SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-KSB
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999
Commission File Number 0-5367
D-LANZ DEVELOPMENT GROUP, INC.
------------------------------
(Exact name of registrant as specified in Its charter)
DELAWARE 11-1717709
(State of Incorporation) (I.R.S. Employer Identification Number)
400 Grove St., Glen Rock, NJ 07452
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, with area code: (201) 445-8862
Securities registered pursuant to.Section 12(b) of the Act:
None
Securities registered pursuant to.Section 12(g) of the Act:
Common stock of $.001 par value per share
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 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 90 days. Yes X No
Check if there is no disclosure of delinquent filers in response to Item
405 of Regulation S-B in this form, and no disclosure will be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-KSB or any amendment to
this Form 10-KSB. X
State Issuer's Revenues for its most recent fiscal year. $-0-
Aggregate market value of the voting stock held by non-affiliates of registrant:
$584,000.00 as of December 31, 1999
Number of shares outstanding as of December 31, 1999: 11,900,000.
Documents incorporated by reference: Exhibits contained in the Form 10-KSB for
the year ended December 31, 1992, and the entirety of the Form 8-K dated
November 3, 1997.
Part I.
Item 1 DESCRIPTION OF BUSINESS
D-Lanz Development Group, Inc. and (hereinafter referred to as
"Registrant", "D-Lanz", or "Company") commenced business activities as a
partnership in 1947 and was incorporated on December 5, 1952, under the name
Osrow Products Company, Inc. Effective December 1, 1972, Osrow Products Company,
Inc., a New York Corporation, merged into OSR Corporation, a Delaware
corporation. OSR was incorporated on June 28, 1972. OSR was formed solely for
the purpose of having Osrow Product Company's state of incorporation changed
from New York to Delaware and its name changed from Osrow Products Company, Inc.
to OSR Corporation. On May 17, 1988, the Company amended its certificate of
incorporation, changing its name to Resort Connections, Inc. and changing the
total authorized capital stock to 55,000,000 of which 50,000,000 shares are
common stock with a par value of $.001 per share and 5,000,000 shares are
preferred stock with a par value of $.001 per share. On January 30, 1990, the
Company amended its certificate of incorporation to change its name to D-Lanz
Development Group, Inc., and to change the aggregate number of shares of stock
the Company may issue to 100,000,000 shares of which 50,000,000 are common stock
with a par value of $.001 per share and 50,000,000 shares are preferred stock
with a par value of $.001 per share. On May 6, 1988, the company restated the
number of common stock outstanding by reverse splitting the number of shares 1
for 4 from 6,2205,970 to 1,551,394.
On September 30, 1997, the Registrant acquired the assets of Health
Technologies International, Inc. ("HTI"), a private New Jersey corporation, in
exchange for 6,448,606 shares of the Registrant's common stock. HTI was
controlled by Roger Fidler, President of the Registrant.
The primary asset acquired from HTI is an exclusive license to
manufacture, market and sell a breast abnormality indicator in Chile and
Singapore. This product, now known as "BreastCare," with FDA marketing clearance
in place, was manufactured in the United States by HumaScan, Inc., a NASDAQ
listed corporation which attempted to market "BreastCare." However, the
marketing effort failed and HumaScan discontinued its efforts. The Registrant
and HumaScan are unrelated.
In April, 2000, the Company entered into an acquisition agreement, with
Eweb21, Inc., a Korean corporation, whereby control of the Company has changed
to the controlling shareholders of Eweb21, Inc. Eweb21, Inc. is a wholly owned
subsidiary of the Company. Eweb21, Inc.'s internet business provides services
under the names Eweb Mail, Eweb Commerce, Eweb Wizard and Eweb Find to and for
over 60,000 on line distributors through offices in London, U.K., Seoul, Korea,
Tokyo, Japan and Sydney, Australia.
The Company transferred the "BreastCare" related assets to another
wholly owned subsidiary, Global Agri-Med Technologies, Inc. which it will
spin-off to its shareholders.
Registrant's principal executive offices are at 400 Grove St., Glen Rock,
NJ 07452. Telephone (201) 445-8862.
Item 2. DESCRIPTION OF PROPERTY
For the year ending December 31, 1999, The Company's President provided
the Company with limited office space in his offices at $250 per month. The
Company's wholly owned subsidiary Eweb21, Inc. maintains offices in Seoul, Korea
and London, England.
Item 3. LEGAL PROCEEDINGS
There are no material pending legal actions involving the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Registrant submitted no matters to a vote of its security holders
during its fiscal year ended December 31, 1999.
Part II.
Item 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS
(a) The company's Common Stock did not trade from 1988 to February of 1998.
Currently, the Company's Common Stock is traded over the counter on the
Bulletin Board. Since that time it has had a high of $1.25, and a low of
$0.25. (See Table)
HIGH LOW
1998
1ST Quarter $1.00 $0.25
2ND Quarter 0.56 0.19
3RD Quarter 0.75 0.25
4TH Quarter 1.19 0.24
1999
1ST Quarter $0.49 $0.16
2ND Quarter 0.22 0.16
3RD Quarter 0.16 0.075
4TH Quarter 0.10 0.075
The recent bid price of the common stock, after the 1 for 100 reverse split
was $12.50 on May 3, 2000. The Company's stock is traded on the OTC Bulletin
Board with the symbol DLAN.
