FORM 10-QSB
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C., 20549
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______ to ________
Commission file number _______________
D.H. MARKETING & CONSULTING, INC.
(Exact name of small business issuer as specified in its charter)
Nevada 88-0330263
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
HC 77 Box 394 B, Routes 6 & 209, Milford, PA 18337 (717) 296-8515
(Address of principal executive offices) (Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: As of September 30, 1997 the
issuer had 4,005,341 shares of common stock outstanding, 2,510,441 shares of
which are restricted and 1,494,900 shares are free trading. As of September 30,
1997 the issuer had 434 shareholders.
Transitional Small Business Disclosure Format (Check one);
Yes [ ] No [X]
<PAGE>
PART I- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
See attached Financial Statements for the quarter ending September 30,
1997.
<PAGE>
D. H. MARKETING & CONSULTING, INC.
and SUBSIDIARIES
Consolidated Financial Report
September 30, 1997
<PAGE>
D.H. MARKETING & CONSULTING, INC.
and SUBSIDIARIES
Contents
Page
Independent Auditor's Report on the
Consolidated Financial Statements 1
Consolidated Financial Statements
Consolidated Balance Sheet 2
Consolidated Statement of Income 4
Consolidated Statement of Stockholders' Equity 5
Consolidated Statement of Cash Flows 6
Notes to Consolidated Financial Statements 8
<PAGE>
Niessen, Dunlap & Pritchard, P.C.
Certified Public Accountants & Business Consultants
590 Bethlehem Pike
P.O. Box 606
Colmar, PA 18915-0606
Phone (215) 997-7200
Fax (215) 997-7295
Independent Auditor's Report on the Consolidated Financial Statements
To the Board of Directors and Stockholders
D.H. Marketing & Consulting, Inc.
Milford, Pennsylvania
We have audited the accompanying consolidated balance sheet of D.H. Marketing &
Consulting, Inc., and Subsidiaries as of September 30, 1997, and December 31,
1996, and the related consolidated statements of income, stockholders' equity,
and cash flows for the nine months ended September 30, 1997. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
Except as discussed in the following paragraph, we conducted our audits in
accordance with generally accepted auditing standards. Those standards require
that we plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements. An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.
In accordance with the terms of our engagement for the nine months ended
September 30, 1997, we did not audit the financial statements for that period
of Universal Network of America, Inc., a 24% owned affiliate. The Company's
investment in that affiliate is stated at $3,331,800 at September 30, 1997,
and its equity in the loss of that affiliate of $318,200, is included in net
income for the nine months then ended. We were unable to satisfy ourselves as
to the carrying value of the investment in the affiliate or the equity in its
earnings by other auditing procedures. See Note 5 for condensed Universal
Network of America, Inc., unaudited financial data.
In our opinion, except for the effects of such adjustments, if any, as might
have been determined to be necessary had we been able to examine evidence
regarding the affiliate investment and earnings, the consolidated financial
statements referred to above present fairly, in all material respects, the
financial position of D.H. Marketing & Consulting, Inc., and Subsidiaries as of
September 30, 1997 and December 31, 1996, and the results of their operations
and their cash flows for the nine months ended September 30, 1997, in
conformity with generally accepted accounting principles. The consolidated
statements of income, stockholders' equity, and cash flows for the nine months
ended September 30, 1996, were not audited by us and, accordingly, we do not
express an opinion on them.
/s/ NIESSEN, DUNLAP & PRITCHARD, P.C.
NIESSEN, DUNLAP & PRITCHARD, P.C.
Colmar, Pa.
November 3, 1997
<PAGE>
D.H. MARKETING & CONSULTING, INC. and SUBSIDIARIES
Consolidated Balance Sheet
September 30, 1997, and December 31, 1996
1997 1996
____________ ___________
Assets
Current Assets
Cash $ 60,313 $ 147,572
Short-Term Investments
Certificate of Deposit 250,000 253,902
Accounts Receivable, Net of Allowance
1997 $2,900; 1996 $2,900 2,171,052 462,026
Inventory 1,117,789 496,776
Prepaid Expenses and Other 135,983 152,045
___________ ___________
Total Current Assets 3,735,137 1,512,321
___________ ___________
Investments
Investments in Qualtronics Corporation, Inc. 0 466,720
Investments in Universal Network of
America, Inc. 3,331,800 0
Investments in Frama, Inc. 1,450,000 0
Investments - Other 48,903 13,195
___________ ___________
Total Investments 4,830,703 479,915
___________ ___________
Property and Equipment, Net of Accumulated
Depreciation, 1997 $425,617; 1996 $5,743 280,649 22,343
___________ ___________
Goodwill, Net of Accumulated Amortization
1997 $20,501 252,843 0
___________ ___________
Other Assets, Including a Deferred Tax
Asset 1997 $129,200 426,092 37,248
___________ ___________
Total Assets $ 9,525,424 $ 2,051,827
=========== ===========
See Notes to Financial Statements.
2
<PAGE>
D. H. MARKETING & CONSULTING, INC. and SUBSIDIARIES
Consolidated Balance Sheet
September 30, 1997 and December 31, 1996
1997 1996
____________ ___________
Liabilities and Stockholders' Equity
Current Liabilities
Line of Credit $ 350,000 $ 0
Current Portion of Long-Term Debt 58,707 1,127
Accounts Payable 190,763 5,112
Accrued Income Taxes 1,082,400 154,300
Other 75,408 1,417
____________ ___________
Total Current Liabilities 1,757,278 161,956
Long-Term Debt 211,174 5,412
____________ ___________
Total Liabilities 1,968,452 167,368
____________ ___________
Minority Interest in Subsidiary 12,166 0
____________ ___________
Stockholders' Equity
Common Stock, 1997 $.0003 Par Value,
Authorized 75,000,000 Shares;
Issued and Outstanding 4,005,341 Shares
(2,510,441 Shares Restricted, 1,494,900 Shares Free Trading)
1996 - $.001 Par Value, Authorized 25,000,000 Shares;
Issued and Outstanding 1,166,447 Shares
(876,947 Shares Restricted,
289,500 Shares Free Trading 1,333 1,166
Additional Paid-In Capital 6,496,880 1,568,047
Retained Earnings 2,459,093 315,246
____________ ___________
8,957,306 1,884,459
Less Cost of 125,000 Shares of Treasury Stock (1,412,500) 0
____________ ___________
Total Stockholders' Equity 7,544,806 1,884,459
Total Liabilities and Stockholders' Equity $ 9,525,424 $ 2,051,827
============ ===========
See Notes to Financial Statements.
