U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[x] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended March 31, 2000.
[ ] Transition report pursuant to Section 13 or 15 (d) of the Securities
Exchange Act of 1934.
For the transition period from ______________ to ________________
Commission File Number: 0-5367
D-LANZ DEVELOPMENT GROUP, INC.
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 11-1717709
-------------------------------------------------------------------
(State or other jurisdiction (I.R.S.Employer
incorporation or organization Identification No.)
400 GROVE STREET GLEN ROCK, NEW JERSEY
-------------------------------------------
(Address of principal executive offices)
201-457-1221
---------------------------
(Issuer's telephone number)
(Not Applicable)
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer
(1) filed all reports required to be filed by 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.
Yes [X] No [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of the latest practicable date:
11,900,000 common shares as of March 31, 2000
Transitional Small Business Disclosure Format Yes [ ] No [X]
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements for the periods ended March 31,
2000 included herein have been prepared by D-Lanz Development Group, Inc.,
(the "Company") without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission (the "Commission"). In the opinion
of management, the statements include all adjustments necessary to present
fairly the financial position of the Company as of March 31, 2000, and the
results of operations and cash flows for the three month periods ended March
31, 1998 and 1999.
2
D-LANZ DEVELOPMENT GROUP, INC.
(A Development Stage Company)
BALANCE SHEET
Assets
December 31, March 31,
1999 2000
Current assets
Cash $352 $292
Other assets
License fees 252,500 252,500
Total other assets 252,500 252,500
Total assets $252,852 $252,792
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable
and accrued expenses
$420,250 $ 18,000
Officer loan payable 22,750 $23,091
Total Current Liabilites
$443,341 $ 40,750
Capital stock
Preferred stock-authorized 50,000,000 shares
$.001 par value. At December 31, 1998 and March 31,
1999 the number of shares outstanding was -0-
Common stock-authorized 100,000,000 shares, par
value of $.001. At December 31, 1997 and 1998,
there were 1,551,394 and 10,000,000 shares
outstanding.
$11,900 11,900
Additional paid in capital 1,470,151 1,470,151
Deficit accumulated during development stage (1,269,949) (1,672,600)
Total stockholders' equity 212,102 (202,449)
Total liabilities and stockholders' equity $252,852 $252,792
See accompanying notes to financial statements.
D-LANZ DEVELOPMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the year For the year For the three For the three
ended December ended December months ended months ended
31, 1998 31, 1999 March 31, March
31, 1999 2000
Income $-0- $-0- $-0- $-0-
Less costs of goods sold -0- -0- -0- -0-
Gross profit -0- -0- -0- -0-
Operations:
General 28,502 242,472 225,940 $402,311
And administrative
Non cash expenses 957,500 40,000 -0- -0-
Consulting fees
Amortization -0- -0- -0- -0-
Total expense 986,002 282,472 225,940 402,311
Profit (loss) from
operations and
before Corporate
income tax expense (986,002) (282,472) (225,940) (402,311)
Corporate income tax -0- -0- -0- -0-
Other Income
Interest income 1,142 -0- -0- -0-
Interest expense -0- -0- -0- (340)
Total other income 1,142 -0- -0- (340)
Net profit or (Loss) (984,860) (282,472) (225,940) $(402,651)
Net income per share $-0.09- $-0.02- $-0.02- $(0.03)
Total number of shares 10,733,333 11,883,333 10,000,000 11,900,000
outstanding
See accompanying notes to financial statements.