(b) As of December 31, 1999, there were approximately 900 holders of the
Company's Common Stock.
(c) No dividends were paid during the fiscal year ending Dec. 31, 1999.
Item 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS OR PLAN OF OPERATION
The Company was formed on June 28, 1972, under the laws of the State of
Delaware to engage in any lawful act or activity for which corporations may be
organized under the business corporation law of the State of Delaware. The
Company's principal assets during 1999 consisted of a license to manufacture and
market certain patented technology for the countries of Chile and Singapore. The
product to be produced under this license is a diagnostic temperature sensing
device to screen the breast for abnormalities, including cancer. Subsequent to
the end of the 1999 fiscal year, the Company transferred the "BreastCare"
related assets to a subsidiary which it will "spin off" to its shareholders.
The Company has acquired a new business, Eweb21, Inc. Eweb21, Inc.'s
internet business provides services under the names Eweb Mail, Eweb Commerce,
Eweb Wizard and Eweb Find to and for over 60,000 on line distributors through
offices in London, U.K., Seoul, Korea, Tokyo, Japan and Sydney, Australia.
Development stage activities.
The following discussion relates to the results of our operations to
date, and our financial condition:
For the next 12 months, the Company plans to devote the majority of its
efforts to (i) obtaining financing to expand Eweb21 Inc.'s distributor base, and
(ii) pursue the acquisition of necessary personnel and assets needed to continue
that expansion.
The Company anticipates that with the completion of a private placement
offering, the Company will be able to expand its operations. The Company
anticipates that its results of operations may fluctuate for the foreseeable
future due to several factors, including the timing of the introduction of the
Company's products into its target markets; whether and when new products are
successfully developed by the Company, market acceptance of current or new
products, competitive pressures on pricing, changes in the mix of products sold.
Operating results would also be adversely affected by a downturn in the market
for current technology if improved technology is introduced. Because the Company
is continuing to increase its operating expenses for personnel and other general
and administrative expenses, the Company's operating results would be adversely
affected if its sales did not correspondingly increase. The Company's limited
operating history makes accurate prediction of future operating results
difficult or impossible.
The Company has been a development stage enterprise since its
inception, June 28, 1972, to December 31, 1999. During this period, management
had devoted the majority of its efforts to obtaining the License agreement,
obtaining preliminary financing, enhancing its sources for inventory, pursuing
and finding a management team to continue the process of completing its
marketing goals, obtain sufficient working capital through loans and equity
through a private placement offering. These activities were funded by the
Company's management and investments from stockholders and officer loans.
Results of Operations
For the year ended December 31, 1999 as compared to the year ended
December 31, 1998
The company has remained inoperative. Sales, costs of goods sold, gross
profit, operating expenses and net profit were $-0- for both the year ended
December 31, 1998 and 1999. The activities of the Company during the year ended
December 31, 1998 and 1999 consisted of preparing and filing corporate income
tax returns and filings for the Securities and Exchange Commission.
The Company's general and administrative costs aggregated approximately
$282,472 for the year ended December 31, 1999 as compared to $986,002 for the
year ended December 31, 1998 representing an decrease of $703,530. The
accumulated costs for the year ended December 31, 1999 represents rent of
$3,000, Salary of $9,000, bank charges of $48, office expense of $1,924 and
consulting fees of $40,000 paid in shares of common stock.
Liquidity And Capital Resources
As of December 31, 1999, the Company's cash balance was $352 and
working capital was negative at $40,398 consisting of cash of $384, Accrued
liabilities of $18,000 and an officer loan of $22,750.
Net (loss) from operations amounted to $(282,472) for the year ended
December 31, 1999 due to increases general and administrative expenditures
related to the payment of consulting fees.
The Company's primary short-term needs are to develop its manufacturing
capabilities, increase inventory levels, begin to support its research and
development programs and begin marketing quantities of Licensed devices and
payment of royalty fees. The Company currently plans to expend approximately
$1.0 million for the expansion and development of its manufacturing facilities
in addition to its marketing and general administrative programs.
The Company expects its capital requirements to increase over the next
several years as it expands its research and development efforts, new product
development, sales and administrative infrastructure, manufacturing capabilities
and facilities. The Company's future liquidity and capital funding requirements
will depend on numerous factors, including the extent to which the Company's
products under development are successfully developed and gain market
acceptance, the timing of regulatory actions regarding the Company's potential
products, the costs and timing of expansion of sales, marketing activities,
facilities expansion needs and procurement.
The Company believes that it must raise additional cash and cash from
operations to satisfy its funding needs for at least the next 12 months.
Thereafter, if cash generated from operations is insufficient to satisfy the
Company's working capital and capital expenditure requirements, the Company may
be required to sell additional equity or debt securities or obtain additional
credit facilities. There can be no assurance that such financing, if required,
will be available on satisfactory terms, if at all.
Income tax: As of December 31, 1999, the Company had a tax loss
carry-forward of $1,269,949. The Company's ability to utilize its tax credit
carry-forwards in future years will be subject to an annual limitation pursuant
to the "Change in Ownership Rules" under Section 382 of the Internal Revenue
Code of 1986, as amended. However, any annual limitation is not expected to have
a material adverse effect on the Company's ability to utilize its tax credit
carry-forwards.
