SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the quarterly period ended September 30, 2002 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.
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(Exact Name of Registrant as Specified in its Charter)
Delaware 11-2881685
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(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
P.O. Box 940007, Belle Harbor, New York 11694
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(Address of Principal Executive Office) (Zip Code)
(718) 318-0994
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(Registrant's Telephone Number, Including Area Code)
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(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
SEPTEMBER 30, 2002
I N D E X
Page
BALANCE SHEETS 1
STATEMENTS OF SHAREHOLDERS' EQUITY 2
STATEMENTS OF OPERATIONS 3
STATEMENTS OF CASH FLOWS 4
NOTES TO THE FINANCIAL STATEMENTS 5-7
DAINE INDUSTRIES, INC.
BALANCE SHEETS
Sept. 30, 2002 June 30,
(Unaudited) 2002
-------------- ----------
A S S E T S
CURRENT ASSETS
Cash and Cash Equivalents $ 23,816 $ 28,936
---------- ----------
Total Current Assets 23,816 28,936
---------- ----------
FIXED ASSETS, At Cost
Machinery and Equipment 31,032 31,032
Less: Accumulated Depreciation (31,032) (31,032)
---------- ----------
-0- -0-
---------- ----------
TOTAL ASSETS $ 23,816 $ 28,936
========== ==========
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 $ 4,500
---------- ----------
Total Current Liabilities 4,500 4,500
---------- ----------
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) (1,424,766) (1,419,646)
---------- ----------
TOTAL SHAREHOLDERS' EQUITY 19,316 24,436
---------- ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 23,816 $ 28,936
========== ==========
See notes to financial statements.
Page 1 of 7
DAINE INDUSTRIES, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
For The Period July 1, 2001 to September 30, 2002
Common Stock
----------------
Total Total
Number $.00001 Retained Share-
of Par Paid-In Earnings holders'
Shares Value Capital (Deficit) Equity
---------- ------- ---------- ----------- --------
BALANCES AT
JULY 1, 2001 1,242,374 $ 12 $1,444,070 $(1,392,540) $ 51,542
Net Income (Loss)
for the year
ended June 30,
2002 (27,106) (27,106)
--------- ---- ---------- ----------- --------
BALANCES AT
JUNE 30, 2002 1,242,374 12 1,444,070 (1,419,646) 24,436
Net Income (Loss)
for the three
months ended
Sept. 30, 2002
(Unaudited) (5,120) (5,120)
--------- ---- ---------- ----------- --------
BALANCES AT
SEPT. 30, 2001
(UNAUDITED) 1,242,374 $ 12 $1,444,070 $(1,424,766) $ 19,316
========= ==== ========== =========== ========
See notes to financial statements.
Page 2 of 7
DAINE INDUSTRIES, INC.
STATEMENTS OF OPERATIONS
(Unaudited)
For The Three Months Ended
Sept. 30,
--------------------------
2002 2001
---------- ----------
Interest Income $ 61 $ 358
General and Administrative Expenses (4,581) (5,566)
---------- ----------
Income (Loss) Before Income Taxes (4,520) (5,208)
Income Tax Expense 600 600
---------- ----------
NET INCOME (LOSS) $ (5,120) $ (5,808)
---------- ----------
Earnings (Loss) Per Share - Basic
and Diluted NIL NIL
========== ==========
Weighted Average Number of
Common Stock Outstanding - Basic
and Diluted 1,242,374 1,242,374
========== ==========
See notes to financial statements.
Page 3 of 7
DAINE INDUSTRIES, INC.
STATEMENTS OF CASH FLOWS
(Unaudited)
For The Three Months Ended
Sept. 30,
--------------------------
2002 2001
---------- ----------
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $ (5,120) $ (5,808)
---------- ----------
Net Cash Provided By (Used In)
Operations Activities (5,120) (5,808)
Cash and Cash Equivalents at
Beginning of Period 28,936 56,042
---------- ----------
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $ 23,816 $ 50,234
---------- ----------
Supplemental Disclosures of Cash Flow
Information:
Cash Paid During the Period for:
Interest $ -0- $ -0-
Income Taxes $ 600 $ 600
See notes to financial statements.
Page 4 of 7
DAINE INDUSTRIES, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002
(Unaudited)
NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS
Daine Industries, Inc. ("Daine") was incorporated on September
24, 1987 and is currently seeking to acquire an operating
business. From February 1990 until November 19, 1998 Daine
operated the business of Lite King Corp. and currently is a
public vehicle to acquire an operating business.
On February 26, 1990, Daine 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,
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. Daine
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. Lite King Corp. merged with National Cabling
services in March 2001.
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 U.S.
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.
Page 5 of 7
DAINE INDUSTRIES, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002
(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, 2002 and 2001 is
principally due to state and local income taxes based upon
capital. Deferred tax liabilities relate to depreciation timing
differences.