3
<PAGE>
D. H. MARKETING & CONSULTING, INC. and SUBSIDIARIES
Consolidated Statement of Income
Three Months Ended September 30, 1997 and
Nine Months Ended September 30, 1997 and 1996
1997 1997 1996
Third Year to Year to
Quarter Date Date
__________ ___________ ___________
(Unaudited)
Sales, Less Discounts
1997 $4,622; 1996 $40,983 $ 3,267,297 $ 9,555,044 $ 986,877
Cost of Goods Sold 1,405,115 5,122,394 313,810
____________ ____________ ___________
Gross Profit 1,862,182 4,432,650 673,067
____________ ____________ ___________
General and Administrative
Expenses 431,827 1,196,193 318,108
____________ ____________ ___________
Other Income (Expense)
Consulting Fees 0 500,000 100,000
Equity Earnings (Loss) in
Universal Network of
America, Inc. (318,200) (318,200) 0
Other (14,654) 8,922 9,178
____________ ____________ ___________
Total Other Income (Expense) (332,854) 190,722 109,178
____________ ____________ ___________
Income Before Income Taxes
and Minority Interest in Net
Income of Subsidiary 1,097,501 3,427,179 464,137
___________ ____________ ___________
Income Taxes
Federal 453,000 1,193,000 13,000
State 77,336 217,336 46,400
Deferred Tax Benefit (129,200) (129,900) 0
____________ ____________ ___________
Total Income Taxes 401,136 1,281,136 59,400
____________ ____________ ___________
Income before Minority
Interest in Net Income
of Subsidiary 696,365 2,146,043 404,737
Minority Interest in Net
Income of Subsidiary (193) 2,196 0
____________ ____________ ___________
Net Income $ 696,558 $ 2,143,847 $ 404,737
============ ============ ===========
Net Income Per Share $.18 $.55 $.36
============ ============ ===========
Weighted Average
Number of Common Shares 3,881,428 3,883,667 1,135,335
============ ============ ==========
See Notes to Financial Statements
4
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Consolidated Statement of Stockholders' Equity
Nine Months Ended September 30, 1997 and 1996
Additional Retained
Common Stock Paid-In Earnings Treasury
_________________
Shares Amount Capital (Deficit) Stock Total
_________ _______ _________ __________ ________ __________
------------------------(Unaudited)----------------------------
Balance,
December 31,
1995 1,119,000 $ 1,119 $ 734,090 $ (369,724) $ 0 $ 365,485
Issuance of
Common Stock 33,960 34 496,796 0 0 496,830
Net Income 0 0 0 404,737 0 404,737
_________ _______ _________ __________ _______ _________
Balance,
September
30, 1996 1,152,960 $1,153 $1,230,886 $ 35,013 $ 0 $1,267,052
========= ====== =========== ========== ======= ==========
Additional Retained
Common Stock Paid-In Earnings Treasury
_________________
Shares Amount Capital (Deficit) Stock Total
_________ _______ _________ __________ ________ __________
Balance,
December 31,
1996 1,166,447 $1,166 $1,568,047 $ 315,246 $ 0 $1,884,459
Issuance of
Common Stock 102,000 102 2,753,898 0 0 2,754,000
3 for 1 Stock
Split 2,536,894 0 0 0 0 0
Issuance of
Common Stock 200,000 65 2,174,935 0 0 2,175,000
Purchase of
125,000 Shares
for Treasury
Stock 0 0 0 0 (1,412,500)(1,412,500)
Net Income 0 0 0 2,143,847 0 2,143,847
___________ _______ __________ __________ ________ _________
Balance,
September 30,
1997 4,005,341 $ 1,333 $6,496,880 $2,459,093$(1,412,500)$7,544,806
========= ======= ========== ========== ========= =========
See Notes to Financial Statements.
5
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 1997 and 1996
1997 1996
___________ ___________
(Unaudited)
Cash Flows from Operating Activities
Net Income $ 2,143,847 $ 404,737
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation 45,299 3,444
Amortization 32,655 12,155
Gain on Sale of Investment (75,000) 0
Deferred Income Tax Benefit (129,200) 0
Undistributed Loss of Universal
Network of America, Inc. 318,200 0
Minority Interest in Net Income of Subsidiary 2,196 0
Change in Assets and Liabilities, Net of
Effects from Purchase of Qualtronics
Corporation:
(Increase) Decrease in:
Accounts Receivable (7,678,786) (245,017)
Inventory 4,319,598 (106,827)
Prepaid Expenses and Other (229,185) (33,422)
Increase (Decrease) in:
Accounts Payable 479,809 148,732
Accrued Income Taxes 928,100 59,400
Other 37,627 (1,852)
___________ __________
Net Cash Provided by Operating Activities 195,160 241,350
___________ __________
Cash Flows from Investing Activities
Purchase of Certificate of Deposit (250,000) 0
Redemption of Certificate of Deposit 253,902 0
Proceeds from Sale of Investment 200,000 0
Purchase of Investments (735,708) (291,610)
Purchase of Property and Equipment ( 27,982) (16,789)
Acquisition of Subsidiary, Qualtronics
Corporation, Inc., Net of Cash (26,496) 0
___________ __________
Net Cash Used in Investing Activities (586,284) (308,399)
___________ __________
Cash Flows from Financing Activities
Net Borrowings on Lines of Credit 350,000 0
Net Proceeds from Issuance of Common Stock 0 318,750
Principal Payments on Note Payable - Officer 0 (60,371)
Principal Payments on Long-Term Debt (46,135) (577)
___________ __________
Net Cash Provided by Financing Activities 303,865 257,802
__________ __________
Net Increase (Decrease) in Cash (87,259) 190,753
Cash
Beginning 147,572 171,096
__________ __________
Ending $ 60,313 $ 361,849
========== ==========
See Notes to Financial Statements.
6
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Consolidated Statement of Cash Flows
Nine Months Ended September 30, 1997 and 1996
1997 1996
___________ __________
(Unaudited)
(Continued)
Supplemental Disclosures of Cash Flow
Information
Cash Payments for:
Interest $ 40,324 $ 530
=========== ==========
Income Taxes $ 479,375 $ 0
=========== ==========
Supplemental Schedule of Noncash
Operating, Investing and Financing Activities
Capital Lease Obligations Incurred
for Use of Equipment $ 0 $ 7,375
=========== ==========
Purchase of Inventory through
Issuance of Company Stock $ 4,425,000 $ 0
=========== ==========
Purchase of Investments through
Issuance of Common Stock $ 450,000 $ 178,080
=========== ==========
Acquisition of Investment in Satisfaction
of Accounts Receivable $ 4,650,000 $ 0
=========== ==========
Acquisition of Treasury Stock
in Satisfaction of Accounts Receivable $ 1,412,500 $ 0
============ ==========
Acquisition of Subsidiary,
Qualtronics Corporation, Inc.