Year 2000 Readiness
The following disclosure is a Year 2000 ("Y2K") readiness disclosure
statement pursuant to the Year 2000 Readiness and Disclosure Act.
The Company's Year 2000 program is designed to minimize the possibility
of serious Year 2000 interruption. Possible Year 2000 worst case scenarios
include the interruption of significant parts of the Company's business as a
result of internal business system failure or the failure of the business
systems of its suppliers, distributors or customers. The potential effect to the
operations of the present business are minimized currently because the Company's
reliance upon computer systems in the day to day operations is minimal.
However, the Company decided to significantly upgrade its "business
systems" (all computer hardware and software used to run its businesses
including its operations management, administration and financial systems).
Specifications were developed for desired capabilities, including Year 2000
compliance. In 1998 the Company began assessing its Year 2000 exposure and
commenced implementation of a plan to achieve Year 2000 readiness. Based on its
review to date, the Company believes that its products and business software are
Year 2000 compliant.
The Company has also begun to survey major suppliers, distributors, and
customers to determine the status and schedule for their Year 2000 compliance.
To date, no significant issues have been identified, and the survey was
completed as of December 31, 1999. Where it believes that a particular
supplier's situation poses unacceptable risks, the Company plans to identify an
alternative source.
The costs of the readiness program for business systems, other
infrastructure areas, and suppliers are a combination of incremental external
spending and use of existing internal resources. In total, the Company expects
to spend less than $1,000 to achieve readiness. This amount is based on the
costs to upgrade the existing business systems to Y2K compliant versions.
Milestones and implementation dates and the costs of the Company's Year
2000 readiness program are subject to change based on new circumstances that may
arise or new information becoming available that may change the underlying
assumptions or requirements.
ITEM 7. FINANCIAL STATEMENTS
The financial statements are attached hereto at page 12.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
The Company did not change accountants for the fiscal year ending 1999.
Part III.
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS OF
REGISTRANT
Name Age Position
Roger Fidler 49 President, Chief Financial
Officer and Sole Director
Jay Hait 30 Secretary
Roger Fidler. Mr. Fidler has been the sole director, President, Chief Executive
and Financial Officer of the Company since September, 1989. He will serve until
the next annual meeting scheduled for May, or until his successor is elected and
qualified. Mr. Fidler has been engaged in the private practice of law since
1983. Mr. Fidler has also been President of PPA Technologies, Inc., a private
specialty chemicals company since its inception in 1994. Mr. Fidler has also
been President of Health Technologies International, Inc., a private medical
device company, since 1994.
Jay Hait. Mr. Hait has served as Secretary of the corporation since November,
1997 and will continue to serve until his successor is elected and qualified.
Mr. Hait has worked as an attorney in Mr. Fidler's law practice since May of
1997. Prior to that, Mr. Hait had been employed as a computer programmer at Isis
Corporation of Oakland, NJ from 1994. Mr. Hait worked as a help desk and LAN
technician at MDY Advanced Technologies of Fair Lawn, NJ in 1993, and Viacom of
New York, NY in 1992.
ITEM 10. EXECUTIVE COMPENSATION
Roger Fidler, President, receives a salary of $500 per month. No
compensation was paid to any other officer or director of the Company during the
fiscal year ending December 31, 1999.
<TABLE>
<CAPTION>
Summary Compensation Table
Fiscal Annual Compensation Long Term
Name & Position Year Salary Bonus Other(1) Compensation
<S> <C> <C> <C> <C>
Roger Fidler Current $6,000 -0- -0- -0-
President 1998 $6,000 -0- -0- -0-
1997 -0- -0- -0- -0-
1996 -0- -0- -0- -0-
</TABLE>
<PAGE>
STOCK OPTION INFORMATION
There are no options outstanding.
The transactions between officers and directors of the Company and the
Company and its affiliates are made on terms no less favorable to the Issuer
than those available from unaffiliated parties. Future transactions will be
handled in the same fashion.
<PAGE>
Item 11. SECURITY OWNERSHIP OF MANAGEMENT AND CERTAIN BENEFICIAL OWNERS
The following table sets forth certain information regarding the
beneficial ownership of the Company's Common Stock as of December 31, 1999, of
each officer or director of the Company, by each person or firm who owns more
than 5% of the Company's outstanding shares and by all officers and directors of
the Company as a group.
Number of Percentage
Name Shares of shares
Owned owned
Roger 6,060,000 50.9%
Fidler
400 Grove St.
Glen Rock, NJ 07452
Scantek Medical, Inc. 2,000,000 16.8%
321 Palmer Rd.
Denville, NJ 07834
Officers and
Directors as
a Group(2 persons) 6,060,000 50.9%
Item 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
On September 30, 1997, the Registrant acquired the assets of Health Technologies
International, Inc. ("HTI"), a private New Jersey corporation, in exchange for
8,448,606 shares of the Registrant's common stock. The primary asset is an
exclusive license to manufacture, market and sell a breast abnormality indicator
in Chile and Singapore. HTI was a closely held corporation controlled by Mr.
Fidler, who owned 93% of HTI's common stock. Scantek Medical, Inc. received its
2,000,000 shares pursuant to the terms of the license agreement.
Item 13. EXHIBITS, FINANCIAL STATEMENTS SCHEDULES AND REPORTS ON FORM 8-K
(a) All required exhibits are incorporated herein by reference
from the Company's Form 10-KSB filed for the year ending December 31, 1992.
