-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, OjXCmJUoGkG7CF3MxqD9fXa/ZMQtI9Zh4xi7UWrb8TKdL3VM45yFsf6vZwxBytGo lalHfIytpZuz0r7+kKKOMw== 0000831752-99-000007.txt : 19991117 0000831752-99-000007.hdr.sgml : 19991117 ACCESSION NUMBER: 0000831752-99-000007 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991115 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DAWN TECHNOLOGIES INC CENTRAL INDEX KEY: 0000831752 STANDARD INDUSTRIAL CLASSIFICATION: WHOLESALE-COMPUTER & PERIPHERAL EQUIPMENT & SOFTWARE [5045] IRS NUMBER: 133493060 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-17864 FILM NUMBER: 99751935 BUSINESS ADDRESS: STREET 1: 12 SMULL AVE CITY: CALDWELL STATE: NJ ZIP: 07006 BUSINESS PHONE: 9732281033 MAIL ADDRESS: STREET 1: 12 SMULL AVE CITY: CALDWELL STATE: NJ ZIP: 07006 FORMER COMPANY: FORMER CONFORMED NAME: DAWN CAPITAL CORP DATE OF NAME CHANGE: 19920703 10QSB 1 1 1 FORM 10-QSB U.S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 [X] QUARTERLY REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1999 [ ] TRANSITION REPORT PURSUANT SECTION 13 OR 15(d) OF THE SECURITES EXCHANGE ACT OF 1934 For the transition period from ______ to ______ Commission file number 0-17864 DAWN TECHNOLOGIES, INC. - ------------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) DELAWARE 13-3493060 - -------------------------------- --------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 12 Smull Avenue, Caldwell, New Jersey 07006 - ----------------------------------------- ---------- (Address of principal executive offices) (Zip Code) (973) 228 - 1033 - --------------------------- (Issuer's telephone number) - ---------------------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities 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 [ ] No [X] Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by court. Yes [ ] No [ ] The number of shares outstanding of the issuer's $.001 par value per share common stock, as of October 31, 1999, was 8,638,944. 2 DAWN TECHNOLOGIES, INC. AND SUBSIDIARIES INDEX Page PART I - FINANCIAL INFORMATION Item 1 - Financial Statements (Unaudited) Consolidated Balance Sheets, September 30, 1999 and December 31, 1998 3 Consolidated Statements of Operations and Accumulated Deficit, nine months and three months ended September 30, 1999 and 1998 4 Consolidated Statements of Cash Flows, nine months ended September 30, 1999 and 1998 5 Notes to Consolidated Financial Statements 6 Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operation 7 Part II - OTHER INFORMATION 8-9 3 DAWN TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, 1999 and December 31, 1998 (Unaudited) 1999 1998 ---------- ---------- ASSETS Current Assets: Cash $ 28,090 $ 90,277 Accounts receivable - 90,277 Inventories - 12,500 ---------- ---------- Total current assets 28,090 193,054 ---------- ---------- Property and Equipment: Furniture and fixtures 330,932 330,932 Equipment 945,592 945,592 ---------- ---------- 1,276,524 1,276,524 Less accumulated depreciation and amortization (1,016,726) (971,726) ---------- ---------- 259,798 304,798 ---------- ---------- $ 287,888 $ 497,852 ========== ========== LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT) Current Liabilities: Notes payable $ 135,388 $ 276,743 Capitalized lease obligations 258,730 258,730 Accounts payable and accrued expenses 1,137,636 1,131,208 Accrued cost of non-compete 320,000 320,000 ---------- ---------- Total current liabilities 1,851,754 1,986,681 ---------- ---------- Stockholders' Equity (Deficit): Common stock, $.001 par value, 15,000,000 shares authorized, 8,638,944 shares issued and outstanding 8,639 8,639 Capital in excess of par value 2,181,117 2,181,117 Accumulated deficit (3,753,622) (3,678,585) ---------- ---------- Total stockholders' deficit (1,563,866) (1,488,829) ---------- ---------- $ 287,888 $ 497,852 ========== ==========
See the accompanying notes to consolidated financial statements. 4 DAWN TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND ACCUMULATED DEFICIT For the Nine Months and Three Months Ended September 30, 1999 and 1998 (Unaudited) Nine Months Ended Three Months Ended September 30, September 30, ------------------------ ------------------------ 1999 1998 1999 1998 ----------- ----------- ----------- ----------- Revenues $ 27,000 $ 1,198,094 $ 9,000 $ 352,381 ----------- ----------- ----------- ----------- Costs and Expenses: Cost of revenues 57,500 1,887,758 27,500 467,821 Selling, general and administrative expenses 47,389 495,680 34,053 51,210 ----------- ----------- ----------- ----------- 104,889 2,383,438 61,553 519,031 ----------- ----------- ----------- ----------- Loss from Operations (77,889) (1,185,344) (52,553) (166,650) ve expenses ----------- ----------- ----------- ----------- Other Income (Expense): Cancellation of indebtedness 2,852 Interest expense (15,568) (4,568) Loss on asset disposition (264,016) (264,016) ----------- ----------- ----------- ----------- 2,852 (279,584) (268,584) ----------- ----------- ----------- ----------- Net Loss (75,037) (1,464,928) (52,553) (435,234) Accumulated Deficit: Beginning of period (3,678,585) (2,213,657) (3,701,069) (3,243,351) ----------- ----------- ----------- ----------- End of period $(3,753,622) $(3,678,585) $(3,753,622) $(3,678,585) =========== =========== =========== =========== Net Loss per Common Share $ (0.009) $ (0.170) $ (0.006) $ (0.050) =========== =========== =========== =========== Weighted Average Number of Common Shares Outstanding 8,638,944 8,638,944 8,638,944 8,638,944 =========== =========== =========== ===========
