SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the Quarterly Period Ended June 30, 1996
Commission File #33-18521-NY
DAVIN ENTERPRISES, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 11-2854355
(State or other jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
461 Beach 124 Street. Belle Harbor, New York 11694
(Address of Principal Executive Office) (Zip Code)
(718)474-6568
(Registrant's Telephone Number, Including Area Code)
The Number of Shares Outstanding of Common Stock, $.0001 par value
at June 30, 1996 was 1,937,354.
(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 and Exchange Act of 1934 during the preceding twelve
months and (2) has been subject to such filing requirements for the
past ninety days. Yes / X / No / /
DAVIN ENTERPRISES, INC.
FINANCIAL STATEMENTS
JUNE 30, 1996
I N D E X
Page
ACCOUNTANTS' REVIEW REPORT 1
BALANCE SHEETS 2
STATEMENTS OF STOCKHOLDERS' EQUITY 3-4
STATEMENTS OF OPERATIONS 5
STATEMENTS OF CASH FLOWS 6
NOTES TO THE FINANCIAL STATEMENTS 7-9
ACCOUNTANTS' REVIEW REPORT
To the Board of Directors and Shareholders
DAVIN ENTERPRISES, INC.
461 Beach 124 Street
Belle Harbor, New York 11694
We have reviewed the balance sheet of DAVIN ENTERPRISES, INC. (A
Development Stage Enterprise) as of June 30, 1996 and the related
statements of operations, stockholders' equity and cash flows for
the three month periods ended June 30, 1996 and 1995, in accordance
with standards established by the American Institute of Certified
Public Accountants.
A review of interim financial information consists principally of
obtaining an understanding of the system for the preparation of
interim financial information, applying analytical review
procedures to financial data, and making inquiries of persons
responsible for financial and accounting matters. It is
substantially less in scope than an examination in accordance with
generally accepted auditing standards, the objective of which is
the expression of an opinion regarding the financial statements
taken as a whole. Accordingly, we do not express such an opinion.
Based on our review, we are not aware of any material modifications
that should be made to the financial statements for them to be in
conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted
auditing standards, the balance sheet as of March 31, 1996, and the
related statements of operations, stockholders' equity and cash
flows for the year then ended (not presented herein); and in our
report dated May 30, 1996, we expressed an unqualified opinion on
those financial statements. In our opinion, the information set
forth in the accompanying balance sheet as of March 31, 1996 is
fairly stated in all material respects in relation to the balance
sheet from which it has been derived.
GREENBERG & COMPANY, LLC
Springfield, New Jersey
July 30, 1996
Page 1 of 9
DAVIN ENTERPRISES, INC.
(A Developement Stage Enterprise)
BALANCE SHEETS
June 30, March 31,
1996 1996
(Unaudited) (Audited)
A S S E T S
CURRENT ASSETS
Cash and Cash Equivalents $ 70,209 $ 80,757
$ 70,209 $ 80,757
OTHER ASSETS
Deferred Acquisition Fees (Note 3) 5,000 5,000
Organization Costs 1,300 1,300
Investment - Target Vision Inc.
- Common Stock, At Fair Value (Note 2) 450,000 450,000
456,300 456,300
TOTAL ASSETS $ 526,509 $ 537,057
L I A B I L I T I E S A N D S T O C K H O L D E R S' E Q U I T Y
CURRENT LIABILITIES
Accrued Taxes and Expenses $ 750 $ 750
Contingencies (Note 6)
STOCKHOLDERS' EQUITY
Common Stock (Par Value $.0001)
50,000,000 Shares Authorized
1,937,354 Shares Issued and
Outstanding (Note 8) 194 194
Paid-In Capital In Excess Of
Par Value 1,072,526 1,072,526
(Deficit) Accumulated During
Development Stage (546,961) (536,413)
525,759 536,307
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 526,509 $ 537,057
Subject to the comments contained in the Accountants' Review Report.