(b) Form 8-k and its associated schedules and reports
reflecting the purchase of assets from HTI on September 31, 1997 was filed in
November 3, 1997, and is incorporated by reference.
<PAGE>
THOMAS P. MONAHAN
CERTIFIED PUBLIC ACCOUNTANT
208 LEXINGTON AVENUE
PATERSON, NEW JERSEY 07502
(973) 790-8775
Fax (973) 790-8845
To The Board of Directors and Shareholders
of D-Lanz Development Group, Inc. (a development stage company)
I have audited the accompanying balance sheet of D-Lanz Development Group, Inc.
(a development stage company) as of December 31, 1999 and the related statements
of operations, cash flows and shareholders' equity for the years ended December
31, 1998 and 1999. These financial statements are the responsibility of the
Company's management. My responsibility is to express an opinion on these
financial statements based on my audit.
I conducted my audit in accordance with generally accepted auditing
standards. Those standards require that I plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
I believe that my audit provides a reasonable basis for my opinion.
In my opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of D-Lanz Development Group,
Inc. (a development stage company) as of December 31, 1999 and the results of
its operations, shareholders equity and cash flows for the years ended December
31, 1998 and 1999 in conformity with generally accepted accounting principles.
The accompanying financial statements have been prepared assuming that
D-Lanz Development Group, Inc. (a development stage company) will continue as a
going concern. As more fully described in Note 2, the Company has incurred
operating losses since the date of reorganization and requires additional
capital to continue operations. These conditions raise substantial doubt about
the Company's ability to continue as a going concern. Management's plans as to
these matters are described in Note 2. The financial statements do not include
any adjustments to reflect the possible effects on the recoverability and
classification of assets or the amounts and classifications of liabilities that
may result from the possible inability of D-Lanz Development Group, Inc. (a
development stage company) to continue as a going concern.
/s/ Thomas P. Monahan
Thomas P. Monahan, CPA
April 10, 2000
Paterson, New Jersey
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
D-LANZ DEVELOPMENT GROUP, INC.
(a development stage company)
BALANCE SHEET
DECEMBER 31, 1999
Assets
Current assets
<S> <C>
Cash $352
Total current assets 352
Other assets
License agreement 252,500
-------
Total other assets 252,500
-------
Total assets $252,852
========
Liabilities and Stockholders' Equity
Current liabilities
Accounts payable and accrued expenses $18,000
Officer loan payable 22,750
------
Total current liabilities 40,750
Stockholders' equity
Common Stock authorized 50,000,000 shares, $0.001 par value each. At December 11,900
31, 1999, there are 11,900,000 shares outstanding
Preferred stock authorized 50,000,000 shares $0.001 par Value each. At
December 31, 1999, the number of shares outstanding was -0-
Additional paid in capital 1,470,151
Deficit accumulated during the development stage (1,269,94)
----------
Total stockholders' equity 212,102
-------
Total liabilities and stockholders' equity $252,852
========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
D-LANZ DEVELOPMENT GROUP, INC.
(a development stage company)
STATEMENT OF OPERATIONS
For the period
For the For the from inception ,
year ended year ended June 7, 1985, to
December 31, December 31, December 31,
1998 1999 1999
<S> <C> <C> <C>
Revenue $-0- $-0- $-0-
Costs of goods sold -0- -0- -0-
Gross profit -0- -0- -0-
Operations:
General and administrative 28,502 242,472 273,591
Non cash expenses-consulting fees 957,500 40,000 997,500
Depreciation and amortization -0- -0- -0-
------ ------ ---
Total expense 986,002 282,472 1,271,091
Loss from operations (986,002) (282,472) (1,271,091)
Other income
Interest income 1,142 1,142
------ -----
Total other income 1,142 1,142
Net income (loss) $(984,860) $(282,472) $(1,269,949)
========== ========== ============
Net income (loss) per share -basic $(0.09) $(0.02) $(0.11)
======= ========= =======
Number of shares outstanding-basic 10,733,333 11,883,333 11,883,333
=========== =========== ==========
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<TABLE>
<CAPTION>
D-LANZ DEVELOPMENT GROUP, INC.
