SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
/X/ Quarterly report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the quarterly period ended June 30, 1997 or
/ / Transition report pursuant to Section 13 or 15(d) of the
Securities Act of 1934
For the transition period from to
Commission file number 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)
240 Clarkson Avenue, Brooklyn, NY 11226
(Address of Principal Executive Office) (Zip Code)
(718)469-3132
(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
Securities and 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 ninety days.
Yes / X / No / /
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS
DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all
documents and reports required to be filed by Section 12, 13 or
15(d) of the Securities Exchange Act of 1934 subsequent to the
distribution of securities under a plan confirmed by a court.
Yes / / No / /
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the
issuer's classes of common stock, as of the latest practicable
date. 1,937,452
10Q-1
DAVIN ENTERPRISES, INC.
FINANCIAL STATEMENTS
JUNE 30, 1997
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, 1997 and the related
statements of operations, stockholders' equity and cash flows for
the three month periods ended June 30, 1997 and 1996, 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, 1997, and the
related statements of operations, stockholders' equity and cash
flows for the year then ended (not presented herein); and in our
report dated June 17, 1997, 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, 1997 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 31, 1997
Page 1 of 9
DAVIN ENTERPRISES, INC.
(A Developement Stage Enterprise)
BALANCE SHEETS
June 30, March 31,
1997 1997
(Unaudited) (Audited)
A S S E T S
CURRENT ASSETS
Cash and Cash Equivalents $ 40,109 $ 45,717
Total Current Assets $ 40,109 $ 45,717
OTHER ASSETS
Organization Costs 1,300 1,300
Investment - Target Vision Inc. (Note 3) 685,078 685,078
686,378 686,378
TOTAL ASSETS $ 726,487 $ 732,095
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 $ 2,283
Contingencies (Note 5)
STOCKHOLDERS' EQUITY
Common Stock (Par Value $.0001)
50,000,000 Shares Authorized
1,937,452 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 (346,983) (342,908)
Total Stockholders' Equity 725,737 729,812
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $ 726,487 $ 732,095
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, 1997
# 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 114,902 12 239,933 239,945
(Loss) for the
Year Ended
March 31, 1989 (60,555) (60,555)
BALANCES -
MARCH 31, 1989 1,937,452 194 1,072,526 (73,668) 999,052
(Loss) for the
Year Ended
March 31, 1990 (73,354) (73,354)
BALANCES -
MARCH 31, 1990 1,937,452 194 1,072,526 (147,022) 925,698
(Loss) for the
Year Ended
March 31, 1991 (35,500) (35,500)
BALANCES -
MARCH 31, 1991 1,937,452 194 1,072,526 (182,522) 890,198
(Loss) for the
Year Ended
March 31, 1992 (31,935) (31,935)
BALANCES -
MARCH 31, 1992 1,937,452 194 1,072,526 (214,457) 858,263
Subject to the comments contained in the Accountants' Review Report.
Page 3 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Company)
STATEMENTS OF STOCKHOLDERS' EQUITY
For The Period April 8, 1987 (Inception) to June 30, 1997
(Continued)
# of $.0001 Paid In Deficit Total
Shares Par Value Capital Accumulated Stock-
During holders'
Development Equity
Stage
BALANCES -
MARCH 31, 1992 1,937,452 $194 $1,072,526 $(214,457) $858,263
(Loss) for the
Year Ended
March 31, 1993 (29,060) (29,060)
BALANCES -
MARCH 31, 1993 1,937,452 194 1,072,526 (243,517) 829,203
(Loss) for the
Year Ended
March 31, 1994 (21,616) (21,616)
BALANCES -
MARCH 31, 1994 1,937,452 194 1,072,526 (265,133) 807,587
(Loss) for the
Year Ended
March 31, 1995 (16,623) (16,623)
BALANCES -
MARCH 31, 1995 1,937,452 194 1,072,526 (281,756) 790,964
(Loss) for the
Year Ended
March 31, 1996 (254,657) (254,657)
BALANCES-
MARCH 31, 1996 1,937,452 194 1,072,526 (536,413) 536,307
Net Income for
the Year Ended
March 31, 1997 193,505 193,505
BALANCES -
MARCH 31, 1997
(Audited) 1,937,452 194 1,072,526 (342,908) 729,812
(Loss) for the
Three Months Ended
June 30, 1997
(Unaudited) (4,075) (4,075)
BALANCES -
JUNE 30, 1997
(Unaudited) 1,937,452 $194 $1,072,526 $(346,983) $725,737
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,
1997 1996
Income $ -0- $ -0-
General and Administrative Expenses
Management Fees 2,400 2,400
Professional Fees 1,750 6,950
Miscellaneous Expenses 184 2,394
Total Expenses 4,334 11,744
(4,334) (11,744)
Other Income
Interest Income 382 764
(Loss) Before Franchise Taxes (3,952) (10,980)
Franchise Taxes (Note 5) 123 (432)
Net Income (Loss) $ (4,075) $ (10,548)
Net Income (Loss) Per Share NIL NIL
Weighted Average Number
of Shares 1,937,452 1,937,452
Cumulative Amounts From Inception
Income $ -0-
Expenses (413,859)
Interest Income 92,414
(Loss) Before Franchise Taxes (321,445)
Franchise Taxes (25,538)
Net (Loss) $(346,983)
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,
1997 1996
Cash Flows From Operating Activities:
Net (Loss) $(4,075) $(10,548)
(Increase) Decrease in Prepaid
Expenses -0- -0-
Increase (Decrease) in Accrued
Expenses (1,533) -0-
Net Cash Provided By (Used In)
Operating Activities (5,608) (10,548)
Net Increase (Decrease) in Cash (5,608) (10,548)
Cash and Cash Equivalents -
Beginning of Period 45,717 80,757
CASH AND CASH EQUIVALENTS -
END OF PERIOD $40,109 $ 70,209
Supplemental Cash Flow Disclosure
Income Taxes Paid $ 260 $ 733
Interest Paid -0- -0-
Disclosure of Accounting Policy:
Cash equivalents consist of highly liquid, short-term investments with
maturities of 90 days or less.