D-LANZ DEVELOPMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the period from
reorganization
For the year For the year For the three For the three June 7, 1985)
ended December ended December months ended months ended to
31, 1998 31, 1999 March 31, March 31, March 31,
1999 2000 2000
CASH FLOWS FROM OPERATING ACTIVITIES
Net profit (loss) $(984,860) $(282,472) $(225,940) $(402,651) $(1,672,600)
Depreciation and amortization -0- -0- -0- -0- -0-
Non cash expenses-consulting fees 957,500 40,000 -0- -0- 997,500
Bad debt write off (371,500) -0- -0- (371,500)
Accounts payable and accrued expenses 9,000 9,000 $2,250 $402,250 420,250
TOTAL CASH FLOWS FROM OPERATING ACTIVITIES (389,860) (233,472) $(223,690) $(401) $(626,350)
CASH FLOWS FROM FINANCING ACTIVITIES
Officer loan payable 19,000 3,750 -0- 341 23,091
Sale of shares of common stock 600,000 -0- -0- 603,551
Commitments and contingencies -0- -0- -0- -0- -0-
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 619,000 3,750 -0- 341 626,642
CASH FLOWS FROM INVESTING ACTIVITIES
Note receivable (229,642) 229,642 $223,642 -0- -0-
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (229,642) 229,642 223,642 -0- -0-
NET INCREASE (DECREASE) IN CASH (502) (80) (48) (60) 292
CASH BALANCE BEGINNING OF PERIOD 934 432 $432 352 -0-
CASH BALANCE END OF PERIOD $432 $352 $384 $292 $292
See accompanying notes to financial statements.
D-LANZ DEVELOPMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Additional
Deficit accumulated
Date Preferred Preferred Common Common
paid
during development stage
Stock Stock Stock Stock in capital Total
12-31-1991 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
12-31-1992 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
12-31-1993 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
12-31-1994 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
12-31-1995 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
12-31-1996 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
9 -30-1997(1) 2,000,000 2,000 2,000
9-30-1997(2) 6,448,606 6,449 246,051 252,500
12-31-1997 Net (1,066) (1,066)
loss
12-31-1997 -0- $-0- 10,000,000 10,000 246,051 $(2,617) 253,434
Issuance of shares
For consulting fees
$-0- 1,100,000 1,100 548,900 $-0- 586,000
Sales of shares 600,000 600 599,400 $-0- 600,000
Loss 12-31-1998 (984,860) (984,860)
Balance 12-31-98
$-0- -0- 11,700,000 11,700 1,430,351 $(987,477) 454,574
Issuance of shares
For consulting fees
-0- -0- 200,000 200 39,800 -0- 40,000
Loss 12-31-1999 -0- -0- (282,472) (282,472)
Balance 12-31-1999
-0- -0- 11,900,000 11,900 1,470,151 1,269,949 212,102
Unaudited
3-31-2000 Net loss
-0- -0- (402,651) (402,651)
Balance 3-31-2000
$-0- $-0- $11,900,000 $11,900 $1,470,151 $(1,672,600) $(202,449)
(1) Sale of shares pursuant to Regulation D at $.001 per share.
(2) Issuance of shares for acquisition of License Rights valued at $.04 per share.
See accompanying notes to financial statements.
1. BASIS OF PRESENTATION
The accompanying unaudited financial statements of D-lanz Development
Group, Inc., (the "Company"), reflect all adjustments which are, in the opinion
of management, necessary to a fair statement of the results of the interim
periods presented. All such adjustments are of a normal recurring nature. The
financial statements should be read in conjunction with the notes to financial
statements contained in the Company's Annual Report on Form 10KSB for the year
ended December 31, 1999.
2. NET INCOME PER SHARE
Primary earnings per share are based on the total number of shares of
common stock outstanding on March 31, 2000. On that date, the total number of
shares of common stock outstanding was 11,900,000.
3. ACCOUNTING FOR INCOME TAXES
The Company follows Statement of Financial Accounting Standards (SFAS)
No.109, "Accounting for Income Taxes," which requires an asset and liability
approach of accounting for income taxes. Deferred tax assets and liabilities are
computed annually for differences between financial statement basis and tax
basis of assets, liabilities and available general business tax credit
carry-forwards. A valuation allowance is established when necessary to reduce
deferred tax assets to the amount expected to be realized.
4. MARKETABLE SECURITIES
The Company adopted Financial Accounting Standards Board ("FASB") Statement
No. 115, "Accounting for Certain Investments in Debt and Equity Securities",
which requires that investments in equity securities that have readily
determinable fair values and investments in debt securities be classified in
three categories: held-to-maturity, trading and available-for-sale. Based on the
nature of the assets held by the Company and Management's investment strategy,
the Company's investments have been classified as available-for-sale. Management
determines the appropriate classification of debt securities at the time of
purchase and reevaluates such designation as of each balance sheet date.
