1
U.S. Securities and Exchange Commission
Washington, D.C. 20549
Form 10-QSB
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarter ended March 31, 2000
- --------------------------------------------------------------------------------
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission File No. 0-30118
DIRECTION TECHNOLOGIES, INC
- --------------------------------------------------------------------------------
(Name of Small Business Issuer in its Charter)
NEVADA 88-0413417
----------------------------- --------------------------
(State or Other Jurisdiction of (I.R.S. Employer I.D. No.)
incorporation or organization)
PMB 723, 250 "H" St.,
Blaine, WA 98230
---------------------
(Address of Principle Executive Offices)
Issuer's Telephone Number: (604) 683-6648
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 Company was required to file such reports). And (2) has been
subject to such filing requirements for the past 90 days.
(1) Yes X No (2) Yes X No
---- ---- ---- ----
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(APPLICABLE ONLY TO CORPORATE ISSUERS)
State the number of shares outstanding of each Issuer's classes of common
equity, as of the latest practicable date:
March 31, 2000: Common Stock - 10,031,000
DOCUMENTS INCORPORATED BY REFERENCE
A description of any "Documents Incorporated by Reference" is contained in Item
6 of this report.
Transitional Small Business Issuer Format Yes No X
----- -----
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DIRECTION TECHNOLOGIES, INC.
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Balance Sheets as of March 31, 2000 and
December 31, 1999 5
Statements of Operations for the three months ended
March 31, 2000 and March 31, 1999 and from Inception through
March 31, 2000 6
Statements of Cash Flow for the three months ended
March 31, 2000 and March 31, 1999 and from Inception through
March 31, 2000 7
Notes to Financial Statements for the three months ended
March 31, 2000 and March 31, 1999 and from Inception through
March 31, 2000 9
Item 2. Management's Plan of Operations 10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 10
Item 2. Changes in Securities 10
Item 3. Defaults upon Senior Securities 10
Item 4. Submission of Matters to a Vote of Securities Holders 10
Item 5. Other Information 10
Item 6. Exhibits and Reports on Form 8 - K 10
Signatures 11
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The Financial Statements of the Company required to be filed with this 10-QSB
Quarterly Report were prepared by management and commence on the following page,
together with related Notes. In the opinion of management, these Financial
Statements fairly present the financial condition of the Company, but should be
read in conjunction with the Financial Statements of the Company for the year
ended December 31, 1999 previously filed with the Securities and Exchange
Commission.
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DIRECTION TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
BALANCE SHEETS
March 31, 2000 and December 31, 1999
ASSETS
CURRENT ASSETS MARCH 31, 2000 DEC 31, 1999
CASH $ 479 $ 14
PREPAID EXPENSES -- --
----------- ----------
TOTAL CURRENT ASSETS $ 479 $ 14
LICENSE FEES $ 50,000 $ 50,000
INVESTMENT IN QIBLAH TECHNOLOGIES LTD. -- --
----------- ----------
TOTAL ASSETS $ 50,479 $ 50,014
----------- ----------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
ACCOUNTS PAYABLE $ 51,579 $ 53,605
LOANS PAYABLE 9,209 4,885
----------- ----------
TOTAL CURRENT LIABILITIES $ 60,788 $ 58,490
----------- ----------
NOTES PAYABLE - -
----------- ----------
TOTAL LIABILITIES $ 60,788 $ 58,490
----------- ----------
STOCKHOLDERS' EQUITY (DEFICIENCY)
SHARE CAPITAL - NOTE 2
AUTHORIZED:
50,000,000 common shares,
$0.001 par value
10,000,000 preferred shares,
$0.001 par value
ISSUED:
10,031,000 common shares $ 10,031 $ 10,031
CONTRIBUTED SURPLUS 15,469 15,469
DEFICIT ACCUMULATED DURING THE
DEVELOPMENT STAGE $ (35,809) $ (33,976)
----------- ----------
TOTAL STOCKHOLDERS' EQUITY (DEFICIT) (10,309) (8,476)
----------- ----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 50,479 $ 50,014
----------- ----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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DIRECTION TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENT OF OPERATIONS
FOR THE THREE MONTHS PERIODS ENDED MARCH 31, 2000 AND MARCH 31, 1999 AND FOR THE
PERIOD APRIL 30, 1998 (INCEPTION) THROUGH MARCH 31, 2000