(a development stage company)
STATEMENT OF CASH FLOWS
For the period
For the For the from inception ,
year ended year ended June 7, 1985, to
December 31, December 31, December 31,
1998 1999 1999
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C> <C>
Net income (loss) $(984,860) $(282,472) $(1,269,949)
Adjustments to reconcile net loss to cash used in
operating activities
Depreciation -0- -0- -0-
Non cash expenses - consulting fees 957,500 40,000 997,500
Bad debt write off (371,500) (371,500)
Accounts payable and accrued expenses 9,000 9,000 18,000
------ ------ ------
TOTAL CASH FLOWS FROM OPERATIONS (389,860) (233,472) (625,949)
CASH FLOWS FROM FINANCING ACTIVITIES
Officer loan payable 19,000 3,750 22,750
Sale of common stock 600,000 603,551
------- --------- -------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 619,000 3,750 626,301
CASH FLOWS FROM INVESTING ACTIVITIES
Note receivable (229,642) 229,642
--------- -------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES (229,642) 229,642
NET INCREASE (DECREASE) IN CASH (502) (80) 352
CASH BALANCE BEGINNING OF PERIOD 934 432 -0-
---- ---- ---
CASH BALANCE END OF PERIOD $432 $352 $352
===== ===== =====
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
D-LANZ DEVELOPMENT GROUP, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
Preferred Preferred Common Stock Common Stock Additional accumulated during
Date Stock Stock paid in capital developent stage Total
- ---- ----- ----- --------------- ---------------- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Balance 12- 31- 1991 -0- -0- 1,551,394 $1,551 -0- $(1,551) $-0-
======= === ========== ======= ======= ======== ====
Balance 12- 31- 1992 -0- -0- 1,551,394 1,551 -0- 1,551 $-0-
======= === ========== ====== ======= ====== ====
Balance 12- 31- 1993 -0- -0- 1,551,394 1,551 -0- 1,551 $-0-
======= === ========== ====== ======= ====== ====
Balance 12- 31- 1994 -0- -0- 1,551,394 1,551 -0- 1,551 $-0-
======= === ========== ====== ======= ====== ====
Balance 12- 31- 1995 -0- -0- 1,551,394 $1,551 -0- $(1,551) $-0-
======= === ========== ======= ======= ======== ====
Balance 12- 31- 1996 -0- -0- 1,551,394 $1,551 -0- $(1,551) $-0-
Sale of shares 2,000,000 2,000 2,000
Issuance of shares for 6,448,606 $6,449 $246,051 $252,500
acquisition of license
right
Loss 12-31-1997 (1,066) (1,066)
-------- ------------- ------------------------------- ------- -------
Balance 12-31-1997 -0- $-0- 10,000,000 $10,000 $246,051 (2,617) $253,434
Issuance of shares for 1,100,000 1,100 584,900 $586,000
consulting fees
Sales of shares 600,000 600 599,400 600,000
Loss 12-31-1998 (984,860) (984,860)
-------- ------------- ------------------------------- --------- ---------
Balance 12-31-1998 -0- $-0- 11,700,000 $11,700 $1,430,351 $(987,477) $454,574
Isuance of shares for 200,000 200 39,800 40,000
consulting fees
Loss 12-31-1999 (282,472) (282,472)
-------- ------------- ------------------------------- --------- ---------
Balance 12-31-1999 -0- $-0- 11,900,000 $11,900 $1,470,151 $1,269,949 $212,102
===== ===== =========== ======== =========== =========== ========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Note 1 - Organization of Company and Issuance of Common Stock
a. Creation of the Company
D-Lanz Development Group, Inc. (the "Company") was formed on June 28,
1972 under the laws of the State of Delaware under the name OSR Corporation. On
May 17, 1988, the Company amended its certificate of incorporation changing its
name to Resort Connections, Inc. and changing the total shares authorized to
issue to 55,000,000 of which 50,000,000 shares are shares of common stock, $.001
par value per share and 5,000,000 shares of preferred stock, $.001 par value per
share. On January 30, 1990, the Company amended its certificate of incorporation
to change its name to D-Lanz Development Group, Inc. and change the aggregate
number of shares of stock the Company may issue to 100,000,000 shares of which
50,000,000 are shares of common stock, $.001 par value per share and 50,000,000
shares preferred stock, $.001 par value per share.
b. Description of the Company
The Company has purchased the License rights to certain patented
technology to manufacture and market for the countries of Chile and Singapore a
temperature sensing device and diagnostic direct reading, digital device to
screen the breast for abnormalities, including cancer.
Note 2 - Summary of Significant Accounting Policies
a. Basis of Financial Statement Presentation
The accompanying financial statements have been prepared on a going
concern basis, which contemplates the realization of assets and the satisfaction
of liabilities in the normal course of business. The Company has been dormant
since December 31, 1990. On September 30, 1997, the Company acquired the License
rights to certain patents. The Company has not generated any income and has been
dependent upon management to pay the expenses to maintain the Company's
existence and pay the costs of acquiring the License rights. These factors
indicate that the Company's continuation as a going concern is dependent upon
its ability to obtain adequate financing.
The financial statements presented at December 31, 1999 consist of the
balance sheet of the Company as at December 31, 1999, and the related statements
of operations, retained earnings and cash flows for the year ended December 31,
1998 and 1999.
b. Cash and cash equivalents
The Company treats temporary investments with a maturity of less than
three months as cash when purchased as cash.
c. Significant Concentration of Credit Risk
At December 31, 1999, the Company has concentrated its credit
risk by maintaining deposits in several banks. The maximum loss that could have
resulted from this risk totaled $-0- and $-0- which represents the excess of the
deposit liabilities reported by the banks over the amounts that would have been
covered by the federal insurance.
d. Earnings per share
Basic earnings per share are calculated on the basis of the weighted
average number of common shares outstanding for each period.
Year ended Year ended
December 31, 1998 December 31, 1999
Weighted number common shares outstanding
3,663,545 10,733,332
e. Revenue recognition
Revenue is recognized when products are shipped or services are rendered
f. Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that effect the reported amounts of assets and liabilities and
disclosure of contingent 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.
Note 3 - Acquisition of License Rights
On September 30, 1997, the Company issued 6,448,606 shares of common
stock to purchase from Health Technologies International, Inc. ("Health Tech")
the rights to manufacture and market certain patented technologies. The License
has been valued at the historic cash purchase price of $252,500 paid by Health
Tech for the manufacturing and marketing rights.