Working Capital Assumed Net
of Cash of $48,504 $ 295,899
Fair Value of Other Assets Acquired,
Principally Property and Equipment 297,421
Cost in Excess of Net Assets Acquired 273,343
Company Investment in Qualtronics
Corporation, Inc as of December 1996 (466,720)
Long-Term Debt Assumed (309,477)
Minority Interests (9,970)
Issuance of Company Common Stock (54,000)
___________
Net Cash Paid in January 1997 to
Acquire Qualtronics Corporation, Inc $ 26,496
===========
See Notes to Financial Statements.
7
<PAGE>
D. H. MARKETING & CONSULTING, INC. and SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
1. Significant Accounting Policies
Nature of Business
D. H. Marketing & Consulting, Inc., a New York corporation, was organized
on January 4, 1994, and was actively engaged in business operations through
September 29, 1994. On September 29, 1994, the Company merged with D. H.
Marketing & Consulting, Inc., a Nevada corporation, incorporated under the
laws of the State of Nevada on September 8, 1994, for the purpose of
acquiring D. H. Marketing & Consulting, Inc., the New York corporation. The
Company is engaged in four main areas of business: marketing and
distributing of chemical burn cleansing solutions (the solutions have been
in use in Europe for six years); the purchase and sale of valuable and
rare stamps, coins, fine art, and other tangible asset collectibles;
network marketing; and general consultation to and possible acquisition of
small growth oriented companies. The Company markets its products
throughout the continental United States, Canada and Europe.
Qualtronics Corporation, Inc., a 97%-owned subsidiary, is a contract
manufacturer, specializing in prototype and low volume electronic and
electro-mechanical assemblies, utilizing surface mount and hybrid
microcircuit technologies. Qualtronics' customers are predominately in
northeastern U.S.
Principles of Consolidation
The consolidated financial statements include the accounts of the Company,
its wholly-owned subsidiaries, and Qualtronics Corporation, Inc., a
97%-owned subsidiary. All significant intercompany accounts and
transactions have been eliminated in consolidation.
Investment in Common Stock
Universal Network, Inc.
The company is accounting for its investment in Universal Network of
America, Inc., a 24% owned affiliate, by the equity method of accounting
under which the Company's share of the net loss of the affiliate is
recognized as an expense in the Company's statement of income.
The fiscal year of the affiliate ends on December 31, and the Company
intends to follow the practice of recognizing its share of the net income
or loss of the affiliate on a quarterly basis. Therefore, the Company's
share of the unaudited net loss of the affiliate for the nine months
ended September 30, 1997, is reported in the Company's statement of income.
Frama, Inc.
The Company is accounting for its 11% investment in the common stock of
Frama, Inc., at cost. The common stock of Frama, Inc., is not publicly
traded.
Property and Equipment
Property and equipment are stated at cost. Major replacements and
betterments are capitalized while maintenance and repairs are expensed as
incurred.
Depreciation is provided generally on a straight-line basis over the
estimated service lives of the respective classes of property.
8
<PAGE>
D. H. MARKETING & CONSULTING, INC. and SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
1. Significant Accounting Policies (Continued)
Other Assets
Organization expenses are recorded at cost and are being amortized on a
straight-line basis over five years. The expenses represent pre-
incorporation cost to establish the entity and develop various sales
venues. At September 30, 1997, the net unamortized balance was $17,948.
Fair Value of Financial Instruments
Unless otherwise indicated, the fair values of all reported assets and
liabilities which represent financial instruments (none of which are
held for trading purposes) approximate the carrying values of such
amounts.
Income Taxes
Income taxes are provided for by the tax effects of transactions reported
in the financial statements and consist of taxes currently due plus
deferred taxes related primarily to the difference between the basis of
the investment in Universal Network of America, Inc., for financial and
income tax reporting. The deferred tax assets and liabilities represent the
future tax return consequences of those differences, which will either be
taxable or deductible when the assets and liabilities are recovered or
settled.
The entire deferred tax asset in the amount of $129,200 relates to the
investment in Universal Network of America, Inc.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the amounts reported in the financial statements
and accompanying notes. Actual results could differ from those estimates.
2. Inventory
Inventories consisted of the following:
Artwork and Collectibles $ 827,060
Work in Process and Raw Materials -
Qualtronics Corporation, Inc. 290,729
___________
$ 1,117,789
===========
Artwork and collectibles are valued on a specific identified cost basis,
while other inventory is valued on a first-in, first-out basis at the
lower of cost or market.
Inventory with a value of $4,425,000 was acquired by the issuance of
Company common stock during the period January 1, 1997, to September 30,
1997.
9
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
3. Qualtronics Corporation, Inc.
On January 9, 1997, the Company acquired an additional 55% of the
outstanding common stock of Qualtronics Corporation, Inc. The Company
currently owns 97% of the stock of Qualtronics Corporation, Inc., with its
results from operations reflected in the consolidated financial statement
since January 9, 1997.
The following pro forma information combines the results of the
Company and Qualtronics Corporation, Inc., as if the acquisition had
occurred at the beginning of the periods presented.
September 30,
________________________________
1997 1996
____________ ____________
(Unaudited)
Sales $ 9,555,044 $ 2,139,977
Cost of Goods Sold 5,080,064 836,998
___________ ___________
Gross Profit 4,474,980 1,302,979
General and
Administrative Expenses 1,196,193 997,450
Other Income (Expenses) 466,592 117,551
___________ ___________
Income Before Income Taxes and
Minority Interest in Net
Income of Subsidiary 3,745,379 423,080
Income Tax 1,391,336 56,760
___________ ____________
Income Before Minority Interest
in Net Income of Subsidiary 2,354,043 366,320
Minority Interest in Net
Income of Subsidiary (2,196) (1,152)
____________ ____________
Net Income $ 2,351,847 $ 365,168
============ ============
Net Income Per Share $0.61 $0.32
============ ============
Weighted Average Number of
Common Shares 3,883,667 1,135,335
============ ============
4. Lines of Credit
On March 20, 1997, the Company entered into two line of credit agreements
with a bank, due on demand, which permit borrowing up to $250,000 on each
line. Interest on the first line is charged monthly on the outstanding
balance at 1.5% in excess of interest paid by the bank on the certificate
of deposit which is the collateral of the first line. Interest on the
second line is charged monthly on the outstanding balance at the lender's
prime rate. The second line is secured by 50,000 shares of common stock of
the Company and its inventory, property and equipment, and accounts
receivable. At September 30, 1997, the outstanding balance of the first
line is $250,000 with an interest rate of 6.75%. The outstanding balance
of the second line is $100,000 with an interest rate of 8.5%.
