SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: June 30, 2000
OR
[ ] 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: 2-41703
Diversified Technologies Group, Inc.
(Exact name of registrant as specified in its charter)
Delaware 43 1594165
(State or other jurisdiction of (IRS Employer
incorporation or organization) identification number)
13555 Noel Rd., Ste. 500, Dallas, Texas 75240
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code:(972) 691 6212
Indicate by check mark whether the issuer (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: As of August 4, 2000, there
were approximately 7,160,000 common shares outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
DIVERSIFIED TECHNOLOGIES GROUP, INC.
(A Development Stage Company)
BALANCE SHEETS
June 30, December 31,
2000 1999
---- ----
(Unaudited) (Audited)
ASSETS
Current Assets:
Cash and Subscriptions 100,000 --
Total Current Assets -- --
--------- ---------
Total Assets $ -- $ --
========= =========
LIABILITIES AND SHAREHOLDERS EQUITY
Current Liabilities
Total Current Liabilities -- --
--------- ---------
Shareholders Equity (Deficit)
Common Stock, $.001
par value, 100,000,000
shares authorized,
60,000 and 6,760,000
shares issued and
outstanding 9,700 3,000
Additional paid
in capital 581,083 397,783
Retained earnings
(deficit) (490,783) (400,783)
--------- ---------
Total Shareholders
Equity (Deficit) $ 100,000 --
--------- ---------
Total Liabilities
and Shareholders
Equity (Deficit) $ 100,000 $ --
========= =========
<PAGE>
DIVERSIFIED TECHNOLOGIES GROUP, INC.
(A Development Stage Company)
STATEMENTS OF OPERATIONS
Six Months Ended June 30,
2000 1999
---- ----
Total Income $ -- $ --
General and
administrative
expenses: 90,000 --
-------- --------
Total Expenses 90,000 --
-------- --------
Net income (loss) $(90,000) $ --
======== ========
<PAGE>
DIVERSIFIED TECHNOLOGIES GROUP, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
Six Months ended June 30,
2000 1999
---- ----
Cash (used) by operating activities:
Net loss
$ (90,000) $ --
Financing activities:
Issuance of stock $ 100,000 --
Adjustments to reconcile net gain (loss) to
net cash provided by operating activities:
Issuance of stock for services 90,000 --
Net Cash Flows (used) by operating activities -- --
Increase (decrease) in Cash -- --
Cash at Beginning of the Period -- --
--------- -------
Cash at End of the Period $ 100,000 $ --
========= =======
<PAGE>
DIVERSIFIED TECHNOLOGIES GROUP, INC.
(A Development Stage Company)
NOTES TO FINANCIAL STATEMENTS
In the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of the financial
condition of registration have been included, and the disclosure are adequate to
make the information presented not misleading.
Note 1. A summary of significant accounting policies is currently on file with
the U.S. Securities and Exchange Commission.
Note 2. The loss per share was computed by dividing net loss by the weighted
average number of shares of common \ stock outstanding during the period.
Note 3. The Company has not declared or paid dividends on its common shares
since inception.
Note 4. The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10 QSB and do not include
all information and footnotes required by generally accepted accounting
principles for complete financial statements.
Note 5. Income taxes have not been provided for in that the Company does not had
a tax liability due to operating losses.
Note 6. As shown in the accompanying financial statements, the Company incurred
net operating losses and liabilities which exceeded assets. These factors, as
well as the uncertainty regarding the Company's ability to raise capital,
creates substantial doubt about the Company's ability to continue as a going
concern.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion of financial condition and results of operations should
be read in conjunction with the Company's audited financial statements and notes
thereto appearing elsewhere in this report. The Company has had recurring losses
from operations since inception and had a net capital deficiency at year end,
each of which raise substantial doubts about the ability of the Company to
continue as a going concern.
Results of Operations: Diversified Technologies Group, Inc., f/k/a Cassco
Capital Corp. (Company), was incorporated as Anthony Kane Incorporated under the
laws of the State of Delaware on February 5, 1969, and became subject to the
reporting provisions of the Securities Exchange Act of 1934 on June 11, 1969,
when a registration statement filed by the Company was declared effective by the
U.S. Securities and Exchange Commission. The Company, prior to 1999, had engaged
in a variety of acquisitions and businesses in the past, none of which have
proved successful.
The Company on December 1, 1999, entered into an agreement (Reorganization
Agreement) to acquire all of the outstanding capital stock of S&J (Chatteris)
Holdings Limited, a United Kingdom corporation (S&J Holdings). Pursuant to the
Reorganization Agreement, the Company agreed to acquire all of the outstanding
capital stock of S&J in exchange for 12,000,000 post split shares of Common
Stock. The Reorganization Agreement required S&J Holdings to perform certain
conditions, including the delivery of audited financial statements. These
conditions had not been fulfilled by February 14, 2000; therefore, the agreement
was rescinded and deemed to have been void and of no effect from the beginning
as if the acquisition had not occurred. All shares issued in the acquisition
were returned to treasury. The Company then elected to recapitalize itself and
effected a reverse 1:50 common share split on June 23, 2000.
On June 10, 2000, the Company raised investment capital aggregating $100,000,
issuing 4,700,000 post split common shares in exchange. On June 30, 2000, the
Company satisfied approximately $90,000 in debt through the issuance of
2,000,000 post split common shares to former officers, directors and contractors
with the Company.