UNAUDITED
APRIL 30, 1998
THREE MONTHS THREE MONTHS (DATE OF
ENDED MAR 31 ENDED MAR 31 INCEPTION TO
2000 1999 MARCH 31, 2000)
SALES - - -
COST OF SALES - - -
------------ ------------ ------------
GROSS PROFIT - - -
OPERATING EXPENSES $ 1,833 $ 16,422 $ 30,809
RESEARCH & DEV - - -
------------ ------------ ------------
LOSS BEFOREOTHER ITEMS $ (1,833) $ (16,422) $ (30,809)
OTHER ITEMS
EXCESS VALUE OF SHARES
ISSUED ON INVESTMENT - (2,500) (1,048)
SHARE OF LOSS OF
QIBLAH TECH. LTD - (728) (3,952)
------------ ------------ ------------
NET (LOSS) $ (1,833) $ (19,650) $ (35,809)
------------ ------------ ------------
BASIC AND DILUTED
LOSS PER SHARE $ (0.00) $ (0.00) $ (0.00)
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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DIRECTION TECHNOLOGIES, INC.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS PERIODS ENDED MARCH 31, 2000 AND MARCH 31, 1999 AND FOR THE
PERIOD APRIL 30, 1998 (INCEPTION) THROUGH MARCH 31, 2000
UNAUDITED
APRIL 30, 1998
THREE MONTHS THREE MONTHS (DATE OF
ENDED MAR 31 ENDED MAR 31 INCEPTION TO
2000 1999 MARCH 31, 2000)
CASH FLOWS FROM
OPERATING ACTIVITIES
NET (LOSS) $ (1,833) $ (19,650) $ (35,809)
ADD: ITEMS NOT
AFFECTING CASH
SHARE OF QIBLAH
TECH LTD LOSS $ - 728 3,952
EXCESS VALUE OF
SHARES ISSUED ON
INVESTMENT $ - 2,500 1,048
------------ ------------ ------------
$ (1,833) $ (16,422) $ (30,809)
CHANGES IN NON-CASH ITEMS
PREPAID EXPENSES - 650 -
ACCOUNTS PAYABLE (2,026) 48,500 51,579
LOANS PAYABLE 4,324 - 9,209
------------ ------------ ------------
NET CASH (USED) BY
OPERATING ACTIVITIES $ 465 $ (32,728) $ 29,979
------------ ------------ ------------
CASH FLOW FROM
INVESTING ACTIVITIES
ACQUISITION OF
LICENSE FEES $ - $ (50,000) $ (50,000)
INVESTMENT IN
QIBLAH TECH LTD - - -
------------ ------------ ------------
NET CASH (USED) BY
INVESTMENT ACTIVITIES $ - $ (50,000) $ (50,000)
------------ ------------ ------------
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CASH FLOWS FROM
FINANCING ACTIVITIES
PROCEEDS FROM
ISSUANCE OF
COMMON SHARES $ - $ 20,500 $ 20,500
------------ ------------ ------------
NET CASH PROVIDED BY
FINANCING ACTIVITIES $ - $ 20,500 $ 20,500
------------ ------------ ------------
NET INCREASE (DECREASE)
IN CASH DURING THE PERIOD $ 465 $ 3,228 $ 479
CASH AT BEGINNING
OF PERIOD 14 - -
------------ ------------ ------------
CASH AT END
OF PERIOD $ 479 $ 3,228 $ 479
------------ ------------ ------------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THESE FINANCIAL STATEMENTS
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DIRECTION TECHNOLOGIES, INC
(the "Company")
NOTES TO THE FINANCIAL STATEMENTS FOR THE THREE MONTHS PERIODS ENDED MARCH 31,
2000 AND MARCH 31, 1999 AND FOR THE PERIOD APRIL 30, 1998 (INCEPTION) THROUGH
MARCH 31, 2000.
1. BASIS OF PRESENTATION
In the opinion of management, the unaudited financial statements reflect all
normally recurring adjustments necessary to fairly present the Company's
financial position and results of operations for the periods indicated. The
accompanying interim financial statements should be read in conjunction with the
financial statements and related notes included in the Company's 10-KSB for the
period ended December 31, 1999, which has been filed with the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in the Company's annual financial statements have been omitted from the
quarterly financial statements based upon Securities and Exchange Commissions
rules and regulations. Net loss per share has been calculated based upon the
weighted average number of common and common equivalent shares outstanding,
unless antidilutive, during the period.
2. FINANCING
Common Additional
Shares Paid-in
# Par Value Capital
------- --------- -------
Balance, December 31, 1999 - $ - $ -
Issuance of shares:
- pursuant to offering
memorandum for cash
- at $0.50 per share 31,000 31 15,469
- at $0.001 per share 5,000,000 5,000 -
- pursuant to acquisition
of Qiblah Technologies
Limited 5,000,000 5,000 -
---------- -------- --------
Balance, March 31, 2000 10,031,000 $ 10,031 $ 15,469
========== ======== ========
The capital raised was used to fund operations. The Company anticipates needing
additional capital to fund operations during the upcoming year. The Company
intends to raise capital through a combination of the private placement of its
securities, establishing operating lines of credit, and through the sale of
product.