Health Tech entered into an agreement on August 15, 1996 with Scantek,
a Delaware corporation located in Mountain Lakes, New Jersey for the licensing
of certain patented technology to manufacture and market for the countries of
Chile and Singapore. The patented technology consists of a temperature sensing
device and diagnostic direct reading, digital device to screen the breast for
abnormalities, including cancer.
As a result of the acquisition, the Company has been granted an
indivisible, exclusive right and license within the territories of Chile and
Singapore to assemble, use and sell the devices for a period ending with the
expiration of the applicable patents in these countries.
If the Company fails to achieve for a period of 12 consecutive months
the minimum net sales of the devices with respect to each country, Scantek may
upon 30 days written notice and at its option either terminate this agreement or
delete the country from the Company's territories. Minimum net sales as defined
is based upon market penetration. The size of the market in each of the three
countries will be computed using official government census information from
each country. The market is defined as the lesser of two pairs of the device for
each women between the ages of 25 and 70 or such usage as may be recommended by
the relevant medical association or government agency in each country in the
Territory.
The percentage of market penetration by year is as follows:
Year Percentage of
Market Penetration
1998 0%
1999 1%
2000 3%
2001 4%
2002 and after 5%
This schedule is based upon the scheduled delivery of an operational
assembly line, part of which will be installed in Scantek's facility, part of
which will be install in the Company's facility. The above referenced years were
adjusted to appropriate calendar years so as not to prejudice the Company's 365
day time period in which to achieve the graduated market penetration.
As of September 30, 1997, Health Tech has paid to Scantek a
nonrefundable License Fees aggregating $252,500.
The Company is required to pay a royalty equal to 15% of Net Sales of
Licensed Devices in the Territories during each contract year during the term of
the agreement. The royalty paid, will in no instance be less than $1.00 per unit
or a guaranteed minimum royalty payable as follows:
The first minimum royalty payment of $80,000 is not due until December 31,
1998; $200,000 for the year 1999; $300,000 for the year 2000 and $400,000 for
each year thereafter.
Royalties are due and payable each quarter either for the actual amount due
or 25% of the minimum royalty payable for the year.
In the event that at any time during the term of this agreement, the
consumer price index in effect for the national government of the country of the
territory be increased by 10% over the index base as of the date of the
agreement. Then the minimum royalty payable and the minimum net sales for the
year will be increased by 10%.
The Company sold to Scantek 2,000,000 shares of common stock,
representing 20% of the total issued and outstanding common shares of the
Company as of the date of the agreement for the aggregate sum of $2,000 or $.001
per share. Under no circumstances will Scantek's common stock position be
diluted to less than 15% of the issued and outstanding common stock of the
Company. In the event Scantek will receive, at nominal cost, warrants to
purchase sufficient shares of common stock to maintain its 20% ownership, such
warrants will allow the purchase of shares at $2.25 per share for five years
from the date of the agreement.
The Company is required to arrange to purchase a turnkey manufacturing
line. Upon completion of the line, that portion of the line that manufactures
Sensors for the licensed devices will be installed at the same location as
Scantek's own manufacturing facility. Scantek will operate that portion of the
line and to the extent of the lines manufacturing capacity, deliver the
Company's requirements for Sensors to the Company's plant location
F.O.B. for cost plus 25%. Scantek will maintain a purchase money security
interest in the sensors delivered pursuant to this agreement.
During each contract year, the Company is required to spend 5% of net sales
during the immediately preceding year on advertising and promotion.
Upon termination of this agreement, the Company agrees that neither the
Company's officers, directors, principals nor its shareholders will during a
period of 5 years from the date of termination manufacture Sensors or purchase
Sensors manufactured by any entity other than Scantek for use in the licensed
devices or any competing device or directly or indirectly manage, operation or
control of or be connected as an officer, director, shareholder, partner,
consultant, owner, employee, agent, lender, donor, vendor, or otherwise, or have
any financial interest in or aid assist anyone else in the conduct of any
competing entity which offers similar devices for sale.
The Company is required to maintain product liability insurance with a
limit of not less than $1,000,000.
Note 4 - Related Party transactions
a. Issuance of Common Shares
On September 30, 1997, the Company issued 6,448,606 shares of common stock
to Health Tech in consideration for the purchase of certain patents valued at
$252,500.
As of the year ending December 31, 1999, Mr. Roger Fidler was President
of both the Company and of Health Tech.
On September 30, 1997, the Company sold 2,000,000 shares of common
stock to Scantek Medical, Inc. ("Scantek") pursuant to Regulation D for $2,000.
b. Lease Commitment
The Company occupies office space on a month to month basis for $250 per
month from Roger Fidler, President, at 400 Grove Street, Glen Rock, New Jersey.
c. Officer Salaries
Roger Fidler, President receives a salary of $500 per month.
Note 5 - Capital Stock
a. Common Stock
On January 30, 1990, the Company amended its certificate of
incorporation to change its name to D-Lanz Development Group, Inc. and change
the aggregate number of shares of stock the Company may issue to 100,000,000
shares of which 50,000,000 are shares of common stock, $.001 par value per share
and 50,000,000 shares preferred stock, $.001 par value per share.
b. Issuance of Common Stock
In May, 1998, the Company filed an Registration Statement on Form S-8,
issuing an aggregate of 300,000 shares of common stock as follows: 150,000
shares of common stock to Sound Capital and 150,000 to Thurcon Capital, Inc. The
Company issued an aggregate of 100,000 shares of common stock pursuant to the
agreement for financial consulting services valued at $1,000 or $.001 per share.
