UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(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, 1999
----------------------------------------
[] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ________________ to _______________
Commission File No. 33-55254-31
UNIDYN, CORP.
(Exact name of Small Business Issuer as specified in its charter)
NEVADA 87-0438639
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
1216 South 1580 West, #B
Orem, Utah 84058
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code (801) 434-7250
8621 North Seventy Ninth Avenue
Peoria, Arizona 85345
- ---------------------------------------------------------------
(Former Address) (Zip Code)
Indicate by check mark whether the Issuer (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 Issuer
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. [X] Yes [ ] No
Indicate the number of shares outstanding of each of the Issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of June 30, 1999
- ------------------------------------ ----------------------------------
$.001 PAR VALUE CLASS A COMMON STOCK 32,000,000 SHARES
1
<PAGE>
ITEM 1. MANAGEMENT DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS.
THE FOLLOWING DISCUSSION INCLUDES FORWARD-LOOKING STATEMENTS WITH
RESPECT TO THE COMPANY'S FUTURE FINANCIAL PERFORMANCE. ACTUAL RESULTS MAY DIFFER
MATERIALLY FROM THOSE CURRENTLY ANTICIPATED AND FROM HISTORICAL RESULTS
DEPENDING UPON A VARIETY OF FACTORS, INCLUDING THOSE DESCRIBED BELOW UNDER THE
SUB-HEADING, "BUSINESS RISKS." SEE ALSO THE COMPANY'S ANNUAL REPORT ON FORM
10KSB FOR THE YEAR ENDED DECEMBER 31, 1998.
OVERVIEW
The Company was incorporated in the State of Utah in 1986 as Macaw
Capital, Inc. and was reincorporated in 1993 in the State of Nevada. In December
of 1997, Macaw Capital, Inc. acquired a portion of the assets of Universal
Dynamics, Inc., a private manufacturer of environmental vibration testing
equipment formed in December 1989, and was renamed UniDyn, Corp. No material
relationship exists between the former management and directors of Macaw
Capital, Inc. and the current management and directors of UniDyn, Corp. UniDyn,
Corp. shares are currently traded under the symbol UNDY on the NASDAQ Electronic
Bulletin Board System.
The current company is in the business of providing products involving
quality control of manufactured hardware and electronics. The Company's products
fall under two categories, A) Vibration Stress Screening (VSS) and B) Sterling
inspection products for on-line printed circuit board workmanship inspection.
The vibration test products are used to check the integrity of
manufactured items including printed circuit boards eventually used in
automotive, computer, and various electronic markets. This core business
primarily consists of 1) the vibration hardware or "shaker" unit which
mechanically vibrates the test platform, 2) the vibration control system which
measures output and regulates shaker intensity, and 3) the amplifier unit which
provides power to the shaker. On the production line, VSS can identify latent
defects not readily identified through visual inspection or during the
development and design process. Vibration Stress Screening of electronic and
mechanical components, such as printed circuit boards saves rework time during
production, reduces warranty exposure and can enhance product quality and
longevity. VSS is most effective in detecting intermittent defects such as loose
connections, broken parts, cracked traces, poor solder joints and mechanical
flaws.
The Company currently markets its Vibration Control System product
under the NorthStar brand and to other OEM's to be repackaged for use in the
aerospace, automotive and semiconductor industries. The Company has also
purchased a complete line of shakers and amplifiers known in the industry under
the trade name "Derritron". Derritron has had an excellent 30 year history in
the shaker business, and is considered a premier shaker product. This combined
with the Company's world class vibration control system, puts UniDyn in the
position to become a first tier provider of turn-key vibration test products.
2
<PAGE>
UniDyn's flagship product is called "Sterling". The Sterling product
technology was completely acquired from Universal Dynamics in the second quarter
of 1998 after the patent search showed no prior art, and open for patent filing.
UniDyn is currently in the process of filing patents on this new testing
process. The Company also has firm commitments with a large Japanese company
with a 45 year history of providing various products for the printed circuit
board industry.
