SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-KSB
{X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the fiscal year ended June 30, 2003
or
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission file number: 001-10196
DIMENSIONAL VISIONS INCORPORATED
(Name of Small Business Issuer as specific in its Charter)
Delaware 23-2517953
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
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8777 N. Gainey Center Drive, Suite 191, Scottsdale Arizona 85258
(Address of Principal Executive Offices) (Zip Code)
Issuer's telephone number, including area code: (480) 471-8500
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, $.001 par value
(Title of Class)
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 periods 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 { }
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained herein, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-KSB or any amendment to this Form 10-KSB. Yes {X} No { }
For the fiscal year ended June 30, 2003, the Company's revenue was zero.
As of September 25, 2003, the number of shares of Common Stock outstanding was 61,771,510. The aggregate market value of the Company's Common Stock held by non-affiliates of the registrant as of September 25, 2003, was approximately $123,543 (based upon 61,771,510 shares at $.002 per share).
DOCUMENTS INCORPORATED BY REFERENCE
The following documents are incorporated herein by reference: (i) Registration Statement on Form SB-2 dated July 10, 2001 (Registration No. 333-56804); and (ii) Amendment No. 1 to Annual Report on Form 10-KSB, dated February 22, 2002 are incorporated in Part III, Item 13(a).
TABLE OF CONTENTS
Page
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TABLE OF CONTENTS
Page
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ITEM 1 DESCRIPTION OF BUSINESS...............................................3
General...................................................................3
Company History...........................................................3
Fiscal Years 1988-1994................................................3
Fiscal Years 1995-1997................................................3
Fiscal Years 1998-2003................................................4
The Market............................................................4
Production................................................................5
Competition...............................................................5
Patents, Trademarks and Proprietary Protection............................5
Employees.................................................................6
Selected Consolidated Financial Data......................................6
ITEM 2 DESCRIPTION OF PROPERTY...............................................6
ITEM 3 LEGAL PROCEEDINGS.....................................................7
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS...................7
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED
STOCKHOLDER MATTTERS................................................8
Holders...................................................................8
Dividends.................................................................8
ITEM 6 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.................................9
Fiscal Years 2003 and 2002................................................9
Results of Operations.................................................9
Liquidity and Capital Resources.......................................9
ITEM 7 FINANCIAL STATEMENTS.................................................10
ITEM 8 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE................................10
ITEM 9 DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL
PERSONS; COMPLIANCE WITH SECTION 16(A) OF THE EXCHANGE ACT.........11
Indemnification of Directors and Officers................................11
Compliance with Section 16(A) of the Exchange Act........................12
ITEM 10 EXECUTIVE COMPENSATION...............................................13
Summary Compensation Table...............................................13
ITEM 11 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.......14
1996 Equity Incentive Plan...............................................15
1999 Stock Option Plan...................................................15
ITEM 12 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.......................15
ITEM 13 EXHIBITS AND REPORTS ON FORM 8K......................................16
ITEM 14 CONTROLS AND PROCEDURES..............................................17
SIGNATURES....................................................................17
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PART I
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ITEM 1. DESCRIPTION OF BUSINESS.
GENERAL
Dimensional Visions Incorporated (the "Company") creates and delivers 3D/animated graphics for products, packaging and marketing communications. However, the Company is not actively conducting operations at this time. See "Company History-Fiscal Years 1998-2003" below.
InfoPak, Inc. is our subsidiary company, but is no longer an operating entity.
The Company's office and principal place of business is located at 8777 N. Gainey Center Drive, Suite 191, Scottsdale, Arizona 85258, and its telephone number is (480)471-8500.
COMPANY HISTORY
FISCAL YEARS 1988-1994
In 1988, Dimensional Visions Group, Ltd. was incorporated in the state of Delaware and headquartered in Philadelphia, Pennsylvania. At that time, the Company created its three-dimensional effects by building model sets and photographing these sets using a robotic controlled camera. These photographed images were then prepared for lithographic printing. The process utilized during this timeframe was very expensive and extremely difficult to consistently reproduce quality images. Throughout this period the Company tried unsuccessfully to perfect the robotic camera process.
FISCAL YEARS 1995-1997
In 1995, the Company acquired InfoPak, Inc. of Phoenix, Arizona ("InfoPak") which is currently our wholly owned subsidiary. InfoPak manufactures and markets a hardware/software package called the "InfoPakSystem(TM)". This system takes existing databases and prepares them for use on a palm-top computer manufactured by InfoPak. It is particularly useful to individuals who need access to information while away from a computer terminal. Therefore, it is marketed to mobile business professionals in the automobile appraisal and real estate businesses. Automobile appraisal guides are available on the palm-top unit for access at automobile auctions or at car dealership lots. Multiple listing data is similarly available for real estate agents for field access to the home listings.
From 1995 to 1997, the Company utilized the software development resources of InfoPak to develop the patent-pending software and systematic digital process for its Living ImageTM Solutions.
FISCAL YEARS 1998-2003
In January 1998, we moved our headquarters to Phoenix, Arizona. Under the leadership of a new executive management team, the Company was restructured including changing our corporate name to Dimensional Visions Incorporated and changing our stock trading symbol from DVGL to DVUI. At the end of 1997, the Company needed to complete private placements of debt and equity to continue operations. As a prerequisite, our investment banking firm, Capital West Investment Group, required the Company to replace the upper level management and effect a 1 for 25 reverse stock split. During the fiscal year 2001, the Company finalized an equity line with Swartz Private Equity, LLC to provide funding through the sale of the Company's common stock. The Company has the right at its sole discretion to put common stock to Swartz, subject to certain limitations and conditions based upon trading volume of the Company's common stock. The Company also utilized $393,000 from a line of credit from Merrill Lynch to sustain operations.
During this timeframe, we sold all of the original robotic photographic equipment to concentrate on the new 3D/animated graphics (utilizing very high-end Intel based graphic design computers). Our management team believed that the new process is much more cost effective, reproducable, and has a shorter production cycle than the photographic process formerly used by the Company. We also believe that it better meets the demands of today's market which requires quick turn around of products from inception to delivery.
During 2001 and early 2002, sales declined, we were unable to access the line of financing secured with Swartz Private Equity, LLC, and we were unable to raise any substantial amount of financing. We laid off all but four employees. Three out of the four remaining employees eventually resigned, leaving only John McPhilimy as President, Secretary, and Chief Financial Officer. In June 2002, Mr. McPhilimy also desired to resign and Jason M. Genet, a consultant to the Company, agreed to replace him, effective upon the appropriate SEC filings. Mr. Genet became a Director and President on August 5, 2002 and hired Larry Kohler as Chief Financial Officer and Lawrence G. Olson as Vice President and Secretary on that same date. Mr. Genet resigned his position on May 15, 2003 and Mr. Kohler and Mr. Olson resigned their positions on September 9, 2003. Mr. Preston J. Shea was elected to the Board on September 8, 2003 and is the President, Chief Financial Officer and Secretary for the company at present. Our new management is now evaluating the Company's options, such as a sale, merger, or other business combination. The Company's financial position is precarious. Unless we are able to generate revenues or acquire funding to cover our present and ongoing operating cost and liabilities, we may not be able to continue as a going concern. The probability of generating revenues or obtaining financing is unlikely at this time.
THE MARKET
Multi-dimensional and/or animated images are used because they combine depth and movement to attract the consumer's attention and potentially increase their sales. Our 3D/animated graphics can be (a) integrated onto products (for example, affixed to yearbooks, children's portfolio covers, etc.), (b) integrated onto product packaging (for example, affixed to cereal boxes, CD packages, etc.), and (c) integrated onto marketing communications for products and services (for example affixed to annual reports, etc.). Should management decide to continue to pursue this line of business, management believes the market for our 3D/animated graphics in the United States are:
* Specially selected Original Equipment Manufacturers;
* Specially selected Promotional Marketing Firms; and
* Specially selected Advertising & Graphics Design Firms (excluding radio and
television).
