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: September 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)
Nevada 43-1594165
------ ----------
(State or other jurisdiction (I.R.S. employer identification number)
of incorporation or organization)
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 November 13, 2000, there
were approximately 28,640,000 common shares outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
----------------------------
DIVERSIFIED TECHNOLOGIES GROUP, INC.
(a development stage company)
BALANCE SHEETS
Sept 30, December 31,
2000 1999
--------- ---------
(Unaudited) (Audited)
ASSETS
Current Assets
Cash $ 36,655 $ 0
Accounts receivable 3,918 0
--------- ---------
Total Current Assets 40,573 0
Equipment, net of accumulated depreciation 41,898 0
Other assets
Organization costs, net of accumulated
amortization 983 0
--------- ---------
Total Assets $ 83,454 $ 0
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 10,411 $ 0
--------- ---------
Total Current Liabilities 10,411 0
Stockholders' Equity (Deficit)
Common stock, $.001 par value
100,000,000 shares authorized
60,000 and 7,210,000 shares
issued and outstanding 10,150 3,000
Additional paid-in capital 597,870 397,783
Retained earnings (deficit) (534,977) (400,783)
--------- ---------
Total Stockholders' Equity 73,043 0
--------- ---------
Total Liabilities and Stockholders' Equity $ 83,454 $ 0
========= =========
See Accompanying Notes to Financial Statements
2
<PAGE>
DIVERSIFIED TECHNOLOGIES GROUP, INC.
(a development stage company)
STATEMENTS OF OPERATIONS
Nine Months Ended Sept 30,
2000 1999
--------- ---------
Revenues $ 45,149 $ 0
Cost of goods sold 18,036 0
--------- ---------
Gross Profit 27,113 0
General and administrative 161,307 0
--------- ---------
Net Income (Loss) $(134,194) $ 0
========= =========
See Accompanying Notes to Financial Statements
DIVERSIFIED TECHNOLOGIES GROUP, INC.
(a development stage company)
STATEMENTS OF CASH FLOWS
Nine Months Ended Sept 30,
2000 1999
--------- ---------
OPERATING ACTIVITIES:
Net Loss $(134,194) $ 0
FINANCING ACTIVITIES:
Issuance of stock 100,050 0
Issuance of stock for services 90,000 0
--------- ---------
Net cash provided by financing activities 190,050 0
--------- ---------
NET INCREASE IN CASH 0
CASH AT BEGINNING OF PERIOD 0 0
--------- ---------
CASH AT END OF PERIOD $ 36,655 $ 0
========= =========
See Accompanying Notes to Financial Statements
3
<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.
Note 7. The Company effected a forward four for one (4:1) split of its capital
shares. The split became effective on Monday, November 13, 2000, for all
shareholders of record as of the close of business on Friday, November 10, 2000.
The share figures in these financial statements are as of September 30, 2000,
and, therefore, do not reflect this forward capital split. All other references
in this filing to capital shares are to post-split shares.
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: On June 10, 2000, the Company raised investment capital
aggregating $100,000, issuing 16,800,000 post-split common shares in exchange.
On June 30, 2000, the Company satisfied approximately $90,000 in debt through
the issuance of 8,000,000 post-split common shares to former officers, directors
and contractors with the Company.
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 1,600,000 "restricted"
common shares of the Company. Mr. Harris remains as the primary operations
officer of Demandfax and has been appointed to the board of the Company.
On September 29, 2000, the Company acquired 100% of the outstanding capital
stock of CareNet, Inc., a privately-held Florida corporation ("CareNet"), from
its sole shareholder, Dr. Allen Okie. CareNet is a start-up "application
services provider" which is still in the process of defining its business plan
and perfecting a web-based software program for sale to the medical services
industry. CareNet has had no revenues to date and is, in fact, still in its
development stage. The Company has extended working capital to CareNet to assist
in the effectuation of its business plan.
4
<PAGE>
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
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.
5
<PAGE>
Liquidity and Capital Resources: The Company, from inception and until June 10,
2000, relied on capital infusions from executive officers and directors and on
credit from vendors. On the foregoing date, the Company received capital
aggregating approximately $100,000 as a capital infusion. Demandfax operates on
approximately a break even basis. The funds expended during the period of this
report, other than those expended by Demandfax and in the extension of funds to
CareNet, were in furtherance of the Company's efforts to find acquisition
candidates.
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. The Company, subsequent to the period
covered by this report effected a forward four for one (4:1) capital share
split, among other matters.
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 147th day of November,
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
* * * * * * *
6