The Company will provide Sterling products to the Japanese company
under an exclusive, five year OEM arrangement in Japan estimated to be worth
over $200,000,000. The quantity is estimated to average approximately 20
Sterling units a month, and relates to the initial model demands and various
production options required by the Japanese customers. The Company is in the
process of engineering the first of several "Production Models" for delivery
beginning in the first quarter of 2000. The Sterling technique has already been
tested successfully at IBM and Delco Electronics. The Company is currently
structuring additional funding for Sterling product development.
The Sterling process provides for completely automated on-line quality
control testing of printed circuit boards. It is expected that the Sterling
process can significantly reduce warranty liability for a variety of industries,
including manufacturers of computers, consumer electronic products, and
aerospace and military systems, by discovering workmanship defects through the
manufacturing process. Currently the industry is experiencing a 4 to 7% warranty
return rate. Sterling is believed to be able to reduce this warranty repair rate
down to perhaps 1%.
The Company has also disclosed arrangements involving distribution
through Singapore for UniDyn Company products. It is estimated to be worth
approximately $10,000,000 a year in product shipments. Arrangements are also
currently being put into place for limited Sterling distribution in Europe.
OVERVIEW ACQUISITIONS
To meet the objectives of its business plan and reach an economy of
scale in the short-term, the Company has entered into several asset acquisition
agreements. In December of 1997, the Company closed a transaction with Universal
Dynamics, Inc. an Arizona corporation, for the transfer of certain assets
including equipment, inventory, accounts receivable, software and other
intangible assets related to the NorthStar vibration control system business.
These systems are Microsoft Windows-based and have been integrated in the
Company's proprietary control systems software.
The Company also entered into an agreement to acquire a 100% interest
in the Derritron product of shakers and amplifiers, previously known as a United
Kingdom based manufacturer of vibration shakers and amplifiers. The Company
completed that acquisition in the second quarter of 1998. With this acquisition,
the Company will receive patents, products, manufacturing equipment and an
established market presence internationally. Derritron is currently 1 of only 4
shaker manufacturers worldwide with a full range of electrodynamic shakers, and
has a full selection of shaker models.
3
<PAGE>
The Company also finished the acquisition of the "Sterling" product
rights from Universal Dynamics, Inc., an Arizona corporation, in the second
quarter of 1998. This acquisition was completed after the "Sterling" process was
discovered clear on the patent search during the second quarter.
Based on funding, the Company is looking to expand its operations
through strategic acquisitions that will benefit the Sterling product
development. The Company has sold its interest in continuing business in England
to focus on the business involving Sterling and focus resources on the Sterling
product.
RESULTS OF OPERATIONS
For the three months ending June 30, 1999, the Company posted an income
of $118,358 on revenues of $352,293 ($56,620 income and $514,314 revenue for the
same period in 1998).
Substantially all sales were generated from the NorthStar product.
NorthStar is composed of off the shelf items and has minimal assembly
requirements. Included in income for the quarter is a $101,565 gain from the
sale of the Company's European subsidiary.
Sales are subject to material monthly fluctuations as the Company
integrates recent acquisitions, modifies operations, introduces new product
lines, and modifies its existing customer base. There can be no assurance that
the Company will have the capital resources necessary to complete the
introduction of the Sterling Process in a timely manner in accordance with the
Company's business plan. The Company is currently involved with various funding
potentials for Sterling.
Cost of Goods Sold for the three months ended June 30, 1999 were
$92,324 with a resultant gross profit of $259,969 ($185,298 and $329,016 for
1998). Gross margin for the period ended June 30, 1999 was 74% (64% in 1998). As
new products are introduced, including the Sterling Process, there is
significant uncertainty about future gross margins relative to total sales.
Gross margin percentage is highly dependent upon product prices, sales volumes,
materials cost and allocation of manufacturing overhead which vary from product
to product. Management has estimated the Sterling product at a 50% gross margin.
That margin is expected to improve as the order volume increases with product
demand.
Selling, General and Administrative costs for the three months ended
June 30, 1999 were $237,117, ($414,296 in 1998). The Company currently leases a
total of about 16 people in the United States. The reduction in G&A expenses
reflects management focus on engineering development for Sterling, and less on
corporate overhead. Management also believes that by leasing its primary
workforce, the Company has substantially reduced fixed overhead costs and
provided for a larger free-cash flow for the Company's growth phase. It also
allows for a better benefit base through managed 401K and health plans already
established in the employee leasing companies.