PRODUCTION
Should management decide to continue to pursue the 3D/animated graphics business, the Company can control or supervise all phases of the production of 3D/animated graphics from the image development and computerized enhancement phases through the color separation and printing phases. Images are provided by clients in many formats including digitally in graphic file formats and photographically in pictures or transparencies. Photographic images are scanned into the computer to be modified and enhanced. Through a proprietary process, several images are composited together to generate a final image that will appear as a three-dimensional and/or animation image when viewed through a lenticular material. "Lenticular" is a plastic optical material that allows the three-dimensional and/or animation image to be viewed without the use of any viewing apparatus such as glasses or hoods. The digital files are forwarded to Travel Tags, our primary printer, or other commercial printer, where, through the lithographic process, the images are printed on a polymer based lenticular material which focuses the multi-dimensional or animation images. Printing is done under the Company's supervision. The lenticular material is supplied by producers in the petrochemical and plastic fabricating industries directly to our printer. The Company has no long-term contracts with its printers.
COMPETITION
Other processes currently are available which allow a viewer to perceive an image in three-dimensions, including those which employ stereoscopic glasses and viewing hoods and other processes, and holograms and other three-dimensional image systems which do not require the use of viewing apparatus. The Company is aware of at least two companies, Optigraphics, Inc. and National Graphics, Inc., which compete with our products. Our products may be more expensive than conventional, high quality, two-dimensional prints and for this reason, high quality, conventional processes and methods may be favored for many, if not most, illustration and promotion contexts. Color lenticular images are less expensive than other forms of three-dimensional prints.
PATENTS, TRADEMARKS AND PROPRIETARY PROTECTION
The Company has received trademark registration of DV3D(R).
The Company enters into confidentiality agreements with all persons and entities who or which may have access to our technology. However, no assurance can be given that such agreements, the patents, or any additional patents that may be issued to the Company will prevent third parties from developing similar or competitive technology. There can be no assurance that the patents will provide us with any significant competitive advantages, or that challenges will not be instituted against the validity or enforceability of its patents, or if instituted that any such challenges will not be successful. The cost of litigation to uphold the validity and prevent infringement can be substantial.
In addition, no assurance can be given that we will have sufficient resources to either institute or defend any action, suit or other proceeding by or against our Company with respect to any claimed infringement of patent or other proprietary rights. In the event that we should lose, in the near future, the protection afforded by the patents and any future patents, such event could have a material adverse effect on our operations. Furthermore, there can be no assurance that our own technology will not infringe patent or other rights owned by others or licenses to which may not be available to us.
EMPLOYEES
The Company has one employee. The Company is not a party to any collective bargaining agreements. The Company considers its relations with employees to be good.
SELECTED CONSOLIDATED FINANCIAL DATA
Set forth below is selected financial data derived from the Company's Consolidated Financial statements, some of which appear elsewhere in this Report. This data should be read in conjunction with the Consolidated Financial statements, included elsewhere in this Report.
Year Ended Year Ended Year Ended Year Ended Year Ended
June 30, 2003 June 30, 2002 June 30, 2001 June 30, 2000 June 30, 1999
------------- ------------- ------------- ------------- -------------
Operating revenue $ -- $ 131,946 $ 234,347 $ 1,008,862 $ 741,901
Net loss $ (118,808) $(1,515,774) $(1,059,775) $(1,021,144) $(1,465,812)
Net loss per share of
common stock $ (.001) $ (.05) $ (.11) $ (.18) $ (.39)
Balance Sheet Data:
Working capital (deficit) $(1,178,340) $(1,059,532) $ (542,882) $ 205,284 $ (603,946)
Total assets $ -- $ 18 $ 211,594 $ 885,033 $ 530,973
Total liabilities $ 1,178,340 $ 1,059,550 $ 597,168 $ 519,112 $ 1,118,740
Stockholders' equity
(deficiency) $(1,178,340 $(1,059,532) $ (385,574) $ 365,921 $ (721,555)
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ITEM 2. DESCRIPTION OF PROPERTY.
In order to reduce expenses, the Company is currently operating out of office space at no charge to the Company.
ITEM 3. LEGAL PROCEEDINGS.
On or about December 6, 2001, Russell H. Ritchie, Dale Riker, and Suntine Enterprises, LLC (the "Arizona Plaintiffs") brought an action in the Superior Court of the State of Arizona, in and for the County of Maricopa, No. CV2001-021203, against the Company, its officers, directors, consultants and shareholders (collectively, "Defendants"), for Breach of Contract and Tort. This matter was dismissed without prejudice by the Arizona Plaintiffs, on June 13, 2002.
To the best knowledge of our management, there are no other material litigation matters pending or threatened against us.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On June 7, 2002, a majority of our shareholders executed a majority written consent in lieu of annual meeting to avoid the expense of holding a formal annual meeting. The majority shareholders voted "for" the following actions:
* The election of the following three directors to the board of directors for a term of one year or until their successors are duly elected and qualified: Jason M. Genet, Lawrence G. Olson, and Larry Kohler.
* The ratification of the appointment of Kopple & Gottlieb, LLP as the Company's independent public accountants for the fiscal year ending June 30, 2002.
PART II
ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
The Company's Common Stock has been quoted on the OTC Bulletin Board (the "Bulletin Board") under the symbol "DVUI" since January 12, 1998. Prior to January 12, 1998, the Company's Common Stock traded under the symbol "DVGL." The following table sets forth the quarterly high and low bid prices of the Company's Common Stock for the periods indicated. Bid quotations represent interdealer prices without adjustment for retail markup, markdown and/or commissions and may not necessarily represent actual transactions.
HIGH LOW
----- -----
FISCAL 2002
First Quarter.......................................... 0.35 0.11
Second Quarter......................................... 0.13 0.03
Third Quarter.......................................... 0.04 0.003
Fourth Quarter......................................... 0.005 0.003
FISCAL 2003
First Quarter.......................................... 0.006 0.003
Second Quarter......................................... 0.007 0.000
Third Quarter.......................................... 0.004 0.000
Fourth Quarter......................................... 0.022 0.001
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HOLDERS
As of September 10, 2002, the number of stockholders of record was 289, not including beneficial owners whose shares are held by banks, brokers and other nominees. The number of stockholders of record as of the date of this filing was not available. The Company estimates that it has approximately 3,000 stockholders in total.
DIVIDENDS
The Company has paid no dividends on its Common Stock since its inception and does not anticipate or contemplate paying cash dividends in the foreseeable future.
Pursuant to the terms of the Company's Series A Convertible Preferred Stock, a 5% annual dividend is due and owing. Pursuant to the terms of the Company Series B Convertible Preferred stock, an 8% annual dividend is due and owing. As of June 30, 2003, the Company has not declared dividends on Series A or B preferred stock. The unpaid cumulative dividends totaled approximately $105,875. See Note 8 of Notes to Consolidated Financial Statements.
SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES FOR FISCAL YEARS 2003 AND 2002
FISCAL YEAR 2003
Three former employees of the company surrendered 2,187,500 shares of the company's common stock that was originally issued to satisfy payroll liabilities.
FISCAL YEAR 2002
The Company issued 75,000 shares of the Company's common stock in connection with the conversion of Series D convertible preferred stock valued at $33,750.
The Company issued 49,978,000 shares of the Company's common stock to consultants for services rendered valued at $704,560.
The Company issued 3,363,375 shares of the Company's common stock to settle accrued payroll liability valued at $67,188.
ITEM 6. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
FISCAL YEARS 2003 AND 2002
RESULTS OF OPERATIONS
The net loss for the fiscal year ended June 30, 2003, was $118,808 compared with a net loss of $1,515,774 for the fiscal year ended June 30, 2002. General and administrative expenses decreased in the fiscal year ended June 30, 2003 by approximately $463,046 over the fiscal year ended June 30, 2002. This decrease was due to the elimination of all expenses except for Accounting ,Auditing, Legal and Transfer fee costs. Marketing expenses and engineering expenses for the fiscal year ended June 30, 2003 were eliminated as a result of a decline in business and lack of funding.
Revenue for the fiscal year ended June 30, 2003, was zero compared to revenue of $131,946 for the fiscal year ended June 30, 2002, as the Company had no activity during the year.
As a result of the decline in revenue, the Company has reduced its fixed overhead costs by reducing the number of personnel. All employees of the Company have either resigned or been laid off except for the one officer of the Company who is working without compensation. In addition, the Company has vacated its prior leased premises and is currently operating out of office space at no charge to he Company.
LIQUIDITY AND CAPITAL RESOURCES
The Company had no collections during the fiscal year ended June 30, 2003.
