstanding shares of Lite King which was distributed to its
shareholders as of November 30, 1998 on the basis of one share
of Lite King for each 100 shares of Daine held. The
distribution of stock certificates of Lite King was made in May
1999.
NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
CASH AND CASH EQUIVALENTS
Cash equivalents consist of highly liquid, short-term
investments with maturities of 90 days or less. The carrying
amount reported in the accompanying balance sheets approximates
fair value.
PROPERTY AND EQUIPMENT, At Cost
Depreciation is calculated using the straight line method over
the asset's estimated useful life, which generally approximates
10 years.
ESTIMATES IN FINANCIAL STATEMENTS
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from
those estimates.
See Accountants' Review Report.
Page 7 of 9
DAINE INDUSTRIES, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2000
(Unaudited)
(Continued)
INCOME TAXES
The Company accounts for income taxes in accordance with
Statement of Financial Accounting Standards ("SFAS") No. 109,
"Accounting for Income Taxes." SFAS 109 has as its basic
objective the recognition of current and deferred income tax
assets and liabilities based upon all events that have been
recognized in the financial statements as measured by the
provisions of the enacted tax laws.
Valuation allowances are established when necessary to reduce
deferred tax assets to the estimated amount to be realized.
Income tax expense represents the tax payable for the current
period and the change during the period in the deferred tax
assets and liabilities.
NOTE 3: INCOME TAXES
Income taxes are accrued at the statutory U.S. and state income
tax rates.
Current income tax expense for September 30, 2000 is
principally due to state and local income taxes based upon
capital. Deferred tax liabilities relate to depreciation
timing differences.
December 31,
2000 1999
Current tax expense:
Income tax at statutory rates $455 $501
Total Tax Expense $455 $501
The tax effect of significant temporary differences, which
comprise the deferred tax assets and liabilities are as
follows:
Dec 31 June 30
2000 2000
Deferred tax asset:
Operating loss
carryback $39,155 $36,000
Valuation allowance (39,155)(36,000)
Net deferred tax asset $ -0- $ -0-
See Accountants' Review Report.
Page 8 of 9
DAINE INDUSTRIES, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED DECEMBER 31, 2000
(Unaudited)
(Continued)
During the year ended June 30, 1999, Daine distributed the
stock of its subsidiary Lite King to Daine shareholders in a
tax free spinoff. Daine has generated operating loss
carryforwards of approximately $90,000 which must be carried
forward for tax purposes until 2020. The tax benefits
associated with these losses have been fully reserved in the
valuation allowance due to Daine's lack of operating
profitability.
NOTE 4: POSTRETIREMENT EMPLOYEE BENEFITS
The company does not have a policy to cover employees for any
health care or other welfare benefits that are incurred after
employment (postretirement). Therefore, no provision is
required under SFAS's 106 or 112.
NOTE 5: INTERIM FINANCIAL REPORTING
The unaudited financial statements of the Company for the
period July 1, 2000 through December 31, 2000 have been
prepared by management from the books and records of the
Company, and reflect, in the opinion of management, all
adjustments necessary for a fair presentation of the financial
position and operations of the Company as of the period
indicated herein, and are of a normal recurring nature.
NOTE 6: COMMON STOCK
On July 24, 2000 the Company effected a one (1) for two hundred
(200) reverse split of the Company's common stock and reduced
the number of authorized shares from 350,000,000 to 50,000,000.
The effective date of the reverse split is July 24, 2000 and
all share and per share amounts are retroactively restated to
give effect for the reverse split within these financial
statements.
See Accountants' Review Report.
Page 9 of 9
Part 1. Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Daine Industries, Inc. ("The Registrant") was incorporated on
September 24, 1987 and is currently seeking to acquire an operating
business. From February 1990 until November 19, 1998 the Registrant
operated business of Lite King Corp. and currently is a public vehicle
to acquire an operating business.
On February 26, 1990, the Registrant acquired substantially all of
the assets (with the exception of the cash) and the business of Lite
King Corporation ("Lite King"), a manufacturer and assembler of wiring
devices, cord sets and sockets. On November 19, 1998, the Registrant
filed a Form 10-SB to spin-off Lite King Corp's shares of common stock
to its shareholders on a pro rata basis. The Registrant owned all of
the 2,484,620 outstanding shares of Lite King which was distributed to
its shareholders as of November 30, 1998 on the basis of one share of
Lite King for each 100 shares of Daine held. The distribution of stock
certificates of Lite King was made in May 1999.
Management of the Registrant believe the two companies as separate
entities may create additional value for the shareholders. There is no
assurance of any trading market developing. Management will attempt to
use the Registrant as a "shell" vehicle to acquire an operating
business.
During the six months ended December 31, 2000, the Registrant's
only revenues consisted of interest income which amounted to $2,156.
Total expenses amounted to $12,158, consisting of general and
administrative expenses (primarily legal and accounting fees) of
$12,158, depreciation and amortization expense of $-0- and income tax
expense of $455, resulting in a net loss of $10,457.
For the six months ended December 31, 1999, the Registrant had a
net loss of $8,665. The net loss of $8,665 was the result of interest
income of $2,243, general and administrative expenses (primarily legal
and accounting expenses) of $7,747, depreciation and amortization
expenses of $2,660, resulting in a loss of $8,665.
At December 31, 2000, the Registrant had total assets of $74,809,
consisting of current assets of $74,809 (cash and cash equivalents), and
fixed assets of $-0-. At June 30, 2000, the Registrant had total assets
of $86,766, consisting of cash and cash equivalents (current assets) of
$86,766 and fixed assets of $-0-.
At December 31, 2000, the Registrant's total liabilities consisted
of accounts payable and accrued expenses of $4,500. At June 30, 2000
total liabilities amounted to $4,500. Shareholders equity at December
31, 2000 amounted to $ 70,309 as compared with $80,766 as of June 30,
2000.
The Registrant is actively seeking candidates for either
acquisition or merger. Presently, management is in discussions for a
potential merger. No assurance can be given that such acquisition or
merger will occur in the near future.
PART II. OTHER INFORMATION:
Item 1. Legal Proceedings. None.
Item 2. Changes in Securities. None.
Item 3. Defaults upon Senior Securities. None.
Item 4. Submission of Matters To A Vote of Security Holders. None.
Item 5. Other Materially Important Events. None.
Item 6. Exhibits and Reports on Form 8-K. None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
By: Arthur Seidenfeld
President
Dated: February 11, 2001