For the six months ending June 30, 1999, the Company posted income of
$76,351 on revenues of $753,493 ($222,515 income and $1,251,729 revenue for the
same period in 1998).
Substantially all sales were generated from the NorthStar product.
NorthStar is composed of off
4
<PAGE>
the shelf items and has minimal assembly requirements. Included in income for
the quarter is a $101,565 gain from the sale of the Company's European
subsidiary. Sales reduction is the result of the Company focusing efforts on
"Morning Star" developments for NorthStar, and redirecting efforts toward the
Sterling Products. Derritron developments will be mostly put on hold until
funding is directed to it through outside funding, or through additional
revenues generated by "Morning Star" or Sterling.
Cost of Goods Sold for the six months ended June 30, 1999 were $213,912
with a resultant gross profit of $539,581 ($383,719 and $868,010 for 1998).
Gross margin for the period ended June 30, 1999 was 72% (69% in 1998). Until the
new products are delivered, including the Sterling Systems, there is significant
uncertainty about future gross margins. Gross margin percentage is highly
dependent upon product prices, sales volumes, materials cost and allocation of
manufacturing overhead.
Selling, General and Administrative costs for the six months ended June
30, 1999 were $554,172, ($746,345 in 1998).
For the six months ending June 30, 1999 the majority of the Company's
research was conducted at the Company's Engineering and Development Center in
Orem, Utah. Substantial research and development costs were incurred by
Universal Dynamics for the development of the NorthStar and Sterling Process
products prior to the December, 1997 asset purchase. The Company's NorthStar
manufacturing along with NorthStar engineering development are both now located
together in Orem, Utah.
LIQUIDITY AND CAPITAL RESOURCES
The Company is currently seeking additional working capital to meet its
short term growth planning including the acquisition of a potential supplier for
the Sterling system. Management believes, although there can be no assurance,
that the Company will have sufficient cash needs for the next 12 months
regardless of its success in attracting additional capital investment. However,
management also believes that a lack of additional working capital over the
remainder of the current fiscal year would substantially curtail the roll-out of
the Sterling Process product line. As of June 30, 1999, the Company has
approximately $255,305 in working capital.
NEW ACCOUNTING PRONOUNCEMENTS
The Financial Accounting Standards Board has adopted several notices
with regard to the treatment of interim financial statements. These issues are
presented in the Company's interim financial statements. As discussed in the
notes to the interim financial statements, the implementation of these new
pronouncements is not expected to have a material effect on the financial
statements.
BUSINESS RISKS
While management believes, but there can be no assurance, that the
Company is sufficiently capitalized to continue operations for the remainder of
the fiscal year, management is currently seeking additional capital investment
to fulfill inventory requirements and outstanding purchase orders which could
have a material impact on short-term growth objectives.
5
<PAGE>
This report contains a number of forward-looking statements which
reflect the Company's current views with respect to future events and financial
performance. These forward-looking statements are subject to certain risks and
uncertainties that could cause actual results to differ materially from
historical results or those anticipated. In this report, the words
"anticipates", "believes", "expects", "intends", "future" and similar
expressions identify forward-looking statements. Readers are cautioned to
consider the specific risk factors described in the Company's Annual Report on
Form 10-KSB for the year ended December 31, 1998 and not to place undue reliance
on the forward-looking statements contained herein, which speak only as of the
date hereof. The Company undertakes no obligation to publicly revise these
forward-looking statements, to reflect events or circumstances that may arise
after the date hereof.
IMPACT OF THE YEAR 2000 ISSUE
The "Year 2000 Problem" arose because many existing computer programs
use only the last two digits to refer to a year. Therefore, these computer
programs do not properly recognize a year that begins with "20" instead of the
familiar "19". If not corrected, many computer applications could fail or create
erroneous results. The extent of the potential impact of the Year 2000 Problem
is not yet known, and if not timely corrected, it could affect the global
economy.
Y2K Statement
The Company has verified that all internal software used in the
operations of the Company and related developments are Y2K compliant. The
Company sees no risk at this time pertaining to Y2K, and internal company
operations.
Products currently manufactured by the Company have also been Y2K
verified. All previous Company customers have the ability to purchase both
hardware and software upgrades from the Company which will certify their
products as Y2K compliant. The amount of needed hardware and software depends on
the associated production model in question.