On January 12, 2001, the Company secured a $500,000 line of credit through Merrill Lynch that was obtained by an investor group of existing stockholders as guarantors of the line of credit. As a result of market conditions, the line of
credit was limited to $393,000 which represents the amount of securities securing the line of credit by the investor group. The Company no longer has access to any financing under this line of credit. As of January 13, 2002, the outstanding debt was in default, and the Company was unable to pay. The guarantors paid off the debt to Merrill Lynch, and assumed the loan at an on-going interest rate of 10% due from the Company. The outstanding debt to the guarantors, Russell Ritchie and Dale Riker, as of June 30, 2003 was $399,253.
In 2001, the Company finalized an equity line with Swartz Private Equity, LLC to provide funding through the sale of the Company's common stock. The Company has the right at its sole discretion to put common stock to Swartz, subject to certain limitations and conditions based upon trading volume of the Company's common stock. However, due to the current limited trading volume of the Company's common stock, the Company is unable to access this equity line of financing.
In 2001, the Company received $25,000 on a 14% convertible debenture from a stockholder. Payment of principal and interest was due on October 13, 2001. This debenture is convertible, in whole or part, at the option of the holder, into shares of the Company's common stock at a rate of $.125 per share. As of June 30, 2003, the company has not repaid the debenture and the holder has not converted.
In 2001, the Company received $20,000 on a 12% convertible debenture. Payment of principal and interest was due on February 3, 2002. This debenture is convertible, in whole or part, at the option of the holder, into shares of the Company's common stock at a rate of $.125 per share. As of June 30, 2003, the Company has not repaid the debenture and the holder has not converted.
In 2001, the Company received $180,000 on a secured note. The note required no principal or interest payments until the maturity date of the note. The assets of the Company were pledged as collateral for the loan. In mid-2002, the Company failed to make its payments due on its premises lease and the landlord of the premises, locked the doors. Some of the Company's equipment was repossessed by the lessors and the remainder of the Company's equipment and other tangible assets were disposed of by the landlord. Due to the loss of the Company's tangible assets, and it current financial condition, this note is now in default.
The Company's financial position is precarious. Unless we are able to acquire additional debt or equity financing to cover ongoing operating costs, satisfy liabilities, and sell or merge or acquire another operating entity or other business combination, we may not be able to continue as a going concern. The probability of obtaining financing is unlikely at this time. Therefore, current management of the Company is reevaluating the Company's prospects and considering the Company's options, such as a sale, merger, or other business combination.
ITEM 7. FINANCIAL STATEMENTS.
The consolidated financial statements required to be filed pursuant to this Item 7 begin on page F-1 of this report.
ITEM 8. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE.
None.
PART III
ITEM 9. DIRECTORS, EXECUTIVE OFFICERS, PROMOTERS AND CONTROL PERSONS; COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT.
The directors and executive officers of the Company are as follows:
Name Age Position
---- --- --------
Preston J. Shea 56 Director, President, Secretary,
Chief Financial Officer
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Preston J. Shea, President, Secretary, and Director is licensed as an attorney in the State of Arizona and as a Barrister and Solicitor by the Law Society of Upper Canada in Ontario. From 1999 to present, he has been vice president and general counsel for an international business organization with offices in Canada and the United States and representative offices in Russian, China, Austria and Mexico. From 1990 to 1999, he practiced international immigration law and business law in Ontario, Canada, Detroit, Michigan and Phoenix, Arizona, with an emphasis on the North American Free Trade Agreement. Prior to that, from 1986 to 1990, he was employed by the government of Canada in various positions including Chief of Staff for the Federal Minister of the Environment, Special Assistant to the Federal Minister of International Trade, and as a Senior Investment Advisor in the Los Angeles offices of the Canadian Consulate. Prior to his tenure with the Canadian government, he was actively engaged in various legal and business positions in the private sector.
Directors serve until the next annual meeting or until their successors are qualified and elected. Officers serve at the discretion of the Board of Directors.
INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Certificate of Incorporation and Bylaws of the Company provide that the Company will indemnify and advance expenses, to the fullest extent permitted by the Delaware General Corporation Law, to each person who is or was a director, officer or agent of the Company, or who serves or served any other enterprise or organization at the request of the Company (an "Indemnitee"). Under Delaware law, to the extent that an Indemnitee is successful on the merits of a suit or proceeding brought against him or her by reason of the fact that he or she was a director, officer or agent of the Company, or serves or served any other enterprise or organization at the request of the Company, the Company will indemnify him or her against expenses (including attorneys' fees) actually and reasonably incurred in connection with such action. If unsuccessful in defense of a third-party civil suit or a criminal suit, or if such a suit is settled, an Indemnitee may be indemnified under Delaware law against both (i) expenses, including attorneys' fees, and (ii) judgments, fines and amounts paid in settlement if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Company, and, with respect to any criminal action, had no reasonable cause to believe his
other conduct was unlawful. If unsuccessful in defense of a suit brought by or in the right of the Company, where the suit is settled, an Indemnitee may be indemnified under Delaware law only against expenses (including attorneys' fees) actually and reasonably incurred in the defense or settlement of the suit if he or she acted in good faith and in a manner he or she reasonably believed to be in, or not opposed to, the best interests of the Company except that if the Indemnitee is adjudged to be liable for negligence or misconduct in the performance of his or her duty to the Company, he or she cannot be made whole even for expenses unless a court determines that he or she is fully and reasonably entitled to indemnification for such expenses. Also under Delaware law, expenses incurred by an officer or director in defending a civil or criminal action, suit or proceeding may be paid by the Company in advance of the final disposition of the suit, action or proceeding upon receipt of an undertaking by or on behalf of the officer or director to repay such amount if it is ultimately determined that he or she is not entitled to be indemnified by the Company. The Company may also advance expenses incurred by other employees and agents of the Company upon such terms and conditions, if any, that the Board of Directors of the Company deems appropriate. Insofar as indemnification for liabilities arising under the Act may be permitted to directors, officers or persons controlling the Company pursuant to the foregoing provisions, in the opinion of the Commission, such indemnification is against public policy as expressed in the Act and is therefore unenforceable.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Section 16(a) of the Securities Exchange Act of 1934, as amended, requires directors and certain officers of the Company, as well as persons who own more than 10% of a registered class of the Company's equity securities, ("Reporting Persons") to file reports of ownership and changes in ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission. The Company believes that all Reporting Persons have complied on a timely basis with all filing requirements applicable to them.
ITEM 10. EXECUTIVE COMPENSATION.
SUMMARY COMPENSATION TABLE
The following table sets forth the total compensation earned by or paid to the Company's Chief Executive Officer for the last three fiscal years. No officer of the Company earned more than $100,000 in the last three fiscal years.
ANNUAL COMPENSATION LONG TERM COMPENSATION
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Awards Payouts
-------------------- --------
Other Securities
Annual Restricted Underlying All Other
Compen- Stock Options/ LTIP Compen-
Year Salary($) Bonus($) sation($) Awards($) SARs(#) Payouts($) sation($)
---- -------- -------- -------- -------- --------- --------- --------
Preston J. Shea 2003 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
President, Secretary,
CFO (1)
Jason M. Genet, 2003 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
President(2) 2002 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
Larry Kohler, 2003 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
CFO(3) 2002 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
Lawrence G. Olson, 2003 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
VP, Secretary(4) 2002 $ -0- $ -0- $ -0- $ -0- -0- $ -0- $ -0-
John D. McPhilimy, 2002 $ 30,500 $ -0- $ -0- $ 25,000 -0- $ -0- $ -0-
CEO, President(5)
Bruce D. Sandig, 2002 $ 29,063 $ -0- $ -0- $ 23,437 -0- $ -0- $ -0-
Sr. Vice President(6)
Lisa R. McPhilimy, 2002 $ 15,813 $ -0- $ -0- $ 12,500 -0- $ -0- $ -0-
Chief Financial
Officer, Secretary
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EMPLOYMENT AND RELATED AGREEMENTS
John D. McPhilimy had an employment agreement with the Company dated January 1, 2001 and commencing on July 1, 2001. The term of the agreement was three years ending in June 2004. Mr. McPhilimy's base compensation was $96,000. The agreement was terminated without cause by Mr. McPhilimy's resignation on June 7, 2002 .
