<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
(Mark One)
[X] ANNUAL REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
FOR FISCAL YEAR ENDED: SEPTEMBER 30, 1998
OR
[_] TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ___________ to __________
Commission file number 33-1599
-----------------------
D-VINE, LTD.
------------------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 22-2732163
------------------------------------- ------------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
712 FIFTH AVENUE, 7TH FLOOR, NEW YORK, NEW YORK 10019
- -----------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number (212) 582-3400
---------------------
Securities registered under Section 12(b) of the Act: NONE
------
Securities registered under Section 12(g) of the Act: NONE
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<PAGE>
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days. Yes X
---
No _____
Total pages: 25
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Exhibit Index Page: 12
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FORM 10-KSB
Check if there is no disclosure of delinquent filers pursuant to Item 405
of Regulation S-B is not contained 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. [_]
State issuer's revenues for its most recent fiscal year. $ -0-
-------
As of September 30, 1998, there were 24,607,731 shares of the Registrant's
common stock, par value $0.01, issued and outstanding. The aggregate market
value of the Registrant's voting stock held by non-affiliates of the Registrant
was approximately $-0- computed at the average bid and asked price as of
September 30, 1998.
DOCUMENTS INCORPORATED BY REFERENCE
If the following documents are incorporated by reference, briefly describe
them and identify the part of the Form 10-KSB (e.g., Part I, Part II, etc.) into
which the document is incorporated: (1) any annual report to security holders;
(2) any proxy or information statement; and (3) any prospectus filed pursuant
to Rule 424(b) or (c) of the Securities Act of 1933 ("Securities Act"): NONE
Transitional Small Business Disclosure Format (check one):
Yes _______; No X
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<PAGE>
________________________________________________________________________________
TABLE OF CONTENTS
________________________________________________________________________________
<TABLE>
<CAPTION>
ITEM NUMBER AND CAPTION PAGE
- ----------------------- ----
<S> <C>
PART I
1. Description of Business................................................................ 4
2. Description of Property................................................................ 4
3. Legal Proceedings...................................................................... 5
PART II
4. Submission of Matters to a Vote of Security Holders.................................... 5
5. Market for Common Equity and Related Stockholder Matters............................... 5
6. Management's Discussion and Analysis or Plan of Operations............................. 6
7. Financial Statements................................................................... 8
8. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure... 8
PART III
9. Directors, Executive Officers, Promoters and Control Persons;
Compliance with Section 16(a) of the Exchange Act...................................... 9
10. Executive Compensation................................................................. 10
11. Security Ownership of Certain Beneficial Owners and Management......................... 10
12. Certain Relationships and Related Transactions......................................... 11
13. Exhibits and Reports on Form 8-K....................................................... 11
</TABLE>
<PAGE>
________________________________________________________________________________
PART I DESCRIPTION OF BUSINESS
________________________________________________________________________________
GENERAL
The Company is seeking to effect a merger, exchange of capital stock, asset
acquisition or other similar business combination with an operating business.
The business objective of the Company is to effect a business combination with a
business which the Company believes has significant growth potential. The
Company intends to utilize equity in affecting a business combination.
HISTORY
The Company was incorporated as Trans West, Inc. on July 22, 1985 in
Delaware.
During the period from October 31, 1986 to March 31, 1987, the Company
remained in the development stage while attempting to enter certain businesses.
The Company was unsuccessful in these start up efforts and all activity ceased
during 1987 as a result of foreclosure on various loans in default and/or
abandonment of all assets. From March 31, 1987 to September 27, 1995 the Company
was an inactive corporation. On September 27, 1995 the Company revived its
corporate charter in Delaware and was reactivated.
Since September 28, 1995, the Company has not engaged in any business
activities and the business purpose of the Company is to seek out and obtain an
acquisition or merger transaction whereby its stockholders would benefit by
owning an interest in a viable enterprise. Since the Company has no operations
or significant assets, its principal potential for profits comes solely from
operations it would receive in any acquisition or merger transaction. A merger
or acquisition transaction with the Company would allow a privately held company
to become a publicly held corporation with a broad shareholder base without
experiencing the substantial time and filing requirements and financial
expenditures imposed by federal and state securities laws.