10
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
5. Investment in Universal Network of America, Inc.
Condensed unaudited financial information of Universal Network of America,
Inc., as of September 30, 1997, and for the nine months then ended, is as
follows:
Assets
Current Assets
Cash $ 202,989
Inventory 5,311,755
Other 29,765
____________
5,544,509
Equipment and Leasehold Improvements Less
Accumulated Depreciation and Amortization 117,480
Other Assets 128,917
____________
$ 5,790,906
============
Liabilities and Stockholders' Equity
Current Liabilities
Accounts Payable and Accrued Expenses $ 1,251,306
Long-Term Debt 5,005
Stockholders' Equity 4,534,595
____________
$ 5,790,906
============
Net Sales $ 3,303,109
Cost of Sales 2,856,753
____________
Gross Profit 446,356
Selling, General, and Administrative Expenses 1,296,274
____________
Net Loss $ (849,918)
=============
The carrying value of the Company's investment exceeded its share of the
underlying equity in the unaudited net assets of Universal Network of
America, Inc., by $2,385,300 at September 30, 1997. The excess is being
amortized over 10 years using the straight-line method. Amortization
for the period ended September 30, 1997, was $103,700, and is included as a
deduction to the Company's investment and as an addition to the loss of the
affiliate.
Universal Network of America, Inc., has suffered cumulative losses through
September 30, 1997, of $1,183,674. The common stock of Universal Network of
America, Inc., is not publicly traded.
11
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
6. Related Party Transaction
During the period January 1, 1997, to September 30, 1997, the Company had
various transactions with its 24% affiliate which included: receipt of
consulting income of $500,000, sales of collectibles of $4,098,400, and
receipt of other payments of income of $231,400. During this period, the
Company accepted shares of common stock in the affiliate, valued at $2 per
share, in the amount of $3,550,000. The Company has on its books an accounts
receivable from the 24% affiliate in the amount of $924,298 at September 30,
1997.
The Company sold collectibles in the amount of $1,631,550 to a shareholder
during the nine-month period ended September 30, 1997. The shareholder paid
for this transaction with the surrender of shares of D.H. Marketing &
Consulting, Inc., common stock and the surrender of other investments. The
Company also sold this shareholder a mortgage option which was paid for
with shares of D.H. Marketing & Consulting common stock, shares of common
stock in the Company's 24% owned affiliate, and $200,000 in cash.
7. Common Stock Split
On February 24, 1997, the Company recorded a three-for-one stock split of
the Company's common stock to shareholders of record on that date. Par
value of the common stock has been adjusted for the three-for-one stock
split. Authorized shares have been increased to 75,000,000 shares.
8. Stock Options
On September 6, 1996, the Company made available to key employees a plan
for granting options on the Company's stock. The options are for a three-
year period from September 6, 1996. Such options are fully vested when
exercised. The options will exist for restricted securities which
typically require the shareholder to hold for a period of two years before
they may be sold, in whole or in part. Options numbering 55,000
(165,000 options after giving effect of the Company's three-for-one stock
split) have been granted, exercisable into an equal number of shares of
common restricted stock at an exercise price of $20 5/8 per share (prior
to three-for-one stock split), the closing price of the publicly-traded
shares as of September 6, 1996.
On January 7, 1997, 400,000 options were granted to certain key employees
of the Company (1,200,000 options after giving effect of the Company's
three-for-one stock split). The options are for a three-year period from
January 7, 1997. These options are for restricted securities, are fully
vested to the employee, and are exercisable into shares of common
restricted stock at $8.92 per share after giving effect of the Company's
three-for-one stock split.
On January 13, 1997, 250,000 options were granted to a certain individual
for a five-year period from January 13, 1997 (750,000 options after
giving effect of the Company's three-for-one stock split). These options
are for restricted securities, are fully vested to the individual, and
are exercisable into shares of common restricted at $9 per share after
giving effect of the Company's three-for-one stock split.
12
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
8. Stock Options (Continued)
September 30,
1997
____________
Outstanding Options
(after effect of stock split)
September 6, 1996 165,000
January 7, 1997 1,200,000
January 13, 1997 750,000
____________
2,115,000
============
No options were exercised, forfeited, or expired during the period
January 1, 1997, to September 30, 1997. The weighted-average price for the
above-noted options is $8.95 and $6.88 for 1997 and 1996, respectively.
At September 30, 1997, the Company's stock option plan was accounted for
based upon APB Opinion No. 25 and related interpretations. Accordingly, no
compensation cost has been recognized for options under these plans. Had
compensation cost for the plan been determined based on the grant date
and fair values of options, and estimated options to be exercised,
reported net income and earnings per share would have been reduced.
Management does not believe any of the current options will be exercised.
The fair value of the stock options granted during 1996 and 1997 were
determined using the Black-Scholes option pricing model and the following
assumptions for 1996 and 1997: risk-free interest rates of 6.02% and
6.55%; expected option life of 3 years and 4 years; and volatility of
35% and 25% with no dividend yield in either year.
9. Facility Lease
Qualtronics Corporation, Inc., leases its facility under a lease that
expires on November 30, 2002. The lease provides that, in addition to the
monthly rent, the lessee pay 16.64% of the cost of real estate taxes, all
risk insurance, and common area charges. These costs will be considered
as additional rent. The Company will also pay the cost of utilities.
The total future minimum rental commitment at September 30, 1997, under
these leases is $484,468, which is due as follows:
Year Ending
September 30, Amount
____________ ___________
1998 $ 93,768
1999 93,768
2000 93,768
2001 93,768
2002 93,768
2003 15,628
___________
$ 484,468
===========
13
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
10. Segment Data
For the nine months ended September 30, 1997 and 1996, the Company had four
reportable industry segments: (i) network marketing, (ii) collectibles,
(iii) chemical burn cleansing solutions, and (iv) acquisitions and
consulting.