Bruce D. Sandig had an employee agreement with the Company. The term of the agreement was three years ending June 2004. Mr. Sandig's base compensation was $90,000 per year. The agreement was terminated without cause by Mr. Sandig's resignation on April 1, 2002.
The Company has no employment agreements with any of its new management.
ITEM 11. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
The following table sets forth the shareholdings of those persons who: (i) own more than five percent of our common stock as of September 25, 2003 with the number of outstanding shares at 61,771,510; (ii) are officers or directors of the Company; and (iii) all officers and directors as a group:
Percentage
Beneficially
Name Number of Shares Owned(1)
---- ---------------- --------
Jason M. Genet, 11,100,000 18.0%
1636 Los Alamos circle
Mesa, AZ 85204
David W. Keaveney 17,100,000 27.7%
3550 N. Central Avenue S-1000
Phoenix, AZ 85012
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(1) Except as otherwise indicated, we believe that the beneficial owners of Common Stock listed above, based on information furnished by such owners, have sole investment and voting power with respect to such shares, subject to community property laws where applicable. Beneficial ownership is determined in accordance with the rules of the SEC and generally includes voting or investment power with respect to securities. Shares of Common Stock subject to options or warrants currently exercisable, or exercisable within 60 days, are deemed outstanding for purposes of computing the percentage of the person holding such options or warrants, but are not deemed outstanding for purposes of computing the percentage of any other person.
1996 EQUITY INCENTIVE PLAN
On June 12, 1996, the Company adopted the 1996 Equity Incentive Plan (the "1996 Plan") reserving 10,000,000 shares of the Company's Common Stock pursuant to which employees, consultants and other persons or entities who are in a position to make a significant contribution to the success of the Company are eligible to receive awards in the form of incentive or non-incentive options, stock appreciation rights, restricted stock or deferred stock. The 1996 Plan terminates on June 12, 2006. The 1996 Plan is administered by the Board of Directors. Restricted stock entitles the recipients to receive shares of the Company's Common Stock subject to such restriction and condition as the Compensation Committee may determine for no consideration or such considerations as determined by the Compensation Committee. Deferred stock entitles the recipients to receive shares of the Company's Common Stock in the future. As of the date hereof, 5,002,978 shares of common stock have been issued pursuant to the 1996 Plan.
1999 STOCK OPTION PLAN
On November 15, 1999, the Board of Directors adopted the 1999 Stock Option Plan (the "1999 Plan"). This plan was approved by a majority of our stockholders on January 28, 2000. The purpose of the 1999 Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by its officers and other key individuals. The 1999 Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company. A maximum of 1,500,000 shares of the Company's common stock is reserved for issuance under stock options to be issued under the 1999 Plan. The option exercise price will be 100% of the fair market value of the Company's common stock on the date the option is granted and will be exercisable for a period not to exceed 10 years from the date of grant. As of the date hereof, no options have been issued pursuant to this plan.
ITEM 12. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
On December 7, 2001, the Company entered into a Multi-Media and Corporate Imaging Agreement and, on March 5, 2002, a Supplement to that agreement, with Jason Genet, who was not then, but later became the Company's President and a Director, and David Keaveney. Pursuant to that agreement and supplement, Messrs. Genet and Keaveney provided marketing services and materials to the Company, including a marketing plan, CD Rom business cards, corporate fact sheets, and multimedia CD ROMs, to the Company in exchange for 19,600,000 shares of the Company's common stock each. The agreement and supplement have been completely fulfilled and have now terminated.
On October 2, 2001, the Company entered into a Secured Note in the original principal amount of $180,000 with interest accruing at 12% per annum with Suntine Enterprises, LLC. Larry Kohler, who was not then, but later became Chief Financial Officer and a Director of the Company, is the manager of Suntine Enterprises, LLC. The note, including payment of principal and all interest, is due on October 2, 2004 and is secured by all assets of the Company.
ITEM 13. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
3.1(a) Articles of Incorporation, dated May 12, 1988
3.2(a) Bylaws
4.1(a) Certificate of Designation of Series A Convertible Preferred
Stock, dated December 12, 1992
4.2(a) Certificate of Designation of Series B Convertible Preferred
Stock, dated December 22, 1993
4.3(a) Certificate of Designation of Series P Convertible Preferred
Stock, dated September 11, 1995
4.4(a) Certificate of Designation of Series S Convertible Preferred
Stock, dated August 28, 1995
4.5(a) Certificate of Designation of Series C Convertible Preferred
Stock, dated November 2, 1995
4.6(a) Certificate of Designation of Series D and Series E Convertible
Preferred Stock dated August 25, 1999
4.7(a) Form of Warrant Agreement to debt holders, dated January 15, 1998
4.8(a) Form of Warrant Agreement to debt holders, dated April 8, 1998
4.9(a) Form of Warrant Agreement to participants in Private Placement
dated April 8, 1998
|
4.10(b) Pledge Agreement dated January 11, 2001 with Dale Riker and Russ
Ritchie
4.11(b) Investment Agreement dated December 13, 2000, with Swartz Private
Equity, LLC
4.12(b) Merrill Lynch Portfolio Reserve Loan and Collateral Account
Agreement, dated January 12, 2002
10.1(a) 1996 Equity Incentive Plan
10.2(a) 1999 Stock Option Plan
10.3(c) Employment Agreement dated January 1, 2001, with John D.
McPhilimy
10.4(c) Employment Agreement dated July 1, 2001, with Bruce D.Sandig
10.5 Settlement Agreement and Release dated April 30, 2003, between
the Company and Russell H. Ritchie, Dale E. Riker, Suntine
Enterprises, LLC, and Cornerstone Wireless Communications, LLC.
21.1(b) Subsidiaries of the Registrant
31.1 Certification of Chief Executive Officer and of Chief Financial
Officer pursuant to the Securities Exchange Act of 1934, Rules
13a-14 and 15d-14, as adopted pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002
32.1 Certification of Chief Executive Officer and of Chief Financial
Officer pursuant to the Securities Exchange Act of 1934, Rules
13a-14 and 15d-14, as adopted pursuant to Section 906 of the
Sarbanes-Oxley Act of 2002
(b) Reports on Form 8-K.
None.
ITEM 14 CONTROLS AND PROCEDURES
Our Chief Executive Officer, President, and Chief Financial Officer (the "Certifying Officers") are responsible for establishing and maintaining disclosure controls and procedures for the Company. The Certifying Officers have designed such disclosure controls and procedures to ensure that material information is made known to them, particularly during the period in which this report was prepared. The Certifying Officers have evaluated the effectiveness of the Company's disclosure controls and procedures within 90 days of the date of this report and believe that the Company's disclosure controls and procedures are effective based on the required evaluation. There have been no significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of their evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, duly authorized.
DIMENSIONAL VISIONS INCORPORATED
DATED: October 14, 2003 By: /s/ Preston J. Shea
------------------------------------
Preston J. Shea, Director, President,
Chief Financial Officer, Secretary
(Principal Executive, Financial and
Accounting Officer)
|
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
YEARS ENDED JUNE 30, 2003 AND 2002
Page
----
Independent Auditors' Report F-2
Consolidated Financial Statements
Balance Sheet F-3
Statements of Operations F-4
Statements of Stockholders' Equity (Deficiency) F-5
Statements of Cash Flows F-8
Notes to Consolidated Financial Statements F-10
|
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Stockholders Dimensional Visions Incorporated and Subsidiary Scottsdale, Arizona
We have audited the accompanying consolidated balance sheet of Dimensional Visions Incorporated and Subsidiary (the "Company") as of June 30, 2003, and the related consolidated statements of operations, stockholders' equity (deficiency), and cash flows for each of the two years in the period ended June 30, 2003. 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.
We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall consolidated financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of Dimensional Visions Incorporated and Subsidiary as of June 30, 2003 and the results of their operations and their cash flows for each of the two years in the period ended June 30, 2003 in conformity with accounting principles generally accepted in the United States of America.