See the accompanying notes to consolidated financial statements. 5 DAWN TECHNOLOGIES, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS For the Nine Months Ended September 30, 1999 and 1998 (Unaudited) 1999 1998 ------------ ------------ CASH FLOWS FROM OPERATING ACTIVITIES: Net loss $ (75,037) $ (1,464,928) Depreciation and amortization 45,000 90,000 Loss on asset disposition 264,016 Changes in assets and liabilities" Accounts receivable 90,277 452,873 Inventory 12,500 214,953 Other current assets - 3,322 Accounts payable and accrued expenses 6,428 415,666 ------------ ------------ Net Cash Provided (Used) by Operating Activites 79,168 (34,098) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITES: Proceeds from sale of property - 200,000 Purchases of equipment - (19,886) ------------ ------------ Net Cash Used by Financing Activities - 180,114 ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of long-term debt (141,355) (81,062) Repayment of capitalized lease obligations - (24,514) ------------ ------------ Net Cash Used by Financing Activities (141,355) (105,576) ------------ ------------ Net Increase (Decrease) in Cash (62,187) 40,440 Cash, Beginning of period 90,277 13,403 ------------ ------------ Cash, End of period $ 28,090 $ 53,843 ============ ============ SUPPLEMENTAL CASH FLOW INFORMATION: Income taxes paid $ - $ - ============ ============ Interest paid $ - $ 15,568 ============ ============ NONCASH INVESTING AND FINANCING ACTIVITIES: Increase in capitalized lease obligations $ - $ 120,000 ============ ============
See the accompanying notes to consolidated financial statements. 6 DAWN TECHNOLOGIES, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note 1 - Summary of Significant Accounting Policies: FINANCIAL STATEMENTS - The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions to Form 10-QSB and do not include all the information required by generally accepted accounting principles. All adjustments which are of a normal recurring nature and, in the opinion of management, necessary for a fair presentation have been included. These statements should be read in conjunction with the financial statements and notes thereto included in the Company's annual report filed in its Form 10-KSB, the last being filed for the Company's year ended December 31, 1996. BANKRUPTCY - On September 1, 1999, Dawn Technologies, Inc. (the Company) filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. On September 3, 1999, the Company filed a motion in the bankruptcy court to substantively consolidate the bankruptcy matter with the previously filed bankruptcy proceeding of its wholly owned subsidiary, Dawn Special Systems Corp. Dawn Special Systems Corp. had previously filed for protection under Chapter 11 on September 18, 1998. GOING CONCERN - The Company's financial position is such that it suggests that the Company might have difficulty continuing in business as a going concern. Without relief from its debts and the infusion of new capital and customers, the Company will likely fail to continue in existence as a going concern. Management is uncertain of the outcome of the bankruptcy proceeding and has made no adjustments attempting to estimate the outcome of the matter, including the recognition of interest expense subsequent to the initial filing for protection by the Company's operating subsidiary. ESTIMATES - Because of the significance of the uncertainty regarding the bankruptcy and the Company's continuing in existence, including any additional costs which may arise as a result of the bankruptcy proceeding, these financial statements reflect significant estimates made by management. Future actual results and circumstances, including potential liabilities, may vary significantly from the estimates made when preparing these financial statements. ACCELERATION OF LONG-TERM DEBT - All of the Company's secured creditors have indicated that the Company is in default on its obligations and have accelerated and called for payment in full of the related obligations. Accordingly, all such obligations are reflected as current in these financial statements. BACKLOG - The Company has no sales backlog at this time. 7 DAWN TECHNOLOGIES, INC. AND SUBSIDIARIES ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OPERATIONS - During 1998, the Company's operating subsidiary suffered significant financial losses, including significant reductions in sales, losses of customers and a failure to generate new customers or prospects. The result being net losses sufficient to require the Company to seek protection under Chapter 11 of the United States Bankruptcy Code. Operating results since September 18, 1999 include the sale of certain residual inventory and the leasing of the Company's equipment on a month to month basis. These operations have not been sufficient to provide any meaningful sales and have not contributed sufficient revenues to generate a profit. Accordingly, the Company has continued to suffer losses through 1999. BANKRUPTCY - On September 1, 1999, Dawn Technologies, Inc. (the Company) filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. On September 3, 1999, the Company filed a motion in the bankruptcy court to substantively consolidate the bankruptcy matter with the previously filed bankruptcy proceeding of its wholly owned subsidiary, Dawn Special Systems Corp. Dawn Special Systems Corp. had previously filed for protection under Chapter 11 on September 18, 