Page 2 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
For The Period April 8, 1987 (Inception) to June 30, 1996
# of $.0001 Paid In Deficit Total
Shares Par Value Capital Accumulated Stock-
During holders'
Development Equity
Stage
Initial Investment
in Capital
Stock 1,600,000 $160 $ 426,220 $426,380
Warrants
Exercised 222,550 22 475,078 475,100
Offering Costs (68,705) (68,705)
Loss for the Period
April 8, 1987
(Inception) to
March 31, 1988 $ (13,113) (13,113)
BALANCES -
APRIL 1, 1988 1,822,550 182 832,593 (13,113) 819,662
Warrants
Exercised 114,804 12 239,933 239,945
Loss for the
Year Ended
March 31, 1989 (60,555) (60,555)
BALANCES -
MARCH 31, 1989 1,937,354 194 1,072,526 (73,668) 999,052
Loss for the
Year Ended
March 31, 1990 (73,354) (73,354)
BALANCES -
MARCH 31, 1990 1,937,354 194 1,072,526 (147,022) 925,698
Loss for the
Year Ended
March 31, 1991 (35,500) (35,500)
BALANCES -
MARCH 31, 1991 1,937,354 194 1,072,526 (182,522) 890,198
Loss for the
Year Ended
March 31, 1992 (31,935) (31,935)
BALANCES -
MARCH 31, 1992 1,937,354 194 1,072,526 (214,457) 858,263
Subject to the comments contained in the Accountants' Review Report.
Page 3 of 9
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
For The Period April 8, 1987 (Inception) to June 30, 1996
(Continued)
# of $.0001 Paid In Deficit Total
Shares Par Value Capital Accumulated Stock-
During holders'
Development Equity
Stage
BALANCES -
MARCH 31, 1992 1,937,354 $194 $1,072,526 $(214,457) $858,263
Loss for the
Year Ended
March 31, 1993 (29,060) (29,060)
BALANCES -
MARCH 31, 1993 1,937,354 194 1,072,526 (243,517) 829,203
Loss for the
Year Ended
March 31, 1994 (21,616) (21,616)
BALANCES -
MARCH 31, 1994 1,937,354 194 1,072,526 (265,133) 807,587
Loss for the
Year Ended
March 31, 1995 (16,623) (16,623)
BALANCES -
MARCH 31, 1995 1,937,354 194 1,072,526 (281,756) 790,964
Loss for the
Year Ended
March 31, 1996 (254,657) (254,657)
BALANCES-
MARCH 31, 1996
(Audited) 1,937,354 194 1,072,526 (536,413) 536,307
Loss for the
Three Months Ended
June 30, 1996
(Unaudited) (10,548) (10,548)
BALANCES -
JUNE 30, 1996
(Unaudited) 1,937,354 $194 $1,072,526 $(546,961) $525,759
Subject to the comments contained in the Accountants' Review Report.
Page 4 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Enterprise)
STATEMENTS OF OPERATIONS
(Unaudited)
For The Three Months Ended
June 30,
1996 1995
Income $ -0- $ -0-
General and Administrative Expenses
Management Fees 2,400 2,400
Professional Fees 6,950 2,677
Miscellaneous Expenses 2,394 73
Total Expenses 11,744 5,150
Operating (Loss) (11,744) (5,150)
Other Income
Interest Income 764 1,160
(Loss) Before Franchise Taxes (10,980) (3,990)
Franchise Taxes (Note 5) (432) (108)
Net (Loss) $ (10,548) $ (3,882)
(Loss) Per Share NIL NIL
Weighted Average Number
of Shares 1,937,354 1,937,354
Cumulative Amounts From Inception
Income $ -0-
Expenses 377,987
Operating (Loss) (377,987)
Interest Income 90,354
(Loss) Before Franchise Taxes and
Extraordinary Item (287,633)
Franchise Taxes (24,250)
(Loss) Before Extraordinary Item (311,883)
Extraordinary Item (235,078)
Net (Loss) $(546,961)
Subject to the comments contained in the Accountants' Review Report.
Page 5 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF CASH FLOWS
(Unaudited)
For The Three Months Ended
June 30,
1996 1995
Cash Flows From Operating Activities:
Net (Loss) $ (10,548) $(565,567)
(Increase) Decrease in Prepaid
Expenses -0- -0-
Increase (Decrease) in Accrued
Expenses -0- -0-
Net Cash Provided By (Used In)
Operating Activities (10,548) (565,567)
Cash Flows From Financing Activities
Write Down of Investment -0- 560,078
Net Cash Provided By Financing Activities -0- 560,078
Net Increase (Decrease) in Cash (10,548) (5,489)
Cash and Cash Equivalents -
Beginning of Period 80,757 100,336
CASH AND CASH EQUIVALENTS -
END OF PERIOD $ 70,209 $ 94,847
Subject to the comments contained in the Accountants' Review Report.
Page 6 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1996
(Unaudited)
Note 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
GENERAL INFORMATION:
Davin Enterprises, Inc. was organized under the laws of
Delaware on April 8, 1987 to function initially as an inactive
publicly held corporation pursuing a combination with a
privately held business engaged in any area of business.
Costs associated with its proposed initial public offering
have been charged directly to paid in capital in excess of par
value.
CASH
Cash equivalents consist of highly liquid, short-term
investments with maturities of 90 days or less.
