U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
[X] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
For the quarterly period ended June 30, 1999.
[ ] 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: 0-5367
D-LANZ DEVELOPMENT GROUP, INC.
(Exact name of registrant as specified in its charter
Delaware 11-1717709
(State of otherjurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
400 Grove Street Glen Rock, New Jersey 07452
Address of principal executive offices)
201- 445-8862
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year, if changed since last report
Indicate by check mark, whether the registrant:: (1) has filed all
reports required to be filed by Section 13 or 15(d) of the 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 No
The Company had 11,900,000 shares of common stock outstanding
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed financial statements for the periods ended June 30, 1999
included herein have been prepared by D-Lanz Development Group, Inc., (the
"Company") without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission (the "Commission"). In the opinion of
management, the statements include all adjustments necessary to present fairly
the financial position of the Company as of June 30, 1999, and the results of
operations and cash flows for the six month periods ended June 30, 1998 and
1999.
The Company's results of operations during the six months of the Company's
fiscal year are not necessarily indicative of the results to be expected for the
full fiscal year.
The financial statements included in this report should be read in
conjunction with the financial statements and notes thereto in the Company's
Annual Report on Form 10-KSB for the fiscal years ended December 31, 1998.
<PAGE>
<TABLE>
<CAPTION>
D-LANZ DEVELOPMENT GROUP, INC.
(A Development Stage Company)
BALANCE SHEET
Assets
December 31, June 30,
1998 1999
Current assets
<S> <C> <C>
Cash $432 $384
Notes receivable-investors 223,642
--- -------
Total current assets 224,074 384
Other assets
License fes 252,500 252,500
------- -------
Total other assets 252,500 252,500
------- -------
Total assets $ 476,574 $252,884
======= =======
Liabilities and Stockholders' Equity
Current liabilities
Accrued liabilities $9,000 $ 13,500
Officer loan payable 19,000 19,000
------ -------
Total current liabilities 28,000 32,500
Capital stock
Preferred stock-authorized 5,000,000 shares $.001 par value. At December 31,
1998 and June 30, 1999 the number of shares outstanding was -0-
Capital stock-authorized 15,000,000 shares, par value of $.001. At December 31,
1998 and June 30, 1999 the number of shares outstanding
was 11,700,000 and 11,900,000 $11,700 $ 11,900
Additional paid in capital 1,430,351 1,470,151
Deficit accumulated during
development stage (993,477) (1,261,667)
--------- ---------
Total stockholders' equity 448,574 220,384
--------- ---------
Total liabilities and stockholders'
equity $476,574 $ 252,884
======= =========
</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 from
For the six For the six reorganization
months ended months ended (December 31, 1990)
June 30, June 30, to June 30,
1998 1999 1999
<S> <C> <C> <C>
Income $-0- $-0- $-0-
Less costs of goods sold -0- -0- -0-
----- ---- ---
Gross profit -0- -0- -0-
Operations:
General and administrative -0- 228,190 265,309
Non cash payments for consulting fees 50,000 40,000 997,500
Depreciation and amortization -0- -0- -0-
---- ---- -------
Total expense 50,000 268,190 1,262,809
Loss from operations and before (50,000) (268,190) (1,262,809)
Other Income
Interest income 1,142
-----
Total other income 1,142
-------- --- ----------
Net profit or (Loss) $(50,000) $(268,190)
$(1,261,667)
======== ======== ==========
Basic and diluted net income
(loss) per common share $(.01) $(0.02) $(0.11)
==== ==== =====
Weighted average shares outstanding -
basic income per share 10,100,000 11,750,000 11,750,000
========= ========== ==========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
D-LANZ DEVELOPMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF OPERATIONS
For the three For the three
months ended months ended
June 30, June 30,
1998 1999
<S> <C> <C>
Income $-0- $-0-
Less costs of goods sold -0- -0-
----- ----
Gross profit -0- -0-
Operations:
General and administrative 2,250 2,250
Non cash payments for consulting fees -0- 40,000
Depreciation and amortization -0- -0-
---- ----
Total expense 2,250 42,250
Loss from operations and before ( 42,250)
Other Income
Interest income
Total other income
-------- ---
Net profit or (Loss) $ ( 2,250) $(42,250)
======== ========
Basic and diluted net income
(loss) per common share $(.00) $(0.00)
==== ====
Weighted average shares outstanding -
basic income per share 10,100,000 11,750,000
========= ==========
</TABLE>
See accompanying notes to financial statements.