On August 14, 1998, the Company issued 200,000 shares of common stock
to Joel Brownstein in consideration for consulting services valued at $136,000
or $0.68 per share.
On August 25, 1998, the Company issued 400,000 shares of common stock
to Vescom Holdings, Inc. in consideration for consulting services valued at
$249,000 or $.623 per share.
On August 26, 1998, the Company issued 200,000 shares of common stock
to Vescom Holdings, Inc. pursuant to an agreement for sale for an aggregate of
$200,000 or $1.00 per share.
On August 26, 1998, the Company sold 400,000 shares of common stock to
Wharton Capital Corp., ("Wharton") for an aggregate consideration of $200,000 in
consulting fees or $0.40 per share. As of December 31, 1998, these shares were
held in escrow by the Company pending immediate delivery as required by a
purchase option agreement. These shares have not been reflected in the number of
shares of common stock outstanding as of December 31, 1998 and were subsequently
cancelled by the Company in 1999.
On August 26, 1998, the Company sold 600,000 shares of common stock at
$1.00 per share in consideration for notes receivable aggregating $600,000 as
follows: 500,000 shares to Joel Brownstein for $500,000; 100,000 shares to Sarit
Hirschkorn (wife of Jay Hait, Esq., Secretary to the Company).
On December 4, 1998, the consulting agreement with Sarit Hirschkorn was
terminated along with the note receivable for $100,000 plus accrued interest and
has agreed to return the shares of common stock to the Company for cancellation.
On February 1, 1999, the Company entered into a consulting agreement
with JB for financial consulting services to be rendered to the Company over a
three month period in consideration for forgiveness of the $228,500 note
receivable and accrued interest beginning February 1, 1999 aggregating $230,785.
In May, 1999, JB returned for cancellation 271,500 shares of common
stock.
On February 19, 1999, the Company filed an Registration Statement on
Form S-8, issuing 200,000 shares of common stock to THE TAXIN NETWORK ("TTN") as
financial consultant for an aggregate consideration of $40,000 or $.20 per share
for a term of four months.
On March 24, 1999, the Company filed an Registration Statement on Form
S-8, issuing 400,000 shares of common stock to Jim D. Tilton ("Tilton") of
Louisville, Kentucky as financial consultant. The agreement entitles Tilton to
option to purchase 400,000 shares of common stock at $0.01 per share. These
shares to be issued will be registered on Form S-8 soon after execution of the
agreement. The shares were valued at $0.20 per share or $80,000.
On November 19, 1999, the Company terminated the agreement with Jim
Tilton by mutual agreement and the shares of common stock are being held by the
Company for cancellation.
c. Preferred Stock
The Company is authorized to issue 50,000,000 shares of preferred
stock, $.001 par value per share. The board of directors of the Company is
granted the power to determine by resolution from time to time the power,
preferences, rights, qualifications, restrictions or limitations of the
preferred stock.
At December 31, 1999, the number of preferred shares outstanding was -0-
Note 6 - Income Taxes
The Company provides for the tax effects of transactions
reported in the financial statements. The provision if any, consists of taxes
currently due plus deferred taxes related primarily to differences between the
basis of assets and liabilities for financial and income tax reporting. The
deferred tax assets and liabilities, if any represent the future tax return
consequences of those differences, which will either be taxable or deductible
when the assets and liabilities are recovered or settled. As of December 31,
1999, the Company had no material current tax liability, deferred tax assets, or
liabilities to impact on the Company's financial position because the deferred
tax asset related to the Company's net operating loss carry forward and was
fully offset by a valuation allowance.
At December 31, 1999, the Company has net operating loss carry forwards
for income tax purposes of $1,269,949. These carry forward losses are available
to offset future taxable income, if any, and expire in the year 2010. The
Company's utilization of this carry forward against future taxable income may
become subject to an annual limitation due to a cumulative change in ownership
of the Company of more than 50 percent.
The components of the net deferred tax asset as of December 31, 1999
are as follows:
Deferred tax asset:
Net operating loss carry forward $ 431,783
Valuation allowance $( 431,783)
----------
Net deferred tax asset $ -0-
The Company recognized no income tax benefit for the loss generated for
the SFAS No. 109 requires that a valuation allowance be provided if it is more
likely year ended December 31, 1999.
SFAS No. 109 requires that a valuation allowance be provided if it is
more likely than not that some portion or all of a deferred tax asset will not
be realized. The Company's ability to realize benefit of its deferred tax asset
will depend on the generation of future taxable income. Because the Company has
yet to recognize significant revenue from the sale of its products, the Company
believes that a full valuation allowance should be provided
Note 7 - Commitments and Contingencies
a. Financial Consulting Agreements
In May, 1998, the Company filed an Registration Statement on Form S-8,
issuing an aggregate of 300,000 shares of common stock as follows: 150,000
shares of common stock to Sound Capital and 150,000 to Thurcon Capital, Inc.