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As described in Note 1 to the consolidated financial statements, the Company has suffered recurring losses from operations and has a working capital and a stockholders deficiency of $1,178,340 as of June 30, 2003, which raises substantial doubt about the Company's ability to continue as a going concern. The future of the Company as an operating business will depend on its ability to (1) obtain sufficient capital contributions and/or financing as may be required to sustain its current operations and (2) Seek out a sale, merger or other business combination with another entity acceptable to the Board of Directors. Management's plan concerning these matters is also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
/s/ Kopple & Gottlieb, LLP -------------------------- KOPPLE & GOTTLIEB, LLP Jenkintown, Pennsylvania October 10, 2003 |
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEET
JUNE 30, 2003
ASSET
Current asset
Cash $ --
------------
Total current asset --
------------
Total asset $ --
============
LIABILITIES AND STOCKHOLDERS' DEFICIENCY
Current liabilities
Short-term borrowings 632,520
Accounts payable, accrued expenses and other liabilities 545,820
------------
Total current liabilities 1,178,340
------------
Total liabilities 1,178,340
------------
Commitments and contingencies --
Stockholders' deficiency
Preferred stock - $.001 par value, authorized 10,000,000 shares;
issued and outstanding 524,044 shares 524
Additional paid-in capital 908,894
------------
909,418
Common stock - $.001 par value, authorized 100,000,000 shares;
issued and outstanding 61,771,510 61,772
Additional paid-in capital 22,373,580
Deficit (24,523,110)
------------
Total stockholders' deficiency (1,178,340)
------------
Total liabilities and stockholders' deficiency $ --
============
|
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED JUNE 30, 2003 AND 2002
2003 2002
----------- -----------
Operating revenue $ -- $ 131,946
Cost of sales -- 30,499
----------- -----------
Gross profit -- 101,447
----------- -----------
Operating expenses
Engineering and development costs -- 101,109
Marketing expenses -- 747,805
General and administrative expenses 48,968 512,013
----------- -----------
Total operating expenses 48,968 1,360,927
----------- -----------
Loss before other income (expenses) (48,968) (1,259,480)
----------- -----------
Other income (expenses)
Interest expense (69,840) (104,773)
Loss on disposal of assets and
capitalized lease termination -- (151,521)
----------- -----------
Other expenses net (69,840) (256,294)
----------- -----------
Net loss (118,808) (1,515,774)
Dividends in arrears on preferred stock (105,875) (95,325)
----------- -----------
Net Loss available to common shareholders $ (224,683) $(1,611,099)
=========== ===========
Loss per share
Basic and diluted loss per common share $ (.004) $ (.05)
=========== ===========
Shares used in computing net loss per share 63,953,017 30,237,523
=========== ===========
|
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY)
YEARS ENDED JUNE 30, 2003 AND 2002
Preferred Stock Common Stock
-------------------- ---------------------
Additional Additional
($.001 Par Value) Paid-in ($.001 Par Value) Paid-in
Shares Amount Capital Shares Amount Capital Deficit Total
--------- ------ ---------- --------- ------ ----------- ------------ -----------
Balance, July 1, 2001
561,544 $ 562 $ 942,606 10,392,635 $10,392 $21,603,561 $(22,888,528) $ (331,407)
Issuance of 8,000 warrants
to purchase 8,000 shares of
the Company's common stock
at $.13 per share for a
three-year period in
connection with the line of
credit due January 12, 2002.
Black Scholes option pricing
model was used to value the
warrants.
-- -- -- -- -- 901 -- 901
Issuance of 1,488,000 of
the Company's common stock
to consultants due services
valued at $166,000
-- -- -- 1,488,000 1,488 164,512 -- 166,000
Conversion of 37,500 shares
series D convertible preferred
stock valued at $33,750 into
75,000 shares of the Company's
common stock
(37,500) (38) (33,712) 75,000 75 33,675 -- --
|
(continued on following page)
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY), continued
YEARS ENDED JUNE 30, 2003 AND 2002
Preferred Stock Common Stock
-------------------- ---------------------
Additional Additional
($.001 Par Value) Paid-in ($.001 Par Value) Paid-in
Shares Amount Capital Shares Amount Capital Deficit Total
--------- ------ ---------- --------- ------ ----------- ------------ -----------
Issuance of 6,000,000
Shares of the Company's
common stock to consultants
for services valued at
$277,500
-- -- -- 6,000,000 6,000 271,500 -- 277,500
Sale of 150,000 shares of
the Company's common stock
at $.10 per share
-- -- -- 150,000 150 14,850 -- 15,000
Issuance of 8,290,000
shares of the Company's
common stock to consultants
for services valued at
$98,560
-- -- -- 8,290,000 8,290 90,270 -- 98,560
Issuance of 3,363,375 Shares
of the Company's common stock
to employees to settle accrued
payroll valued at $67,188
-- -- -- 3,363,375 3,364 63,824 -- 67,188
Issuance of 34,200,000
shares of the Company's
common stock to consultants
for services valued at
$162,500
-- -- -- 34,200,000 34,200 128,300 -- 162,500
|
(continued on following page)
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIENCY), continued
YEARS ENDED JUNE 30, 2003 AND 2002
Preferred Stock Common Stock
-------------------- ---------------------
Additional Additional
($.001 Par Value) Paid-in ($.001 Par Value) Paid-in
Shares Amount Capital Shares Amount Capital Deficit Total
--------- ------ ---------- --------- ------ ----------- ------------ -----------
Net loss
-- -- -- -- -- -- (1,515,774) (1,515,774)
------- ------ ---------- ---------- ------- ----------- ------------ -----------
Balance, June 30, 2002
524,044 $ 524 $ 908,894 63,959,010 $63,959 $22,371,393 $(24,404,302) $(1,059,532)
======= ====== ========== ========== ======= =========== ============ ===========
Surrender of 2,187,500
shares of the Company's
common stock originally
issued for compensation
-- -- -- (2,187,500) (2,187) 2,187 -- --
Net loss
-- -- -- -- -- -- (118,808) (118,808)
------- ------ ---------- ---------- ------- ----------- ------------ -----------
Balance, June 30, 2003
524,044 $ 524 $ 908,894 61,771,510 $61,772 $22,373,580 $(24,523,110) $(1,178,340)
======= ====== ========== ========== ======= =========== ============ ===========
|
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED JUNE 30, 2003 AND 2002
2003 2002
----------- -----------
Operating activities
Net loss $ (118,808) $(1,515,774)
Adjustments to reconcile net loss to net cash
used in operating activities
Loss on disposal of assets and capitalized lease termination -- 151,521
Consulting service paid through issuance of common stock -- 740,560
Depreciation and amortization of property and equipment -- 37,154
Amortization of debt discount -- 46,763
Amortization of other assets and deferred costs -- 157,223
Security deposit used to pay rent -- 4,100
Changes in assets and liabilities which provided (used) cash
Accounts receivable, trade -- 8,614
Prepaid supplies and expenses -- 4,224
Accounts payable, accrued expenses and other liabilities 118,590 168,855
----------- -----------
Net cash used in operating activities (218) (232,760)
----------- -----------
Investing activities
Payment of obligations under capital lease -- (32,169)
----------- -----------
Net cash used in investing activities -- (32,169)
----------- -----------
Financing activities
Sale of common stock -- 15,000
Short term borrowings 200 247,320
----------- -----------
Net cash provided by financing activities 200 263,320
----------- -----------
Net decrease in cash and cash equivalents (18) (1,609)
Cash and cash equivalents, beginning of year 18 1,627
----------- -----------
Cash, end of year $ -- $ 18
=========== ===========
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ -- $ 12,315
=========== ===========
Issuance of common stock in connection
with consulting services $ -- $ 704,560
=========== ===========
|
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS, continued
YEARS ENDED JUNE 30, 2003 AND 2002
Supplemental disclosure of non-cash investing and financing activities for fiscal year 2002:
The Company issued 75,000 shares of the Company's common stock in connection with the conversion of Series D convertible preferred stock valued at $33,750
The Company issued 49,978,000 shares of the Company's common stock to consultants for services rendered valued at $704,560.
The Company issued 3,363,375 shares of the Company's common stock to settle accrued payroll liability valued at $67,188
See notes to consolidated financial statements.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED JUNE 30, 2003 AND 2002
Note 1: Summary of Significant Accounting Policies
DESCRIPTION OF BUSINESS, FINANCING AND BASIS OF FINANCIAL STATEMENT
PRESENTATION
Dimensional Visions Incorporated (the "Company" or "DVI") was incorporated in Delaware on May 12, 1988. The Company produces and markets lithographically printed stereoscopic and animation print products.