Securities classified as available-for-sale are carried at estimated fair
value, as determined by quoted market prices, with unrealized gains and losses,
net of tax, reported in a separate component of stockholders' equity. At March
31, 1998, the Company had no investments that were classified as trading or
held-to-maturity as defined by the Statement.
The following is a summary of cash, cash equivalents and available-for-sale
securities by balance sheet classification at March 31, 2000:
Gross Gross Estimated
Unrealized Unrealized Fair
` Cost Gains Gains Value
------ ------------- ------------- -------------
Cash $292 $292
Total cash and
cash equivalents $292 $292
Item 2. Management's Discussion and Analysis or Plan of Operation
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
for the nine months ended March 31, 1998 and 1999
-------------------------------------------------
Except for the description of historical facts contained herein, this Form
10Q-SB contains certain forward looking statements that involve risks and
uncertainties as detailed herein and from time to time in the Company's filings
with the Securities and Exchange Commission and elsewhere. Such statements are
based on management's current expectations and are subject to a number of
factors and uncertainties which could cause actual results to differ materially
from those described in the forward-looking statements. These factors include,
among others, the Company's fluctuations in sales and operating results, risks
associated with international operations and regulatory, competitive and
contractual risks and product development.
Results of operations for the nine months ended March 31, 1999 as compared
to the nine months ended March 31, 1998.
- - ---------------------------------------------------------------------------
Revenues were $0 for the three months ended March 31, 2000 as compared to
$0 for the three months ended March 31, 1999. Costs of goods sold for the three
months ended March 31, 2000, were $0 as compared to $0 for the three months
ended March 31, 1999 representing a cost of goods sold percentage of 0% for the
three months ended March 31, 2000 as compared to 0% for the three months ended
March 31, 1999. The cost of goods sold percentage during the first quarter of
fiscal 2000 remains approximately consistent with the percentage during the
first quarter of fiscal 1999.
General and administrative costs for the three months ended March 31, 2000
were $402,311, an increase of 78% over expenses of $225,940 for the three
months ended March 31, 1999.
Liquidity and capital resources as of the end of the three months ended
March 31, 2000.
- - ----------------------------------------------------------------------------
The Company's cash balance was $292 and working capital was negative at
$443,049 as of March 31, 2000.
The Company's primary short-term needs for capital, which are subject to
change, are for development of its manufacturing to adequately deliver new
products and an increase in inventory levels to fill large anticipated orders.
Income tax: As of March 31, 2000, the Company has a tax loss carry-forward
of $1,672,600. The Company's ability to utilize its tax credit carry-forwards in
future years will be subject to an annual limitation pursuant to the "Change in
Ownership Rules" under Section 382 of the Internal Revenue Code of 1986, as
amended. However, any annual limitation is not expected to have a material
adverse effect on the Company's ability to utilize its tax credit
carry-forwards.
The Company currently plans to expend approximately $2.0 million for the
expansion and development of its manufacturing, marketing and general
administrative capabilities in connection with the fulfillment of the Company's
marketing program and the anticipated launch of the Company's products currently
under development. Additionally, the Company utilizes cash generated from
operating activities to meet its capital requirements.
The Company expects its capital requirements to increase over the next
several years as it commences new research and development efforts, undertakes
new product development, increases sales and administration infrastructure and
embarks on developing in-house manufacturing capabilities and facilities. The
Company's future liquidity and capital funding requirements will depend on
numerous factors, including the extent to which the Company's products under
development are successfully developed and gain market acceptance, the timing of
regulatory actions regarding the Company's potential products, the costs and
timing of expansion of sales, marketing and manufacturing activities, facilities
expansion needs, procurement and enforcement of patents important to the
Company's business, results of clinical investigations and competition.
The Company believes that its available cash and cash from operations will
be sufficient to satisfy its funding needs for at least the next 36 months.
Thereafter, if cash generated from operations is insufficient to satisfy the
Company's working capital and capital expenditure requirements, the Company may
be required to sell additional equity or debt securities or obtain additional
credit facilities. There can be no assurance that such financing, if required,
will be available on satisfactory terms, if at all.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
No legal proceedings are pending against the Company.
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.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
D-LANZ DEVELOPMENT GROUP, INC.
/s/Paul Lambert
Mr. Paul Lambert,
President
Dated: May 25, 2000