September 30,
2002 2001
------ ------
Current tax expense
Income tax at statutory rates $ 600 $ 600
------ ------
Total Tax Expense $ 600 $ 600
====== ======
The tax effect of significant temporary differences, which
comprise the deferred tax assets and liabilities are as follows:
Sept. 30, June 30,
2002 2002
--------- --------
Deferred tax asset:
Operating loss carryback $ 53,700 $ 52,200
Valuation allowance (53,700) (52,200)
-------- --------
Net deferred tax asset $ -0- $ -0-
======== ========
Page 6 of 7
DAINE INDUSTRIES, INC.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 2002
(Unaudited)
(Continued)
The Company has net operating loss (NOL) carryforwards for income
tax purposes of approximately $145,100. This loss is allowed to
be offset against future income until the year 2022 when the
NOL's will expire. 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, 2002 through September 30, 2002 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.
NOTE 7: CONTINGENCIES
The Company as owner of a vehicle and the Company's president, as
driver are defendants in a lawsuit in the County of Brooklyn, New
York State seeking damages of $1,100,000 as a result of an
accident. The Company has liability insurance in the amount of
$1,000,000. The Company and its president have denied any and all
liability and are being defended by the insurance company. The
Company expects the lawsuit to be dismissed or to be settled
within the policy limits. Accordingly, there has been no accrual
for a contingent liability in these financial statements.
Page 7 of 7
PART I. FINANCIAL INFORMATION
---------------------
Item 1. 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 the 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. Lite King Corp. merged
with National Cabling services in March 2001.
During the three months ended September 30, 2002, the Registrant's
only revenues consisted of interest income which amounted to $61. Total
expenses (excluding income tax expense) amounted to $4,581, consisting of
general and administrative expenses (primarily legal and accounting fees).
Income tax expense amounted to $600. The two expense items offset by
interest income resulted in a net loss of $5,120.
For the three months ended September 30, 2001, the Registrant had a
net loss of $5,808. The net loss of $5,808 was the result of interest
income of $358, general and administrative expenses (primarily legal and
accounting expenses) of $5,566, and income tax expense of $600, resulting
in a loss of $5,808.
At September 30, 2002, the Registrant had total assets of $23,816,
consistingof current assets of 23,816 (cash and cash equivalents), and
fixed assets of $-0-. At June 30, 2002, the Registrant had total assets
of $28,936, consisting of cash and cash equivalents (current assets) of
$28,936 and fixed assets of $-0-.
At September 30, 2002, the Registrant's total liabilities consisted
of accounts payable and accrued expenses of $4,500. At June 30, 2002
total liabilities amounted to $4,500. Shareholders equity at September
30, 2002 amounted to $19,316 as compared with $24,436 as of June 30, 2002.
The Registrant is actively seeking candidates for either acquisition
or merger. No assurance can be given that such acquisition or merger will
occur in the near future.
Item 4. Controls and Procedures.
The President, who is also chief executive and chief financial
officer of the Registrant, has concluded based on his evaluation as of a
date within 90 days prior to the date of the filing of this Report, that
the Registrant's disclosure controls and procedures are effective to
ensure that information required to be disclosed by the Registrant in the
reports filed or submitted by it under the Securities Act of 1934, as
amended, is recorded, processed, summarized and reported within the time
periods specified in the Securities and Exchange Commission's rules and
forms, and include controls and procedures designed to ensure that
information required to be disclosed by the Registrant in such reports is
accumulated and communicated to the Registrant's management, including the
president, as appropriate to allow timely decisions regarding required
disclosure.
There was no significant changes in the Company's internal controls
or in other factors that could significantly effect these controls
subsequent to the date of such evaluation.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Registrant as owner of a vehicle and the Company's president, as
driver are defendants in a lawsuit in the County of Brooklyn, New York
State seeking damages of $1,100,000 as a result of an accident. The
Registrant has liability insurance in the amount of $1,000,000. The
Registrant and its president have denied any and all liability and are
being defended by the insurance company. The Registrant expects the
lawsuit to be dismissed or to be settled within the policy limits.
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: October 21, 2002
CERTIFICATIONS
I, Arthur J. Seidenfeld certify that:
1. I have reviewed this quarterly report on Form 10-Q of Daine
Industries, Inc.
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant, as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rule 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function);
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls: and
b) any fraud whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: October 21,2002
/s/ Arthur J. Seidenfeld
------------------------
Arthur J. Seidenfeld
President and Chief Executive Officer
CERTIFICATIONS
I, Arthur J. Seidenfeld certify that:
1. I have reviewed the quarterly report on Form 10-Q of Daine Industries
Inc.
2. Based on my knowledge, this quarterly report does not contain any
untrue statement of a material fact or omit to state a material fact
necessary to make the statements made, in light of the circumstances
under which such statements were made, not misleading with respect to
the period covered by this quarterly report.
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and
cash flows of the registrant, as of, and for, the periods presented in
this quarterly report.
4. The registrant's other certifying officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rule 13a-14 and 15d-14) for the registrant and
we have:
a) designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b) evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c) presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's auditors and the
audit committee of registrant's board of directors (or persons
performing the equivalent function);
a) all significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls: and
b) any fraud whether or not material, that involves management or
other employees who have a significant role in the Registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: October 21 2002
/s/ Arthur J. Seidenfeld
------------------------
Arthur J. Seidenfeld
President and Chief Financial Officer