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
_____________ _____________
(Unaudited)
Sales (Net of Discounts)
Multi-Level Network Marketing $ 369,100 $ 351,218
Collectibles 7,624,049 605,523
Burn Cleansing Solution 30,722 30,136
Mechanical Assemblies 1,531,173 0
_____________ _____________
9,555,044 986,877
Acquisitions and Consulting 500,000 100,000
_____________ _____________
Consolidated $ 10,055,044 $ 1,086,877
============= =============
Operating Income (Loss)
Multi-Level Network Marketing $ 323,205 $ 316,701
Collectibles 3,426,419 321,146
Burn Cleansing Solution 12,182 9,978
Acquisitions and Consulting 256,800 100,000
Mechanical Assemblies 52,421 0
_____________ _____________
Consolidated 4,071,027 747,825
Other Income 9,923 9,708
General Corporate Expenses (611,140) (292,866)
Interest Expense (42,631) (530)
_____________ _____________
Net Income (Loss) Before
Income Taxes $ 3,427,179 $ 464,137
============= =============
14
<PAGE>
D. H. MARKETING & CONSULTING, INC., and SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1997
10. Segment Data (Continued)
Nine Months Nine Months
Ended Ended
September 30, September 30,
1997 1996
_____________ _____________
(Unaudited)
Accounts and Other Receivables
Multi-Level Network Marketing $ 127,131 $ 45,381
Collectibles 1,530,188 186,470
Burn Cleansing Solution 3,704 5,997
Acquisitions and Consulting 350,000 100,000
Mechanical Assemblies 287,160 0
_____________ _____________
Consolidated 2,298,183 337,848
Corporate 324 3,534
_____________ _____________
Total Accounts and Other
Receivables $ 2,298,507 $ 341,382
============= =============
Identifiable Assets
Multi-Level Network Marketing $ 187,447 $ 70,664
Collectibles 2,357,248 435,564
Burn Cleansing Solution 6,576 9,811
Acquisitions and Consulting 5,505,333 560,228
Mechanical Assemblies 1,148,742 0
_____________ _____________
Consolidated 9,205,346 1,076,267
Corporate Assets 320,078 427,560
_____________ _____________
Total Assets at Period End $ 9,525,424 $ 1,503,827
15
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS AND
PLAN OF OPERATION.
Management's Discussion and Analysis
Overview
D. H. Marketing & Consulting, Inc.'s (the "Company") Initial Public Offering
became effective with the Securities Exchange Commission on August 11, 1995.
The Company completed its Initial Public Offering October 11, 1995, having
sold 119,000 shares and received net proceeds of $537,990.
The proceeds of the Initial Public Offering significantly increased the
Company's working capital, cash availability, inventory and general business
capabilities. Shares first traded on the OTC Bulletin Board on January 4,
1996 at $5 per share under the symbol "DHMK."
On February 25, 1997, the Company undertook a three for one forward split of
its common stock and, as a result of the stock split, is now traded under the
symbol "DHMG." At the close of business, September 30, 1997, ending the third
quarter of 1997, shares were traded at the closing price of 12 1/2.
The Company is segmented into four distinct operations, consisting of the
Network Marketing Division, the Collectible Division, the Burn Cleansing
Solution Division and the Acquisitions & Consulting Division.
At December 31,
1995, the Company's headquarters were located in Tarrytown, New York, with
regional offices in Vancouver, British Columbia, Canada and Hawley,
Pennsylvania. As of February 1, 1996, the Company relocated its headquarters
from Tarrytown, New York, to Milford, Pennsylvania. During the fourth quarter
of 1996, the Company opened a West Coast Relations Office in Las Vegas,
Nevada and has recently, in the early part of the second quarter of 1997,
reopened its regional office in Vancouver, British Columbia.
The Company is a 97% equity owner of Qualtronics Corporation, Inc. ("QCI"), a
contract manufacturer of electronic and electromechanical assemblies based in
Allentown, Pennsylvania.
The Company is also a 24% equity owner of Universal Network of America, Inc.
("UNAI"), a direct sales organization distributing various tangible asset
collectibles through Independent Distributors. UNAI is based in Sarasota,
Florida.
Selected Financial Data
Sales 1996 1995 1994
__________ _________ _________
Network Marketing $ 556,393 $ 136,425 $ 0
Collectibles 1,172,698 58,500 0
Burn Cleansing Solution 38,265 50,541 44,200
Acquisitions & Consulting 250,000 0 0
Total Operating Revenue, Less Discounts 1,767,356 245,466 44,200
Net Gain (Loss) Before Income Taxes 917,970 (186,082) (183,642)
Net Gain (Loss) Per Share Before .80 (.18) (.23)
Income Taxes
1/1/97- 1/1/96-
Sales 9/30/97 9/30/96
(audited) (unaudited)
___________ ____________
Network Marketing $ 369,100 $ 351,218
Collectibles 7,624,049 605,523
Burn Cleansing Solution 30,722 30,136
Acquisitions & Consulting 500,000 100,000
Mechanical Assemblies (QCI) 1,531,173 0
Consolidated Operating Revenue 10,055,044 1,086,877
Net Income Prior to Tax 3,427,179 464,137
Net Income Per Share Prior to Tax $.88 $.41
Net Income 2,143,847 404,737
Net Income Per Share $.55 $.36
Weighted Average Number of Common Shares 3,881,428 1,135,335
Liquidity
During 1995 and 1994, the first two years of operation, the Company invested
significant amounts of capital in formulating its business plan, establishing
market penetration and presence and preparing and completing its Initial Public
Offering. During this two-year period, the Company experienced insufficient
levels of sales to meet operating needs. This resulted in operating losses
for 1994 and 1995 of $183,657 and $192,852, respectively. The Company
supplemented cash availability by issuing stock in 1994 through a private
placement and in 1995 through the Initial Public Offering. Management believes
that as a result of the Initial Public Offering and increased revenues, the
Company now has adequate cash availability and income to satisfy present
operating needs. The Company posted net pre-tax income of $41,519,
$140,095, $218,566 and $517,790 in the first, second, third and fourth quarters
of 1996, respectively, which would indicate management's expectations were
correct. In 1997, the Company has posted pre-tax income of $1,078,695,
$1,248,594 and $1,097,694 respectively in the first, second and third quarters.
The Company has recently posted net income of $696,558 in the third quarter
of 1997 and has recorded Total Current Assets of $3,7,35,137 and Total
Investments of $4,830,703 as of September 30, 1997. In addition, Total
Stockholders' Equity at September 30, 1997 was $7,544,806 and the Company had a
Market Capitalization of $50,066,763.