1998. GOING CONCERN - The Company's financial position is such that it suggests that the Company might have difficulty continuing in business as a going concern. Without relief from its debts and the infusion of new capital and customers, the Company will likely fail to continue in existence as a going concern. Management is uncertain of the outcome of the bankruptcy proceeding and has made no adjustments attempting to estimate the outcome of the matter, including the recognition of interest expense subsequent to the initial filing for protection by the Company's operating subsidiary. ESTIMATES - Because of the significance of the uncertainty regarding the bankruptcy and the Company's continuing in existence, including any additional costs which may arise as a result of the bankruptcy proceeding, these financial statements reflect significant estimates made by management. Future actual results and circumstances, including potential liabilities, may vary significantly from the estimates made when preparing these financial statements. ACCELERATION OF LONG-TERM DEBT - All of the Company's secured creditors have indicated that the Company is in default on its obligations and have accelerated and called for payment in full of the related obligations. Accordingly, all such obligations are reflected as current in these financial statements. BACKLOG - The Company has no sales backlog at this time MANAGEMENT - In July 1999, Nicholas M. Garruto was elected to the Board of Directors (by vote of the existing Board of Directors). Upon the election of Mr. Garruto to the Board of Directors, all other existing members of the Board of Directors resigned. Mr. Garruto currently holds all the executive offices of the Company. Mr. Garruto's efforts are directed toward administration of the bankruptcy proceedings and development of future business opportunities for the Company. The success or failure of Mr. Garruto's efforts cannot be predicted. 8 DAWN TECHNOLOGIES, INC. AND SUBSIDIARIES PART II - OTHER INFORMATION ITEM 1 - LEGAL PROCEEDINGS On September 1, 1999, Dawn Technologies, Inc. (the Company) filed for bankruptcy protection under Chapter 11 of the United States Bankruptcy Code. On September 3, 1999, the Company filed a motion in the bankruptcy court to substantively consolidate the bankruptcy matter with the previously filed bankruptcy proceeding of its wholly owned subsidiary, Dawn Special Systems Corp. Dawn Special Systems Corp. had previously filed for protection under Chapter 11 on September 18, 1998. ITEM 2 - CHANGES IN SECURITIES None ITEM 3 - DEFAULTS UPON SENIOR SECURITIES The Company has defaulted on the payment of interest to two banks (Citibank and Penn Security Bank) and four equipment-leasing companies (Textron Financial, Colonial Pacific Leasing, CIT Credit and JLA Credit). All of the Company's secured creditors have indicated that the Company is in default on its obligations and have accelerated and called for payment in full of the related obligations. Accordingly, all such obligations are reflected as current in these financial statements. ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None ITEM 5 - OTHER INFORMATION During 1998, the Company's operating subsidiary suffered significant financial losses, including significant reductions in sales, losses of customers and a failure to generate new customers or prospects. The result being net losses sufficient to require the Company to seek protection under Chapter 11 of the United States Bankruptcy Code. Operating results since September 18, 1999 include only the sale of certain residual inventory and the leasing of the Company's equipment on a month to month basis. These operations have not been sufficient to provide any meaningful sales and have not contributed sufficient revenues to generate a profit. Accordingly, the Company has continued to suffer losses through 1999. The Company's financial position is such that it suggests that the Company might have difficulty continuing in business as a going concern. Without relief from its debts and the infusion of new capital and customers, the Company will likely fail to continue in existence as a going concern. Management is uncertain of the outcome of the bankruptcy proceeding and has made no adjustments attempting to estimate the outcome of the matter, including the recognition of interest expense subsequent to the filing for protection by the Company's operating subsidiary. The Company has no sales backlog at this time. 9 In July 1999, Nicholas M. Garruto was elected to the Board of Directors (by vote of the existing Board of Directors). Upon the election of Mr. Garruto to the Board of Directors, all other existing members of the Board of Directors resigned. Mr. Garruto currently holds all the executive offices of the Company. Mr. Garruto's efforts are directed toward administration of the bankruptcy proceedings and development of future business opportunities for the Company. The success or failure of Mr. Garruto's efforts cannot be predicted. ITEM 6 - EXHIBITS AND REPORTS OF FORM 8-K EXHIBITS - There are no exhibits filed as a part of this report. REPORTS ON FORM 8-K - The Company filed a report on Form 8-K on September 22, 1999 announcing the filing for protection under Chapter 11 of the United States Bankruptcy Code. SIGNATURES /s/ Nicholas M. Garruto November 12, 1999 - ----------------------------------------- ------------------ By : Nicholas M. Garruto Date Chief Executive and Chief Financial Officer -----END PRIVACY-ENHANCED MESSAGE-----