The Company, through its wholly-owned subsidiary, InfoPak, Inc., developed a data delivery system that provides end users with specific industry printed materials by way of a portable hand-held reader. Data is acquired electronically from the data provided by mainframe systems and distributed through a computer network to all subscribers.
The Company has historically financed its operations primarily through the sale of its securities. The Company has had no sales during the year ended June 30, 2003 and limited sales of its products during the year ended June 30, 2002. The volume of business is not sufficient to support the Company's cost structure. Accordingly during April 2002 the Company ceased its present operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company has incurred losses since inception of $24,523,110 and has a working capital deficiency of $1,178,340 as of June 30, 2003. The future of the Company as an operating business will depend on its ability to (1) obtain sufficient capital contributions and/or financing as may be required to sustain its operations and (2) ultimately achieve a sale, merger, or other business combination with another entity acceptable to the board of directors. Management's plan to address these issues includes, (a) continued exercise of tight cost controls to conserve cash, (b) obtaining financing, a sale, merger, or other business combination with another entity, and (c) negotiating a settlement of various obligations in order to position the company for a sale, merger, or business combination.
The consolidated financial statements have been prepared on a going concern basis which contemplates the realization and settlement of liabilities and commitments in the normal course of business. The available funds at June 30, 2003, is not sufficient to satisfy the present cost structure. Management recognizes that the Company must obtain additional funding to enable it to continue operations. Unless the Company is able to merge with or acquire another operating entity or other business combination it may not be able to continue as a going concern.
Further, there can be no assurances, that the Company will achieve a sale, merger, or other business combination with another entity. In the event the Company is not able to accomplish a sale, merger, or other business combination with another entity, it may cease its operations and/or seek protection under the bankruptcy laws.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 1: Summary of Significant Accounting Policies (continued)
CONSOLIDATION POLICY
The consolidated financial statements include the accounts of DVI and its wholly-owned subsidiary, InfoPak,Inc. All significant intercompany balances and transactions have been eliminated in consolidation.
DEPRECIATION AND AMORTIZATION
Depreciation, which included amortization of assets under capital Lease was provided by the use of the straight-line method over the estimated useful lives of the assets as follows:
Equipment 5-7 years Furniture and fixtures 5 years
PATENT RIGHTS
Costs incurred to acquire patent rights and the related technology were amortized over the shorter of the estimated useful life or the remaining term of the patent rights. In the event that the costs of patent rights and/or acquired technology are abandoned, the write-off will be charged to expenses in the period the determination is made to abandon them.
ENGINEERING AND DEVELOPMENT COSTS
The Company charges to engineering and development costs all items of a non-capital nature related to bringing "significant" improvement to its product. Such costs include salaries and expenses of employees and consultants, the conceptual formulation, design, and testing of the products and creation of prototypes. All such costs of a capital nature are capitalized.
INCOME TAXES
The Company accounts for income taxes under the liability method. Deferred tax assets and liabilities are determined based on differences between the financial reporting and tax bases of assets and are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.
LOSS PER SHARE
Basic and diluted loss per common share is calculated using the Weighted average number of common shares outstanding during the period. There are no dilutive effects from outstanding options, warrants and convertible securities on the weighted average number of common shares outstanding.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 1: Summary of Significant Accounting Policies (Continued)
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 reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the dates of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.
CONCENTRATION OF CREDIT RISK
The Company was subject to credit risk through trade receivables. The Company relied on a limited number of customers for its sales. The Company during April 2002 ceased building a customer base for its products and, therefore, the degree of risk no longer exists until the Company redirects itself.
The Company also relied on several key vendors to supply plastics and printing services. Although there are a limited number of vendors capable of fulfilling the Company's needs, the Company believes that other vendors could provide for the Company's needs on comparable terms. Abrupt changes could, however, cause a delay in processing and a possible inability to meet sales commitments on schedule, or a possible loss of sales, which would affect operating results adversely.
STOCK-BASED COMPENSATION
The Company accounts for stock-based awards to employees in accordance with Accounting Principles Board Opinion No. 25, "Accounting for Stock Issued to Employees" ("APB Opinion No. 25") and has adopted the disclosure-only alternative of Statement of Financial Accounting Standards No. 123, "Accounting for Stock-Based Compensation" ("FAS 123").
Note 2: Cash
The Company considers all highly liquid investments, with an original maturity of three months or less when purchased, to be cash equivalents.
Note 3: Accounts Payable, Accrued Expenses and Other Liabilities
Accounts payable $414,213
Accrued Interest 115,535
Salaries 16,072
--------
Total $545,820
========
|
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 4: Short-Term Borrowings
On January 12, 2001, the Company secured a $500,000 line of credit through Merrill Lynch that was obtained by an investor group of existing stockholders as guarantors of the line of credit. The outstanding debt as of June 30, 2001 was $385,000 and on July 2, 2001 an additional $8,000 was borrowed. The terms of the line of credit are for one year with an interest rate of the 3-mont LIBOR rate, plus 2.5%. Interest payments are calculated and due monthly, and the principal balance is due on January 13, 2002. The outstanding debt may also be assumed by the stockholders at a rate of three shares of Dimensional Visions' common stock for every dollar assumed.
As a result of market conditions, the line of credit was limited to $393,000 which represents the amount of securities securing the line of credit by the investor group.
In connection with the guarantee by the investor group, the Company issued 39,300 restricted shares of its common stock, valued at $7,958, 196,500 commitment warrants at fair market value {$.266 per share} and 385,000 usage warrants at 75% of fair market value (ranging from $.113 to $.218 per share). The warrants were valued using Black-Scholes option pricing model at $71,948.
Accordingly, the line of credit was discounted for the value allocated to the stock and warrants. As of June 30, 2002, the additional interest expense of $46,763 was recorded for the year.
On January 29, 2002 Merrill Lynch declared the loan in default and accordingly, during January and February 2002 the loan was paid off by the investor Group plus accrued interest. The investor group paid Merrill Lynch $399,053 which included $6,053 of interest. The loan balance as of June 30, 2003, which is due to the investor group is $399,253 plus accrued interest of approximately $55,893 through June 30, 2003 calculated at 10% per annum.
During July and August of 2001 the Company borrowed $45,000 and issued a 14% convertible debenture for $25,000 due in October 2001 and issued a 12% convertible debenture for $20,000 due in February 2002. Both debentures are in default under the terms of the debenture agreement. The Company continues to accrue interest on these obligations. The debentures are convertible into 360,000 shares of the Company's common stock at $.125 per share.
During September and October 2001 the Company borrowed $180,000 from a limited liability company and signed a 12% secured note that pledged the assets of the Company as collateral for the loan. The note was originally due on October 2, 2004 along with all unpaid accrued interest. Under the terms of the secured note the obligation was declared in default as a result of its insolvency. The Company continues to accrued interest under this obligation.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 4: Short-Term Borrowings (Continued)
During January 2002 the company borrowed $8,267 from an individual and no repayment terms have been established at this time.
On April 30, 2003, the Company entered into a settlement agreement and release with "the debt holder group," which includes the investor group representing $399,253 of short term debt, the limited liability company of $180,000 of short term debt and an entity owned by the investor group which made disbursements of approximately $ 47,244 for the benefit of the Company through June 30,2003, which is included in other liabilities. The agreement calls for all of debt holder group liabilities to be paid in full by issuing $50,000 in post reorganization unrestricted Company Common Stock and issuing $200,000 in post reorganization restricted Company Common Stock. The agreement requires the Company's common stock to be issued within 10 days of the completion of the reorganization of the Company. At the time the stock is issued, interest accrued on the motes will be cancelled. The debt holder group is permitted to liquidate up to $10,000 worth of the unrestricted common stock each month for five months commencing 10 days after receipt of the Company's Common Stock. The debt holder group may receive additional unrestricted stock if the Company's stock falls below $50,000 upon liquidation and additional shares of restricted stock if the price of the restricted shares fall below $200,000 one year after first receipt. As of September 2003, no plan of reorganization has been entered into.