Capital Resources
On September 30, 1997, the Company had recorded Total Current Assets of
$3,7,35,137 and Total Investments of $4,830,703, of which $310,313 was held in
cash and cash equivalents and $1,117789 was held in inventory at cost.
Approximate Total Current Assets at September 30, 1996 was $1,512,321 of which
$401,474 was held in cash and cash equivalents.
Cash Expenditures
Total general and administrative expenses increased from $318,108 on September
30, 1996 to $1,196,193 on September 30, 1997. The most significant increases
were due to increased employment, advertising and general office activity.
Long-Term Debt/Current Liabilities
The Company has satisfactorily retired all Long-Term Debt with the exception
of a Capital Lease for Office Equipment that totaled approximately $5,500 in
current and long-term debt.
At June 30, 1997, the outstanding balance of the Company's lines of credit
was $350,000 with an interest rate of $6.75%.
Qualtronics Corporation, Inc. ("QCI"), a subsidiary of the Company,
contributed toward $493,351 of Total Liabilities reflected on the Company's
Consolidated Financial Statements dated September 30, 1997, of which $205,762
was considered long-term debt. The long-term debt of the subsidiary consists of
a note payable and obligation under capital lease for machines used in its
manufacturing process. The note payable is a seven-year term loan due in 84
equal monthly installments of $2,976 plus interest at prime plus 2.25%. The
final payment is due in April 2003. The loan is secured by the assets of QCI
and, as a result of the acquisition by the Company, is technically in
default. As of September 30, 1997, the bank has made no demand for repayment
and has indicated the terms will be adjusted to reflect the change in ownership
without adjustment to the terms of the loan agreement.
Revenue
Total revenue, less sales discounts of $4,622 in 1997 and $40,983 in 1996,
increased from September 30, 1996 to September 30, 1997 from $986,877
to $9,555,044 most significantly, as a result of the Company's Collectible
and Fine Art Division, representing $7,624,049 of total revenue. Revenue as
a result of the Company's Acquisitions & Consulting Division also added
significantly to this quarter's growth. This division, instituted by the
Company in the third quarter of 1996, had operating revenue of $100,000 in the
period one year ago and posted revenues of $2,031,173 year to date as of
September 30, 1997 including revenue generated by the Company's subsidiary
Qualtronics Corporation, Inc.
Total revenue from the Company's Network Marketing Division remained
moderate from 1996 to 1997. In the network marketing division, representatives
qualify Retail Sales Centers with items of intrinsic value, and earn
commissions or products as the system is being built around them.
Items that can be purchased include jewelry, authentic leafs from the First
Edition Noah Webster's American Dictionary of the English Language; authentic
leafs from the original issue of the King James Bible and collectible
numismatic Morgan Silver Dollars. Representatives then earn commissions
corresponding to the sales volume generated at their portion of the network.
Revenue related to the Company's Burn Cleansing Solution Division remains
moderate to steady as representatives continue to develop relationships with
industrial consumers and expand upon the product's visibility.
Plan of Operation
D. H. Marketing & Consulting, Inc. (the "Company") was incorporated under the
laws of the State of Nevada on September 8, 1994 for the purpose of acquiring
D. H. Marketing & Consulting, Inc., a New York corporation ("D. H. Marketing-
New York"). D. H. Marketing-New York was organized on January 6, 1994 and has
been actively engaged in business operations since that time. On September
29,1994, the Company entered into a merger agreement with D. H. Marketing-New
York in a transaction in which the Company was the surviving entity. The
Company is segmented into four distinct operations, consisting of the Burn
Cleansing Solution Division, Network Marketing Division, the Collectible
Division and the Acquisitions & Consulting Division.
Burn Cleansing Solution Division
In 1986, the PREVOR Laboratory of Valmondois, France, developed a revolutionary
chemical burn cleansing solution. Unlike current rinsing solutions that dilute
chemicals while they continue to burn the skin, diphoterine absorbs the
burning molecules on contact, preventing additional exposure to the skin.
Diphoterine is effective on the skin for burns resulting from caustic acids,
bases and solvent. Testimonies from European Fortune 500 Companies credit
diphoterine for improving productivity, decreasing absence, preventing
permanent injury and improving employee safety.
Diphoterine is effective on the skin for burns caused by all acids, bases and
caustic solvents except white phosphor and hydrofluoric acid. Hexafluorine
was developed specifically for use against burns caused by hydrofluoric acid.
Both cleansing solutions have been in use in Europe for seven years.
European users include Rohm and Haas, IBM, Proctor and Gamble, BASF and
DuPont. A Rhone Poulenc five year study showed use of diphoterine
decreased both the number of chemical spatters reported and the number
of employees requiring emergency treatment due to chemical burns.
Any employee exposed to acids, bases and caustic solvents is at risk of being
injured as a result of a chemical spatter. Current good manufacturing
practices require cleansing solutions be in close proximity to these employees.
But current solutions dilute and wash away only some of the chemical while the
remaining chemical continues to attack the body, causing permanent injury and
scarring. Diphoterine and hexafluorine are chemical burn cleansing solutions
that will absorb all the caustic chemical, normalizing pH levels and stop the
burning within seconds.
There were 60,000 individuals in 1993 requiring emergency treatment due to
chemical burns at an average cost of over $50,000. The Company believes that
use of diphoterine and hexafluorine in the work place will decrease the number
of individuals permanently injured from chemical spatters.
Network Marketing Division
During the second quarter of 1995, The Company became a Representative within
Universal Network, Inc.'s Network Marketing system. In the system,
representatives sell products and qualify retail sales centers with items of
intrinsic and/or collectible value. In addition, by purchasing these items,
representatives are also eligible to earn commission and/or sell products.
At the close of 1995, the Company had earned over $136,00 in commissions and
was the third largest dollar earner within the entire system. At the close of
1996, the Company had earned commissions in excess of $500,000 and was the
largest dollar earner within the entire system.
The network marketing system was developed and is governed by Universal
Network, Inc., also known as Universal Network of America, Inc.
Collectible Division
The Company's collectible and fine arts division is involved with the purchase
and sale of valuable and rare stamps, coins, fine art and other tangible asset
collectibles. Principals of the Company are experts at locating and
negotiating transactions to acquire investment-grade collectibles. Clients are
then able to purchase these items directly from the Company. By selecting only
the most valuable, highest quality, and collectible pieces, both the Company
and its clients profit from the transaction.