<TABLE>
<CAPTION>
D-LANZ DEVELOPMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
For the
period from
For the six For the six reorganization
months ended months ended (December 31, 1990)
June 30, June 30, to June 30,
1998 1999 1999
CASH FLOWS FROM OPERATING
ACTIVITIES
<S> <C> <C>
Net profit (loss) $(50,000) $(268,190) $(1,261,667)
Depreciation and amortization -0- -0- -0-
Non cash payments consulting fees 40,000 997,500
Bad debt write-off (371,500)
Accrued liabilities 4,500 13,500
--- ------- -------
TOTAL CASH FLOWS FROM OPERATING -0- (223,690) (622,167)
ACTIVITIES
CASH FLOWS FROM FINANCING
ACTIVITIES
Officer loan payable 19,000
Sale of shares of common stock 603,551
--- --------- ---------
TOTAL CASH FLOWS FROM FINANCING 622,551
ACTIVITIES
CASH FLOWS FROM INVESTING ACTIVITIES
Notes receivable-investors 223,642
-------- --------
TOTAL CASH FLOWS FROM INVESTING
ACTIVITIES 223,642
NET INCREASE (DECREASE) IN CASH 2,000 (48) 384
CASH BALANCE BEGINNING OF -0- 432 -0-
PERIOD ----- ------- ------
CASH BALANCE END OF PERIOD $ 2,000 $ 384 384
===== ======= =======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
<PAGE>
<TABLE>
<CAPTION>
D-LANZ DEVELOPMENT GROUP, INC.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
Deficit
accumulated
Additional during
Date Preferred Preferred Common Common paid development
Stock Stock Stock Stock in capital stage Total
<S> <C> <C> <C> <C> <C> C>
12-31-1991 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
==== ==== ========= ===== ======= ===
12-31-1992 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
==== ==== ========= ===== ======= ===
12-31-1993 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
==== ==== ========= ===== ======= ===
12-31-1994 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
==== ==== ========= ===== ======= ===
12-31-1995 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
==== ==== ========= ===== ======= ===
12-31-1996 -0- $-0- 1,551,394 $1,551 $(1,551) $-0-
Sale of shaes 2,000,000 $2,000 $2,000
Issuance of shares
for acquisition of
License rights 6,448,606 6,449 246,051 252,500
Net loss (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 consulting
fees 900,000 900 449,100 450,000
Issuance of shares
consulting fees 200,000 200 135,800 136,000
Sale of shares 600,000 600 599,400 600,000
Net loss (990,860) (990,860)
----- ----- --------- ----- ------- ------- --------
Balance
12-31-1998 -0- $-0- 11,700,000$11,700 $1,430,351 $(993,477) $448,574
Unaudited
Issuance of shares
for consulting fees 200,000$ 200 39,800 40,000
Net loss (268,190) (268,190)
----- ----- --------- ----- ------- ------- --------
Balance
6-30-1999 -0- $-0- 11,900,000 $11,900 $1,470,151 $(1,261,667) $220,384
=== ===== ========== ====== ========= ========= ======
</TABLE>
See accompanying notes to financial statements.
<PAGE>
D-LANZ DEVELOPMENT GROUP, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE A--BASIS OF PRESENTATION The accompanying unaudited financial
statements have been prepared in accordance with generally accepted principles
for interim financial information as set forth in Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all necessary adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Operating results of D- Lanz Development Group, Inc. (the "Company")
for the six months ended June 30, 1998 and 1999 are not necessarily indicative
of the results that may be expected for the fiscal year ending December 31,
1999.
