U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED DECEMBER 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ______
Commission File Number 0-18270
DAWCIN INTERNATIONAL CORP.
(Exact name of the registrant as specified in its charter)
NEW YORK 11-2857523
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
100 Garden City Plaza
Garden City, New York 11530
(Address of principal executive offices)
(516)739-8800
(Registrant's telephone number)
Command Credit Corporation
(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 X No
--- ---
State the number of shares outstanding of each of the issuer's classes of common
equity, as of February 7, 1997: 2,388,254. This amount reflects a Two Hundred
(200) to One (1) reverse stock split effective at the open of business on
October 17, 1996.
Transitional Small Business Disclosure Format (check one):
Yes No X
--- ---
<PAGE>
PART I: Financial Information
ITEM 1: Financial Statements
DAWCIN INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
ASSETS
(UNAUDITED)
December 31
1996
------------
Current Assets:
Cash and Cash Equivalents (Note 2) $ 10,866
Accounts Receivable, net (Note 3) 107,527
Notes Receivable (Note 4) 610,000
Prepaid Expenses 6,479
------------
Total Current Assets 734,872
------------
Fixed Assets:
Equipment 678,461
Furniture & Fixtures 166,975
Leasehold Improvements 225,003
------------
1,070,439
Less: Accumulated Depreciation
and Amortization 755,490
------------
Total Net Fixed Assets 314,949
------------
Other Assets:
Long Term Notes Receivable (Note 4) 650,000
Organization Expenses 4,062
Computer Software 129,291
Goodwill 261,704
Security Deposits 38,701
------------
Total Other Assets 1,083,758
------------
Total Assets $ 2,133,579
============
The accompanying notes are an integral part of this report.
F-1
<PAGE>
DAWCIN INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL POSITION
LIABILITIES & SHAREHOLDERS' EQUITY
(UNAUDITED)
December 31
1996
------------
Current Liabilities:
Accounts Payable & Accrued Expenses (Note 5) $ 1,083,506
Leases Payable 20,141
Payroll Taxes Payable 430,196
Notes Payable (Note 6) 226,397
Salaries Payable (Note 7) 211,250
------------
Total Current Liabilities 1,971,490
------------
Long Term Liabilities:
Leases Payable 25,259
Notes Payable (Note 6) 627,834
------------
Total Long Term Liabilities 653,093
------------
Total Liabilities 2,624,583
------------
Shareholders' Equity (Note 8):
Common Stock - Authorized 150 Mill. Shares,
$.0001 Par Value, 2,388,254 Issued and
2,382,896 Outstanding at 12/96 239
Paid-In-Capital in Excess of Par Value 44,939,477
Paid-In-Capital from Treasury Stock 946,434
Paid-In-Capital from Warrants Exercised 902,389
Translation Adjustment 4,852
Retained (Deficit) (46,249,976)
------------
Total Shareholders' Equity 543,415
Less: Treasury Shares at Cost (1,034,419)
------------
Net Shareholders' Equity (491,004)
------------
Total Liabilities and Shareholders' Equity $ 2,133,579
============
The accompanying notes are an integral part of this report.