ITEM 2. LEGAL PROCEEDINGS
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Financial statements as of June 30, 1999
(b) Reports on Form 8-K
None
6
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of
1934, the Issuer has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNIDYN, CORP.
Dated: August 13, 1999
Ira Gentry, President and Director
7
<PAGE>
UNIDYN, CORP. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
ASSETS (Unaudited) (Audited)
---------------------- --------------------
CURRENT ASSETS
<S> <C> <C>
Cash in bank $ 35,855 $ 138,936
Accounts receivable 256,680 245,312
Receivable - shareholder 87,150 0
Deferred tax benefit 9,500 14,500
Prepaid expense 1,180 17,564
Inventory 45,975 34,173
---------------------- --------------------
TOTAL CURRENT ASSETS 436,340 450,485
PROPERTY, PLANT & EQUIPMENT 49,089 95,287
OTHER ASSETS
Deferred tax benefit 196,500 196,500
Derrition Technology 4,008,400 4,008,400
---------------------- --------------------
4,204,900 4,204,900
---------------------- --------------------
$ 4,690,329 $ 4,750,672
====================== ====================
LIABILITIES & EQUITY
CURRENT LIABILITIES
Accounts payable $ 75,566 $ 173,138
Accrued expenses 0 47,285
Payable - related party 105,469 90,670
Income taxes payable 0 50
---------------------- --------------------
TOTAL CURRENT LIABILITIES 181,035 311,143
STOCKHOLDERS' EQUITY
Common Stock $.001 par value:
Authorized - 100,000,000 shares
Issued and outstanding
32,000,000 shares 32,000 32,000
Additional paid-in capital 4,341,832 4,341,832
Retained earnings 142,048 65,697
Accumulated other comprehensive loss (6,586) 0
---------------------- --------------------
TOTAL STOCKHOLDERS' EQUITY 4,509,294 4,439,529
---------------------- --------------------
$ 4,690,329 $ 4,750,672
====================== ====================
</TABLE>
F-1
<PAGE>
UNIDYN, CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1999 1998 1999 1998
------------------ ----------------- ----------------- ------------------
<S> <C> <C> <C> <C>
Net sales $ 352,293 $ 514,314 $ 753,493 $ 1,251,729
Cost of sales 92,324 185,298 213,912 383,719
------------------ ----------------- ----------------- ------------------
GROSS PROFIT 259,969 329,016 539,581 868,010
Other Income:
Commissions 0 182,900 0 212,900
Gain on sale of subsidiary 101,565 0 101,565 0
------------------ ----------------- ----------------- ------------------
101,565 182,900 101,565 212,900
Bad debts 0 30,000 0 30,000
General and administrative expenses 237,117 414,296 554,172 746,345
------------------ ----------------- ----------------- ------------------
237,117 444,296 554,172 776,345
------------------ ----------------- ----------------- ------------------
NET INCOME (LOSS)
BEFORE INCOME TAXES 124,417 67,620 86,974 304,565
Income tax expense 6,059 11,000 10,623 82,050
------------------ ----------------- ----------------- ------------------
NET INCOME (LOSS) 118,358 56,620 76,351 222,515
OTHER COMPREHENSIVE LOSS
Foreign currency translation
adjustments 0 0 (6,586) 0
------------------ ----------------- ----------------- ------------------
TOTAL COMPREHENSIVE
INCOME (LOSS) $ 118,358 $ 56,620 $ 69,765 $ 222,515
================== ================= ================= ==================
Net income (loss) per weighted
average share $ .00 $ .00 $ .00 $ .01
================== ================= ================= ==================
Weighted average number of common
shares used to compute net income
(loss) per weighted average share 32,000,000 24,144,000 32,000,000 24,144,000
================== ================= ================= ==================
</TABLE>
F-2
<PAGE>
UNIDYN, CORP. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended
June 30,
1999 1998
----------------- -----------------
OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 76,351 $ 222,515
Adjustments to reconcile net income to cash provided
by operating activities:
Depreciation 12,605 3,000
Bad debts 0 30,000
Gain on subsidiary disposal (5,717) 0
Deferred taxes 5,000 (276,000)
Foreign currency translation (6,586) 0
Changes in assets and liabilities:
Accounts receivable (65,557) (160,741)
Inventory (11,802) 6,103
Prepaid expenses 7,306 (38,426)
Accounts payable 6,674 34,455
