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 March 31, 1999 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 0-25105
LITE KING CORP.
(Exact Name of Registrant as Specified in its Charter)
New York 11-2996988
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
240 Clarkson Avenue Brooklyn, New York 11226
(Address of Principal Executive Office) (Zip Code)
(718)469-3132
(Registrant's Telephone Number, Including Area Code)
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. 2,484,620
10Q-1
LITE KING CORP.
FINANCIAL STATEMENTS
MARCH 31, 1999
I N D E X
Page
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT 1
BALANCE SHEETS - ASSETS 2
BALANCE SHEETS
- LIABILITIES AND SHAREHOLDERS' EQUITY 3
STATEMENTS OF SHAREHOLDERS' EQUITY 4
STATEMENTS OF OPERATIONS 5-6
STATEMENTS OF CASH FLOWS 7
NOTES TO THE FINANCIAL STATEMENTS 8-11
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Shareholders
LITE KING CORP.
Brooklyn, New York
We have reviewed the accompanying balance sheets of LITE KING CORP. as
of March 31, 1999 and the related statements of operations,
shareholders' equity and cash flows for the nine month periods ended
March 31, 1999 and 1998, 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 LITE KING CORP.
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, 1998, and the
related statements of operations, shareholders' equity and cash flows
for the year then ended (not presented herein); and in our report dated
August 6, 1998, we expressed an unqualified opinion on those financial
statements. In our opinion, the information set forth in the
accompanying consolidated balance sheet as of June 30, 1998 is fairly
stated in all material respects in relation to the consolidated balance
sheet from which it has been derived.
GREENBERG & COMPANY LLC
Springfield, New Jersey
April 22, 1999
Page 1 of 11
LITE KING CORP.
BALANCE SHEETS
A S S E T S
March 31, 1999
(Unaudited) June 30, 1998
CURRENT ASSETS
Cash and Cash Equivalents $ 686,723 $ 585,552
Accounts Receivable 37,506 392,787
Inventory 582,002 595,194
Prepaid Expenses 21,335 13,348
Deferred Taxes 11,010 284
Total Current Assets 1,338,576 1,587,165
FIXED ASSETS, At Cost
Machinery and Equipment 363,113 363,113
Leasehold Improvements 9,787 9,787
Less: Accumulated Depreciation
and Amortization (270,658) (243,215)
102,242 129,685
OTHER ASSETS
Deposits 6,100 6,100
TOTAL ASSETS $1,446,918 $1,722,950
See accompanying notes and Accountants' Review Report.
Page 2 of 11
LITE KING CORP.
BALANCE SHEETS
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
March 31, 1999
(Unaudited) June 30, 1998
CURRENT LIABILITIES
Accounts Payable & Accrued Expenses $ 73,907 $ 323,824
Total Current Liabilities 73,907 323,824
OTHER LIABILITIES
Deferred Income Tax Liability 8,423 8,423
TOTAL LIABILITIES 82,330 332,247
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY
Common Stock (Par Value $.001)
50,000,000 shares authorized,
2,484,620 shares issued and
outstanding 5,400 5,400
Paid-In Capital 1,127,880 1,127,880
Retained Earnings 231,308 257,423
TOTAL SHAREHOLDERS' EQUITY 1,364,588 1,390,703
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,446,918 $1,722,950
See accompanying notes and Accountants' Review Report.
Page 3 of 11
LITE KING CORP.
STATEMENTS OF SHAREHOLDERS' EQUITY
For The Period July 1, 1997 to March 31, 1999
Total
Number $.001 Share-
of Par Paid-In Retained holders'
Shares Value Capital Earnings Equity
BALANCES AT
JULY 1, 1997 2,484,620 $5,400 $1,127,880 $272,817 $1,406,097
Dividend Paid (2,000) (2,000)
Net Income (Loss)
for the Year Ended
June 30, 1998 (13,394) (13,394)
BALANCES AT
JUNE 30, 1998
(AUDITED) 2,484,620 5,400 1,127,880 257,423 1,390,703
Net Income(Loss)
for the Nine
Months Ended
March 31, 1999 (26,115) (26,115)
BALANCES AT
MARCH 31, 1999
(UNAUDITED) 2,484,620 $5,400 $1,127,880 $231,308 $1,364,588
See accompanying notes and Accountants' Review Report.