F-2
<PAGE>
DAWCIN INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED FOR THE SIX MONTHS ENDED
DECEMBER 31 DECEMBER 31 DECEMBER 31 DECEMBER 31
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues:
Operating Revenue $ 276,994 $ 228,614 $ 573,285 $ 370,674
------------ ------------ ------------ ------------
Total Revenue $ 276,994 $ 228,614 $ 573,285 $ 370,674
Costs Related to Revenue 185,848 136,569 341,559 243,422
------------ ------------ ------------ ------------
Gross Income $ 91,146 $ 92,045 $ 231,726 $ 127,252
------------ ------------ ------------ ------------
Operating Expenses:
Selling and Administrative Expenses 732,380 803,226 1,874,449 1,405,201
Cost of Shares for Services Rendered 1,069,225 5,884,290 2,348,218 7,398,017
(Gain) Loss on Investment -0- -0- -0- 1,901,492
(Gain) Loss on Sale of Assets (77,335) -0- (102,335) -0-
Bad Debt Expense -0- 53,500 -0- 671,813
Taxes 22,737 52,932 51,787 76,902
------------ ------------ ------------ ------------
Total Operating Expenses $ 1,747,007 $ 6,793,948 $ 4,172,119 $ 11,453,425
------------ ------------ ------------ ------------
Net (Loss) from Operations (1,655,861) (6,701,903) (3,940,393) (11,326,173)
------------ ------------ ------------ ------------
Non-Operating & Non-Recurring:
Gain ( Loss) on Sale of Marketable Equity Securities 358 (187,500) 1,358 (193,801)
------------ ------------ ------------ ------------
Net (Loss) ($ 1,655,503) ($ 6,889,403) ($ 3,939,035) ($11,519,974)
============ ============ ============ ============
Net (Loss) per Outstanding
Common Share (Note 9) ($0.27) ($409.00)* ($1.25) ($1,093.00)*
============ ============ ============ ============
</TABLE>
* NOTE: This amount has been restated to reflect a One Hundred Fifty (150) to
One (1) reverse stock split effective | October 27, 1995, and a Two
Hundred (200) to One (1) reverse stock split effective October 17, 1996.
The accompanying notes are an integral part of this report.
F-3
<PAGE>
DAWCIN INTERNATIONAL CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
FOR THE SIX MONTHS ENDED DECEMBER 31
(UNAUDITED)
1996 1995
------------ ------------
Cash Flow from Operations:
Net (Loss) ($ 3,939,035) ($11,519,974)
Adjustments to Reconcile Net Loss
to Net Cash Provided by Operations
Depreciation & Amortization 11,767 (261,323)
(Gain)/Loss on Sale of Marketable
Equity Securities 1,000 193,801
Foreign Currency Translation Adjustment (676) (14,034)
(Increase) Decrease in:
Prepaid Expenses 3,434 (310,072)
Accounts Receivable 140,938 240,990
Notes Receivable 1,225,000 (10,000,000)
Interest Receivable 600,000 -0-
Organization Expenses (3,385) 29,685
Computer Software (9,299) 891
Security Deposits -0- (5,000)
Increase (Decrease) in:
Accounts Payable 298,989 (796,082)
Leases Payable (6,609) (58,163)
Payroll Taxes Payable 190,734 (198,782)
Notes Payable 486,935 575,028
Salaries Payable 52,306 25,416
------------ ------------
Net Cash Used (Provided) by Operations (947,901) (22,097,619)
------------ ------------
Cash Flow from Financing Activities:
Proceeds from Issuance of Common Stock 1,007,385 18,264,367
Purchase of Treasury Stock (4,872) (30,000)
Retained Earnings Liquidated Subsidiaries 33,115 1,215,564
------------ ------------
Net Cash Flow from Financing Activities 1,035,628 19,449,931
------------ ------------
Cash Flow from Investing Activities:
Capital Expenditures Paid in Cash 50,081 404,766
Bank/Data Center Acquisition -0- 260,993
Goodwill (185,737) 1,938,030
Proceeds from Sale of Marketable
Equity Securities 13,500 -0-
------------ ------------
Net Cash (Used) by Investing Activities (122,156) 2,603,789
------------ ------------
Net Increase in Cash and Cash Equivalents (34,429) (43,899)
Cash and Cash Equivalents Beginning of Period 45,295 228,098
------------ ------------
Cash and Cash Equivalents End of Period $ 10,866 $ 184,199
============ ============
The accompanying notes are an integral part of this report.
F-4
<PAGE>
DAWCIN INTERNATIONAL CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
(UNAUDITED)
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A) Method of Accounting: Dawcin International Corp. utilizes the accrual method
of accounting in recording all transactions.
B) Consolidation: Command Credit Acceptance Corporation ("Acceptance") was
incorporated in Florida on September 9, 1985. On October 12, 1988, Acceptance
was acquired by Video Plan International Corp. ("VPI"), a New York corporation
with virtually no business activity since 1980. Simultaneously, VPI changed its
name to Command Credit Corporation ("Command"). In October 1996, Command changed
its name to Dawcin International Corp. ("Dawcin"). Results of operations of
Dawcin and its subsidiaries are reported on a consolidated basis.