The Company issued an aggregate of 100,000 shares of common stock
pursuant to the agreement for financial consulting services valued at $1,000 or
$.001 per share.
b. Agreement with Joel Brownstein
In August, 1998, the Company filed an Registration Statement on Form
S-8, registering options to sell 200,000 shares of common stock at $.001 per
share for an aggregate of $2,000 to Joel Brownstein ("JB") in consideration for
a financial consulting agreement for a period of 6 months. On August 5, 1998,
the Company issued the shares of common stock. The transaction was valued at
valued at $136,000 or $0.68 per share.
On December 1, 1998, the Company restructured its note receivable with
Joel Brownstein ("JB") in consideration for the sale of 500,000 shares of common
stock as follows: A new note for $228,500 with interest at 6% due by March 31,
1999 was entered into and an agreement to return 271,500 shares of common stock
as soon as practical for cancellation.
On February 1, 1999, the Company entered into a consulting agreement
with JB for financial consulting services to be rendered to the Company over a
three month period in consideration for forgiveness of the $228,500 note
receivable and accrued interest to February 1, 1999 aggregating $230,785.
c. Agreement with Wharton Capital Corp.
On August 13, 1998, the Company entered into a financial consulting
agreement with Wharton Capital Group, Inc. ("Wharton") for a term of one year
and may be canceled upon 30 days notice by either party. As consideration, the
Company issued 400,000 shares of common stock valued in the aggregate at
$249,000 or $.62 per share.
d. Agreement with Vescom Holdings, Inc.
On August 25, 1998, the Company entered into a financial and management
consulting agreement with Vescom Holdings, Inc. for a period of one year. In
consideration for this agreement, the Company agreed to as follows: issue
400,000 shares of common stock valued at $4,000 or $.01 per share; to grant
options to purchase 200,000 shares of common stock at $1.00 per share and
required the payment of an aggregate of $100,000. The payment of $100,000 was to
be paid in installments as follows: $25,000 upon execution of the contract;
$25,000; $25,000 a week latter and the balance within 30 days provided the
Company is satisfy with Vescom's performance.
As of December 31, 1998, 200,000 of the 400,000 shares of common stock were
delivered and the initial payment of $25,000 was made.
As of December 31, 1998, the contract was canceled for unsatisfactory
performance.
As of December 31, 1998, 200,000 shares were being held in escrow by
the Company pending immediate delivery as required by a purchase option
agreement. These shares have not been reflected in the number of shares of
common stock outstanding as of December 31, 1998.
As of December 31, 1999, these shares were being held by the Company
for cancellation for non-execution of the agreement for optioned shares at $1.00
per share.
e. Agreement with Sarit Hirschkorn
On August 23, 1998, the Company entered into computer consulting
agreement with Sarit Hirschkorn ("Hirschkorn") to create a customer and sales
tracking database. In consideration for these services, Hirschkorn was granted
an option to purchase 100,000 shares of common stock at $1.00 per share. In
August, 1998, the Company issued 100,000 shares of common stock in consideration
for a note receivable for $100,000 plus accrued interest at 6%.
On December 4, 1998, the agreement was terminated along with the note
receivable for $100,000 plus accrued interest and has agreed to return the
shares of common stock to the Company for cancellation.
f. Agreement with THE TAXIN NETWORK
On February 19, 1999, the Company filed an Registration Statement on
Form S-8, issuing 200,000 shares of common stock to THE TAXIN NETWORK ("TTN") as
financial consultant for an aggregate consideration of $40,000 or $.20 per share
for a term of four months.
The agreement calls for members of the Company to make appearances on
various broadcast stations around the country, optional mailings to a list of
listeners of "The Financial Hours with Ed Taxin"; printing of press releases to
be published on the Internet under the by line Ed Taxin; inclusion of the
Company at various speaking engagements and financial seminars ;and other
appearance opportunities.
g. Agreement with Jim D. Tilton
On March 24, 1999, the Company filed an Registration Statement on Form
S-8, issuing 400,000 shares of common stock to Jim D. Tilton ("Tilton") of
Louisville, Kentucky as financial consultant. The agreement entitles Tilton to
option to purchase 400,000 shares of common stock at $0.01 per share. These
shares to be issued will be registered on Form S-8 soon after execution of the
agreement.
This Agreement was terminated on______________________
Note 8 - Development Stage Company
The Company is considered to be a development stage company with
little operating history. The Company is dependent upon the resources of the
Company's management and its ability to raise or borrow additional funds to
continue to exist. The Company has purchased the License rights to manufacture
and market certain patented technologies from Scantek and will require
additional funds to complete the process of building manufacturing facilities
and implement the Company's marketing program.
Note 9 - Subsequent Events
Subsequent to the date of the financial statements, the Company
formed a subsidiary with the name Global Agri-Med Technologies, Inc. and on
March 31, 2000 assigned the License rights to certain patented technology to
manufacture and market for the countries of Chile and Singapore a temperature
sensing device and diagnostic direct reading, digital device to screen the
breast for abnormalities, including cancer.
<PAGE>
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.
DATE: May 5, 2000 By: s/Paul Lambert
--------------------------
Paul Lambert
President & Chief Financial
and Accounting Officer
DATE: May 5, 2000 By: s/ Henry Choi
--------------------------
Henry Choi
Chief Financial
and Accounting Officer
Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on behalf of
the registrant and in the capacities and dates indicated.
DATE: May 5, 2000 By: s/Paul Lambert
--------------------------
Paul Lambert
President
Director
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This schedule contains summary financial information extracted
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