Page 4 of 11
LITE KING CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
For The Three Months Ended
March 31,
1999 1998
REVENUES
Sales - Net of Returns
and Allowances $ 72,052 $ 119,882
COST OF GOODS SOLD
Beginning Inventory 570,002 615,866
Purchase and Freight 39,606 71,785
Direct Labor 23,522 15,846
633,130 703,497
Less: Inventory - End of Period (582,002) (621,866)
Cost of Goods Sold 51,128 81,631
GROSS MARGIN 20,924 38,251
Interest Income 5,642 3,210
General and Administrative Expenses (80,311) (74,635)
Depreciation Expense (9,125) (9,615)
INCOME (LOSS) BEFORE INCOME TAXES (62,870) (42,789)
Income Tax Expense (Benefit) (10,374) (12,297)
NET INCOME (LOSS) $ (52,496) $ (30,492)
Earnings (Loss) Per Share $(.02) $(.01)
Weighted Average Number of Shares of
Common Stock Outstanding 2,484,620 2,484,620
See accompanying notes and Accountants' Review Report.
Page 5 of 11
LITE KING CORP.
STATEMENTS OF OPERATIONS
(Unaudited)
For The Nine Months Ended
March 31,
1999 1998
REVENUES
Sales - Net of Returns
and Allowances $1,080,031 $ 848,300
COST OF GOODS SOLD
Beginning Inventory 595,194 607,127
Purchase and Freight 611,591 444,505
Direct Labor 160,347 155,799
1,367,132 1,207,431
Less: Inventory - End of Period (582,002) (621,866)
Cost of Goods Sold 785,130 585,565
GROSS MARGIN 294,901 262,735
Interest Income 15,434 8,524
General and Administrative Expenses (319,381) (296,616)
Depreciation Expense (27,443) (28,845)
INCOME (LOSS) BEFORE INCOME TAXES (36,489) (54,202)
Income Tax Expense (Benefit) (10,374) (10,868)
NET INCOME (LOSS) $ (26,115) $ (43,334)
Earnings (Loss) Per Share $(.01) $(.02)
Weighted Average Number of Shares of
Common Stock Outstanding 2,484,620 2,484,620
See accompanying notes and Accountants' Review Report.
Page 6 of 11
LITE KING CORP.
STATEMENTS OF CASH FLOWS
(Unaudited)
For The Nine Months Ended
March 31,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income (Loss) $(25,831) $(43,334)
Adjustment to Reconcile Net Income to
Net Cash Provided By (Used In)
Operating Activities:
Depreciation and Amortization Expense 27,443 28,845
Change in Assets and Liabilities:
Decrease (Increase) in Accounts
Receivable 355,281 423,210
Decrease (Increase) in Inventory 13,192 (14,739)
Decrease (Increase) in Other
Current Assets (18,997) (27,954)
Increase (Decrease) in Accounts Payable
& Accrued Expenses (249,917) (96,831)
Increase (Decrease) in Income Tax Payable -0- (1,574)
Net Cash Provided By (Used In) Operating
Activities 101,171 267,623
CASH FLOWS FROM INVESTING ACTIVITIES
Capital Expenditures -0- -0-
Net Cash (Used In) Investing Activities -0- -0-
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend Paid -0- (2,000)
Net Cash Provided by (Used In)
Financing Activities -0- (2,000)
Net Increase (Decrease) in Cash and
Cash Equivalents 101,171 265,623
Cash and Cash Equivalents at
Beginning of Period 585,552 271,553
CASH AND CASH EQUIVALENTS AT
END OF PERIOD $686,723 $537,176
Supplemental Disclosures of Cash Flow Information:
Cash Paid During the Period for:
Interest $ -0- $ -0-
Taxes $ 352 $ 5,487
See accompanying notes and Accountants' Review Report.
Page 7 of 11
LITE KING CORP.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 1999
(Unaudited)
NOTE 1: ORGANIZATION AND NATURE OF OPERATIONS
Lite King Corp. (LKC) is a New York corporation. LKC is owned
100% by Daine Industries, Inc. (Daine), a Delaware corporation.
LKC's principal business is the manufacture and assembly of
electrical wiring devices, cord sets and sockets. LKC's
customers consists 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.
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.
ACCOUNTS RECEIVABLE
Accounts receivable are judged as to collectibility by
management and an allowance for bad debts is established as
necessary. As of each balance sheet date, no reserve was
considered necessary.