NOTE B--EARNINGS PER SHARE
In 1997, the Financial Accounting Standards Board issued Statement No. 128,
"Earnings Per Share". Statement No. 128 replaced the calculation of primary and
fully diluted earnings per share with basic and diluted earnings per share.
Unlike primary earnings per share, basic earnings per share exclude any dilutive
effects of options, warrants, and convertible securities. Dilutive earnings per
share is very similar to the previously reported fully diluted earnings per
share. The Company adopted Statement No. 128 and has retroactively applied the
effects thereof for all periods presented. The impact on the per share amounts
previously reported was not significant.
NOTE C-COMMITMENTS
a. Leased Office Space
The Company occupies office space on a month to month basis for $250 per month
from Roger Fidler, President at 400 Grove Street, Glenn Rock, New Jersey.
b. Officer Salaries
Roger Fidler, President is to receive a minimal salary of $500 per month until
such time as the Company enters into profitable operations.
c. Consulting Agreement
a. Agreement with Joel Brownstein
In February, 1999, the Company entered into a financial and managerial
consulting agreement with Joel Brownstein for a term of six months in
consideration for the offset of a note receivable due the Company in the amount
of $223,500 plus accrued interest of $2,225.
b. 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 guest appearances or
visits 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.
c. 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 Titlton 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.
As of June 30, 1999, the 400,000 shares of common stock were being held by the
Company in escrow pending delivery upon execution of the agreement and have not
been reflected in the number of shares of common stock outstanding at June 30,
1999.
<PAGE>
Item 2. Management's Discussion and Analysis of 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 New York. The Company's
principal assets consist of a purchased 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.
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 build production facilities to manufacture
and market its Licensed device, (ii) enhancing its sources for inventory, and
(iii) pursuing and finding a management team to continue the process of
completing its marketing goals and to market limited quantities of the Licensed
devices. 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 it 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 June 30, 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 six months ended June 30, 1999 as compared to the six months ended
June 30, 1998
The company has remained inoperative. Sales, costs of goods sold, gross
profit, operating expenses and net profit were $-0- for both the six months
ended June 30, 1998 and 1999. The activities of the Company during the six
months ended June 30, 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 $268,190
for the six months ended June 30, 1999 as compared to $50,000 for the six months
ended June 30, 1999 representing an increase of $218,190. This increase
represents rent of $1,500, Salary of $3,000, bank charges of $48 and consulting
fees of $263,642.
Liquidity And Capital Resources
As of June 30, 1999, the Company's cash balance was $384 and working
capital was megative at $32,116 consisting of cash of $384, Accrued liabilities
of $13,500 and an officer loan of $19,000.
Net (loss) from operations amounted to $(270,440) for the six months ended June
30, 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 administration 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 and
manufacturing activities, facilities expansion needs, procurement and
enforcement of patents important to the Company's business, results of clinical
investigations and competition.
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 June 30, 1999, the Company had a tax loss
carry-forward of $1,261,667. 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 is expected
to be completed in the third quarter of 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.
PART II
OTHER INFORMATION
Item 1. Legal Proceedings.
No legal proceedings are pending against the Company.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security-Holders
None.
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
D-LANZ DEVELOPMENT GROUP, INC.
/s/Roger Fidler
Mr. Roger Fidler,
President
Dated: January 11, 2000
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from
financial statements for the six month period ended June 30, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000075053
<NAME> D-lanz Development Group, Inc.
<MULTIPLIER> 1
<CURRENCY> $
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Jun-30-1999
<EXCHANGE-RATE> 1
<CASH> 528
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 528
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 253,028
<CURRENT-LIABILITIES> 500
<BONDS> 0
0
0
<COMMON> 10,100
<OTHER-SE> 242,428
<TOTAL-LIABILITY-AND-EQUITY> 252,528
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> 1,906
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (1,906)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,906)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,906)
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