C) Foreign Currency: Currency fluctuations resulting from the consolidation of
Foreign Offices are accumulated as prescribed by translation of foreign
operations under FASB 52. The resulting translation gains and losses are shown
as a component of Stockholders' Equity.
D) Depreciation & Amortization: Depreciation of fixed assets is being computed
on a straight line basis over a period of five years. Organization expense and
Goodwill are being amortized over five and thirty year periods, respectively.
Leasehold improvements are amortized over the shorter of the life of the lease
or the estimated useful life.
E) Revenue Recognition: All revenue is recognized when earned.
F) Income taxes: The Company recognizes taxes on income as the liability is
incurred. To date, the Company has accumulated net operating losses which can be
used to offset future earnings.
NOTE 2: CASH AND CASH EQUIVALENTS
Cash and cash equivalents represents amounts available for current operations
held in cash, checking accounts and interest bearing accounts.
NOTE 3: ACCOUNTS RECEIVABLE
Accounts receivable consists primarily of trade receivables in connection with
the Company's credit card division. There is no allowance for doubtful accounts
because all receivables are deemed collectible.
NOTE 4: NOTES RECEIVABLE
In October 1995, the Company signed a definitive agreement with Jetlease Finance
Corp., a Florida corporation ("Jetlease"), under which the Company acquired 100%
of the common stock of Fidelity Holding Corp. ("Fidelity") a wholly-owned
subsidiary of Jetlease (the "Jetlease Transaction"). Jetlease is primarily
engaged in the leasing of small, medium and large aircraft to
2
<PAGE>
corporations and high net worth individuals. The Jetlease Transaction provided
for Jetlease to issue two promissory notes to Fidelity totaling ten million
dollars ($10,000,000) in the aggregate, at a 12% per annum interest rate. These
notes were interest only for twenty-four (24) months with the entire principal
due at the end of twenty-four (24) months. One note was collateralized by a 1974
Boeing 727-200F and the other note was collateralized by a 1971 Boeing 727-100.
These notes are currently in default. The Company has not received any interest
payments on the two promissory notes. The Company notified Jetlease and the
Federal Aviation Administration ("FAA") of the default and commenced an action
to foreclose on its collateral, the aircraft. The Company also commenced an
action against Jetlease, its principals and others, for damages. The Company had
accrued interest income on these notes in the amount of $600,000 which
represented accrued interest for the period January 1, 1996 through June 30,
1996. However, Management now believes the probability of collecting this
accrued interest is unfavorable and therefore, has written off interest
receivable in the amount of $600,000.
On April 21, 1996, an involuntary petition under Chapter 7 (liquidation) of the
United States Bankruptcy Code was filed against Jetlease in the United States
Bankruptcy Court for the Southern District of Florida. Jetlease consented to the
entry of an order for relief, to convert the case to a case under Chapter 11
(reorganization) and the appointment of a trustee. Subsequent to June 30, 1996,
the Company was informed by its legal counsel that the collateral securing these
promissory notes had been misrepresented to the Company. The Company had been
supplied with fraudulent appraisals. Based upon this information, in September
1996, the Company wrote down the value of the two promissory notes to
$1,875,000, their current market value. This amount was determined by an
appraisal of the aircraft ordered by the Judge of the United States Bankruptcy
Court, for the Southern District of Florida.
During the quarter, a settlement with regard to these bankruptcy proceedings was
achieved. However, this settlement is still subject to the courts approval. As a
result of this settlement the Company has written off its note receivable from
Jetlease in the amount of $1,875,000. Further details will be provided upon the
courts approval of this case.
Long term notes receivable consists of an amount due from the principals of
Prime Source Managed Total Care, Inc. ("Prime"). In November 1994, the Company
acquired 88% of Prime, a medical billing service that also provided managed
health care. The Company later discovered substantial problems with Prime and in
June 1995, the Company entered into a Demand for Arbitration with Prime. A
settlement of this case has been achieved and as a result the Company is
recording a note receivable in the amount of $650,000 from the principals of
Prime.
In addition, the Company has a note receivable in the amount of $360,000 as a
result of a guaranteed investment and a note receivable for computer services
provided to a third party.