INCOME TAXES
During 1993, the Company adopted Statement of Financial
Accounting Standards No. 109(SFAS 109), Accounting for Income
Taxes. SFAS 109 requires an asset and liability approach to
measuring deferred income taxes. Previous standards required
an income statement approach. The cumulative effect of this
change in the method of accounting for income taxes was not
material.
Note 2: INVESTMENT - TARGET VISION, INC., AT LOWER OF COST OR FAIR
VALUE:
On April 21, 1988, the Company concluded an agreement with
Target Vision, Inc. ("TVI") for their merger, which agreement
was subsequently terminated.
As part of the merger agreement, the Company had agreed to
lend TVI up to $800,000 from the proceeds of Class "A" and
Class "B" warrants exercised. The Company advanced $685,078
to TVI. Subsequently, litigation ensued relating to the note
with TVI, which was settled on June 28, 1991.
Pursuant to the Company's receipt of 2,883,333 shares of TVI
common stock the action was discontinued. The implementation
of the settlement agreement took place on July 31, 1991.
Therefore, the loan receivable was reclassified to an
investment in common stock. The cost of this investment is
$685,078, which was the carrying amount of the loan.
Page 7 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1996
(Continued)
(Unaudited)
Extraordinary Item
In the quarter ended June 30, 1995 a sale of TVI stock
occurred. The sale was by an unrelated shareholder and
resulted in a complete liquidation of that stockholders
interest. The current financial statements reflect a $235,078
extraordinary write down of the Company's investment to
reflect the fair value, as there currently is no market for
TVI stock. The fair value was estimated based primarily on
the financial condition and operating results of TVI and not
the single liquidation of a minority shareholder's interest.
Unaudited financial information of TVI for the year ended
September 30, 1995 follows:
Total Assets $2,780,874
Stockholders' Equity 680,958
Revenues 6,686,957
Net Income 633,841
Note 3: DEFERRED ACQUISITION COSTS
The Company retained a business brokerage firm ("BBF") to
locate business opportunities. A good faith deposit was
placed with the broker upon the acquisition of a business
through BBF. The deposit will be reimbursed to the Company if
the Company completes an acquisition using BBF's services. If
the Company ceases to use the services of BBF, the good faith
deposit will be forfeited and at such time it will be charged
to operations.
Note 4: RELATED PARTY TRANSACTIONS
The Company has entered into an oral agreement with Modern
Technology Corp., a principal shareholder, to provide services
and the partial use of its office to the Company for the sum
of $800 per month since July 1, 1991. Arthur Seidenfeld,
president of the Company, is also president of Modern
Technology Corp.
Note 5: FRANCHISE TAX
Franchise taxes represent payment of New York State and New
York City taxes. No federal income tax was due as the Company
has generated a loss since inception. The Company has
available $281,756 of Net Operating Loss (NOL) carryforwards
which can be used to offset future income. These NOL's expire
between the years 2003 and 2009. The income tax benefit for
the current quarter is the result of prior period
overpayments.
Page 8 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1996
(Continued)
(Unaudited)
Note 6: CONTINGENCIES
Certain officers and directors of the company have been
included as defendants in a class action entitled "Barker et
al v. Power Securities Corp., et al" in the Western District
of New York, which action alleges violations of the securities
laws, in trading certain securities including those of the
company and its affiliated company, Daine Industries Inc., by
all of the defendants. Certain officers and directors of the
company, who are also officers and directors of Daine
Industries Inc., deny the allegations and believe the suit to
be without merit. The alleged violations refer to Section 10b
and Rule 10b-5 of the Securities and Exchange Act of 1934.
NOTE 7: POSTRETIREMENT EMPLOYEE BENEFITS
The company does not have a policy to cover employees for any
health care or other welfare benefits that are incurred after
employment (postretirement). Therefore, no provision is
required under FAS'S 106 or 112.
NOTE 8: COMMON STOCK
On May 29, 1996 the Company effected a one (1) for one hundred
(100) reverse stock split. The number of authorized shares
was changed from 250,000,000 to 50,000,000. All share and per
share amounts presented in these financial statements have
been adjusted to reflect this reverse stock split on a
retroactive basis.
NOTE 9: INTERIM FINANCIAL REPORTING
The unaudited financial statements of the Company for the
period April 1, 1996 to June 30, 1996 have been prepared by
management from the books and records of the Company, and
reflect, in the opinion of management, all adjustments
necessary for a fair presentation of the financial position
and operations of the Company as of the period indicated
herein, and are of a normal recurring nature.