________________________________________________________________________________
ITEM 2. DESCRIPTION OF PROPERTY
________________________________________________________________________________
The Company at this time has no properties.
Since 1995 all activities of the Company have been conducted by corporate
officers from either their home or business offices. Currently, there are no
outstanding debts owed by the Company for the use of these facilities and there
are no commitments for future use of the facilities.
4
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________________________________________________________________________________
ITEM 3. LEGAL PROCEEDINGS
________________________________________________________________________________
NONE.
PART II
________________________________________________________________________________
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
________________________________________________________________________________
NONE.
________________________________________________________________________________
ITEM 5. MARKET FOR COMMON EQUITY
AND RELATED STOCKHOLDER MATTERS
________________________________________________________________________________
The Company's common stock is quoted under the symbol "DVNL" on the NASD
OTC Bulletin Board. The last reported activity on the OTC Bulletin Board in the
Company's common stock was on February 16, 1995. Currently, no market exists
for the Company's securities and there is no assurance that a regular trading
market will develop, or if developed, that it will be sustained. A shareholder
in all likelihood, therefore, will be unable to resell the securities referred
to herein should he or she desire to do so. Furthermore, it is unlikely that a
lending institution will accept the Company's securities as pledged collateral
for loans unless a regular trading market develops. To the best knowledge of
management, there was no other trading of shares during the past two years
except as reported on Form 8-K September 25, 1996.
The number of shareholders of record of the Company's common stock as of
September 30, 1998 was 91.
The Company has not paid any cash dividends to date and does not anticipate
paying dividends in the foreseeable future. It is the present intention of
management to utilize all available funds for the development of the Company's
business.
5
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________________________________________________________________________________
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATION
________________________________________________________________________________
The Company is considered a development stage company with no assets or
capital and with no operations or income since approximately 1988. The costs and
expenses associated with the preparation and filing of this registration
statement and other operations of the Company have been paid for by shareholders
of the Company. It is anticipated that the Company will require only nominal
capital to maintain the corporate viability of the Company and necessary funds
will most likely be provided by the Company's existing shareholders or its
officers and directors in the immediate future. The Company is actively seeking
business opportunities.
The statements contained in this Report on Form 10-KSB that are not historical
facts are forward-looking statements (as such term is defined in the Private
Securities Litigation Reform Act of 1995) that involve risks and uncertainties.
Such forward-looking statements may be identified by, among other things, the
use of forward-looking terminology such as "believes," "expects," "may," "will,"
"should" or "anticipates" or the negative thereof or other variations thereon or
comparable terminology, or by discussions of strategy that involve risks and
uncertainties. From time to time, the Company or its representatives have made
or may make forward-looking statements, orally or in writing. Such forward-
looking statements may be included in various filings made by the Company with
the Securities and Exchange Commission (the "SEC"), or press releases or oral
statements made by or with the approval of an authorized executive officer of
the Company. These forward-looking statements, such as statements regarding
anticipated future revenues, capital expenditures, Year 2000 compliance and
other statements regarding matters that are not historical facts, involve
predictions. The Company's actual results, performance or achievements could
differ materially from the results expressed in, or implied by, these forward-
looking statements. Potential risks and uncertainties that could affect the
Company's future operating results include, but are not limited to: (i) economic
conditions, including economic conditions related to entry into any new business
venture; (ii) the availability of equipment from the Company's vendors at
current prices and levels; (iii) the intense competition in the markets for the
Company's new products and services; (iv) the Company's ability to integrate
acquired companies and businesses in a cost-effective manner; (v) the Company's
ability to effectively implement its branding strategy; and (vi) the Company's
ability to develop, market, provide, and achieve market acceptance of new
service offerings to new and existing clients.