Note 5: Leases
The Company leased certain equipment under a master lease agreement, which are classified as capital leases. The equipment leases were for all five year term with an option to acquire the equipment for $1 at the end of the lease term. The equipment was repossessed during April 2002 and the capitalized leases were written off, as well as, the related lease obligation. Included in accounts payable is approximately $68,300 to the leasers on these obligations. The Company was also evicted from its office facility during April 2002 and no additional obligation was recorded (see note 6). As a result of the disposal of equipment and lease repossessions the Company recorded a loss of Approximately $151,500.
The Company's rental expense for operating leases was zero for the year ended June 30, 2003 and approximately $44,383 for the year ended June 30, 2002.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 6: Commitments and Contingencies
There are no legal proceedings which the Company believes will have a material adverse effect on its financial position.
The Company has not declared dividends on Series A or B Convertible Preferred Stock. The cumulative dividends in arrears through June 30, 2003 was approximately $105,875
The Company's lease obligation under the remaining lease term through December 2003 was approximately $70,000. Management has had no communications with the former landlord, since October 2002.
Note 7: Common Stock
As of June 30, 2003, there are outstanding 7,798,000 non-public warrants and options to purchase the Company's common stock at prices ranging from $.01 to $0.50 with a weighted average price of $.16 per share.
As of June 30, 2002, there were 524,044 shares of various classes of Convertible Preferred Stock outstanding which can be converted to 888,818 shares of common stock (see Note 8).
As of June 30, 2002, there are convertible debentures outstanding that can be converted to 360,000 shares of common Stock (see note 4) and the investor group can also convert the outstanding loan to 1,197,159 shares of common stock at an exchange rate of three shares for every dollar.
On December 13, 2000, the Company entered into an investment agreement with Swartz Private Equity, LLC. The investment agreement provides for the Company to issue and sell up to $20 million of the Company's common stock to Swartz, subject to a formula based on stock price and trading volume for a three year period beginning July 10, 2001 on the date that the registration statement was declared effective. For each common stock share put to Swartz, the Company will receive the lessor of 91% of the market or the market price less $.075.
The total number of shares of the Company's common stock that would have been issued upon conversion of the outstanding warrants, options, preferred stock and loans converted equaled 10,243,977 shares as of June 30, 2003, and would be in addition to the 61,771,510 shares of common stock outstanding as of June 30, 2003.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 8: Preferred Stock
The Company has authorized 10,000,000 shares of $.001 par value per share Preferred Stock, of which the following were issued outstanding:
Allocated Outstanding
--------- -----------
Series A Preferred 100,000 15,500
Series B Preferred 200,000 3,500
Series C Preferred 1,000,000 13,404
Series D Preferred 375,000 130,000
Series E Preferred 1,000,000 275,000
Series P Preferred 600,000 86,640
--------- ---------
Total Preferred Stock 1,900,000 524,044
========= =========
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The Company's Series A Convertible 5% Preferred Stock ("Series A Preferred"), 100,000 shares authorized, is convertible into common stock at the rate of 1.6 shares of common stock for each share of the Series A Preferred. Dividends from date of issue, are payable from retained earnings, and have been accumulated on June 30 each year, but have not been declared or paid (see Note 6).
The Company's Series B Convertible 8% Preferred Stock ("Series B Preferred"), is convertible at the rate of 4 shares of common stock for each share of Series B Preferred. Dividends from date of issue are payable on June 30 from retained earnings at the rate of 8% per annum and have not been declared or paid (see Note 6).
The Company's Series C Convertible Preferred Stock ("Series C Preferred") is convertible at a rate of .4 shares of common stock per share of Series C Preferred.
The Company's Series D Convertible Preferred Stock ("Series D Preferred") is convertible at a rate of 2 shares of Common stock per share of Series D Preferred.
The Company's Series E Convertible Preferred Stock ("Series E Preferred") is convertible at a rate of 2 shares of Common stock per share of Series E Preferred.
The Company's Series P Convertible Preferred Stock ("Series P Preferred"), is convertible at a rate of .4 shares of common stock for each share of Series P Preferred.
The Company's Series A Preferred, Series B Preferred, Series D Preferred and Series E Preferred were issued for the purpose of raising operating funds. The Series C Preferred was issued to certain holders of the Company's 10% Secured Notes in lieu of accrued interest and also will be held for future investment purposes.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 8: Preferred Stock (continued)
The Series P Preferred was issued to InfoPak shareholders in exchange
for (1) all of the outstanding capital stock of InfoPak, (2) as
signing bonuses for certain employees and a consultant of InfoPak, and
(3) to satisfy InfoPak's outstanding debt obligations to certain
shareholders.
Note 9: Stock Option Plan and Equity Incentive Plan
On November 15, 1999, the Board of Directors of Dimensional Visions adopted the 1999 Stock Option Plan (the "1999 Plan"). This plan was approved by a majority of our stockholders at our January 28, 2000, stockholders' meeting. The purpose of the 1999 Plan is to advance the interests of the Company by encouraging and enabling acquisition of a financial interest in the Company by its officers and other key individuals. The 1999 Plan is intended to aid the Company in attracting and retaining key employees, to stimulate the efforts of such individuals and to strengthen their desire to remain with the Company. A maximum of 1,500,000 shares of the Company's common stock are available to be issued under the 1999 Plan. The option exercise price will be 100% of the fair market value of the Company's common stock on the date the option is granted and will be exercisable for a period not to exceed 10 years from the date of grant.
As of June 30, 2003, no stock options have been granted under this plan.
The Company on June 13, 1996 adopted the 1996 Equity Incentive Plan (the "Plan") covering 10,000,000 shares of the Company's common stock $.001 par value, pursuant to which officers, directors, key employees and consultants of the Company are eligible to receive incentive, as well as non-qualified stock options, SAR's, and Restricted Stock and Deferred Stock. The Plan, which expires in June 2006, will be administered by the Compensation Committee of the Board of Directors. Incentive stock options granted under the Plan are exercisable for a period of up to 10 years from the date of grant at an exercise price, which is not less than the fair market value of the common stock on the date of the grant, except that the terms of an incentive stock option granted under the Plan to a stockholder owning more than 10% of the outstanding common stock may not exceed five years and the exercise price of an incentive stock option granted to such a stockholder may not be less than 110% of the fair market value of common stock on the date of the grant. Non-qualified stock options may be granted on terms determined by the Compensation Committee of the Board of Directors. SAR's which give the holder the privilege of surrendering such rights for the appreciation in the Company's common stock between the time of grant and the surrender, may be granted on any terms determined by the Compensation Committee of the Board of Directors.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 9: Stock Option Plan and Equity Incentive Plan (continued)
Restricted stock awards entitle the recipient to acquire shares for no cash consideration or for consideration determined by the Compensation Committee. The award may be subject to restrictions, conditions and forfeiture as the Committee may determine. Deferred stock award entitles recipient to receive shares in the future. Since inception of this plan in 1996 through June 30, 2000, 5,102,978 shares of common stock have been issued. As of June 30, 2003 and 2002, no options or SAR's have been granted.
If the Company had elected to recognize compensation expense based on the fair value of stock plans as prescribed by FAS No. 123, the Company's net loss and net loss per share would have not changed for the pro forma amounts as indicated below:
2003 2002
----------- -----------
Net Loss available to common shareholders $ (224,683) $(1,611,099)
Net Loss - pro forma $ (224,683) $(1,611,099)
Net Loss per share - as reported $ (.004) $ (.05)
Net Loss per share - pro forma $ (.004) $ (.05)
Note 10: Income Taxes
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The tax effects of significant items comprising the Company's net deferred taxes as of June 30, 2003 were as follows:
Deferred tax assets:
Goodwill $ 201,000
Net operating loss carryforwards 7,927,000
-----------
8,128,000
-----------
Net deferred tax asset 8,128,000
Valuation allowance (8,128,000)
-----------
Net deferred tax asset reported $ --
===========
|
The change in valuation allowance for the year ended June 30, 2003 was increased by approximately $52,000.
There was no provision for current income taxes for the years ended June 30, 2003 and 2002.
DIMENSIONAL VISIONS INCORPORATED AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED JUNE 30, 2003 AND 2002
Note 10: Income Taxes (Continued)
The federal net operating loss carryforwards of approximately $21,526,000 expires in various years through 2023. In addition the Company has state carryforwards of approximately $6,755,000.