NOTE 5: ACCOUNTS PAYABLE AND ACCRUED EXPENSES
Accounts payable consists of miscellaneous trade payables and amounts due to
vendors. Accrued expenses consist primarily of expenses incurred during the
period but invoiced after December 31, 1996.
3
<PAGE>
NOTE 6: NOTES PAYABLE
Current notes payable consists of an amount due to a third party lender, payable
with interest at prime plus 2% with a maturity date of May 1997 as well as
amounts due to the principals of Berwyn Holdings, Inc., a wholly owned
subsidiary of the Company. Long term notes payable consists of amounts lent to
the Company by William G. Lucas, the Chairman of Dawcin. The Company will repay
Mr. Lucas' loans at such time when there is sufficient revenue generated from
the implementation of the Company's programs. In addition, the Company has notes
payable as a result of convertible debentures. These debentures are repayable,
based on their agreement, either through the issuance of stock or cash.
NOTE 7: SALARIES PAYABLE
Salaries payable consists of amounts owed to Mr. Lucas, the Chairman of Dawcin.
For the past two years, Mr. Lucas is owed approximately twenty (20) months of
salary. He will continue not to draw a salary until such time when significant
revenues are generated from the implementation of the Company's programs. Mr.
Lucas has also forgiven a significant portion of his salary in prior years.
NOTE 8: SHAREHOLDERS' EQUITY
At December 31, 1996 the Company had outstanding 2,388,254 shares of common
stock. Management believes that the Company's common stock is greatly
undervalued, and therefore, has from time to time purchased its securities on
the open market. To date, the Company has reacquired 5,358 (1,071,413 reverse
split 200 to 1 on October 17, 1996) shares of common stock. These shares were
accounted for at cost to the issuer and at December 31, 1996, all such shares
are held in the treasury.
NOTE 9: NET LOSS PER SHARE
Net loss per share was computed by dividing the net loss by the weighted average
number of shares of common stock outstanding during the period. The weighted
average number of common shares outstanding during the three months ended
December 31, 1996 and 1995 was 6,130,909 and 16,842, respectively (the 1995
amount has been restated to reflect a 150 to 1 reverse stock split at October
1995 and a 200 to 1 reverse stock split at October 1996). The weighted average
number of common shares outstanding during the six months ended December 31,
1996 and 1995 was 3,141,563 and 10,543, respectively (the 1995 amount has been
restated to reflect a 150 to 1 reverse stock split at October 1995 and a 200 to
1 reverse stock split at October 1996)
NOTE 10: MERGERS AND ACQUISITIONS
On October 17 1996, Dawcin acquired 97% of First Equities Corp., a full service
mortgage banking company in a stock for stock exchange. Subsequently, on
December 10, 1996, the transaction was reversed through a combination of a
spin-off and a surrender of Dawcin common stock by certain key First Equities
shareholders. This transaction had no material effect on the Company's financial
statements. However, shareholders of Dawcin benefited by their subsequent and
continuous ownership of stock in First Equities.
4
<PAGE>
NOTE 11: SUBSEQUENT EVENTS
On January 20, 1996, the Company's Board of Directors approved the sale of 100%
of Berwyn Holdings, Inc., ("Berwyn") a wholly owned subsidiary of Dawcin. On
January 24, 1996, the Company sold 100% of the issued and outstanding stock of
Berwyn to Century Financial Services, Inc. ("Century"). As consideration for the
sale of stock, Century agrees to pay to the Company a sum equal to fifty percent
(50%) of the net profits of Berwyn from all currently existing accounts for as
long as such accounts continue to contract with Berwyn or any successor entity
to Berwyn. As additional compensation, Century will pay to the Company a sum
equal to fifty percent (50%) of the net profits of Berwyn from each new account
originating from an existing client contract. Said compensation shall continue
for as long as the originating account and/or new account continues in its
contract. In addition, it is agreed to by Century that $668,320 is due to the
Company by Berwyn and Century, as the new owner of Berwyn, shall assume
responsibility of this debt. Such debt is evidenced by a note to Dawcin executed
by Berwyn. In addition, the Company and Century agree that as further
consideration for this transaction, Century shall give the Company an agreement
whereby the Company will act as an independent new account agent for Berwyn and
the Company will be compensated for new business generated. No cash
consideration was exchanged in connection with this transaction, however, this
transaction will create a substantial reduction of liabilities (approximately
$900,000) as well as an increase in assets (approximately $370,000), which
Management believes will have a positive impact in the Company's financial
statements. The terms and conditions of this transaction can be found in the
Company's 8-K filing on February 7, 1997.