6
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RESULTS OF OPERATIONS
Results of operations for the year ended September 30, 1998 as compared to
the year ended September 30, 1997
Revenues were $-0-for the year ended September 30, 1998 as compared to $0
for the year ended September 30, 1997. Costs of goods sold for the year ended
September 30, 1998, were $0 as compared to $0 for the year ended September 30,
1997 representing a cost of goods sold percentage of 0% for the year ended
September 30, 1998 as compared to 0%for the year ended September 30, 1997.
General and administrative costs for the year ended September 30, 1998 were
$72,145, an increase of $65,520 over $6,625 for the year ended September 30,
1997.
LIQUIDITY AND CAPITAL RESOURCES AS OF SEPTEMBER 30, 1998.
The Company's cash balance was $-0- and working capital was a negative
$4,270 as at September 30, 1998.
The Company's primary short-term needs for capital, which are subject to
change, are for the acquisition of new business opportunities.
Income tax: As of September 30, 1998, the Company has a tax loss carry-
forward of $938,091. 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.
The Company currently plans to continue to accept funds from or accrue
expenses incurred officers, directors and other related parties to seek new a
new business business opportunity.
The Company expects its capital requirements to increase over the next
several years as it commences new search and development efforts, undertakes new
product development, increases sales and administration infrastructure and
embarks on developing in-house business 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 present management
can fund the continued capital requirements, the timing of regulatory actions
regarding the Company's potential acqusitions, the costs and timing of expansion
of sales, marketing activities, facilities expansion needs, and competition in
any business entered into.
The Company believes that its available cash and cash from management
contributions will be sufficient to satisfy its funding needs. Thereafter, if
cash generated from any newly
7
<PAGE>
acquired or developed business 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.
________________________________________________________________________________
ITEM 7. FINANCIAL STATEMENTS
________________________________________________________________________________
The financial statements of the Company and supplementary data are included
beginning immediately following the signature page to this report. See Item 14
for a list of the financial statements and financial statement schedules
included.
________________________________________________________________________________
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS
ON ACCOUNTING AND FINANCIAL DISCLOSURE
________________________________________________________________________________
In February 1999, the Company appointed Thomas Monahan as its accountant
for the years ended September 30, 1997 and 1998. There were no disagreements
between the Compamny and its former accountants, between the Company and its
former accountant, Robison, Hill & Co. on amny matter of accounting principles,
practice or financial statement disclosures. There are not and have not been any
disagreements between the Company and its accountants on any matter of
accounting principles, practices or financial statements disclosure.
PART III
________________________________________________________________________________
ITEM 9. DIRECTORS EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
________________________________________________________________________________
EXECUTIVE OFFICERS AND DIRECTORS
The following table sets forth the name, age, and position of each
executive officer and director of the Company:
8
<PAGE>
<TABLE>
<CAPTION>
DIRECTOR'S
NAME AGE OFFICE TERM EXPIRES
- -------------------------------------------------------------------------------------
<S> <C> <C> <C>
Edward Tobin 42 Chief Executive Officer, Chairman of Next Annual
the Board of Directors and President Meeting
Thomas Tuttle 32 Director Next Annual
Meeting
Christopher F. Brown 36 Director Next Annual
Meeting
Steven A. Saide 52 Secretary Next Annual
Meeting
</TABLE>
Edward Tobin has served as chairman and chief executive officer of the
Company since September 11, 1996. Mr. Tobin is also Managing Director of GEM
Ventures, Ltd. Prior to joining GEM, Mr. Tobin was Managing Director of
Lincklaen Partners, a private venture capital group. Mr. Tobin received his
M.B.A. from the Wharton School, and a Master of Science in Engineering and a
Bachelor of Science in Economics from the University of Pennsylvania.
Thomas Tuttle has served as a director of the Company since September 12,
1996. Mr. Tuttle is also a Managing Director of Global Emerging Markets North
America, Inc. Prior to this he was the Indonesian county manager for Morgan
Stanley where he was responsible for capital raising and advisory services in
that market.
Christopher F. Brown has served as a director of the Company since
September 12, 1996. Mr. Brown is also the President of GEM North America Inc.
Previously he was with Drexel Burnham Lambert as an associate, Smith Barney as
an Investment Advisor from 1986 to 1988, and Shearson Lehman Brothers from 1988
to 1993. He subsequently founded and managed the Mergers and Acquisitions
department at Drake Capital Securities, Inc.