Total revenue for this division totaled just over $58,000 in 1995 and over
$1,172,698 in 1996. The substantial increase in sales was partially
attributable to time. This division commenced activity already one half way
through 1995. However, this increase in sales is more attributable to the
Company's increased ability to participate in more sizable and profitable
activities as a result of its increased asset base and cash position. Evidence
to the aforementioned statement is provided in that sales for the first
half of 1997 alone total $5,008,209 for this division.
Acquisitions and Consulting Division
The Acquisitions and Consulting Division commenced activities late in the
third quarter of 1996, acquiring 42% of Qualtronics Corporation, Inc., a
contract manufacturer of electromechanical and electronic devices, and
provided general consultation services.
The Company is looking for this division to expand significantly in 1997, as
the Collectible and Fine Art Division did from 1995 to 1996 and as it has
continued to expand in 1997. The Company is looking to acquire additional
small growth oriented companies, in addition to commercial real estate, as
well as continuing to provide general consultation services.
This division was successful in acquiring an additional 55% of Qualtronics
Corporation, Inc. in the first quarter of 1997, increasing its total holdings
to 97%.
This division was also successful in acquiring 24% of Universal Network of
America, Inc. Both companies believe definite synergistic business
opportunities will be presented as both companies mature and increase their
visibility and general business.
PART II- OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any material pending legal proceedings and, to
the best of its knowledge, no such action by or against the Company has been
threatened.
ITEM 2. CHANGES IN SECURITIES
On August 30, 1996, the Company purchased 42% of the issued and outstanding
stock of Qualtronics Corporation, Inc., whereby it issued, in reliance upon
Section 4(2) of the Securities Act of 1933, to 28 shareholders of Qualtronics
Corporation, Inc. 8,960 shares of restricted common stock, valued at $19.875
per share.
On October 4, 1996, the Company purchased items to be held in inventory,
whereby it issued, in reliance upon Section 4(2) of the Securities Act of
1933, 13,487 shares of restricted common stock to nine individuals, valued
at $27 per share.
On January 8, 1997, the Company purchased 55% of the issued and outstanding
stock of Qualtronics Corporation, Inc., whereby it issued, in reliance upon
Section 4(2) of the Securities Act of 1933, to one shareholder of Qualtronics
Corporation, Inc. 2,000 shares of restricted common stock, valued at $27
per share.
On January 13, 1997, the Company purchased items to be held in inventory,
whereby it issued, in reliance upon Section 4(2) of the Securities Act of
1933, 100,000 shares of restricted common stock, valued at $27 per share.
On March 6, 1997, the Company purchased items to be held in inventory,
whereby it issued, in reliance upon Section 4(2) of the Securities Act of
1933, 150,000 shares of restricted common stock, valued at $11.50 per share.
On May 5, 1997, the Company purchased 450,000 common shares of Frama,
Inc., whereby it issued, in reliance upon Section 4(2) of the Securities
Act of 1933, 50,000 shares of restricted common stock, valued at $9 per share.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company did not submit any matters to the security holders to be voted upon
during the quarter ended September 30, 1997.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Exhibits and Reports on Form 8-K (including related comments thereto) filed as
part of this report are listed below:
(a) Exhibits. The following exhibits are filed with or incorporated by
reference in this report.
The Exhibits required by Item 6 are incorporated by reference in the
Registration Statement File No. 33-91240 filed with the SEC on April 14, 1995
and Amendments No. 1 through 4 filed in connection therewith.
Exhibit Description and Method of Filing
No.
2.0 The Merger Agreement entered into by and between D.H. Marketing &
Consulting, Inc. a New York Corporation, and the Registrant, dated
September 29, 1994, filed with the Nevada Secretary of State,
November 10, 1994. (Filed with SEC on April 14, 1995, in
Registration Statement.)
3.0 Certificate of Incorporation of the Registrant, consisting of
Articles of Incorporation filed with the Secretary of State of the
State of Nevada on September 8, 1994. (Filed with SEC on April 14,
1995, in Registration Statement.)
3.1 By-Laws of the Registrant, dated September 8, 1994. (Filed with
SEC on April 14, 1995, in Registration Statement.)
3.2 Articles of Incorporation for FCS Financial Communication Services
Inc., filed in the Province of British Columbia, dated October 12,
1994. (Filed with SEC on April 14, 1995, in Registration
Statement.)
10.0 Engagement Letter between D.H. Marketing & Consulting, Inc., a
Nevada Corporation, and Max C. Tanner, Esquire, dated July 18,
1994. (Filed with SEC on April 14, 1995, in Registration
Statement.)
10.1 Stock Redemption Agreement between D.H. Marketing & Consulting,
Inc., a Nevada Corporation, and David D. Hagen, dated October 24,
1994. (Filed with SEC on April 14, 1995, in Registration
Statement.)
10.2 Distribution Agent Agreement between D.H. Marketing & Consulting,
Inc., a Nevada Corporation, and All Safety and Supply, dated August
17, 1994. (Filed with SEC on April 14, 1995, in Registration
Statement.)
10.3 Sales Agent Agreement between D.H. Marketing & Consulting, Inc., a
Nevada Corporation, and Jack Yee, dated July 6, 1994. (Filed with
SEC on April 14, 1995, in Registration Statement.)
10.4 Regional Sales Manager Agreement for the Western Territory between
D.H. Marketing & Consulting, Inc., a Nevada Corporation, and Billy
J. Richardson, dated June 24, 1994. (Filed with SEC on April 14,
1995, in Registration Statement.)
10.5 Regional Sales Manager Agreement for the Northwest Territory
between D.H. Marketing & Consulting, Inc., a Nevada Corporation,
and David J. Miller, dated August 8, 1994. (Filed with SEC on April
14, 1995, in Registration Statement.)
10.6 Marketing Agent Agreement between D.H. Marketing & Consulting,
Inc., a Nevada Corporation, and Leon Barnett & Associates. (Filed
with SEC on April 14, 1995, in Registration Statement.)
10.7 Distribution Agent Agreement between D.H. Marketing & Consulting,
Inc., a Nevada Corporation, and Demoore Products & Services.
(Filed with SEC on April 14, 1995, in Registration Statement.)
10.8 Promissory Note for the amount of $87,500.00 between D.H. Marketing
& Consulting, Inc., a Nevada Corporation, and David D. Hagen, dated
February 9, 1995. (Filed with SEC on April 14, 1995, in
Registration Statement.)
10.9 Distribution Agent Agreement between D.H. Marketing & Consulting,
Inc., a Nevada Corporation, and Hazmat Medical Associates, LTD.,
dated July 26, 1994. (Filed with SEC on April 14, 1995, in
Registration Statement.)