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, 1997
(Unaudited)
Note 1: ORGANIZATION AND NATURE OF OPERATIONS
Davin Enterprises, Inc. (Davin) 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.
Davin is located in New York. Davin is considered a
Development Stage Enterprise as it has not begun any
commercial operation. Davin's principal assets are cash and
an investment in a private company.
Note 2: 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 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.
PREPARATION OF FINANCIAL STATEMENTS
Preparation of the Company's financial statements in
conformity with generally accepted accounting principles
requires the use of management's estimates, primarily related
to the fair values of investments. Accordingly, actual
results could differ from those estimates.
Note 3: 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.
Page 7 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1997
(Unaudited)
(Continued)
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, representing approximately 9.1% of the
outstanding 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.
In the first quarter of fiscal year 1996 a sale of TVI stock
occurred. The sale was by an unrelated shareholder and
resulted in a complete liquidation of that stockholders
interest. 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. Audited
financial information of TVI for the year ended September 30,
1996 follows:
Total Assets $4,684,632
Stockholders' Equity 1,176,821
Revenues 8,616,999
Net Income 797,050
Note 4: RELATED PARTY TRANSACTIONS
The Company 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 approximately $320,000 of Net Operating Loss (NOL)
carryforwards which can be used to offset future income.
These NOL's expire between the years 2003 and 2010. The tax
benefit relating to these NOL's has been fully reserved in the
valuation allowance account since the Company has never had
taxable income and the realization of these benefits is highly
uncertain.
Page 8 of 9
DAVIN ENTERPRISES, INC.
(A Development Stage Enterprise)
NOTES TO THE FINANCIAL STATEMENTS
FOR THE THREE MONTHS ENDED JUNE 30, 1997
(Unaudited)
(Continued)
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: STOCK SPLIT
On May 29, 1996 the company declared a reverse stock split.
The company effected a one (1) for one hundred (100) reverse
split and reduced the number of authorized shares 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.
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.
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 ensued relating to the note which
was settled on June 28, 1991. Pursuant to the agreement, on August 21,
1991, the Registrant converted $685,078 of debt into 2,883,333 shares of
TVI common stock, representing approximately 9.1% of the outstanding
shares of TVI, with a potential dilution to 8.7% if additional shares
are issued.
For the year ended September 30, 1996, TVI generated net
revenues of $8,616,999, and net income after taxes of $797,050. At
September 30, 1996, TVI had total assets of $4,684,632, and
stockholders' equity of $1,176,821. The figures already mentioned for
the year ended September 30, 1996 and the balance sheet figures at
September 30, 1996 were audited 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 while
management is in discussions with several firms interested in a
potential merger, no assurances can be given that the Company will be
successful in completing a merger or acquisition in the near future.
For the three months ended June 30, 1997, the Registrant
generated a net loss of $4,075. The loss for the three months ended
June 30, 1997 reflects interest income of $382; general and
administrative expenses amounted to $4,334 of which professional fees
(accounting and legal) amounted to $1,750, 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 $184. For the three months ended June 30, 1996 the net
loss amounted to $10,548. This loss reflects interest income of $764.
General and administrative expenses for the three months ended June 30,
1996 amounted to $11,744 of which professional fees (accounting and
legal) amounted to $6,950 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 $2,394.
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, 1997 was 1,937,452.
During the week of August 2, 1996, the Registrant's common stock has
been relisted on the OTC bulletin board with the symbol DAVN.
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.
<PAGE>
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: August 13, 1997
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