Steven A. Saide has served as Secretary of the Company from September 12,
1996. Mr. Saide is also a partner in the New York office of the Firm of Bryan
Cave LLP attorneys.
The Company's Certificate of Incorporation provides that the board of
directors shall consist of from one to four members as elected by the
shareholders. Each director shall hold office until the next annual meeting of
stockholders and until his successor shall have been elected and qualified.
BOARD MEETINGS AND COMMITTEES
The Directors and Officers will not receive remuneration from the Company
until a subsequent offering has been successfully completed, or cash flow from
operating permits, all in the discretion of the Board of Directors. Directors
may be paid their expenses, if any, of attendance at such meeting of the Board
of Directors, and may be paid a fixed sum for attendance at each meeting of the
Board of Directors or a stated salary as Director. No such payment shall
preclude any Director from serving the Corporation in any other capacity and
receiving compensation therefrom. No compensation has been paid to the
Directors. The Board of
9
<PAGE>
Directors may designate from among its members an executive committee and one or
more other committees. No such committees have been appointed.
COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT
Based solely upon a review of forms 3, 4, and 5 and amendments thereto,
furnished to the Company during or respecting its last fiscal year, no director,
officer, beneficial owner of more than 10% of any class of equity securities of
the Company or any other person known to be subject to Section 16 of the
Exchange Act of 1934, as amended, failed to file on a timely basis reports
required by Section 16(a) of the Exchange Act for the last fiscal year.
________________________________________________________________________________
ITEM 10. EXECUTIVE COMPENSATION
________________________________________________________________________________
NONE.
________________________________________________________________________________
ITEM 11. SECURITY OWNERSHIP OF CERTAIN
BENEFICIAL OWNERS AND MANAGEMENT
________________________________________________________________________________
PRINCIPAL SHAREHOLDERS
The table below sets forth information as to each person owning of record
or who was known by the Company to own beneficially more than 5% of the
24,607,731 shares of issued and outstanding Common Stock of the Company as of
September 30, 1998 and information as to the ownership of the Company's Stock by
each of its directors and executive officers and by the directors and executive
officers as a group. Except as otherwise indicated, all shares are owned
directly, and the persons named in the table have sole voting and investment
power with respect to shares shown as beneficially owned by them.
<TABLE>
<CAPTION>
NAME AND ADDRESS NATURE OF NUMBER OF
OF BENEFICIAL OWNERS OWNERSHIP SHARES OWNED PERCENT
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Edward Tobin/(1)/ Common Stock 19,500,000 79.24%
Christopher F. Brown/(1)/ Common Stock 19,500,000 79.24%
Thomas Tuttle Common Stock 0 .0
Steven A. Saide Common Stock 0 0
All Executive Officers Common Stock 19,500,000 79.24%
and Directors as a Group
(4 persons)
</TABLE>
______________
/(1)/ Edward Tobin and Christopher F. Brown are partners in D-Vine Investment
Partners, which is the direct beneficial owner of the Shares.
10
<PAGE>
________________________________________________________________________________
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
________________________________________________________________________________
NONE.
________________________________________________________________________________
ITEM 13. EXHIBITS, AND REPORTS ON FORM 8-K
________________________________________________________________________________
(a) The following documents are filed as part of this report.
<TABLE>
<CAPTION>
1. FINANCIAL STATEMENTS PAGE
----
<S> <C>
Report of Thomas Monahan, Independent Certified Public Accountant F-1
Balance Sheets as of September 30, 1998 F-2
Statements of Operations for the years ended
September 30, 1998, and 1997 F-3
Statement of Stockholders' Equity for the years ended
September 30, 1998 and 1997 F-4
Statements of Cash Flows for the years ended
September 30, 1998 and 1997 F-5
Notes to Financial Statements F-6
</TABLE>
2. FINANCIAL STATEMENT SCHEDULES
The following financial statement schedules required by Regulation S-X are
included herein.