5
<PAGE>
ITEM 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition
The following discussion and analysis should be read in conjunction with the
Company's financial statements and related notes thereto.
Results of Operations
Three and Six Months Ended December 31, 1996 Compared to Three and Six Months
Ended December 31, 1995
Revenues. Revenues for the three and six months ended December 31, 1996 were
$276,994 and $573,285, respectively, compared to $228,614 and $370,674,
respectively, for the three and six months ended December 31, 1995. The increase
in revenues is primarily due to the improved operations of the Company's
subsidiaries, specifically, the addition of Berwyn's contracts with European
American Bank (EAB) and Fleet Bank and the Company's acquisition in May 1996 of
Integrated Systems International, Inc. (ISI). ISI is a high-tech MIS company
with expertise in implementing specific network solutions and integrating
diverse network systems and applications.
Selling and Administrative Expenses. Selling and Administrative expenses
for the three and six months ended December 31, 1996 were $732,380 and
$1,874,449, respectively, compared to $803,226 and $1,405,201, respectively, at
December 31, 1995. The decrease for the three month period is due to a reduction
of costs in the current quarter which relate to the previous quarter. Had the
first quarter expense been properly reported (reduced), the second quarter
expenses would be virtually unchanged from the same period last year. The
increase for the six month period is due primarily to an increase of
professional fees, specifically, legal fees incurred in connection with the
Company's arbitration proceeding against Prime and litigation with regard to the
Jetlease transaction. In addition, salary expenses increased due to the
acquisition of ISI.
Cost Of Shares Issued for Services Rendered. The Cost of Shares Issued for
Services Rendered for the three and six months ended December 31, 1996 were
$1,069,225 and $2,348,218, respectively, compared to $5,884,290 and $ 7,398,017,
respectively, for the three and six months ended December 31, 1995. These
decreases are a result of the Company's efforts to reduce the amount of shares
of its Common Stock issued to various consultants and professional servicers for
consulting, marketing, public relations and research and development.
Loss on Investment and Bad-Debt Expense. There was no Loss on Investment or
Bad Debt Expense for the three and six months ended December 31, 1996. Loss on
Investment for the three and six months ended December 31, 1995 was $-0- and
$1,901,492, respectively. Bad-debt expense for the three and six months ended
December 31, 1995 was $53,500 and $671,813, respectively. These decreases are
due to the Company having no Loss on Investment or Bad Debt Expense in the
current periods compared to the write-off in September 1995 of Prime Source
Managed Total Care, Inc. a medical billing service that also provided managed
health care, located in Salt Lake City, Utah and the write off of two inactive
subsidiaries, BanServ, Inc. (BanServ) and Command Credit Limited (Limited) which
were written-off during 1995.
6
<PAGE>
Net Losses. For the three and six months ended December 31, 1996, the
Company had net losses of $1,655,503 and $3,939,035, respectively, compared to
$6,889,403 and $11,519,974, respectively, for the three and six months ended
December 31, 1995. The decrease in losses is due primarily to the decrease in
loss on investment and bad-debt expense, described above, as well as a decrease
in the cost of shares issued for services
Liquidity and Capital Resources
As of December 31, 1996, the Company held cash and cash equivalents of
approximately $11,000. The Company had total assets of $2,133,579 and total
liabilities of $2,624,583.
In the past, the Company has experienced cash flow difficulties as a result
of the substantial effort and expense incurred to implement its credit card
programs. The Company generates its cash flow almost exclusively from its
operating activities. When the Company experiences cash flow difficulties,
William G. Lucas, Chairman of Dawcin, from time to time lends the Company funds
at virtually no interest. Mr. Lucas has also not drawn a salary for the past
several months and is currently not drawing a salary. In addition, in past years
Mr. Lucas has forgiven a significant portion of his salary.