The Company has had numerous transactions in its common stock. Such transactions may have resulted in a change in the Company's ownership, as defined in the Internal Revenue Code Section 382. Such change may result in an annual limitation on the amount of the Company's taxable income which may be offset with its net operating loss carryforwards. The Company has not evaluated the impact of Section 382, if any, on its ability to utilize its net operating loss carryforwards in future years.
EXHIBIT 10.5
This Settlement Agreement and Release (hereinafter the "Agreement") are
entered into by and between Russell H. Ritchie, Dale E. Riker, Suntine
Enterprises LLC and Cornerstone Wireless Communications LLC (hereinafter
referred to collectively as "Russell and Group") and Dimensional Visions Inc.
(hereinafter referred to as "DVUI" or the "Company") with reference to the
following:
RECITALS
1. WHEREAS, DVUI is a Public Company currently trading on the
Over-the-Counter Bulletin Board with the symbol DVUI.
2. WHEREAS, Russell H. Ritchie, Dale E. Riker, Suntine Enterprises LLC,
Cornerstone Wireless Communications LLC and any other related known and unknown
parties are the major secured and unsecured creditors of DVUI and are owed
approximately $626,297.00, plus accrued interest.
3. WHEREAS, DVUI is currently insolvent and cannot pay Russell and Group
what they are owed.
4. WHEREAS, a new management group has agreed to take control of DVUI and
infuse working capital and assets into the DVUI to allow the Company to be
solvent and create shareholder value.
5. WHEREAS, a condition of the new management group's involvement is the
settlement of Russell and Groups debt for Company stock.
6. WHEREAS, Russell and Group have agreed to take a combination of
restricted and unrestricted stock in settlement of combined debt which has been
proposed by the new management of the Company.
7. WHEREAS, all parties hereto now wish to resolve the debt to Russell
and Group and develop the business of the Company and create shareholder value.
8. IN CONSIDERATION, of the promises and mutual covenants hereby contained,
it is hereby agreed as follows and will confirm all arrangements previously made
to settle the obligation owed Russell and Group by DVUI.
TERMS
1. Russell and Group will receive the sum of Fifty Thousand Dollars
($50,000.00), in post reorganization Company unrestricted Common Stock.
2. Russell and Group will receive additional shares if the value of the
unrestricted stock falls below the value of Fifty Thousand Dollars upon its
liquidation.
3. Russell and Group agree that they may liquidate $10,000.00 worth of the
unrestricted stock each month for five months commencing Ten (10) days after
receipt of the stock.
4. Russell and Group will receive the sum of Two Hundred Thousand Dollars
($200,000.00) in post reorganization Company restricted Company Common Stock.
These share will have piggyback rights to any registration that is filed, at no
cost to Russell and Group.
5. Russell and Group will receive additional shares if the value of the
restricted stock falls below the sum of Two Hundred Thousand Dollars ($200,000)
on the date One (1) year after its receipt. The number of additional shares will
be determined based on the average closing of last 5 trading calendar days of
the holding period.
6. Upon completion of the reorganization of the Company, Russell and Group
will receive the Company stock within Ten (10) days.
7. It is further understood and agreed that this Settlement Agreement and
Release, and payment pursuant thereto is in full settlement of all claims by
Russell and Group.
8. The parties agree to bear their own costs, expenses, and Attorney's fees
incurred in this matter.
9. Except with respect to the liabilities and obligations created by this
Settlement Agreement and Release and the covenants set forth herein; each of the
parties hereto releases each other party and their heirs, affiliates, executors,
administrators, successors or assigns, or and from any and all manners of,
actions and causes of action, suits, debts, accounts, covenants, contracts,
agreements, judgments, claims and demands whatsoever in law or in equity,
including without limitation all claims made or which could have been made in
any action, which each of the parties ever had, or now have, or which any of
their heirs, affiliates, executors, administrators, successors or assigns, or
any of them, hereafter can, will or may have, for or by reason of, any cause,
manners of a thing whatsoever, at all times prior to and as of the date of the
execution of this Settlement Agreement and Release.
10. Each party represents and warrants that he has the authority to enter
into and be bound by this Settlement Agreement and Release.
11. Each of the parties hereto acknowledges that each has had the benefit
of the advice of an attorney of his or her choice in the negotiating, drafting,
and executing this Settlement Agreement and Release, and the language in all
parts of this Settlement Agreement and Release is a product of the efforts of
all counsel and/or parties. Accordingly, neither the entire Settlement Agreement
and Release nor any provision in it will be (a) deemed to have been proposed or
drafted by any party, or (b) construed against any party. This Settlement
Agreement and Release will be construed as a whole according to its plain
meaning. It will in all respects be interpreted, enforced, and governed under
the laws of the State of Arizona, except that parole evidence will not be
admissible to vary or modify any of its terms.
12. If for any reason any provision of this Settlement Agreement and
Release will be determined to be invalid or inoperative, the validity and effect
of the other provisions hereof will not be affected thereby.
13. This Settlement Agreement and Release constitute the entire agreement and understanding between the parties with respect to the subject matters set
forth herein, and supersede and replace any prior agreements and understandings,
whether oral or written between and among the, with respect to such matters. The
provisions of this agreement may be waived, altered, amended, or repealed in
whole or in part, only upon the written consent of all parties to this
Settlement Agreement and Release.
14. In the event that any party hereto is required to commence an action to enforce the terms of this Settlement Agreement and Release, or to execute any
stipulated judgments entered into as part of it, the prevailing or executing
party shall be entitled to attorneys feels and costs reasonably incurred in
connection therewith.
THE UNDERSIGNED FURTHER STATES THAT HE HAS CAREFULLY READ THE FOREGOING
SETTLEMENT AGREEMENT AND RELEASE AND KNOWS THE CONTENTS THEREOF, AND SIGNS THE
SETTLEMENT AGREEMENT AND MUTUAL RELEASE AS HIS OWN FREE ACT. THE UNDERSIGNED
FURTHER ACKNOWLEDGES THAT HE HAS BEEN REPRESENTED BY THE ATTORNEY OF THEIR
CHOICE THROUGHOUT THE PENDENCY OF THESE MATTERS, AND THAT THE UNDERSIGNED HAS
HAD THE OPPORTUNITY TO DISCUSS THE CONTENTS OF THIS SETTLEMENT AGREEMENT AND
RELEASE WITH AN ATTORNEY IF THEY SO WISHED.
Dimensional Visions Inc.
/s/ Larry Kohler ------------------------ Larry Kohler Chairman and CFO |
CAUTION!
READ BEFORE SIGNING!
Individually and for Cornerstone Wireless Communications, LLC
/s/ Russell H. Ritchie ------------------------ Russell H. Ritchie President |
Suntine Enterprises, LLC
/s/ Larry Kohler ------------------------ Larry Kohler Manager |
Individually
/s/ Dale E. Riker ------------------------ Dale E. Riker |
EXHIBIT 31.1
CERTIFICATION PURSUANT TO RULE 13a 14(a)/15D-14(a) and
SECTION 302 OF THE SARBANES-OXLEY ACT
I, Preston J. Shea, President and Chief Financial Officer of Dimensional Visions Incorporated, certify that:
1. I have reviewed this annual report on Form 10-KSB of Dimensional Visions Incorporated;
2. Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the small business issuer as of, and for, the periods presented in this report;
4. The small business issuer's other certifying officer(s)and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the small business issuer and have:
a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the small business issuer, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) Evaluated the effectiveness of the small business issuer's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and
c) Disclosed in this report any change in the small business issuer's internal control over financial reporting that occurred during the small business issuer's most recent fiscal quarter (the small business issuer's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the small business issuer's internal control over financial reporting; and
5. The small business issuer's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the small business issuer's auditors and the audit committee of the small business issuer's board of directors (or persons performing the equivalent functions):
a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the small business issuer's ability to record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the small business issuer's internal control over financial reporting.
Date: October 14, 2003 /s/ Preston J. Shea ----------------------------- Preston J. Shea President and Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION PURSUANT TO 18 U.S.C.SECTION 1350,
AS ADOPTED PURSUANT TO SECTION 906 OF THE
SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of DIMENSIONAL VISIONS INCORPORATED (the "Company") on Form 10KSB for the period ended June 30, 2003 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), I, Preston J. Shea, President and Chief Accounting Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and result of operations of the Company.
/s/ Preston J. Shea ------------------- Preston J. Shea President and Chief Accounting Officer October 14, 2003 |