3. RELATED PARTY TRANSACTIONS
On January 12, 1999, the company acquired the shares of Qiblah International
Industries Ltd. (Qiblah"). Qiblah was a private company controlled by a
significant shareholder of the Company. On January 19, 1999, two directors of
Qiblah became directors of the Company. Accounts payable at March 31, 2000
includes $50,000 (1999: $50,000) owing to E.T.C. Industries Ltd., a company with
a common director. Loans payable at March 31, 2000 includes $4,324 (1999: $Nil)
owing to directors of the Company.
4. DESCRIPTION OF SECURITIES
The Company has two class of securities authorized; 50,000,000 shares of $0.001
par value common voting stock and 10,000,000 of $0.001 par value preferred
shares. The holders of the Company's Common Stock are entitled to one vote per
share on each matter submitted to a vote at a meeting of stockholders. The
shares of Common Stock carry cumulative voting rights in the election of
directors. There are no preferred shares issued.
Stockholders of the Company have no pre-emptive rights to acquire additional
shares of Common Stock or other securities. The Common Stock is not subject to
redemption rights and carries no subscription or conversion rights. In the
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event of liquidation of the Company, the shares of Common Stock are entitled to
share equally in corporate assets after satisfaction of all liabilities. All
shares of the Common Stock now outstanding are fully paid and non-assessable.
There are no outstanding options.
There is no provision in the Company's Articles of Incorporation, as amended, or
Bylaws that would delay, defer, or prevent a change in control of the Company.
Item 2. Management's Plan of Operations
The Company is in its initial stages of development with no revenues or income
and is subject to all the risks inherent in the creation of a new business.
Since the Company's principal activities to date have been limited to
organizational activities, prospect development, and acquisition of interests,
it has no record of any revenue-producing operations. Consequently, there is no
operating history upon which to base an assumption that the Company will be able
to achieve its business plans.
PRINCIPAL PRODUCT.
One of the specific reasons the Company was founded is for the purpose of
entering into a world-wide license agreement with E.T.C. Industries Ltd. of
Vancouver, British Columbia, Canada to license certain technology, and obtain
advice in facilitating the production of electric vehicles using certain
technology developed by the licensor.
The other specific reason for formation of the Company is to purchase certain
assets of Qiblah International Industries Ltd. a British Columbia corporation,
of Vancouver, British Columbia, Canada (a non-operational holding company).
Qiblah International Industries Ltd. owns 50% of Qiblah Technologies Ltd. a duly
registered non-reporting, non-listed South African public corporation. This
firm has developed a state-of-the art electronic device called the Qiblah
Locator, a battery-operated hand-held device that indicates the direction of the
Muslim religious center Mecca from any location in the world. The Qiblah Locator
is designed to be of assistance to the more than 1.5 billion adherents of the
Muslim faith in the performance of their religious observations.
LIQUIDITY.
During the next 12 months, the Company will need significant working capital to
fund its marketing efforts and to manufacture product. The Company intends to
obtain working capital from the sale of product and through private investments
made by third parties.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None;
Item 2. Changes in Securities and Use of Proceeds.
During the first quarter of 2000, the Company did not issue any
securities.
Item 3. Defaults Upon Senior Securities.
None;
Item 4. Submission of Matters to a Vote of Security Holders.
None;
Item 5. Other Information.
On March 3, 2000 the Company was cleared by the NASD for trading on
the OTC Bulletin Board. The symbol is DRCG.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
None
(b) Reports on Form 8-K.
None
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SIGNATURES
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 thereunto duly authorized.
DIRECTION TECHNOLOGIES, INC
Date: 5/09/00 By: /s/ Rolf Papsdorf
President and Director
Date: 5/09/00 By: /s/ Dieter Schindelhauer
Secretary/Treasurer and Director
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AND STATEMENT OF OPERATIONS FOR DIRECTION TECHNOLOGIES, INC. A DEVELOPMENT
STAGE COMPANY, AND IS QUALIFIED IN ITS ENTIRETY BY REFERNCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> MAR-31-2000
<CASH> 479
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 479
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 50,479
<CURRENT-LIABILITIES> 60,788
<BONDS> 0
0
0
<COMMON> 10,031
<OTHER-SE> 15,469
<TOTAL-LIABILITY-AND-EQUITY> 50,479
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 1,833
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,833)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,833)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,833)
<EPS-BASIC> (0.00)
<EPS-DILUTED> (0.00)
</TABLE>