RECLASSIFICATIONS
Certain prior period financial statement accounts have been
reclassified to conform to current presentation.
INVENTORY
Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out method.
Inventories consist of:
3/31/99 6/30/98
Raw Materials $491,875 $506,875
Work-in-Process 63,427 65,427
Finished Goods 26,700 22,892
$582,002 $595,194
Page 8 of 11
LITE KING CORP.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 1999
(Unaudited)
(Continued)
CONCENTRATION OF CREDIT RISK
Financial instruments that potentially subject the Company to
concentration of credit risk are accounts receivable. During
the periods ended March 31, 1999 and 1998, three customers
accounted for approximately 61%, 11%, 9%, and 35%, 20%, 16%,
respectively, of total revenues. The Company performs ongoing
credit evaluations of its customers but generally does not
require collateral to support customer receivables. The loss
of the Company's largest customer could have a material adverse
effect on the financial condition of the Company.
PROPERTY AND EQUIPMENT
Renewals and betterments are capitalized; maintenance and
repairs are expensed as incurred.
Depreciation is calculated using the straight line method over
the asset's estimated useful life, which generally approximates
10 years.
REVENUE RECOGNITION POLICY
The Company recognizes sales, for both financial statement
purposes and for tax purposes, when the products are shipped to
customers.
ADVERTISING
Advertising costs are expensed as incurred.
COMMON STOCK
In October 1998, the Company increased tha authorized number of
shares of common stock from 200 to 50,000,000. Concurrently,
there was a 24,686.20 for one stock split. All share and per
share amounts have been retroactively restated for these
changes.
ESTIMATES IN FINANCIAL STATEMENTS
Preparation of the Company's financial statements in conformity
with generally accepted accounting principles requires
management to make estimates 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. Accordingly, actual results could
differ from those estimates.
Page 9 of 11
LITE KING CORP.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 1999
(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: COMMITMENTS AND CONTINGENCIES
The company is currently in a lease for office and factory
space requiring minimum annual base rental payments for the
fiscal periods shown as follows:
1999 $ 58,333
2000 60,333
2001 62,000
2002 36,166
Total $216,832
In addition to annual base rental payments, the company must
pay an annual escalation for real estate taxes.
NOTE 4: INCOME TAXES
Income taxes are accrued at the statutory U.S. and state income
tax rates.
Income tax expense is principally due to state and local income
taxes based upon capital. Deferred tax liabilities relate to
depreciation timing differences and operating loss carrybacks.
March 31,
1999 1998
Current tax expense (benefit):
Income tax at statutory rates $ 352 $ 5,487
Deferred tax expense (benefit):
Operating loss carryback (10,726) (16,355)
Total Tax Expense (Benefit) $(10,374) $(10,868)
Page 10 of 11
LITE KING CORP.
NOTES TO THE FINANCIAL STATEMENTS
FOR THE NINE MONTHS ENDED MARCH 31, 1999
(Unaudited)
(Continued)
The tax effect of significant temporary differences, which
comprise the deferred tax assets and liabilities are as
follows:
March 31, 1999 June 30, 1998
Deferred tax asset:
Operating loss
carryback $11,010 $ 248
Deferred tax liability:
Depreciation $ 8,423 $8,423
NOTE 5: 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 6: INTERIM FINANCIAL REPORTING
The unaudited financial statements of the company for the
period July 1, 1998 to March 31, 1999 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 7: SUBSEQUENT EVENT
On November 23, 1998 Lite King Corp. (a 100% owned subsidiary
of Daine Industries Inc. (Daine) filed a Registration Statement
under the Securities Act of 1934 on Form 10-SB relating to a
distribution of 100% of the outstanding shares of Lite King
Corp., presently owned by Daine, on a pro rata basis to
Daine's shareholders as a dividend in the form of one share of
Lite King Corp. for each 100 shares of Daine held. Fractional
shares will be rounded up or down. The shares will be
distributed in May 1999 to shareholders of record as of
November 30, 1998.
Management of the Registrant believes the two companies as
separate entities will create additional value for the
shareholders. There is no assurance of any trading market
developing. It should also be noted that even though the
Registrant is a public company its shares have not traded in
the past few years. Management will attempt to use the
Registrant as a "shell" vehicle to acquire an operating
business.