All schedules are omitted because they are not applicable or the required
information is shown in the financial statements or notes thereto.
3. EXHIBITS
(a) The following exhibits are included as part of this report:
11
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<TABLE>
<CAPTION>
SEC
EXHIBIT REFERENCE
NUMBER NUMBER TITLE OF DOCUMENT LOCATION
=========================================================================================
<S> <C> <C> <C>
Item 3. Articles of Incorporation and Bylaws
------------------------------------------------------------------
3.01 3 Articles of Incorporation of Trans West Incorporated
Inc., a Delaware Corporation now known by Reference
as D-Vine, LTD.
3.02 3 Bylaws Incorporated
by Reference
</TABLE>
(b) The Company did not file any report on Form 8-K during the last
quarter of the period covered by this report.
(c) The exhibits listed in Item 14(a)(3) are incorporated by reference.
(d) No financial statement schedules required by this paragraph are
required to be filed as a part of this form.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended, the Registrant has duly caused this report to
be signed on it behalf by the undersigned, thereunto duly authorized.
D-VINE, LTD.
Dated: March 15, 1999 By /s/ Edward J. Tobin
----------------------------------
Edward J. Tobin, President
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Registrant and in the capacities indicated on this 15th day of March 1999.
D-VINE, LTD.
By /s/ Edward J. Tobin
----------------------------------
Edward J. Tobin, Director and
Principal Executive, Financial
And Accounting Officer
By /s/ Thomas Tuttle
----------------------------------
Thomas Tuttle, Director
By /s/ Christopher F. Brown
----------------------------------
Christopher F. Brown, Director
13
<PAGE>
THOMAS P. MONAHAN
CERTIFIED PUBLIC ACCOUNTANT
208 LEXINGTON AVENUE
PATERSON, NEW JERSEY 07502
(973) 790-8775
To The Board of Directors and Shareholders
of D-Vine, Ltd. (a development stage company)
I have audited the accompanying balance sheet of D-Vine, Ltd. (a development
stage company) as of September 30, 1998 and the related statements of
operations, cash flows and shareholders' equity for the years ending September
30, 1997 and 1998. 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 as of September 30, 1998 and
the related statements of operations, cash flows and shareholders' equity for
the years ending September 30, 1997 and 1998 in conformity with generally
accepted accounting principles.
The accompanying financial statements have been prepared assuming that D-
Vine, Ltd ( a development stage company) will continue as a going concern. As
more fully described in Note 2, the Company has incurred operating losses since
inception 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-
Vine, Ltd. (a development stage company) to continue as a going concern.
/s/Thomas Monahan
- ---------------------------
Thomas P. Monahan, CPA
March 8, 1999
Paterson, New Jersey
F-1
<PAGE>
D-VINE, LTD.
(A Development Stage Company)
<TABLE>
<CAPTION>
September 30,
1998
---------------
<S> <C>
ASSETS
Current assets
Cash $ -0-
---------
-0-
Current assets
Total assets $ -0-
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Accounts payable $ 4,270
Stockholders' equity
Common Stock authorized 50,000,000 shares, $0.01 par value each. At
September 30, 1998, there are 24,607,731 shares.(Note 1c) 246,077
Additional paid in capital 637,744
Common stock warrants - 1,000,000 warrants outstanding on June 30, 1998 50,000
Deficit accumulated during development stage (938,091)
---------
Total stockholders' equity (4,270)
---------
Total liabilities and stockholders' equity $ -0-
=========
</TABLE>
See accompanying notes to financial statements.
F-2
<PAGE>
D-VINE, LTD.
(A Development Stage Company)
STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
FOR THE YEAR FOR THE YEAR REORGANIZATION,
ENDED ENDED OCTOBER 1, 1995,
SEPTEMBER 30, SEPTEMBER 30, TO SEPTEMBER 30,
1997 1998 1998
---- ---- ----
<S> <C> <C> <C>
Revenue $ -0- $ -0- $ -0-
Costs of goods sold -0- -0- -0-
----------- ----------- -----------
Gross profit -0- -0- -0-
Operations:
General and administrative(Note 1c) 27,125 72,145 106,248
Depreciation and amortization -0- -0- -0-
----------- ----------- -----------
Total expense 27,125 72,145 106,248
Net loss $ (27,125) $ (72,145) $ (106,248)
=========== =========== ===========
Net loss per share -basic $(0.00) $(0.00) $(0.00)
=========== =========== ===========
Number of shares outstanding-basic 22,607,731 22,657,731 22,657,731
=========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
D-VINE, LTD.