Accrued expenses (30,958) 0
Payable - related party 14,799 0
Income taxes payable (50) 338,000
----------------- -----------------
NET CASH PROVIDED
BY OPERATING ACTIVITIES 2,065 158,906
INVESTING ACTIVITIES
Loans (87,150) (16,000)
Purchase of equipment 0 (27,728)
----------------- -----------------
NET CASH PROVIDED (USED)
BY INVESTING ACTIVITIES (87,150) (43,728)
FINANCING ACTIVITIES
Cash remaining with former subsidiary (17,996) 0
Loan principal payments 0 (74,775)
----------------- -----------------
NET CASH (USED) BY
FINANCING ACTIVITIES (17,996) (74,775)
----------------- -----------------
INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS (103,081) 40,403
Cash and cash equivalents at beginning of year 138,936 104,522
----------------- -----------------
CASH AND CASH EQUIVALENTS
AT END OF PERIOD $ 35,855 $ 144,925
================= =================
Cash paid for income taxes $ 11,870 $ 50
Cash paid for interest 0 0
</TABLE>
SUPPLEMENTAL INFORMATION
During the six months ended June 30, 1998, the Company issued 14,576,000 shares
of restricted common stock for Derritron technology with a value of $4,008,400.
The value was based on a discounted value of free-trading stock on the date of
issuance.
F-3
<PAGE>
UNIDYN, CORP. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1999
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES
Accounting Methods
The Company recognizes income and expenses based on the accrual method
of accounting.
Principals of Consolidation
The financial statements for June 30, 1999 contain the accounts of the
Company and its formerly wholly-owned subsidiary, Unidyn (Europe)
Limited.
The financial statements for June 30, 1998 contain the accounts of the
Company and Universal Dynamics, Inc. ("Universal"). Universal could be
considered an entity under common control as at one time, the President
of the Company and the president of Universal were the same person. Also
the Company issued common stock to Universal to acquire the NorthStar
operations from Universal. NorthStar is currently the main line of
business for the Company. All significant intercompany transactions have
been eliminated on consolidation.
Dividend Policy
The Company has not yet adopted any policy regarding payment of
dividends in cash.
Organization Costs
The Company amortized its organization costs over a five year period.
Inventory
Inventory consists of items for resale and is valued at the lower of
cost (first-in, first-out basis) or market.
Allowance for Uncollectible Accounts
The Company provides an allowance for uncollectible accounts based upon
prior experience and management's assessment of the collectability of
existing accounts.
Revenue Recognition
Revenue is recognized upon shipment of products.
Cash and Cash Equivalents
For financial statement purposes, the Company considers all highly
liquid investments with an original maturity of three months or less
when purchased to be cash equivalents.
Earnings (loss) per share
Earnings or loss per common and common equivalent share is computed by
dividing net earnings (loss) by the weighted average common shares
outstanding during each period.
Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets, liabilities,
revenues, and expenses during the reporting period. Estimates also
affect the disclosure of contingent assets and liabilities at the date
of the financial statements. Actual results could differ from these
estimates. Such estimates of significant accounting sensitivity are
allowance for doubtful accounts.
Stock Options
The Company has elected to follow Accounting Principles Board Opinion
No. 25, "Accounting for Stock Issued to Employees" (APB 25) and related
interpretations in accounting for its future employee stock options
rather than adopting the alternative fair value accounting provided for
under Financial Accounting Standards Board ("FASB") FASB Statement No.
123, Accounting for Stock Based Compensation (SFAS 123).
Income Taxes
The Company records the income tax effect of transactions in the same
year that the transactions enter into the determination of income,
regardless of when the transactions are recognized for tax purposes. Tax
credits are recorded in the year realized.