Page 11 of 11
PART 1 Financial Information
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Lite King Corp. ("The Registrant") was incorporated in New York on
January 4, 1990 and is currently engaged in the manufacture and assembly
of wiring devices.
Since February 1990, the Registrant has operated as a wholly owned
subsidiary of Daine Industries, Inc. ("Daine"). The Board of Directors
of Daine have determined to spin-off Lite King Corp.'s shares of common
stock to its shareholders on a pro rata basis. Presently there are
248,461,935 shares of Daine outstanding. Daine owns all of the
2,484,620 outstanding shares of the Registrant which it will distribute
to its shareholders as of November 30, 1998 on the basis of one share of
the Registrant for each 100 shares of Daine held. Fractional shares
will be rounded up or down. Shares will be distributed in May 1999 to
shareholders of record on November 30, 1998.
Management of Daine and the Registrant believe the two companies as
separate entities will create additional value for the shareholders.
There is no assurance of any trading market developing. It should be
noted that even though Daine is a public company it has not traded in
the past two years. Management will attempt to use Daine as a "shell"
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, a manufacturer and assembler of wiring devices, cord sets
and sockets. The assets acquired had a total cost of $738,079,
consisting of machinery and equipment, inventory, accounts receivable,
a non compete clause entered into with Lite King Corporation's former
president and principal shareholder and a rent deposit. The purchase
price ($663,079 in cash and a $75,000 five year note payable in
quarterly installments with interest of 12%) was arrived at by arms
length negotiations and Daine obtained the funds for the purchase from
its own internal sources. There was no material relationship between
Daine and Lite King Corporation or any of its officers or directors
prior to this transaction. The Registrant had entered into a six month
consulting agreement with Lite King Corporation's former president and
owner Mr. Jerold Kolton. For the consulting services rendered the
Registrant paid Mr. Kolton the sum of $36,000 plus expenses of $9,000 or
a total of $45,000.
Lite King's facilities consist of approximately 16,000 square feet
of office and factory space with annual lease payments of $58,000. Lite
King's work force fluctuates during the year, from about 6-30 employees,
all, except three, which were engaged in manufacturing and assembly
activities.
During the nine months ended March 31, 1999, the Registrant
generated revenues of $1,080,031. During the nine months ended March
31, 1998 the Registrant generated revenues of $848,300. During the nine
months ended March 31, 1999, the Registrant had a net loss of $26,115 as
compared with a net loss of $43,334 for the nine months ended March 31,
1998.
The increase in revenues can be attributed to added sales from one
of its major customers. Gross Margins for the nine months ended March
31, 1999 declined to 27% from 30% for the nine months ended March 31,
1998. The decline is due to the Company's inability to pass along price
increases to its major customers and a reduction in the profit margin
earned on one of the Company's principal products.
General and administrative expenses increased by 7% when comparing
expenses for the nine months ended March 31, 1999 and the nine months
ended March 31, 1998. This increase can be attributed primarily to
higher real estate expenses and taxes.
Interest income increased by 81% for the nine months ended March
31, 1999 as compared with the nine months ended March 31, 1998. This
increase is due to higher balances in interest bearing accounts.
During the three months ended March 31, 1999 the Registrant
generated revenues of $72,052 as compared with revenues of $119,882 for
the three months ended March 31, 1998. The decrease of 40% can be
attributed to a decline in sales from one of the Registrant's largest
customers. For the three months ended March 31, 1999 the Registrant
generated a loss of $52,496 as compared with a loss of $30,492 generated
during the three months ended March 31, 1998. Much of the loss for the
three months ended March 31, 1999 can be attrributed to added general
and administrative expenses, principally associated to real estate and
related taxes booked during the period and professional fees generated
during the period ended March 31, 1998. The gross margin for the three
months ended March 31, 1999 was 29% as compared with 32% during the
three months ended March 31, 1998. The lower gross margin can be
attributed to the inability to pass along price increases to its
customers.
Management anticipates activities for the quarter ended June 30,
1999 may result in a loss. The Registrant is experiencing added
competition from firms with production facilities in China, Mexico and
third world nations which resulted in lower gross margins. The
Registrant is at a disadvantage in that firms based in the above listed
nations have labor rates considerably lower than the Registrant's.