(A Development Stage Company)
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock DEFICIT ACCUMULATED
PREFERRED PREFERRED COMMON COMMON ADDITIONAL PAID Purchase DURING DEVELOPMENT
STOCK STOCK STOCK STOCK IN CAPITAL Warrants STAGE TOTAL
----- ----- ----- ----- ---------- -------- ----- -----
Date
- ----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
09-30-1994 16,666,657 $166,667 $ 665,176 $(831,843) $ -0-
09-28-1995 10 $ 1 3,999 4,000
--- ----- --------- --------
09-30-1995 10 $ 1 16,666,657 $166,667 $ 669,175 $(831,843) $ 4,000
=== ===== ========== ======== ========= ========= ========
Reverse split 150 to 1 10 $ 1 107,731 1,077 834,765 (831,843) $ 4,000
Capital contribution 2,978 2,977
Conversion of preferred
stock to common (10) (1) 20,000,000 200,000 (199,999) -0-
09-30-1996 (6,978) (6,977)
Net profit (loss) ----- ---------- -------- --------- --------- --------
- -----------------
09-30-1996 -0- $ -0- 20,107,731 $201,077 $ 637,744 $(838,821) $ -0-
Issuance of shares for
consulting fees 2,500,000 25,000 25,000
Net loss (27,125) (27,125)
--- ----- ---------- -------- --------- ---------- --------
09-30-1997 -0- $ -0- 22,607,731 $226,077 $ 637,744 (865,946) (2,125)
Unaudited
- ---------
Sale of warrants at $0.05 50,000
Net loss (52,145) (52,145)
----- ---------- -------- --------- ---------- ---------- --------
09-30-1998 -0- $ -0- 22,607,731 $226,077 $ 637,744 $50,000 $(918,091) $ (4,270)
=== ===== ========== ======== ========= ========== ========== ========
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
D-VINE, LTD.
(A Development Stage Company)
STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
FOR THE PERIOD
FROM
REORGANIZATION,
FOR THE FOR THE OCTOBER 1, 1995,
YEAR ENDED ENDED TO
SEPTEMBER 30, SEPTEMBER 30, SEPTEMBER 30,
1997 1998 1998
-------------- -------------- ------------------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss (27,125) $(72,145) $(106,248)
Depreciation -0- -0-
Adjustments used to reconcile net loss to net cash
provided by (used in) operating activities
Prepaid expenses
Accounts payable 2,125 2,145 4,270
-------- -------- ---------
TOTAL CASH FLOWS FROM OPERATIONS 25,000 (70,000) (101,978)
CASH FLOWS FROM INVESTING ACTIVITIES -0-
---------
TOTAL CASH FLOWS FROM INVESTING ACTIVITIES -0-
CASH FLOWS FROM FINANCING ACTIVITIES
Recognition of common shares(Note 1c) 20,000 20,000
Shareholder loan
Sale of stock purchase warrants 50,000 50,000
Issuance of shares of common stock 25,000 25,000
Capital contribution 2,978
Sale of preferred stock 4,000
-------- -------- ---------
TOTAL CASH FLOWS FROM FINANCING ACTIVITIES 25,000 70,000 101,978
NET INCREASE IN CASH -0- -0- -0-
CASH BALANCE BEGINNING OF PERIOD -0- -0- -0-
-------- -------- ---------
CASH BALANCE END OF PERIOD $ -0- $ -0- $ -0-
======== ======== =========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
D-VINE, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
NOTE 1. ORGANIZATION OF COMPANY AND ISSUANCE OF COMMON STOCK
----------------------------------------------------
a. Creation of the Company
D-Vine, Ltd., (the "Company") was formed under the laws of the state of
Delaware on July 22, 1985. On February 13, 1996, the Company amended its
certificate of incorporation, changing its name to D-Vine, Ltd.
b. Description of the Company
The Company is a development stage company that has remained dormont for
the last ten years. The Company is seeking new and profitable business
opportunities.
c. Issuance of Shares of Common Stock
The Company sold 10 shares of preferred stock for an aggregate
consideration of $4,000 from Erma S. Warburg.
