UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
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or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number: 33-28417
SITEK, Incorporated (formerly known as Dentmart Group, Inc.
and Elgin Corporation)
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(Exact name of registrant as specified in its charter)
Delaware 95-4585824
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(State of other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1817 West 4th Street, Tempe, Arizona 85281
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(Address of principal executive offices) (Zip Code)
(602) 921-8555
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(Registrant's telephone number, including area code)
Dentmart Group, Inc., 192 Searidge Court, Shell Beach, California 93449
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(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 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 [X]
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.
12,230,813 shares of common stock outstanding as of October 31, 1998
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TABLE OF CONTENTS
Part I. Financial Information
Item 1. Financial Statements
Statements of Financial Position
June 30, 1998 and March 31, 1998.................................1
Statements of Operations
Three Months ended June 30, 1998 and 1997
and Period from April 5, 1989 (Inception)
through June 30, 1998............................................2
Statements of Cash Flows
Three Months ended June 30, 1998 and 1997
and Period from April 5, 1989 (Inception)
through June 30, 1998............................................3
Notes to Financial Statements....................................4
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..........................6
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K..............................8
i
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SITEK, INCORPORATED
STATEMENTS OF FINANCIAL POSITION
(UNAUDITED)
ASSETS
June 30, 1998 March 31, 1998
-------------- --------------
CURRENT ASSETS
None $ 0 $ 0
TOTAL ASSETS $ 0 $ 0
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
None $ 0 $ 0
STOCKHOLDERS' EQUITY
Common stock: Par value $.01;
5,000,000 shares authorized;
4,999,983 shares at March 31,
1998 and 3,030,813 shares at
June 30, 1998, were issued and
outstanding $ 30,000 $ 30,000
Accumulated deficit during
development stage (30,000) (30,000)
-------- --------
Total stockholders' equity $ 0 $ 0
-------- --------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 0 $ 0
======== ========
SEE NOTES TO FINANCIAL STATEMENTS
1
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SITEK, INCORPORATED
STATEMENTS OF OPERATIONS
(UNAUDITED)
PERIOD FROM
THREE MONTHS APRIL 5, 1989
ENDED JUNE 30, (INCEPTION)
----------------- THROUGH JUNE 30,
1998 1997 1998
---- ---- ----------------
Revenues $ 0 $ 0 $ 0
Cost and expenses $ 0 $ 0 $30,000
--- --- -------
NET INCOME (LOSS) $ 0 $ 0 $30,000
=== === =======
SEE NOTES TO FINANCIAL STATEMENTS
2
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SITEK, INCORPORATED
STATEMENTS OF CASH FLOWS
(UNAUDITED)
PERIOD FROM
THREE MONTHS APRIL 5, 1989
ENDED JUNE 30, (INCEPTION)
----------------- THROUGH JUNE 30,
1998 1997 1998
---- ---- ----------------
Cash Flows from Operations:
Net loss $ 0 $ 0 $ 30,000
--- --- --------
Net cash uses by operations $ 0 $ 0 $(30,000)
Cash Flows from Investment Activities 0 0 0
Cash Flows from Financing Activities $ 0 $ 0 $ 30,000
--- --- --------
Net Increase (Decrease) in Cash 0 0 0
Cash Balance, Beginning 0 0 0
--- --- --------
CASH BALANCE, ENDING $ 0 $ 0 $ 0
=== === ========
SEE NOTES TO FINANCIAL STATEMENTS
3
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SITEK, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
1. FINANCIAL STATEMENT PRESENTATION
The financial statements have been prepared in accordance with
generally accepted accounting principles and include the accounts of SITEK,
Incorporated (the "Company").
The statements of financial position as of June 30, 1998 and the
statements of operations and cash flows for the three-month periods ended June
30, 1998 and 1997 have been prepared by the Company without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position at June 30, 1998
and the results of operations and cash flows for the three-month periods ended
June 30, 1998 and 1997 have been made. The results of operations for the interim
periods are not necessarily indicative of the results to be expected for the
complete fiscal year. The statement of financial position for the fiscal year
ended March 31, 1998 is derived from the Company's audited financial statements
included in the Company's Annual Report on Form 10-K for the year ended March
31, 1998. These financial statements should be read in conjunction with the
financial statements and notes thereto included in the Company's most recent
Form 10-K.