As of March 31, 1999, the Registrant had total assets of $1,446,918
current assets of $1,338,576, fixed assets of $102,242, other assets of
$6,100, current liabilities of $73,907, other liabilities of $8,423 and
total shareholders' equity of $1,364,588. At June 30, 1998, total
assets amounted to $1,722,950, current assets of $1,587,165, fixed
assets of $129,685, other assets of $6,100, current liabilities of
$323,824, other liabilities of $8,423 and shareholders' equity of
$1,390,703.
Lite King has completed an expansion program which resulted in the
addition of new equipment. The Registrant has also begun to manufacture
some of the components used in some of its finished products. As part
of this program, Lite King has upgraded some existing tooling which
should result in having available some improved products. Management
believes it has adequate financing to fund Lite King's expansion
program.
The Registrant has introduced several new products for sale
directly to the end user as compared with current sales to original
equipment manufacturers. These products will be sold as replacement
items for Christmas, Halloween and Easter decorative plastic items.
Management does not anticipate sales of these new products to have a
material effect on fiscal year 1999 revenues or Company profitability.
Lite King's main customer base are manufacturers of Christmas,
Easter and Halloween products. Management considers its principal
business to be seasonal in nature with sales usually at its lowest point
during the quarter ended March 31st, with sales rising steadily during
the June, September quarters and declining in the December quarter. The
Registrant is experiencing lower gross profit margins because of the
introduction of some new components used on some products, mandated by
Underwriters Laboratories Inc., and added competition from firms with
manufacturing facilities in China. For the nine months ended March 31,
1999, Lite King's three largest customers accounted for about 81% of its
total sales. (The largest of the three accounted for 61%, the second
for 11% and the third for 9%.)
The cash and cash equivalents balances of the Company as of March
31, 1999 and June 30, 1998 were $686,723 and $585,552, respectively.
The increase in cash and cash equivalents was principally the result of
lower accounts receivable for the quarter ended March 31, 1999. The
Company expects that its current balances of cash and cash equivalents
will be sufficient to meet its minimum planned capital and liquidity
needs for the next year.
The Company does not believe that the impact of inflation on its
activities is significant. The Company is directing its marketing
effort to reach out to new potential customers in non-related fields.
No assurance can be given that such marketing activities will result in
the Company adding new customers.
Management sees added operating problems in fiscal year 1999 (year
ended June 30, 1999) as a result of expected added competition from
Chinese based manufacturers and their U.S. representatives of electrical
cords. These firms may offer their products at lower prices making
their products more competitive with the Registrant's products.
Management believes that Lite King's third largest customer will
not be buying any product from the Company during the remainder of
calendar year 1999 and will be importing its product needs from China.
For the nine months ended March 31, 1999 sales to this customer
accounted for 9% of Lite King's sales.
Management also believes that sales to its second largest customer
for calendar year 1999 will be about 50% lower than sales during
calendar year 1998 (a reduction of about $100,000 in sales). The loss
of its third largest customer and reduction in orders from its second
largest customer is primarily due to lower labor rates existing in
China, making Lite King's product to seasonal decorative lighting
customers less price competitive. Management sees this adverse trend
continuing and is exploring other unrelated business opportunities for
possible involvement, although no assurance can be given that any such
business ventures will be successfully implemented.
The loss of the business of Lite King's largest customer could have
a material adverse effect on the financial condition of the Registrant.
The Registrant is importing one of its finished products from China
as opposed to producing it in its facilities. Importation results in a
lower profit margin and selling price (due to added competition) than
when the product was being manufactured by the Registrant. No assurance
can be given that this product will be available in fiscal year 1999 in
the quantity required by the Registrant.
Year 2000 Compliance
The Registrant has evaluated the impact of the Year 2000 issue on
the business and does not expect to incur significant costs with Year
2000 compliance. The Registrant believes that all software and hardware
requirements to enable it to cope with the Year 2000 issue have been or
are being currently implemented. However, there can be no assurance
that unanticipated costs may arise in implementing these requirements.
On November 23, 1998, Lite King Corp. (a 100% owned subsidiary of
Daine Industries Inc.) filed a Registration Statement under the
Securities Act of 1934 on Form 10-SB relating to a distribution of 100%
of the outstanding shares of Lite King Corp., presently owned by Daine
Industries Inc., on a pro rata basis to the Registrant's shareholders as
a dividend. (One share of Lite King for each 100 shares of Daine held.)
Fractional shares will be rounded up or down. The shares will be
distributed in May 1999.
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: May 11, 1999
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