On February 10, 1996, the Company reverse split the number of shares of
common stock outstanding from 16,666,657 to 107,731.
In September, 1996, the 10 shares of 1995 Series AA Convertible Preferred
Stock were converted into 20,000,000 shares of common stock.
In September, 1996, the Company received an additional capital contribution
of $2,978.
In September, 1996, the shares of preferred stock were converted into 20,000,000
shares of common stock.
In October, 1996, the Company issued 2,500,000 shares of common stock in
consideration for consulting fees valued at $25,000 or $0.01 per share.
For the year ended September 30, 1998, the Company was notified by the
Company's new Stock Transfer Agent that a certificate for 2,000,000 shares of
common stock had been submitted for transfer that did not appear on the
transfer records as being validly outstanding. The Certificate appeared to have
been prepared by the Company's former Stock Transfer Agent, who is now out of
business. The Board of Directors approved the further transfer of the
certificate after reaching the decision that the cost of litigation would exceed
the nominal market value of the certificate. The Board has however passed a
resolution that the appearance of any other stock certificates that appear to
have not been properly authorized and registered by the
F-6
<PAGE>
D-VINE, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
Company will be challenged and be vigorously litigated. The Company has
recognized a loss aggregating $20,000 or $0.01 per share.
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 incurred net losses of
$938,091 for period from July 22, 1985 to September 30, 1997. On September 12,
1996, the Company changed managerial control. 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 ongoing maintenance. 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 consist of the balance sheet of the
Company as at September 30, 1998 and the related statements of operations and
cash flows for the years ending September 30, 1997 and 1998 and for the period
from reorganization, October 1, 1995, to September 30, 1998.
b. Cash and cash equivalents
The Company treats temporary investments with a maturity of less than three
months as cash.
c. Revenue recognition
Revenue is recognized when products are shipped or services are rendered.
d. Selling and Marketing Costs
Selling and Marketing - Certain selling and marketing costs are expensed in
the period in which the cost pertains. Other selling and marketing costs are
expensed as incurred.
F-7
<PAGE>
D-VINE, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
e. Earnings per share
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, EARNINGS PER SHARE ("Statement No.
128"). Statement No. 128 applies to entities with publicly held common stock or
potential common stock and is effective for financial statements issued for
periods ending after June 30, 1998. Statement No. 128 replaces APB Opinion 15,
Earnings per Share ("EPS"). Statement No. 128 requires dual presentation of
basic and diluted earnings per share by entities with complex capital
structures. Basic EPS includes no dilution and is computed by dividing net
income by the total number of common shares outstanding for the period.
Shares used in calculating basic and diluted net income per share were as
follows:
<TABLE>
<CAPTION>
For the year For the nine
ended ended
September 30, 1998 September 30, 1997
------------------ ------------------
<S> <C> <C>
Total number common
shares outstanding 24,607,731 22,607,731
Effect of conversion of
common stock purchase warrants
into shares of common stock 1,000,000
---------- ----------
Total shares of common stock
outstanding fully diluted 25,607,731 22,607,731
========== ==========
</TABLE>
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.
F-8
<PAGE>
D-VINE, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
g. Asset Impairment
The Company adopted the provisions of SFAS No. 121, Accounting for the
impairment of long lived assets and for long-lived assets to be disposed of
effective January 1, 1996. SFAS No. 121 requires impairment losses to be
recorded on long-lived assets used in operations when indicators of impairment
are present and the estimated undiscounted cash flows to be generated by those
assets are less than the assets' carrying amount. SFAS No. 121 also addresses
the accounting for long-lived assets that are expected to be disposed of. There
was no effect of such adoption on the Company's financial position or results of
operations.