<PAGE>
On July 21, 2000, the Company acquired 100% of the outstanding capital stock of
Demandfax, Inc., privately held Texas corporation (Demandfax), from its sole
shareholder, Mr. John P. Harris, solely in exchange for 400,000 restricted
common shares of DTGI. Mr. Harris remains as the primary operations officer of
Demandfax and has been appointed to the board of DTGI.
Business of Demandfax: Demandfax provides enhanced fax, voice broadcast, and
email broadcast services that allow its customers to reach their audience;
customers, staff, business associates, prospects, the media, investors, and
more, all over the world, anytime, quickly and efficiently. These services
provide internal corporate, and organizational communications, sales and
marketing, advertising, public relations, customer service response, and any
other communications project that requires sending volume communications at low
cost.
Demandfax can send a fax to millions of recipients anywhere in the world
overnight. DemandFAX provides Fax on demand service which distributes client
information requests 24 hours a day, seven days a week. Two areas of focus are
in response advertising so that (1) customers can offer sales and marketing
information via an 800 number and (2) customer service can allow customers to
call the system and request technical or other customer support information. The
Web enabled version allows fax documents to be retrieved via the Internet.
Demandfax, in conjuction with Multipath Imaging Services, offers a proprietary
digitizing process for ensuring the highest quality, highest resolution images.
The unique digitization process and conversion of artwork, B&W and color photos,
graphics, and other materials allows DemandFAX to offer faxes with greater
visual impact than that of other firms.
DemandFAX offers enhanced email broadcasting that can send millions of emails to
internet users around the world. The basic enhanced email broadcast service
supports multiple attachments, links to Internet URL's and extensive reporting
capabilities.
Demandfax offers enhanced voice broadcasting which allows customers to send a
pre recorded message via sound, music, voices, etc. to millions of phone numbers
automatically.
Demandfax provides the following ancillary services: (1) list
procurement/compiling (fax, email, phone); (2) graphics & photography; (3)
layout & design; (4) copywriting; and (5) database management
<PAGE>
Demandfax Markets: Demandfax competes in the outsourced facsimile and unifired
messaging markets. Unified messaging combines voice mail, fax and email into one
universal mailbox accessible by phone and computer.
Outsourced Facsimile Market: The following projections were taken from
Computer Telephony in December, 1998, and June, 2000, and from Communications
News in July, 2000:
1. The number of fax minutes projected for calendar 2000 is 500 billion. 2. The
outsourced fax compound annual growth rate is 22 percent. 3. Faxing will be a
$3.24 billion market by 2003. 4. There are 45 million fax machines installed in
United States. 5. 100 million fax machines have been installed worldwide. 6.
99.9 percent of those organizations with 100+ employees have facsimiles. 7. 1.55
billion people have fax access. 8. 75 percent of the Fortune 500 companies have
no plans to phase out fax. 9. Facsimile traffic accounts for 40 percent of the
average business' phone bill.
Unified Messaging Market: The following projections were taken from trade
research data made available by ICD/JFAX in May, 2000:
1. The estimated revenue for 1998 in the Unified Fax markets was $10,000,000. 2.
The estimated revenue for 2002 is projected at $6.3 billion. 3. There were
35,000 unified messaging mailboxes in 1998. 4. There will be 25.4 million unifed
messaging mailboxes in 2003. 5. Surveys show that nearly one fourth of US
households are interested in messaging mailboxes.
Mr. John P. Harris retains operational control of Demandfax. He has 30 years
experience in developing and implementing broad based marketing/sales
strategies. Mr. Harris has specialized in startups and turnarounds in the
following markets: Consumer Products and Services, Wholesale Distribution
Networks and Telecommunications. Mr. Harris founded Demandfax in 1992 and
continues to serve as its chairman and chief executive officer. In his
capacities with this organization he developed and implemented the business plan
for the entity, with particular emphasis on the development and implementation
of a a marketing/sales strategy. Mr. Harris attended San Jose College and the
Wake Forest School of Business, but received no degree from either institution.
Liquidity and Capital Resources: The Company, from inception has relied on
capital infusions from executive officers and directors and investors and on
credit from vendors.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Litigation
No material legal proceedings to which the Company (or any officer or director
of the Company, or any affiliate or owner of record or beneficially of more than
five percent of the Common Stock, to management's knowledge) is a party or to
which the property of the Company is subject is pending and no such material
proceeding is known by management of the Company to be contemplated.
Item 2. Change in Securities
This item is not applicable to the Company for the period covered by this
report.
Item 3. Defaults Upon Senior Securities
This item is not applicable to the Company for the period covered by this
report.
Item 4. Submission of Matters to a Vote of Security Holders
There were no meetings of security holders during the period covered by this
report; thus, this item is not applicable.
Item 5. Other Information
There is no additional information which the Company is electing to report under
this item at this time.
Item 6. Exhibits and Reports on Form 8-K
This item is not applicable to the Company for the period covered by this
report.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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 this 7th day of August,
2000.
DIVERSIFIED TECHNOLOGIES GROUP, INC. (Registrant)
By: /s/ John C. Harris
----------------------
John C. Harris, Chief Executive Officer
By: /s/ John C. Harris
----------------------
John C. Harris, Chief Financial and
Accounting Officer and Treasurer