F-4
<PAGE>
UNIDYN, CORP. AND SUBSIDIARY
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS (continued)
June 30, 1999
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING PRINCIPLES (continued)
Income Taxes (continued)
In February, 1992, the Financial Accounting Standards Board adopted
Statement of Financial Accounting Standards No. 109, Accounting for
Income Taxes, which supersedes substantially all existing authoritative
literature for accounting for income taxes and requires deferred tax
balances to be adjusted to reflect the tax rates in effect when those
amounts are expected to become payable or refundable. The Statement was
applied in the Company's financial statements for the fiscal year
commencing January 1, 1993.
NOTE 2: ORGANIZATION AND HISTORY
The Company was incorporated under the laws of the State of Utah on May
2, 1986 as Macaw Capital, Inc. On December 30, 1993, the Company was
dissolved as a Utah corporation and reincorporated as a Nevada
corporation. On December 3, 1997, the name was changed to UniDyn, Corp.
The Company manufactures and sells computer products that perform
vibration testing to assure product stability.
NOTE 3: FORWARD STOCK SPLIT
Effective December 3, 1997, pursuant to written action adopted
unanimously by the Board of Directors and a majority of the
shareholders, the Company changed its name to UniDyn, Corp., and
approved an eight-for-one forward stock split on the Company's common
stock as follows: each outstanding share was converted into eight
shares. Before the change, the Company was authorized to issue
100,000,000 shares of $.001 par value common stock; after the forward
stock split the Company shall continue to be authorized to issue
100,000,000 shares of $.001 par value common stock. The number of
outstanding shares of common stock affected by the forward split was
4,000,000. The number of issued and outstanding shares of common stock
of the Company after the forward stock split is 32,000,000.
NOTE 4: 1998 EVENTS
STERLING PATENT
During the quarter ended June 30, 1998, the Company issued 6,416,000
shares of restricted common stock, previously held as treasury stock, to
acquire a patent on the Sterling Project from Universal. The patent will
be amortized over fifteen years. The Sterling Project will allow the
testing of printed circuit boards. Sterling will estimate the projected
life of each solder connection on the printed circuit board, which will
quantify the reliability of the manufactured part. The Company expects
to have a working production model by the end of 1998 with sales
expected in the second quarter of 1999.
DERRITRON TECHNOLOGY
Effective June 30, 1998, the Company issued 14,576,000 shares of
restricted common stock, previously held as treasury stock, to acquire
the technology. The technology will be amortized over five years. The
Company will need to spend some money to upgrade the technology and
expects sales to begin in the third quarter of 1999. With this
acquisition, the Company receives patents, products, manufacturing
equipment, and an established market presence in England and other parts
of Europe.
NOTE 5: SEGMENT INFORMATION
The Company's subsidiary had sales in Europe of $36,145, cost of sales
of $23,926, general and administrative expenses of $90,779, and a net
loss of $78,560. Included in cost of sales is $16,533 paid to the
Company for inventory to sell.
NOTE 6: SALE OF SUBSIDIARY
Effective April 1, 1999, the Company sold its subsidiary to its largest
shareholder for $185,933. $98,783 is reflected in accounts receivable
representing uncollected sales made to the former subsidiary and $87,150
is reflected as receivable - shareholder. The Company expects to collect
the entire $185,933 within the next twelve months. No operations for the
subsidiary after March 31, 1999 are reflected in the statement of
operations.
F-5
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from UniDyn, Corp. June 30, 1999 financial statements and is
qualified in its entirety by reference to such financial
statements.
</LEGEND>
<CIK> 0000894542
<NAME> UniDyn, Corp.
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 35,855
<SECURITIES> 0
<RECEIVABLES> 256,680
<ALLOWANCES> 0
<INVENTORY> 45,975
<CURRENT-ASSETS> 436,340
<PP&E> 57,753
<DEPRECIATION> (8,664)
<TOTAL-ASSETS> 4,690,329
<CURRENT-LIABILITIES> 181,035
<BONDS> 0
0
0
<COMMON> 32,000
<OTHER-SE> 4,477,294
<TOTAL-LIABILITY-AND-EQUITY> 4,690,329
<SALES> 753,493
<TOTAL-REVENUES> 753,493
<CGS> 213,912
<TOTAL-COSTS> 213,912
<OTHER-EXPENSES> 554,172
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 86,974
<INCOME-TAX> 10,623
<INCOME-CONTINUING> 76,351
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 76,351
<EPS-BASIC> .00
<EPS-DILUTED> .00
</TABLE>