10.10 Regional Sales Manager Agreement for the Northeast Territory
between D.H. Marketing & Consulting, Inc., a Nevada Corporation and
David J. Miller, dated August 8, 1994. (Filed with SEC on April 14,
1995, in Registration Statement.)
10.11 Employment Contract Agreement between D.H. Marketing & Consulting,
Inc., a Nevada Corporation, and Steven Olivieri. (Filed with SEC
on April 14, 1995, in Registration Statement.)
10.12 Independent Contractor Agreement between D.H. Marketing &
Consulting, Inc., a Nevada Corporation and Stevie Holland. (Filed
with SEC on April 14, 1995, in Registration Statement.)
10.13 Installation and Support of Accounting System Contract and
Managerial Support Contract between D.H. Marketing & Consulting,
Inc., a Nevada Corporation, and Runes Corporation, a Pennsylvania
Corporation, dated December 8, 1994. (Filed with SEC on April 14,
1995, in Registration Statement.)
10.14 Amended Regional Sales Manager Agreement for the Western Territory
between D.H. Marketing & Consulting, Inc., a Nevada Corporation,
and Billy J. Richardson, dated February 21, 1995. (Filed with SEC
on April 14, 1995, in Registration Statement.)
10.15 Fund Escrow Agreement between Brighton Bank, and D.H. Marketing &
Consulting, Inc., a Nevada Corporation, dated May 1995. (Filed in
Amendment No. 1 to Registration Statement.)
10.16 Selected Dealer Agreement. (Filed in Amendment No. 1 to
Registration Statement.)
10.17 Selected Dealer Agreement - Revised. (Filed in Amendment No. 2 to
Registration Statement.)
21. Subsidiaries of the Registrant: Financial Communication Services
Inc. (FCS) a corporation organized in the Province of British
Columbia, Canada. (Filed with the SEC on March 27, 1997 in Form
10-KSB.)
23.1 Consent of Accountants, Niessen, Dunlap & Pritchard, P.C., dated
May 19, 1995, to the publication of their report, dated May 19,
1995. (Filed in Amendment No. 1 to Registration Statement.)
23.2 Consent of Accountants, Niessen, Dunlap & Pritchard, P.C., dated
May 19, 1995 to the publication of their report, dated May 19,
1995. (Filed in Amendment No. 1 to Registration Statement.)
23.3 Consent of Accountants, Niessen, Dunlap & Pritchard, P.C., dated
June 30, 1995, to the publication of their report, dated December
31, 1994. (Filed in Amendment No. 2 to the Registration
Statement.)
23.4 Consent of Accountants, Niessen, Dunlap & Pritchard, P.C., dated
August 3, 1995, to the publication of their report, dated December
31, 1994, and March 31, 1995 and 1994. (Filed with Amendment No. 3
to the Registration Statement.)
23.5 Consent of the Accountants, Niessen, Dunlap & Pritchard, P.C.,
dated August 8, 1995, to the publications of their report, dated
December 31, 1994, and March 31, 1995 & 1994. (Filed with Amendment
No. 4 to the Registration Statement.)
23.6 Consent of the Accountants, Niessen, Dunlap & Pritchard, P.C.,
dated March 15, 1996 to the publications of their report, dated
February 26, 1996 and December 31, 1995 & 1994. (Filed with SEC on
April 1, 1996 Form 10-KSB.)
23.7 Consent, dated April 26, 1996, of the Accountants, Niessen, Dunlap
& Pritchard, P.C., to the publication of their report, dated April
4, 1996. (Filed with SEC on May 1, 1996 Form 10-QSB.)
23.8 Consent, dated July 30, 1996, of the Accountants, Niessen, Dunlap &
Pritchard, P.C., to the publication of their report, dated July 8,
1996. (Filed with SEC on August 7, 1996 Form 10-QSB and on October
16, 1996 Form 10-QSB/A.)
23.9 Consent, dated October 21, 1996, of the Accountants, Niessen,
Dunlap & Pritchard, P.C., to the publication of their report, dated
October 3, 1996. (Filed with the SEC on November 6, 1996 in Form
10-QSB.)
23.10 Consent, dated March 12, 1997, of the Accountants, Niessen, Dunlap
& Pritchard, P.C., to the publication of their report, dated
January 29, 1997. (Filed with the SEC on March 27, 1997 in Form
10-KSB.)
23.11 Consent, dated April 30, 1997, of the Accountants, Niessen, Dunlap
& Pritchard, P.C., to the publication of their report, dated
April 9, 1997. (Filed with the SEC on May 27, 1997 in Form
10-QSB/A.)
23.12 Consent, dated July 28, 1997, of the Accountants, Niessen, Dunlap
& Pritchard, P.C., to the publication of their report, dated
July 7, 1997. (Filed with the SEC on August 7, 1997 in Form 10-QSB.)
23.13 Consent, dated December 1, 1997, of the Accountants, Niessen,
Dunlap & Pritchard, P.C., to the publication of their report, dated
November 3, 1997, filed with the SEC in this Form 10-QSB.
27.1 Financial Data Schedule for the 6-month period ending June 30,
1996. (Filed with the SEC on October 16, 1996 in Form 10-QSB/A.)
27.2 Financial Data Schedule for the 9-month period ending September
30, 1996. (Filed with the SEC on November 6, 1996 in Form 10-QSB.)
27.3 Financial Data Schedule for the 3-month period ending March 31,
1997. (Filed with the SEC on May 27, 1997 in Form 10-QSB/A.)
27.4 Financial Data Schedule for the 6-month period ending June 30,
1997. (Filed with the SEC on August 7, 1997 in Form 10-QSB.)
27.5 Financial Data Schedule for the 9-month period ending September 30,
1997, filed with the SEC in this Form 10-QSB.
(b) REPORTS ON FORM 8-K.
No reports on Form 8-K have been filed during the quarter ending 9/30/97.
<PAGE>
SIGNATURES
In Accordance to the requirements of the Securities Exchange Act of 1934,
the registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
D.H. Marketing & Consulting, Inc.
A Nevada Corporation
12/1/97 By: /s/ DAVID D. HAGEN
Date David D. Hagen
President, Treasurer and Chief Financial Officer
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
We hereby consent to the use of our report, dated November 3, 1997 in this
Quarterly Report on Form 10-QSB for D.H. Marketing & Consulting, Inc.
/s/ NIESSEN, DUNLAP & PRITCHARD, P.C.
NIESSEN, DUNLAP & PRITCHARD, P.C.
Colmar, Pa.
April 30, 1997
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