The Company currently has no material commitments for capital expenditures.
The Company continues to explore new means to increase its capital base to
finance current operations and to implement its business plan.
7
<PAGE>
Part II- Other Information
ITEM 1. Legal Proceedings
In September, 1994, Command Credit Corporation ("Command"), William G. Lucas
("Lucas"), President of Command and Philip Leone ("Leone"), (a former officer of
Command), consented to the entry of a cease and desist order. The Securities and
Exchange Commission found that Command, Lucas and Leone violated Section 5 of
the Securities Act. Command purported to rely upon the exemption from
registration provided by the Securities Act Section 4(1) and upon Regulation S,
the Commission's safe harbor for overseas sales of securities. However, Section
4(1) was not available because Command, the issuer, was a party to the
distribution and Regulation S was inapplicable because the entire transaction
occurred wholly within the United States. Accordingly, it was ordered, pursuant
to Section 8A of the Securities Act, that Command, Lucas and Leone permanently
cease and desist from committing or causing any violation or future violation of
Section 5 of the Securities Act.
ITEM 2. Changes in Securities
On October 4, 1996, the Company's Board of Directors approved a reverse stock
split of its common shares, pursuant to which every Two Hundred (200) shares of
the Company's issued and outstanding common stock was converted to One (1)
share. This reverse split became effective the open of business on October 17,
1996. In addition, shareholders of record as of the close of business on October
16, 1996 will be granted a stock option on a one for one basis equal to the post
reversed split shares. A registration filing for these shares will be submitted
to the SEC within 120 days from the date the option is granted. In order to
qualify, shareholders must have held their existing shares for thirty (30) days
from October 16, 1996 at which time shareholders of record will receive an
option to purchase shares in Dawcin on a one for one basis at a discounted price
of fifty cents ($0.50) per share.
The Company's outstanding warrants did not reverse split with the common stock,
however, the terms of the warrants have been amended. The new terms of the
warrants are as follows: for every two hundred warrants a shareholder may
purchase one common share for three dollars and fifty cents ($3.50) per share.
With respect to uneven amounts, a shareholder can pay the fractional amount
equal to one full share.
ITEM 5. Other Information
On October 8, 1996, the Company's Board of Directors approved a name change from
Command Credit Corporation to Dawcin International Corp.
On October 7, 1996, the Company's Board of Directors accepted the resignation of
William G. Lucas as President of Dawcin and approved the appointment of Mr.
Edward Capuano as President and Chief Operating Officer of Dawcin. Mr. Lucas
still holds the title of Chairman and Chief Executive Officer of the Company. On
December 20, 1996 the Company's Board of Directors accepted the resignation of
Mr. Edward Capuano as President and Chief Operating Officer and approved the
appointment of Mr. William G. Lucas as President and Chief Operating Officer.
8
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) EXHIBITS
(27) Financial Data Schedule incorporated herein.
(b) REPORTS ON FORM 8-K
8-K dated February 7, 1997 to report:
Item 2. Acquisition or Disposition of Assets
9
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15 (d) 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.
Dated: February 13, 1997 DAWCIN INTERNATIONAL CORP.
(Registrant)
By:/s/ William G. Lucas
------------------------------
William G. Lucas, Chairman and
Chief Financial Officer
10
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 10,866
<SECURITIES> 0
<RECEIVABLES> 1,367,527
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 734,872
<PP&E> 1,070,439
<DEPRECIATION> 755,490
<TOTAL-ASSETS> 2,133,579
<CURRENT-LIABILITIES> 1,971,490
<BONDS> 0
0
0
<COMMON> 239
<OTHER-SE> (490,765)
<TOTAL-LIABILITY-AND-EQUITY> 2,133,579
<SALES> 0
<TOTAL-REVENUES> 573,285
<CGS> 341,559
<TOTAL-COSTS> 1,874,449
<OTHER-EXPENSES> 2,297,670
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (3,939,035)
<INCOME-TAX> 0
<INCOME-CONTINUING> (3,939,035)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,939,035)
<EPS-PRIMARY> (1.25)
<EPS-DILUTED> (1.25)
</TABLE>