The shares of common stock issued and outstanding on June 30, 1998
reflect a 1.65 for 1 reverse split effected on July 14, 1998 by the Company.
2. ORGANIZATION AND BUSINESS
The Company is the successor to Elgin Corporation. Elgin Corporation
was incorporated under the laws of the State of Delaware on April 5, 1989. On
February 6, 1991, Elgin Corporation merged with Home Indemnity, Incorporated, a
Nevada corporation, the assets of which consisted of a portfolio of securities
and a wholly-owned subsidiary, Dentmart Incorporated. On February 8, 1991, Elgin
Corporation amended its Articles of Incorporation to change its name to Dentmart
Group, Inc.
On February 15, 1991, Dentmart Group, Inc. (the successor Delaware
corporation to Elgin Corporation) merged with Dentmart Group, Inc. (a Colorado
corporation). The Colorado corporation is the successor entity.
Effective March 31, 1998, the Company changed its year end for both
accounting and tax purposes from a calendar year ending December 31st to a
fiscal year ending March 31st.
As of June 30, 1998, the Company was not engaged in any business
activity, and had been dormant since 1992.
4
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The Company completed an acquisition of CMP Solutions, Inc., an Arizona
corporation on July 31, 1998 pursuant to a Stock Purchase and Exchange Agreement
dated as of July 14, 1998. The terms of the acquisition are more fully described
in the Company's Report on Form 8- K filed on August 17, 1998, which is
incorporated herein by reference. The effect of this acquisition on the
Company's financial position will be reported on its quarterly report on Form
10-Q for the quarter ended September 30, 1998.
3. COMMITMENTS AND CONTINGENCIES
The Company has no outstanding commitments or obligations, nor is it a
party to any litigation. The Company presently shares office space with a
shareholder for which it pays no rent.
4. INCOME TAXES
The Company owes no federal income taxes. Operating loss carry-forwards
have been disallowed due to the change in majority ownership of the Company
during 1994 and 1995.
5. NEW ACCOUNTING PRONOUNCEMENTS
The Company has adopted the Statement of Accounting Standard No. 130.
There is no difference between comprehensive income and net income.
5
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MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion of significant factors that
affected the Company's interim financial condition and results of operations.
This should be read in conjunction with Management's Discussion and Analysis of
Financial Condition and Results of Operations included n the Company's Annual
Report on Form 10-K for the year ended March 31, 1998.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Company was in the development stage and, from
inception to June 30, 1998, has experienced no significant change in liquidity
or capital resources or stockholder's equity other than the receipt of
subscriptions for its common stock in the net amount of $30,000. Consequently,
the Company's Statement of Financial Position for the three months ended June
30, 1998 reflects a total asset value of $0, which is unchanged from the three
months ended June 30, 1997.
The Company completed an acquisition of CMP Solutions, Inc., an Arizona
corporation ("CMP") on July 31, 1998 pursuant to a Stock Purchase and Exchange
Agreement dated as of July 14, 1998. The terms of the acquisition are more fully
described in the Company's Report on Form 8-K filed on August 17, 1998, which is
incorporated herein by reference. The effect of this acquisition on the
Company's financial position will be reported on its quarterly report on Form
10-Q for the quarter ended September 30, 1998.
The Company anticipates that CMP Solutions will commence the selling of
its products and services in the quarter ending December 31, 1998.
RESULTS OF OPERATIONS
During the period from April 5, 1989 (inception) through June 30, 1998,
the Company has engaged in no significant operations other than organizational
activities, acquisition of capital and preparation for registration of its
securities under the Securities Exchange Act of 1934, as amended. The Company
received no revenues during this period. Consequently, the Company had no
revenues for the three months ended June 30, 1998, which is unchanged from the
three months ended June 30, 1997.