Page 9 of 9
Part 1. Financial Information.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Davin Enterprises, Inc. ("The Registrant") is a development
stage company which was incorporated on April 8, 1987. The Registrant
has no predecessors and has no history prior to its date of
organization. During the quarter ended September 30, 1987, the
Registrant completed its proposed public offering selling 40 million
units (each consisted of one share of common stock, one Class "A"
warrant and one Class "B" warrant) at .01$ each, raising $331,295, net of
underwriting costs and expenses and raised $715,045 through the exercise
of Class "A" and Class "B" warrants during the fiscal years ended March
31, 1988 and 1989.
The proposed business of the Company was to provide a
mechanism to take advantage of business opportunities which management
believes arise from time to time. It was believed that the Company's
ability to take advantage of some business opportunities is enhanced by
its status as a small, publicly held entity with liquid assets which
could be deployed quickly to investigate, acquire an interest in and
devote to business operations, product development, asset acquisition of
other opportunities.
On April 21, 1988, the Registrant concluded an agreement with
Target Vision, Inc. ("TVI") for the merger of TVI with the Registrant.
In conjunction with the merger agreement, the Company loaned TVI
$685,078.08. Subsequently, litigation insued relating to the note which
was settled on June 28, 1991. Pursuant to the agreement, on August 21,
1991, the Registrant converted $685,000 of debt into 2,883,333 shares of
TVI common stock, representing approximately 9.6% of the outstanding
shares of TVI, with a potential dilution to 8.7% if additional shares
are issued.
For the year ended September 30, 1995, TVI generated net
revenues of $6,686,957, and net income of $633,841. At September 30,
1995, TVI had total assets of $2,780,874, and stockholders' equity of
680,958. The figures already mentioned for the year ended September 30,
1995 and the balance sheet figures at September 30, 1995 were unaudited
and provided by TVI. TVI's primary product is computer based business
television that is used in a variety of environments as a communication
vehicle. Its dominant application is in industry, where communicators
use the product as an employee communication tool. Its system combines
television with the technology of computers to allow for immediate
updating and dissemination of information. With the termination of the
proposed merger, the Registrant began seeking out appropriate business
opportunities. It should be noted that the Registrant's efforts in
seeking out business opportunities had been hampered by the outstanding
lawsuit and no assurances can be given that the Company will be
successful in completing a merger or acquisition in the near future.
In the quarter ended June 30, 1995, a sale of Target Vision,
Inc. stock occurred. The sale was by an unrelated shareholder and
resulted in a complete liquidation of that stockholder's interest. The
stockholder's position, representing 14% equity interest in Target
Vision, Inc. was purchased by Target Vision, Inc. for $250,000.
For the three months ended June 30, 1996, the Registrant
generated a net loss of $10,548. The loss for the three months ended
June 30, 1996 reflects interest income of $764; general and
administrative expenses amounted to $11,744 of which professional fees
(accounting and legal) amounted to $6,950, managerial fees, paid to a
company in which the officers and directors of the Registrant are
majority shareholders, amounted to $2,400 and miscellaneous expenses
amounting to $2,394. For the three months ended June 30, 1995 the net
loss amounted to $3,882. This loss reflects interest income of $1,160.
General and administrative expenses for the three months ended June 30,
1995 amounted to $5,150 of which professional fees (accounting and
legal) amounted to $2,677 and managerial fees, paid to a company which
the officers and directors of the Registrant are majority shareholders,
amounted to $2,400 and miscellaneous expenses amounted to $73.
No salaries have been paid to the officers and directors of
the Registrant since inception. Services to the Registrant such as
administrative, bookkeeping and clerical are provided for through the
management fee compensation arrangement. The Registrant's management
has determined that considerable monetary savings can be achieved
through such an arrangement, as compared to hiring the additional
personnel needed to perform the comparable administrative, clerical and
bookkeeping services. The management fee for services has been $800 a
month since July 1, 1991.
On May 29, 1996, the Registrant effected a one for one hundred
reverse split of its Common Stock, and reduced the number of authorized
shares from 250,000,000 to 50,000,000. As a result, the number of
shares of Common Stock outstanding at June 30, 1996 was 1,937,354. As
a subsequent event, during the week of August 2, 1996, the Registrant's
common stock has been relisted on the OTC bulletin board with the symbol
DAVE.
PART II. OTHER INFORMATION;
Item 1. Legal Proceedings
See 6/30/89 Form 10-Q Re: "Barker et al v. Power Securities
Corp., et al".
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.
Item 5. Other Materially Important Events. None.
Item 6. Exhibits and Reports on Form 8-K. None.
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) of the
Securities Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly authorized.
DAVIN ENTERPRISES, INC.
BY Arthur Seidenfeld
President
Dated: November 18, 1996
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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