NOTE 3 - RELATED PARTY TRANSACTIONS
--------------------------
a. Office Space
The Company occupies office space at the office's of the Company President,
at 712 Fifth Avenue, 7th floor, New York, New York rent free, on a month to
month basis from Edward Tobin.
NOTE 4 - COMMITMENTS AND CONTINGENCIES
-----------------------------
a. Commitments and Contingencies
As of September 30, 1998, the Company is not a party to any commitments,
contracts or litigation.
b. Common Stock Purchase Warrants
In August, 1997, the Company sold for an aggregate consideration of $50,000
to Ocean Strategic Holdings Limited, a Guernsey corporation, 1,000,000 Warrants
to purchase 1,000,000 shares of common stock at $0.01 per share. The Warrants
are exercisable beginning August 1, 1998 until 5:00 p.m. (New York time) on
August 1, 2001.
The Warrant agreement contains various terms and conditions, amongst which
include the following as well as other provisions: that the Company will
preserve the Warrant Holders position subsequent to any adjustment to the
Company's capital structure. In addition, in no event may the Warrant Holder be
entitled to exercise any portion of this Warrant such that giving effect to such
exercise, the aggregate number of shares of common stock beneficially owned by
F-9
<PAGE>
D-VINE, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
the Holder and its affiliates would exceed 9.9% of the outstanding shares of
common stock following such exercise.
The Company has reserved 1,000,000 shares of common stock pending the
conversion of Warrants.
NOTE 5 - CAPITAL STOCK
-------------
The Company is authorized to issue 50,000,000 shares of common stock, $0.01
par value each and 10,000,000 shares of preferred stock, $0.01 par value each.
Of the 50,000,000 shares of common stock, 1,000,000 shares are designated as
Class A common.
a. Preferred Stock
On April 5, 1988, the Company amended its certificate of incorporation to
establishing a series of preferred stock designated as the "Series A Convertible
Preferred Stock", $0.01 par value each. The Series A Preferred Stock is
convertible into 1,000,000 shares of common stock. On October 19, 1995, the
Company amended its certificate of incorporation to establishing a series of
preferred stock designated as "1995 Series AA Convertible Preferred Stock",
$0.01 par value each. Each share of Series AA Preferred Stock is convertible
into 2,000,000 shares the Company's common stock.
The Company sold 10 shares of 1995 Series AA Convertible Preferred Stock
for an aggregate consideration of $4,000.
In September, 1996, the shares of preferred stock were converted into
20,000,000 shares of common stock.
On December 20, 1996, the Company amended its certificate of incorporation
eliminating the Series A Convertible Preferred Stock, the Series AA Convertible
Preferred Stock and the Class A Common Stock.
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
F-10
<PAGE>
D-VINE, LTD.
(A DEVELOPMENT STAGE COMPANY)
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
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
September 30, 1997, 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 carryforward
and was fully offset by a valuation allowance.
At September 30, 1998, the Company has net operating loss carry forwards
for income tax purposes of $938,091. This carryforward is available to offset
future taxable income, if any, and expires in the year 2010. The Company's
utilization of this carryforward 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 September 30, 1998 are
as follows:
Deferred tax asset:
Net operating loss carry forward $ 318,951
Valuation allowance $(318,951)
---------
Net deferred tax asset $ -0-
=========
The Company recognized no income tax benefit for the loss generated in the
period from reorganization, October 1, 1995, to September 30, 1998.
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.
F-11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF D-VINE, LTD. AS OF SEPTEMBER 30, 1998 AND THE RELATED STATEMENTS OF
OPERATIONS AND CASHFLOWS FOR THE YEAR THEN ENDED AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> SEP-30-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 4,270
<BONDS> 0
0
0
<COMMON> 246,076
<OTHER-SE> (250,347)
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 0
<TOTAL-REVENUES> 0
<CGS> 0
<TOTAL-COSTS> (72,145)
<OTHER-EXPENSES> 7
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (72,145)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (72,145)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