For the current fiscal year, the Company anticipates incurring a loss
as a result of expenses associated with resumption of reporting under the
Securities Exchange Act of 1934, expenses associated with locating and
evaluating acquisition candidates and expenses associated with the acquisition
of CMP.
6
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NEED FOR ADDITIONAL FINANCING
The Company believes that some additional capital will be required to
meet the Company's cash needs, including the costs of compliance with the
continuing reporting requirements of the Securities Exchange Act of 1934, as
amended, and the integration of the acquisition of CMP with the operations of
the Company. There is no assurance the Company will be able to acquire the
additional capital or that the funds, if acquired, will ultimately prove to be
adequate to allow it to successfully integrate the acquisition of CMP with the
operations of the Company.
No commitments to provide additional funds have been made by management
or other stockholders. Accordingly, there can be no assurance that any
additional funds will be available to the Company to allow it to cover its
expenses.
Irrespective of whether the Company's cash assets prove to be
inadequate to meet the Company's operational needs, the Company might seek to
compensate providers of services by issuances of stock in lieu of cash.
INFLATION
The Company has limited experience with respect to the effect of
inflation on its business. However, based on management's understanding of
industry, results of the Company's operations in the future will likely not be
affected by inflation in a material way.
YEAR 2000 COMPLIANCE
Many currently installed computer systems and software products are
coded to accept only two digit entries in the date code field. Beginning in the
year 2000, these date code fields will need to accept four digit entries to
distinguish twenty-first century dates from twentieth century dates. As a
result, in less than two years, the computer system and software used by the
Company will need to be upgraded to comply with such "Year 2000" requirements.
Significant uncertainty exists in the software industry concerning the potential
effects associated with such compliance.
The company has scheduled hardware and software package upgrades to
make the Company's computer systems Year 2000 compliant, and the compliance
effort will be borne primarily by internal resources. However, there can be no
assurance that such upgrades will be sufficient to make the Company's computer
systems Year 2000 compliant in a timely manner or that the allocated resources
will be sufficient. A failure to become year 2000 compliant could disrupt the
Company's operating results and financial condition.
7
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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Certain of the statements contained in this document that are not
historical facts, including, without limitation, statements of future
expectations, projections of results of operations and financial condition,
statements of future economic performance and other forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995, are
subject to known and unknown risks, uncertainties and other factors which may
cause the actual results, performance or achievements of the Company to differ
materially from those contemplated in such forward-looking statements. There can
be no assurances that the forward-looking information will be accurate. In
addition to the specific matters referred to herein, important factors which may
cause actual results to differ from those contemplated in such forward-looking
statements include: the future supply of silicon; the future demand for
semiconductor products; world economic conditions; potential costs and delays in
integrating acquisitions; timing of market introductions; and
higher-than-expected costs of product development.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) See Exhibit Index following the signature page which is
incorporated herein by reference.
(b) Reports on Form 8-K
On August 17, 1998, the Company filed a Current Report on Form 8-K
dated July 31, 1998 to report in Item 1, a change in control of the Company
effected by the acquisition by the Company of CMP Solutions, Inc. pursuant to a
Stock Purchase and Exchange Agreement.
8
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SITEK, INCORPORATED
(Registrant)
Date: November ___, 1998 By:
-------------------------------------
[Name]
[Title]
(Authorized Officer)
Date: November ___, 1998 By:
-------------------------------------
[Name]
[Title]
(Principal Financial Officer)
9
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SITEK, INCORPORATED
EXHIBIT INDEX TO QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1998
Exhibit No. Incorporated by
Filed Herewith Description Reference to:
- -------------- ----------- -------------
3.1 Articles of Incorporation of Form 8-K filed with the SEC
Registrant on August 17, 1998
3.2 Bylaws of Registrant Form 10-K filed with the
SEC on April 17, 1998
27 Financial Data Schedule Filed Herewith
10
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